 in the report and have a conversation with us. I just remember you've been here the last two days, so you know what we're up to. I don't know if we've been, or anyone who wasn't in the room, basically, I think we've recapitulated a miniature to act with me to proceed in a way. And we had a lot of conversations. Now we'd love to hear and view the report. And then have some discussion to follow. I'm looking forward to how we might construct a committee bill that takes advantage of what we've, what you're sharing with us and what we want next week. So, thanks again for coming over, and I look forward to your next. Well, thank you, Senator Gray. And for the record, I'm Barbara Cheney. I'm one of the three commissioners on the public utility commission. And with me today is policy director Tom Nower. And he was the lead auditor of the report and he'll be chiming in whenever he wants to, pad or correct ones. So, Act 62, which he passed, was signed into law in June, last year, June 2019. Among other questions, it asked the PUC to consider whether the state could create an all fuels energy efficiency program. With coordinated funding and implementation for all regulated and unregulated fuels. As a reminder, we have had a statewide comprehensive, fully regulated approach to electric and non-natural gas efficiency, which is funded by an efficiency charge on everyone's bills. Unregulated fuels, fuel oil, propane, diesel, and gasoline have no such comprehensive program or uniform or adequate source of funding. Of course, in considering whether to create such a program, funding is an essential element. Act 62 asked for two reports, one, six months, and the final report in January of 2021, next year. What we delivered to your committee on Wednesday is the approximately 60 page preliminary report, the result of an investigation that included a series of written filings and workshops with participants from state agencies, electric, natural gas, and efficiency utilities, building professionals, consulting groups, industry groups, and citizens. The investigation is ongoing and will conclude with the final report due a year from now. The first report lays out Vermont's existing laws, policies, and programs for all fuels and their multiple funding sources. Understanding the multiple, uncoordinated, spotting programs, and importantly, the various existing funding that goes with each program is a necessary starting point for designing a meaningful, coordinated, statewide approach for all fuels. What is not in the preliminary report is the answers to these questions. This will require more time for a much deeper dive. For example, if the focus switches to prioritization of greenhouse gas reductions in all fuels, over efficiency savings and regulated fuels, how would it even be measured? How would spending be prioritized? What would be the impact on bills? What are other funding options? What if there are no other funding options? The design of the program will be affected dramatically by the amount of funding and where it comes from. Again, this report is due a year from now. So to review what we have in place today, first, at the highest level, our energy policy is based on ensuring, and this is in statute, for a month's ability to meet its energy needs in a way that's adequate, reliable, sustainable, and affordable, and encourages economic vitality, the efficient use of resources, cost-effective demand side management, and protection of the environment. The Comprehensive Energy Plan, the second bullet, was the plan of 2016, includes a number of broad goals, but also specific recommendations to reduce energy consumption per capita by 15% by 2025 and more than a third by 2050. It proposes meeting 25% the need for renewables by 2025, 40% for renewables by 2035, and 90% by 2050. Remember, these percentages apply to all energy, not just electric. It suggests renewable end uses of 10% for transportation, 30% buildings, and 67% electric. Then, number three, in statute, we have targets pegged to 1990 baseline levels to reduce greenhouse gases by 50% by 2018, two years ago, and 75% by 2050. In the RES, we have specific requirements for electric utilities, both in the electric sector and in carbon reduction. We have long-established regulated programs for our electric, and now our natural gas utilities, our electric energy efficiency program. They're held to performance standards and have a dedicated funding stream. Next to last, section 209E, tagged funding for weatherization from the Regional Greenhouse Gas Initiative and the Forward Capacity Market, and requires the program to make, quote unquote, continuous progress toward attaining our building efficiency goals. And finally, the goal for weatherization is entitled 10 to improve the energy fitness of 80,000 homes by 2020. So it's a real catch work, but then there are regional and global efforts too. We fit within that context. Unlike the Trump administration, Vermont has signed onto the 2016 Paris Climate Agreement through the US Climate Alliance, which includes 25 states. Vermont is also engaged in the New England Governors and Eastern Canadian Premier's Climate Change Action Plan and of course, Reggie. At the federal level, we still have the Environmental Protection Agency's Affordable Clean Energy Rule and the Department of Energy's Appliance and Equipment Standards. Tom, don't forget to turn the middle of the time. So here broadly is where we are today. You can read it for yourselves. If you can see that, Tom, can you see it? Okay. The figure for electricity reflects our status as of 2016, which came from a 2017 report issued by the Department of Public Service. They just issued a report yesterday? Wednesday. Wednesday, and... Is there any more energy report under section 202B? So it may be necessary to update some of these figures that we didn't have access to when we issued our report. But we understand the electricity percentage is more or less the same. Onto specific goals and requirements, our success varies. All three tiers are on track for the REZ. We have continued success in the traditional energy efficiency world, electric energy efficiency, I should say. But as you can see, we're falling really far behind in our