 Call our meeting to order and take up S5 and we would do a walk-through with our legislative council Ellen Tchaikovsky Good afternoon Ellen Tchaikovsky office of legislative council today. I am here on S5 So on your website today is draft 1.1 of a strike all amendment So you haven't done full markup yet in this committee, but last over the last week or so you have received multiple Pieces of proposed amendments. I have included in this document Some of those proposed amendments for your consideration The amendment includes the language from the Public Utility Commission the recommendations from the Office of Racial Equity and the efficiency Vermont edits And again, these are proposals of amendments there you don't have to keep them and So they're highlighted in yellow the changes But we haven't done a full markup, so I didn't know if you wanted me to start at the top Or if you want me to jump to the edits That's a great question So the first edit is on page four It's highlighted in yellow And this is in section a 122 So it's in section three of the bill, which is the statutory provisions and this is a The exact text of this was not Sorry, so on page four line one The the Public Utility Commission proposed changing the word May to shall and making the default delivery agent the default in how credits are obtained by the obligated parties and so So that's the first part and so then I reconfigured the language slightly in response to that for readability So on page four This is the section of the bill that lays out the sort of primary elements of the program So on page four line one an obligated party shall obtain the required Amount of clean-heat credits through the delivery of eligible clean-heat measures by it is that a designated statewide Default delivery agent unless the obligated party receives prior approval from the Commission So the language that's struck out on this page where the other three options And so I have moved the language from that to the default delivery agent section farther in the bill so that It is more clear later that if if this is that the amendment you want to make This is a clear statement that the default is going to the default delivery agent and that if Obligated party wants to do something else. They have to get approval From the PUC and that's where it lists the other options of going to the credit market or doing the work themselves Or hiring a contractor to do the work So I thought for the sake of readability that would be later where there's that approval language When you were reading this on line three at the beginning you said default delivery agent, but it doesn't Oh, you're right It says designated statewide delivery agent. So it's without it would be without the word default the correct So I believe later in the So on pay on the next page, it's defined as default delivery agent In in H715 we went back and forth on what the Designated delivery agent or does it so that may be a holdover. So yeah, I can insert the word default I'm just trying to be clear which way it is it doesn't I'm not saying it needs to be in there, but Yeah, yeah, I think that's the defined term so the So aside from the grammar of this section. I think that this is a This is a this is a pretty substantial change that the PUC is proposing The the way that it came over from the Senate was sort of moving towards this language of the default being the default if we will This is pretty this is strengthening that and I think that that is definitely a policy choice on how much Focus you want to be on the default delivery agent I think that it makes sense the PUC explained their logic of why they think that would be logical I think a big picture idea that you should consider and I am not an economics person, but Originally the default delivery agent was supposed to act in some way similar to the non-compliance payment under the RES As it would be the option that allowed there to be a set price that was known It would and it would be the option to go there Otherwise Ali a party could go find credits potentially cheaper on the credit market With the price of the DDA being potentially the most expensive If you shift to the default being the default delivery agent and then therefore they have to pay that credit price I don't know what that does to the credit market And maybe it does nothing But you may want to think about that So some of the things that I'm hearing around this so I heard the PUC Say they wanted to have this shell Because it would be easier for enforcement and enforcement is something that the fuel dealers actually have raised for us the other concern that I'm hearing on the flip side is potentially around if We move to this now, this is going to then require obligated parties To present a plan to the PUC as opposed to just go and do stuff. Yeah, so And that may be the a better policy choice, but I do want you to consider that And it will provide a bit more certainty again another positive aspect is that there would be certainty for everyone The print the DDA credit price would be known in advance But then they would have to make a decision up front about if they're going they're going to do the DDA credit price Or they have a plan to get the credits another way. So there would be certainty in that model I just don't know if it changes the economics at all I mean it doesn't seem like it would change the economics it seems like And And I don't I guess my concern would be does it limit the opportunities for the obligated parties By shifting to this in my sense as it does not It adds a level of what we're going to tell you what we're going to do, but I Think practically it doesn't because the options are still there, but the PUC wants to know up front Who is going to be taking advantage of the default delivery agents services so that they can budget for all of that So I don't think it's technically limiting their options And it's providing more certainty and more data up front so the DDA can do their budget planning Okay, thank you Thank you, Madam Chair given that Part of this relates to the other Parts of the DDA. Can we like go through all the changes and then come back to discuss because What I think about this relates to how it plays into other elements of the DDA Sure. So the next change is on page five And this was also a change proposed by the public utility commission On page five in the definition of low ink customer with low income, which is definition number five Um A new phrase is added at the end And so it reads customer with low income means a customer with a household income of up to 60 percent of area median income As published annually by the u.s. Department of Housing and Urban Development Or a customer who qualifies for a government sponsored low income energy subsidy And so as the PUC did point out this language exists elsewhere in the in the bill But it's adding it to the definition here So, uh, does this serve to expand the number of people who would qualify or contract Um, I think potentially it doesn't do either. It just makes clear Um, that if someone already qualifies for another program There doesn't need to be necessarily income verification Okay Yeah, it's sort of an automatic qualification statement So the next change is on page seven And this uh was proposed I think primarily by the office of racial equity, but seconded by The public utility commission. So it's striking. Um The sentence