Vermont Affordable Heat Act becomes law

The Vermont House on May 11 voted 107 to 42 to override Gov. Phil Scott’s veto of the Affordable Heat Act, which is designed to affordably reduce greenhouse gas (GHGs) in the state’s thermal sector through efficiency, weatherization measures, electrification and decarbonization.

The bill, S. 5, was introduced in January and was passed by both houses of the Vermont legislature this spring. Scott vetoed the legislation on May 5. He, in part, cited concerns over costs to consumers, particularly provisions of the bill that will raise the costs of fuel oil. The Vermont Senate voted 20 to 10 to override the veto on May 9, followed by the House veto-override vote two days later.

The new law establishes a Clean Heat Standard under which obligated parties are required to reduce GHGs attributable to the state’s thermal sector by retiring required amounts of clean heat credits to meet required GHG reductions of the thermal portion of Vermont’s Global Warming Solutions Act, which was enacted in 2020.

The Affordable Heat Act lists advanced wood heating and sustainably sourced biofuels as two of several eligible clean heat measures that can be used to generate credits under the program. Other eligible clean heat measures include thermal energy efficiency improvements and weatherization; cold-climate air, ground source, and other heat pumps, including district, network, grid, microgrid, and building geothermal systems; heat pump water heaters; solar hot water systems; electrical appliances providing thermal end uses; noncombustion or renewable energy-based district heating services; the supply of green hydrogen; the replacement of a manufactured home with a high efficiency manufactured home and weatherization or other efficiency or electrification measures in manufactured homes; and line extensions that connect facilities with thermal loads to the grid.

The bill also addresses the use of renewable natural gas (RNG). For pipeline RNG and other renewably generated natural gas substitutes to be eligible under the program, an obligated party must purchase RNG and its associated renewable attributes and demonstrate that it has secured a contractual pathway for the physical delivery of gas from the point of injection into the pipeline to the obligated party’s delivery system.

Additional information, including a full copy of the bill, is available on the Vermont legislature website.