THE VERMONT CLEAN HEAT STANDARD
What is the Clean Heat Standard?
The Vermont Public Utility Commission (PUC) is designing a Clean Heat Standard in response to Act 18 of 2023. Once called the "Affordable Heat Act," the law is an attempt to get Vermonters to use less fossil fuels to heat homes and businesses. A "Clean Heat Credit" is earned when something is done to reduce greenhouse gas emissions in the thermal sector. A “Clean Heat Fee” is paid when someone purchases propane, kerosene, or heating oil.
How much will the Clean Heat Fee be?
We don’t know yet, but the best guess so far is 70 cents per gallon. That estimate comes from Julie Moore, Vermont’s Secretary of the Agency of Natural Resources. Another analysis comes from the consulting firm NV5. They claim the total cost of the program will be $17 billion. This accounts for 25 years of economic activity required to reduce greenhouse gas emissions in accordance with the Global Warming Solutions Act (GWSA).
What is the GWSA?
The GWSA is a 2020 Vermont law that requires greenhouse gas emissions to be reduced by 40% by 2030 and 80% by 2050. These reductions are mandates, not goals. Failure to cut emissions will likely lead to a lawsuit.
How will the program work?
Vermonters who continue to use fuel oil, kerosene, natural gas, and propane to heat their home will pay the Clean Heat Fee. The fee will be collected and paid by whoever brought the fuel into Vermont. This is known as the “obligated party.”
Will all fuel dealers collect the fee?
The fee is paid by whoever brings the fuel into Vermont, regardless of the company's size or the amount of fuel sold. Nearly all of the “obligated parties” will be small retail providers of heating fuel. Since there are no refineries in Vermont and very few wholesale distributors, even the smallest fuel company will be considered “obligated” under the law.
When will Vermonters pay the fee?
The fee for heating your home with oil and gas will only apply if and when the Vermont Legislature allows the “Clean Heat Standard” to go into effect. They are expected to vote in January 2025. If that happens, the Public Utility Commission has determined that the earliest possible date that the Clean Heat Fee could go into effect is January 1, 2026.
What is a “Clean Heat Credit,” and what is it worth?
Sales of renewable liquid and solid fuels, weatherization, wood stoves, and electric-powered heat pumps are among the products and services that will generate credits. Nearly every fuel dealer will need them, but it isn’t clear where they will get them or what they are worth or until the program is fully designed.
Who supports this law?
A majority of Democratic lawmakers in Montpelier, several lobbying organizations, and the two largest sellers of fossil fuels in Vermont.
Who opposed it?
Hundreds of locally owned fuel suppliers and tens of thousands of their customers.
I heard that this fee is only for “big oil?"
Nope. That is a different law. The Vermont legislature did pass a law in 2024 that requires major oil producers and refiners from outside Vermont to pay for damages related to climate change. This is not that. This is a totally different regulation. This is a fee on Vermonters who use oilheat, kerosene and propane to incentivize them to use less fossil fuels.
What happens with all the money?
Vermonters who continue to use oil heat, kerosene, natural gas, and propane will pay the Clean Heat Fee. The money will then be distributed to others who weatherize their home, install wood stoves or electric-powered heat pumps, or purchase renewable fuels.