the the phrase here on page seven Um, so starting on line eight annual requirements shall be expressed as a percent of each obligated party's contribution To the thermal sectors life cycle co2e emissions in the previous year The annual percentage reduction shall be the same for all all obligated parties To ensure understanding among the obligated parties the commission shall provide shall publicly provide a description of the annual requirements in plain terms Um, and so the words with translation services available has been struck. Um In the senate the The office of racial equity were some of the last people to testify and so they had recommended adding Translation services that phrase um in a few different places and I think this actually may have been a Error on my part of where where specifically they were recommending It be added and so I have moved this phrase actually to the end in the public engagement section So the next change is on page eight There are two changes here So the top of page eight subsection four The commission may temporarily For a period not to exceed 36 months Adjust the annual requirements For good cause after notice and opportunity for public process Um in the bill as came over from the senate. It was 18 months So this is raising it to three years. This came from the puc And I think efficiency vermont also agreed Um, and there is another change in this paragraph So good cause may include a shortage of clean heat credits Market conditions as identified by the department's potential study conducted pursuant to section 81 25 of this title Or undue financial impacts on particular customers or demographic segments And so the that language was recommended by efficiency vermont, I think Or the puc yes efficiency vermont recommended that Uh, so the next change is on page nine subsection three line seven beginning in 2024 Each year on or before july 15th The department of taxes shall annually provide to the commission a copy of the forms That were submitted between july 1 of the previous year in june 30 of the current year By the entities that pay the existing fuel tax established in 30 vsa 33 vsa 2503 a1 and 2 And these changes were recommended by the puc And I think you're going to hear more about the tax forms stuff tomorrow This was one of the changes This was a change that the fuel dealers had asked for also Moving from december to july is it here? No, it's not here. Okay That's right, that's right Yeah, and so this is just clarifying the language that came over from the um Senate already was requiring the department of tax to provide the forms This is just adding by date certain when they need to provide the forms And then again related down on line 18 On or before july 1 2023 the department of taxes shall ensure That the the fuel tax form required under 33 vsa 2503 includes a prominent notice Explaining that the form will be made publicly available. So again adding a date certain So the next change is on page 12 um, this is another Small change that relates to a larger change that's discussed later in the bill um so on page 12 subsection 4 With consideration to how to best serve customers with low income and moderate income The commission shall have authority to change the percentages established in subdivision 2 And those are the percentages that require Credits specifically coming from low income customers and moderate income customers So they have the authority to change the percentages for good cause Uh, and actually after should not be struck. Sorry after notice an opportunity for public process Good cause may include shortage of clean heat credits or undue adverse financial impacts on particular customers or demographic segments so, um, the consultation with the equity advisory group is struck there Because the office of racial equity suggested getting rid of the equity advisory group in and instead having a third-party consultant Due specific public outreach related to the equity questions So throughout this draft I have struck the other references to the equity advisory group So I don't know if you want to talk about this now or later when we get to the public engagement consultant section. So the next change is on page 16 On page 16 This is the section on the default delivery agent So appointment The default delivery agent shall be one or more statewide entities capable of providing a variety of clean heat measures The commission shall designate the first default delivery agent on or before june 1 2024 So this recommendation came out of efficiency vermont's testimony. They actually didn't pick a date Um in their testimony. They just identified Setting a date for the first designation. Um, so june 1 is a placeholder You may want to hear testimony on what date that should actually be But given that the work is going to start in july of this year I went with june 1 however that may be too late Um, you may want to consider This morning efficiency vermont mentioned february potentially Um, so you may want to hear testimony, but they didn't I don't think they included a specific date As a recommendation Yeah, and so this date isn't on so on the timeline that I Did rough draft of I put it roughly sometime in the spring of 2024 So but I I don't know and I don't know if there's been any testimony on how long it's going to take to actually Designate the default delivery agent So you may want to hear more about how long the puc thinks it will be take to actually appoint someone Uh, alternatively, you don't need to include a deadline if you don't want one So the next change is on page 17 and it's the one that I mentioned first about the default delivery agent So on page 17 line 11 use of the default delivery agent An obligated party shall meet its annual requirement through a designated default delivery agent appointed by the commission However, the obligated party may be approved by the commission to meet its requirement in whole or in part Through one or more of the following ways By delivering eligible clean heat measures Contracting for delivery of eligible clean heat measures or through the market purchase of clean heat credits So originally this language With those three options was up at the front I thought it made sense If you're going to accept the puc's suggestion that it made sense here in this paragraph And so additionally there's some uh cleanup language in the next paragraph So the commission shall provide a form for an obligated party to indicate how it intends to meet its requirement The form shall require sufficient information to determine the nature of the credits that the default delivery agent will be responsible to deliver On behalf of the obligated party If the commission approves Of a plan for an obligated party to meet its obligation through a mechanism Other than payment to a designated default delivery agent Then the commission shall make such approvals known to the default delivery agent as soon as practicable So down at the bottom of page 18 Is a change that you have discussed again from the puc I believe so The commission shall open a proceeding honor of 4 july 1 2023 and at least every three years thereafter So adding at least Um, and then it goes on to say to establish the default delivery agent credit costs or costs And the quantity of credits to be generated for the subsequent three year period So That this language at the top of page 19 about the quantity of credits. Um, this