 This is the House Department and Energy Committee and this morning we're going to do a walkthrough of the latest version of S5, draft number 2.3 posted to our webpage today with our legislative council, Ellen Chekowski. Morning, Ellen Chekowski, Office of Legislative Council, yes, draft 2.3. So the version on the website that is posted may be easier to read because during our last discussion there was yellow highlighting in draft 1.1 of the strike all. You asked to keep those in to prove them in this draft. And so in yellow are the changes from the prior draft that are the same, but changes that are new to this draft are in blue highlighting. And on the internet, the blue is easy to read. When printed it is less, the blue is darker than I was expecting. So I apologize, you requested pink. I thought the pink was too dark when printed so I went with blue and I'm sorry. So here we are. So the first change in draft 2.3 is on page three. So in the intent section of the bill it's adding to the intent that the clean heat standard be designed and implemented in a manner that protects public health. So in addition to minimizing costs and recognizing affordable heat is essential that protects public health. The next change is on page four. It's clarifying the discussion that we've been, you all have been having about specifically how obligated parties will achieve their required credit amounts. So in section C is making just a clarification. So an obligated party shall obtain the required amount of clean heat credits through delivery of eligible clean heat measures by a default delivery agent unless the obligated party receives prior approval from the commission to use another method as described in section 8125 of this title. And so 8125 we will get to and see what that language is but that's where the PUC will approve a plan to use another method. Okay. That's great. Yeah, let's go. So the next change is on page five. So it's in the definition of customer with low income and then the same language is added in the definition of customer with moderate income. The customer with low income means a customer with a household income, up to 60% of the area or statewide median income, driver is greater as published annually by the US Department of Housing and Urban Development or a customer who qualifies for a government sponsored low income energy subsidy. So I do think you discussed this change as part of the last. Representative Logan. Thank you. I'm not sure that the US Department of Housing and Urban Development publishes information on the statewide median income. I could be wrong. So I did look into this and I was having a little trouble finding it on the HUD website, but I will say currently in statute this language is used actually in Act 250 for the definition of affordable. It does cite the HUD area median income or the HUD statewide median income. So I'd be happy to hear if anyone can confirm that, but that is what it says currently in title 10 already. And so then as I just mentioned, customer with moderate income means a customer with a household income between 60% and 100% of the area or statewide median income, whichever is higher as published by HUD. Okay, so I think then those changes are good, but we need to confirm. And I think Kate is going to do that. If that data is still being compiled, maybe it may be an old reference. It could just be. I know. So can I just ask process wise, did you want to approve changes as we went over them? Yes. Okay. That would be good. So I think we've approved the ones we've gone through. Okay. Good, because that might mean. We are doing that. Representative, I do have a question back. I was waiting on this on page four in C, which I think is great, but I'm not clear what the standard of review is. Right. So it's addressed directly in the other section. We'll probably do it together. Okay. I do think you could take out this cross-reference if you want, because really this is just the introduction section. The process is spelled out in age 125. Okay. Cross-reference is good, because it'll answer folks who have that same question. So the next change is on page seven. Wait. Sorry, did we already do number six on page five? I might have missed it. Yes. So it's the same language for customer with moderate income. It's adding statewide median income at whichever is greater as published by HUD. So the next change, I don't think we've had too much discussion about, and there is, so I'll just read it. So on page seven, the definition of thermal sector. Thermal sector has the same meaning as the residential, commercial, and industrial fuel sector, fuel use sector, as used in the Vermont Queenhouse Gas emissions inventory and forecast, and does not include non-road diesel or any other transportation or other fuel use categorized elsewhere in the Vermont Queenhouse Gas emissions inventory and forecast. That's it. Thanks, Madam Chair. I think we did hear discussion about this. I know Rich Carr in his testimony said that this bill is only supposed to be applied to the thermal sector and not this area and that it was able to parse it out. And so I think if this helps to clarify, I think that's helpful if there are concerns that we're being at all unclear. I think it's helpful. Agreed. I think this is good clarifying language. And so there's a related provision at the end of the bill related to this asking to the PUC to report on if additional clarity on this is needed. So we'll get to that in section six. I had a question about cooking, gas used for cooking at the commercial scale. Now that would be addressed. I'm just bringing it now because it's not directly related to this, but related to it. It's got me thinking about it. So as far as I'm aware, cooking is part of the thermal sector in the Queenhouse Gas emissions. Right. And that's what I thought. But so I mean, we would be then therefore would sort of a clean heat measure would be also helping sort of commercial pieces we're clarifying. It would be helping a restaurant, for example, convert to an induction range. Yes. And appliances are on the list of eligible measures. Right. Just want to clarify. Yeah, thanks. Okay. Representative Smith. You knew that all the best meals prepared at a restaurant are overpropane. But anyway, I did have a question by me. You've used your question, Chip. Remember, Dennis Smith. Thank you. Thank you. I think on page five, where'd it go here? Line five. The heat measure means fuel delivered in technologies shall include switching from one fossil fuel to another. The least expensive way that myself in my income bracket could go to a cleaner, more efficient heat would be to get rid of an old oil burner and replace it with a new oil burner. So I won't get any kind of credits or any kind of incentives to do that, will I? No. Representative Sebelia. So in the case of a Vermonter who has an old boiler, who may not get an incentive to switch to a new fossil fuel boiler, there would be incentives envisioned around weatherization, which of course will make the most significant difference. They could potentially be looking at some sort of biofuel. And let me think of their additional measures. They could be looking at appliance. There are measures that will be available. And of course, they also do not need to. They're not required to change their boiler. And even if there's not an incentive for a more efficient boiler, putting one in would in fact lower their fossil fuel use and lower their exposure to the volatility in the pricing. So this feels okay to me, even though it's not fossil, it doesn't allow fossil or fossil. There are still measures for folks who cannot switch fossil or fossil. Representative Stovins. Thanks, Senator. Yes, there's still measures if people want to do them. I think the other piece is that the concept, as I understand it in this bill is to motivate someone to take an action that they might not otherwise take. And so if you're gonna go and if your boiler breaks and you go and buy the next available boiler, that is not motivating any change. That's exactly what you would have done otherwise. And I don't, I think if the concept here is to actually motivate shifting change, that action wouldn't be any form of change that you wouldn't do otherwise. Representatives Pat, and then... Just to add to that, if one has a boiler or a furnace, a central heating system in the house and it needs to be replaced, and let's say it burns oil or protein, an opportunity does exist either with a furnace or a boiler, since that is the distribution system you have for heat in your house to switch to a pellet of boiler or a furnace. That is an option to consider. I keep mentioning it because it's what I ended up being confronted with. It appears to me that the most efficient way for me to do something differently is to get rid of my oil burning furnace and put in something electric or something along that lines, but then I'm gonna spend $15,000 or $16,000, $17,000 instead of spending 12 or $13 or $1500 to replace a more efficient heating system. And that doesn't seem quite fair to someone that's in, I'm not in a high income or a low income bracket, but I'm in a bracket where I will get no assistance from anybody. And that just seems a little bit discriminatory if someone in my income bracket can't get an opportunity to upgrade to the same type of a fuel system. It could be included in this bill, but if it can't be, it can't be, but I just want to bring that to the attention of committee. Well, I think a lot of the cleaning measures are gonna be available to everyone. So the, you know, predigates and all of those things will still be available to anyone who wants them. We'll see. Thank you. Thank you. Representative Tori. Just very quickly too. You bring up a really good point because most of us don't know when our furnaces or boilers might die on us, but a prudent thing for everyone to do is invest in the weatherization because that's gonna get your costs down and you can spread out your costs instead of having to do everything at once, right? And it can also affect the sizing that you need when you do make a change. So the, what I think are very important focus is the weatherization measures that are helpful for everyone. Sure, absolutely. Weatherization is probably more important than changing your heating system, I think. Right now, my house is pretty airtight for an old, under the 50 year old timeout. But you're right. Thank you. Thank you, Madam Chair. As long as we're on that subject, I'd like to also just remind people that that boiler when it fails or furnace is still gonna, even if you switch to a heat pump to get the access to the incentive, still gonna need to replace that boiler or furnace because it's the supplement during the cold weather as I have found out with mine. I'm not talking about estimates or assumptions or anything, it's true. You have to have, you have to have that supplemental heat when your initial one is not working effectively. All right. Page seven, I think he said, was the next. So the change on page seven works in. Talked about that. Got it. Oh, and the change at the bottom of seven, yes, we're accepting that. So then there are changes on page nine related to the tax departments. Page eight is in the middle. We should just, yeah, so we didn't put the yellow ones, we need to revisit. Okay. So on page eight, in subsection four, the commission made temporarily for a period not to exceed 36 months, adjust the annual requirements for good cause after notice and opportunity for public process. In the prior version, it was 18 months. And then additionally, good cause may include a shortage of clean heat