 Good morning, and this is Vermont Lawyer's House Committee on Environmental Energy, and we're going to continue our discussion of S5 with our legislative council members. We have an updated timeline, and this is a really great opportunity for you all to ask clarifying questions on the bill. We don't currently have an updated draft. We went through, and we got through all the proposed changes that were in the most recent draft. And then, hopefully you all went home and reread. So, it's a great time for clarifying questions. Members. When are you looking for interest, suggest a change this. Sure. And that folks have those. You can talk about them. I've been gathering a bunch of witnesses. Walk through a number of them. Let's see if there's clarifying questions that people have first. That if you would like to go, you want to go through the timeline in its entirety again, or we can be quicker today right because we just kind of point out that. Yes. Ellen Chakowsky, I was a legislative council. So today I did provide you an updated timeline. It fixed a few of the typos from yesterday. It also includes a couple of the updated dates that are in the first version of strike all amendment. And so, I'm going to move forward. These dates can be adjusted based on how you respond to the changes in the bill. But a couple of things I also added a couple of the things that we talked about yesterday to the timeline just trying to again. This is an imperfect system because it's a chart but added trying to add more things on here so that you can visually see where they fall. So first I the third box July 1 2023. I moved the DPS potential study into that box, because currently there isn't a due date in the draft, but they're going to start it presumably around July 1 2023, when all that work gets underway. And then right below that is another July 1 date that wasn't in the previous draft and this is acknowledges that the Department of Tax will need to start providing the fuel tax data to the PC, then. Next. So additionally in the February 15 2024 box. Your most recent draft had the funding source recommended by the PUC coming in February 15 2024. So that's moved into that box related to the report that's also supposed to come back and so I suspect they'll probably be in the same document. So additionally, June 1 2024 there's a box added for that with the PUC appointing or contracting with a DDA your 1.1 draft does have June 1 2024. I know that you had some conversations around that yesterday so I put a question mark next there in case that's not a final date you're going to land on. So then one of the next sort of typo that I fixed was in the January 15 2025. So January 15 2025 the PUC are going to they are going to submit the final rules to the legislature. Additionally, they do have to also report back at that same time with a lot of other information, including the rules but also the status update that includes all the economic analysis. I didn't have that yesterday. But I think again it will probably come either in the same document or an attached document with those rules in January 2025. So on the next page, I did sort of questions. Thank you. And these rules, the final rules come to the legislature in 2025. Is it going to be a vote upon or is it just going to be that's the way it is. So we're going to be the pastor for fail this bill this year. What are we voting on. We're voting on just the study correct. This year. Yeah, you are voting on the full substance of what is an S5, which would authorize the PUC and the Department of Public Service to begin the work on this. However, they will not be able to enact final rules, establishing the full details of the clean heat program, until at least two years from now in 2025, when the rules come back to the legislature for review. So this is what I was going to lead to you on the next page. And so you'll remember that yesterday, I explained that when the rules come back to the General Assembly, the General Assembly is going to have multiple options of what they do with the rules. So they will come to the whole General Assembly for review, the rules cannot be submitted for adoption, and therefore take effect until there's enacted specific authorization to do so. And that would need to be a full bill passed by the General Assembly, and then either signed by the governor or over or have a veto override. The bill can take a number of different forms. It could be as short as saying the legislature authorizes the PUC to submit its final rules for adoption. Or it could direct the PUC to make any number of changes to the rules before they're adopted, or the statute establishing the clean heat standard could be amended in any number of ways to dictate what else should be in the rule or what should not be in the rule. And then additionally, and this is, I added this on the timeline. After the legislature acts, if they do enact legislation with authorization, the rules then will also go to Elkar. And then at Elkar, and I added this on here the lead, the members of Elkar which are eight legislators will review the rules in the statutory criteria. So they will look at whether or not the PUC exceeded their authority at all, whether or not the rules are within the legislative intent, whether any of the rules are arbitrary, if they're stylistically sound. And they will also review the economic analysis and the environmental analysis that are required. Additionally, and so we haven't talked about that a lot in here but generally administrative procedure act rulemaking does require an additional environmental analysis and economic analysis. So even after the full legislature passes authorization, Elkar will still have another chance to review the rules and could actually further dictate further changes if they also find something in the rules that are a problem. So, in short, right now, we will be voting on a bill that we won't know what the results are. We will be voting to do to establish a statute on the clean heat standard that will then initiate work at the PUC to develop the program, which will then come back to the legislature. Okay. Thank you that helps. Yeah. Yeah, and so that is a lot of what I covered on the second page of the timeline. I realized that as I was talking about it yesterday. One, sort of description in the bill itself but so the rules are going to come to the legislature in January of 2025. If the legislature passes a lot of the PUC will be allowed to file the final role of Tory. So I'm, I speculate that could be between May and July, which is when the majority of bills are enacted into law in the General Assembly, it could be earlier, it could be later. But not until that happens, can the PUC then submit the final rules through the Secretary of State and Elkar. And then Elkar will receive them and do another review with those steps I just met. And then they cannot take effect. So rules, we haven't talked about too much the APA process here