 Good morning. Today is Thursday, January 6th. It's 9 o 2 a.m. And this is a meeting of Senate natural resources and energy And we're continuing our week one Work to bring us up to speed on things that have happened since we adjourned last last spring Just a couple housekeeping notes so We don't Stream our meeting with captions turned on because the fully automated instantaneous live captioning is has so many inaccuracies that it is Been judged problematic. However, there's a far more accurate captioning and transcript available once Approximately 24 hours has gone by Automatically added by YouTube. So for the time being we're not streaming caption as we work But if anybody watching the proceedings Needs To have a real-time captioning, please let Our committee assistant Judith Newman or me know and we will turn that on for the meetings in which you're planning to attend But otherwise everyone should know that YouTube has a much more accurate captioning It's just that it follows 24 hours after the meeting and there's also a transcript available Secondly, we have an open door policy for having people who are not necessarily Testifying on a bill but wish to quote-unquote be in the room And so for instance today Commissioner walk is sort of visiting with us. He's not a formal witness if anyone wants to Participate in a committee meeting meeting either the sort of in the room status or to be an actual witness delivering testimony as usual, please let again Jude or me know and We will do our best to add you to the agenda With that, I think that's it for housekeeping for the moment Gonna one of the things that we talked about very briefly last spring and then we adjourned and there's been a lot of development In the interim is that there's a proceeding across the street at the Public Utility Commission related to a an application on the part of global foundries And a complimentary one from Green Mountain Power in order for global foundries to become a Utility Regulated with certain de minimis provisions. So it's we don't have as a committee an active role to play in terms of That application it being administratively complete. I think last March However, it's of interest to us because there's an impact All repairs actually when a customer of global foundry size Leaves the the territory of GMP So we just want to be aware the other thing is for the sake of transparency I want to note that as an individual senator. I wrote to the PUC and I think it was around The very beginning of December something like that and I distributed a copy to members of the committee So you'll know what my own take is but again today is not about arguing for or against that application It's just to come up to speed on how things have happened, you know, what has unfolded and what the current time line is I think later on as a policy discussion we might get involved in Questions about what if a similar application were to come forward and how would Do we want to consider the potential for others to make similar applications? So that a lead-in like to turn to our council. Mr. Kowsky who has been Helping us all by following the proceeding and it's going to give us a Bring us up to date on where we are with what's happened since last May basically Maybe you should even start with the application in the spring Sure. Good morning Ellen check house the office of legislative counsel Please let me know if at any point you can't hear me. I'm having some issues this morning but yes, so global foundries has Filed a petition with the public utility commission. It's petition 21-1107 PET It is a petition on for a certificate of public good under 30 VSA section 231 the the words in this conversation are very particular. I Do want to correct the chair slightly and say The application is not specifically to become a utility However, global foundries is seeking to be regulated by the public utility commission And what they're calling this entity is a self-managed utility Which will in a lot of ways look different than a regular utility But I don't want to get too in the weeds about the differences specifically section 231 regulates Companies within the PUC's jurisdiction So global foundries has applied to be a operate as a company within the PUC's jurisdiction This petition was filed on March 17th there was a Related petition filed by global Green Mountain power To amend their service territory to exclude global foundries from their service to Service territory so that they would no longer be a customer of Green Mountain power. I Spoke to your committee on this issue on April 27th, so I did you did here on that day also from Global foundries as well as the public service department Senate finances also held a couple of hearings around that time also Since the legislature broke for the session a few things have happened But I'll take a step back. So global foundries has filed a petition at The public utility commission Green Mountain power is also a party in this proceeding as their petition is directly related to global foundries there are also a number of Parties by right under the statute, but also intervening parties that have joined the proceeding before the public utility commission currently the parties are Global foundries and Green Mountain power the agency of commerce and community development conservation law foundation Renewable energy Vermont all-earth renewables Inc. Stowe electric department Velco VT transco Burlington Electric Department Vipsa the Department of Public Service of course and ANR joined as a party over the summer and I'll mention that briefly So when we last spoke A number of the parties had already joined And had started to file some pre-filed testimony But in June The Department of Public Service Filed their initial filings They filed pre-filed testimony from Ed McNamara Stating that the department would support global foundries concept conceptualization of a self-managed utility subject to de minimis regulation Provided that the PUC impose a condition that requires global foundries to develop a satisfactory greenhouse gas mitigation proposal with meaningful and enforceable obligations So DPS provided that they would support this moving forward But only if the PUC would provide would require a condition on the cpg With meaningful greenhouse gas mitigation Global foundries responded in in its rebuttal testimony that it would agree to a condition setting a commitment to greenhouse gas emission reduction Provided that the goals and mechanisms specified were practicable So in September The Department of Public Service submitted a letter of intent that was signed by global foundries the department and ANR Regarding their intent to enter into a memorandum of understanding Establishing a greenhouse gas emissions reduction plan As it Was interpreted the parties planned to negotiate greenhouse gas reductions And we're planning to submit the plan to the PUC as a proposed condition of The the certificate of public good. It was at this point that ANR joined this proceeding as a party so And part of that reason was ANR is the agency within the state whose job it is is to protect the interests of the state particularly in regard to air pollution and greenhouse gas reduction and climate change So that was september 23rd. The parties were looking to have a finalized greenhouse gas reduction proposal by november 15th In the