 Sorry for the delay. Thanks for coming We're here to talk about Senate bill 5 The affordable heat act previously known as the clean heat standard before I start talking about the bill I'd like to remind everyone of the actions we're taking to combat climate change In fiscal year 22 alone. I asked for and then work with the legislature to secure more than 200 million for climate action So there's no confusion I want to be clear My administration agrees with many of the same objectives as legislators like reducing emissions from the thermal sector But how we achieve our goals is where there's a bit of disagreement. I Firmly believe we need to help people make changes not punish them Last January my administration was at the table with legislators Listening engaging and asking questions about the clean heat standard then h7 15 But after months of discussion it became clear that the bill was not going to get any more specific Provide the details for monitors expected or deserved At that point I clearly Repeatedly and respectfully Ask the legislature include language that after the PUC finished designing this new strategy to reduce emissions That the General Assembly would put the PUC's plan into bill form and then transparently debate the policy and costs with all the details Before any burden will be imposed on Vermonters For my standpoint, that's what Vermonters expect Deserve and have a right to receive Now that was last year But unfortunately it appears we're in the same exact situation today at least in the Senate version As governor and as elected legislators We have an obligation to ensure Vermonters have all the details and Understand the costs and impacts of what any policy would have on their lives in the state's economy Last year the legislature's own joint fiscal office wrote the following in regard to the clean heat standard And I quote It is too soon to estimate the impact on Vermont's economy households and businesses The way in which the clean heat standard is implemented Including the way in which clean heats credits are priced and how incentives or subsidies are offered to households and businesses Must be established before meaningful analysis as possible At the same time those incentives or subsidies could be costly for the state Suggesting larger fiscal impacts in future years end quote again While I support the work to reduce emissions We've got to be realistic about what's achievable Consider the very real workforce challenges we face and make sure we don't harm already struggling Vermonters in the transition As most of you are aware, I'm an advocate for the transition to electrification. I believe there will be long-term savings as a result But we cannot ignore the fact that there are significant upfront costs Which could be a regressive and harmful to low-income Vermonters a Policy like this will require a lot of thought To ensure those who can least afford it are not punished because they have no real choice At last week's press conference. I gave an example of the Vermonters. I'm worried about most People in mobile homes typically have above-ground fuel tanks And they have to buy kerosene at six dollars per gallon to prevent gelling in the winter And they want to electrify They'll need to make thousands of dollars in upgrades and this is money. They simply don't have It's the same for retiree on a fixed income or a single mom barely making ends meet None can afford to pay a premium on a gallon of heating fuel whether it's 70 cents or even more And they certainly can't afford the upfront cost to upgrade their service panels and install heat pumps We're joined today by Steve Richards of Richards Electric who will talk through the logistical challenges needed to make this transition Again, we can't rush into this without a well thought-out plan But first I'd like to turn it over to Secretary Moore to talk about our proposal and concerns from the agency's perspective on S5 But before I do I want to express my sincere appreciation for a dedication poise and professionalism over the last few weeks Julie has been the target of some unfair attacks throughout this process For the simple crime of bringing up potential impacts of this policy Asking questions and seeking answers which have been in short supply Now Julie doesn't typically tout her credentials But she's a civil engineer and also has a masters in environmental science and policy From Johns Hopkins University In total she served over a decade as a public servant in the agency of natural resources and in her previous stint Help lead the state's efforts in cleaning up our waterways, which she's still championing today She's a true expert and Unlike some we're leading the charge on the so-called affordable heat standard She has nothing personal to gain from it passing or not passing She just wants to help get it right That's all we're asking for We need the legislature to fully understand the impacts of this bill and then be honest with Vermonters about those very real costs and complication That's it. That's our request So I'm now turning over to Secretary Moore to recap the testimony and advice She's been providing to the five members of the Senate Natural Resources Committee over the last six weeks Good afternoon Over the past several weeks there's been considerable criticism of the cost estimate I provided for the clean heat standard legislation I stand by my cost estimate and perhaps more importantly the principles it represents that Government has an obligation to be honest about benefits and costs and that Vermonters deserve transparency Transitions cost money real money to date my concerns and my cost estimate Have been largely dismissed by the legislature and advocates as scare tactics. I see this as unfortunate My goal