By Rob Roper
One of the favorite talking points supporters of the Clean Heat Standard, S.5, like to pull out is that it will at most only add pennies to the cost of a gallon of heating fuel. Those who call the program the “Unaffordable Heat Act” and claim the costs will be somewhere in the $0.70 to $4.00 range are fear mongers and have no evidence to back up these claims. Neither the former nor the latter is in the least bit true.
First a little background into what the Clean Heat Standard (CHS) is and does.
Rob Roper
The CHS is a product of the 2020 Global Warming Solutions Act (GWSA) and the Climate Action Plan created under that law. The GWSA mandates that Vermont reduce its greenhouse gas emissions by 40% below 1990 levels by 2030 and 80% below by 2050. That’s the law; it’s non-negotiable. The CHS addresses the thermal sector (space/water heating and cooking) portion of that mandate.
S.5 itself states, “It is the intent of the General Assembly that the Clean Heat Standard be designed and implemented in a manner that achieves Vermont’s thermal sector greenhouse gas emissions reductions necessary to meet the requirements [quoted above from the GWSA]…” This, assuming passage, will be the law. It’s non-negotiable. Not subject to scaling back or slowing down. Dates and targets are what they are.
The Climate Action Plan states that in order to achieve those thermal sector emissions requirements, by 2030 120,000 homes need to be weatherized, 177,000 heat pumps need to be installed, 136,000 heat pump water heaters need to be installed, 15,000 homes need to switch to advanced wood heat systems, and 21,000 need to switch over to biofuels. The cost to do all of this work will be enormous – billions of dollars by 2030 – and, per the GWSA and S.5, this program’s scope not negotiable.
What, in part, the Climate Action Plan says the Clean Heat Standard must subsidize.
And, being non-negotiable, someone has to pay for all this, and those someones are those of us who currently and will continue to heat with oil, propane, natural gas and kerosene through the CHS “carbon credit” scheme.
The most conservative estimate of what all that activity will cost between 2026, when the CHS is expected to become fully operative, and the first GWSA benchmark in 2030 is $2 billion, put forward by Secretary of Natural Resources, Julie Moore. Moore also calculates that of that $2 billion, roughly $800 million will be covered by federal funds and individuals privately paying to voluntarily transition to the new technology. This leaves a $1.2 billion ($300 million per year) nut for the CHS program to cover.
“A few cents per gallon” will not come close to raising this much revenue.
How do we know this? Vermont already has a $0.02 excise tax on heating oil, kerosene and dyed diesel. It raises about $5 million per year. So, a per gallon surcharge on home heating fuels would have to raise about sixty times that amount to pay for the Clean Heat Standard mandates, or $1.20 per gallon. That’s just math, folks!
But supporters of the bill squeal that Oregon has a clean motor fuel standard and it only increased costs on gasoline by $0.07 per gallon! That’s the number we should be comparing to. Okay, let’s compare!
Oregon’s program is on motor fuels, not heating fuels, so there is already an apples to oranges dynamic happening here. But, to the extent it is useful to look at, at $0.07 per gallon, the Oregon standard, according to testimony taken on S.5, only raises about $50 million. That’s not the $300 million-ish Vermont would need to raise, which is six times more. So, 6 x $0.07 = $0.42 per gallon. Moreover, Oregon’s population is 4.25 million compared to Vermont’s 640,000, or 660% larger. That means to achieve the same amount of revenue, in rough numbers, each Vermonter would have to pay 6.6 times more than what each Oregonian would have to pay. So, $0.42 x 6.6 = $2.70 per gallon.
Now, these numbers are admittedly rough, but they are based on a realistic understanding of what the laws – GWSA and CHS – demand. Any intelligent gut check of what this project will end up costing Vermonters will tell you “mere pennies” per gallon is not going to come close to cutting it. Anybody who tries to convince you otherwise is selling you a bridge in Brooklyn.
The last bit of evidence that the Clean Heat Standard will cost a heck of a lot more than what its supporters are saying – and that they know it and are outright lying about it to their constituents – came in the form of the Harrison Amendment to S.5, which would have capped any impact the CHS might have on heating fuel prices at $0.20 per gallon.
As Rep. Jim Harrison (R-Chittenden) explained when presenting his amendment on the floor, “If you are comfortable that the price impact of S.5 will be minimal, then this amendment should be easy to support. On the other hand, if you believe it will be more and want the bill to pass to allow it to go higher, then you may want to reject this amendment.” The amendment failed 43-101, largely along party lines.