was a suggestion by efficiency vermont um I do think It makes sense. Um I have I have been wondering if the july 1 or if in the first um budgeting cycle When in the process, they'll know how many credits will need to be generated um But it doesn't actually give a deadline so it's probably fine And then subsequently I think it'll be easier to figure out But that first one the timing on these things may take a little while Do you want to follow up on what I just said? Could you say it again? Sure so the first proceeding on establishing The default delivery agent and its budget um The proceeding will start on july 1 2023, but the default delivery agent won't be hired at that point And also at in july of this year. We also won't know The realm of uh emissions reductions that will need to be achieved We won't know the exact number um, so at least in the first Year the quantity of credits to be generated won't be known until probably closer to 20 26 um, and I don't think that's necessarily setting a deadline here, but um I just wanted to point that out that the first the first time they do this work It's going to take a little time to figure out that math Okay, so the next change is uh on page 20 and it's in the rulemaking section Um And so this was again proposed by the puc So in subsection b the requirements to adopt rules And any requirements regarding the need for legislative approval Before any part of the clean heat standard goes into effect Do not in any way impair the commission's authority to issue orders or take any other actions Both before and after rules take effect to implement and enforce the clean heat standard So this um, this is a change from what the senate sent you um I do think that the senate's check back language left sort of an open question about to what extent the puc could see could do any work And so this language is clarifying that that they still have the authority to do Some work including issuing orders um The next page the next change on this page is yeah Yeah Yeah, just just skipping over this uh Somewhat quickly or and you did a good job explaining it, but if they do not need legislative approval before Any prior to the clean heat standard goes into effect I thought we had we have a guardrail number one that's coming back to us This is just for the rules So this is actually just for the orders So it's the lead in language is a little awkward here So the requirement to adopt rules and and any requirements regarding the need for legislative approval Do not in any way impair the puc's authority to issue orders So this is saying notwithstanding the later notwithstanding clause the puc can issue orders on the clean heat standard So this is an open question the puc has asked for this because the check back provision at the end would prevent them from issuing any orders So they propose this Do you want them to be allowed to issue any orders? before the check back And you could potentially be more specific if you'd like this language is broad If you'd like to specify what orders they would be allowed to issue for example If you'd only like them to be allowed to issue orders establishing the credit market or Some of the orders around the forms that um The oddly parties would need to be able to need to fill out if you want to give them some Specific order authority you could be more specific on this Thank you. Um, I guess in regards to this I mean so You mentioned some of the orders that they could possibly do or take other actions I'm just looking for what what what could they Possibly issue orders about that would actually Hurt our ability to you know be a check back. I mean, yeah Do you know me? Yes, I do. I do. I think that there have um There have been statements from the legislature including from senate appropriations who asked for the check back Um, they don't want the clean heat standard itself to take effect until there's full legislative approval Right. And so then the question is Does the puc need to do any Smaller parts of it do they need authority to do any of that in the meantime? So I think the credit system is one of the things where that is Because there's early action credits allowed in here where people allowed to to um gain credits earlier Um, that might be something you want to consider giving them authority to do because then people could start accruing credits um, if you never passed the rules on the clean heat standard then that would sort of they would just be floating out in space so maybe you don't want to do that, but Um, that's a pretty discreet element of all this where there will need to be a third party consultant Setting up a system of registration and verification of those um You may want to ask the puc If there's any other I I was trying to think of other examples I was brainstorming some other examples of discreet other elements that they may want But the the forms I do think is a potentially another aspect They want to register people and start getting a handle on the the universe of entities we're talking about so if they want to issue a An order a procedural order on what the forms look like for the people to register that might be one I guess we could talk about that We just include the default delivery agent in section as well So under the default delivery agent they can either do an order of appointment or a contract of appointment And so if you don't give them any order authority, I think they might have to go with a contract Which I don't know Detail wise the differences between that But potentially Yes, if they wanted to do an order of appointment, I do think that could impact the default delivery agent In fact, it does say an order of appointment on page 16, but doesn't it also say contract? Yep line five question about 12 years In this section, but okay I don't know where the number come from. Sorry um I think the puc asked for that in the Senate, I don't know if it has a I don't know if there's precedent for that But that that was something they recommended was 12 years Yeah, I think I think I understand the need for them to Give orders and I would say in general without getting into specific. It's so that that In the event the legislature does give approval to go ahead. They're ready to go And they have everything they have things set up so that that they can then perceive the legislature doesn't give approval Then you could say well, I would you know that there was wasted effort on their part But but we if we if the legislature does give approval We would want them to to be ready, you know to ready ready to go and so to set up requirements For some of the obligated parties, you know things that they need to do or Or to have Contract in place with an entity contingent on legislative approval means that they you know, they could really get started They were going to get started Just general without getting into you know, what would the orders say because we don't we don't know that but I think I think I understand the need for So also on page 20 is a is a slightly different topic. Um, so subsection c um, there is a request from the office of racial equity So, uh, subsection c The commission's rules may include a provision that allows the commission to revise its clean heat standard rules by order of commission Without the revisions being subject to the rulemaking requirements Of three vsa chapter 25 Provided the commission Provides notice of any proposed changes