in developing a ballpark estimate was to highlight what was missing from the discussion Careful consideration of the upfront cost of making big changes and how we heat our homes The fact is that while there have been numerous studies on the need to address carbon emissions generated from building heat There has not been a detailed evaluation of the clean heat standard How it would apply to Vermont and what the near term cost impact will be on Vermonters We raised this concern a year ago and the group's advocating for the program declined to study this important issue If such work had been already completed around the clean heat standard We would have the answer to the question that matters most to Vermonters How is this going to affect my heating bill? The simple fact is we don't know yet. There is no economic study There is no fiscal analysis of the clean heat program and S5 currently contains no cost containment provisions To be clear, I think we can know these things, but it will take a bit more time Despite the rhetoric it is important to remember as the governor just said there is no real Disagreement between the legislature and the administration on the need to transition from heating our homes and businesses with increasingly high-priced and volatile fossil fuels Transitioning how we heat our homes won't be easy. It's complex. It requires significant investments and done poorly Will disproportionately affect those least able to afford it because as the cost of fuel rises as Clean heat costs incurred by fuel dealers are passed along to cost consumers fuel assistance benefits will not go as far My team at A&R has contracted with Heinzberg based energy futures group to gather more data points and complete Needed technical analysis to better understand price impacts and support a thoughtful program design This ongoing work includes assessing opportunities to take advantage of the tens of million Millions of dollars in federal programs to support things like weatherization and installing heat pumps Undertaking technical analysis of policy options for clean heat that evaluate the full cost of implementation Regardless of how much of the cost is borne by fuel suppliers Individual homeowners or government price impacts by fuel type and rate impacts on natural gas and electricity future savings because of changes in heating fuel and electricity consumption and Knowing that costs and savings may not be distributed evenly across Vermont Looking at differences between urban and rural areas by income level and impacts on commercial and industrial building heat The need for supporting policies is also a piece of this work Thinking about residential electrical service upgrades and improvements to grid infrastructure that will be critical to implementation This work is on track to be completed in June and absent this sort of work Legislators are voting for an idea not a plan and there are real risks to acting hastily. I Want to close by saying I care deeply about supporting meaningful and timely climate action Environmental protection is my life's work And as a public servant, I feel an incredible obligation to Vermonters to be forthright And make clear that changing how we heat our homes is not going to be simple or free. I Absolutely believe we can achieve the desired future state the legislature envisions if we work together It will however take a bit more time to do the necessary homework for something this impactful and this complex Thank you, and I'm pleased to turn it over to Steve Richard who will provide a boots on the ground perspective Thank you. My name is Steven Richard. I'm a master electrician. I've been an electrician for over 45 years I own and operate an electrical construction and maintenance company down in Hartford, Vermont on the New Hampshire border Also a past president and current board member of the Vermont Independent Electrical Contractors Association I came here today to discuss the aspects of Installing primarily electric heat pumps from my vantage point as as an electrician and You know being responsible for a crew of electricians that do this work I Did kind of a mini Analysis I looked at one of our customers who happened to be a mechanical contractor that we were wiring a lot of heat pumps for In the last nine months, we wired over 55 residential heat pump systems and an average cost of $1300 This was for the electrical only did not include the mechanical portion of the project the equipment or any of that my understanding talking with the mechanical contractors and with homeowners is that the average costs of installing these systems residential systems are more in the range of five to ten thousand dollars You know turnkey That would not include The cost of upgrading the electrical service, which is kind of a choke point, you know, there's only so much Available whether it be a 60 amp service some of the old services in mobile homes are still 60 amps Most of them are either a hundred or two hundred amps This kind of gets more complicated when you start throwing in car chargers to because Now all of a sudden you have a complete electric home that is has run out of power So if you've got upgrade the service, you're you're in the range of an additional Three to six thousand dollars on top of these other numbers One a one family member of mine who lives in a manufactured home heats with oil The oil bill is a significant part of her expenses She would have no choice but to pay the extra dollar per gallon surcharge rather than install heat pumps at a minimum of five thousand dollars she Doesn't have the money. There's this. It's not that she would have no no option And I can see this being the case for a lot of Vermonters This does provide work for us as electricians it's good