Ed McNamara, chair of the state’s Public Utility Commission, testifies before lawmakers on Thursday, Jan. 16. Photo by Emma Cotton/VTDigger Implementing the controversial clean heat standard could cost significantly less than others have previously suggested, the chair of the state’s Public Utility Commission told lawmakers on Thursday while presenting a long-awaited report. However, Ed McNamara concluded by saying that the commission recommends that the state does not move forward with it.Debate about the proposed program — which is designed to reduce planet-warming greenhouse gas emissions that come from heating and cooling buildings in Vermont — has almost entirely focused on its potential cost to consumers. In May 2023, state lawmakers overrode Gov. Phil Scott’s veto of a bill that set up, but did not implement, a clean heat standard. Instead, lawmakers directed the state’s Public Utility Commission to complete a detailed framework that they could analyze and decide whether to pass in the 2025 session.Political momentum to enact a clean heat standard has swiftly waned, given that Democratic supporters lost ground in November’s elections, and lawmakers have increasingly said the program would be too expensive for Vermonters. However, supporters of the policy have long warned that skeptics should wait for the delivery of the commission’s final report before jumping to conclusions about the program’s viability and cost. That 247-page report went live at 11:37 p.m. Wednesday evening, and McNamara attempted to sort through its major findings only hours later for lawmakers in a joint hearing between the Senate Natural Resources and Energy Committee and the House Energy and Digital Infrastructure Committee. The report, which McNamara said contained gaps, estimated that a clean heat standard would likely increase the cost of a gallon of fuel oil by less than 10 cents in 2026, and that price could increase by another 45 cents by 2035. That’s far less than other per-gallon cost estimates, including a $4 per gallon estimate often cited by Scott. Staff at the commission concluded in the report that, while the clean heat standard prescribed in the 2023 Affordable Heat Act is “theoretically workable,” commissioners wrote, the body “does not believe that this program is well suited to Vermont.”The state has “a long history of implementing innovative and effective programs to reduce energy use,” commissioners wrote, and it would be more effective to build on existing programs rather than stand up an entirely new policy. After the presentation, Sen. Anne Watson, D-Washington, said in an interview her initial reaction was relief that the cost “was not as high as what some folks had projected that it might be.”She referred to other options put forward by the commission, including increasing the existing fuel tax and funneling the additional money toward incentives for cleaner heating systems, and a potential thermal efficiency charge that could be used in a similar way. “As we know, we have to find common ground amongst Republicans, Democrats and Progressives this session,” she said. “And so I think having a menu of options is a good thing for us.”The conversation is taking place while Vermont careens toward a 2030 deadline in the state’s landmark climate law — the 2020 Global Warming Solutions Act — by which time Vermont must cut its emissions almost in half. Without a comprehensive program to reduce heating-related emissions, the state is certain to miss that deadline — which has prompted a different discussion about moving the 2030 deadline back. Scott has long been opposed to the clean heat standard, and without a supermajority of Democrats and Progressives, any effort to move the program forward is unlikely to succeed. Sen. Scott Beck, R-Caledonia/Essex, the Senate minority leader who also serves on the Senate Natural Resources and Energy Committee, told VTDigger that he won’t support “a program that imposes taxes, penalties or fees on Vermonters.”“I am willing to support, and I have supported in the past, programs that are supported by general fund revenues, and goals that are based on the affordable technologies that are available,” he said. Ellen Czajkowski, an attorney with the Vermont Office of Legislative Council who helped craft the Affordable Heat Act in 2023, testifies before lawmakers on Thursday, Jan. 16. Photo by Emma Cotton/VTDigger Another cost estimateA clean heat standard would work by establishing a credit market. It would require fuel dealers that import heating-related fossil fuels into Vermont to offset the emissions associated with their products by earning credits. Fuel dealers could gain credits in several ways, by delivering cleaner-burning products like biofuels, for example, or by paying a fee. Money raised from those fees would go toward switching Vermonters to efficiency measures and other heating systems that pollute less, but those who don’t make the switch could pay higher prices for heating fuels. Many have tried to estimate how much prices would increase. The Public Utility Commission’s new report provides another cost estimate of the clean heat standard. However, along with past estimates that have been widely criticized, this estimate may be similarly murky. The analysis is missing a major component, McNamara told lawmakers. It only calculates program costs — such as the cost for the government to provide incentives to buy a heat pump — not costs that individuals pay to make those upgrades. Its analysis also cuts off at 2035, meaning that the long-term cost benefits of purchasing a heat pump in 2034, for example, are not included. As a result, lawmakers still don’t have a clear picture of the total costs and benefits. Those missing pieces aside, the upshot, according to McNamara, is people who are able to switch to less-polluting heating systems because of the clean heat standard would likely save money. The commission’s rough estimate shows that a clean heat standard might cause people who don’t switch to different systems to pay between 8 cents and 9 cents more for a gallon of heating fuel in 2026. By 2035, that price is estimated to increase to between 56 cents and 65 cents per gallon. In addition to cost, McNamara said the credit market established in the clean heat standard would be tricky for Vermont to pull off alone. More testimony came Thursday from Mia Watson, special programs manager at the Vermont Housing Finance Agency, who chaired an Equity Advisory Group that was tasked with telling lawmakers how the clean heat standard might affect low-income people and other marginalized communities. Watson said the status quo — in which heating oil prices have fluctuated immensely throughout the past several years — is highly inequitable and that lower income households use a greater percentage of their budget on heating costs. Lower income households, which statistically produce fewer greenhouse gas emissions, are also more likely to “rely on expensive and price-volatile heating fuels,” she said. Still, the clean heat standard would pose a web of challenges for the same group, Watson said. For example, there are no requirements or market forces that would ensure that weatherization would occur before heat pumps are installed in Vermonters’ homes. Experts recommend that weatherization happens first, “so you’re not blowing hot air into an unsealed space,” Watson said. Low-income Vermonters are more likely to live in older homes, which are more likely to need repairs — and those repairs could be costly. “Even when homes don’t require repairs, full decarbonization of a home can easily cost over $20,000 for weatherization and multi-zone heat pumps in a single family home, and that’s kind of a good-case scenario,” Watson said, which is more than a lot of people can afford, even with incentives. About 78,000 Vermont households earn at or below the median income, she said. Rick Weston, who worked with the commission as chair of the clean heat standard Technical Advisory Group, told lawmakers that, while implementing a clean heat standard might be challenging, “that’s not a reason not to do it.”“Reducing emissions and reducing costs are not alternative, mutually exclusive choices. In my view, they are the same choice,” he said, pointing to volatile fuel prices. Mia Watson, a staff member with the Vermont Housing Finance Agency, testifies before lawmakers on Thursday, Jan. 16. Photo by Emma Cotton/VTDigger Given that the governor does not support the program and its prospects of political success are slim, Johana Miller, energy and climate program director with the nonprofit Vermont Natural Resources Council, said she hopes “the governor and his team do far more work to figure out, if not this, then what.”“Business as usual is not serving anyone well,” she said. “We need solutions that actually help Vermonters, reduce their energy bills, access more clean, local heating resources and save money, as well as doing our part to mitigate the climate crisis.”At the conclusion of McNamara’s presentation, Sen. Ruth Hardy, D-Addison, thanked him and apologized that he had to present the information so soon after the commission’s comprehensive report was filed.“It seems important to get out of this what we can, especially given all of the work you guys have done,” Hardy said. “I don’t want to waste your work.”Read the story on VTDigger here: Clean heat standard is less expensive than previously thought, though not ‘well suited to Vermont,’ commission says.