interim there were a lot of other Issues that the other parties were briefing and discussing as part of the case So during the summer and fall there were no hearings on this case. There were just A lot of motions filed as well as briefs on the legal issues as well as requests from information from the various parties So a form of discovery was taking place. They were seeking information and Information was going back and forth between all the parties. All this information is available on the PUC's website EPUC But so so a number of other legal issues came up during the summer That the PUC and the other parties were interested in So on september 30th the PUC issued two orders One asking global foundries for additional information And then the other asked all of the parties to brief on two specific legal questions first they asked Whether the PUC had jurisdiction to grant global foundries requests to operate as a self-managed utility under Diminished regulation. I think this is the question that a lot of That came up a few times during the hearings before the legislature last year Whether or not this is a issue that the PUC has jurisdiction over So the PUC's asked the parties to brief this issue and provide legal arguments on whether or not the PUC has jurisdiction they also asked Whether all the parties to provide legal arguments on whether global foundries tenants are customers Such that the operations if continued would If continued to provide power to those tenants would constitute public public service business So this is another Sort of complicated aspect of this proposal global foundries has a very large campus On that campus not only is their facility, but also a number of smaller tenants Other businesses who are currently their tenants global foundries is their landlord. So A few of the parties raised whether or not These are by providing power to these tenants. Are they in fact acting as a utility if they were providing power to these entities So the parties were asked to brief those issues And They did so the the legal briefs on those issues were due on november 8th Global foundries and green mountain power filed briefs addressing those issues in addition all earth renewables filed Filed briefs, but also filed a motion to dismiss the case And the conservation law foundation filed a motion for summary judgment, which would also effectively end the proceeding A few days later on november 12th Global foundries filed a letter with the puc stating that they had not reached an agreement with the department of public service and anr Regarding the the greenhouse gas reduction plan. So there isn't currently an mou Or greenhouse gas reduction plan before that has been submitted to the puc And the the there were further reply briefs follow that followed that So at the moment There hasn't been any movement on the case in a in a couple of weeks The parties filed their their final sort of legal arguments um in the middle of December on these legal questions The puc has made the rest of the proceeding schedule to be determined So they cancelled the initial hearing on the on the case and made it to be determined based And and that will largely be based I think on their Evaluation of the the legal briefs on the question of jurisdiction But also they are regarded. They are reviewing the motion to dismiss and the motion for summary judgment Which would effectively end the cases if they the case if they approved either Agreed with either of those motions. So the rest of the schedule is to be to be determined So there's sort of in limbo at the moment the puc Has not weighed in on any of the motions that have been filed recently So the parties are currently waiting To I think to see what the puc is going to do in response to the legal arguments That have been made and the motions So that's where the case is right now. It's a little it's sort of on pause waiting for the puc's response Uh, any questions for council? Thank you for that very helpful Summary of just the different pieces that are moving along When I first heard about The quest for more filings from parties on the questions, etc There was I don't know if it was officially stated or it was just people estimating but that in the second half of January they they might Be uh, I'm not sure what they would be doing. They'd be setting the rest of the schedule. I guess that's well or or coming back with a judgment on some of those questions you laid out so but What I had heard was the second half of January we might hear from the puc I don't know if you've heard anything more sounds like nothing official has come out I am I haven't heard anything. Okay. There's nothing recent on the epuc And I'm not a party to the case. I'm not in contact with anyone. So I don't know what's going on Okay Senator campion Thanks, senator bright. I missed this part. I think so our role in this right now are we Sort of observers are is what what's the legislative possible? um role in all of this if any Other than chops lever Well, I mean, I'm just trying to is this um something that we observe And we watch happen uh happening in lifetime or is is there a role for the legislation all this? um, well, I'll give a partial answer and I'll look for counsel to keep me Track here from from my understanding, you know, like this there was an administratively complete application last march therefore, um, you know the statutes of that moment apply to the case and Not that those statutes can't be amended in the future But um as they apply to to everyone in a class not just in particular category um at any rate other people, you know, one of the other things we might consider is If this were to move forward, um, how many other Entities in the state of vermont might judge themselves to be in a better position by doing something similar So I've heard a variety of things for instance the uvm Uh campus and health center of vermont large customer in bed territory Might they say we want in essence out. We're going to go shopping for our own power or could you have a virtual consortium all the ski areas that use a lot of electricity say We're going to be a virtual utility and we want to buy our power in bulk Um other large industrial users So there's a question about what happens to things like our Our energy system in the state of vermont If we start to have large consumers step out of traditional regulation And one of the key elements of the global foundry's Provisions is when they're asking to be subject to de minimis regulation they for instance don't want to be bound by the Allegation to participate in our renewable energy standard So that would be eight percent of the state's load leaving one of our major energy programs at a time when we're Confronting climate change and trying to manage greenhouse gas emissions. That is more one than one way to do it I'm not saying the res is the only answer but If this were to become a trend Then I think that that's where I really see Us looking forward is where I feel like this is This is nudging us to look forward at how this might roll out Sarah McCormick Thanks The way I taught this question of just what is the role of the legislature relative to the administration and vice versa We write the law, but then we hand it off to the administration to administer it And we are it's not our role to play administrators Not our role to to decide what the