work for us. There's no question about that However, given the current state of our workforce We don't have the workforce to take on additional work I mean if we didn't have these heat pump jobs, we would have other jobs to do. It's that's not a It's not a huge benefit per se for us so Many homes just don't have the electrical capacity to convert to all electric You know start talking about electric stoves dryers hot water heaters cars heating systems cooling systems It's a lot and many homes are simply not going to be able to Add these without significant investment in upgrading their service The the grid is questionable From the people I talked with that the utilities and from what I see on the ground I don't see where the grid is Able to add all these loads Many people will not be able to pay for the conversion to the electric heat pumps to heat their homes The speed of converting to an all-electric home is outpacing the ability to make The installations the ability of the grid to supply the added electrical loads and the ability for people to pay for all this this is Obviously from my perspective as as an electrician installing these these systems Thank you very much Steve and we do appreciate your boots on the ground perspective And I know how intimidating it can be to come up here and speak to everyone But but I'm sure they may have more questions for you, but we'll open up to questions at this point How many electricians do you employ come right up Steve? We have about 20 employees total of that Probably around 13 electricians and apprentices approximately It couldn't happen overnight, but I could see us You know adding another eight license electricians over time we could we could put them to work our Customer base is large enough and the work that we're turning down. We could we could employ Probably additional eight electricians Right, okay, so how many would this Well, I mean sorry How many excuse me how many more would you need to hire and is there any chance you could find? Well, there's no chance we can find them There really isn't our the number of electricians that We have is decreasing You know we max out the number of apprentices that we have to try to bring up through we always have To try to create electricians that way and even with that You know the workforce is getting older and retiring and and there's just Not anywhere near enough new ones in filling to meet the need Do you think that why spread electrification of home heating Is a useful direction for the state to go in I think at the current time giving the cost involved and given the difficulties of workforce and We haven't really talked about supply chain issues, but there are some of those as well and just Just to see that the grid is ready for it, you know people's electrical services are ready for it I say they're not at this time. I think that it's the The push for these the electrification of these homes is outpacing those those things You sense your opinion about Do pumps today Do the job in all weather conditions? Do they heat when it's really cold? If that works your only source of heat Well, I'm not a Makina co contractor, but I can speak just from What I've learned from them and reading and so forth, but And talking with people first, you know firsthand that When the heat as it gets colder the heat pumps will have to work harder Okay, and when it gets to a certain point Depending on who you talk to there's different numbers, but I was talking to a friend yesterday who had heat pumps installed in this house in Vermont and when he gets to the single digits he fires up his His oil burner to augment his heating in his home So now there's these cold weather heat pumps that they have which I understand are much better Those have been out for a couple years now So I think that those are gonna be making them their way into the marketplace, you know, so they still hear these stories of people not being able to heat their homes a hundred percent with These heat pumps is a little concerning See, a lot of the people you mentioned that are lower income that are probably able to afford some of the upgrades you're talking about Are you tied into the state programs that have offered thousands and thousands of dollars to low-income Vermonters to be able to do these upgrades and And can the state maybe speak to the amount of money that it is put toward helping low-income Vermonters and moderate-income Vermonters to be able to afford these kind of upgrades I'm familiar with efficiency Vermont You know who they do have rebates on different types of heat pumps I'm not aware of any rebates they have for the electrical portion of that or if there's a service that needs to be upgraded I'm not aware of any programs they or anyone else has to pay for the expenses and involved with those things Can someone from the agency speak about whether There is money available for such upgrades and if not, why not? June here any Christian or Department of Public Service Kevin, I will speak to that, but I want to get at the premise of your question first Is there enough is what we should be asking not whether there is any Now how much money has been put toward those types of subsidies and help is a matter of public record One of the things that I have found troubling about the discourse today around this bill has been the Failure to look at specific facts and to acknowledge when facts don't exist So I will not stand here today and attempt to tell you from memory How much money has been put toward these things? I will tell you that it is an above historical amount and I tell you today it is not enough So the question is with everything that we've put toward it so far and the pace of deployment that is envisioned by this law Would there be enough to help