Vermont is moving from fuel oil to clean heat

More than half of Vermont’s households burn petroleum products including fuel oil and kerosene to stay warm during New England’s frigid winters. A new state law could dramatically reduce that share by pushing fuel providers to deliver cleaner, cheaper sources of energy.

Late last week, Vermont’s Legislature enacted the Affordable Heat Act (S.5) to curb greenhouse gas emissions from the state’s homes, offices and industrial buildings, ending what has been a ​“tumultuous, yearslong battle” to rein in the state’s reliance on imported fossil fuels.

Policymakers in both chambers voted to strike down a veto from Republican Governor Phil Scott, who had rejected the measure on April 28. Scott warned that it would ​“financially punish” people who can’t afford to make the transition to cleaner fuel.

In Vermont, a heavily forested state of some 647,000 people, burning oil, gas and wood to heat buildings generated more emissions than any other sector in 2020, comprising 36 percent of planet-warming pollution that year, according to the most recent analysis by the Vermont Agency of Natural Resources.

“Vermonters are facing a climate emergency and a heating crisis, and the status quo isn’t working for anyone,” Elena Mihaly, vice president and director of Conservation Law Foundation Vermont, an environmental group, said in a May 11 statement. The legislature’s override of Scott’s veto ​“sends a clear message, and we don’t have a moment to waste implementing the new law,” she added.

The Affordable Heat Act establishes a ​“clean heat standard” to help meet Vermont’s existing climate goals of reducing emissions to 40 percent below 1990 levels by 2030 and to 80 percent below by 2050.

Under the law, Vermont’s Public Utility Commission — an independent, three-member organization — will design and implement a credit-based marketplace. Every year, companies that make or import fuel that’s used in the state will have to buy or generate a certain number of ​“clean heat credits,” depending on how much fossil fuel they delivered in the previous year and how dirty it was.

The value of each credit is based on the emissions reductions associated with a particular measure. That can include helping households and property owners to weatherize buildings and make energy-efficiency improvements, or to install cold-climate heat pumps and solar hot-water heaters. Other eligible, yet controversial, measures include replacing fossil fuels with wood pellet stoves, ​“sustainably sourced” biofuels and renewable natural gas (RNG), the latter of which can be made by capturing methane from landfills, cow manure and food waste.

Some environmental groups and Democratic state policymakers said they opposed the new standard because of its expansive view of ​“clean heat.” RNG infrastructure, for instance, can potentially leak planet-warming methane. Clearing crops and trees to produce biofuels or wood pellets also risks boosting, rather than reducing, emissions.

The Vermont Fuel Dealers Association has voiced concerns that the policy will hurt rural residents and local family-run businesses. Other critics of the Affordable Heat Act, including Republican state lawmakers, warned that fuel companies would likely pass the cost of implementing such measures onto their customers — at a time when home-heating costs are soaring across the country, hitting lower-income Americans the hardest. On that last point, the law includes provisions to ​“minimize adverse impacts” to lower-earning households and those with the highest energy burdens.

Any clean-heat measure taken on January 1, 2023 or later can count toward the new credit system. But the marketplace itself won’t get up and running for a couple more years. The law’s ​“check-back” provision requires the Public Utility Commission to first provide the legislature with a report estimating the economic impacts on customers by January 2025. Lawmakers must then approve a second law based on those estimates before the rules can take effect.

“For Vermonters who are concerned that they would have limited choices [under the law], my comment to that is, you have limited choices now,” State Sen. Becca White (D), one of the measure’s top proponents, told reporters last Thursday, according to the news site VT Digger.

“And the only way that we’ll move beyond you being locked into fossil fuels until it’s too expensive to heat your home or cool your home is if we design a system out of it,” she added.