allows for a 30 day common period response to all comments received on a proposed change provides a notice of language assistance services on all public outreach materials And arranges for language assistance to be provided to members of the public as requested Using professional language service services companies So four and five were proposed by the office of racial equity So on page the next change is on page 21 And here we're in section 81 27, which is regarding the clean heat credits um So in subsection b there's proposed language from efficiency vermont Again, this is proposed language Uh, so credit ownership line 14 The commission in consultation with the technical advisory group Shall establish a standard methodology for determining what parties what party or parties shall be the owner of a clean heat credit upon its creation Including a representative value for the provision of all components of current and future programs To include financial incentives workforce development And mark market uplift and training The owner or owners may transfer those credits to a third party or to an obligated party So, um, I haven't Uh Talked to you about all this. So this is a proposal from them. Um, I find this to be an odd provision um I think it's very interesting this idea about using the credits to um Enhanced and support workforce development, but I don't so first I'm not sure that putting it in the credit ownership section makes sense I was wondering if it should go maybe in the next section on how credits are valued, but I I don't know how the math would be done To count workforce as part of the credit and I'm wondering if they're envisioning A credit being divisionable or divisible And based on the amount of workforce development but I also I don't know how that would be quantified So maybe we need more information on how you would Quantify workforce development and market uplift in a credit Denomination So Yeah, this is one of the um things that I I like the idea of trying to include workforce development training, etc into the credit system Because then that provides resources to ensure that those activities are happening and recognize this as a contribution The reduction of emissions. I think it's a good idea um And also I am not particularly concerned about how they figure out how to do it Since it's up to the puc and consultation with the tag to determine how That would work, but I also see your point that If it's stated in the ownership section might Also need to be addressed Yeah, because I was I wasn't sure if they were suggesting that they get their own credit in addition to the installation credit or if it was Dividing the credit that's given for a measure. So I maybe have follow-up questions. Just but Yeah, I think that this adds a level of complexity Here that is not going to be helpful. I think we should try to take care of the workforce issues Yeah Dave also have mentioned Tier three Is it kind of a similar thing? There's different actors. There's the electric Utilities who have tier three credits they want to get Um, and this is kind of talking about the upstream work of someone like ebt and doing workforce development and training Um, is it related? Is that a related question about how these different actors would So my I think The only thing I'm aware of with tier three is that there were issues initially when Tier three credits were getting sorted out about who got credits When combining incentives from multiple agencies and so, um, I do think in tier three Credits are divided If there are shared incentives provided by multiple agencies so that So it's slightly different I don't know if they've done anything else beyond that because I But you potentially could hear more about some of the other issues They looked at when they were developing the tier three system Representative Pat The tier three system for the electric utilities That's a case where two different entities like the utility and efficiency Vermont Are both contributing to the installation of certain efficiencies so you can actually measure what what the, um The the effect of the efficiency measure is and then you say well If it was paid for 50 50 then each entity gets credit for that But but the point I'm making is that you're you actually can measure This measure Has this effect and with Training, uh, you know making training competent employees to do this work doesn't measure What the greenhouse gas emissions reductions are even though we all understand that we need to do it So I think that's why the sounds complicated to me You had mentioned that maybe there was another way to capture this or Put another location to try and hook this for well so I was think so in the next page There's um subsection c lists a couple of ways that credit values are counted um, and so it's not specifically on But if we're talking about dividing a credit I thought maybe it might Go there As opposed to the ownership, although maybe it doesn't make a huge difference, but I was if if you're thinking about If the thinking on this language was related to how to quantify Elements beyond greenhouse gas emissions Maybe that should be addressed under the section where they talk about how credit values are established but This makes sort of really deep in the weeds on what the process is going to be and maybe Maybe i'm overreading it just because I hadn't really Thought about doing this before I haven't i'm not really familiar with this concept, but It seems like we should agree whether we Wanted here or not for one person Vice chair Less enthusiast about it I'm representative Logan Thanks. Um, yeah, I I think about this as someone who works in social services administration somewhat similar to the kind of calculation you would do on a grant to include all of the material resources that are necessary for the administration of and and it's kind of novel to actually think about packaging that into Climate work um The services provided Um the installation services. Yes, you can measure the The amount of emissions that are reduced and then you also have overhead Things like workforce development training Et cetera that are required for the business to be able to Install the community representatives Yeah, I I think where I'm at is I don't know that it goes in credit ownership. Um, but I I do think There should be I would like to remain open to where it could fit to be captured as an area that Is going to take Effort and investment and then therefore should be recognized in some way, but I it doesn't seem right here Why don't we ask Ellen to think about where she thinks it should go and then we'll give all of us time to think about whether We want to include it Morris Listen to represent the visibility. I also flagged to me that If we're going to include the workforce development A credit use for workforce development that the have nots are going to be paying into a credit system for the ones that have the installation efforts And would be training their workforce So the ones that have the have nots or do nots that are going to install would be paying for the ones that do to train their workforce and perhaps Would cut would cut some of the incentives for the installations that we're trying to get into the load of medium income So that I would have that concern about using credits for Workforce development, I think but maybe I didn't I got one head nod and yes and one questioning