The Affordable Heat Act (S.5) passed the Senate on March 3 and moved over to the House. Our Environment and Energy Committee started its work last week with an initial step-by-step “walk-through” of the bill.
This week’s committee agenda includes testimony from fuel dealers, companies that deliver heating and cooling services, and nonprofit agencies that work with low- and moderate-income Vermonters. There will be much more testimony in the weeks ahead.
The bill has kicked up a lot of controversy, mostly about how it might affect future fuel prices. This is a really important question, because it focuses squarely on a core value that most Vermonters share: We need to help, not harm, the folks in our communities who are most vulnerable. This includes people with fixed, low or moderate incomes, older Vermonters and rural residents.
That’s exactly why I support this bill.
The Affordable Heat Act will help us meet our state’s mandatory greenhouse-gas emissions reduction targets. But it’s really about helping people and companies adapt to a rapidly changing world. The global economy is shifting, faster and faster, away from fossil fuels. Meanwhile, the price of these fuels will continue to spike and fluctuate, at the mercy of market forces far beyond our control.
By way of painful example, for many Vermonters, the cost of heating oil rose $2 per gallon in just two years. That’s why families who can afford to slash their fossil fuel use — by weatherizing or installing heat pumps, for example — are already doing it. Who gets left behind? The people who can’t.
The AHA is designed to ease this global energy transition, right here at home. It will help ensure that everyone can access cleaner, more affordable heat — not just people who already have the resources to do so.
The bill requires fuel dealers to meet an established number of credits — essentially, points they earn by delivering clean-heat measures to Vermonters. These measures include weatherizing a home; installing heat pumps, solar hot water heaters or an advanced wood-heat system; helping a customer switch from fuel oil to biofuel; or even replacing a drafty old mobile home with a new, energy efficient manufactured home. Fuel companies can do this work themselves or with a partner (a good way to diversify their business model). They can buy the credits. Or they could work with a statewide entity similar to Efficiency Vermont.
While fuel dealers will be obligated to get this done, Vermonters won’t be required to do anything. There’s no mandate for customers, period. If you don’t want to change your heating system — if that choice doesn’t work for your finances or your home — then you won’t have to. Rather, S.5 would gradually create a Vermont in which more affordable options are available to more people through lower prices and incentives.
Will dealers pass along their increased cost to consumers in the form of higher fuel prices? They don’t have to, but they probably will. That’s why the bill is so carefully designed. Among other things, S.5 requires that low- and moderate-income Vermonters must be prioritized in the creation and implementation of the program, including the mandate that 60 percent of all residential clean-heat credits are delivered to these households.
The bill also includes important mechanisms to avoid unintended price consequences. The Senate added a notable “check-back” provision, which I support. Here’s how it works: If the bill becomes law in 2023, the Public Utilities Commission will spend the next two years building the Affordable Heat program. This will include public PUC meetings, at least six public hearings, and several interim reports to the Legislature. One of these reports must “estimate the impact on customers, including impacts to customer rates and fuel bills.” It will also look at potential savings: One reliable estimate says that by 2030, Vermonters could save up to $2 billion thanks to actions taken as a result of the AHA.
In January 2025, all this information — the reports, the cost-benefit analysis and the detailed rules governing the program — will come back to the Legislature for another round of voting. If it passes both the House and Senate again in 2025, the program will begin its gradual rollout in 2026. And even then, the PUC could temporarily pause the program at any time for “good cause,” which could include price impacts or workforce shortages.
So what are our options? Well, we could do nothing, leaving Vermonters increasingly exposed to a global commodity market that’s completely outside of our control.
Or we can join growing numbers of states and countries that are shifting strategically to cleaner, less price-volatile energy. Through the Affordable Heat Act, we can navigate this transition in a thoughtful, predictable way — supporting Vermonters who need it most, while leaving no one behind.
To learn more about the S.5, the Affordable Heat Act, check out the extensive frequently asked questions and answers published by the Energy Action Network (eanvt.org/affordable-heat-faq). It includes five scenarios explaining how Vermont households could save money on heating costs through the AHA (Question 5). You can read the bill, download testimony and watch hearings on the Vermont General Assembly website at legislature.vermont.gov.