greenhouse gas reductions. The most recent report from the Agency of Natural Resources shows our greenhouse gases to have decreased 4% from 2015, but we are still 13% higher than we were 30 years ago, and this is solely due to emissions from our cars, trucks, and fossil fuel heating systems. I have an observation. After commissioning with Cheney to put these slides together, I was reviewing the side deck, and you can note the first two bullets, first regarding the REZ program, and the second is our traditional efficiency program. The first two bullets where Vermont can claim some great success, those reflect sectors of the Vermont economy where lawmakers have identified the policy and the funding. They've put the PUC and the Department of Public Service in charge of providing the regulatory oversight, and the lawmakers have tasked regulated entities with stepping up and being accountable. And my observation is the second can't be said about the second two bullets, where we don't yet have funding identified. So that's the difficult job that you guys have. It's easy. It's the easiest part for us. But if and when you are able to identify funding sources for these sectors of the Vermont economy, I'm confident that the Vermont community can step up and form the types of oversight and accountability that would be necessary to achieve the goals. And I think one example of what Mr. Nauer was saying was that in weatherization, we did have a goal that was in place for a number of years and for 50,000 homes short for the reasons that he mentioned. And to emphasize it again in a different way, why are we falling backwards? Most of them have to do with money and scarcity of trained workers in the weatherization area to adhere to that as a problem as well. But it could be partially tied to the fact that there is no security about what the funding level is. We're gonna hire more workers if there's not a program that is robustly funded. I think we talked with CapSnow last year when we were working on Act 62. They were asking us not to begin what had happened before where there was a surge of funding. I don't know if it was our money that flowed into Vermont. Yes, it was. So there was hiring at that time? Yes. Pick up the pace and then that was one time money, not ongoing funds and then the painful experience of hiring on training people and then having to reduce staff. That's a consistent message that we've heard in the investigation both from Capstone and from the Building Performance Professionals Association that contractors are hesitant to staff up or to invest in equipment for weatherization without a dedicated, stable, long-term commitment to funding sources. Respect to the third bill, I just wanted to span on that a little bit. We know that we have the weatherization assistance programs for lower income vermincers. Those programs will basically provide 100% of the funding necessary for the weatherization and the efficiency utilities get involved as well. If you need a new appliance, they often cover 100% of the cost. Higher income level vermincers who have good credit scores, they have access to financing so that when they know that they need to do some weatheration work, they can get financing. There's the middle part of vermin demographics that financing and addition funding is a real question mark. And so perhaps more accurately should have said for all of the very highest income levels, which presumably in which area many people may take action anyway. So through the renewable energy standard, our electric distribution utilities have a mandate, not a goal, to reduce fossil fuel consumption through their tier three requirements. They are meeting these requirements through a wide menu of options depending on the utility. For example, line extensions for a place fossil fuel generators with electricity, snow making compression, heat pumps, electric vehicle incentives and so on. Vermonters also spend more of their energy budget on the worst greenhouse gas emitters. First on filling their cars and trucks, which is the highest greenhouse gas sector. Second on staying warm, which is the second highest emitter of greenhouse gases and leased on their electric bills. And we're having a lease success in the sectors that emit the most greenhouse gases and costs Vermonters the most money. So where's the current funding for our various programs coming from, such as they are? First are established efficiency programs funded by a monthly charge on each rate payers bill relative to their usage. We have programs for large energy users from global foundries and down to slightly smaller industrial commercial customers that are self-funded and have performance standards. And utilities use rate payer funds to meet their res requirements. It's not confusing. Utilities use the rate payer financing. But you said the first one was self-funded. Yes, would you like that? Squelfle, for example, with SMEAP, which is the program for global foundries that was first started for IBM, in lieu of paying their customer, I mean their electric efficiency charge. So they're not self-funded. They use the money that... Not in that case. However, in the case of some of these other programs, can you explain how that worked? It's a little more complicated for those. Right, so yeah. So for the SMEAP program, rather than paying into the statewide system, entities that qualify, I think it's global foundries and al-Omia who was admitted to the program a year or so ago, they can enter the program, not pay the efficiency charge, as long as they dedicate to spending a minimum amount over a three-year period. The other two programs, the Energy Savings Account program and the Customer Credit programs, those customers in those programs do pay into the statewide efficiency fund, but they kind of manage it more than you and I do when we pay into the efficiency fund. They get the dedicated percentage back and they work with the efficiency utility. Forgive me, Mr. Chairman, when you say that they're self-funded and they get the tax break over here and they spend their money differently, so it's... That may be probably a result of trying to be too efficient in the private slide. Thank you. When the public hears that they're