outcome of the administrative procedure ought to be But it is our role to reconsider the laws that we've written And the question is if if we Don't like this happening Then the question is okay. We don't like it, but is it legal? And if it's not legal there if somehow people are Misinterpreting or misusing the law that will come out administratively or judicially perhaps It may be that we don't like it, but it is legal It may be that it's consistent with the law the legislature has created in which case we then have to consider Should we rewrite the law and that's my understanding of what we're doing now Is looking at the situation and I said the question do we like it? If we like it fine if we hate it, is it legal? And if the thing we hate is legal, do we need to rewrite the law? And now I can be corrected Where I screwed up No, I think if you don't mind I think that was a really good explanation and I Don't want to I don't want to go too deep into this but a lot of people have raised The fact that the the phrase self-managed utility is not in statute And that's true And this does appear to be a novel petition before the PUC There hasn't been anything identical to this before However, they are making a legal argument that under the current structure They could do this and the PUC is currently deciding whether or not they are correct And so, you know, that's what lawyers do a lot of time is is try to parse the words and see if what they're trying to do fits under it And title 30 is a confusing chapter of law title of law to read It is a little bit complicated and so potentially if There are there are ways that you could clarify if you would be interested in clarifying for the future Okay Well, great So obviously it's we're just touching base, but I wanted, you know, I think there's potentially some really important ramifications of this Docket And I just wanted to make sure we all stay deprived of how things had unfolded in between It's not that we're at the moment deep getting into the record and arguing one interpretation over another just That we know that where we are in the proceeding. I think we may welcome back to this and get into More details, but it's also I think we're trying to be sensitive to the fact that we're there's a question being adjudicated across the street and I think we want to stay in our lane but Not hobble ourselves entirely from thinking about the question so We'll try to be diplomatic and keep on keep on working Any other questions for counsel about where we are currently just sort of facts of the case All right Well, thank you very much for coming in bring us back up to speed. Um, thanks for I'm Following it. I You know, I get because I signed on to the epuc. Well, probably everyone knows this But this will be good to share with committee and anyone watching remotely for any particular case or docket that you're interested in you can go on to the Public utility commission's website and go to the epuc Part of it and sign up To be automatically emailed a notification of any filings related to any particular Docket that you're interested in following I know that because I signed up for this docket last spring I haven't done this search by Docket member on my email, but the last time I did that in november I had 238 emails notifying me of things happening. I think it was that the the puc So it's a really volumin to me. It seems like a voluminous docket and I want to thank mr. Kowski for Keeping up with it because it's a it's been a lot of back and forth a lot of parties a lot of interesting questions a lot of arguments and so I'm sure we'll be coming back to this in some form or another So mr. Kowski if you hear anything more about schedule across the street if you can help the committees Keep us informed that would be very we'd appreciate that Okay All right With that I'm looking around the room And Joyce Manchester is already here. So As we've talked about a little before we have more money flowing through this committee each year Which is good news But it's made it more challenging for us to keep up to speed I mean the first large tranche of money we saw were commitments around clean water And now with harpa money and work on climate change and infrastructure there's literally hundreds of millions of dollars and It's been my sense that the committee has Been in a somewhat passive position. You know where we receive budgets from a and r for instance But we haven't had Regular we we have partnered So somewhat infrequently with jfo to help us Follow and actively participate in looking at the money. So this year where I talked to kathryn benham And actually it's starting in the summer fall and about Trying to make sure that we work more closely and collaborate with jfo Throughout the session so that before we're under a lot of pressure and budgets are closing, etc Etc that we we're up to we're well informed on the dollars. We're in a better place To make recommendations other than the administration's sort of following the administration's proposals when we think that's merited so With that I'd like to welcome miss manchester to the committee and and also One more time make a public service announcement for the committee and to anyone watching that the that Joyce uh and It was brianna back then parker put out a issue brief on climate change And that was back on november 30th and it's a great summary docket. Uh, sorry so many documents. So with that like to turn it over and ask you to reintroduce yourself to the committee and And then if you could talk just a little too as you get started about um, how we can Work more closely with you in essence. I sort of see it as being better clients and of You and a joint fiscal office So miss manchester Thank you very much senator bray. Good morning everyone. I'm joice manchester from the joint fiscal office um By way of introduction, I've been with the joint fiscal office since 2014 Previously I spent most of my career in washington dc working for the congressional budget office And also for the social security administration So I am trained in macroeconomics and public finance. I have a phd I've been doing a lot of research throughout my life Um as an economist, but since coming to jfo I've I've turned into more of a public service economist working for the legislature So the job of jfo in terms of climate change Has been spelled out in the global warming solutions act, which you all passed back in 2020 And jfo is on the hook to produce a report That looks at the economic budgetary and fiscal impacts of the climate action plan Yesterday secretary more did a very nice job presenting the climate action plan to your committee I wish I could tell you that uh The climate action plan contains the information we need to do our report Unfortunately, it does not it does not provide enough specifics About the cost of the various proposals that are introduced So we are waiting for that pathways report that secretary more mentioned That will be coming january 20th That will have more of the quantitative information that we will need in order to look at the economic budgetary fiscal impacts For the state of vermont So at this point where we're sort of in a holding pattern We're thinking hard about how to approach the subject and and what the essential elements will be for our report Um today i'm going to provide some background information