credits, market conditions as identified by the department's potential study conducted pursuant to section 81, 25 of this title or undue financial impacts on particular customers or demographic segments. This one? Yes. Representative Smith. Thank you. Is this language in here in case it's bill fails? No. What do you mean by fails? Well, they can temporarily stop the process and they can go to 36 months in the event that something doesn't go right. I guess I'm trying to figure out. So it's adjusting the credit amounts. So I don't think they could fully stop the program, but if they identify a shortage of credits or market conditions or negative customer impacts, they could adjust the amount of credits that the obligated parties owe. What would cause that? Shortage of credits, market conditions or negative impact on customers. What could cause a shortage of credits? Could be workforce or material shortage? I don't know entirely, but perhaps. Thank you. Representative Sebelia. I will just notice that this is one of two circuit breakers in the bill that are more important, I think, when we don't have a check back coming in. Oh, these were sort of original. Well, they're still important. Yes, they're still important. These were part of the first bill, but give us the ability to say, we can reassure ourselves that if things are going, hey, why are we totally commissioning the cause? Great, so it is for once the program is running. If there's unforeseen circumstances, they can adjust the credit amounts. Representative Bonner. I, the last sentence, wow, shall not material effect. I don't know how you adjust the credits without having the material effect. So as with everything else in this bill, this is a tension between the competing interests of not negatively affecting the monitors and meeting the goals of the requirements of the Global Wearing Solutions Act. So part of this is that it will be a temporary adjustment, a way that that may play out, depending on one of the options for the PUC in order to comply with the Global Wearing Solutions Act, is that if something happens, if there's a pandemic situation or something where there are no credits available, work has stopped, the PUC may say, okay, no one is required to have credits this year, but next year the credit amount may go up a bit to try to catch up. That is an option, it's not required, but it does ask the PUC to just evaluate if they're going to be on track with meeting the requirements. There are multiple places in this bill where it does ask the PUC to be monitoring the credit amounts to see if they can further on track with the Global Wearing Solutions Act. So I'll just throw out there, would it possibly be better for it to say, Mr. Chancellor, I mean, downward adjustment is the minimum amount necessary to deal with the situation because I don't get that, it's not gonna happen, it will affect what you said, I get it. Yes, you have options to change this paragraph to say whatever you want. Potentially affect versus, what did you put on? Something like the minimum amount necessary to deal with the conditions, which is not for the PUC, it's better way to say that, but. So I think that we have provided some flexibility in our goals we have in statute and this bill with the potential study, which allows us to look at what is available to us. And so I think that this is okay. So, Mr. Chancellor, I'm sure that may downward not materially affect the state's ability to comply with the requirements. And so we have to put forward a plan and we have to make progress towards that plan. Representative Simmons. Thank you. In my head, we have like two other relief valves. So maybe we can come back to this relief valve after we've revisited the language from the other two relief valves because I feel like combined, we have multiple tools for the commission to balance those competing interests. But at this point, I'm okay with this language because in my head, we have those other relief valves that we're going to go through. One of which we resist the first one. Yeah. We'll get at different versions. Okay. I think that's a good suggestion. Hold that thought. Is that okay? Thank you. Yeah, HUD does not publish statewide, median income data. They publish county level and area based on household size data. But so I do believe that the place that Secretary Moore received that information from was the Vermont tax department and median statewide median income. But they don't publish. I just looked and they don't publish that in their annual tax statistics right now. So there's no, there are other very informal sources of that information on the internet, but not from HUD or the state of Vermont. So we strike out the as published annually by the US Department of Housing and Urban Development. Does that resolve this issue? Let's read it again, back to page five. So if you strike it, I think the PUC is going to have to address it. What source of data they're going to use. So I do think they could potentially address it in the rule. The other option is you could move statewide to the end of the sentence or so that it's not covered by the HUD clause of that sentence, but there is probably going to need to be a unified definition. So if you leave in any ambiguity, I think the PUC is going to have to resolve it. So say again, what they do publish. They publish the area meeting. Right. Yep. So what if we strike board statewide? That is more expansive, particularly for lower in the state, but then I was going with what I didn't get to finish. What Ellen was going to say, I think is then move statewide so that we still gather it, although who's where are we getting it from statewide? I think we'd have to ask the Vermont Department of Taxes if they could provide that information for us. And you found they currently provided to ANR. Well, secretary Moore shared information about statewide median income, the number of households than certain brackets of statewide median income. And she said that she received that information from the Vermont Department of Taxes, but we haven't communicated directly with them in any way. We have a commissioner. Oh, right. So I think for now we need to find another, figure out the source of the statewide data and remove it from the description of the HUD data. Move it to the end. Yeah. Yeah. I think Ellen was suggesting. I think that makes sense. Adam, Jerry, I had a question on this earlier. I didn't have that. I think it'll come up later or whatever, but when we have, it seems like multiple opportunities to find low and medium income sources, it would be advantageous, I think, if we would have what it is currently so that we would at least know who qualify, who would qualify? Oh, in here? Yeah. Well, not in the bill, but just so we can explain it to people, constituents and such that, or myself, who would be covered, what income levels would qualify for the credit. Right. Okay, sure. So moving on, back to where we were. We're on page nine. Yes. So on page nine, there are two changes that relate to the tax department forms. And there is another change related at the end. So as I'll start on page nine, at a minimum, the commission shall require registration information. So this is the annual registration for all entities that sell heating fuel. So registration information to include legal name, doing business as name, if applicable, municipality, state, types of heating fuel sold, the exact amount of gallons of each fuel type separated by type that was purchased by the submitting entity and the name and location of the entity from which it was purchased. So the whole sailor potentially. And the volume of sales of heating fuels into or in the state for final sale or consumption in the state. And the calendar year immediately proceeding the calendar year in which the entity is registering with the commission. So I admit this language maybe needs to be fixed a little bit, but this is leading up to paragraph three that has the requirements on what the tax department would need to do are being struck. So this is asking, this is requiring that the PUC in their registration documents require all of the information that they're going to need. And so breaking it out by exact amount of gallons per type separated by type and who they purchased from. I think I need to maybe tweak the language. I think it's slightly redundant, but so that the tax department wouldn't be collecting that information, but the PUC would be. Representative Stevens, I'm sure. So is there a place here that the PUC can later on in the bill, is there a place for the PUC can check for the department to, okay, great. Yes, so that's in section five. So I don't know if you want to jump there now, but in the prior version, there was language in section five about changing the confidentiality requirements of the tax department. And so now that language is slightly different, creating a slightly different process by which the PUC can verify its data with the department of taxes. Do you want to jump to that now? Okay, so section five is on page 36. Six, and I only highlighted the section heading because I didn't, I wanted to make sure you can actually read all this language. So all the language in section five is new. So page 36, section five, this is a session law provision on confidentiality of fuel tax returns for 2024. So notwithstanding 32 BSA 3102A, which is the confidentiality provision for the tax department. From January 1, 2024 until December 31st, 2024, the commissioner of taxes shall disclose to the Public Utility Commission and the Department of Public Service, a return or return information related to the fuel tax imposed under 33 BSA 2503 provided the return or return information provided is necessary to verify the identity, fuel tax liability and registration status of an entity that sells heating fuel into Vermont for purposes of administering the clean heat standard established in 30 BSA chapter 94. Pursuant to 32 BSA section 3102H, the person or persons receiving return or return information under this section shall be subject to the penalty provisions of 32 BSA 3102 for unauthorized disclosure of return or return information as such, as if such person were the agent of the commissioner. Pursuant to 32 BSA 3102G, nothing in this section shall be construed to prohibit the publication of statistical information, rulings, determinations, reports, opinions, policies or other information provided. The data is disclosed in a form that cannot identify or be associated with particular persons. Pursuant to one BSA section 317C6, a fuel tax return and related documents, correspondence and certain types of substantiating forms that include the same type of information as in the tax return itself with or maintained by the Vermont Department of Taxes, disclosed to the public utility commission and the Department of Public Service under this section shall be exempt from public inspection and copying. This section was added to address the concerns that the tax department did bring in the other day. Yes. And so this language will allow for the year 2024 when they're setting up the system, registering the fuel dealers for the PUC to go and DPS to go to the Department of Taxes and request to verify information that the PUC has received against what the Department of Taxes has without the Department of Taxes turning over all of the forms with the confidential information. Representative Simmons. Thanks. The dates from January 1, 2024 until December 31, 2024. So does that mean it ends? Yes, it's just that first. Yeah, so it's just for the initial first year I'm setting them up. So if there are new companies that start working in 2025, the