self-funded, they think they're doing it themselves. Right, so thank you. I apologize for any interruptions. That turned me up. Melody's not in the report is. He's trying to be efficiently expressed the idea in the slide. That's a quick question on the SMIC funding level. Is it comparable to all those they're managing themselves? Is it comparable that the dollars spent comparable to that they've paid in the energy efficiency check? I haven't done that analysis. My suspicion is that when the law was passed about a decade ago, probably it was expected to be about the same. I haven't done that analysis for today. I haven't seen it for a while, but I believe there's a requirement in that law that says they have to meet a certain standard of reinvestment. That's correct. They have to spend a minimum amount per year for global founders, I think it's a million dollars per year, three million over a three-year period, and for only I think it's less like. Going on memory, I think it's half a million per year. And Mr. Chair, we're trying to understand the facts so you can give us a recommendation in the future. SMIC, we have a mandate today in law to reduce fossil fuels and to do it in the least cost way, et cetera, et cetera, et cetera. The SMIC program allows those people who are using money not going to the ETC funds to spend it on fossil fuels and not on electric savings. That's one of the provisions in there. So that is contrary to, and the legislature passed it, but contrary to the mandate that previously existed, notwithstanding the mandate, they're able to do this. It's different. I think rather than self-funded, the better word would be self-administered. And they're allowed to use it, and we've not withstood your mandate about carbon fuels to allow them to use it for things not reducing carbon fuels, and perhaps increasing the use of carbon fuels. I'd say certainly for participants in the SMIC as well as the customer credit pilot, you're allowed to use that money on a wider variety of projects than for programs. It's what I just said, and you just said it differently. Okay, so the answer is yes. We're in agreement. Okay, thank you. Okay, so I will go on. I just started with some of the programs and their funding. There's more. No-income weatherization gets money from the Weather Assistance Program through a gross receipts tax on all fuels with intersections with the Department of Energy and federal LIHEAP assistance. Second, there's limited non-low-income weatherization provided by Efficiency Vermont with a dedicated fund from Reggie and forward capacity market revenue. But this source is volatile. At this week's Demand Resources Plan presentation, Efficiency Vermont forecast of the state will be receiving $3.1 million less in Reggie and FCM revenue for these programs. We have no control over that. And that's for what time period, please? Excuse me? The forecast of down 3 million is for... 3.8 million for 20... For the next three years of the false period, 21 through 23. Thank you. Mr. Chair. Senator. Senator. You didn't include in the... There's a substantial amount of low-income weatherization that takes place on fossil fuels collected through the Energy Efficiency Tax on Natural Gas. Is that true? That is correct. So that wasn't mentioned in one of the funding sources. Well... In low-income weatherization, you mentioned several, but not the carbon tax on the natural gas. Well, that's meant to be covered in the first bullet on the previous slide. Vermont Gas is a regulated utility, and they recently, in the last few years, appointed to be an efficiency utility as well. And so, in that first bullet there, they also levy a customer usage charge and have commission-approved budgets and performance. And then customer usage charges on fossil fuels. Yes. On natural gas. Yeah. I didn't hear that distinctly in your presentation. Thank you. That is, in the first bullet, that is a regulated fossil fuel. And that's one of the distinctions we're making between regulated fossil fuels and electricity, and which have programs that are funded in unregulated fuels. So we're... Finally, we also have some variable funding for electric vehicle incentives through utilities as part of their Tier 3 activity through the Volkswagen Settlement Fund and through federal tax credits. And here I'll put in a plug for a very comprehensive report we issued to the legislature last June, full of specific recommendations on how to grow electric vehicle use and charging infrastructure in the state, not all of which come with a price tag. Besides the recommendations in that report, we also include a recommendation in today's report, and this week's report I should say, that is for the legislature to approve the use of efficiency charge money collected from charging EVs for strategies aimed at upstream information and upstream market barriers. Like, for example, promoting awareness of electric vehicles, working with manufacturers, creating dealing networks, training sales teams, the strategic placement of electric charging infrastructure, and other supply chain activities. The goal would be to increase the availability of electric vehicles and improve the capability of the workforce to sell them. Now electric efficiency utilities are currently not authorized to participate directly in supporting the electrification and the transportation sector. So we support a limited application of the electric efficiency charge to fill this need. It could be done with the statutory change suggest this year. And finally, remembering from the efficient amounts of testimony earlier this week, currently that, which I heard, something in the order of $120,000 a year, is that right? That would be the monies you're identifying here. That's correct. We generally did a back of the annual calculation. We came up with the exact same figure that Efficiency Mon provided us in one of our workshops. And as you're considering this recommendation, I would advise the committee to also keep tabs on what the Senate Transportation Committee may or may not be doing with respect to electric vehicles and efficiency charges. I know that the Public Utility Commission was requested last year to do a follow-up study to the electric