 Good afternoon. Welcome to the Vermont Legislature's House Committee on Environment and Energy. This afternoon we're going to take up S5 again and we're going to hear from the Department of Public Service, though we're going to learn about the renewable energy standard. Great. Well, thank you for having us back again. And for the record, TJ Poror, Director of Planning at the Department of Public Service. Hi, and I'm going to introduce myself now. Yeah, Melissa Bailey, Director of Efficiency and Energy Resources at the Department of Public Service. So we just have a few slides here for like an overview of the renewable energy standard really high level structural things. And we're happy to take this wherever, wherever you want to take it with questions and how kind of the implementation happens or just like the verification, etc. Whatever you want to talk about, we're here to answer questions for you. And so I'll just start really quickly with. Hi, Melissa. Representative Sibley. Yeah, I thought this testimony might be helpful in terms of we have a, we have one other type of energy standard in statute. There are obligated parties. And this program that is evaluated and supervised so they are not one to one comparisons, but just conceptually, I thought it might be helpful just to think about, understand a little bit more how this different, but similar type of program. And just to give you a sense in the division of responsibilities at the Department. Planning. Planning vision does a lot of work on the wholesale side and the power supply so that's tier two of the renewable energy standard dealing with how our electricity supply is supplied. And the energy is, we'll get into the energy transformation tier and is more the retail side services to customers reductions the fossil fuels and that's less as team efficiency and energy resources. Really works on that, which is why both of us are here today. It seemed to advance my. Really quickly the renewable energy standard is an obligation on Vermont's electric distribution utilities that's is obligated by 17 electric distribution utilities in the state. So that's the number of reporting that possible reporting entities although smaller utilities can combine and report as one under Vipsa. I'm a public power supply authority for 11 of the smaller municipal utilities, I park and so report on there on Burlington electric reports on their own, all of the co-ops and. There's three tiers to the renewable energy standard and I'll talk really briefly about tears one and two. One is that total renewable energy requirement how much is a percent of your retail sales are you required to have as renewable energy is defined by statute here too is how much of that is small local generation under five megawatts and located in Vermont. And tears one and two are the clients is shown towards the obligation by the retirement of renewable energy certificates or renewable energy credits. So really quickly both of the both of the tears one and two have a statue to set up a purpose of it describes that eligibility which resources can be heard into the state. The required amounts, I won't go over those in detail here. I've done that another time. I have exemptions to tier one so you know, for example, we talked a little earlier today but the Commission has opportunity to reduce utilities obligation of findings are made for good cause. The tears has an alternative compliance payment and so that's the, the maximum that a utility will pay for resource to meet its requirement. Otherwise, you know, if they, they were to pay above that those actually likely wouldn't be recoverable in rates. The alternative compliance payment just sets a cap on what utilities can pay to meet the obligation and what the legislature has said is an acceptable acceptable amount to pay for for the purpose. And in tier one case that purpose is to encourage economic and environmental benefits of renewable energy. And then in tier two state case it's specifically to encourage distributed generation just ability to avoid T and the constraints and the first five resources have impacted it from off. And so, fairly outlined purpose and compliance is is met by those renewable energy certificates. That's really the high level overview that I wanted to give for tears one and two and kind of let you guide what you wanted to know in detail we could go on to tier three first, or we could just do it. I'd like to learn more about renewable energy certificates and how you manage you I'm assuming you manage those and how do they work. So yeah, sure. So a renewable energy certificate is a backup every time a mega one hour is generated, no matter if it's a renewable resource or, or not. It has an environmental attribute associated with it that's trapped and the renewable ones are called renewable energy certificates and renewability is defined differently in each state in New England and Vermont definition is in 30 BSA 8002 says what's renewable it's not. And so, each, each time you generate a megawatt hour it has an associated renewable energy attribute or renewable energy credit. Now, when a generator gets cited or even when the new one the standard was first established a generator had to apply to the public utility commissions to get its generation or its facility certified by the commission as a resource as a eligible resource to meet the renewable energy standard, and that was either for tier one or for tier two. Once it's certified. You know the generation each megawatt hour generated kind of goes into the New England grid right and so ISO New England and the regional grid operator operates something called the generator information system. And this is a database that tracks every attribute in New England that has generated or imported into New England. And so that that database is is kind of the tracking mask mechanism for clients and what happens is every year after you know after the year closes the and let me back up so sorry I'm just trying to get to the best order to explain this but so after the year closes each utility files a compliance report with the Department of Public Service and what they do is from that generator information system managed by ISO New England they provide reports that show that each megawatt hour that is in that system that they either retired those or that they have the rights for those megawatt hours in order to understand that that was renewable energy that they had so it's all the compliance for to the renewable energy standards here one and two is all based on this tracking system and renewable energy credits it actually doesn't matter what they that energy that they purchase renewable energy credits can be purchased with the actual electricity or they can be unbundled we call it and purchase separate from that separate from that electricity. And so really we're just in terms of compliance looking at those racks. Once we get that we verify that they have the right amount compared to their obligation, and we submit a report to the public utility commission that is ultimately the decider upon whether the utility has met their obligation or if they don't meet their hadn't met their obligation, then they have to pay the alternative compliance payment for every megawatt hour they don't meet they pay that to the clean energy. That has never really happened happened once there was like a data error and there was one renewable energy credit that was needed so clean energy development fund got a check for $10. Because that was the alternative compliance payment at the time. So that hasn't happened because the utilities. It's been more affordable than the alternative compliance payment to actually just go get the renewable energy credit so they instead they they purchase those credits. That was very helpful is a one wreck is it static and it's linked to like I put in a solar field and it's generated one megawatt. And it's that's one wreck for that one solar field that's done. It's one wreck for each megawatt hour generated from the from the facility so it keeps accruing as this energy is generated. Correct. Okay. We have questions on the tier one and tier two. So the other bit of information I should share is that tracking system is is pretty complex all the states use it. So, and it says, you know, where each resource is eligible for a solar generator for instance that's located in Vermont might actually be eligible for to be used for compliance in in Massachusetts, for example. And so it's not bound by Vermont borders that tracking system, because it's complicated and cover. And it deals with a lot of