looks so I'm wondering understand Representative I think the point is that well, I'm not sure what you mean by have nots and that don't do the installs Paying the credit Have to buy the price From those that have them right To satisfy the requirements on an annual basis um right, um I mean Yes, if if I think the I think the real question is really just what does it take to actually implement this program and should we include the operations Installation That's nice for example and but is required to build up the workforce for Do the work Um Okay, we should write on in a different location and then that'll of course have to think about it Yeah, um, yeah, because my other thought would maybe be in the ddi budget but I'll Think about that Seems to me your first inclination Under credits made sense credit values All right, so the next change is on page 22, uh, so small change Uh, but potentially big impact so on page 22. This was uh suggested by the office of rachel equity Down on line 19 list of eligible measures Eligible clean heat measures delivered to or installed in vermont may include and there are a list of 11 Uh measures so as it came over from the senate it was shall include Uh, the office of racial equity did Present this in senate natural as well and senate natural wanted to stay with shall um So this is again just for your consideration um, don't know Thoughts will help us understand. Um, so if it's shall does it limit it to these things? No, so but shall um, and so this is uh The eligible measures that the tag and the pc Shall look at and potentially award credits to is this list the list can be more than this And potentially will grow over time. This is the baseline list that need to be reviewed for, um greenhouse gas emissions and uh awarding credits for Changing it to may does not require that they review all 11 actions um and so It's kind of a minor point. I think what senate natural discussed was Uh, I mean, I think one of the prime examples is green hydrogen I don't believe that there are currently any residential use of green hydrogen for heating um, and That is a newer technology. I don't know if and or when it would be available for residential use um But it is on the list for the tag to consider how many credits it could get Um, they may find that the technology is not currently these Uh feasible or advisable for home use and so they may award zero credits For someone seeking to install green hydrogen um, it's only looking at the supply of biofuels and green hydrogen And it's commercial industrial too. That's yeah yeah so, um Senate natural was comfortable that if something wasn't that something would be sort of ranked based on how many Credits it could actually gain and if it wasn't Very efficient it would get fewer credits than other things So it would be less incentivized um But changing it to may means that the tag doesn't necessarily have to consider all 11 on this list We Representative Sibilia. Yeah, so I think I would like to leave this um as it was We have um um Something else I would say is that um, there's 11 items on this list in I believe in h715. There were only seven It was a shorter list um and In during the initial drafting of s5 there was concern that it wasn't clear if unnamed technologies would be included and so the list was made broader to be more explicit um You could default to a shorter list Because it would allow the tag to take up other technologies sort of as ad hoc as they come up um Not having something on this list doesn't inherently preclude it from being considered This is creating the baseline um Representative pat and then certainly so what's based on what you just said if if um If the language goes in The way it is here And three years from now there's a new technology that everyone agrees this you know this works um That doesn't preclude them from adding that it just it's so it's so what by adding may it Recognizes that there may be additional measures in the future beyond this list that would That would is that what it's just saying um, so I think either way New technologies will be um able to be considered The question with may versus shall is whether or not you want everything on this list to be initially considered Yeah, I think future wise any other things that can be brought to the tag But this is the the starting list of things to be considered And potentially if there's things on this list, you actually don't want to be initially considered Maybe you should just take them off the list Representative sacraments Wondering if this might be one of those cases where the problem is that it's a list Yeah, and maybe we ought to be coming up with Description of the kinds of things that we want rather than trying to The list to come from I believe this list has come from Are the advocates here in a half? That's going to negotiations between the Very very diverse group of stakeholders that have been working on this behind the scenes Because we are we are trying to be technology neutral So this seems like putting it as a list is kind of at least implicitly Making it not so neutral right we're saying these are the ones that like I don't know for if you're trying to be technology neutral But we were in terms of how we're getting clean heat That we were measuring according to a common standard and That's how we get to that standard is up to the market You know, this is not limiting. This is a starting place. Yeah, inclusive Representatives of Logan thanks Could we resolve this by saying something like shall but It's not limited to Include does that job? Yep. Um including includes but not limited. Yeah. Yeah, and what was the impetus for the may We know um Office of racial equity Uh, yeah, you may want to look at their testimony. I think they said that They have concerns that not everything on the list is environmentally sound green I agree yeah, so May May would give you would give the puc the ability to not include something on this list potentially That's it sevens Um Ultimately the tag is going to Decide Through their method methodology what is Achieving, you know reduced emissions um and I guess I'm wondering if this is much of a muchness. Um, because it's You know that it's not I mean Essentially, you know, we're saying you must hate tag. You must look at these 11 items and other items Or we're saying you can look at these 11 items and other items Exactly If you want to say a representative sevens They can look at anything they want to they stop this language It's just what they're saying the first go around you must look at this Think about this one too Sure so All this work is done Market is created come back to the legislature two years Green hydrogen is a nightmare can the legislature at that point say uh and no green hydrogen Yeah In a bill ideally in a bill. Well, yes. Yes. Yes I mean you could say that But we probably would want to amend this statute And strike green hydrogen at that point. I guess I was not aware that there was some other way Do it I'm sorry I think that that conversation in two years will have a couple of dimensions, but because it will be in a statute. Yeah It's really just a matter Do we want to refer them to look at this entire list or are there things on there that we are prepared to eliminate right now? Right. Yes Oh Moving on on page 27 Is another recommendation from the office of racial equity um, and their testimony was that Low and moderate