PUC wouldn't be able to ask the Department of Taxes whether or not they've captured them all. Well, if a brand new company is set up, they wouldn't necessarily have done any tax returns yet anyways. But I understand what you're saying. Yes, this is a time limited provision. If you'd like to adjust that, I think you can consider that. I think the tax department has concerns about doing this type of process. So it's currently proposed to just do it for one year, but it is a policy decision. I'm just changes to think they work. So back to the front part of the bill, the earlier sections. The next change is on page 12. So I was a little bit confused based on the conversation we had last week about this section. So please let me know if I included the wrong changes. So on page 12, this is in the section about credits coming specifically from low income customers and moderate income customers. So of their annual requirement, each obligated party shall retire at least 16% with customers, from customers with low income and then additional 16% from customers with low or moderate income. So I know you discussed this last week, but I actually wasn't sure if you were asking to add this or not. So if we're talking about this capture, what we talked about and looking around to see if, except concerns about it. Thanks. Actually, before we move on, if everyone's okay with that, in the next subsection, the commission shall consider front-loading the credit requirements because customers with low income and moderate income, we hadn't discussed the possibility of striking the consider, just making it shall front-load, especially given the federal resources available currently. I apologize for that. Ellen, I think we talked that through a little bit offline. So if you want to share where we got to, that'd be great. So this language, I actually think proceeds or predates the 16 and 16 requirement. Before that was set, there was interest in making sure that more credits were provided for low and moderate income. So I think this language, if you change, if you strike the word consider, I think that would slightly conflict what you already have in the statute because you are saying 16% and 16%. But then asking the PUC to have additional requirements in the rules that are greater than that 16%. So, it just feels like a slight conflict, but if you want to, you can change it, but this is asking them to review that. I think there is also the consideration that the credits we're talking about will come from residential customers, which would include the low income and moderate income customers, as well as the commercial and industrial sector, which don't have low income and moderate income customers. So I think what you have currently is based on the balance of all those considerations, if you'd like to make a change, you can. Representative Lincoln. Thank you. I would be comfortable with saying since section two says at least 16%, right? And we know that there are a significant amount of federal funds that we don't know will be renewed after several years. I think we could probably say something like the commission shall, to the greatest extent possible or something like that, front load the credit requirements. I think we've heard testimony that that would that's clear direction from the legislature. And that with the federal funds that we have available, it is practically possible to do so, do that. And also given the testimony that we've received, that industrial and commercial clean heat technology is not quite there yet, the majority of residential, the majority of credits will be retired from residential projects probably in the initial years. So the commission, you're proposing the commission shall, to the greatest extent possible, front load the credit requirements for customers. The flow of moderate income. Yeah, in the earlier years. Yeah. I'm fine with that. I can narrow it. Yeah. I just wonder if possible might be too strong. Like that means sort of like, if you could possibly do it, you should do it, even if there's some reason why, maybe it's not a good idea to do it anyway, because it's possible. Maybe reasonable or something like that. It's a bit, it's a bit possible. What, feasible? Feasible, feasible, feasible. Reasonable feels like possible. Reasonably possible. I think I'd like to represent it more. This is another one that falls back to a question I asked in a previous meeting regarding the upfront money and how we're going to initially roll out this program. The 16% we're talking about here for the low income and 16% for the moderate income is a floor only, correct? That's just a floor. And then we're saying we're going to consider front loading in number three. We don't have any money yet. Are we going to front load it? We do. From America. I haven't seen any money actually tied to S5. The federal government. It tied it to S5? No, we are. We are? Yeah. Is it in this bill? It's like 67 million or something. It's more than that. So we have tremendous amount of federal resources. We took testimonies from the department of public service about some of those, $160 million in federal funds that would be applicable in heat measures. And we also, I think Mr. Cowart may have, maybe Mr. Cowart that talked to us about or Mr. Westman about the effect that that would have on a credit, that's a tremendous amount of dollars. We have additionally, it's $30 million in weatherization that we've allocated in federal funds. And so what those dollars are doing, they're in action now. They're available for early credits. And so they're kind of priming market and they are making it easier for compliance. Actually, I believe for our obligated parties because we have dollars there. So my explaining this. Yeah, so I understand the concept of what you're saying. And thank you for that, by the way, but I'm just also gonna start. So just we have a lot of federal money and it's being allocated in different parts. And I'm just, if this S5 was to go through, we can point to that and say, that's our money that's gonna go towards this program. So it's buying clean heat measures and things that will count as clean heat measures now and we've provided in this bill for those to count as early action credits. So actually, you reminded me, we did get a list of the money in a summary of that. So we should find that if you represented the studies. Yeah, I mean, also I can't recall if it was in the BAA or the budget, there was a 5 million or 10 million for the healthy home or the clean home initiative. We also have programs like LIHEAP and we have programs currently, incentives currently being offered in proficiency Vermont. We have incentive programs also currently being offered like Burlington Electric has increased incentives for lower income Vermonters who install heat pumps for getting the use of that only CD. So I agree with you, it's not necessarily in this bill. And I don't know, you've mentioned this a few times, I don't know if it would be helpful to clarify like the types of money pots that are out there actually does say it in the findings, but there are many different pots of money that are currently in existence. If it's not enough, we will probably see that come up in the potential study. And if it's not enough, we also have those relief valves. I mean, the relief valve that we just saw, good cause may include a shortage of thinking credits or undo as those financial impacts. So I don't know if that's helpful. It is and thank you for that one. So if S5 passes and those pots of money will be used to stand this program up. They can't, they can't, it won't be used to stand the program up. So the only appropriation to stand this up is funding right now for the department and the PUC for staffing and their facilitators. But these programs that are already, this is from the Department of Public Service testimony that we took from TJ Poor, I think a week and a half ago, the slide. This is part of dollars, Representative Stevens was talking about others. So they'll count towards us. These are gonna happen anyways. They're all affected by this. When we enact this is to help the transition for our obligated parties so just while we're on this three, I would suggest that we say the commission shall come up to these possible public. I'm not going to put it in context. I don't think we'll be too prescriptive and but this is the last one with a job to consider shall to the extent it is to be possible for them. I think it gets kind of where we're trying to go. But without being, it might be opportunities that we're not seeing yet so it goes now. Did you count to that, Ellen? So just a question. Does that give the P that still gives the piece? Mm-hmm. Yeah. Okay. So the next change is still on page 12 in subsection four. So this was in the prior draft. It's striking consultation with the equity advisory group. So this is the one of the other circuit breakers. So with consideration to how to best serve customers with low income and moderate income, the commission shall have authority to change the percentages established in subdivision two, which are the credits from low and moderate income customers for good cause after notice and opportunity for public process. Good cause may include shortage of immediate credits or undue financial impact on particular customers or demographic segments. So this draft, in the prior draft, the equity advisory group was struck entirely. This draft is setting up a slightly different construct with having this equity advisory group sunset. So this provision with this circuit breaker is a long-term one. And so the equity advisory group likely won't exist unless that sunset is reestablished. Representative Sebelia. I cannot recall if we had this discussion. In for, with consideration how to best serve customers with low income and moderate income, the commission shall have the authority to, I think there was a suggestion that we say increase. You did have that discussion. Thank you. So why would if, okay, so this section goes on to say good cause is harm. So it's shortage for financial impacts. And so why would the commission increase credits based on that information? So if you're going to change that, you probably should change what good cause means. Additionally, there's the language of five. So we did have this discussion last week. Our code. Okay. Thanks. Go down the climb. We'll leave it. Yeah. So on page 13 related to that, there is new language in subdivision five to hopefully clarify it. So in determining whether to exceed the minimum percentages of clean heat managers that must be included to customers with low income and moderate income, the commission shall take into account, participation in other government sponsored low income and moderate income weatherization programs. Participation in other government sponsored low income and moderate income weatherization programs shall not limit the ability of those households to participate in programs under this chapter. So that's consistent with what the intent was, but if this helps clarify that. Great. Okay, onto page 14. On page 14, the non-compliance payment amount has been changed from four times to three times the amount of the credit price. And then additionally, that language that you discussed last week is in here. So the commission shall order an obligated party that fails to retire the required amount to pay a non-compliance payment of three times the amount. However, in number three, the commission may waive the non-compliance payment required by subdivision two for an obligated party if the commission finds that the obligated party made a good faith effort to acquire the required