different compliance entities. It's about a million dollars per year to run that that's shared through by all six states. So it's low ratio share of that, about, you know, four or five percent and so what we're paying for that system but it's, it's not a. It's not just like a workbook that manages it like an Excel sheet. It's really a complicated system but it is, it's important because it ensures that two different entities aren't counting the same, the same resource. And it ensures that, you know, utilities are actually it's the vehicle by which we can ensure that our utilities are actually meeting our obligation. What does it mean to retire. That's a good question so if you're retiring a wreck you're kind of taking it out of circulation. And by doing so you're retiring it for utility would generally retire it in order to meet its obligation but once you pick that box in the in the tracking system, then it can no longer ever be used again. It's used that once it's retired for your 2022 and it can't be used again that megawatt hour, and so it's retired from the marketplace. Now other entities can also retire renewable energy credits like a private company may have their own, their own company goals or in, in, in service of those, they may want to. They may want to retire renewable energy credits in order to show their own compliance so they can either have a utility do it on their behalf or they themselves can say I own this megawatt hour of this wreck. And I would like to retire in the system and it then is taken out of, you know, the marketplace so that other other entities utilities can't use it for compliance with their, with their own operation. So essentially if, if I was, you know, my own company and I wanted to retire a rack in Vermont, then the state by its tracking would be, you know, whatever renewability is required by the utilities, the utilities have required plus one, plus what I've retired and that's how much energy, the state can actually claim. Do you retired annually. I. Yeah, so usually the compliance years are based by the calendar year. The market works quarterly so you have options to do it quarterly, but the compliance years are usually annual. So, can you talk a little bit about the effect of the renewable energy standard on the grid and carbon. Sure. So, where to start. The renewable energy standard was intended to reduce our fossil fuel use for electricity. In part, and I'm actually not sure that that was, if that was one of the goals. So I think it is to. So it had a number of goals associated with the renewable energy standard but when the renewable energy standard came into effect in, it was passed in 2015 started in 2017, Vermont did not have a obligations of their utilities to be renewable. There are power supply resources that largely, you know, those contracts for electricity were being entered into by our utilities and they were some of them were renewable some of them, you know, there's contracts for the nuclear plant in New Hampshire. There's a biomass plant sometimes they own plants, and the utilities enter into those and then often sell the renewable energy credits associated with them for into other states markets in order to reduce rate pressure. And so when, when you sell that the right to call something renewable, then you can no longer say you have renewable energy. And so that power was, you know, Connecticut, for example, could claim that they had biomass racks, because the wrecks from McNeil worse. And so what, what the resulting mix is when you sell the attributes that you have, you're assumed to have kind of what's called the ISO residual mix and so that's the ISO knowing when the grid operator the remainder of all the attributes that nobody has claimed. And that's an average emissions profile of that, and that's kind of dirty. It's mostly natural gas. And, but there is nuclear in there there is hydro in there and there's some other renewable resources, but it. And so just when those renewable energy credits were sold out of state, you know, a mix, essentially was now replaced by that those megawatt hours as we count like towards the greenhouse gas inventory was replaced by the ISO knowingly mix. So yes, in that instance, in this case when we had the renewable energy standard we said utilities you have to repeat your renewable attributes and new ability going to replace, replace that residual mix, which was, which was dirty. Which there was an easier answer to that question. Okay. So, we'll move on to tier three for now. First dimension renewable energy standard was passed in 2015 took effect in 2017 tier three was significantly different from the other two tiers. We call it the energy transformation tier, and it really was a policy aimed at spurring activity in the transportation and thermal sectors, recognizing that Vermont had a long standing successful programs in the electric sector to increase renewability and to promote efficiency. We had a significant supply and we had a significant investments in efficiency but there was this gap where the transportation and thermal sectors were still largely fossil fuel driven I think that's still the case today, but tier three was one kind of right into those sectors and again it's aimed at reducing fossil fuel consumption, the obligated entities are still the electric distribution utility so the same 17 entities that are obligated under tears one and two. The, the only caveat is that tier three can be satisfied by doing more tier two so tier two is small scale renewable development in state utilities option to do more of that and not do these fossil fuel reduction projects and programs if they want or if they find that more cost effective for their individual utility I think we only have one utility right now that's not doing tier three programs. So, and the obligations are set as megawatt hour equivalent. So they're expressed as a percentage of retail sales just the way tears one and tears two are. But really the basis of these credits these three credits are MMB to use so reduction in energy use so it's fossil fuel converted MMB to you and then there's this conversion to megawatt hours, but that's really just so that you can express the obligation as a percent of an electric companies sales it's just putting the unit of measurement into what electric utilities are used to. And I think an important point on the obligation is it, the tier three obligation wasn't tied to meeting any specific specific amount of energy savings or any specific energy coal so tier three started at 2% of retail sales and wraps up to 12% of retail sales by 2032. But again it wasn't aimed at meeting the GWSA or any other kind of set policy goals so it's different than what's envisioned under the clean needs standards also just different than what's envisioned are them our current practice with the energy efficiency world where we go out to a fire all cost effective efficiency. So this one I don't want to use the word arbitrary but I can for lack of a better word it's kind of an arbitrary target for tier three credits. Let's see what else I was just a couple more points on here. Utilities are required to do cost effectiveness screening they need to do that either in their integrated resource plans which they do every three years, or through their tier three plans which they present to the Public Utility Commission every year. The statute to three statute requires incremental investment so utilities can only take credit for projects that wouldn't have happened otherwise under existing programs like the weatherization programs or efficiency programs. So it's an incremental program. There is an alternative compliance payment, which sets the cap for how much utilities can spend on their tier three programs that started at $60 a megawatt hour and has been adjusted up upwards by the consumer price index. And I realize I didn't have a bullet on the tag but the technical advisory group for tier three is the is the group that sets the savings amounts for each measure under tier three. We can talk a little bit about more about tier three measures but it's pretty broad policy really any fossil fuel production technology can be an eligible to your through measure and so that can be anything from inverting from a gas powered lawn mower to an electric lawn mower to you know replacing a diesel generator with electric use for for a more commercial application. Yeah question. Representative Tory. What kind of staff time does it take to monitor this. I have a question and I can follow up with a concrete estimate but I can try and think if you're on the fly so