but rules state in them when they will take effect. They cannot take effect for at least 15 days after they have been approved. So at the very least if Elkar moved as fast as possible, that could potentially be June. But sometimes rules also included dates certain when they will take effect and so it could be much more than two weeks so it could be a couple of months. So it's a little bit unclear when the rules will actually take effect and that will depend on when the legislature acts and what date is actually included in the final rules that go to Elkar. Which is something the legislature would have control over when they review the rules in 2025. Representative Tory. So the rulemaking that we're talking about here are the rules that we're talking about. We just refer back to the to S5 specifically where they're mentioned is it 8126. So if you look at the third column on on the timeline. Yeah so primarily what I'm talking about is in section six F. It is also discussed in 8126 because that's the PCs general rulemaking authority that ruling and authority will last as long as the statute lasts. The process for the initial rulemaking the sort of hybrid system of rulemaking you're creating here is in section six F. Can you remind me the sections of the APA that are omitted from this statute and that they're omitted because the public process is already embedded here. Yes. Yeah. So there's a number of steps that are required under the APA that would be potentially redundant or less restrictive than what you're doing in this bill or mandated more public engagement that is normal that is what is normally required under the API. Okay, I just wanted to. Right. Stan was a page. I'm sorry. Page five of the new version of discussion yesterday I didn't follow up yesterday but I really understand the. This was talking about. Okay. 1111 1112. When we describe what is. And then we asked us to take away the 60% at the bottom of that and what that actually meant. I have some edits suggested language changes that came from that was. Because at least one of our witnesses yesterday I think to spoke to supporting it. Oh, representative civilian. So in five customer with a little income means a customer with a household infant about 60% of the area or state one income, whichever is greater. We have a paid number. Five. Five line seven. It's the definition of customer with low income and customer with moderate income. So customer with low income means a household income of up to 60% of the area or statewide. That's a change. Which ever is greater. And then moving to six customers with moderate income means a customer with a household income between 60% and 120% of the area or statewide median income which other is greater. Okay. Thank you. Thank you. I would support that. I think we've heard both appreciation for articulating this clearly, but then we've also heard requests to ensure that as we articulate it, we're not making it. Number one, confusing. And number two, something that means that there's a cliff and they can't provide support. Okay, thank you. And as I recall, the Jaffa was suggesting that we drop the 60% out of the bottom from customer with moderate income. I know that there was further conversation among people. Yesterday, it said maybe a change needs to be in the percentage of clean heat measures delivered to low moderate income households. Yes. I have that change in here. Okay, just that. That's page 11. Yes, that's where it is. Number two is where the 16% are mentioned. None of seven. So, from the submitted testimony from VHFA, but they also asked was to remove the floor. Right. That was 60%. I think there's an alternate suggestion, right? It's in a different location than I think it's what we're talking about. Okay. And I ask why is then the definitions would overlap. Exactly. Then the definitions what? But then they would overlap. So someone. I think it's to make it more inclusive. I can read this. I don't agree with what she submitted. Okay. I have a suggested change from her incorporated edit from her. Right, but let's, let's cover the Y for a second. Okay. As written in section 81 23. The definition for moderate income has a floor of 60% AMI, meaning that low income households are not eligible for the moderate income benefits. So I would ask the committee to change that so that the definition of quote customer with moderate income. Are those with incomes below 120% of median income. The impact would be that the lowest income for monitors would be included in both the low and moderate income categories. So I don't fully understand that either representative Logan. Yeah, I, I kind of get it because there are some programs that go up to 80% AMI. I understand the idea behind just wanting to make low income households eligible for all programs that serve everybody under the 120% AMI. But it also does mean that low income folks are both low income and moderate income, which is a very important point. So I think there's a suggestion about how to keep that definition clear, but also make sure that the benefits are flowing generously. Okay, so on page 11. This is 8124 cleaning standard compliance. To suggest a change of their annual requirement, each obligated party shall retire at least 16% from customers with low income. Each obligated party shall retire at least 16% from customers with low income. And there's new words and additional 16% from customers with low or moderate income and change from them further down. Yeah. I just wanted to represent about where should play it out. I just want to play it out a little bit. There is then potential for the reverse to happen. That question of going to low income and moderate income gets. I don't question doing anywhere but if it but if it's right at the low income category goes all the way up. It sounds to me like this language is going to confuse many different groups of people. Whether they're low income or moderate income, someone with a moderate income is going to end up finding out they're not in a moderate income. I don't think there's real good clarification as to who's going to get what what's going to get over here. I just want to say at least. It's not restricted. Right. Yeah, thank you. I'm just having thought based on the chart more from BHF a showed us yesterday about the breakdown of low and moderate income households, homeownership versus mental. And lower and moderate income homeowners. And there were low income homeowners. And so programs like the one that the HFA was talking about serve those under 120% am I are for homeowners. So there's just some programs that are for homeowners that qualify at the rap funding for example for weatherization. It's a financing program for folks who own their home. I don't know. It does seem like this gives a lot of flexibility to the providers to maximize the resources that they have available to them and, you know, target the right people that it also doesn't provide your direction. You're