amount and its failure resulted from market factors beyond its control and directed the obligated party to add the number of credits deficient to one or more future years. Oh, and that's not exactly the language that you proposed, but I made the grammar, I think it was a little more clear. Just smoothed it out a little bit. Yeah, I do. On page 15, the numbers. Before we move. Oh, yeah. I'm gonna voice my opinion again that our intent is not to put them out of business and this three times payment could and now we've added language that says it may be waived. Yeah, I'm just concerned that I'm gonna lose some also fuel delivery agents obligated parties trying to be obligated parties that are fulfilling a need to where they're customers in our constituents. And I appreciate adding the language that gives the PUC opportunity to work with them. Perhaps. But I'm still struggling with the three. Yeah, I just think it's an amazing penalty. And I get up where it came from from previous legislation or just voicing an opinion. So I would just respond to that. The credit price has not been set and that is one of the things that the rules will set when you receive them in 2025 for review. And so at that point, you will have more information on what a compliance payment would look like cause you'll have the credit price amount. Thank you. Representative Smith. You think that perhaps we should wait to vote on the bill until we know exactly what it's gonna be or how it's gonna be applied to everything? Well, if you don't vote on the bill, there's no directive for anyone to figure that out. Exactly, thank you. And it's okay. So I would like us to figure it out and then come back and vote on it. Therefore, I think we need to vote the bill. Representative Stevens. Well, and furthermore, again, this is not the first time we've done this. We established renewable energy standard for the credits and alternative compliance payment and other economic determinations weren't set before putting the program into place or rather when we were voting on the bill. And I think that's kind of how it has to be because energy prices are going up and down and up and down. So I don't know how we could possibly set it and then stay forever because that's not at that price because that's not what's going on with energy market prices. Go ahead. Representative Bonner. I'm just reading two literately. Could we get a response to say that if you fall just short, you get charged three times the entire amount, even if you did some of them. It doesn't say for the unfulfilled reaction anywhere. I was just wondering, but thank you for bringing that up. If I may, Madam Chair, to comment on that as well is this penalty set up for those that are not participating or failed to hire them with credits. That's going to include the obligated parties that are perhaps doing installations of alternative measures, but maybe not to the level that's required. Well, they're also going to be penalized. So if I'm reading this correctly. You could on line nine when it says to make a non-compliance payment for the unfulfilled credits to the default agent because you could anyway, what is that? Yeah, non-compliance payment for the unfulfilled credits. Seems good to me. Representative Sebelia. Yeah, just wondering if such counsel has any comment on the effect of doing that. So I would just say that the PUC is the enforcement entity here and as with any enforcement mechanism, the PUC will have discretion to enforce to the extent that they see fit. This is how other enforcement authority works. So if you'd like to be more clear here, you can. I do not think this language is tying their hands. I think that they have, I think that this language asserts your intent on what things are, but they will have enforcement authority at the end of the day to set the penalty. So if you'd like to be adjusting the language here, you can, but at the end of the day, the PUC will have the authority to set the penalty. So I like Representative Bungard's suggestion as long as it's not kind of shifting anything really significantly, it's just adding clarity. I mean, I appreciate the discussion. So I think we should put that in there. Representative Smith. This is a whole different idea, but I don't like finding any businesses for anything if they're working hard to try to do the right thing. And I agree with Representative Morris. I'll even more so than what he said about this three times that we just can't keep charging or finding Vermonters and working hard, but this does, right? I'm disappointed in it. Senator Sebelia. Yeah. Can you tell me what the language as we have it with the addition of Representative Bungard's or without if entity came in and had been making efforts, had notified the PUC, had followed the steps, registered, notified the PUC of how they were going to comply, and they fell short, is it possible that the PUC could not charge them? They could come up with some other means of dealing with that? Is it possible or they could say there is no client? I think so. And I think that that is common in what other agencies do. They first ask for the party that's in violation to attempt to cure the violation before they require the penalty payment. So I do think they still have that authority, especially because the default position here is their existing authority under title 30. So yes, I do think that's a possibility. If there's concern about the word shall online six, you could change that. But it does really depend on what your intent is. Just to say, if we had those words that I suggested, I'm fine with it. If we do want to mean it from the one hand, on the other hand, we want to get some, as long as we clarify that it's for our folks. Can you read them again to me? Is it at the end of the first sentence? No, that's all right, nine. Okay. To make a non-compliant payments payment before the unfulfilled credits to the reform. I think that works. Yeah. All right. I think we've got a tremendous amount of flexibility here. And it's good. Next is on 16, I think. So at the bottom of page 16, so now we're in the section on the default delivery agent. This changes the fire draft and it's requiring that we designate the first default delivery agent by June 1st, 2024. So the next change is on page 18, still in regard to the default delivery agent. This is related to language I mentioned at the beginning of this draft. So in starting on line nine, an obligated party shall meet its annual requirement through a designated default delivery agent appointed by the commission. However, the obligated party may seek to meet its requirement in whole or in part through one or more of the following ways by delivering eligible clean heat measures by contracting for delivery of eligible clean heat measures or through the market purchase of clean heat credits. An obligated party shall be approved by the commission to meet its annual requirement using a method other than the default delivery agent if it provides sufficient details on the party's capacity and resources to achieve the emissions reduction. So they may go through this other route and if they provide sufficient detail the PUC will approve their plan. So this provides flexibility for the obligated parties, those that are providing clean heat measures to like Brian Gray, who we heard from. Now here's how we're gonna do it. We've demonstrated they have the capacity, the resources to do it, the PUC will say great. Or to elect that they're going to use the DDA to deliver the clean heat measures. I would just say importantly here, we're providing some clarity for the fuel dealers themselves to do some planning that the PUC is not going to be able to surprise, it's gonna be really hard for you to do these on your own. Basically we're saying here that if you have the resources, the ability to demonstrate you have the capacity to do this, you'll be able to do yourself. Yeah, it's having some standards for what they need to demonstrate in order to do this. So also on page 18, down on line 20 related to this provision. So the commission shall provide a form for an obligated party to indicate how it attends to meet its requirement. Oh, and I guess I should probably keep reading. So the form shall require sufficient information to determine the nature of the crash that the default delivery agent will be responsible to deliver on behalf of the obligated party. If the commission approves of a plan for an obligated party to meet its obligation through a mechanism other than payment to a default delivery agent, then the commission shall make such approvals known to the default delivery agent as soon as practicable. So making sure that the DDA knows how many credits as soon as practicable that they're gonna need to generate. Next, so on page 19, the mission shall by ruler order establish a standard timeline under which the default delivery agent credit costs are established and by which an obligated party must file its form. The default delivery agent's schedule of costs shall include sufficient costs to deliver installed measures and shall specify separately the costs to deliver measures to customers with low income and customers with moderate income as required to subsection 8124D of this title. So I think this was already implicit but it's making further clear. The credit for low income customers and moderate income customers will probably cost different amounts based on the cost share required. So the schedule of costs need to address that. Representative Sebelia, this language I think is helpful and a lot of parties have been working to make sure that we're counting for counting for this. So I'm really happy with this language. All right, so just can I ask for clarification? Yes, the default delivery agent can be an in-state or out-of-state company? It doesn't specify. It doesn't specify, yeah. We do have companies out-of-state that deliver it to the mall. I would like to qualify for installation of alternatives and I just don't want to exclude them. I don't think we could. Yeah. Legally, so a couple more and then we'll take a break. So at the top of page 20, I do think this is also a clarification and this came from discussion last week. So clean heat credits generated through installed measures delivered by the default delivery agent on behalf of an obligated party are creditable in future years. Those credits not required to be the obligated party's existing obligations shall be owned by the obligated party. So an installed measure has a measure life probably somewhere 10 to 12 to 15 years. So it will generate credit in every year that it's installed. If at some point the obligated party has more credits that it needs to in a year, those credits that have been installed by the based on the DDA's work can be retained by the obligated party. Is that a studio? I would like to propose adding a few words here. Okay. So clean heat credits generated through installed measures delivered by the default delivery agent on behalf of an obligated party that are creditable in future years and are not required to meet the obligated party's existing obligations shall be owned by the obligated party. That's the language you originally proposed and I changed it because I thought it was very confusing. So I think my language says the same thing. If you'd like to go back to that language, that's fine. I thought the break of the sentence helps. If it doesn't, we can use, you can go back to that language. I think it might involve going anyway. That's not required to do. I think this was the section that I said, the way I had been reading the language that you just proposed representative Sibilia was that