 Hello and welcome to the Burlington Mayor's Show for the month of January 2023. I am excited to be back in the studios and I'm excited to have with me today Darren Springer, who is the general manager of the Burlington Electric Department and the two of us are going to talk about all things Net Zero, this major goal that the city has set. We started establishing this goal back in 2016, a couple years after we met our last major environmental goal, which was to become the first, we didn't actually set up to be on the first city, but we were the first city that sourced 100% of our electricity from renewable sources. After doing dozens of interviews on that and realizing how powerful setting that ambitious vision had been, in 2016 we consolidated around this idea of becoming a net zero energy city by 2030 and in 2019 we released a very detailed roadmap that laid out the strategies for getting us there and here we are now in 2023. It's been kind of remarkable, I think it's four years since we were by the end, I think it was late in the year in 2019, so it will be four years at the end of this year since we released this plan. We have taken a number of the actions that were laid out in that plan. We are making progress towards that numerical goal and this week, this town meeting day, Burlington voters have again an opportunity to take a really meaningful step in that direction with the passage of a ballot question that will implement the charter change essentially that Burlington supported a couple of years ago on town meeting day by about 65% of voters voted to give the city the authority to regulate heating systems and then it took a year, but the legislature passed this last year. We are now ready to go back to the voters and actually lay out a essentially a new ordinance for people to approve that will really give us more ability to make progress towards this goal for the first time. So Darren and I are going to talk, we're going to start at least by talking about this, this thermal heating and carbon pollution impact fee. Why don't I turn it over to you, Darren, maybe you could summarize for people what they're going to be voting on. Absolutely, thank you mayor. It is exciting to be thinking about all the progress that we've made with net zero just in the last several years. We have launched dozens of incentive programs. We've implemented in the city a number of meaningful policies, including rental weatherization standards and requirements for new construction to be heated with renewable energy. And now this town meeting day is really the culmination of several years of work starting back in October of 2020 with a proposal that you had laid out that focused on how do we electrify the heating and thermal uses in buildings in Burlington. That led to the charter change discussion, the vote in 2021 to pass a charter change action in 2022 from the legislature and the governor to give Burlington the authority under the charter change. And then over the last six plus months, our department and the department of permitting and inspections has been working to bring forward a policy proposal that includes a carbon pollution impact fee as part of fairly ambitious new policies that if approved by voters on town meeting day, the idea would be the city council could come back and draft an ordinance. And the goal, the main goal here is that starting in 2024, all new construction is 100% renewable or if they are using any fossil fuel systems, there's a carbon pollution impact fee that accounts for the impact on the environment and on health from using those fossil fuels and similar requirements for large existing buildings over 50,000 square feet when they're replacing a heating system or water heating system. And critically, it's important to mention what's not included here because I think sometimes folks can get confused with all the details that are out there. This does not affect existing residential buildings, does not affect single family homes or, you know, apartments or condos or affordable housing. It does not affect small businesses. This is really about the largest buildings in the city currently and new construction as well as city buildings where we can lead by example as well. Great. Maybe I know you have some slides here. Maybe we should get into a few of the details that really I think you've done these analyses that really speak to really the only concern I think or the main concern I've heard about this is some people say, isn't this going to make housing? Isn't this going to make starting new businesses in Burlington more expensive? It's already expensive to build here. You know, understand we got to do something about climate, but isn't this going to make that issue worse? We've really grappled with that question and the results I think are not intuitive. Maybe you can walk us through a couple of those examples. Absolutely. So I'm going to jump ahead a few slides here to some of the analysis that you were referencing. And Burlington Electric worked on this analysis using real buildings in the city. These are real examples where we had data and we worked with a national group of experts from the Building Electrification Institute to come up with this. And what we see here is 150,000 square foot example of a new multifamily building. So this is a significantly large building, new multifamily building in the city. And the gray bars represent on the farthest left a baseline fossil fuel heating and water heating system. And then the darker gray bar represents that system with the carbon fee applied in the scenario where the carbon fee would be applied. And all of the green bars here represent renewable systems. We're talking about using renewable fuels or using electric heat pump or ground source heat pump technologies. And