About climate change in vermont and the public policy solutions That might be out there This will include a nice review of the spending that has been done by the state of vermont Over the past five years in various programs Um, I also want to say that brianna parker was an analyst at jfo She left jfo to move to colorado back in october She did a lot of work on this issue brief and we're very grateful to her for all of her Good inputs Um in november we hired a new economist her name is julia rickter She's right now in in the ways and means committee so she couldn't be with us This morning, but I hope soon you'll be able to meet her She'll be doing a good amount of work on the climate change issue as well So Mr. Chair. Yes, senator mcdonnell What's the name of the committee that reported to us yesterday? You mean so the vermont climate council wrote a climate action plan And okay my apologies. I thought we were getting mixed up with the global warming solutions act versus the Departments and my error. Thank you Well the global yeah global warming solutions act called for the creation of the vermont climate council that wrote the climate action plan This is like the goose that laid the golden egg here. Um, okay, okay, my my I sometimes these Terms get interchanged and they mean different things. So my my error. Okay, no no problem Well, it's there's a little bit of alphabet soup going on here because right after we finish hearing from Ms. Manchester, we're going to be hearing from the department of public service about the cep the climate of the comprehensive energy Plan which is on its own six-year cycle and has a relationship to the cep Okay, so it is I can understand how it gets a little confusing You know the one thing I wanted to say Ms. Manchester is that we know, you know last year We did a lot of work on weatherization and we are going to be doing a committee bill So that means that by January 31st, we'll have formally introduced something that lets us work Continue our work on weatherization so if You are stymied somewhat by a lack of a full pathways report One of the things we'll know we want to go ahead on is weatherization And if that is helpful to you in terms of something you know you could bear down on because We're certain we'll be moving forward on that again Yes, thank you for that Um, I I noticed yesterday that the vermont climate council is identifying either two or four top priority items And certainly weatherization is one of those electric vehicles is another one So we do have some some specific policies to look at the question is What's the scale year by year and what's the cost year by year and how is that? Ramp up going to happen. So we'll be talking about some of that As I go through the issue brief today. Okay, great. Thank you So I'd like to share my screen. I prepared some Some slides to help us I hope you're seeing my screen. Yes Not quite yet There we go Okay, good um Right, so I'm I'm going to be talking Today about the issue brief and I'll be running through it As it was it was released back in december This title is climate change and public policy solutions in vermont and again, it was co-authored with brianna parker The question is wise might there we go So there will be three parts to did it today's talk the first part has to do with Existing vermont programs for greenhouse gas reduction. We'll be looking back over the past five years or so Part two will look more specifically at the requirements that were set by the global warming solutions act And again, you you saw a little bit of this yesterday, but we will review and part three has to do with Some possible forthcoming strategies and associated considerations So this is a broad look. This is not specifically what's available in the climate action plan That's been recommended by the vermont climate council but it it's it's sort of a big picture view of Various actions that could be taken So we'll start with part one and as you know Vermont already has a lot of programs in place to reduce carbon emissions And to improve adaptation and resilience and remember that all three of those pieces are part of the global warming solutions act So it's not enough according to the gws a to reduce carbon emissions According to the quantitative targets. We also have to improve adaptation and resilience according to the law So I first wanted to note that there are lots of state agencies that are involved in Reducing climate change effects Agencies of natural resources, administration, transportation Agriculture food and markets and commerce and community development as well as the department of public service So we have lots of players that have a key role to play here Now if anyone is interested in exact programs and exact numbers You should be looking at the appendix that is part of the issue brief that was released back in december It's a very large table. I tried To show it on a on a slide and it just uh, it's too much So if you are interested in specific numbers or specific programs Jfo worked quite diligently to try to collect Lots of programs from lots of places and you will find those all listed in the appendix table So what comes out of that table if you look in broad brush strokes across the table? You'll see that during fiscal years 2018 through 2021 We had about 160 million dollars per year devoted to addressing climate change in vermont Of that amount about 100 million per year came from the state budget And about 60 million came through the energy efficiency utility program Some of you know Efficiency vermont is part of part of that program and a very big part of that program So that's how the dollars shake out during the past Four years and then we come to fiscal year 22 in which we sit now So the state of vermont plans to invest more than 228 million of state and federal funds in programs related to reducing greenhouse gas emissions Adapting to climate change and building resiliency So about 172 million of that came from state and federal funds About 50 million came from federal funds in the arpa act the american rescue plan act The public utility commission plans to invest about 56 million in green initiatives through the energy efficiency utility Program, so there is a bit of a ramp up in fy 22 And of course these state programs range from weatherization to public transportation and electric vehicles To environmental conservation. So there's a broad array of programs already happening out there So lots of programs target the transportation sector in part because Transportation is the largest contributor to greenhouse gas emissions statewide So already the state is incentivizing sales of electric hybrid and fuel efficient vehicles Encouraging residents to adopt cleaner and more efficient transportation modes assisting low-income residents with vehicle emissions repairs And expanding the infrastructure for charging electric vehicles So there is a lot going on in the transportation sector as secretary more mentioned yesterday We really have to ramp that up if we expect to meet our targets by 2030 now Tark Buildings thermal energy and buildings is the second largest contributor to greenhouse gas emissions statewide. And so we have a very active weatherization assistance program To assist vermonters with low income With energy efficiency improvements in their homes and also to reduce greenhouse gas