Roper: Questioning the highly questionable ESSEX carbon tax

By Rob Roper

The Vermont House Committee on Energy and Technology is taking testimony on the ESSEX carbon tax bill. Here are some questions our legislators (and all Vermonters) should ask regarding the bill.

What’s the real benefit here?

662. (1) Allocation to classes. The mechanism shall allocate the total revenues received by the collection date among three customer classes, based on the estimated percentage contribution of each class to those total revenues. The classes shall be commercial, industrial, and residential.

Question: What percentage of the total revenue collected (50 percent of the estimated $240 million when fully implemented, will be allocated to each class? How much will be available for residential customers versus commercial and industrial? What’s the real potential financial benefit to average Vermont families on their electric bills versus increased costs for driving and heating their homes? It would appear to be pretty minimal.

662. (iv) With the monthly bill to a customer who has demonstrated eligibility for this income-based rebate, the provider shall include a check to the customer if,…

662. (c) … A person seeking one or both of the rural residential and income-based rebates established under this section shall demonstrate eligibility. The Commission shall create a mechanism to be used for the self-certification of eligibility for these rebates.

Question: The implications here are that rural and low-income Vermonters will have to actively apply for these rebates and update that application on a monthly basis. Does this mean that Vermonters who don’t apply for these rebates will not receive them? And is this daunting logistical burden on low income and rural Vermonters really fair?

Cost of implementation

Question: Given the above language implying that rebate seekers must demonstrate eligibility and continue to do so on a monthly basis, tracking and verifying this information by the state and effectively communicating it to electricity providers would appear to be an incredibly complicated bureaucratic process on a level exceeding that of Vermont Health Connect — a program that has cost taxpayers hundreds of millions of dollars to implement. How much is this carbon tax going to cost to collect, distribute, continuously track and enforce? If, as the statement of purpose asserts, the goal is to “to return all of the revenues from that charge to customers on their electric bills,” where will the revenue come from to do this?

663. (a) The Auditor of Accounts of the State may conduct audits of the activities under this chapter to ensure that all of the monies raised by the carbon charge are returned to customers. The Auditor shall conduct two such audits… (b) The Auditor and his or her authorized representatives may at any time examine the accounts and books of a Vermont retail electricity provider 3 relating to this chapter, including its receipts, disbursements, contracts, funds, 4 investments, and any other relevant matters.

Question: What are the estimated costs of these audits? Again, as noted above, where will the money come from to pay for them?

663. (a) … A Vermont retail electricity provider shall show each rebate received by a customer pursuant to section 662 of this title as a separate line item on the customer’s bill…

(e) In addition to the duties specified in this 12 chapter, the Commission may specify such other duties of retail electricity providers that it considers necessary in implementing this chapter.

(c) … A Vermont retail electricity provider shall have the opportunity to recover in retail rates its necessary and reasonable expenses, other than rebates, in implementing this chapter.

Question: This language seems to understand that retail electricity providers will also have considerable cost burdens associated with implementing this carbon tax and authorizes them to raise their rates in order to cover these costs. What are the estimated costs to providers, and what are the implications for electricity rates? Is this really just a scheme of putting money into one pocket of Vermonters (if they apply for rebates) while taking it out of another?

Question: Will this carbon tax, especially in its early phases, cost more to collect than it will take in?

Other general questions

The Transportation Fund. If this carbontax works as intended and people use significantly less gasoline and diesel for transportation, what will be the impact on Transportation Fund revenues? Will revenue from this tax necessarily have to be utilized to pay for roads and bridges? Or will another tax have to be raised to offset losses in the T-Fund? In either case, how can this carbon tax be honestly called “revenue neutral”?

Winners and Losers. Global Foundries and the ski industry are named in the ESSEX Plan document as potential big winners in this scheme. Ben & Jerry’s has presented that it will be a big winner. Who are the losers? Landscaping businesses that rely on pick up trucks, lawn mowers, chain saws, etc.? Plumbers, electricians, contractors, etc., with vans and customers that require driving many miles? Are we looking at a program that subsidizes large, wealthy companies at the expense of small, blue collar workers?

Revenue Neutrality. Proponents of this carbon tax tout that it is “revenue neutral.” If the money to cover the costs of implementing this tax do not come from the revenues generated by the tax, where will they come from, and how much are they expected to be?

Climate Change. In its Statement of Purpose, this bill says one of its objectives is “to address climate change.” What real world impacts will this bill have on mitigating future temperatures and future extreme weather events in Vermont, if any?

Rob Roper is president of the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

Image courtesy of Public domain

2 thoughts on “Roper: Questioning the highly questionable ESSEX carbon tax

  1. A wise person would advocate putting the horse before the car, i.e., first use less energy, then build-out the much lesser capacity systems needed for the energy still being used. This is so simple. Most people get it, but most pro-carbon tax folks do not.

    Pro-carbon tax folks want to have the unilateral carbon tax now, so the state government would set up various programs, and folks would have to go through various hurdles to qualify to get some of their money back; most folks would never qualify. Here is one way the money would be used.


    Various subsidies would be used to finance high-efficiency duplex mobile home communities in Vermont’s Northeast Kingdom, with solar panels on the roofs and batteries on the wall, and efficient appliances and lighting, and heat pumps. It would be part of GMP’s expensive “islanding/microgrid” fantasy. Here are examples of such a state-subsidized boondoggles.

    The low-income residents likely would:

    – Have minimal or no heating and electric bills
    – Pay minimal or no rent
    – Get food stamps and qualify for Medicaid, and other welfare goodies
    – Pay minimal or no income and school taxes
    – Sing the praises of the good that befell to them in pro RE press releases
    – Vote for Democrat legislators forever


    Who pays for all the subsidies?
    Who pays the resulting higher prices for goods and services?
    Answer: Those who will pay the carbon taxes, and other taxes, surcharges and fees.

    Anytime a politician says he going to extort a tax from you and “give it all back”, he means give some of it to back you, but most of it to his favorite constituents who voted for him.

    Efficiency Vermont is a notoriously wasteful, quasi-government program, audited on a cozy basis, by the PUC.
    EV, financed with an onerous, ever-increasing, $65 million surcharge on electric bills, is a perfect example of taxing the many and giving to the few who are “deserving”, i.e., willing to do things the expensive EV way to get some money back.

    In the meantime, Vermont ranks 48th on business climate, per Forbes. A unilateral carbon tax, and more government-directed, socialist-style redistribution programs will make it even worse. State-directed, socialist-style economics was practiced in the USSR and Cuba. We all know how that worked out.

  2. It sounds like any monies gained through the tax cut came with wings attached because the carbon tax will negate it.

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