vehicle report that Commissioner Achini just discussed. And that request from lawmakers was, one of the questions asked was whether there ought to be a transportation efficiency charge. That would be the same level as, but in lieu of the electric efficiency charge. And my understanding is the commission's report recommended not to do that, not to have a transportation efficiency charge. And it wouldn't make sense to me to go down North Rose, both repurpose electric efficiency funds as we're suggesting you consider and dedicate that same pool of money to the transportation efficiency fee. It just wouldn't be feasible. And the report that he just mentioned was submitted to the Transportation Committees in December last month. That was at their request. That was your supplemental report. That was your supplemental report. Supplemental reports. And there are two reports. One I mentioned that we issued in June at School of General Recommendations. And the other is specific to fees. So thanks for that heads up. And I mean, I think if there was a word that was used more often than any other word this week in our discussions, it was collaboration, and well, collaboration would be that word. So it would be helpful to not have competing, disjointed things moving forward. Well, if I could add a word to your list, it would be coordination. So in compiling all the different programs and funding sources that currently exist in the all fuels landscape, we came to some general conclusions. First, our current efficiency programs are well coordinated. Here's the coordination. Are well coordinated and held to strong performance standards. They are successful. Still they engage only in portion of Vermont's economy. Second, efficiency programs for all other fuels are uncoordinated, inconsistent, and without performance standards. They are severely underfunded relative to our need to achieve our greenhouse gas reduction goals. Just as in programs, the same disparities exist for funding. Existing law provides a reliable, fair funding stream for electric and natural gas efficiency. But funding for all other fuels is severely limited relative to what the state aspires to achieve. According to prior studies, the funding gap amounts to $30 to $60 million per year, but we need to examine this further for our final report. The $30 to $60 million is that from us. I am wondering if you know what the course seems more than one figure. But someone that was like the total energy, the total energy task force, so that's. The task force mentioned a range of $30 to $40 million. There have been a number of studies done, so here's the range. Right, to add to that, say the low end of this range reflects what the task force reported, the thermal efficiency task force, and their work was really focused on the weatherization goals. And the upper end of this reflects the regulatory assistance projects reported to lawmakers last February when they were looking at more holistic, looking at fossil fuel and greenhouse gas reductions, and that's the example of transportation electrification as well as thermal. And in terms of that, I know we're not here to really drill down into funding, but in terms of sort of the rough math for it, is that to put us on track to meet a particular target or all targets, what that spending case is? Correct, that's to put us on a path towards achieving the statutory goals. And it would be annually considering where we need to end up. But again, we need to do that analysis. Sure, yeah, we tried to be very clear in the report that these are not commission-generated numbers. These are, we've got existing resources and reports that have been provided to lawmakers. And in fact, I asked the question of participants in our case, is the task force report number, is that a reasonable proxy for today? I think that report was issued in 2013 or 2014, and we're six, seven years down the road, and people said, yeah, it's a reasonable proxy to begin the conversation. Senator McLean. I sense that your presentation today is moving from what you've learned to where we might go. And I wanted to ask, and I quibbled over a couple places in your report where I think you didn't state as boldly politically sensitive things that you've learned and I don't understand why. You may yet do so. Okay. So, patience. In doing this report, and you folks know more about the details in the nuts and bolts, what did you find that came to the members of the report that surprised them or taught you something that you didn't know when you started the report? What did you learn that you didn't sort of already know? There is one slide further on that, that is one thing that was not only surprising but also important to what we planned going forward and thinking of the different measures we turned on. Yes, I think that's... What was that? It'll be in a future slide. It's about... Okay. I'll find it when we get to it. Okay. That's one thing. Thank you. Go ahead. One theme that I don't think was surprising but that I've already alluded to that strikes us over and over is that if we are going to achieve our goals, we need funding for the heating and transportation sector problem. So, I'll keep going. Yes, please. So, weatherization, turning just to weatherization, we emphasize the funding point. And our next report will not just analyze the amount needed but we'll aim to make specific recommendations on where the money could or should come from. One example that has already been loaded appears here and on the next slide. This comes from the Department of Public Services Thermal Efficiency Task Force report which we've already mentioned that was issued in 2013. It suggested a fossil fuel excise tax or a thermal systems benefits charge as equitable and transparent. It estimated what would be needed to raise 10, 20 or 30 million dollars. They did not include natural gas in the analysis because Vermont gas at that point had not been appointed a efficiency utility and was not levying efficiency charge on great payers at that point. So, their analysis included a separate tax on natural gas. Again, we have not yet analyzed the amount of funding that would be needed to meet our goals. The same thermal efficiency task force report