SmartTranscript of Senate Natural Resources and Energy 2025-03-12 9:00 AM

[31 seconds of silence] [Chair Anne Watson]: Hi. Let me know when you're ready. We're ready. Oh, are we we're going? [Jude Newman]: Yep. Okay. [Chair Anne Watson]: You're right. Good morning. It is Wednesday, March twelfth. This is National Resources and Energy, and we are starting out this morning with the cell phone. We have a new draft, and let your council with us to walk us through it. Good morning. [Michael O'Grady]: Good morning. This is Michael Grady. Last counsel, you should have a chat. It says four point four of March twelfth date on seven thirteen AM time stamp. Yes. Sounds okay. Yep. Yep. You will see different color coding throughout. The yellow is the changes that were made in the previous draft, but I never walked through them with you. And so I left them in there, and then there's Greg highlighting which is gonna be a additional instruction I received for change to the bill. What would it be like we did do or highlight? [Chair Anne Watson]: I think since we haven't walked through the yellow or the gray, I think it makes sense to do both if that is okay. [Speaker 3 ]: So k. [Michael O'Grady]: So there were some changes that were suggested by the agency natural resources, and much of the yellow is related to those for five fifteen is on eighty one, nine seventeen or eighteen. There was you'll see it says compensation applies soft. It previously said applies or supervises others to apply soft. The the concept of the the the master is being, flushed out a little bit more. You see that there is that definition of a master commercial soft applicator that's being added in subdivision three. You will see that there is no longer a definition of a municipal soft applicator because they are no longer in this part of the bill. They are not in the program. They are now in session law directing AOT to boot as part of the local curriculum training of those municipal saw applicators. So they're they're moved out of the statute into session. K. You know, moving down, you can move into thirteen fifty two, the the contaminating the the chloride contamination reduction program. The first chain on page two line fifteen, that is, again, removing the master or municipal salt applicators in the states. So municipal salt applicators are are not covered in the the training program. Then on page two on seventeen and eighteen, they had previously set a competitively selective third party vendor. The agency asked that competitively selected being struck. They do have opportunity. I'm at a risk date of both in three point five and not that to go a little bit. So I think they're probably trying to maintain as many alternatives as they can. And so that's why they asked for competitively selected to be struck. Page [Speaker 4 ]: two, [Michael O'Grady]: line twenty. Again, municipal soft applicator are being struck. They're not currently in the program. Page three, subdivision b three. Again, municipal soft applicators are being struck. And then at the end of that subdivision, this will say, it previously said and required submission to the agency of natural resources, and that was removed at the agency's request. But the chair asked that there be language that say, any other factors that the secretary of natural resources deems necessary for the purposes of the program? [Chair Anne Watson]: There there's gonna be some record keeping going to ANR elsewhere for the for the program for the call. Yes. [Speaker 5 ]: Can we talk a little bit about the municipality being struck by going into session off? So I understand that. [Michael O'Grady]: So ANR had recommended that they not be part of the program because they're already part of the program that ANR and AOT run. I mean, it's jointly. It's ANR comes out with best management practices for stormwater management roads and that that's AIT. That's the training. And so that's what they we will prefer to address the municipal sought applicators through that program and [Speaker 5 ]: not through this program. So that that we heard from DLCT yesterday, and they basically said that they like municipalities to be involved to the point where they they get the liability [Michael O'Grady]: exemption. Well, the chair asked me to add language and all of those language in the section law portion. You you all should recall, and I'm surprised ELC did not DC did not recall us, but they have sovereign immunity. We're Vermont is one of the few states where municipalities still retain sovereign immunity from tort liability. [Chair Anne Watson]: You should watch their testimony. No. Then [Michael O'Grady]: There there is a provision in law of twenty four b s a nine zero one a, which states that if a municipal employee is sued in or that the municipality must step in and represent the municipal employee and in so doing has to waive their sovereign immunity defense. But that's what the language leader in the bill of the customer service are. And overarching concern about about liability of doing this stuff. They they're just not or just not. [Chair Anne Watson]: Wow. I wish you had been here yesterday or that one of us have thought about that. And then they were about it. You did all the best. [Michael O'Grady]: Well, I figured they had. [Speaker 3 ]: Yeah. I [Chair Anne Watson]: figured they'd Yeah. I figured they'd want to hear. [Michael O'Grady]: And I went back and I read the case on on nine zero one a. The municipal employees are are the lead factor, and it it's very clear. It says, and it was a twenty twenty case. How has it been overturned? So [Chair Anne Watson]: So why because yesterday, I was like, this never came up with an awesome I mean Yeah. And I Yeah. That was