saying. So the credits pricing will also factor in values. Here, just this is, I think this is the one we should sit with. And we'll consider this change and move on to others. We're just, you know, we're not deciding right now we're thinking we're getting ideas on the table so that we can think about them and decide next week. I'm going to go to the next one or sure. Yeah, I mean if yes, let's do that section. Page 12. Before line nine here. So with consideration to how to on how to best serve customers. With low income, moderate income and commission shall have the authority to get rid of the word change and make that word increase percentages established in subdivision two of the subsection. So I think we should pause. After consultation with the energy. That seems just clarifying. No. What Ellen. So, so I would respond. Why would you increase the credits, if there is a credit shortage. You could. So the second sentence is good cause could include credit shortage or undue financial impacts. So, do you think that changes neutral about whether or not they could increase or decrease and that was intentional about harm or shortage of credits. So if there are not funds available or not sufficient funds available to get credits from low income work. This is a circuit breaker for not requiring because it could lead to price impacts. And as you mentioned on the prior page, it's at least 16%. So there is already some suggestion that it could be increased 16%. This would also potentially allow them to increase it from 16%. So I think change is probably the proper word unless you also want to change what cause is. Just another question mark on that one. Okay. So we're on this page. Okay. Number five. We had this discussion maybe Laura, which was not quite. Commission shall take into account purchase. In a way yesterday as I understand it, we were sort of saying the commission shall not take into account. Because we were to have in this discussion, right, because we don't want this to say that the fact that you are getting something from some other part of government or otherwise doesn't stand in a way of being able to access the edits of the markets or the work being contemplated here. And are we so determining whether I guess my question is almost do we need this section at all. Let's pause at that. So in the primary whether to exceed the minimum percentages, we need measures that must be delivered to customers with low income, water income commission shall take into account for just nothing else I asked a question what is that. Sure. Yeah, do you want to. You want our state of council to respond. So I do think this language is awkward and I have wondered if it should just be at 24. If the if there's an interest in requiring more than 16% from the low admitted mental income customers that could come from information regarding how many customers are using other state sponsored government programs and therefore already getting these incentives. And so if for example we hear that like he has a large amount of customers in it. That would suggest potentially that a large amount of customers are accumulating credits and therefore I believe parties will be able to have more than 16% of their credits coming from the low income customer base. So I do think the language is a little awkward, but it's knowledge that if for some reason there is a large amount of credits potentially being generated by a government sponsored low income program that does suggest that there's a lot of low income credits on the market. So the aim so that the 16% could be increased. And maybe we could I could say a little better in some language tweaking but I do think it's an awkward sentence. I think the representative has a thought on it, although, if your thoughts change based on that. I mean, it very well may, but the suggestion was made here. And I think that's why via Jeff and others was adding sentence at five at the end participation in other government sponsored low income and moderate income weatherization programs did not limit the availability of clean heat measures available to those households by nature of that particular. So, I do hope that this sentence in five isn't suggesting I think there's an overall policy in this bill that sentence should be stacked. So I've never read five to suggest otherwise. So, potentially that language with help or maybe incorporating some of those words into five might help. And isn't that elsewhere in the bill. Yeah. Where else to. So it is in the section on credits. So I believe that's 8127. And it is. Yes, in credit eligibility, so page 26 onto page 27. And so on page 26 it describes that the credits can be created regardless of who does the work or who funded it, regardless of if it's required by state or federal programs, or which which would include low income weatherization and tier three. So I think they can count towards those policy goals as well as create clean heat. I guess it's different though. I mean it's one is saying like to eliminate you from participation and the other thing they can have they can. Other thoughts on this suggested. It's going to take some language. Sure, if the issues but participation I think that is right that it is necessarily addressed in that later section. Yeah, I can. I can try to rewrite this to be more clear. Basically, it's notwithstanding. Sorry about that. Apparently, I did not. Really glad that I'm on the floor. Everybody check your phone. I'm on the floor like morning. Everybody. Sorry. Yeah, how's that silent move going. Why are you calling it. I am not at any rate. What we just finished. Hold on. Morris where you at the. So just from my clarity. Number five and I meant we. Some thoughts about maybe striking it or changing and amending it and putting into four, etc, etc, but basically this, it's notwithstanding participation in other programs. Right. That's what we're saying. You can do. You do all your study or stack it shouldn't live just because you participated one doesn't mean you're not eligible for this. And so, and I think that this conversation around four and five together came up a lot last year as well this year about was 16% and 16% the right numbers. And so that's why there's this sort of this language in both of these that sort of allow well the piece you could find that it should be less because we don't have enough credits. Or the piece you could find that it should be more because we have more credits. Representative Tony. Would there be a situation where there's fewer credits because some of these related programs are experiencing barriers, their financial funding barriers or some other barriers. Because it seems like this market's going to be a really good picture of more of a lot of different successes and issues. As it grows, or if it were to flatline, for example, we would be learning and gaining insight into, you know, a lot of, a lot of potential. It's not a barometer, but it just, it just occurs to me