because tier three looked more like an efficiency program then then something in the power supply world which is what TJC manages. It sits with with my team which is the division of efficiency and energy resources. We do have six, but I would say the bulk of our staff resources are on the efficiency utility side so efficiency Vermont. We do have two technical staff that are responsible for measurement and verification. We do have some modification of their labor hours for doing verification related specifically to tier three. We probably not want to enter it on the fly. And then there's the policy component and there's some legal components so we do have pretty good estimates of those that we developed to inform the S5 consideration. I'll say the like I'm going to touch on this next but the tracking for tier three. We don't have a GIS for tier three tier three is one of those areas in which Vermont is weak. Other states in the region do not have this fossil fuel environment sitting on electric utilities so this is all spreadsheet based tracking. And again it's the same 17 entities that have the obligation but 11 of those comply in aggregate through Vermont public power supply authorities who really have six or seven obligations and it is they submit a spreadsheet every year and we would compare those to the previous year spreadsheet make sure that the credits that they were carrying over year to year tie out. We do not have a tracking system. Wait here's one or two to represent of civilian. Melissa I just wanted to double check. I think I heard you say there are no other states that have this type of a thermal burden on their electric utilities. This would require requirement to reduce fossil fuel usage. At the time here three was implemented. I believe we're the first I cannot say confidently that there aren't any other similar obligations now. Tier three I mean in essence tier three has largely been in implementation it's largely been focused on electrification so electric utilities encouraging their customers to adopt technologies that use more electricity like electric vehicles and so that's why I'm pausing I think other states may have other activities where the electric utilities invest in those electrification technologies. So can you tell us just a little bit more about the tier three and how that is being fulfilled. I'm hearing you say electric cars is that the predominant way that that's being fulfilled. Yeah we have a chart here. The heat pumps is predominantly the. These are the second largest component. And so structurally and statutorily any fossil fuel reduction activity largely is eligible so you could think whetherization is eligible converting to you know biomass heating would heating those are all eligible under tier three because they're reducing fossil fuel usage. So for the most part the utilities look at they compare. So when the utilities build their programs they typically are focused on electrification because they're looking at the ability then to generate more revenue through those added sales. So if the utility is looking at for an individual customer do I incentivize putting in a wood stove or do I incentivize putting in a heat pump from the utility rate payer perspective it's more advantageous typically to incentivize that heat pump they will then be able to collect additional revenue by the electricity they're selling to power the heat pump. So, so most many utilities design their tier three programs to be essentially cost neutral so that it's not an expenditure of funds or it is an expenditure funds upfront and they recover that revenue. Whereas if they were investing in things like wood stoves or weatherization, it would be money out of the utility and they wouldn't ever recover that back. Electrification dominating compliance. So how is the, like, how are you assigning them their requirements in this tier three. So that's the piece that I said was a bit arbitrary when the statute was, it's a megawatt hour equivalent. The percentage of the retail sales so every utility has a certain annual sales expressed in megawatt hours for tears one and two, they have to have a certain percentage of those megawatt hours from renewable sources. Tier three also has a requirement expressed as starting at 2% of their retail sales ramping up to 12% of the retail sales equivalent savings through tier three. That's a little bit complicated but essentially what the tag does is look at the net fuel savings that you get, which is like gallons of say oil for instance they convert that to MMB to you which is just the universal measurement for energy. And then, at the very end of the day, they do a conversion to megawatt hours. So what, what does that MMB to you what is that amount of energy equate to megawatt hours and that's really just putting it in the units that the utilities are conversant. And so you say it ramps up from two to 12% ramps up over what what metric time or. Yeah, so so sorry the initial obligation year was 2017 for most utilities some utilities got a delay until 2019, and that requirement wraps up until 2032, and then it's just held steady at 12% of retail sales. Year over year though. And do they have to each. So if being it so every day have to do 12% of this kind of work, 12% of the retail sales, they have to invest that into electrification or getting people a fossil essentially they have to acquire the equivalent of 12% of their sales in fossil fuel reductions. And that obligation going out in perpetuity currently in statute. So, once we hit 2032. They'll be so as your, as your sales, if your sales are increasing you have to do more time markers. Over time. Just because if your electricity is renewable and green. And that's sort of. That there may not be potential if we come to a completely renewable future, there may not be enough potential to produce fossil fuel. Well there, well there's that but also, yeah. Thank you representative Tory. Thank you. I'm just wondering as technologies emerge. We're piloting into credit controls right now that become an eligible to. Yeah, so under the tag process typically a utility would come forward and say this is a measure I'm interested in offering. I think there is a pathway where for utility doesn't sponsor measure they can come to the public service department and say look this is a promising technology. So the utilities are all participants in tag as is the Department of Public Service and the efficiency utilities. And what happens in 2032. We just keep going at 12%. Yes, so they say we've done everything we can do. Yeah I suppose that would be a good problem to have but yes right now that the obligation flattens out in 2032 and they would continue to acquire fossil fuel reductions tied to the percent of their sales and there is an accounting for savings there is an accounting to your question about, you know our fuel supplies are electric supplies getting more and more renewable so that's accounted for in calculating the fossil fuel savings from each measure so if I have if I'm if I'm served by a utility that has a power supply that relies heavily on fossil fuels. And by changing over to say a heat pump won't be considered 100% green or 100% renewable it'll only be considered renewable up to the portion of my utilities portfolio that's served by renewable resources so there are utilities in the state electric departments want an electric and Washington electric co op that have 100% renewable power supply so if I replace my, my car my gas burning car with an electric vehicle that's considered a complete offset of fossil fuel usage, because it's assumed that I would never be using any fossil fuel to power my vehicle, but if I'm a customer of a utility that has a 75% renewable portfolio 25% of the electricity used to power the car then is still reliant on fossil fuels so that's all accounted for in the measure characterization and I hope that makes sense. In the tag does the message characterization tag does the measure characterization. This exclusive function of tag right now is quantifying the fossil fuel reductions. So, I should, I'll just make a note friend here that, and under tier three you do utilities do claim the lifetime savings of the measure in the first year in the year that they offer the program or offer the rebate so they're paying out a rebate for an electric vehicle and they're able to claim the fossil fuel savings that will accrue over the whole 12 year life of that vehicle. So they're not. It's not an annual claim which again is different than the structure envisioned under s five and the affordable heat act where