income customers should not Be required to disclose more information than other customers And so the language on page on page 27 line 14 Adjust that language. So this is still in the clean heat credit system. And this is the information needed to register a credit So the system shall require entities to submit the following information to receive the credit The location of the clean heat measure customer income amount The type of property where the clean heat measure was was installed or sold type of clean heat measure and other information And so previously it read whether the customer was low income and moderate income had a low income or moderate income And So i'd be interested to know if that language is sufficient I think there would be a couple different ways to accomplish this But in some way Income level will have to be known because of your interest in providing credits for those with low and moderate income So some amount of of income information will need to be known But this at least requires it from everyone Um, and it maybe doesn't need to be super specific. Perhaps it could just be Which of the categories do you roughly fall into? or something like that, but so um qualifications Requirements to be low income or moderate income are not my customary place of existing. So i'm wondering Are there other indicators rather than income that also go into that like number of people in your household Yes, so that must be part of why that We need to call it out Oh, sure. Okay, like otherwise. We're not going to really know for meeting that So somehow we need to Okay A little beyond income I think Representative Sebelia. So, uh, I just want to make sure I'm oriented to where we are So, uh in order for a measure that is being installed by an obligated party or the dda Uh to receive credit So you're installing a heat pump Uh and receiving credit for that. So there's some sort of value that's transacting back and forth for the customer for the Requirements compliance requirements In order for that to receive credit you have to have the income. So it's not You have to verify income make sure I'm So and that seems um, it seems pretty They're seeming something in exchange for It's you're not being required to give that information You're receiving something Yeah, and so the way I've tried to draft it here to be Neutral and vague and so it may not require Exact income verification. Um, because there have been concerns raised about I think for multiple parties, um concerns raised about exactly requiring people to disclose their exact um information income information but to get Since this bill does require credits come from customers who have low and moderate income That will need to be determined at some stage and so this is at the credit registration stage Yeah, that's a good point when should it be I mean that's when we're keeping track of it, right? so Presumably someone would installing it would probably ask upfront But this is requiring it at the registration stage specifically so you would Right, so If you haven't asked upfront you're not going to have the information here So I mean, I guess you'll have to ask upfront What would happen if you don't ask a friend? Uh, so here's a question for you customer income amount And that so what about customer income information as opposed to amount? Or range So, I mean information feels like it gives you more flexibility in terms of what could be provided or asked for Representative pat I think the original language protects privacy more than the new language Because um because of the the issue of you don't just need to know a dollar amount I need to know how many people in the household and and maybe and other factors as well That might affect that. I mean, I think elsewhere If the per if if the household is eligible for and receiving and government sponsored And energy subsidy That in itself no more information is needed that in itself tells everybody The person the person's qualified. Um, so, um, I would I would I don't see what's wrong with your language as original and I think it by saying customer income amount You're actually saying we need to know How many dollars everybody's income. Yeah You're gonna fall back. Yeah. Yeah, I prefer the original You're right. I thought yeah, I think Wait just well taken Okay, so the next change is on the starts on page 30 and goes into 31 and it is striking the clean equity You know the clean heat standard equity advisory What you get is a recommendation from the office of racial equity So the language is just shrug Fair and then new language is added to rest this on page 35 So this is all struck um And we should maybe come back to the change on page 33, but I don't know if we want to talk about the The public engagement language on 35 first So in response to getting rid of the equity advisory group on page 35 the facilitator The public engagement facilitator language has been Increased so So this is in the public engagement section at the end of the bill So the commission shall hire a third party consultant to design and conduct public engagement The commission may use funds appropriated under this act on hiring the consultant Public engagement shall be conducted by the facilitator for the purposes of And this is most of the language that's being struck In the equity advisory group section So for the purposes of supporting the commission in assessing whether customers will be equitably served by clean heat measures And how to increase equity in the delivery of clean heat measures Identifying actions needed to provide customers with low income and moderate income with better service and to mitigate the fuel price impacts calculated in 30 vsa 81 28 Recommending any additional programs incentives or funding needed to support customers for low income and moderate income And organizations that provide social services to Vermonters in affording home heating fuel and other heating expenses And providing information to the commission on the challenges renters face in equitably assessing clean heat measures And recommendations to ensure that renters have equitable access to clean heat measures So that is most of the language that was in the equity advisory group previously And so this is moving it to have a one-time public engagement process on these topics led by a public engagement facilitator um, and so My only additional thought is I am wondering if this level of public engagement may require some additional funds Mr. Shell changed at the top of page 35. Yes, it was previously in May And so that's why I think there is some So the money that's appropriate at the end of the bill to the puc encompasses their Their new staff and then the facilitator costs as well as advertising for public engagement But I think this would contempl and so that would cover six public meetings But I am wondering if this potentially may require additional public meetings potentially or I'm not entirely sure what it Would cost a facilitator to run this kind of public engagement. So that may require some additional funding I'm not entirely certain Mr. Zeno Simmons Is the reason why is there a reason why you changed it from the main to the shell? That was the recommendation from the office. Okay. That was awesome. Yeah, especially because you're giving them a substantial more amount more of work here because Previously it was may hire a consultant to design and engage and do public