estimated that we would need about 30 to 40 million per year. But in contrast or in a different avenue, representatives from the regulatory assistance project recommended that fossil fuels should contribute to efficiency at a level closer to what is contributed by electricity and natural gas. And this chart shows how much will be raised by different levels of tax on liquid fuels. Again, it includes natural gas and that's a little outdated given that they have a program now. I think it's also, this is based on fuel usage at the time. And as we all know, fuel usage changes all the time. Some people who used to be burning fuel or propane now have access to natural gas in Madison County. People may have more efficient boilers or furnaces and so their consumption has already gotten down. So this reflects a snapshot in time and it will be worthwhile updating this. Yes, and this is not meant as a recommendation it is just meant as I said, a snapshot and an example, some of the analysis that's already been performed and we need to do our own version of the same. Another example for raising or an idea for raising revenue comes from a February 2019 report by the regulatory assistance project. Before I go on, I should say that the source I put on this slide is inaccurate and I will be providing a new slide to the committee and remember what the source actually was. Right, yeah, this was also discussed in the task force report. Okay, so this idea was to impose an efficiency obligation on all suppliers of unregulated fuels because they do not currently pay an efficiency fee. In common parlance, what's that recommendation? That would be, in other words, for example, for the electricity and the natural gas that ratepayers use, they pay an efficiency charge based on your usage, that model is another way rather than a simple excise tax it would be an efficiency charge. How would it live, Tom? So the way that I have understood this idea and been thinking about this idea is not mandate that you pony up and contribute to a central fund. Instead, if you're someone involved in the unregulated fuels sector, you could say you have an obligation to come up with two, three percent efficiency per year. You can do that by contracting with someone. You can do that by providing the services on your own or if those options aren't appealing to you, you could pay into a central fund. And the administrator of that central fund would implement the services for you. You've just mentioned both a several mechanisms for bureaucracy, systems to provide the money. You also mentioned that, percentage figure, what was the, just for example, say you have to come up with 2% efficiency per year. And since you, and what's the energy efficiency charge percentage right now for electricity? I couldn't tell you off the top of your head. We don't do that as a percentage basis. It's a fixed charge, a set of fractions of cents per kilowatt hour. And so, approximately five percent. You guys can't tell us roughly what the percentage is. Approximately five percent. Who else? Approximately five percent of your bill is a good fall apart figure. You could agree with that? Yes. But it's not done as a percentage calculation, but that's what it works out to. This is more of a model of performance standards so that they, people who are selling fuel. X percent. Need to address efficiency work. Thank you. I'll take that as an information request and we can send you the exact figures. Yes. Back to the overarching goal. Where do we need to be? Depending on whether we're taking state goals into account or international goals, the numbers are high. But there are incremental concrete ways to meet them. In February of last year, RAP issued to the legislature its report called Economic Benefits and Energy Savings through Low Cost Farm Amendment. The report estimated the greenhouse gas reductions that would result from specific investments in the thermal and transportation sectors. I've taken the top four returns on investment that were in their report. In other words, dollars spent per greenhouse gas reduction achieved. But the report goes into more detail and provides other investment calculations such as wood pellet boilers for schools and heavy duty electric vehicles. We have not independently assessed these results. However, if you took these four measures and compared them to the numbers on the previous slide in terms of million metric tons, and here we have dollars spent in metric tons of carbon dioxide equivalent achieved, you can see that the goals are achievable with the right strategy and the required investment. A comprehensive approach to reducing greenhouse gas emissions should consider a large portfolio of measures to provide opportunities for all remoders to participate. And here Senator McDonald is one of the surprises. It is possible to put a quantification on where you get the most bang for the buck. And here are four of them. However, there's a more recent report or calculation in the Department of Public Services energy report that just came out this week. And Tom can describe what they know. Right, I wouldn't manage expectations here. I haven't read the report in detail yet. This came out Wednesday afternoon at about the same time that we were working on getting our report out. But on page 18, figure six of their energy reports, they have kind of a cost of carbon for different measures. It's a very compelling chart and I would encourage you to get someone from the department here to discuss the meeting and their findings. The McKinsey chart? It's similar, right. And I think as you're considering the committee bill next year, the central question is what are you trying to achieve with that bill? We've been talking, or I've been listening this week about modernizing the efficiency utility programs and services. So the central question is why, what do you hope to achieve? And I think this chart and this analysis should be considered in that discussion. It shows that electric efficiency is the most cost effective use of dollars from the carbon sample. I'm sorry, would you repeat that? The electric. What I understand this chart to be saying, and again, I want to caveat this, but I haven't read their study in