that reasons for the credits to shrink could be less. Yes. Representative students. Thanks. Just for like, for my brain in terms of how we approach this bill and talking about it. I think that the two pieces that I really will one of the pieces that I heard truly from you see as the request for. There is the request for flexibility. And yet also there is the request for some specificity so that we're providing directions. And I guess, so to the point of specifying participation and other government sponsored low income like that second request from the HFA to make sure that the mapping can occur that it feels helpful that the comments about modifying the word from change to increase feels like that might not be helpful on the flip side. Yeah. And moving on. Your next suggestion. Yes. That's to F2. Here. See this has to do with the compliance. So actually over to page 14. We've heard a lot about this of the month and it should be four times the amount established by the commission for timely per credit payments to the default. So we have a suggestion. To add under here. The commission may waive the non compliance payment required by this subdivision to an obligated party, which failed to retire the number of cleanly credits required in the proceeding year. If the commission. If the commission. colon number one, one finds the obligated party made a good faith effort to achieve that required amount. And it's failure to achieve that amount resulted from market factors beyond its control and, and to directs the obligated party. So the difference between the clean heat credits required to be retired, and the clean heat credits, the obligated party actually retired for that year to its required amount for one or more future years. So it's demonstrable that market forces were the problem, and they take the difference between what they did what what they were obligated what they did and they add it to one or more future years. So, representative Clifford. So, in that, does that strike the four times does not not at least the four times the four times, but it says that the commission may waive that. And it lists the conditions by which they monthly, if there were market forces that caused them to miss. And, and if the obligated so they miss it, they say, here's our commitment. Okay, we missed it. Here's why we missed it we missed it because of the market and also here's the amount we missed, we're going to apply that into next year the year after three years after what happened. So, you know, if we were obligated for 10 we hit eight. And here's the reason that that happens because the market, and we're going to take those two and apply it to next year year after three years down to our obligation. Representative longer might be clear. I agree. The word at the section. Read literally, we have the assurance that they have the authority to do it anyway. But read literally does say there's no way to suggest no we way. I think there should be some delay and I might even add something like faith effort. I think that's the market forces something around. I don't think we want it. It's just good faith already. Oh, I'm sorry. These, this is just a compilation of edits that I have put together so I can if you'd like, or might be easier for members. I think that's the right direction. Okay. Sure. So it sounds like it's setting up a difference between a good faith effort to comply and a bad faith effort so bad faith would be ignoring that you needed to comply the first place and made no attempts to comply. Whereas good faith is having some kind of demonstration that you attended to comply and then identifying what prevented you from. And saying you will pay it in a later year. So I do think you have options that is is an option. You could change the shell to a may in the penalty statute generally, you could go in a different direction. If you don't want to do a four times multiplier. I did look into this. I have some feedback from the other attorneys in the office. There are a few statutes in the environmental realm, particularly that go with double times penalties or aggregating factors, particularly in the hunting realm if you have additional aggregating factors. It's double than the standard penalty that's already in the statute in litigation if damages are assessed and there are mitigating factors there can be triple damages what's known as treble damages. So that's another one in the tax world from failure to pay your income tax is a multiplier of a percentage of your, your tax liability. And so different multipliers are in statute in various ways. But broadly, the rest of the PUC's statute for penalty are specified amounts that the PUC cannot exceed when asserting a penalty. So, if you don't want to go with the structure that's here you do have options on how to craft a penalty in a different way. Thank you for that. That's good reporting on your homework. And I have some other specific examples mice. Oh great he sent me a bunch of examples if you'd like to see other one specifically but there are, there are different ways to craft a penalty. And I didn't find that are any exactly like this. I would also point out that currently in the renewable energy statute, the renewable energy standard which is somewhat similar to this. There's a statutory amount for the penalty. And so it sets what is sort of the credit price in statute. And that happened in 2015 prior to that the public service board was setting, I think, annually, but they were setting the per credit compliance price in rule. And it's significantly different than the current price in the test, I reviewed testimony this morning, and then that's a pretty big difference between, I think between the current price and what's the statute. Yes, statute is much higher. Yes, and that is to act as sort of the last resort, and it helps the market and so there was some idea here to try to do that. But there are slightly different choices in this bill because it is a slightly different system. Yeah, I get that. Okay. Senator Morris. Just so the committee knows the four times penalty is going to be a problem for me up to four times penalty. I'm appreciating the language that is being suggested now that the options that are available in perhaps the discussion, but the four times penalty is. I haven't thought time supporting that the goal here is to provide incentives for low income moderate income to change over to alternative heating measures. And this section appears headed towards putting potentially some dealers out of business and that's the problem struggling. I'd like to focus on the incentives, as opposed to penalize my opinion. Yeah, I hear you. One of the things I've heard clearly from the fuel dealers for years on this is the need to ensure compliance by all a fairness factor. And so, you know, this is one of those places where we, you know, if one or, you know, if there are a set of fuel dealers who are able to just, you know, or if the penalty