the utility or the I'm sorry the obligated parties would be claiming those savings each year throughout the measure life. So it's a structural difference there. So when we think about an unregulated largely unregulated sales component of our fossil fuels. And you look at this lifetime savings all at once are spread out over. Is there either. Either of those more suitable for a trend transition or envisioning here. In terms of whether you claim the savings upfront versus year over year. I think the complexity and tracking is simplified if you claim it upfront. And that's for, I think two reasons one being consistency with tier three because we're talking about a policy that would basically be an umbrella that sits over tier three. There's a policy there so that if you're if a utility has claiming a tier three credit all upfront, having consistency with how the other obligated entities claim their credit simplifies that. And it I think alleviates some of the burden on the obligated entities for tracking credits year over year. Again, it's unclear whether this would be done through spreadsheets or through another more complicated tracking system. And that TJ spent a lot of time discussing right utilities or obligated parties have kind of a bank of credits and they're able to draw from that bank and retire them. I think that that process would be simplified. Again, if they were claiming those credits upfront and then of course the PUC would have to set the obligations knowing that all of those savings didn't really accrue in that first year. So potentially you'd be looking at higher obligations on the obligated parties. And so, having that spread out is a lower burden, potentially a lower burden on the obligated parties over time. Not necessarily I think because they'd be paying for the measure up front so if you're paying for a weatherization job and you're paying for the entire amount in that first year. To some extent tying the credit to the year to the payment might help them and might avoid the incentive for them to pay for measures that are potentially like cheaper but just one time measures or shorter term measures. But having them go out over time keeps their obligation for doing new work lower than it would if they did it in the first year. I think it keeps the obligation lower, but I'm not sure that keeps the cost lower bigger obligation and credits that were potentially lower cost. Any further questions. That was the high level on kind of have a renewable energy standard structure as I there's, you know, thousands of different details. The commission did it through first through an order and did a rulemaking for the renewable energy standard. And there was, you know, a lot of open public. Well, there's a lot of public utility commission process where the opportunity participate theoretically is there and different people have different opinions on how accessible that process is but there there was kind of this process as the PUC was designing the details of the renewable energy standard. There was time to within the parameters of the statute shift and make some decisions how things might play out. There's a need for annual plans for instance and that Melissa mentioned or exactly how the might work or how the tag technical advisory group might approve measures, those types of things are worked out. I think there was a proceeding on, you know, energy storage is included as a tier three measure for instance it comes to mind. So that kind of crosses the whole sales and retail side that that technology but it. That went through a process and became became elsewhere. Questions about how hydroquibat renewable energy credits would be treated or your power authority acts would be treated. So there was space in that process to kind of take input and and make decisions. We're either of you involved in that process. I was. We both historically were at Vermont Public Power supply authority. And participated in that process there. There was some of that process when I came back to the department that I was still involved at the tail end of that process. Was there resistance to implementing the rest. And it was proposed. Thank you. Sure. Yeah. Yeah again so I was sitting in a utility seat at the time at Vermont Public Power supply authority I believe when the rest was passed. It was passed with support of at least the majority of the utilities. There's some background I think here three was largely seen as a way because of as I spoke before about electrification bringing additional revenue to utilities. That added revenue could potentially offset the costs of complying with tears one and two. And that was I think a key component of the package of having three tiers. Here's one and tears two are seen as having incremental costs right there are no ability doesn't come for free. So I think taken as a package tears one two and three my recollection is that there was wide support among the utilities if not universal support. And there was another issue and tears one and two as well that where other states were making noises about hey Vermont doesn't actually have a renewable portfolio standard and we're actually paying for their projects and I think implementing that structure was supported because of that they were I think, for instance, there was a threat that the energy credits from McNeil would actually not no longer be counted in in Connecticut which would have been a significant burden on the rate on owners of McNeil and so there was there was a whole lot of moving pieces there. Yeah, but ultimately, I think Melissa's right that it generally had support. Representative seven. Thanks run chair. I guess I'm trying to phrase this as a question as someone who actually sat on the Senate floor while it was debated. How about outside of the utilities where their concerns from legislators about this, blowing up people's electricity costs costs to remember that. And I'm sorry that is a leading question. Because you remember it. I remember it easily. Yeah, I don't. We can both share our perspectives. I don't. I think there was discussion around cost and I think this was a proposal largely supported by the Department of Public Service and they came in with rate estimates of what the impacts would be and again that balancing between tears three, three offsetting the costs of tears one and two. So I remember that there was discussion of cost and that there were numbers and assumptions that were, you know, kind of openly discussed and debated. Concerns at the level of it's going to blow up electric bills or it's completely unsustainable but I'm not. Those may have been aired as well. I do think that there was a little, a little more confidence in the estimates of while there were estimates as Melissa said of what it would cost and there are confidence in those estimates because there were renewable portfolio markets at least for tears one and two I'll speak to that. You know, other states have been trading these renewable energy credits and we had a general sense of what those would cost in Vermont as well. And then, of course there was an alternative compliance payment that said hey, if it costs more than this then it will it won't cost more than this because this is the most you know that alternative compliance payment is the cap. And so Yeah, so with our utilities, we regulate the price also that their rate prices, which is not actually equivalent with with this standard. So Yeah, our utilities are very used to being regulated. I guess my point was capping the price. I mean, we are managing the price overall. We're still not going to be managing the price overall here we're allowing market forces to drive prices. That's what's addition here as opposed to the renewable energy standard where we do have regulated entities and we can really manage and manufacture that price. Well, we can help manage price in terms of prudency of their investments and how they those investments translate into rates, but if costs are reasonably incurred we it's not like we can say no you you only charge 7 cents a kilowatt hour so we think that's what electricity costs they get everything they can are allowed to build our reasonable rates. So, if you take a lot of we take a lot of information about our utilities, which allows us to have a much better sense of what their costs, but what the necessary costs are, which is not what's envisioned. Yes, part of this we wouldn't have that level of insight, I think into Right, we do not have that level of insight into the unregulated entities are representative Smith. Thank you. Thank you for the supply all of