detail, but how I understand it on its face is that the most bang for your buck is funding electric efficiency. As we have to do. As we have to do. So I really think that this is part of the discussion that needs to be had. It goes on to, it looks at a whole basket of things that you could put your money towards. Electric efficiency, plug in hybrid vehicles, heat pump, water heaters, all electric vehicles, tier two renewable resources. So again, it has them ranked in higher in terms of the most bang for your buck to most costly. And a list that you just gave are that represent that ranking. After the electric efficiency investment comes hybrid electric vehicles. And then the same next. Right, and then heat pump, water heaters, and then followed by all electric vehicles. And the bang we're looking for on that chart is greenhouse gas reduction. That's how I understand it. Per dollar invested. Per dollar invested. So it's sort of a carbon reduction efficiency. Turn it down. And only when the electricity is not produced from carbon. I suspect that they have incorporated what is not doing it in this electric portfolio. So I'm in agreement with you. So you're, I think you're saying that the recommendation is if you want to reduce carbon, don't power things with carbon. And that in today's world, electricity has less carbon in it. Therefore you recommend electricity. And if electricity were made with coal, you wouldn't be sitting here today. Recommending, is that fair analysis? Thank you. Thanks for pointing that out in the report. And we'll hear from the department next week. Again, we'll be doing this heavy lift for the next report and it will include recommendations. But there are some principles that we're going to be relying on. I've stressed funding a number of times. Funding is essential if we're going to transform the sectors that emit the most greenhouse gases. And also, by the way, also represent Vermonters biggest energy burden. The funding must be consistent and equitable. And any programs that are funded need to be coordinated statewide. The needs of low income Vermonters must be considered. And finally, as you know, there's a long standing principle that electric and natural gas rate payers should not subsidize programs for unregulated fuels which currently pay no efficiency charge. If current efficiency charge funds were redirected, the bill savings and other benefits that were assumed when the amount of the charge was established would be tenuous at best and could be lost. Vermonters would experience the same rate effect but would not necessarily experience the benefits. And of course, that said, presumably the programs to which funds were redirected would provide societal benefits and possibly some rate payer benefits. The current statute, the commission's current regulatory process for setting efficiency utility budgets and saving goals and avoided costs were not designed for conducting the cost benefit analysis of using energy efficiency charge funds for non-electric efficiency. And in our next report, we will examine issues like this. Well, and as you know, we're contemplating how we might, while waiting for full reports, begin to make progress on those two sectors that are such a large source of emissions. So there's an, in part because we have expertise and staff and funds, as opposed to creating new adequate funding where it's precise with the full work that we're talking about. The challenge is trying to find a way to get started without weakening our energy efficiency. So one of the things we're talking about is a sunset on any provision that we do and that one of the balances is for utilities, EUs and EUs participating that they're looking for, excuse me, predictability, stability, something that they could actually staff and become expert in and start doing the work. But in the meanwhile, we don't want to create any kind of program that would allow anyone to feel comfortable with a long haul using energy efficiency charge dollars derived from electric in the unregulated fuel sector. So there's a balancing act that we're going to do. I'm very aware of that too, and I think the final slide speaks for itself and I'm thanking you for the opportunity to outline what we presented in our report this month. You read a read from your report about what you recommended, you read from your report, your recommendation on how we should move forward, which was to, could you put that into common language and how it might be reported on the radio or on television or underneath people's windshield wipers at shopping centers. What did you recommend that we do that we're not doing differently? We have in this preliminary report laid out the landscape. We varied spotting different programs. We needed to understand that before we could bring all those disparate elements together to recommend a statewide program and a statewide approach. We don't have a specific, as I said in the slide, about what is not in this report. It is not the answer to those really needy questions, whether to create an all fuels efficiency program or whether to expand the programs that are currently offered by the existing ones. So we don't have, this is what we recommend. We're saying this is where we are now. These are some of the considerations and if we're going to achieve our green gas gas reduction goals, we need to target the transportation and weatherization sectors with a lot of appropriate funding. And your recommendation about appropriate funding is? That's coming in our next report. Did you agree with that, Tom? I would say more to begin with. More. More funding. Rapp said yesterday, don't take the current pie and cut it up differently. Oh, absolutely. The pie should be bigger. Yes. So you're waiting to? We're waiting to see, first we need to analyze how much money is actually needed and then we need to present a recommendation on where those funds should be acquired. We do not believe it should come from the electric efficiency budget. What does that leave as a possible list of choices? That's what's coming in the next report. No, no, no. The possible list of choices someone should be able to know and articulate today. You may recommend which of those are selected. I mentioned