Rob Roper is a freelance writer who has been involved with Vermont politics and policy for over 20 years. This article reprinted with permission from Behind the Lines: Rob Roper on Vermont Politics, robertroper.substack.com
Comparison of CO2 Reduction in my House versus EAN Estimate
My CO2 emissions for space heating, before HPs, were 850 gal/y x 12.7 lb CO2/gal, from combustion = 4.897 Mt/y
My CO2 emissions for space heating, after HPs, were calculated in two ways:
1) Market based, based on commercial contracts, aka power purchase agreements, PPAs
2) Location based, based on fuels combusted by power plants connected to the NE grid
See Appendix for details.
Market Based
Per state mandates, utilities have PPAs with Owners of low-CO2 power sources, such as wind, solar, nuclear, hydro, and biomass, in-state and out-of-state.
Utilities crow about being “low-CO2”, or “zero-CO2” by signing PPA papers, i.e., without spending a dime.
Energy Action Network, a pro-RE-umbrella organization, uses 33.9 g CO2/kWh (calculated by VT-DPS), based on utilities having PPAs with low-CO2 power sources.
Using that low CO2 value makes HPs look extra good compared with fossil fuels.
My CO2 of propane was 550 gal/y x 12.7 lb CO2/gal, combustion only = 3.168 Mt/y
My CO2 of electricity was 2,489 kWh x 33.9 g/kWh = 0.084 Mt/y
Total CO2 = 3.168 + 0.084 = 3.253 Mt/y
CO2 reduction is 4.897 – 3.253 = 1.644 Mt/y, based on the 2018 VT-DPS “paper-based” value of 33.9 g CO2/kWh
Location Based
Utilities physically draw almost all of their electricity supply from the high-voltage grid
If utilities did not have PPAs, and would draw electricity from the high-voltage grid, they would be stealing.
ISO-NE administers a settlement system, to ensure utilities pay owners per PPA contract.
Electricity travels as electric-magnetic waves, at near the speed of light, i.e., from northern Maine to southern Florida, about 1,800 miles in 0.01 second.
There is no physical basis for lay RE folks to talk about there being a “VT CO2” or a “NH CO2”, etc.
All electricity on the NE grid has one value for g CO2/kWh.
ISO-NE, the NE grid operator, calculated that value at 317 g CO2/kWh, at wall outlet, for 2018
My CO2 of propane was 550 gal/y x 12.7 lb CO2/gal, combustion only = 3.168 Mt/y
My CO2 of electricity was 2,489 kWh x 317 g/kWh = 0.789 Mt/y
Total CO2 = 3.168 + 0.789 = 3.937 Mt/y
CO2 reduction is 4.897 – 3.937 = 0.939 Mt/y, based on the 2018 “real world” value of 317 g CO2/kWh, as calculated by ISO-NE
Cost of CO2 Reduction is ($2059/y, amortizing – $204/y, energy cost savings + $200/y, service, parts, labor) / (0.939 Mt/y, CO2 reduction) = $2,188/Mt, which is outrageously expensive.
https://www.eia.gov/environment/emissions/co2_vol_mass.php
https://afdc.energy.gov/files/u/publication/fuel_comparison_chart.pdf
EAN Excessive CO2 Reduction Claim to Hype HPs
EAN claims 90,000 HPs, by 2025, would reduce 0.37 million metric ton of CO2, in 2025, or 0.37 million/90,000 = 4.111 Mt/y.
https://www.eanvt.org/wp-content/uploads/2020/03/EAN-report-2020-final.pdf
EAN achieves such a high value, because EAN assumes 100% displacement of fuel (gas, propane, fuel oil), which is completely unrealistic, because the actual fuel displacement in Vermont houses with HPs was only 27.6%, based on a VT-DPS-sponsored survey of HPs in Vermont, and 35% in my well-insulated/well-sealed VT house, as above stated.
The EAN 100% claim would be true, only for highly sealed and highly insulated houses, which represent about 2% of all Vermont houses.
In addition, the average Vermont house would need 2 to 3 HPs, with 4 to 6 heads, at a turnkey cost of at least $20,000, to achieve 100% displacement. See URL
Coddling RE Businesses
Heavily subsidized businesses selling/installing/servicing HPs, etc., will be collecting hundreds of $millions each year over the decades, while already-struggling, over-regulated, over-taxed Vermonters will be further screwed out of a decent standard of living.
HP boosters Sens. Bray, McDonald, etc., know about those dreadful HP results in Vermont, and yet they continue shilling for HPs.
All these expensive Vermont GWSA efforts will be having ZERO IMPACT ON GLOBAL WARMING.
HEAT PUMPS ARE MONEY LOSERS IN MY VERMONT HOUSE, AS THEY ARE IN ALMOST ALL NEW ENGLAND HOUSES
https://www.windtaskforce.org/profiles/blogs/heat-pumps-are-money-losers-in-my-vermont-house-as-they-are-in
I installed three heat pumps by Mitsubishi, rated 24,000 Btu/h at 47F, Model MXZ-2C24NAHZ2, each with 2 heads, each with remote control; 2 in the living room, 1 in the kitchen, and 1 in each of 3 bedrooms.