the people who are most vulnerable and my judgment today would be no One likes to think so but that's precisely the analysis that is yet to be thoroughly and in a granular way Carried out. That's what's missing from the analysis in this conversation It would be however It is also being told at the same time that it must design a program that achieves certain Metrics that are laid out in law so that if they're honest and searching analysis Concludes that in fact those goals are not achievable. They don't have the discretion to design a program that is achievable So it's not good enough to say. Oh the PUC will figure it out Just if you recall all the money we put in I mentioned in my remarks the $200 million that we put into Weatherization we're not we haven't completed that yet either. I think there's a long ways to go in terms of weatherization And there is a path forward as we replace the systems and it becomes more affordable people naturally I think Steve Richards commented on this that he they have customers that are willingly moving forward with with heat pumps climate Cold climate heat pumps in particular this new technology that could make this Aventages and I believe in the future This could be advantageous to every Vermonner, but I'm not convinced we're there yet I'm very concerned. I've said this before About the grid and the capacity of the grid in certain areas. I don't think we have to go too far from here I think it was on a radio program last week where the the host had talked about his his car electric vehicle and Wanted to put a car charger in his his home or his garage But the transformer wasn't of the capacity that could he could utilize one So and it would be on his dime to replace this transformer and they're six months out That's just one one instance So times that by the number of people throughout Vermont they may want this need this or may be required to do it That's my concern. Like are we moving so quick that we can't keep up with the workforce? Are we moving so quick? We can't keep up from a supply chain standpoint Are we moving so quick that new technology doesn't even have a chance if we had moved this quick? Three years ago with the the first generation of heat pumps I'd say those are outdated now same with the electric vehicle chargers I mean you you take the the level one that were first initiated the level two There were and then then came the fast chargers afterwards. They're just coming online now So had we moved forward with them, they'd be outdated at this point So I think that this has to be a measured approach to be sure we're getting the benefit That we need and not spending money. We don't have an impacting Vermonters who don't have the the upfront costs either so I just think we we have to be realistic about this and We need a plan and we need to know what we're facing in order to do that I'm wondering You know Well, there have been other concerns particularly With the the grid capacity and some of the other things I've learned over the last six eight months But having said that having this debate transparently openly With our eyes wide open and for monitors understanding what the costs and implications are Then that would be preferable and and I've stated that in the past so Unfortunately there as as I read the The proposal that was passed out of appropriations in the Senate yesterday It looks like the same language as last year So that doesn't do it. We sent to them we Emailed them exactly what needed to be in the provision For this to come back to the legislature They didn't do that last year. I vetoed it as a result But now they put the same language back in so that doesn't do it. It needs to be far more detailed than that What's the difference between the language that exists? It's really about we we detailed it it really is about having those specifics and having the PUC Contemplate that in fact This is what we wrote Almost a year ago And this was to the legislature and this was after they passed it and saying that I they took care of my concerns about this check back and The only person they didn't ask was me So we didn't we weren't We weren't part of this process. They put in this this language So we wrote back to them and said and I'll just take out pieces of this I'm writing to make clear each 715 currently before the Senate on third reading does not address the governor Scott's concern with a clean heat standard The governor has asked the PUC plan for Implementation and pricing as well as the economic impacts come back to the legislature for review and approval through the legislative process The current language does not accomplish this In order for the governor to consider approving h715 it will have to clearly Require enactment of legislation to approve how the clean heat standard is implemented How clean heat credits are priced? The impact on customer rates and fuel bills and impacts on economic activity and employment And that still holds true today today Still the same stand by that You So I think it's important to keep in context what the recommendation of the climate council was which was to do this more Fulsome evaluation of the role of clean heat standard could play The if you read the climate action plan It specifically acknowledges that we don't know what the costs are and part of the charge to the climate council from the Global Warming Solutions Act Is to look for cost-effective greenhouse gas emissions reduction strategies So I would argue that the climate action plan itself Acknowledged there were significant unknowns when it comes to the clean heat standard I think that at the same time other counselors would tell you and myself included the clean heat standard is a very Interesting approach to what is a complex and challenging