emissions And as you know, that's been ongoing for a number of years with Significant investments there again as secretary more mentioned yesterday. We think we're doing Well in that area, but in fact we will need to ramp up Significantly in order to hit our targets Any questions on those programs before we move on to the requirements In the gws a global warming solutions act passed in 2020 What's those requirements for greenhouse gas emissions into law? And says that the state can be sued if we are not making sufficient progress towards those goals So here's a picture showing what our emissions have been. That's the blue dotted line Then we have the 2005 and the Baseline levels and as you'll recall the gws a sets those greenhouse gas emission targets in terms of reductions relative to first 2005 and then 1990 So you can see between 2017 where we have the latest reading on greenhouse gas emissions In the state between 2017 and 2025. There is a continued ramp down But then between 2025 and 2030 it becomes much steeper So in order to hit the 2030 targets, we have to start taking action now Um, I have a quick data question. I've noticed in a number of these charts. There are spiky years So i'm looking on this one like 2014 15 Do you have to know if this is just weather related? like, you know, particularly cold winter comes through and there's more uh emissions related to home heating So I think I've looked at this before and I'm going to be talking a bit off the cuff because I haven't looked at it lately But I think there are a number of things going on in 2015 um And I can check on this to be sure but um, one thing is that vermont yankee went offline in Which year 2011 maybe? So that Well, okay, I'll have to check the timing on that but that had an effect Also, we had a recovery from the economic recession and it was a very slow recovery through the early 2010s It was picking up speed by 2015 There were a number of programs that were going into effect after 2015 that brought the average down so Yeah, okay I think there were lots of things going on But I can I can check on some of those if you like curious Okay, so that's where we have to go and also I should mention that all of these uh Points on the graph here are measured in terms of what's called m m t co2e. You can see that over on the left hand Um axis that is million metric tons of co2 equivalent. So it's all Measured in terms of carbon, but it includes other pollutants as well. So The million metric tons of co2e you will see in many places as the measurement of greenhouse gas emissions And my final point on this slide is that by 2050 you can see we're down at 1.73 Million metric tons. That's 80 percent below the 1990 level um that that will be Uh a challenging target to meet and also that 2050 target is also Described as net zero emissions. So it assumes that we have enough sequestration Coming from forests and from soils to offset that 1.73 in terms of the gross emissions Okay, so we've got pollutants coming into the air, but we've also got forests and soils that are absorbing some of those uh pollutants or most of those by 2050 Um senator mcdonnell, do you have a question? Okay, too many. I'll I'll I'll be quiet I'm happy to answer questions as we go through. I think it it helps everybody stay tuned in um, okay, so here's a table that shows the sources of greenhouse gas emissions in vermont um, both of these both the table and the the figure come from the greenhouse gas emissions inventory and forecast So you can see here as I mentioned transportation and mobile combustion represent 39 of our emissions residential and commercial fuel use that's the thermal residential buildings Emissions represent 31 so put those together and you get 70 a very large share of emissions Next comes agriculture at almost 16 percent and then we have industry and electric generation waste and a tiny bit from the fossil fuel industry So you can see where we have to put our major focus And that will be on transportation and thermal energy So as I said those two sectors 70 greenhouse gas emissions We know that technologies exist currently in order to reduce those greenhouse gas emissions But um They do require some large upfront investments now the the The other side is that they probably Result in lower long-term operating costs So if we can get people to adopt these new technologies then in the longer run their operating costs will be less But the hurdle is the the initial investment So this is the case for electric vehicles certainly There's a price to be paid for electric vehicles. You've got to find charging stations. You've got to get used to the idea of Not stopping by a gas station on every corner Heat pumps cold weather heat pumps work in vermont, but again, there's an initial upfront investment that is Not insignificant However, you do save save money In future years because your heating costs are less So the point here is that publicly funded programs can play an important role in an equitable transition to electrifying both our transportation and our thermal sectors But we have to be very thoughtful about how that Public involvement happens and we have to have money in order to make it happen So those are the big challenges For you all as policy makers I do have a slide here to talk about gross versus net emissions. I know I was confused by this When I first read the comprehensive energy plan and the global warming solutions act I did talk about this Earlier, so I don't want to spend too much time on it, but it is true that both 2025 and 2030 GWSA requirements Focus only on the gross annual emissions. So how much are we generating that that's going into the air? The 2050 requirement is zero net carbon emissions meaning that we count not only what's going into the air But also what's being sequestered in forests and soils The the issue is that forests are sequestering less and less CO2 equivalent over time because we are losing acreage And and maybe also because we aren't managing the forest as well as we could So you can see in the lower part of the slide Gross emissions in 2017 were 8.67 million metric tons of CO2 equivalent The forests were sequestering about 4.63 millions or about a little over half net emissions in 2017 4.24 but That sequestration coming from forests is declining over time And so we we need to be careful about how we're managing our our forest resources as well as our agricultural soils You mean we're the forests are being cut. Is that what you're saying? We are losing acreage Forest acreage has been declining And also we may not be managing the forest as as best we could There's a there's a lot to be to be discussed in terms of forest sequestration. Of course if you Cut down the forest You're no longer actively sequestering right the the green leaves are no longer absorbing the carbon dioxide If you burn that that log you are sending some of that carbon back into the air So what had been sequestered is now turning into carbon emissions On the other hand if if you turn that log into furniture You are essentially capturing that carbon and holding onto it as long as the furniture Is not burned up right as long as it's not emitting the carbon. So there's There are many complications Along with forest sequestration. I'm no expert, but um, I've I've been interested to learn a little bit more about it Yeah, and just Note for all