Vermont power needs. Theoretically. If we had the import lines and then it could theoretically be possible they have enough supply. You know, yes, I'm not sure that that would be a great idea would be the least expensive. Not necessarily. It depends on a lot of factors you know. We have embedded contracts that we've signed with Hydro Quebec that go out for a number of years. But they Hydro Quebec now wants to sell into the regional marketplace, and so they want to get aid what the market will offer. So if you're going to enter into a contract with them you're kind of evaluating that based on the market price and then they need to evaluate well. If I'm entering a contract with Vermont, we can get long term certainty over that price and you know there's trade offs in that kind of contract negotiation but wouldn't be able to say for certain that it would be higher or lower price and other resources. So thank you so much for coming in not once but twice today. Thank you for having us. All right members I think take a five minute break. So we are going to continue our shift to a discussion of S five and we have with us our legislative council and take house key. And so we have taken a considerable amount of testimony. And we finished the walkthrough and I think it would be it's never to have questions about the bill or about testimony that you've heard suggested edits that we've gotten along the way this week. Now would be a great time to bring them up. Have we have the language from efficiency Vermont. Yeah. We got that yesterday. Yes, we've got a walkthrough of their suggestions, but we have the language. Okay. PC brought language yesterday. But I think efficiency Vermont still needs to send us there. Okay. Copygate. So maybe it was sent to Dave Westman Dave Westman. Do you get that. We're checking on that. I know that. Thank you. I know a bunch of us got an email from a constituent and Burlington about the carbon intensity of biomass including solid fuels in carbon intensity scale I've been asking around by learning more about that, whether or not it should be a concern, whether it made sense to insert a solid liquid or gaseous into the heat measure into that section, which is on page 22 carbon intensity of fuels, and I'm persuaded that we don't need to be concerned about it, because the I mean, we still need to beat our emissions reduction schools on the annual basis and technical advisors suggest that this scalability of biomass is such that it isn't the same level of threat as liquid and gas heat measures so I don't know if anybody else is wondering about that email thread. I actually just had a conversation with representatives with representative Elden that I would like to have some testimony and you're from people who have the knowledge about about biomass. And I have that will be making some suggestions about that but I think for purposes of thermal energy as opposed to electric generation which is a separate, a separate subject. I do think there's a very important place for it actually in terms of what's now called advanced heat would heat in pellets in particular so I think there are and we have heard, you know about that that heat pumps have, at least in current technology have the limit certain limitations in terms of, you know, they're not forever they're not for every situation so I, I'm having dealt with this issue in the previous committee that that that I served on and all of that I'm pretty convinced that that that it is an important important option that probably should have a little bit more mention in the bill, and that we shouldn't form ourselves a little bit more about them. I mean, I'll just say in terms of biomass for electric generation there are two existing plants that do that, but they that is not, is not the efficient use of biomass unless you use the waste heat, which Burlington has been talking about for a while. And, and Rige was considering but nothing has, has happened and Rige is not in the situation where a destructing system is as possible given that it's in the middle of nowhere. Thank you, Madam Chair. I'm just looking for an answer and from anybody in the document yes by document on page four definitions 8123 carbon intensity value is the amount of life cycle greenhouse gas emissions per unit of energy of fuel expressed in grams of carbon dioxide equivalent to per mega mega truly like a jewel. You don't know what that means. I'm open. I'm trying to give a explanation for how you might be at this by now. Sure, I mean I think the first few words are the most important is the amount of life cycle greenhouse gas emissions per unit. So it's trying to standardize how we measure across a bunch of different fuel types, the amount of carbon emissions. It's going to be a unit of measurement basically, we talked about it later, and it's 80 to 20. So this is a scale it's a it's a round ish number, but it's going to be a unit of measurement of emissions. And it can be used for different fuel types and so that's why there's all those other extra words addressing the different units of measurement. Okay, I just hope none of my constituents want me to go further on that I'm going to call you. Well, I don't know. We could give you an example. Okay, I personally could not provide an accurate one for you, but I could imagine one, which would be something like. So you, you earn wood in a fireplace to eat your home. It's going to have a really high ratio of greenhouse gas emissions per unit of heat. Right. Yeah. So if you earn a much cleaner source of energy it's going to have a smaller percentage of greenhouse gas emissions emitted per unit of heat energy produced. Okay. So it's just more efficient versus less efficient heating fuels. And the life cycle piece is sort of like, so if you're thinking about natural gas that is obtained from like Texas or something. The life cycle would be from when they actually pull it out of the well, and then they transfer it to wherever they treat the gas and then they the whatever is released through leaks as it comes through pipes. And then finally, when it's, you know, gets to the Vermont home and it is burnt, that's the full life cycle, as opposed to, you know, if, as opposed to just what is burnt in your house. So the life cycle is from the, yes, exactly. Okay, thank you. Yeah, and the other example that's in this bill later you established sort of a baseline that number two heating fuel has a carbon intensity of 100. So, if any biofuels are blended into that the carbon intensity will go down, because there will be less carbon emissions, because a cleaner source has been blended into that fuel. Thank you very much. And what's the biofuel that would be blended into. There's a lot, and they do their carbon intensity values do very widely. They're not all created equal. I think some of the ones that are considered the cleanest are for example used cooking oil, particularly because they're being reused and repurposed. But there are different sources so different plant fuels, a few plant types that can be turned into fuels like corn or so it questions. Oh, oh, wow, okay, maybe that's here. I've got an idea for the rest. I don't have enough. I'm thinking, I'm going to think out loud for a second. That's wise. Good morning for all of us. It was not you. It wasn't personal to you. That's okay. I do have a question. Representative Smith. You mentioned cooking oil and corn oil as a biofuel. If we start using more corn, people will be eating less corn, because you can only grow so much in this country. This is a very complicated topic that I'm the exact extra on. However, there's a significant amount of subsidies on corn in this country, and a significant amount is grown specifically for the production of biofuels. Yes, so there's already a fair amount of our corn crops go to the production of fuels. Federal subsidy for that. Just on testimony that we've heard this week or questions that you have outstanding topics you would see us cover representative more than sevens. I thought that the changes suggested by the PEC seems like ones we should talk about. Yeah. So, I think that we will ask Ellen to work those into the next draft. Representative Stebbins, then Logan, then. I would love to spend some time looking at the dates, because that's been raised in a few different testimonies. And one of the ones that from the testimony we heard that I particularly resonated with me was number 10. From Matt Kota, which was January for the fuel dealers. I don't know what they're doing. If they're just registering, I think it's easy enough to fill out a registration form. No, it