problem And deserves the level of evaluation that it's currently undergoing under contract with A&R The 2030 deadline in particular can be really will be really challenging in this instance in order to meet the 2030 requirement We've estimated that almost 90,000 new home additional homes will need to be weatherized Just for context over the last 20 years for months weatherized about 30,000 homes More than a hundred and twenty thousand heat pumps would need to be installed and about a hundred and forty thousand heat pump water heaters So these are really significant increases in the number of units That would need to be installed And that's to meet the 2030 requirement It doesn't sort of independent of the clean heat standard and I think just speaks to the challenge that that requirement presents And the the real conversations that need to be held about our ability to achieve it And our ability to achieve it in light of what we all want to accomplish by 2050 Which is decarbonizing both how we travel and how we heat our homes and buildings Your view should the legislature Well again We need to have all the facts before us before we can make that determination. I I don't know And that's what we're getting at. We don't have all the data and And understand what we're getting ourselves into so until that's done I don't think we can make that determination Governor You know They're also I think for us we'll be looking more to the north of us Through hydro kebek and and as well they have some large-scale wind generation there I think there'll be some off-scale or offshore Wind in the lower parts of New England that will come online TDI is as I said a couple weeks ago is Become very real again So I have Have great hopes that that will be considered because that would go the new The new proposal would be that it would go both ways that it could bring power in but also bring power back as well So that makes it interesting but With all the solar capacity here in the state and growing and with the hydro kebek and with some of we may be depending on some of the lower regions of New England in the future as well But but I will say and I think I made this comment a Couple weeks ago when I'm speaking to Other governors in New England in the lower part of New England particularly They're more concerned about how are they going to get more natural gas To their plants right now so that they have the generation capacity To take care of the needs right now So this is a real issue for them We are in a much better position because of hydro kebek and the proximity there, but but they're very very concerned about just the electric Generation right now and they need more natural gas in order to accomplish that Nuclear again, you mentioned that you don't think we could do that in Vermont I'm I'm I don't think that should be off the table in the future To be honest with you. There's been advancements and in nuclear and So I think we everything should be on the table so to speak if we're really serious about Decarbonization Well, we I mean we have the Connecticut River hydro dams as well So I I don't I don't have any in particular, but I'll let Julie answer Hi, Tim, June Tierney here I Was listening to your question and I don't mean to quibble, but I'm not sure I agree with you that things are quite so bad for the development of Renewable energy in state. I think the PC is following a process where they're very carefully examining Projects that come before them and now and again there is a project where you sort of scratch your head and you say How do they get to their decision to not permit it? But for every one of those outliers there are significant numbers of in-state solar projects that are in fact being approved There's a robust conversation underway right now in the climate council about the role that Bio or woodmass plants have to play we have in-state generation in that area too And I think the governor's policy to date of supporting that we keep that Generation is is sound Precisely for the reason that you're raising but it has its critics so I think a more nuanced view of How we produce generation right now and how the regulatory environment is receiving applications Gives me confidence that we are in a position to meet our needs But as the governor correctly points out in the long term We have resources to draw on that perhaps our colleagues in other states don't necessarily have readily ready access to such as Hydro power and there are other concerns Meant and you know principally about how we meet today's generation in the region and the need for natural gas that deserve attention as well I hope that answers your question If anyone would Yeah, go ahead Isabel with your off topic You Could you could you repeat the first portion of that? Yeah, I'm not I'm not sure about what expansion you're talking about we're talking we are having conversations about The replacement of the women's facility juvenile distensions Center But but beyond that I'm not I'm not sure about the expansion. It's more about replacement The women's facility really from a programmatic standpoint is is not ideal Where are other models? We've been looking at the main model is one that seems to be getting the most attention I think we're in agreement that that would be much more suitable to the for the women's correctional facility So we're looking at that model and and knowing that we need to upgrade the facility all our facilities are Getting older and some are in need of replacement The juvenile center as well. There's some other you mentioned maybe more in terms of more localized Solutions and and we're contemplating that in fact in the southern Vermont and both in In the Bennington area as well as in the Wyndham County area We are considering