engagement which may have been kind of a That might that seemed like it was a more sort of standard process potentially. This is a little more Tailored for the clean heat standard. So I don't know if that would potentially involve maybe a different type of consultant Representative civilian Yeah, no All right Sorry Excuse me This is one of the reasons why I was looking at at 154 we're going to strip out uh equity advisory group and for reasons good reasons that we heard which Were that it is a similar group of people, you know being tasked on all of these equity advisory boards um in order to provide a sufficient level of accountability for um the facilitator um, it does seem Like we need some um reference to The environmental justice advisory council or the interagency environmental justice committee um Who are tasked with guiding and coordinating State agency implementation of the environmental justice state policy, etc reference where Here in the section on public engagement Since the environmental justice policy won't be implemented until 2026 um I mean ongoing, you know Every three years then but this policy would be implemented after 2026 But this is effectively removes all accountability Of the facilitator to any state standards Basically says the facilitator standards will be sufficient for determining whether or not the process has been equitable But it does seem that the facilitator should be accountable to these Oops that have been formed. I'm just not sure which Representative civilian so Do you see in consultation with or after consulting with Child hire Eventually, but I mean it has to be in existing about that That's the Yeah, so the interagency committee, I think just started meeting And I don't know if the advisory council has been fully formed yet Looks were supposed to be appointed to both groups on or before december 15th. Yeah, they they were not Um, they are starting to be appointed and I think some appointments have been made. I don't think they have all been Okay, I guess my concern here is that Climate council did all this work To develop guiding principles for a just transition and environmental justice advocates did all this work to Develop these principles and there's just no there's no link back. Yeah, there's no link back and no obligation of the facilitator To implement that vision. So my suggestion is the first time that ellen's heard it So why don't we um, maybe you could work with her a little on that too Yes, my feet is out there for where it makes sense to include it. Okay Yeah, I'm I'm wondering if anyone I don't know if you want to pose that question to the office of racial equity Since that was their suggestion if maybe they want that, um It do know that the puc has been participating in the interagency council Um, so they are at least aware of the work that is starting to but I think your point is well taken All have been appointed according in the speaker's office. Oh good. Um, I I'm happy to reach out to j At the Or or susanna at the office of racial equity and make sure that they're okay with the reference back to Ej policy You need to go back to page 33 And so the language on this this Time page 33 is related to what we were discussing earlier. So this is the check back section um, and this was proposed by the puc And so the check back provision currently says the commission shall not file proposed rules to the secretary or state secretary of state Or issue any orders and so that is struck implementing the clean heat standard So And that's in connection to their piece of language about allowing them to issue orders Representative Stevens the puc is coming in tomorrow. Yes. Can we ask them for some verification on this tomorrow? Yes I think we are almost done So on page 36 again the reference um to the equity advisory group has been struck in paragraph one in subsection one and in subsection four And then in subsection two the reference to translation services Is is added back in because it was moved from the front So the meeting shall be open to everyone. These are the the meetings about developing the rules Including all stakeholders members of the public and all other potentially affected parties with translation services available to those attending And then uh related to that on page 37 again from the office of racial equity Advertising the puc is supposed to use some of the funding on advertising the public meeting to get a wide variety of segments of the public So new languages added on line three all advertisements of public meetings shall include a notice of language assistance services The commission shall arrange for a language assistance to be provided to members of the public as requested seeing the services of professional language services companies language services And then on page 38 This is a change from the so, um this is in the rulemaking section and so Part of the api is being Waved in this making section because of the fact that the rules are going to come before the full general assembly So in uh subsection four they've added this language Um, I think just clarifying what was already there But once adopted and effective any amendments to the rules implementing the queen heat standard Shall be made in accordance with the api Unless the adopted rules allow for amendments through a different process in accordance with 30 vsa 81 26 c and b So again, that's their order authority And then finally on line 19, uh, this was also proposed by the puc So on or before february 15 2024 the commission shall report to the general assembly on suggested revenue streams that may be used or created Um, and previously it was january 15 2024 So i'm bringing it out an extra month representative smith Funding so we don't know or this bill doesn't know right now How things are going to be funded doing or where we're getting money to fund Uh, well, so this bill appropriates funding for the first year. Um, but thereafter it is not clear Okay, thank you Great, thank you, um Beautiful questions I Generally in the document do you want to comment on these edits? Yeah, well the question about appropriations those are for positions. I think those are for two year positions So actually there are permanent positions and a limited there is one limited service position for the puc yes, um, but the It's 825 thousand dollars and it's supposed to cover the the new salaries for those staff as well as the consultants of which there are three um and advertising uh, and then any marketing public outreach and then any additional operating costs Um, and so I do think it is based on a one-year budget And a good paying job Okay So I have a couple questions about the on page 11 Did the 16 percent come from or each of those categories so I'm wondering if every none of sabilia and pat may remember so the S h715 came out of the it was a committee bill in in-house energy last year and originally there was a discussion about At least a third of the credits should come from low-income customers and then that conversation Regressed and I think They just landed on I think just sort of negotiation. I don't know if it's based on any like concrete data But I'm aware of um So there was a specific work going on around this and particularly with representative rogers and representative breakland. So I would be The history there's a history Um And also at the one half for each of these groups at least one and a half The credits