is not sufficient enough for the obligated party, and you potentially are risking unfairness to the others in terms of compliance. So, although I am, I hear you and I'm happy myself to also think about, you know, how we could further temper that the waiver feels pretty substantial. Thank you. Thank you. Everyone represented Mars. These dealers aren't going to know if you're going to four times the amount is going to be $300 going to be $30,000. No one knows we won't know until after the study happens. For the last six years, I've been trying to get a texting and driving bill through. And I've been told by hours to be that, you know, we don't feel comfortable about finding Vermonters. And that's why my bill is installed. One of the reasons my attitude might be another one, but anyway, I don't think it's right to find Vermonters when they don't know what they're going to be fined for the amount. That's that's my take on it. Evans and Clifford. Thanks, arm chair. Thank you representative civilian I am interested in that language that you mentioned. I also, I understand your point about need for compliance. I also to me it seems like, to me, I typically am looking for reference points in terms of consistency with how we go about business probably. And, you know, I personally when the PUC was here and they said, you know, more typically you see trouble or three times that seems, this just seems to me a little bit like, you know, and that is not the point of this bill. I would be interested three times as opposed to. Representative flicker. Thank you. I appreciate that. Thanks. I was going to bring that up and look for like a compromise of middle ground. I was even going to ask if we would consider to two times. And I know what the language of what, and what the Senate discussed was the three, the three. You know, we're going to, you know, either. I do it or I mean, I think the year language covers a lot of that what the PUC has a constant control of. But the deep hope that we can even go to instead of for that's just throwing that out there. I think it was for us. Think about like continue. Sure. I'm looking at the default page page 15. This is looking at the default delivery agent. And there are a number of suggested edits here from both to see Burma and business. So starting with. See. See. It's on page. 18 to 19. So open the suit. 18. Yes. Actually on page. Starting with, and here we're at the potential study. So this language around the potential study. A potential study conducted by the public service to include an assessment and quantification of the resources that are technically available. Maximum achievable. And program achievable resources. And we heard that from both Dave Westman and Rich Cowart of what potential studies typically consider. Continuing on the results shall include a comparison. Of the applications of the thermal sector portion. Of the GWSA. And 10 PSA 578. The potential study shall consider and evaluate market conditions for delivery of clean heat measures within the state. Including an assessment of workforce characteristics. Capable of meeting consumer demand. And towards meeting the obligations of the GWSA. And the SA. That's an A. Going on to be. The development of a three year plan and associated proposed budget by the default delivery agent. New language. And will be informed by the final results of the department's potential study. The DDA may propose a portion of its budget. Towards promotion and market uplift. Workforce development. And trainings for clean heat measures. And activities shall be eligible for earning a proportional share of clean heat credits pursuant to 81. Stop right there. I do have additional. One additional in G here if folks. Questions. I think we heard yesterday. Representative. Representative Tory the logo. I just missed this, but the baller in the potential study section. We have a date one it's due. Well, yeah. I think we heard yesterday. Give us. Earlier this week, I think. If you're talking about Mr. Westman's testimony. Yeah, so I think we've heard that. Yeah, so I did ask David Westman when he was here, how long may they take to conduct. And so he said nine to 12 months. And so I think we'll need to be some time for them to figure out who the consultant is going to be to do this work. It's slated through to me if they have a standard consultant they use currently for the potential studies they already do. Or if it may take longer time because this is more specialized work. But if they already have a consultant six to nine months. Maybe the reasonable number. Yeah. Representative. Actually. Do we have the document that you're using Laura yet. I have not sent it. For me to take that in. This is Bobby. Yeah, I was just going to say I. This calendar timeline. I'm going to go back to the calendar. The calendar date. I'm going to go back to the calendar date. But that's Council Davis today. It sort of tweaked it. If this is at all helpful for July 1st 2023. PPS. Releases of the potential study are. And then it's really more like. September 2024 would be when the potential study is. September 1st. Yeah, would be when the potential study was completed. So that would give like. A little bit of a sense of what the future is. And that's for the. RFP announcement selection contract was completion, which is tight. But. Just in terms of putting in a timeline. It did want to ask another question if that's okay. Somewhat related to this. So this language, I believe is from efficiency Vermont. That's where I printed out my version from. That's where I printed out my version from. That's where I printed out my version from. If we're putting this language. If we're trying this language on. Does that mean that the conversation we had. Earlier this week. Where. The credit value. For your comment. That was only the most. Our credit values of change that language with regards to workforce. We were saying that maybe that seems a little odd. Is this where it would be instead? Yes. Yes. Thank you. Yes. Can you say that one more time? Yes. So I am looking for it right now. We have. Where's credit value. It was under credit ownership. So it's later in the bill. Under. Maybe page 20. 