was having to be true to, and he was saying can we trip later. Yeah, I feel like those folks are really there. They're answering no he calls and I think I'd like to look at the full data date list. Great. And Ellen, I don't know if you've had a chance to look at the suggested you see edits, but they also included some suggested timeline stuff that so you brought up the timeline to us. And they also brought the timeline up to us. So I think we're hearing that we need to address timeline issues. So, to the extent we can move forward on that that would be great. Can you define the efficiency for not. Yes. Is it posted Kate efficiency. Great. Dave Westman Dave Westman. That code at 10 points. Still not seeing. Yeah, stay March 30. We just look under Dave Westman really. I would like to take some testimony on a potential study, and specifically Dave Westman in on that from efficiency Vermont. And not sure. Perhaps rich coward also from regulatory assistance project on those items. Okay, and rich has maybe done them. I think in terms of, yes, yes. Dave Westman is subjected to them as well or. Okay, great representative Clifford and requested here from a couple people. You should be on our Tuesday lineup. It should be on our Tuesday. Thank you very much. Yeah, so folks who've requested we're trying to accommodate them. Number of them and on Tuesday. People who've requested to testify. Representative Tory, I was wondering if other people have any interest in kind of a higher level. I think it's a really interesting picture, maybe from a national organization is one I'm aware of called the wire in America. That could be useful for us just in terms of big picture. As we're getting on the news. It could even just be a webinar or something that we watch on runtime. Something I feel like I'm missing right now. I had an order. Logan and then said, thanks. And it's suggested by the Office of racial equity. Oh yeah, thank you. I wanted to be sure that I've reviewed those and they look good. Yeah, they've got some. We should include those also represents that comments. Things I'd like to learn more about one is like to know how the large amounts of recently approved federal money sort of intersects with the goals of this bill. If we were to have this bill go forward, what would be the role with all this new money play. How are we all kind of together. Another question is to know how this bill affects either positively or negatively low income folks who rent. I'd like to know similarly, how all the home residents would be affected by this believe in a positive. And we were going to hear from the capstone. Yes, we're trying to get some folks in. Can I respond to one of the things. So there. So the PUC in the Senate recommended strengthening the default delivery agent so that it was having and I think in this recommendation they did as well as that more that it was more default. And part of that being having a central body who could specifically be drawing down the federal funds in this sector. The PUC would have close eye on that budget process and the process they were using to, and really working on drawing down those funds. So I think that there have been conversations that having the DDA, the central figure. That's really sort of aggregating some of the different incentives to do this work and having sort of economies of scale that way is something they're envisioning with the default delivery agent and having them also more work is going to go. I think that was that my most eloquent answer but. No, that was. That's good. Sorry. Yeah, on the DBA. In my mind, it would be really effective if they were doing a lot of capacity building around workforce because we really heard that so loudly from the field dealers now that they're not even well staffed up. I'm just wondering, like, is that, is that in a vision for the DBA yet, or is it something that we would want to hear more about how workforce could be in capacity for the transition. Yeah, from efficiency Vermont yesterday. They were, they were asking if we could utilize this system to get credits for workforce development training. How that would get valued. Yeah, yeah, how could it be valued as us. Yeah, okay. Recommendation three. We have that. We do. Yeah, under Dave Westman witness. Thanks for representative Sackowitz comment about federal dollars. Joyce Manchester from JFO did give a presentation to Senate natural resources that had you know what an overview where some of the different dollars would be available. But just asks JFO that come in for 15 minutes or something on that. But the other thing I just wanted to mention the budget bill, do they have money in it, or he was like $100,000 or so for sustainable jobs fund to provide training to existing energy service businesses to help make a shift. There's also funding in there for other work for climate workforce efforts. So I just want to highlight that there are initiatives underway, there are and I keep going back to I'd like to know who's keeping track of them all and today with the T day of the slide that we got from them. I wanted, I didn't get to ask because I had to leave but it was that representative of the universe of funding or are there others. I don't know how do we answer that question. Do you think that. So in the Senate yes I did hear from JFO but I think they did also hear from yes who is keeping a close eye on all of the pots of money in this year so you could also potentially hear from them and I don't know if they'll be able to answer that question fully but I do think they are. They're the one closest. Yeah, I was one. I mean I'm not did you guys get to ask that question to them today. They provided it. Yeah, yeah, it's in there's presentation from today I just wasn't sure if I was trying to I was trying to let me question so I didn't ask a question that I need to be answered. That was only the list of federal funds that didn't include any state workforce development. Yeah, so, um, I, you could put the ask out though and see if they could come back. Yeah, or on the state funds. JFO also, JFO could give us the state and maybe DPS is representative Smith. We know if the state of Vermont monies will be there when federal money runs out once this is all if once if and when it is all established this bill if the federal funding that's pushing it is no longer there are we going to have enough money to keep it going the way we want to keep it going. So that is one of the central themes of this bill is creating a marketplace that generates revenue to do this work. That is the intent is to create a stable funding source. So this is where the extra dollars that where fuels are going to cost more money. Additional taxes on fuels. Is that going to be the funding. No, find it. So technically there will be there are no taxes and no taxes being raised fees fees and there aren't specifically any fees. Okay, it's it will be generated by the selling of the credits. Whatever price those are set at that will generate the revenue. We won't know how much a credit is going to be until this bill is passed. Until well after this bill is passed. Yes. There's more than bongers. Oh, thank you. That credit. It's a monetary value comes from somewhere that monetary value. Yep. And it's going to be price per gallon or something similar. This probably will trickle down, but I do just want to make clear that this bill this bill doesn't establish a funding source in the mechanism of attacks or a fee. But it's creating a market where things can be sold and bought to generate revenue and yes there potentially will that will lead to costs on the price of fuel. And with that said, do we, and I, and I've heard through a couple of the forums and climate action meetings that one out of five dealers in Vermont just deliver a whole meeting as opposed to doing installations for alternatives. We have is there that we don't have an accurate number of actually how many that is and how many people employed. I don't have that. I'm not sure they registered now. Matt Kota provided that information. I want to say a hundred. That's the number I heard. After represented bongers. All right. So just sort of sitting there and talking thinking about this. No, there's some work being done on workforce, open workforce. I'm saying I'm wondering whether whatever we're doing we need to do times 10. Or I have, I just, I don't know this, but I'm wondering. Are we just kind of looking around the edges of that issue. Despite all the work that I know has been done by like way of laying groundwork and the numbers that I've heard are correct. That we need another 