a couple that have been floated. For example, fuel excise tax. There could be a. Put that into the common language. Tax on the fuels. Fuel excise tax. I've never seen a leaflet under my windshield that says the legislature is considering a fuel excise tax. I never see the. This is what I would say. The fuel dealers like underneath my windshield for anything the legislature's done. So we need more money. Number one, number two, we don't know yet where it should come from. We need to do that work. Number two, we need to target the transportation and feeding sectors that are going to reduce our greenhouse gases. Do we, does that include shifting the entire paradigm so that instead of having efficiency be the goal, which is currently the goal of our standing efficiency programs and make the goal greenhouse gas reductions, that's a fundamental shift. Presumably that could also mean that we don't, that we raid the, if you want to put it that way, we raid the electric efficiency fund to do that. We did that for 18 months to give, to provide the opportunity to deal with the things in your first slides about training a workforce. There were X, Y, and Z where the money is going today. The study that we're getting today apparently almost suggests where the money should come from but we have to find a place. We've taken it from the electric for 18 months. We stole it fair and square to it. But in the future, it needs a funding source and you're saying we need a funding source. It has to be bigger than it is today. We shouldn't take it from the electric efficiency. And the list of choices is income tax, surcharge on the well-being, property tax, and the analysis for it yet. And that's what we've, that's why I believe your committee gave us till January of 2021 because that requires more than we had six months, nine months. Part of that analysis will be if there is no more money. I mean, because you have to consider all possibilities. If there is no more money except it's currently raised by the electric efficiency charge and that if may depend on political will to raise a tax or whatever it takes. That's our problem. I know, but let me finish. If there's, this is what we need. This is where it might come from. If it were to come from these different sources, what would be the effect on Vermonters? Including what would be the effect on this, in terms of the successes that we no longer achieve if the money came from the electric efficiency fund? Currently, the electric efficiency work is reducing greenhouse gases. It's saving Vermonters money. And it is the investment, it is the dollar that brings the most return. Every dollar invested in efficiency saves the most, lots of different things. Let's put it just greenhouse gases. Anyway, that's a complex analysis and we will be delving into all those considerations. So we... So to put it down, just to make a point, we asked them for acclimations next year, so to press them for an answer now doesn't seem quite fair. They have another year to do the work that we asked them. You have your own hypotheses. You're free to state that at any time. If it's gonna take political will to raise the money and do this, we're the ones, and we're basically, if we can't get any stronger answers today, we no longer have to worry about political will and we can wait until next year until we see a report to worry about it. We hope to. And you're gonna present what you're gonna present it. We hire these people to do what we asked them to do and when they produce what we asked them to do, that's fine. But to say that we shouldn't ask them, opinions is unfair. Where do I have to share? I'm sorry, you hired who? You are, we're saying to you, give us some report. Okay, so what is the report? There's nothing fair or unfair about that. No, it's not fairness. It's just what we are able to present to you today. And what we will hope to present to you in the next report is options and analyses so that you can make the decision whether it involves political will or not. It will ultimately be up to you to consider what we present to you in our next report. So if we were to do anything in the interim that, because fuel changes, fuel use changes all the time. If we were to do something in the interim before we get to the next report, would you question us to not do anything that would preempt or overreach or render your future report to do it less useful? Well, the way I see it is we didn't say this is your best recommendation for funding. That's clear. We did say here are some very strong principles that you should consider as you're looking at different funding options. And we say six years ago, seven years ago, the Global Efficiency Task Force did a very comprehensive analytical job in looking at this. There are a lot of stakeholders engaged in that process. They made funding recommendations there. They looked at, they recommended many different funding options. They provided, you know, here are our highest priority. Here's a, you know, social considerations and here's we just can get enough people on board so we don't recommend these. What do you mean you didn't get enough people on board? What I mean is, and I'm paraphrasing the task force report here. They're saying, here was an idea for funding thermal efficiency that was raised but not too many members of the task force thought that was a viable option and therefore the task force report didn't recommend it. Recommend? Funding? Sources? What are you saying? Did not include it in its highest order recommendations to lawmakers at the time. To do what? To fund? To fund thermal efficiency. You just say that. Mr. Chair, thank you. Thank you. Thank you. Thank you. And so I think what the commission's report says is there are a lot of good ideas there. You should consider those today and at the same time, we've got a lot of work to do and we will continue to look at those ideas to see if we can provide you with any updated recommendations. Thank you, Mr. Chair. Thank you. Our question amongst ourselves would be in the meantime, what we do against this goal. Thank you. And I might add that the thermal efficiency task force targeted or focused on the weatherization which is a big part of the problem and I