the interesting thing here is that, especially with the carbon fee included, every single renewable option is cost competitive. But even without the carbon fee, a number of the renewable systems are cheaper than putting in a fossil fuel system when we think about the upfront costs. And that's I think a relatively new development. These technologies have been coming along for a number of years. We're seeing more and more buildings in the city, even before this requirement is fully in place, embrace these technologies, including Hula where we were yesterday, which is 100% heated and cooled with geothermal ground source heat pumps. When you look at these analyses, you almost wonder, wow, gosh, why do we even need a fee given this? But here's one of the for me, one of the reasons why this is important is I think to have that, in this case, what appears to have been about almost exactly a $600,000 fee for this building, that is a significant expense for a developer. Having been a housing developer in the past, looking at that kind of expense, if going through a permitting process and being kind of confronted with that, that I think is really kind of a guarantor that builders are going to do their homework on this particular issue. Like in any field, people want to get things done. If someone's been building a building in a certain way, maybe this is the 10th time they've built an apartment building. They may have a way that they like to do it. It may have been a while since they really did a deep dive on what the up-to-date technologies are. I think this fee is going to get people's attention and ensure that they take a hard look at this and only use the fossil fuel infrastructure if they really need to. And we do still allow them to do that in circumstances where they feel there's a compelling technological cost reason where they have to go with the fossil fuel alternative. They will only be charged for that piece that deviates, only that part of the system. So I think in many cases you may see buildings paying a partial fee, but a much smaller fee than they would have if they hadn't grappled with these issues. It's an excellent point because even with the slide here that indicates that some of the renewable systems were significantly cheaper, in some cases looks like almost half a million cheaper, the building that I'm referring to here ended up going with a fossil fuel heating system. So maybe had the carbon fee been in place at that time, that might have been the nudge to really take a more serious look at the renewable technology and really it creates an even bigger delta of savings potentially for that building when we look at that particular example. I think another thing that I want to make sure everyone understands about this conversation is the fee, this new fee would be an important tool. Again we think it is going to change the way builders approach new construction, change the way institutions like the hospital, UVM, the way they manage their buildings and replace equipment in their major buildings. I think it's important for people to know at the same time that in, at the same time that we have this new role, which is potentially a new fee, BED is at the table with anyone who wants to build something in Burlington offering very generous, very significant incentives to go in the direction. That's baked into these models, right? Those potential incentives. In some cases they are and in some cases these are just the numbers without our incentives. So we may be able to go even further based, because this example is from a few years back, we can go even further now because we have new resources through our revenue bond that was approved just in December of 2021 by the voters and issued just in April of last year. And we have new incentives through state regulatory programs. There's new federal incentives and this was done before the federal bill even passed I think. Correct. So geothermal heating for example now has a 30% tax credit associated with it. So that would have a dramatic impact on these charts if that was reflected. So I mean that's exciting. Yeah we have a better economic case even than what we're presenting in the chart when we factor in those new federal incentives and some of the BED incentives are available as well. So maybe it'd be worth that. This is what we've just been looking at and actually make sure I'm reading this correctly. This is essentially just looking at is the whole building cost or just like the mechanical systems of 150,000 square foot. This particular example looks at the heating and water heating system cost. So that component of the project. That's right. Okay and let's look at what the analysis you've done for an existing system in one of these major buildings. So I'm going to go back to the slide here. So this slide is an existing building. Again a real example in Burlington, 50,000 square feet. And the light gray bar represents a baseline fossil fuel heating system replacement for that building. The darker gray bar represents that same system with the carbon fee applied. And then the green bars represent various renewable technologies. Again to your point not all of these have the new federal incentives, some of the new BED incentives included. What this example shows however is here the carbon fee really makes the difference. Here it might have been less expensive to go with just a traditional fossil fuel replacement. However when we account for the pollution impacts from that fossil fuel system and add those in then all of the renewable alternatives are cheaper in terms of an upfront cost of replacement than the fossil fuel system. So this really illustrates the power of the carbon fee to really level the playing field for renewable sources that are going to be not