6,000 people doing legislation and really knowing we're getting trained to do installation. I don't know if that I don't know what the right number is, and it may be unknowable actually, but I am wondering whether, you know, for instance, for those of you who have been around this. Do we believe this. You know that we're going to get those numbers for. For past. So I don't know that's, that's a fundamental question I'm sitting, I've been sitting there thinking about the last couple of cases. We're really doing what we really need to do about the workforce. That actually, most of the most important thing to do. Yeah. So Logan, was your question related to work for it. Right along with what chef. Reps have all got you just talking about it. Yeah, thank you. I don't think we've done a lot of in depth discussion about this here in the committee act about the potential study but was it yes it was Dave Westman started talking about the potential study and how you would. How you would do that and what that does is it helps us set. So we've got our goals and statute and then we're looking at okay now what is possible based on. I think he said you know you measure what needs to be done then you measure if everything's free. What would be the percentage of people that would participate which still wouldn't be 100% then take it another level what do we have for what are the limiting factors. What's the workforce situation what are supply chain issues what's happening with fuel prices. All of those things and then we end up with something that looks more likely. That is achievable reason. I would like to add to the point. So it helps us, it helps us to adjust to the workforce that we have while we're building work for us. Well, while we're up in this field is talking about the potential study, I would. Can you just help us understand how you see the study informing us by now it goes forward, how would it get worked in. So it's it is in here right now. I'm not sure what section it's in here, and it's pretty small. What we need to do I believe is put some parameters around it. There's been a their potential study is not a new concept. This is a regulatory assistance project for instance this is taking a successful successful hours. 21 209. That would that be it. 18. So right now, this has the department public service. Conducting this. We're looking at what's possible. So we need to give them a little bit more information about what factors we'd like them to consider. And that's why I've asked for folks who have either been subjected to potential studies or who have to critique them, or. My answer your question madam chair. I'm wondering how what what what you're kind of interested in. How would you need to augment it. What's like what's not here that we need or and or like I have a note here said needs a deadline so that's another thing we need to work into the timeline that was from you walking us through it so. What else does the potential study, if we want to kind of integrate it into informing this, you know, creation of this program. What else do we need to do, well we may want to give the administration clear parameters about what we want them to consider when they're assessing what the potential is so things. And what we don't necessarily want them to consider assessing what the parameters are time timeline is that. Okay, I was just a former friend. Sorry, representative Smith has been patient. Thank you. It's kind of like, but represent Bob got to say it's kind of like building a house, you buy a material and you can't find anybody to build it. So, is it does it make any sense to even pursue as five. Before we know if we got the workforce to make it work. If you don't have the workforce as five can sit on a can sit right up on that wall forever. It will scale. Yeah, representative Logan, sorry, and then. Well I say, and I'm concerned with the workforce considerations too but if there isn't a market for something then there's no point in having a workforce you need both. You need to do both, you need to be prepared for the market by preparing a workforce and then the workforce will naturally grow and it'll, it'll scale up naturally as word gets out about this new profession and people become more accustomed to it but but you do have to like, you know, give it a little kick is certain. Yeah, a little certainty by setting the market conditions and so along those lines. I have I'm looking at this, the recommendations from efficiency Vermont the recommendation number three to support all map market activities that result in clean heat measures. This is an interesting place to put this into the bill in section 8127 on credit ownership. I recommend adding a clause to 8127 the credit ownership. Okay. Thank you. So, tradeable under section 8127 treatable clean heat credits section subsection be credit ownership commission and consultation with the tech tag shall establish a standard methodology for determining what party or party shall be the initial owner, and they strike initial, the owner of a clean heat credit upon its creation, comma, including a representative value for the provision of all components of current and future programs to include but not be limited to financial incentives, workforce development, market uplift and training. So in other words, considering the fact that installation or delivery of a clean heat measure also requires all of these other pieces the financial incentives the workforce development market uplift and training, but I, for the life of me cannot understand how this would work. I can't imagine it and I feel like I need somebody to explain it to me but then that would be the purpose of the tag the tag would need to figure out how to include those components or three to. Right. How does that. Yeah, but I think it's smart because like you said it would, it basically provides a way for funding the conditions that will create a successful market. Representative Pat. I'm getting getting back to what we're talking about, you know, sort of the obstacles like whether or not, whether or not there's going to be workforce or those kind of questions. I think the bill as a senate past does put it basically within this, this will not in any event be implemented until at least two years from now after the study is done. And I think we should be able, we can add language around the study that I think beyond what it says now that specifies that we want analysis of the, you know, whether whether it's realistic and what time frame would, you know, issues such as is there sufficient workforce and stuff like that that should be part of the study the study may say, you know, it will take some time before the workforce develops sufficient to be fully functioning and what what you want to do or may not I don't you know I don't know. But that should be one of the things that we have for analysis, as well as any any other kind of obstacles. Because it will, it will already says that that it's necessary that they give the cost impact of it. What, what, what this might or might not do to the cost of a gallon of fuel. Representative Stevens. So, from this morning's presentation. So, this chart here where it went 2324 2526. I mean, I interpret this as these are all with the arpa dollars, and you know the IRA dollars. This is what we've been doing. And then there's this stop. And so, you know, when I was listening to their testimony and there was the statement of like the gap. You know, it was sort of going to your point for we're building up workforce in 2324 2526. And then there's this drop without federal input. And that's where I sort of see this market approach, helping to keep that go. We're filling in the difference. Sure. That's actually great. Yeah, and so the 6000 number short workers that we were told we would need to do this work and I guess I think like it's not mean if we were going to do it all today we wouldn't 6000 or is there a time is again is there a time frame put to that. So, what secretary more has presented to us, and is being widely widely shared is looking at the goals that we have in the Global Warming Solutions Act. And what it would take for us to hit the 2030 goal in terms for emissions reductions. So what are the measures, how many people will we need, and then she's transferred the cost. It is. Yes, it is. And so what you asked before about how does this potential study help us this potential study says, Okay, now let's look at what's actually possible. And, you know, I like to be really clear that, you know, when we look at what's actually possible that we will know that that sense is