will turn you again to consider some of the recommendations we've made in the elected vehicle report in June of last year because there are some common sense ideas that would help jumpstart that area of it. Jumpstart elected vehicles? Although they don't really need jumpstarts. So we have those reports in the room to make sure everyone has access to them and we can get a resurrected copy of the thermal efficiency task force report so that we could be behind there. And remembering that it's a little out of date because that includes natural gas. I have your principles and formal future recommendations. The second bullet is any new funding should be consistent and equitable. And can you elaborate a little bit on that word equitable because we've talked about different perspectives and for instance, if any individual rate payer might have a different perspective than rate payers as a group and or members of one utility versus members served by another utility or even society-large looking at some sort of societal test. So how do you, when you say equitable, what, how are you thinking about that? Right, I think Senator, you have put your finger on it that equitable can mean different things. And I think at the highest order, when I hear this word, I go back to traditional regulatory making principles of cost-cozure pays. In my opinion, absent some other very compelling policy reason, one class of customers should not be subsidizing a different class of customers. So when we implement our current efficiency programs, we have a number of different equity standards that we hold efficiency of not brilliant electric from not gas to. We know that the residential class of customers contributes a certain amount to the funds, commercial, industrial, contribute a different amount. We want the outcomes to be, to kind of not exactly repress each customer class's contribution, but there ought to be pretty close outcomes. Same thing with geographic equity. I know that this committee heard from other witnesses over the past couple of days talking about geographic equity. Currently it's done on a county basis. You know that the VEPSA members have been discussing rather than or in addition to doing it on a county-wide basis, let's look at this on a utility by utility basis. Another idea might be let's consider low income customers and make sure that we're returning at least as many benefits to those customers as they contribute to the fund. And those are the types of things that I believe the commission was referring to when it used this word. Which one? Equitable. You're such a long-run. What do you mean? You said consistent. Well, can I stick with one question here? So equitable, when we do something like low income sensitivity equations. So that seems as though we're adding another criteria in perhaps shifting benefits. So it's, I'm equitable. Sounds like you want me to aim for it, be conscious of it, but there could be inequities as in greater benefits delivered to the lower income demanders than non-low income demanders that the social policy sort of laid on to the equity discussion. Is that my, on the right track here? That's how I look at it is here's what the traditional principles, here's how that would guide us. There may be other compelling policy reasons, societal reasons why we may go beyond what would traditional regulatory rate making approach would guide you. Senator King, we had a question about consistency. No, I put a period of consistency because that's a principle everybody understands and we've all talked over and over again that for this advantage for matters shouldn't be put farther behind when we implement the program. That's one of the principles that you're trying to say when you use the word equitable. Is that what you're trying to say? It includes the notion of not cost, again as Mr. Narrow said, the cost-causer pays. So just another way of thinking about that is cost shift, people and people benefiting from what they're paying as well. So those are all forms of being equitable. So for this advantage for matters today, regardless of what we do where the principles is when we do it, we shouldn't leave them farther behind and finding life less affordable than they do before we make the change. That's one of the principles. That's another principle, yes. We think that low income considerations are important as in this next slide here. We need to be sensitive to the needs of lawyers. Thank you. Any committee questions for the commission? So our plan as a committee is to put together a committee bill and we'll share that with you all. So just one way to have it and invite you and all the other, and all the stakeholders that you've seen and actually continue to weigh in on the draft we produce. But I think the direction that we were going based on this week's discussion could be something quite narrow both in terms of new permissions to use some funding in the transportation sector, fully recognizing that every fuel should pull its own weight and that would, but we're not ready for that complete discussion. And that build in some limitations to be conscious of limitations so that we keep an eye on the equitable at least that we're just talking about. If there are not any more questions, then thank you very much, both. Thank you and thanks for the opportunity to talk to you and we look forward to the next step. We'll work this through on January 17th, 2021. Ready to go. Thank you again. Thank you. And for anyone in the room, this is the PBC's report is up on the whole page of the committee page. We'll get onto that page as well, the department's report and we'll be here in the department next, we'll be scheduling with the department next week to come in and spend time with us in more detail so we'll get to go through that with you. And so for the moment, I just wanna pause and see if based on that report, if there's, I mean, almost everyone in the room participated in the hearing in the last two days, I don't know if anyone has any comments or questions they wanna share now before we back up in here. So in that case, thank you all. Keep an eye on us next week. We'll be inviting you all back in as we start to shape up the bill and we are adjourned for today.