having the same type of impact in terms of climate change in terms of pollution and really ensuring that the fossil fuel system is accounted for fully. So Darren I know before bringing this forward and taking this to the voters you led some work that you know after you and I talked about in part I thought this was a really important part of the process having seen this in the past. You led some work reaching out to the stakeholders that are going to be most affected by this the owners of these very large buildings. What's the reaction been when you've been talking to the owners of properties that are going to be impacted by this new rule? That's right and I'm just going to pull up a slide here that just covers some of the some of the process that we had in terms of outreach with stakeholders with neighborhood planning assemblies and with you know we did a webinar with the district 2030 which really represents some of the developers and design community in Burlington. We really listened hard to the feedback that we heard and this policy reflects in a lot of ways a pragmatic approach. One example is we heard from some of the buildings that might be affected that if we end up paying the fee we'd like the opportunity to have some of the fee come back to us so we can use it for emissions reduction projects at our facility and when we think about large existing buildings and there's roughly 80 in the city that would be covered by this policy that are over 50,000 square feet you're talking in a lot of cases about folks that have more than one building the university, Champlain College, the school district, the city, the hospital and others and so they may have opportunities to cost effectively reduce emissions on their campus and it may have been that that particular system that they were replacing wasn't one of those opportunities so we've incorporated into the proposal the idea that some of that revenue can come back to them, support them in their mission to reduce emissions. That was just one example of the type of feedback we heard and the other piece is that really for existing buildings this is a phased approach this kicks in in 2024 but it wouldn't affect the existing building until they go to replace the system so this is something that is going to be phased that they can plan for or they can put into their capital planning and their capital budgeting and really account for as they move forward as opposed to something that would be more immediate and harder to account for financially. I think another great example of how you and the team really listened and amended our plans in response to the feedback was with the fact that for new construction most of this law this new rule goes into effect we'll go into effect assuming we're supported at the beginning of 2024 but we heard some specific feedback about multifamily water heating systems I believe that the you know builders here in this community just said look we understand what you're trying to do here we're going to be able to get there but the technology is just not quite there yet can you give us more time for those systems and that's what we've done we've moved it back a couple years the implementation deadline on that piece of it. That's right the ballot language reflects that as well that for water heating in multifamily buildings the implementation date would be 2026 instead of 2024 and really water heating in a single family home we have the solutions we have heat pump water heaters that are very efficient that can work well and even in a smaller maybe a duplex or you know up to kind of a four unit we can kind of handle that but as you get into a larger building we talked with affordable housing developers some of the electric based water heating solutions are relatively new we all agree that the technology is improving and going to be more cost effective but having a little bit more runway for implementation was an important component and we listened to that and incorporated that. So let's walk through now some you know I think many people will find a way to avoid paying the fee because everything we've been talking about here they will instead ensure that they're going with these electric renewable systems as much as possible but we do do we have any sense about how much revenue this is going to generate and what what are we going to do with it? Yeah so I'm going to jump ahead a couple slides here in terms of carbon pollution impact fee so you know there the couple of examples that we had are illustrative I think you know in one example the fee would have created about a $17,000 difference if somebody had paid it relative to the you know conventional system in another example it would have been $600,000 so this could be a significant revenue source and it could be a revenue source that really is dependent on how many permits are coming in for new construction and for heating system replacements but one of the things we were conscious of in developing this policy proposal was there was an advisory question in 2021 on town meeting day advisory question seven that really spoke to trying to have equity as part of the proposal and so one of the key pieces here is we're proposing that there would be a new city fund that would be administered to support low-income Burlingtonians renters households to access clean heating technologies with some of the revenue from this fee and between the inflation reduction act BEDs incentives and that potential new source of revenue we could do a lot to help low-income Burlingtonians access clean heating technology so that I think would be a really exciting development I already mentioned that existing buildings may be able to get a portion of the fee back the other piece here is the city is doing some exciting work electrifying the