21. Yep. So. Right. Thank you. So it's page 21. It's like. Specifically line 1819. Yes. And that had felt a little odd. Talking about whether or not that seems appropriate. And this seems more appropriate. In terms of. What we're trying to say. I agree. Me too. The next. I think. Okay. Thank you. Thank you. Okay. So we'll talk about. Lowing credits to be used for workforce development. Training. Perhaps. Is there a print? Is there any implication here that there's going to be. A bit on that. I mean the goal is to get. Alternative heating sources into homes. Just wondering if it could be all consumed by workforce. can be spent in future years. We're allowing for that. Just concerned that, and I recognize workforce development is necessary. What he's gonna argue that I don't think, but if there's other funding mechanisms or programs that are currently available, if we're not, I won't say double dipping, but if we're creating spending of the credits here for workforce that could be covered in other areas and that the goal of reducing fossil fuel you've spent on training a workforce. Yeah, the way I see that, it would be that the potential study would include those other programs in our ability to have the workforce. Right. I would say, go ahead, Ellen. So I haven't seen the direct language that Representative Sebelia just read, but I think by moving it to the budget section, it would not be related to credits, but it would be allowing the BDA to set in their budget some funding for workforce specifically, so not related to the actual awarding credits. I think that's what it said, but I haven't. It's proportional. But that is something you could work on if that's where you wanted to. I may propose a portion of its budget to go towards promotion, market uplift, workforce. It's hard not seeing the language, Representative Morris, but basically it takes it out of that credit piece that we were discussing the other day. So it does go on to say that these activities shall be eligible for earning a proportional share of clean heat credits. So I just want to public service announcement the edits that Laura, I mean, she worked really hard overnight to get these to us and file them so we can do this. And if others have suggestions, we're open to those as well. They're now posted, I think in acknowledgement that this is a work in process. I just want to say, I think completed. Your thoughts were compiled as recently as this morning. So thank you for doing the homework and sharing it. So then what I just said though was slightly, it was inaccurate because I hadn't, so it's that second part where earning a proportional share of credits. So that may be something you want to consider. Yeah. Thank you for posting them by the way. Representative Logan. I just wanted to note while we're discussing this topic that I've been in communication with efficiency Vermont who provided the original language in the credit ownership section to reference market uplift activities such as workforce and training. And so this language is in the budget section on the potential study considering, who's the DDA? By the way, designated delivery agent. Okay, sorry, default delivery agent may propose a portion of its budget. I think that they were actually not just assuming that it would be the designated delivery agent. It could be also, for example, EHFA, who's providing finance mechanisms. So I'm not, where did this language come from regarding the potential study? So this piece has come from, this was part of their S, maybe part of other business of its. I think there's a lot of complexity potentially in including this as part of the credits. PUC yesterday said that this just seemed, this is how renewable energy credits are already working. I think it's just that we're discussing it for the first time as if we didn't realize what all was packaged in to the distribution of ownership for credits. And so I'm happy to talk about the response that efficiency Vermont has given in that credit ownership section, because I know we had also separately discussed moving that language that they provided into the credit valuation section. And they responded to say that they don't, still don't think that that's the appropriate as for that language, but I don't wanna get off topic from this potential study language. So we can talk about the other piece at any point. All right, I think we're still just trying stuff on. Think about it. We may see it again next, in the next iteration. Present to you. I have a question, because Poggi today, remind me how, what the process for determining the greenhouse gas emission value that a credit that's assigned. Does that happen as part of the tag? Yes. Okay. So if workforce is going to be given some value in the credit, I just wanna make sure that the tag has workforce related participants, which can be followed through EBT, but we're not using more broadly that workforce. I just thought, yeah, I can't remember where the tag is just anyone pointing to that section. Okay. On 28th, thank you. Present sevens. Budget, the budget for the default delivery agent seems different to me than what a credit, greenhouse gas emission reduction credit is. So I'll just flag it. That's why I thought it made more sense to put it in the budget than to have it as the credit ownership. And so it sounds to me like there's a couple, like there's possibly two separate things happening. Whether or not you wanna build a workforce into a credit's value, or whether you wanna give credit for workforce. See if you're not quite right, but go ahead, Representative Logan. So it makes sense to include those considerations in the budget and the potential study. I think that's something we can all agree on. We wanna know how much it's gonna cost, right? Those activities. So that's a separate question than if, and this is, so I guess I'll just, I can forward the email that I received from efficiency firm on to everyone. I sent it to committee leadership this morning, I believe. Okay, so Dave Westman says I believe the, on matters such as these, the most important consideration is that the legislature direct the tag to address this topic. The tag will not take action on credit allocation among the many parties responsible for it. Excuse me. Disacting. So the tag will not take action on credit allocation among the many parties responsible for implementing a clean heat project and must directed to do so by the legislature where it shows up in the legislation can be something of a moving target. He admits, but he believes, so Dave Westman from efficiency Vermont believes the language is best suited in the section on credit ownership because that section is dealing with who owns credits once a project is complete. There may be one or more parties who should earn credits from a single project and those credits should be allocated proportionally once the project is completed. So I have a suggestion. I would love to work with folks around this issue at lunchtime, maybe, if that's possible, would that make sense? Yeah. Okay, then. It's good. Okay. Moving on. So that specifically is the workforce issue and the market uplift. Sure. Okay. Moving on to age 19. Still here in the default delivery agent and specific programs. This is a request from a conglomeration of business interests that we modify this. And here it would be that specific program, talking about specific programs and that the default delivery agent shall create specific programs for multi-unit dwellings, condo associations, renters, manufactured homes, comma, and commercial and industrial customers. So these groups have an equitable opportunity to benefit from the clean standard. So I think this is clarifying language. I think that commercial and