it seemed as though it could be binding future years, meaning if an obligated party wanted to actually say, here you can have all my credits for the next 10 years because I would rather just do this and be done in year one or whatever that negotiated agreement was. I read the language that we had originally had in the last round as saying that they couldn't make that decision if they wanted to. And so I think this was your attempt to make it clearer that it's up to the obligated party. If they want to keep it, they can negotiate that if they want to trade it in in future years. They can negotiate that, but the negotiation is up to the obligated party with the DA. Am I summarizing that correctly? That was part of the discussion. So I think either way, this is a slightly verbose sentence either way. So if the prior language is more clear, that's fine. Maybe it's that last sentence, those credits not required to meet the obligated party's existing obligations may or may not be owned by the obligated party depending on what the obligated party wants. I don't know. I just don't want to make sure that negotiation is flexible. And I didn't, the last version, I did not read to me to be flexible. Yeah, so I guess you could add words at the end of that sentence owned by the obligated party to do with what they wish. It sounds like this is setting up arbitrage. Right, but I mean, articulate that. Okay, so under currently with wrecks, arbitrage is when a wreck, they're unbundled and they can be sold for, if a utility has them and they don't currently need to retire them for their amounts, they can sell them to other people and that would result in revenue for the utility. And so, and then they can then use that revenue to either buy cheaper wrecks or do additional renewable generation. So it's setting up flexibility and the buying and the selling not requiring retiring. And really where I was going with this the last round the way I read it was, if an obligated party says here are my credits for this year and if they wanted to also say and here are my credits for next year that they couldn't do that. That's how I read the language last year. If I'm the only one I'm fine to drop it. Representative Sibiliu. I'm actually fine with what you proposed. Yeah, I'm gonna withdraw my suggested changes. All right, all right. I think with that we'll take a break. All right, we're gonna reconvene our meeting and continue our walkthrough of us version 2.3. Okay, so on page 20. So subdivision E talks about the budget for the default delivery agent. So there's some new language in here regarding the potential study. But to start with line six, the commission shall open a proceeding on or before July 1, 2023 and at least every three years thereafter to establish the default delivery agent credit costs or costs and the quantity of credits to be generated for the subsequent three-year period. That proceeding shall include a potential study conducted by the Department of Public Service the first of which shall be completed no later than September 1, 2024 to include an assessment and quantification of technically available, maximum achievable and program achievable thermal resources. The results shall include a comparison of the legal obligations of the thermal sector portion of the requirements of 10VSA 578, A2 and 3. The potential study shall consider and evaluate market conditions delivery of clean providers within the state including an assessment of workforce characteristics capable of meeting consumer demand and meeting the obligations of 578, A2 and 3. So I think I'll stop there unless you want me to read the next paragraph and then go back. Sure, let's go through. So the top page one to one still on the same topic the development of a three-year plan and associated proposed budget by the default delivery agent to be informed by the final results of the department's potential study. The default delivery agent may propose a portion of its budget towards promotion and market uplift, workforce development and trainings for clean heat measures. So there's a couple of new things from yesterday. There's obviously the additional detail of what the potential study should focus on but I did also include a completion date for the first one of September 1, 2024. Representative Logan, thanks. I have a question. I'll just state this language and be looks good to me. And then in a potential study, would the potentials, the consideration and evaluation of market conditions for delivery of clean heat measures within the state? Will that also include a market analysis of what we expect to be the extent to which the biofuels market will expand in the state? Or is it entirely focused? It's entirely focused on estimating the cost but not on the effects on certain markets that the policy will have, correct? Is there another part? I feel like we have a lot of different pieces where there's reflection and reporting back that needs to be done. And I'm personally curious to know what impact the Affordable Heat Act will have in the long-term expansion of the biofuel industry in Vermont and which biofuels in particular would be able to meet the standard. I don't know that there's a perspective. Yeah, where does that come out? I'm sorry. Representative Sebelius. I don't think that would be technically available, maximum achievable. So I'm not sure that that's what the potential study covers. I will say there are two other places that I think it comes up under the review of consequences section. And then also under the tags listed provisions, it isn't as specific as what you were just saying but they're supposed to review the sustainability of the production of clean heat measures. And so including land use changes and ecological and biodiversity impacts. And so I think that's what you're talking about a little bit, but I'm not sure. Is that so when we get to those sections? Yeah, Anaya. Thanks, Representative. Yeah, I would just note the potential study, the addition of a date, I think is important here, I'm being certain. So. Yeah, it's good. Moving on. Okay. So on page 21, once the commission provides the default delivery agent with the obligated parties plan to meet the requirements, the default delivery agent shall be granted the opportunity to amend its plan and budget before the commission. So just changing what the form is called. And then on still on page 21 subsection G, so the default delivery agent shall create specific programs for multi-unit dwellings, condominium associations, rental properties, commercial and industrial customers, and manufactured homes. So these groups have an equitable opportunity to benefit from the clean heat standard. And I'm wondering if it actually should be commercial and industrial buildings, since the rest of that sentence is kind of about building type. Yeah, that before you. Representative Tory. It's a little wordsmith thing. The word groups on line 17, because you're talking about buildings. Oh, sure. Instead change it to building types or? Sure. What did you say, Ed? On line 17. So these building types have an equitable opportunity to benefit? Yeah. And minimum association is not a building type. And yes. Yeah, condominiums. And buildings don't need equity. Right. Yeah, the groups needs to be. Just as we talked about lining this up before, I think it's a little more lining up. And Representative Svilian. So, yeah, I think we were kind of stumbling around here. What if we, I think we want to make sure they have an opportunity to benefit? Maybe just take out that group. Or or if it's OK, I don't care. The other thing, I mean, you could you could specify the building types and then you could. Like, they qualify that. The occupants of these building types. Yeah, I haven't had an opportunity. Yeah, so it could be create specific programs for owners and occupiers of. Multiunit condominiums, rental occupants. Reversed in occupants, occupants. Or these groups have an equitable or owners or occupants. Representative Svilian, what if we were to default delivery agents shall create specific programs for multiunit dwellings, condominium associations, front of properties, commercial industrial buildings and for manufactured homes here? OK, so. How about that side, that side with me? Yeah, I guess it's fine. You would have a little. But yeah, the point of this was this. I believe the history is it was before the other low income parts of the bill were added. And that's why I have a note that says this is necessary. Like, and then we talked about adding a commercial. I understand we had that conversation, but I just. Yeah, representative Svilian thinks that. Well, I think the commercial industrial is necessary. That's this was a business request, right, to have them. OK, so I'm fine with the suggested change of representative Logan. Is there another place where we discuss. Tenant access to. Yes, programs. Yeah, we'll get to it. I think there is a reality. I think it's. Sorry, as we kind of reference renters. I don't remember off the top of my head. I do believe they are mentioned elsewhere. Yes, each old. But it's around page 11 or the equitable distribution of cleaning measures number one. Yeah, so. Fortnign the sentence. And more say on that. I just was. So am I changing industrial customer customers to buildings? Yeah. And then something should happen from the minimum stations. And the minimums. Yes, OK. So on page 22, now this is the rulemaking section, the statutory provision for rulemaking. Um, so subsection B, the requirements to adopt rules and any requirements regarding the need for legislative approval before any part of the clean heat standard goes into effect. Do not in any way impair the commission's authority to issue orders or any other actions before and after the final rules take effect and then further down. No, this was just reminding us that this was just part of making sure that the commission can actually do the work to get us to the place where we can make a decision as to whether or not we want to go forward. So then under subsection C, there was this addition from the Office of Racial Equity. So so the commission's rule shall include a provision that allows the commission to revise its clean standard rules by order by order of the commission without revision being subject to the rulemaking requirement of the API provided the commission provides notice of any proposed changes, allows for a 30 day common period response to all comments received on the proposed changes provides a notice of language assistance services on all public outreach materials and arranges for language assistance to be provided to members of the public as requested using professional language services companies on page 23. Now in the section on clean heat credits. So there's some strikeouts in the credit ownership section. So the commission in consultation with a technical advisory group shall establish a standard methodology for determining what party or parties shall be the owner of a clean heat credit upon its creation. The owner or owners may transfer those credits to a third party or to an obligated party part of it. So some of this language has been struck with added into the potential study as you we heard we talked about a minute ago. So that's where the market uplift and workforce development will be addressed is in the budgeting process for the DDA. This language really to the other conversation we had about who owns the original correct prior. So this is allowing the PUC to define the rule, how to determine who the owner of a credit is. OK. And so the the other language that we talked about previously would need to be would dictate what their rules