vehicle fleet and so another purpose here the revenue could support would be to continue that transition away from fossil fuel vehicles and towards electric vehicles one of the things I like about that for all taxpayers in the city is the savings operationally are going to benefit everybody because we know it's cheaper to fuel an electric vehicle there's less maintenance and it's cleaner so that's something that I think every Burlingtonian would benefit from great so let's uh you know I my sense I'm very hopeful that there's going to be support for this on town meeting day I mean when you look at what happened a couple years ago which was in some sense very related I mean it was it was the vote that made the vote we're coming forward with now possible there was a fair amount of discussion about this kind of carbon pollution fee at the time and still 65 percent of voters supported it so which I think really you know I'm proud that we live in a community that wants to take action at the local level on addressing the climate emergency it's I think a really impressive and fairly unique part of the Burlington story over the last pushing 40 years now of leadership on climate at the local level it's something that throughout my time in this office I've tried to continue that tradition and really lean into and I think voters agree and that's why 65 percent voted for last time I'm hopeful we will get at least that many this time I you know the concerns that I've heard we I think we've addressed a lot of them already we talked about you know I think some people do have concerns about is this going to drive up the cost of housing you know another concern can you speak to and I've heard less of this in recent weeks so I'm hoping this stays there but I know there was some concern about you know frankly some concern about the McNeil plant and whether this the emissions that are coming from the McNeil plant and does this initiative be cut somehow mean that McNeil is going to be polluting for decades into the future in a way that wouldn't otherwise and I know you've given a lot of thought to this issue so maybe you could talk about a little bit I'm going to do something interesting here I'm going to pull up my phone my phone here and I'm going to go to the ISO New England app which is the grid operator for the New England region and they have a great app so it's ISO to go anybody can download it and what it shows is I don't know if we can see this on the screen what it shows is the mix of energy sources that we're using to generate energy right now this this moment and I'll just read it for folks 56% natural gas 23% nuclear about 21% from hydro and renewables and a little bit from coal that's what's happening right now in ISO New England in the grid and what we have in Burlington is we're 100% renewable so you know this community and and and to the point you just made environmental leadership really throughout the decades this community has said we want renewable resources we don't want nuclear we do not want coal we don't want oil we don't want gas and Burlington Electric since 2014 has been able to put together a portfolio that really matches that community value we've had because of the focus on emissions we've had more discussion around McNeil lately and the thing that I think is important to realize is McNeil is an important part of that portfolio it's about a third roughly of our electric generation we also have wind and solar and hydro in the generation portfolio and we love all those resources McNeil is the only one that you can actually dispatch you can provide fuel when we need it to run the plant all of the rest of those are dependent on is the sun shining is the wind blowing is the river running and those are all great and then McNeil provides this great opportunity to say okay prices are high on the grid we're using more natural gas oil and coal we're going to run McNeil to help displace that from an emissions standpoint I think the thing that I would want Burlingtonians to know is McNeil is essentially helping to keep working lands as working lands we do not have foresters going into the woods to cut trees down for McNeil really what we're doing is taking the leftover wood from other higher value logging jobs that are done sustainably we have four foresters on staff who make sure that when we buy wood it's from a sustainable harvest we're taking the leftover wood and we're able to use it as wood chips for energy so just let's just pause that point the leftover wood is all coming from sustainable so it's first of all sort of like efficient that we're using a sustainable leftover wood to begin with right these are trees that are being chopped down for for other purposes right and then that we only take that from forests that are being managed in this sustainable way that's right we have standards for our Vermont harvest and standards in New York because we get wood from about a 60 to 70 mile radius so it's local and in number of cases we're managing those lands so sustainably that 30 years later we can come back and have another harvest we're not talking about clear cutting like we have in the southeast I think when we talk about climate concerns around biomass a lot of folks think of clear cutting in the southeast and taking wood and transporting it across the Atlantic to Europe to be burned that's not what's happening at McNeil you know we're local we have sustainability standards and we're using essentially what was called the residue the leftover wood and we're providing economic value back to the property owner who's able to keep that land as a working land maybe if we weren't doing that there might be a pressure to develop that land and if we had a development happen there we lose the carbon storage and sequestration