The HPs have DC variable-speed, motor-driven compressors and fans, which improves the efficiency of low-temperature operation.
The HPs last about 15 years.
Turnkey capital cost was $24,000, less $2,400 subsidy from GMP
http://www.windtaskforce.org/profiles/blogs/vermont-co2-reduction-of-HPs-is-based-on-misrepresentations
My Well-Sealed, Well-Insulated House
The HPs are used for heating and cooling my 35-y-old, 3,600 sq ft, well-sealed/well-insulated house.
The basement, 1,200 sq ft, has a near-steady temperature throughout the year, because it has 2” of blueboard, R-10, on the outside of the concrete foundation and under the basement slab, which has saved me many thousands of space heating dollars over the 35 years.
I do not operate my HPs below 10F to 15F (depending on sun and wind conditions), because all HPs would become increasingly less efficient with decreasing outdoor temperatures.
The HP operating cost per hour would become greater than of my efficient propane furnace. See table 3
High Electricity Prices
Vermont forcing, with subsidies and/or GWSA mandates, the build-outs of expensive RE electricity systems, such as wind, solar, batteries, etc., would be counter-productive, because it would:
1) Increase already-high electric rates and
2) Worsen the already-poor economics of HPs (and of EVs)!!
https://www.windtaskforce.org/profiles/blogs/high-costs-of-wind-solar-and-battery-systems
My Energy Cost Reduction is Minimal
– HP electricity consumption was from my electric bills, and an HP system electric meter.
– Vermont electricity prices, including taxes, fees and surcharges, are assumed at 20 c/kWh.
– My HPs provide space heat to 2,300 sq ft, about the same area as an average Vermont house
– Two small propane heaters (electricity not required) provide space heat to my 1,300 sq ft basement
– I operate my HPs at temperatures of 10 to 15F and greater (depending on wind and sun conditions)
– I operate my traditional propane system at temperatures of 10f to 15F and less
– My average HP coefficient of performance, COP, was 2.64
– My HPs required 2,489 kWh to replace 35% of my fossil Btus.
– My HPs would require 8,997 kWh, to replace 100% of my fossil Btus.
https://afdc.energy.gov/files/u/publication/fuel_comparison_chart.pdf
https://www.nature.com/articles/s41597-019-0199-y
https://acrpc.org/wp-content/uploads/2021/04/HeatPumps-ACRPC-5_20.pdf
Before HPs: I used 100 gal for domestic hot water + 250 gal for 2 stoves in basement + 850 gal for Viessmann furnace, for a total propane of 1,200 gal/y
After HPs: I used 100 gal for DHW + 250 gal for 2 stoves in basement + 550 gal for Viessmann furnace + 2,489 kWh of electricity.
My propane cost reduction for space heating was 850 – 550 = 300 gallon/y, at a cost of $2.339/gal (buyers plan) = $702/y
My displaced fossil Btus was 100 x (1 – 550/850) = 35%, which is better than the Vermont average of 27.6%
My purchased electricity cost increase was 2,489 kWh x 20 c/kWh = $498/y
My energy cost savings due to the HPs were 702 – 498 = $204/y, on an investment of $24,000!!
Amortizing Heat Pumps
Amortizing the 24000 – 2400 = $21,600 turnkey capital cost at 6%/y for 15 years costs about $2,187/y.
This is in addition to the amortizing of my existing propane system. I am losing money.
https://www.myamortizationchart.com
Other Annual Costs
There likely would be annual cleaning of HPs at $200/HP, and parts and labor, as the years go by.
This is in addition to the annual service calls and parts for my existing propane system. I am losing more money.
My Energy Savings of Propane versus HPs
Site Energy Basis: RE folks claim there would be a major energy reduction, due to using HPs. They compare the thermal Btus of 300 gallon of propane x 84,250 Btu/gal = 25,275,000 Btu vs the electrical Btus of 2,489 kWh of electricity x 3,412 Btu/kWh = 8,492,469 Btu. However, that comparison would equate thermal Btus with electrical Btus, which all ethical engineers know is an absolute no-no.
A-to-Z Energy Basis: A proper comparison would be thermal Btus of propane vs thermal Btus fed to power plants, i.e., 25,275,000 Btu vs 23,312,490 Btu, i.e., a minor energy reduction. See table 1A
BTW, almost all RE folks who claim a major energy reduction from HPs, do not know how to compose this table, and yet they mandate others what to do to save the world from Climate Change.
Yes indeedy 19.250 pennies per 275 gal fill up. (based on the .70 increase) Whats a couple hundred dollars a fill up to save the planet../s