say would say. So the rules are going to be governed by all the provisions of the statute. So they'll need to be consistent with that as well. Right. And thank you. And so in the previous language that we talked about that is connected here. What is happening there is that a obligated party will have an obligation that they need to meet and they elect to have the DDA that provide the measures to the measures. And some of those measures are going to have a long life. And so after three years, I believe it is right, that that long life will still it still counts towards their obligation. The previous. We're clear that it still counts towards their ongoing obligations that they continue to receive. Benefit credit for that long life, long delivery and clean heat measure. So it's reducing their obligation in future years. So some measures are better than other measures to install. So if you're installing something that has a lot really, it's a lot lower emissions to a low income in building qualified building, it's really good. Now I'm going too far. Yeah, I'm going too far. I get it. Thanks. Well, I'm looking at representative Morris. If I may, madam chair. Yes. They retain the credit because it's a long term commitment. Each year they're going to have. That's not going to say they had 100% of their credits earned in the first year. That's not what they don't have to stop installing or retiring additional credits in future years. If they have to continue to earn or it's based on how much fuel they're selling, you know, their obligation that will be a part of the calculation of their obligation. So, you know, you're selling this year, selling this much fuel. Therefore, you're obligated to help offset that emissions there with this many measures. And let's look at what previous measures you caused to be maybe through the DDA and we'll subtract that from your obligation. That's helpful towards meeting your application. Right. But if they did 100% one year theoretically. They sold all their they sold their required credits in the first year. That's not going to prevent them from having to. That's not going to prevent them from having to install others or give them permission to not install future years because those credits would make. Yeah, yeah. But if they did all installed measures as opposed to selling biofuels, which only last one year, they're only going to need to cover the delta for the next year. Right. So if the increase in the next year is only 1%, they're going to only need to make up that 1%. But if they did biofuels, that wouldn't be the case. We installed some of the installed measures that and get one 15th for a year or whatever it is of life is it going to be hard to hit it the first year? Why? It's a target because you get such a small amount in the first year and we have one 15th or whatever. No, that's not right. Because it starts the credits can start accruing this year as of three months ago. So that's part of the concept part of the concept is to get you back. Yes. And also the calculation is maybe that narrow. It's going to include the emissions reductions achieved in that year. So I don't know if it would be one 15th per se, but. It would be a portion. It would be the emissions reductions achieved in that year by that measure. And then each year, that amount until it keeps the sort of diminishing return at the end of the life. So it's not one 15th of a credit. It's the credit based on the amount of emissions reduction in that year. OK, that makes sense. OK, I got you. Could you also then have enough ongoing credits every year that would offset your. Requirements. Not do any more. So it's an interesting question because we don't know the pace at which the annual requirement will be set. Yeah, that's a little bit of an open question. I think it might have been better worded what you said. But it makes sense. Plus the three years make sense to you. Is that this question that all makes sense? So I'm going up there. So on page 24 now, we're in the section on the clean heat measures. So subsection D sets up the list of eligible clean heat measures. So eligible clean heat measures delivered to or installed in Vermont shall include. As past the Senate, it was shall. The last version had May. This goes back to shall. Happy to discuss those issues. And then number one adds the words residential, commercial and industrial thermal energy efficiency improvements and weatherization. And it also adds those three words on the next page. And so I was wondering if it would be more succinct to say in subsection D. Eligible clean heat measures delivered to or installed in residential, residential, commercial and industrial buildings in Vermont. Shall include. You know, because there's the fuel sources too. Yeah. In the list. Well, or shall it's delivered to or installed in. I may be representative. So does that then would that obligate us to offer a industrial or commercial solar hot water system as a measure? Yes. Were you not envisioning that as an eligible clean heat measure current for commercial and industrial? Yeah. OK. If you. So yes, if you want to be specific. I'd say leave it the way it is. I don't I don't think I don't. With number eight and number 12. I don't. I don't think you can put residential, commercial and industrial into little D. Well, 12 has residential, commercial and industrial. Yeah. All right. But so my extension is to a residential, commercial, industrial building. It's not this. And if you're talking about a districting service, it's not technically in the building. And I think this it is in and out of the buildings. Well, it's OK. Sure. I think I could come up with a way to fix the grammar, but I guess the real question is, are you only identifying these RCI for the specific measures on the list? Yeah, excuse me. For all of them. Right. For the civilian. Now, all of them may not be currently feasible for all residential, commercial and industrial types, but. Right, which makes no problem. Not if it's if it's not even available, no one's going to try to install it. Eligible measures shall. OK, oh, represent seconds. Are there options other than residential, commercial and industrial? Right, because if not, then that's everybody. Then why do we even need it? Yeah, and yeah, the line improvements for connecting residential representatives. So the addition in one and six is a request of business. Generally, business interests generally became then some clarification for sure. These would benefit them and wealth is. We're all interests, so things like. Sure, Shaq, Shaq, I understand that I'm just saying, like, if what is it, is it adding anything? Is it working so to make it harder for us to say it? We'll do one side and possibly. Begs, the question on the other ones, if it's only on a few of them, doesn't represent Logan, thank you. I'd say that. But residential, commercial and industrial does not include public buildings. Commercial industrial, yeah. Representative, I was just going to say something about that because in the utility world, a school or a public building is considered a commercial account because it books the usage and it looks in the building that is similar to a commercial. So there isn't a distinction, at least in that in that regard. So when I read commercial, I'm including public buildings in that. But if it's not clear, that could be added. Public buildings and facilities or whatever. And it will again then civilian. Just seems confusing, except for 12 potentially. Yeah, I'm fine with Ellen's suggestion to add. I think being specific in there is helpful for. For monitors to understand it's all sectors of the bill. It's redundant. It's not really necessary, but it's helpful for people to see that. Yes, we met you two. So we're putting it at the beginning. Yes. Yeah. Right. Representative Smith, I would make this a good time or a bad time to ask a question in general about this bill. Well, we are trying to get through the walkthrough in a timely fashion. So I guess I would ask then I'm going to ask the question and you can tell me if we want to wait till later. What effect will this bill have on Vermont's maple sugar industry? As far as, you know, the sugar houses that burn made me think of it burning fuel oil or propane. Are they going to be able to sustain? That's why 12 was added is to make sure they are included. Right. So that's a discussion that we're going to have to have probably in length at some point, I think, because it's going to cost them a lot more money, I believe. Representative Smith, so 12. I think that we would 12 specifically to try and offset. To try to try and allow those types of buildings opportunities to reduce their fossil fuel usage, to include them. So you're you're allowing a line extension. How will they reduce fossil fuel usage when they depend on fossil fuel to generate quantities of maple syrup? So there may be other things in there, maybe lights that are propane, but who knows, there may be other measures that they can take. OK, thank you. I didn't mean to hold you up here, but we're not going to log in. Thank you, Chair. If we could just pause for a moment to look at number eight. Noncombustion or renewable energy based districting services. I don't know if the other representative from Burlington has heard quite a bit about unconstituents about districting as a clean heat measure. And I wanted to just where we move along, take a moment to ensure that we that we believe as five is sufficiently structured to provide sufficient review to the carbon emissions implications of, for example, district. Eating projects under consideration. Representative Stobin, thanks for sharing. I mean, I think so because it goes through. It requires the full cycle analysis, so. In comparison to some of the other analyses that we do for the state of the law, for this program would be the full life cycle, including, for example, backup generation sources that might be required in order to enable a district heating program. Back up. You know, like natural gas, for example. You mean like supplementary heating for it or backup backup energy. So this will calculate the energy required also to it would be the full. I mean, if they're proposing a project, it would be the full analysis. That answer your questions. It does. I think that that's the best that we can possibly do is to provide options, but also. Really strict requirements in terms of analysis that needs to be done on any given project that could be considered a clean heat measure, right? Consistency across the types of fuels being used. And, yeah, I think is the intention of the life cycle analysis. That's what I've pursued in the review of consequences. Yeah, and sustainability. Yeah. So on page 25. Um, I think we're just discussing it, but line extensions that connect residential, commercial, or industrial customer facilities with thermal modes to the grid is the new item on the list of eligible measures. So sorry, I just wonder, I mean, industrial probably captures it, but is there any harm and call it agricultural? Just that we're only raising it. So if the. So going to what representative Pat said when, for example, efficiency remont is looking at a custom incentive in agricultural building, barn or if, you know, would be would fall into the area of usually commercial, depending on what the size would be to a sugar shack. Representative Pat, I mean, we can go around and around on definitions here, but to me, the making of maple syrup is a commercial activity, not an agricultural activity. The processing of a agricultural product comes at commercial or industrial activity. I mean, you can, we can talk forever about where