why. Like Yeah. That was not. So Okay. That was very interesting. K. Okay. So [Michael O'Grady]: moving down to c one, that line nine, The agency, they struck first strikes municipal salt applicator, and then there was the annual certification for the program for the New York and salt applicator. The agency asked that that be once every other year. On page four, line seventeen and eighteen, this is the reporting environment that that shared referenced earlier. A certified saw operator shall submit an item of sunrage the total winter software music in the secretary of natural resources. On page five, under the subdivision d, there is no longer a subdivision d four. Or a good interactive for the agency to develop soft production targets to guide the agency natural resources and measure to be reducing borlact chloride levels in surface waters and groundwater. That that was removed. And then there have been a requirement to annually report to you. Look at label's tracks. We are right before thirteen fifty three. So we're on page five. What I'm discussing is language that is no longer in the bill that was submitted. There had been a subdivision four and a subdivision five. Subdivision four related to developing soft reduction targets by ANR. Subdivision five was an annual report to the general assembly giving the findings of the assessment of the nature of the magnitude associated impacts of of SAR on surface water. [Speaker 4 ]: Is that correct? That the ACS for [Michael O'Grady]: that, and you're new and it was removed. [Speaker 5 ]: Should I go forward? Yes. There's questions. I think we're good. [Michael O'Grady]: Okay. Page five, line fourteen, commercial. After commercial solid applicator, certified municipal solid applicator was struck. That was made on page five on fifteen after commercial sold out here, but it's not highlighted. CG to page five. Line twenty municipal sold out the care was removed. Change page six lines six and seven. Again, page six line nine, same change. Certified municipal sought after care was removed. And then page six line fifteen and sixteen, this was just the clarification of how that rebuttal presumption would work. It was for the TMDL under the chapter, which is chapters of it's the chapter for water resources. And then more of the requirements of an MS score under section twelve sixty four That was just adding some cross referencing. Moving on from there, you can go to d on the next page. And then first g with the v seven. Line two is not highlighted, but after commercial saw that with here, municipal saw that with here was struck, and then the language in v seven line four and five about keeping a record shall be consistent with the requirements determined by the secretary under the subchapter. Moving on from there, you get to the sword and disposal which is, by the way, why I just crossed off for so long. We figured. Thank you. Okay. So how do you fund the cover requirements that are in currently p seven line eleven? What was struck on that that that first line was reference to private contractors. They're no longer being required to cover their storage, and the agency doesn't want to go look for them either. And then page seven, line eight a, this is the requirement that all state municipal and privately owned facilities for the stores of salt or sand, and salt and sand mixtures that are a hundred yards of service water and water source to be covered on report twenty thirty, and that's all other state units, all, and high of the facilities where the store and the salt were North Salt and the sand mixture would be under cover on for twenty thirty five. And then PG line three for me, that's just the cover requirement for sand that is not mixed with salt, and that's within a hundred yards of the surface water or drinking water process on the dirty. [Chair Anne Watson]: Can I stop you? I'm sorry. Mhmm. So the salt mix oh, salt or salt mix with sand. Yeah. And out. Okay. [Speaker 4 ]: K. I have [Chair Anne Watson]: to do where where the salt was. Okay. Thank you. Sorry. [Michael O'Grady]: And then the PG line nine through twelve, the certified funds are funding sources that may be used to grant funds to facilities subject to the cover requirements, and that would allow prior grant awards to be provided the solid shed projects to meet this palace with fewer than twelve hundred residents. So the committee across the officer of transportation, I just heard from Heath Buffon. Pete said that they I didn't hear all of these testimony. I'll just summarize what I heard. Basically, he said that they would rather report back on the scope of the problem and identify what needs to be done, including the funding. And so that's what I heard. I didn't hear him specifically saying he doesn't support coverage. I heard him say that they will first wanna assess and report for on the problem and then summarize the cost. The committee across the hall wants this to be prioritized if it's a mandate, wants it to be prioritized as a funding source. So it's not a nonfunded mandate. [Chair Anne Watson]: Understandable. Do you so the do you have sense of whether or not their amendment is going to be well, we should just have them in to talk about their amendment at some point. [Michael O'Grady]: So I drafted an amendment for them this morning, which I just handed out, but I was drafting it while they were talking to Pete. So by the time I got back with my amendment, it was it was not complete. [Chair Anne Watson]: No. [Michael O'Grady]: What I had drafted was to to make funding of coverage a priority, tier two priority from the recommendations of the clean water going forward, going forward just the year twenty seven and into the future. And they were talking