not correct. We will not know what is correct. But that's 70 cents presumes that we're doing all of these measures that we can do all of these measures by 2030 potential study will help us understand what in fact we can do as well and as resources are changing as our workforce is building that will increase as our supply chains loosen up that will increase. So, I think that 6000. That's good for us to understand. But also, I think this we, we have mechanisms to help us scale to what is possible. And we were reminded today that global warming Solutions Act is not at any cost. That's right, right, that's right has to be reasonable and doable. That's right. Does it make sense to have it might be the only one that thinks I need to know what a credit is worth before we pass a bill. You won't know how much a credit is worth till after the bill is well after the market. Do you know how much of our energy credit is worth? I don't know how much room you need for the cubic ton of carbon. How much is your heating well going to be in three years. It could go down if we start drilling might go up. It could go up to go in any direction. There's a lot of this. Yeah, that we that's volatile and unpredictable. That we live with today. It's built into the default because people need to eat their houses. Representative Logan. Just going back to the efficiency Vermont recommended edits. Other recommendations that are around timelines and then or the to allow the potential study to temporarily modify the compliance obligation. And change the period for any adjustments based on the potential study to be up to 36 months rather than 18 months. That piece we heard from the PC that increase from 15 to 30. Both of them I think they agreed. Yeah, they did agree. And also to take market conditions into consideration. And also to include the quantity of credits generated in the high annual proceedings where they set credit costs and and the quantity of credits to be generated. Anyway, all of their commendations seem sound representative Sibilia and chair for still trying to test money. I think some I think representatives seven talked about the dates. I think it would be good for us to have another kind of walk through with the council on the dates. Also be helpful just to understand as part of those dates, the orders and just the different actions that you see is taking as a part of that. Add into the title. Yes. Okay. So I'm going to see if there is a specific workforce. East of that would be great. The other body has something that was mentioned by DPS today about public engagement. And their concerns around there and I kind of wanted to, I think there was an issue with the PUC kind of mixed bag on public engagement. So maybe that's another area that we can get some insight into. I don't know if anyone else is curious about that. Yeah, we've been getting public engagement. That's not productive. And then how they get. I would say we have been getting a lot of public engagement. There's been a number of elections that have occurred since the Global Warming Solutions Act also, which is this is in response to. But in, it was age 715, we did have other public engagement engagement measures in there that were pretty in last year's version pretty well. This year's region is different. So, yes, well I would say that the DPS, so we heard from so Secretary Moore and the department are both engaging right now in very robust processes and then it will be for the next year, which presumably is going to feed into this work. So I mean I think Vermont is having extremely healthy discussion. Extremely engaged. Discussion about heated discussion. That's right. It does come up. It does come up. The public process. Yes. There were questions about the PC process being different people having different experiences with how accessible they find it. Representative Stebbins and then Logan. Thanks Madam Chair. So we also heard this morning that public service department or an our analysis is there's going to be a draft in April May. Yes. And they will be done in June. And then the Department of Public Service is doing this sort of large public process for the next comprehensive energy plan. And I guess I just see those as what you were saying Representative Sebelia I see them more as I see those as complimentary. And I guess really hearing that people said don't make this more challenging or more complex hearing that one of the things that maybe if we go through another walk through at some point does there need to be more direction to take some of the feedback from the comprehensive energy plan public process and you know how do we because it also doesn't make sense to do multiple public processes. I mean how many times does the public want to come out to hear about amongst energy policy like it makes sense to leverage that in my mind with this. That's my question is, is that those were the recommendations from the office racial equity is that they hire a facilitator for the public outreach for five is that the process that will be used for the consolidated energy plan. Public engagement process because that I think that's where it would get tricky like we're going to improve language in the bill based on the Office of Racial Equities recommendations on how to conduct the outreach more effectively and in a more inclusive way. And then that wouldn't impact the outreach in this process here I think. Yeah, and my I mean I feel like in the past. And I don't know if this is how the public service department is doing it this round, but in the past for comprehensive energy plans or for different types of efforts like that. You know they've they've set up like six meetings throughout the state and they'll go to like johnsbury or the braddle bro. And I could imagine there could be some way to balance the two and work them together. While not also asking everyone that's already been tasked 18 times to 18 different committees in the racial justice. I've never heard that. Yeah, I just want to be clear because I was not I was saying so a an artist running an analysis they're not running the process and then department department this process. Thank you miss something. Did you have one more. I guess all. May I. You may. Thank you. I'll just talk about racial equity. I don't mean to sound unknowledgeable of this but what does that have to do with a clean heat standard. I don't know and I've been wanting to ask that question for quite a while. Well, I mean, we could take further testimony if you really want to get into the nitty gritty but if you look back at the energy action networks presentation I believe. We do a demographic analysis and and and demonstrate that there are different different social and economic groups that have a higher energy burden, meaning that they pay more of a percentage per dollar of their household income for heating or home. It's a great question. It's not a short answer. And that that's why people use the term historically marginalized that groups who have been treated differently socially and economically in the past continue to have lingering economic differences between say, like, white middle class folks have more wealth than black middle class folks in the United States on average. Same thing with lower income white folks have an average of $109,000 of wealth in their household, whereas lower income black folks in America has negative $9,000 of wealth in their household. That's a lingering impact so that and that's probably a tough thing to figure out remote. I think, and I'm guessing on the percentage is 3% African American families remote and 4% or 5% Latino. So, and they all 90% of them concentrate on it on a city somewhere to live. One of the reasons we have an office of racial equity is to help provide the data that helps us understand inequity in Vermont. And so there's, there are super helpful resource in terms of, you know, facts, data. All right. That's enlightening me thank you. Yes. Thank you for this discussion. I think where we're going to head from here is to ask him to integrate the suggestion so many of the suggested changes that we've heard. I would recommend that you all revisit them. And, you know, when we walk through the walkthrough make sure you're tracking once you're interested in. And so at Wednesday of next week I think we'll be looking at another draft this always feel free to send us ideas for witnesses you want to hear from and Laura is obviously been integral to helping do this and make sure that we're going to hear from people so both of us. And that's that I think this just a great week thanks it was so long.