the line is, but in that case, that's that's how I would define it. Yeah, I think it's pretty inclusive. We should move on. The next change is on page 27. In determining the baseline emission rates for clean heat measures that are emission baselines shall fully account for methane, emission inspections or captures already occurring or expected to occur for each fuel pathway as a result of local, state or federal legal requirements that have been enacted or adopted at reduced greenhouse gas emissions. Page 27, I know emissions schedule section G. What is that? That reduced greenhouse gas emissions adding? Yes. Oh, this is sort of the requirements of the land of a landfill or to be captured. And so this is this is the avoiding double counting. That's the intention. OK. Yes, they're already required to be doing this work. They're not going to get please credits for that. They're more directly. I'm just saying what you just said. It's a long time to get there. I'm hesitant to try to because I think this came from advocates who know more about methane than I do. Good. All right. Other questions on this moving on. Great review of consequences. The Commission shall by annually assess harmful consequences that may arise in Vermont or elsewhere from the implementation of specific types of clean heat measures and shall set standards or limits to prevent those consequences. Such consequences shall include public health, deforestation or forest degradation, conversion of gas lands, increased emissions of criteria pollutants, damage to watersheds or the creation of new methane, meet fuel demand. So if you can remind us what criteria pollutants are about. Sure. Does anyone at the table know more about air? OK, so criteria pollutants are a concept under a federal air quality. So. Criteria air pollutants are pollutants for which acceptable levels of exposure can be determined and for which ambient air quality standards have been set by the EPA. So examples are ozone, carbon monoxide, nitrogen dioxide, sulfur dioxide and particulate matter. Representative Sibilia. So the inclusion of this. Does this change what measures would be eligible? It wouldn't change directly, which mail, which measures are eligible. It is adding this to the list of things. The PUC should keep an eye on after the program is running, if there is any harm created because of increased use of the clean heat measures. Since yeah, representative, sorry. I'm just wondering what the additional criteria pollutants here. About the positive side of it. So reducing criteria pollutants. Has a lot of benefits and the measures, some of the measures do that. So I'm just wondering where is we this is so greenhouse gas focused. I was wondering where that value reflected or assessed. Is that something that. So I would say that the life cycle analysis that's going to be done for the measures includes converting the emissions to carbon dioxide equivalent. So. Eligible clean heat measures that release criteria pollutants. I think those would be converted to the carbon dioxide equivalent. Those that have less of those would have a less. So I don't think it'll be necessarily directly. I don't know if it's directly addressed anywhere. Although there's some. There are some sections that mention the PUC reviewing. How this program is working towards achieving the emission reductions. And then also in the annual report, they have to report on some of the environmental impacts, I believe. But you yes, there aren't too many sections that require a discussion of the positive benefits. That seems. That this section is focused on the harmful and I've had that thought before, so I'd like to not lose it and just. Think about where where it makes the most sense to go. It's going to banger just just. Have discussion. This is a little bit. Indirect we don't ever quite say that we want biofuels to be sustainably harvested in the first instance. Yes, we do. Say it directly. It's the sustainably source of sanally sourced biofuels is what it says. Okay. Okay. Yes. This is just a reinforced that. Yeah. Okay. Representative Logan. Thank you. Two things in this section. I will say that we have not defined what sustainability means so that that does, you know. I mean. The PUC and the tag. Like they have to produce those definitions as part of the rulemaking process. It is a specific requirement of the tag. Right. So. One thing I wanted to ask if we might be able to add to this section and review of. Consequences would be. Us, you know. Environmental injustice. As defined in what is that three. Yes. Six thousand and. Two. Three. Two. Okay. Maybe. I can check act 154. On the lines of public health. Environmental burdens maybe. So that's the tag. This is credit for the ability. So for any giving mission heat measure. To review the consequences of that clean heat measure. I think it makes sense to add. You have a. You said environmental burdens. Yeah. Is that you refer directly to the definitions in that section of statutes. Well, sure. Yeah. So environmental burden is one is the defined term. Okay. In six thousand and. Two. Yeah. Yeah. Are we. Where would we put this so. Is. Another way of saying harmful consequences. Is that are we trying to make harmful consequences more specific to. No, so public health is. Yeah, public health is in here. And so would be, you know, like public health environmental burden. So the human. Human impact. Added to the review of consequences and it's covered in other places, but just to be thorough. And this was specifically requested in terms of. There might be another place where it would be helpful to add, but in considering sort of like. A far flung consequences. So environmental burden. So environmental burden. So environmental burden means any significant impacts to clean air, water, and land, including any destruction, damage or impairment of natural resources. Resulting from intentionally or reasonably foreseeable causes. Of a particular particular measure because this says in Vermont or elsewhere. Okay. Ellen, you have what you need to add that. Sure. Did you want me to read you the definition of our little burdens. The definition goes on to list a number of examples. I don't know if you remember. Another eight lines of examples. So. So. I didn't know if that. It's your purpose or you were thinking of something else. There's this. Yes. Yeah, not environmental justice, but environmental burden. Yeah. I mean, I could. Well, you could also environmental justice though. I think the environmental justice. Yeah, actually. A specific example that I'm thinking of. So environmental justice means all individuals are afforded equitable access to and distribution of environmental benefits. Equitable distribution of environmental burdens. And fair and equitable treatment and meaningful participation in decision making processes. Including the development, implementation and enforcement of environmental laws, regulations and policies. And it goes on further, but that's. The main part of it. Thank you. That is a little awkward, especially since it discusses. I mean, environmental justice. I think it's a meaningful participation in decision making process since we're referring to in Vermont or elsewhere. So environmental burden is probably the best. But. Yes. Okay. I was just going to suggest that maybe it should be first. Before public health. One more thing. And it would this be a good place to add. I mean. I think it's a good place to add. Increased emissions of criteria pollutants does seem to get at this bit. But I'm similar to creation of new methane to meet fuel demand. Also taken into consideration the expansion of the production of unsustainable liquid biofuels. Or unsustainable biofuels. I don't know. That change. Change. Hopefully since the bill requires sustainably source biofuels. They'll be reviewing for that. But. Well, as a clean heat measure, sustainable biofuels are a clean heat measure, but it could have. Development of a market for biofuels in the state could have the unintended consequence of the expansion of the production of unsustainable biofuels. That are sold into the state. Not for the purposes of retiring clean heat credits. So I would just add that the entire subsection was created in response to the inclusion of biofuels in this bill. I think. So because. And so deforestation. Right. Water sheds. Right. Right. So. So. Conversion of grasslands, the original terms, I think we're intended to get at some of the issues that could be caused by unsustainable biofuels fuel sources. But. I don't know if there's other aspects of that. You're thinking about in that. Actually, I think. After a moment of reflection, the question that Kate. That representative Logan was asking is if this was the appropriate place to put that assessment in. And I think the next section is the tag. I think that's where we talked about maybe having some sort of us. Thank you. If there was, if necessary. Right. Yeah. Senator Simmons. And I'm just hoping that we can definitely maybe try to find a place to identify. That there is some valuation of. Public health benefits from some of these measures, as opposed to just not just that I mean just, but as opposed to, we're doing a good job at like reeling in. Right. But I want to make sure that we're also recognizing that some of these measures. Yeah. Absolutely. Well, great. That segues to the next section. But the next section. Actually strike what I just said that's coming up, I think. There's more about public health later in the film. Um, So on page 29, there's a change that you've already discussed in the. Uh, so for credit registration. So the system for credit registration down on line 15. Um, Shall require entities to submit the following information to receive the credit. The location of the clean heat measure, whether the customer or tenant has low income or moderate income. A type of property where the heat measure was installed or sold type of clean heat measure and any other information required. So as it came over from the Senate, it had that language in blue. The last version was customer income amount. And just going back to the original. Yes. Thank you. Is the fuel dealer going to be responsible to know if the customer or tenant is a lower moderate income. Individual. Um, so not necessarily the fuel dealer. Uh, the one who installs, uh, clean heat measures who, uh, are seeking to gain credit based on it coming from a low income or moderate income customer will have to know that information. Who might that be, for example. Uh, Anyone doing clean heat installation work. Okay. Thank you. We have a ways to go. I'd like to get as far as we can. Um, if we need a break right now might mean we go a little past. Or you want to soldier through. Okay. We're going to keep going. All right. So on page 30. We're going to take a look at what we're going to do. So we're in the section about the tag. So first there is a small change down in sub paragraph three, but I think this is one of the topics of discussion. So some paragraph three of the duties of the tag include periodically assessing and reporting to the commission on the sustainability of the production of clean heat measures. By considering factors, including greenhouse gas emissions, carbon sequestration and storage, food costs, ecological and biodiversity impacts, groundwater and surface water impacts, air, water, and soil pollution and impacts on food costs. So, I was recognized. You were recognized representative. So might this be the place to add in. The language that represent. Have been asking about earlier around. What are the impact impacts. Because this, well, this is specifically assessing