If you followed the headlines this spring, you probably heard about a new law that was developed to help Vermonters transition to cleaner fuels to heat their homes and businesses. The Affordable Heat Act (Act 18) passed in May 2023, following lawmakers’ work on a similar bill in 2022. This law represents the most significant effort Vermont has made to address emissions resulting from heating buildings. As its name implies, it prioritizes affordability in balance with efforts to make meaningful climate progress. At VGS, we know our customers count on reliable and affordable energy to stay warm. This column includes a short summary of Act 18 and how VGS is approaching it on your behalf. We will keep you updated as the policy is developed and reviewed over the next two years. Have questions or feedback? Reach out and let us know – we welcome your perspective.
Why is Vermont focused on addressing climate pollution caused by heating buildings?
To reduce statewide greenhouse gas emissions, policymakers have focused on climate pollution resulting in the buildings and thermal sector. Buildings in Vermont emit 34% of all greenhouse gas emissions produced in state. These emissions contribute to climate change, and a 2020 Vermont law called the Global Warming Solutions Act requires Vermont to cut statewide greenhouse gas emissions 40% by 2030, with an eventual 80% reduction by 2050.
What is Act 18?
Act 18 establishes a Clean Heat Standard that will require VGS and other heating fuel providers to gradually reduce greenhouse gas emissions. The legislation is what is known as a “performance standard.” This framework sets increasing requirements that VGS and other fuel providers must meet by generating credits through carbon-reducing activities, purchasing credits in a market, or by making compliance payments. In addition to addressing climate pollution, the long-term goal is to lower the cost of heating, and spur business transformation in the thermal energy sector.
Has Vermont or other states successfully used this type of policy?
Performance standards and credit markets are common in energy policy. For instance, Vermont has a standard for renewable electricity generated and purchased by utilities. Other states have successfully used low carbon fuel standards to reduce the carbon intensity of transportation fuels. What makes Vermont’s new law unique is that it is one of the first statewide policies to lead the shift to cleaner fuels used for buildings in the thermal sector.
When will the program be fully implemented?
While Act 18 commenced creation of a performance standard and credit market, the law did not grant authority to fully implement requirements on fuel providers yet. The Governor and lawmakers who take office in 2025 will have to review, debate, and consider the program designed by the Public Utility Commission. The only way the requirements can take full effect is if Vermont’s elected officials enact another bill in 2025. If approved, the earliest the program would begin is January 1, 2026.
Will Vermonters see a change in their heating bill?
The cost impact on Vermonters is something that will be thoroughly studied before the Affordable Heat Act returns to the Governor and lawmakers for review in 2025. Given that Vermont already has statewide requirements to reduce emissions, there could be fuel cost increases as a clean fuel market is established and fossil sources are reduced. In general, customers who take advantage of incentives for installed measures will see their monthly bills, energy usage, and carbon footprint shrink. As always, VGS remains committed to delivering affordable energy to its customers.
If the program is fully implemented, what does that mean for VGS?
VGS is well-positioned to manage compliance with the Affordable Heat Act and will continue to provide the safe, reliable, and affordable service customers count on 24/7/365. As it stands, we offer many products that could generate credits under the program. Examples include comprehensive weatherization, low-to-no-carbon alternative supply options that displace traditional gas, and heat pump thermal solutions in customers’ homes. These services already contribute to Vermont’s climate objectives. Under the Affordable Heat Act, they will have the added benefit of supporting affordable rates for VGS customers and more options for Vermonters who seek cleaner heating solutions.
What does the Affordable Heat Act mean for you as a VGS customer?
It’s important to note that Act 18’s requirements are on fuel providers. There is no mandate on Vermonters – you can continue using your existing equipment as you always have. Likewise, you can choose lower carbon heating solutions. Customers have the ultimate say, just as they do today.