Home Commentary The Affordable Heat Act: How it Works

The Affordable Heat Act: How it Works

By Sen. Anne Watson

As a physics teacher at Montpelier High School, I used to give an assignment that asked students to do an informal energy assessment of their own homes using resources from Efficiency Vermont. We would have honest conversations about the challenges, solutions, and questions students had about heating their homes. For me, Vermont’s heating challenges are not an abstraction. Families need support to make their heating bills more affordable. For the sake of these families, I am excited to support S.5, the Affordable Heat Act. 

Fossil fuels are expensive. Between 2020 and 2021, the price of propane increased by 70% and the price of fuel oil increased 120%. Meanwhile, the fossil fuel industry has reported record profits. 

Vermonters who heat with fossil fuels are at the mercy of the fossil fuel industry and global forces beyond our control. For many Vermonters this feels like a terrifying roller coaster of prices, and people are looking for the exit. During the same timeframe, the cost to heat with heat pumps stayed flat and was significantly cheaper than heating with fossil fuels.

Through this bill, every heat pump or pellet stove installation, weatherization retrofit, or biofuel gallon that reduces carbon emissions creates a “clean heat credit.” Fuel sellers will be required to subsidize those activities by purchasing credits. Some fuel dealers are already starting to provide that work themselves (for example, installing heat pumps), and this bill will directly encourage that workforce transition. What does that mean for you? Heat pumps will be cheaper. Weatherization will be cheaper. And there will be a larger workforce to get it done faster. 

Since the bill creates a “clean heat credit” marketplace that requires “clean heat” installations, it will bring down the price of heat-saving and carbon-saving measures to a level that actually makes it attractive enough for folks to make the jump. It’s hard to know what that level is right now, but that is the purpose of creating a market for clean heat credits. The market will find the level that Vermonters think is “affordable.” 

One might wonder how much this will raise prices on fossil fuels. The fact that the program’s precise cost isn’t written into the bill is a feature, not a bug. As designed, the market will do its work so that we can meet our climate requirements at the lowest possible cost to Vermonters. The program doesn’t start until 2026, and regulators will come back with multiple reports on projected costs and benefits well before implementation begins. Ultimately, the program is predicted (by EAN) to save each Vermont household about $7,500 on average over time. Vermonters will need less fuel, and heating with less carbon-intense energy is much cheaper than heating with fossil fuels. 

When a fuel seller doesn’t meet their credit obligation, or if they would just prefer to not do the work themselves, they’ll pay a “designated delivery agent” to do the work for them. What’s a designated delivery agent? Think Efficiency Vermont, but for heat. You probably know that Efficiency Vermont offers incentives for equipment that can save you money. That is also what the designated delivery agent will do. In part, Efficiency Vermont was created because electric companies were not great at helping people use less electricity. Similarly, fuel sellers have not generally helped their customers use less fuel. We need an organization similar to Efficiency Vermont to protect Vermonters when it comes to heat. 

Since low- and moderate-income Vermonters are more likely to live in multi-family buildings, more likely to be renters, and more likely to need financial help with the transition off of fossil fuels, they have the toughest homes to transition off of carbon. That’s why this bill requires that low- and moderate-income homes are prioritized for clean heat work. They must be a part of the mix every year, instead of being put at the back of the line. 

The Affordable Heat Act is based on last year’s Clean Heat Standard, but improves upon it in multiple ways, most notably how the bill treats biofuels. I appreciate that this bill quantifies exactly how much better or worse any particular biofuel is from a carbon pollution perspective relative to fuel oil. All biofuels are not equal, and the program will value each biofuel appropriately based on their total (including embodied) carbon emissions, and the allowable carbon pollution is ratcheted down over time. 

Let’s not forget, the cost of doing nothing is almost unimaginably high. The cost to local and global ecosystems, the cost to human health, all add up. And who will be paying those costs? Our children. We can no longer shirk our carbon pollution responsibility. Most of us need help to make the transition off of carbon, and this bill will provide that help. Please join me in supporting the Affordable Heat Act.

Senator Anne Watson, Washington District, is the former mayor of Montpelier and a teacher at Montpelier High School.