and reporting to the PUC on the sustainability of the production of clean heat measures. So this, this is a whole section that is about the clean heat measures themselves. The impacts of the clean heat measures themselves. My concern is about the expansion. Of the clean heat measures. So I think there are some markets for biofuels that. Can't be used to retire clean heat credits. So we're requiring. Biofuels to be sustainably sourced. And so this is in order to be considered a clean heat. And this is assessing on the sustainability. Of the production. So I think what I'm getting at is. Unintended. Market impacts. Are there any more biofuels in that don't. Our definition, but would be somehow supported by our. Use of this for this, for this setting up the structure. So how. Would that happen? You know, we can't restrict. Who sells products into remark. So that's happening now. Absolutely. So just as. The use of biofuels becomes normalized. And you could potentially get. You know, less environmentally beneficial. Biofuel cheaper. I understood correctly. Representative Logan, I think what you were hoping to understand is what's happening. To the biofuels markets. Yeah, as we're going on. Yeah. So what is the development? What is the potential growth? What's happening there? Yeah. A market analysis biofuels market analysis. Yeah. Just under, just having an understanding of that. And. Yeah. Yes. Can we. Hold it and writing that down and keep going. And keep looking for where it belongs. Yeah. So on page 32, there is a change. And it starts at the bottom of 30 page 31. So members of the tag shall be appointed by the. And shall include a public service agency and natural resources. The department of health. And then parties who have expertise in the following areas. And it's adding public health impacts of air quality and climate change. Deforestation and forest degradation. And the department of health is a default member. Representative Logan, thank you. Can we also add environmental burden here? People who are experts in environmental burdens. How about I read the whole list. So expertise in the fall, one or more of the following areas. Technical and analytical expertise in measuring life cycle, greenhouse gas emissions. Energy modeling and data analysis. Energy measures and energy technologies. Sustainability. And non greenhouse gas emission strategy. Strategies designed to. To reduce and avoid impacts to the environment. Public health impacts of air quality and. Climate change. Delivery of heating fuels. Land use changes. Deforestation and forest degradation. And climate change mitigation law. Law and policy. Law. I think it's fine to add that. I mean, it's just another. Materia. In the definition from the environmental justice. So are they going to. It says. Have expertise in. They don't have to have the tag doesn't have. Does the tag have to have someone that is an expert in all of these. No. So I guess is it expertise in. Mitigating environmental burdens. Yeah. Okay. So on page 33. All of section 8129 is in blue. However, this language has not changed. This is putting the equity advisory group back in. However, on page 34, it's adding a sunset to the group. So the language of the groups tasks and then their. Make makeup is still intact and the same. And then down at the bottom of page 34 subsection C. The equity advisory group shall cease to exist when the initial clean heat standard rules are adopted. They're after the issues described in subsection. A shall be reviewed by the commission in compliance with. Previous a check or 72, which is the environmental justice. After. Subsection. Yeah, these are. This is one of three places where. Logan has worked with the office of racial equity to ensure we've kind of fighting this. With their previous testimony. And the other language that we had done so. A lot of work. Yeah, thank you. Yes, the director signed up on this. All right. So I'm page 35. This is a change from the prior draft. That was in the prior draft. So this is on the check back provision and 8131. So the commission. Shall not file proposed rules of the secretary of state. Implementing the clean heat standard without specific authorization. Striking. Borders. Hey, so then there's a change in section four. That's on page 36. So this is on the greenhouse gas. So now we're going to go ahead and. And then there's a change in section four. That's on page 36. So this is on the greenhouse gas. So now we're not in the clean heat section anymore. What's on the greenhouse gas inventory. So the secretary of natural resources shall include a supplemental accounting. In the Vermont greenhouse gas emissions inventory and forecast that measures the upstream and lifecycle greenhouse gas emissions of liquid liquid gaseous solid. And then there's a change in the amount of fuel that we're going to use to store organic fuels, combusted in Vermont. So I think I asked what is the sensitivity analysis. And now it's. Remind us what the sensitivity analysis is versus the supplemental account. So I don't really. I'm probably not going to explain this clearly. So my understanding is that a sensitivity analysis is a specific type of analysis done to evaluate variables and assumptions, and it kind of measures like the margin of error based on the assumptions that are in the model. A supplemental accounting, I think, is instead of doing an analysis, it's just more data, including the upstream life cycle, upstream and life cycle emissions, and then also including geologic and biogenic fuels. Representative Sebelia. So, line six and seven made this language consistent with climate action. Language. Right. 6465 climate action. It's just so I know, what's it, what's it measures upstream and life cycle. I mean, they kind of sound the same to me what's the, what is upstream versus a cycle. I don't know. It's life cycle. Yeah. So it's, it's kind of redundant. But it's consistent with the aspects there. Right. I think we've done section five. We did section five. Yes. Goodness. Okay, so on page 37 is changes in first in section six in the facilitator section. So this also relates to the observation office of racial equity work that representative Logan worked on. So facilitator. The commission shall hire a third party consultant with expertise in equity justice and diversity to design and conduct public engagement. The commission and the facilitator shall incorporate the guiding principles for a just transition into the public engagement process. The commission may use funds appropriated for hiring the consultant the public engagement shall be conducted by the facilitator for the purposes of, and this language hasn't changed supporting the commission and assessing whether customers will be required to work by clean heat measures and how to increase equity and delivery of clean heat measures. Identifying actions needed to provide customers low income and moderate income to better service and to mitigate your price impacts calculated in 8128. Recommending any additional programs incentives or funding needed to support customers low income and moderate income and organizations that provide social services for monitors in a form. Providing information to the commission on the challenges renters face inequitably assessing accessing clean heat measures and recommendations to ensure that renters have equitable access to clean heat measures. So this is setting up that during the public engagement process the public engagement facilitator will have special expertise in this area of justice equity and inclusion. It will specifically work on looking at these issues. The equity advisory group will also come into existence and look at the initial development of the rules. And then once the rules are adopted the PC will be monitoring these issues. Based on the climate based on the environmental justice work that's required under statute. So then related to that at the top of page 39. At the top of page 39 the equity advisory group was struck in the previous draft and so it's being that added back in so that their automatic participants in the proceeding. And they receive notice of the public meetings and opportunities to comment. The next sections on still on page 39 public meetings are open to everyone and they will be translation services available to those who attend. Number four is language that had been previously struck but is back and again so the commission shall invite organizations and communities recommended by the equity advisory group to participate in the public meetings. Thank you. This is one piece that seems a bit redundant. Okay, since there were this is this other list for the facilitator. Okay. So everybody else comfortable with removing this responsibility from the equity advisory group. Number four, number four. In the mission this is for the commission. Well they have to take recommendations from the equity advisory group so then equity advisory with some make up to make decisions. But we've already said who should be the facilitator should be doing that. Yeah, you're doing that. Yeah. Next in the advertising section all advertisements of public shall include notice of language assistance services. The commission shall arrange for language assistance to be provided to members of the public as requested using language services the services of professional language services companies. So, on page 41. So now we're in the check back revision. There was a request to add on the list. At the top of page 41 the filing shall include everything that is required under the following sections. So it's adding back in B and C. I think it's fine. It makes sense to add these back if you want them to B and C detail the, the specific requirements of what's in the economic analysis and what's in the environmental analysis required under the APA. So, I think it was probably already covered under one of the other provisions but I know that there are a lot of cross references in here so adding that makes it extra clear. And then in subsection four. So once adopted any amendments to the clean heat standard shall be made in accordance with the admission procedure act, unless the adopted rules allow for amendments through the different process in accordance with 18126 down in funding. So on our before February 15, 2024 the commission shall report to the general assembly on suggesting revenue streams that may be used or created to fund the commission's administration of the clean heat standard program, and shall include programs to support market transformation, such as workforce development market uplift and training that may be administered by a third party. So we'll come back in the report with their recommendations on that. Hey, and then, finally, the last one is on page 42 and this is part of the check back report. So in addition to the other elements of the check back reports down a line 10 reports shall recommend any legislative action needed to address enforcement or other aspects of the clean heat standards, including how to ensure fuel used for non thermal use is not impacted under the program. Smith. Thank you. Could you explain that a little bit. I think there's clear intent in the clean heat standard program for it to be limited to thermal fuel and thermal uses. But you have, I think her testimony that fuels are used for non for both thermal and non thermal uses. And so, while there's no intent to capture non thermal uses. There's no intent in the PUC to report back on how to ensure that they're not being swept up in that. Primarily those would be sort of transportation. Off course over non road vehicles that use that diesel. Thank you. All right. Thank you, Ellen.