industrial is already part of, but I think this gives another group of remonters some assurances that they are also included in the standard. Representative Steadings, that seems like a no-brainer to me. I mean, our current efficiency programs, understanding that whoever the DDA would be is going to go through an entire process to be identified, but our current efficiency programs provide services to commercial and industrial. And I mean, if we don't provide services to these customers, then we're not going in the right direction. So that seems like a no-brainer to me. Representative Clifford. Sure. I just was wondering in renters, how does that affect landlords in any way? Is that because if a renter has to get permission? It does not say here. It does not say here. I guess the question is, what do you mean? So renters are potentially at a disadvantage because they don't have a control over their property. And so this is agnostic about what type of program. I've assumed this meant incentive program, but it's asking the DDA to create specific programs for renters and these other types of units that are different than a homeowner owning a house and can make changes to it. So it isn't clear what type of program it's going to be created, but I will stop there. Representative Bunger. Is the program what actually be for landlords? For what? It's not a program for landlords, but it's not a program for landlords. It's not a program for landlords. Of a rental. Of apartments. Benefit renters. But wouldn't the program and the ascent is actually here too. Landmort, I guess. It is very vague on the specific type of program that could be created. So potentially not. Or maybe. that of Logan. Thank you. So this is the split incentive issue that we've been talking about. And I think one of the things that would make these programs more accessible to renters is if they were able to be the initiating party in in accessing the program. And then would need their landlord's permission. But they would go through they would be able to go through the process themselves of applying to take advantage of a particular benefit. So this is the issue that has been faced in the past is that it had to be a landlord taking the initiative. And then there needed to be permission for that landlord to qualify on the basis of the income of their tenants. So we need to make that clear that that that the landlord can qualify to participate in programs. So low, moderate income status of their tenants. But we would also be asked practice to allow tenants to initiate participation in a program as well. That's good. Representative Smith. Thank you. If the tenant say in a duplex to two tenants want heat pumps, and they get the landlord's permission to go ahead and have the heat pumps installed. Chances are the landlord's going to be out of the income bracket to qualify for it, but the tenants will qualify for it. So two years down the road, these tenants decide they want to move on somewhere else. Do they take the heat pumps with them? No, no, no, they will belong to the landlord. They will belong on the property. So I do think it would belong to the owner of the property, the landlord or whoever the. Yeah. Thank you. I think the original intention of this language was to make kind of an association is supportive of targeting low income. And so now if we add the commercial and industrial, then do we have to add single family? Yeah. I mean, I feel like that wasn't the intent of this section originally. And I'm not against it. I do think it's fine to be explicit that commercial and industrial customers surely should benefit from this, but equitable. And then is there anything left for single families? And I don't know how this affects others. Yeah, and I think also, and maybe the word shouldn't be renter, maybe it should be rental properties. But it's these are types of properties that have perhaps challenges that are unique to the property type in getting clean heat measures. Yeah, which commercial industrial probably are too. But I think everyone has challenges. That's the way we're doing this. I have that. I would also say that this was on the on the list of provisions that were added right at the end of the Senate. Okay. And so yes, I do think there was equity concern. But also they didn't necessarily have a ton of time to flesh out the specifics of what these programs could be. Yeah. All right. What we're going to try to do is get through as many of these as we can and then incorporate them into the next draft to continue this next week. So just let's keep going. Next one. Okay. Say, President Bonner. So what we're really saying here, or we might want to say is just develop a program for you. Yeah, right. So which would we kind of everything but it makes it then easier for those people in that category to know what the program is for them. So yeah, this may go back to one of your questions on another one is actually necessary. What do we get? What's the added benefit here? I think the added benefit are that nowhere else in the bill they discuss unit dwelling specifically or condos. Renters are mentioned and so are manufactured homes. But there was discussion in the Senate about how they could address these other different types of buildings. And so yes, you may not need this here. You could be more broad and include other types. But I think they had heard testimony on these different building types and wanted to acknowledge them. So that's back to your point of consistency. Mental units, commercial industrial buildings. We're going to be kind of parallel in the construction. All right. Next up. Okay. Okay. Next, we are moving to do you see where we are? E 31 is we have really not labeled peaceful. This is where obligated party show me its annual requirement through a designated delivery to a designated default delivery agent appointed by the commission, which is intersection. I think you're you're talking about page 17. We're going backwards. Thank you for saving. I think that's what you were reading. Yes. Right. So in actually age 18. So this is a plan of that. What's that? Plan approval and approval of the default delivery agent being on page 18. This so right here, I am going to suggest we need to figure out how to three, one the capital T an obligated party show me its annual requirement through a designated default delivery agent appointed by the commission. However, the obligated party may be approved by the commission to meet its requirement in a whole or in part. You're one of the following ways. I think you're starting it here. 17 and starting in here. Adding a D because it doesn't exist. It would go after the C into that language. You just it does exist. Are you trying to move it or change it? I'm trying to highlight it and talk about it. Okay. So it's on page 17. The point was that in which that said, yes, there it is. D one. It's not D three. One is D one. Okay. My apologies. That's so here. I think we need to