that those trees are providing it's one of the most complex processes from a carbon accounting standpoint but I think it's really important that we look holistically at not only the emissions from the plant but also the carbon sequestration that's happening and try to have a holistic look at what the you know wood chip plan is providing it's I we were at a press conference the other yesterday where this issue came up and actually you gave a shared a stat that I hadn't heard before that in the forests that we are working with there's actually we measure we know how where things stand in terms of carbon sequestration versus new wood being chopped down and that's right and what what do those numbers say yeah so we had analysis done in 2020 as part of our integrated resource plan that we submit to the public utility commission a third-party analysis that says in the lands where we harvest in New York and Vermont we are actually adding net tree carbon storage since at least 2003 that's as far back as the study went and what that means is we can be in a cycle where we think of it as the above ground carbon cycle you know with fossil fuels we're taking carbon that's been stored geologically for millions of years we're putting it in the atmosphere and there's no plan to resequestor it with wood chips we're taking carbon that's been above ground essentially part of a natural cycle and we can harvest and we can regrow and the important part is that we're regrowing if we weren't then there would be a climate concern I think relative to how we're managing McNeil all the literature I've looked at from the IPCC the EPA the World Resources Institute suggests that we really need to measure the land use impacts of using wood chips and when we look at it and we're adding that tree carbon that's a positive especially we consider Vermont 100 years ago 200 years ago a lot of it didn't have forest was really farmland that had been cut you know and now we've been able to regrow forests in a number of areas in Vermont and have a climate benefit as a result of that we are almost out of time and I believe maybe just let's just shift gears slightly and just remind people we've another a related but separate announcement is the new green incentives for burlingtonians from BED are out for people that want to consider electric vehicles cold climate heat pumps a whole range of other technologies what should people know about those incentives and how do they find out more the short story here is it is the absolute best time to consider moving to an electric vehicle or a heat pump or other technology from an incentive standpoint we have the best combination of incentives that we've ever had when we consider the federal inflation reduction act combined with BED incentives invite anybody who's interested to go to our website burlingtonelectric.com there is a rebates tab and and folks can scroll through and see what technologies they're interested in reach out to us you can email us at energy services at burlingtonelectric.com and our energy services professionals will give you know free consultation and advice to any homeowners or businesses or property owners anybody in the city who's looking at making improvements or switching to an electric vehicle I had a long conversation with one customer yesterday who was considering the switch to an electric vehicle we went through a lot of the different aspects of owning and operating electric vehicle and we're happy to have those conversations with customers you gave a pretty striking example at our press conference on this that we did a few weeks ago that took the example just you know we just picked this one of a range of a number of different electric cars electric vehicles that could benefit from these incentives but we focused on the Chevy Bolt $31,000 kind of list price currently if you layer the $3,000 local BED incentive that many BED customers are eligible for low and moderate income customers plus I believe is now a $4,000 state incentive plus this brand new $7,500 federal incentive that is available right now and may not always be available because the rules are still come somewhat even though this is a 10-year program the rules are changing and they may be less generous for some cars at least in in the near future right if you go right now I mean you can you can get incentives for it it takes the cost of a $31,000 car down to $15,000 and then you can come home and if you do a little bit of work and set up your home with a with a kind of smart charger which will help you do you can reach fill that car for the equivalent the electrical equivalent of 70 cents a gallon it's uh it's really a game changer the this federal incentives plus what we're doing locally and if we're going to get to our net zero goals Burlingtonians need to know this and enact on it and call BED and help help get this done the vehicles in your home this is how we are going to do our share to end the climate emergency and it's happening we're getting it done I think we'll cut it off there thank you for tuning in tonight Darren it's always great to have you on this show and be able to talk about climate issues with you I appreciate how dedicated you are and committed you are people of Burlington are so fortunate to have you leading this effort so skillfully and I think the last few weeks have been an exciting time for this effort and I'm looking forward to you know coming back and talking in the months ahead about our next update with the net zero plan seeing what the results show we're gonna we're gonna keep pushing on this very hard in 2023 so I'm sure we'll be talking to again soon thank you mayor thank you for having me all right we'll see you everyone again next month in February thanks for tuning in today and have a great month