both and hope to do a bit in both both counties So we're looking for all different kinds of Solutions to the dilemma we find ourselves in but but I think we're having good conversations with the legislature about this And the path forward But the challenges in particular around helping, you know, folks who live in mobile homes or much other homes Also, you know spoke to the particular price vulnerability and energy burden that those household states remind I know s5 as I write the McKenna natural resources this time There is a provision there to allow some of the credit generating activities Replacing some of those those mobile homes with high efficiency modular options, and then I'm curious, you know From the administration's perspective that that feels like a suitable path forward And if not, you know, just given that knowing that that is a really really difficult place in terms of making this transition If you see other solutions, yeah, that could be the ideal a solution in some respects if you try to couple You know older Manufactured home And then you you look at what it would cost to weather eyes Upgrade the entry at the service entrance for the electrical and then install heat pumps and retrofitting and so forth It could very quickly exceed the value of the home itself so having another Another unit that it is already retrofitted as a high-ramp service in as whether Much more weather eyes than the existing home and has the heat pumps already installed that may be the more practical solution so I'm I think we have to again contemplate where we're going here and Where all this money is going to be generated and how much it's going to cost before we get there But I'm amenable to looking at that solution I Would just add that that I I think that that's the the challenge is that the up that may actually be the most cost-effective way for Addressing the the needs of a manufactured housing resident But what at what cost and what does that do to the value of a clean heat credit and where the revenue would come from to? Cover that cost. We know that replacing those units with more efficient units is a significant undertaking And so again, it's just it is an unanswered question as the governor indicated and in a place where additional work and analysis is required And again just so we're clear it's not just the home is not just the service Steve had alluded to the grid itself having the capacity that the current available And the capacity to to service a whole part is has got to be considered They are real concerns about great capacity with electrification And for me Do you feel like those concerns are substantial enough that It would factor into your ability to support this policy Again, I don't have any way of knowing that until we have all the details and that's part of what we have been Asking for let's let's have our eyes wide open Understand the challenge ahead of us and and then deal with it, but we don't have all the information at this point Yeah, I mean I've talked a lot about cradle to career over the last six years and that includes integrating our child care Into the school system as well So I'm not opposed to that but the course the devil is in the details and How do we make sure that our kids have child care in the summer when the schools are closed? There are a lot of details that need to be worked out and and have what costs and who's going to do it Obviously child care one of the big issues of the building this year What are your conversations to look like with lawmakers since the House and Senate? I am not aware that they have had Many conversations with us about our plan What's your plan? The one we put in the budget 56 million coupled with everything else I Next door Folks that are rallying for the passage of the Senate bill 100 The zoning bill from Senator Ron Insale, which you yourself call a strong bill There are some changes to Act 250 which is Drawing concerns from some of the environmental community I'm wondering if you've had a chance to look at some of those Act 250 changes We have I mean we've been working with them on this bill We think they're moving in the right direction and and it's all needed in order to to solve this other crisis That we have the housing crisis, so I think they're moving in the right direction Yeah, but but as written now, I mean it hasn't Gone much further than coming out of the committee So as we know it's got a long ways to go on the floor tomorrow You're hoping on the floor in the Senate and over the house. So again long ways to go And then you want to say about town meeting next week I hope everyone takes the opportunity to To be engaged and to understand what what's the stake with them and their communities. I think town Town meeting day is an institution in Vermont and we should all take advantage of that School budgets I Mean it's it's going to inflation is is impacting all of us in all different sectors and the school budgets are With a high amount of that being in labor It's no surprise that the school costs are increasing Solution given that Is it in committee is it being taken out You know I vetoed The bill as you know I for a lot of reasons I didn't think was constitutional still don't think it's constitutional But at the same time we've come a long ways. We've been at the table. We're trying to find solutions And I believe that we need to keep marching forward With whatever we do. I mean I I think we have to be realistic about some of the goals But at the same time, you know, it's The time to stop that was a couple years ago I have not ever done that in the past And I have probably no intention of doing it this year But I haven't been asked either I haven't asked to Speaking on behalf of the legislature All right, thank you all very much