of us So as part of the act 250 bill will we do we'll be doing includes addressing forestry and Because I think this committee has been alarmed by the trend I think depending on whose numbers you're looking at we're we're losing something like 11 to 15,000 acres a year which honestly, I I don't quite understand how it's How we're doing that because Senator westman so I would um and senator campion has brought this issue up a number of times on the community I would like to spend some time more with that. I'd like to know how much of that is um people building um houses in development and then cutting big long driveways into into chunks of land and so I I can't really tell how much of this is um bad forestry management practices versus people um developing our countryside So, um, yeah, as uh senator campion as you said, he's Been helping us keep our eye on this and I think we're all disappointed to see how the trend has gotten continued or maybe gotten worse so While it's our turn We would I think we'd all like to turn that around so, okay So thank you. I just related to that mr. Chair if I may. Yes. I I did Take a look last evening at uh president biden's it's the um america beautiful uh america the beautiful act which Again is setting aside hoping to set aside 30 of american land And I I don't know if there are ways that this committee can collaborate How the state of vermont is collaborating But it might just be interesting. It might be a good way to review this conversation by bringing a and r back and at some point To see how they're they're working with our federal partners on this Right. Great. Thank you for that reminder. I think it's a 30 by 30 30 percent and obviously well given that Forest land covers 75 percent of vermont now although most 80 percent of that is privately held I don't um You know the good news is we have a lot of green space already, but the bad news is that We are uh We're it's trending the wrong way So thanks. There's I think this is probably a It's a slow quiet but really important thing for us to make some progress on the session just um Mr. Chair the marketplace Encourages people to cut farce down and sell the lumber That's what that's why the farce are being reduced So unless you got a plan to Encourage people not to cut it down and sell it for chips or lumber or whatever and to use it for Other purposes and it's going to continue to happen. So Mr. Chair, what's yeah center, um, I I think we took some testimony and there's quite a lot of evidence That um, there is a breakup of land ownership into smaller and smaller pieces and um, and I I'm worried that that plays A huge piece in this and we keep hearing about that But we don't seem to be able to get our arms around quantifying that I consider westman is correct. There is money to be made in developing forest land for housing There's money to be made in cutting forest land down and selling the product and And those are profitable activities in a society that Believes in free markets and we will continue to see around Vermont and the rest of the world Farce being cut down because cutting them down is profitable and Makes money for the people that own those properties. So unless we deal with it and make it No longer profitable. It's going to continue to happen I would just add that there is a new Carbon offset market that some folks some landowners in vermont are participating in And of course that carbon offset market pays owners to maintain their forests so that they are sequestering carbon the question is Does vermont want to be selling its sequestration? to california or to Airlines or do we want to hold on to that sequestration for vermont's offsets so there's a lot to be analyzed in in that whole area and It's an area of interest and There are folks at a and r who are working on it. So i'm sure the committee can hear further testimony on that Is that a voluntary market? Is yes, it's voluntary Well, well, so those people who choose not to join the forest the voluntary market for Carbon offsets will continue to profit by cutting forests down as they do is going on throughout the world So we we had a little testimony on the the carbon markets as forest Income for forest owners for keeping forest forests and and receiving payments for the the sequestration activities, but Miss Manchester brought up a point. I hadn't really thought about when we Monetize that value and sell it then we can no longer book it as part of our own portfolio. So See where we're to do object to deal with portfolios or to not Cut down forests Okay, it's interesting. So my husband and I have had exactly that conversation and uh, I don't think there's a right answer, but it's it's a really interesting issue But it's kind of fundamental because that's where we have we sequester carbon on this planet Is by not cutting down forest Absolutely Yeah, the only way maybe and just to throw this into that the conversation Mr. chairs is if the state were to Make purchases create a fund that does set land aside in that old traditional way that you know Purchase land from landowners set it aside make larger tracks of forest and preserve them right well Yeah, and I think I mean this is a topic that Merits a lot more discussion there. There's also What do you have to do on that forest land in order to Earn your sequestration credits, you know, can you still Sustainably manage and harvest or do you have to leave it alone and entirely alone? Use value is being reconsidered in the house. I believe to look at Allowing people to have no harvesting requirements on a parcel Or forced to parcel and remain in good standing in UVA so there's Active work going on And we'll come back to it. I'm just mindful of the time. I don't want to I don't want to lose our chance to hear the balance of your report miss Manchester Sure, so we have more interesting things to talk about as well We're moving on now to part three which talks about some forthcoming strategies and associated Considerations, so it's certainly true that we will not be able to adopt Three or four policies and hope to meet our targets I think the targets are going to require a very broad swath of policies to be implemented In order to achieve those targets So one important aspect for policymakers is to think about both equity being fair to all parts of society Folks with low income folks in rural areas People employed in specific industries and so forth, but also the efficiency So we want to achieve the largest reduction in emissions per dollar invested So both of these considerations are paramount going forward So I want to talk a little bit. Oh, sorry. I need to get back to my Here we go Why is this not Advancing there we go So as I mentioned, we want to avoid any disproportionate hardship on certain Vermonters Historically, it's been true that people with higher incomes have been early adopters of big technological and social transformations And I'm thinking here about electricity in the early days Broadband certainly public education way back in the 1700s Um, so those early adopters are already Doing their thing in vermont buying electric vehicles and heat pumps and so forth But people with lower incomes generally have been less able to benefit because of those upfront costs we mentioned earlier Because of price adjustments lifestyle changes other unforeseen consequences So now we are looking at