shall be installed to clean heat measures That's new this year um, and that was proposed by the stakeholder group and So, I mean, I think there are some reasons for that. I don't know if 50 came from anything specific other than an acknowledgement that they were concerned about just biofuels um, and then Oh Of course, I'm going to finish with you. Do you know? On the same page line 11 with it says and renter households with tenant paid energy bills um I'm curious about unintended consequences there like what if it can it incentivizes landlords to have tenants pay the energy bill or I don't know wondering renter households with tenant paid energy bills Where that call out came from so there's this concept called the we called the split incentive where Landlords that own a property that they don't pay the energy bills are on are not incentivized to ever upgrade them Or make them more efficient because they don't actually bear the cost of the energy bill um, and so I think there was recognition that When a renter pays The utility bill or the heating bill they don't necessarily have direct control over whether or not The property is upgraded um So this is some intent language about acknowledging that renters May face difficulty in getting their landlords upgrade building Representative. Thanks. Um, I worked on the EAN weatherization at scale team And one of the policies that we considered as part of that was to authorize tenants to You know seek weatherization without the landlords permission Yeah, I mean that part I get but I guess I'm thinking it's sort of like if the landlords paying the bill I'll get that the idea would be to have the ability but it also could I mean incentive how do you incentivize them to do it on their own Did you just say that tenants can weatherize without landlords permission? Yeah, well that was part of the proposal from the weatherization at scale team, but that um legislative proposal has not Yeah, I don't see why a landlord would refuse it Right, especially because it would increase the properties value. Absolutely. Yeah Is that a second? You know, if we're looking at the economics of that situation, I think it requires some care because from the renters point of view, you know, all that person really cares about in a strict economic sense is how much it costs them to live there each month and whether they're paying rent or they're paying Utilities in a strict sense like Doesn't really matter So I think getting the incentive right is tricky because you know, you know, you can also argue that You know, a landlord might want to make improvements to their property um, and then when they do lower their energy burden on their tenants that they then have room to increase the rent because again from From a renters perspective, what really matters is how much is it cost each month to live there? So I'm not I just I just think it can be very tricky in terms of how we get those those incentives right given those those pieces of the puzzle Representative pat I have a lot of past history with with with this issue and it is very very complicated in terms of some of the things people have said in terms of whether you can Require somebody to do something to their own property. But the other issue is in a in a multi You know multi-dwelling rent rental situation Um, you can't you can't have a situation where where One tenant decides to go weatherize That would be completely sort of unproductive without doing without doing the whole building and uh, so I just The way to get landlords to cooperators to incentivize landlords to cooperate many many do some don't I just wonder will we be considering any of the changes that the feudalism association presented Um, I'm just curious we've heard from the proposed changes from the PUC the equity council and efficiency Vermont Well, there's this I haven't I haven't chance to look at any of them. I just wonder if the committee is going to consider them Yeah, I think that would be if if you want to look at them. I will look at them again too and um Consider them Thank you. Uh, I also have another question about the four times for non-compliance one where that number came from so uh in the in s in age 715 as passed last year the non-compliance was three times um the amount of the credit cost um and then the office of racial equity Recommended increasing that um to senate to the senate committees. Um, they did not necessarily provide a specific number. Um, and so Um, senate natural resources and senate appropriations considered increasing it to a different number and they went they requested it go to four times You know if there's precedent or anywhere else that we have that kind of penalty um Well, so this penalty structure is not generally speaking is not really like other ways. Um The The puc's existing penalty structure is pretty I'll just step back and say I don't think Uh, there are too many penalty structures Like this generally Can you remind us where this is? I'm sorry page 14 I would also just say I haven't actually ever looked Out of their way other types of penalties. I don't I don't you know work in judicial issues So like I don't know too much about other penalty structures other than out of No way I'm checking in with the attorney who does just getting back to us Okay, um There but I again Generally, I don't know that there are too many other systems like this in state government, right? Because like this is a requirement that you do a specific thing by a specific date um So I Don't know how many other systems are like that Well, maybe we first start to find out if there's another one That's like it if it if there's a comparable and if there's not Representative thank you madam chair for bringing this point up because I had it circled as well we did hear from one of the field dealers that if for some reason they didn't register on time and they were going to be Analyze four times the amount would effectively Close up shop for them. They wouldn't be able to afford so that I I understand intent we're trying to incentivize to weatherize and to reduce fossil fuel dependency I Bring and we've heard different numbers one out of five fuel dealers at just two installations and I'm assuming not all of them would decline to register that they would that's just putting them out of business at least according to one One testimony we heard just That is causing some heartburn so I would also add that The PUC as the enforcing agency here will have inherent discretion on how they enforce And so I think generally with most penalties assessed in statute The enforcing agency doesn't necessarily have to Assess the full Amount this shall be Right, but so the PUC in their enforcement order would have discretion on actually setting that amount You're if it's just like Days later or something um Is cure have a particularly legal definition there? Um I Do you think that the PUC has enforcement discretion in this? um If you'd like to reframe it so that it Specifies, um, I think I can't remember if it was in senate natural if it was last year. There was conversation back and forth about whether it should be may or shall to sort of Can note the discretion, but if you'd like it to be more clear that it would be discretionary amount You could rephrase the sentence Could reframe it um And we're going to take a break till a quarter of and then we're going to start with our next witness. Thank you, Ellen