think about what this what this says right now is that you you have to meet your credits through the DDA unless the DDA approves a plan that you bring forward and there's been some concern by industry that has brought been brought forward that that really gives a lot of discretion to the commission and that we might look at and how to kind of soften that so that plans would be approved, provided that they they have sufficient resources like workforce and other. So the concern here is the concern from the PC is here I am single person saying I will be installing 10,000 heat pumps this year and the PC has no means of doing anything. So they're just going to say, no, we don't prove that. And industry is saying, well, but if we propose something and we say we've got sufficient resources and kind of demonstrate that we should be able to do that PC should be. So I think we should ask Ellen to work on this language just a little bit more. Yeah, so it doesn't currently set a standard by which the PC should judge a plan. So I think this is adding clarity of what a plan needs to include for the piece roughly what it needs to include for the PC to approve it. Moving on now that I'm reoriented page three of page 18. So sorry, page 18 number three. Here. I believe this is also an efficiency. Commission shall by rule or order establish a standard timeline or suggestion I should say a commission shall by rule or order establish a standard time under which the default delivery agent credit costs or costs are established and by which an obligated party must file its election form. We'd add in the default delivery agents schedule of costs shall include sufficient costs to deliver installed measures and shall specify separately the cost to deliver measures to customers with low income and customers with moderate income as required by subsection meeting 24 D of this title and down to four. Yes. The rationale for that is just to clearly show where the budget is going or yes. Yeah, I do think that's already implicit, but that is a clear statement of what I think intent already is. The issue for would add so for says the default delivery agent shall deliver creditable clean measures either directly or indirectly and use customers locations in Vermont sufficient to meet the total aggregated annual requirement assigned to it pursuant to the section. Along with any additional amount achievable through non-compliance payments as described in subdivision. The one 24 F2 of this title. Suggested addition is clean heat credits generated through installed measures delivered by the default delivery agent on behalf of an obligated party are creditable in future years, but not required to meet the obligated party's existing obligations that are credible in future years, but not required to meet the obligated party's existing obligations shall be owned by the obligated party. And so what what they're trying to do here is when the DDA has up is installing measures. And say there is 12 years worth creditable credits. Oh, OK, OK, so it's after like the, you know, like it may just be for the first three years if that's the DDA and then afterwards would go to the obligated party credits would go to the. So it helps the. Up to reduce their obligation. Yeah, and so just to remind everyone, so if the installed measures will have an expected life, probably 10 to 12 years or somewhere in that range. And so who owns them later in its life if the DDA is the one that installs them. And so because they're going to be using money from an obligated party, a full life of the credits should go to the obligated party. I think that makes sense. Moving on to page 22 into July page 21. I'm just noting in B. This is that section that we're talking about working out a number of us eventually over the lunch hour or longer. I'm moving to B. On page 22. This is where we are listing eligible measures. We have a request here again. The conglomeration of businesses and also we have a request from some rural interests. The first is the clean heat measures listed in one. That we the explicit. I think this is this is the sharing language. It's already residential commercial industrial. Thermal energy efficiency improvements. Going to six again. This is electric appliances providing thermal and uses again that we would add here residential commercial and industrial uses residential commercial industrial. Which I think is assuring language. It's not new. New cost plus. And then a proposal. For a new measure and remembering that this is a baseline of measures. It is not an exclusive list of measures. It's measures that must be required. They can elect to add other their measures and this one would be line extensions that connect residential commercial or industrial facilities. Thermal loads to the grid. So we've heard about like sugar shacks for instance. And connecting those and that's actually happened where we've had a sugar maker be connected to the growth to kind of reduce their emissions. So that's a suggested from some rural interests. I'm seven. I'm a little slow right now. Is it okay if I ask it to clarify question to Ellen for the previous comment? Yeah. So the previous comment is there any by adding this reassuring language? This is this is thing he credits. That are not used this year but have a future year value that they stay with the obligated party. I can understand this. I guess if you state it like that in statute is there like let's say there is a negotiated agreement that the obligated party says you can you can have my next you know yes you can have this year's and you can also have the next five years if there's a negotiated agreement there because my experience working in efficiency Vermont over a decade ago we would do that sometimes if we place this language in there like that does that mean by statute they can't do that like is that accidentally restricting the potential negotiated agreements? Well, I don't think you need to answer that now because I don't I'm just we're just walking through it. I'm just that can be bought sold trading. Right. I think she's asking if that if having it be a shell would prevent bought sold trade and so I think you would probably what we could make that clear that that's not restricting the DDA or the obligated party from them doing whatever they want with them. Yeah, it's whether or not this is accidentally making it more confining as it goes to clear about the options. Anyway, you don't need to answer that but just as I read it and like and on the line extension, I'd love to just think about that. Just a suggestion. I'm going to plug these in. Could you plug the new ones in? I'd like to keep it low. Okay. All right. Let's plug it in a different color. Oh, multi-colored. That's a great idea. Thank you. Have a good idea. I'd like to think of something. I don't something like to read through. I think not to you. Black. Mr. Eggbein. Thank you. We are we are going to reconvene at one o'clock today.