electrification of vehicles and heating And we especially need to pay attention to Vermonters with low and middle incomes Those living in rural areas and others who might be adversely affected So this is going to be a challenge Going forward certainly I wanted to talk about some of the big picture ways to address climate change and greenhouse gas emissions I'm going to start with An approach known as carbon pricing also known as carbon taxes carbon fees all that sort of thing So here the idea would be that that a An extra tax or an extra fee gets tacked on to the cost of using energy The good part about a carbon fee or a carbon tax is that it does generate revenues Which can then be invested to reduce emissions or distributed to ease that disproportionate effect Especially for citizens with low and middle incomes So, um, you'll recall that a couple of years ago in 2019 The legislature asked for a report from resources for the future in which they looked at a carbon tax and we called it decarbonization Back in the day The bottom line there was that a carbon tax is not going to do a lot on its own for vermont because we've already done a lot in terms of electricity generation and so forth However, a carbon tax or fee Would generate a lot of revenue that could be then invested in public policy initiatives For example, that could help pay for The incentives that we need to help low and middle income people buy heat pumps and electric vehicles And set up charging stations throughout the state and so forth and so on So it is one way to generate revenue And it is directly related to the carbon emissions that come from from energy consumption I would just note parenthetically that there was just a a big survey of economists in in the u.s 1400 economists were asked for their opinions about various statements And a large majority of economists would favor a market based solution For addressing climate change. So that means either Carbon pricing or the next item. I'll talk about which is a cap and trade system So let's think about a cap and trade system now That's sort of going at the quantity of carbon emissions rather than the price of carbon emissions Okay, see so in carbon pricing you set the price and you see what happens to emissions and then you adjust the price as needed In a cap and trade system you set the quantity And the market determines the price that industry has to pay in order to pollute more than they've been allowed Okay, and generally speaking once you've set a cap You can then adjust that cap over time quite often You adjust it downward to try to reduce carbon emissions over time But again, there will be a price on carbon emissions that is determined by the market So as you know vermont already participates in a cap and trade system for electricity through the the reggie the regal greenhouse gas initiative And that has been working for a number of years and has helped in reducing carbon emissions from the electricity sector Certainly a similar program could be set up for heating and transportation sectors To limit emissions and to incentivize switching to lower emission fuel sources and again That approach works best when it's coupled with public policies public investment to help address the equity concerns Because again, you you don't want to leave the low and middle income folks out of the transition So who opposes that solution? Where's the opposition come from? How come it hasn't taken place right? So I believe that yesterday jerry devolve addressed the question why did the vermont climate council not consider carbon taxes And his answer was that carbon taxes have been seen in other places to not be as effective as one had hoped And also that they do place this extra burden on low and middle income folks, especially low income folks and People living in rural areas who have to depend on transportation in order to get to work and so forth So the comeback from economists would be that Prices adjust in order to to meet the targets And that you use the revenue in order to offset those equity effects And this this is one way to directly generate the revenues that would be needed to offset the the equity impacts So, uh, this is a conversation that will go on I'm sure as as the climate action plan is discussed in the legislature But I I do think that it's worth considering the various approaches before latching on to any specific ones Certainly the tci there was quite a lot of discussion yesterday about the transportation climate initiative That is a type of cap and trade system So if that had gone forward that would have applied something like reggie to the transportation uh sector and presumably there could be a cap and trade system that also applies to the heating sector That's part of the wci the western climate initiative. So Let's see. I did before we move off the slide I did also want to mention that uh back in 2019 following the resources for the future report The legislature also commissioned a report from rap the regulatory assistance project That report was very helpful in identifying ways that public investment could be made in terms of weatherization and electric vehicles and so forth to to um help people with low incomes get into Heat pumps and electric vehicles and so forth Ms. Manchester, could you do us the favor of sending that report the rap report on Which we've looked at and rich cowards been in for instance But um onto a new year If you could send it to jude and she'll send it out to everyone in the committee and put it up on our webpage. That would be great A quick question. So when I think about carbon pricing versus cap and trade Let me check in and with you and see if I have it right and the carbon pricing scheme It generates an explicit revenue that then can be managed to address first the disproportionate impact on low income Energy users right but in the cap and trade system, it's the providers or the products That have to have the allowances. So as they comply with the law and buy allowances Um, that cost is going to be I suppose you might say baked into the product It doesn't necessarily generate a revenue stream that comes to The state is that right or wrong? I'm just trying to think of Do we Do we have less of an ability in a cap and trade system? To generate revenues and then use them in ways that would help address the disproportionate impact on uh, energy burdened households Yes, so that's a good point and whether the state gets revenue depends very much on how the cap and trade system is set up For example, the tci program would have generated Hundreds of millions of dollars for the state of vermont because the the allowances were being bought and sold through the state and the state Received many of those revenues So it really depends on how the the system is set up But you're right to ask that question Okay, thank you Okay, and finally we we get to the third general approach, which is direct public investment And that can take many different forms technology subsidies grants for innovation and research Procurement standards for example requiring that the state fleet only purchase evs going forward That would be an example of a procurement standard And clean energy products. So this would be part of RES for example setting setting regulatory standards for Where energy is coming from? so One one aspect is that public investment probably needs to pay attention to efficiency in other words Where are we getting the biggest bang for our buck? and so When you're weatherizing a home you want to focus on insulation because insulation gives you more greenhouse gas savings per dollar invested than buying new windows, for example, so To increase equities programs could include tiered subsidies based on income or direct support for rural households So maybe you say, okay, we pay all 100% of weatherization Expenses for households under a certain income level. We pay 80 percent 60 percent and so forth So that you're you're targeting the lowest households first with your public dollars And then subsidizing but not fully paying for those investments with maybe middle middle income households So secondly grants for innovation and research could spur new technologies that may have long-term benefits by carrying more risks that's certainly reasonable area for public investment and Setting efficiency standards for state purchases is a way to lead by example at the same time that you're reducing greenhouse gas emissions I would also say that having Electric vehicles in the state fleet gives more people the opportunity to try driving one and see how they work And so that may be a way to to help incentivize people Okay, now what about moving forward on reducing carbon emissions So as you know the infrastructure investment and jobs act was signed into law in november 2021 And that provides a substantial amount of money in the transportation area in particular To help Vermont make investments towards electrifying the transportation sector The build back better Bill is Maybe on resuscitation at this point, but there's some chance that that there will be further investment funds coming from washington to help vermont in public investments in electric vehicles Charting stations heat pumps hot water heat pumps and cleaner fuel So there may be more federal funds coming and certainly arpa has provided a large number of dollars to vermont in order to invest in climate Approaches Mr. Chair Please all of that is All that was just said was true But the infrastructure investment act is a step backwards in Carb it it uses more carbon than it saves. It's every the analysis of that law Is it's a uh, but it does not um sequester carbon it uses more than That would have been used if the law had past The That's that's just What that law does and um Sure, it sends us money, but we're sliding in the wrong direction When we take that money, it's not enough to to make to move us In further intercarbon sequestration so Yes, and there's certainly a debate about whether we should be expanding our transportation networks building more highways and so forth because that invites more Automobile traffic and so forth. Um, these are all very good issues to be discussed. Absolutely Or either we're you know So are we discussing building more highways or are we discussing how do we reduce carbon use? The global warming solutions act is not about building more highways. It's about reducing carbon use Um We're eager to hear about things that we can do that reduce the putting carbon into the atmosphere as opposed to um getting money to Put more carbon into the atmosphere I I understand. Um, I think it's important to remember that the global warming solutions acts also requires adaptation and resilience So that we cannot just focus on reducing carbon, but we also have to think about Where we build new housing so that it's not subject to extreme flooding and so forth There how do we build charging infrastructure so that we can support the electric vehicles? We need all all of that. So okay So the climate action plan released by the vermont climate council december 1st 2021 illustrates steps that vermont needs to take to reach the gwsa requirements in 2025 2030 and 2050 Here I made a point not to be overlooked the climate council recognizes the critical importance of maintaining a focus on social justice And again, this has to do with vermonters with low incomes Vermonters who live in rural areas and so forth And we really do need participation by all households at all income levels Especially those with low and middle incomes if we are going to ramp up to such an extent To meet those targets by 2025 2030 and then eventually 2050 So finally, I've included a list of resources for the committee The issue brief. Uh, look at that. I even have the the wrap Issue brief on that slide. So I think now the committee has that reference I've given you the the link to the the jfo website where that report is still available I've also given you the links to the issue brief The climate action plan itself and the greenhouse gas emissions inventory in case those are helpful So thank you very much for the chance to talk with you today. I'm happy to answer further questions I know we're three minutes over time Well, um, thanks for Bringing just the right amount of information to help us Keep on keep on making progress than this. Um, I'll just flag something for us to come back to Because I think it's a much longer conversation. I think on your prior slide, uh, the phrase used was Social justice and I'm feeling like There's a certain amount of, uh Conflation going on when we you know, I hear terms like environmental justice social justice Income in equality and We're trying to address all of them but sometimes The I'm not saying you're doing this but different parties are using the terms in In ways that are sometimes confusing like to what degree are we actually Focusing Emissions versus actually just social policy that we say this particular economy Has too many people earning too few too little money and therefore we're going to try to help them They're Raise their standard of living by explicit work. It just sort of happens to come in the form of energy related work, but it's a Income inequality or social justice mission in the form of energy policy Sometimes it's the other way around and it's energy policy leading And then there's social justice considerations to be considered on the way there and um So it's something i'm noticing more and more in our conversations in the last year And i'm still trying to figure it out and keep it clear and I I know economists are good at Defining terms, so we'll we'll want to ask you to help out or keep our thinking clear on this as we keep working All right, certainly and I I know that the Vermont climate council has spent a lot of time thinking about social equity social justice Uh the BIPOC community low-income folks um, yes, and they're trying to get feedback from from Focus groups and so forth in order to Make sure that everybody is included in in the plan going forward right and this committee will be Looking into that issue. I think through the um in the form of s148, which was submitted at the end of last session environmental justice bill and So we'll be taking a much deeper dive in the Weeks ahead with that. Um, I want to thank you very much for coming in and helping us out today I look forward to continue to work with you and your colleagues uh in the coming months because they're this is certainly an an area of a lots going on daunting and exciting roles In terms of committee we have our next witness at 10 30 so we'll have a nine minute break and Um And then we'll jump back in for the balance of the morning on the comprehensive energy plan So thanks very much