about what I drafted said that there were gonna be a million dollars that would be recommended each year for that. The the chair said, we don't know how much is needed because we don't know what we don't have. And then that's he said, well, what they do want, they'll probably include some language about prioritization under the feed water fund, but they wanna report back from ANR. They didn't say by then, but to assess the scope of the problem and recommend a funding amount necessary to assist municipalities and financing coverage. Kindly [Chair Anne Watson]: I have questions. But we'll I suppose we'll deal with those when we have the opportunity to talk about the amendment more more formal. So [Michael O'Grady]: I mean, this bill is going on appropriation, so you do have another week. Yeah. Okay. Fair. [Chair Anne Watson]: Senator, do you have a question? [Speaker 5 ]: So if I apologize, but you were talking about getting your piece testimony. That's what that's what's director of the large picture. So I don't know if you want fiscal if you will give us a fiscal note on this at some point. [Chair Anne Watson]: I mean, we have one. But it sounds like it just changed. It's changed. But Well, it sounds like what they want is a report back on potential for how much of the cost to cover all of [Speaker 4 ]: those trades. [Michael O'Grady]: Right? So, apparently, they have done some it's not on the ground. He said they didn't actually go out on the ground, but they used some data analysis to determine that there's twenty sheds that are within a hundred feet of the service water. But they would need to confirm that. Most of the municipal. Yes. Mhmm. Okay. So Yeah. Yeah. So if they're sheds, they're covered. Well, I call them a shed, but it's all stored. So I Okay. And and one of the things that they they is an alternative instead of coverage is removed. Do that. And whether or not over time that's an alternative for any of the twenty that are identified for so that [Chair Anne Watson]: Yeah. That's cheaper. [Jude Newman]: Mhmm. Why would they [Chair Anne Watson]: have them uncovered anyway? Doesn't solve I mean, since it's solved, somebody gets I almost [Speaker 5 ]: you gotta break the salt. [Michael O'Grady]: He said that coverage of salt is smart because Yeah. You're gonna pay a lot for it, and if it gets rained on it, [Speaker 6 ]: it it goes all. It's a reality. It goes down. [Chair Anne Watson]: I thought it would. [Michael O'Grady]: I thought it would. I thought it would. I thought it would. I thought it would. [Speaker 5 ]: I thought it would. I thought it would. I thought it would. I thought it would. I thought it would. I thought it would. I thought it would. I thought it would. I thought [Speaker 4 ]: it would. [Michael O'Grady]: So I think you still have that dynamic between you and the committee across all about funding, determining how much funding and prioritizing funding for. Yeah. Go ahead. Just thinking about this, but would it be better to say they have to be moved unless they are covered? And the other part about covering is covered to affect what? And by that, I mean, truly covered? Is there still ability for you know, is it is it covered in such a way that's going to prevent Mhmm. Is really what we're looking for. Mhmm. Maybe we need to say it. Well, maybe we should leave with moved unless [Chair Anne Watson]: Moved or covered in order to present prevent runoff? Because, yeah, because we need to cover car, that might not be very effective. [Speaker 5 ]: And any construction now has to be within can be within a hundred feet above of the water. And if if it's a body of water, they're that they're rolling is gonna keep eating away at that hundred feet. So I think probably a lot of them have been thinking about moving their chairs, but they haven't had a reason to. [Michael O'Grady]: I I think there are standards for for coverage. Yeah. [Chair Anne Watson]: Yeah. There are [Speaker 3 ]: standards for coverage, but that's only for constructing a structure. I I think your question is good with being centered. We might need to define cover. Oh, [Chair Anne Watson]: dang. Well, that's something that if we want I I would still love to be able to, like, move this today. So if [Speaker 5 ]: we We're trying to [Michael O'Grady]: move it. We're trying [Chair Anne Watson]: to Exactly. We've done a bit about declining. Yeah. Well, and on page eight, line five, there's that language managed to contain runoff. Mhmm. So that might get to what your concerns were, senator. Is that in both sections? Yes. [Michael O'Grady]: Not in [Chair Anne Watson]: paragraph three and paragraph four. Good. And so maybe we could just say moved further than a hundred yards or recovered and managed to contain runoff. [Speaker 5 ]: Hundred feet. A hundred feet. [Chair Anne Watson]: Oh, hundred yards. No. Hundred yards. Yes. Yeah. You have some, like, gas maybe. But otherwise Well, no. If I'm at that Can you can you say what you said again, Sarah? That on bottom of page seven, that that storage that that are within one hundred yards of the service or drinking water, of course, be undercover and managed to contain runoff or or moved further than a hundred yards or however, like, you wanna put first or second. But getting those two concepts, you've been covered and managed to contain runoff or you would prefer to that a hundred yards runoff water source. [Michael O'Grady]: Okay. So Is [Chair Anne Watson]: that clunky? [Michael O'Grady]: No. It's not. But it it it the second part of that subdivision three says that all facilities need to be covered by twenty thirty five. So are you [Chair Anne Watson]: Oh, yeah. You're right. Even if they're more than a hundred units, you can I see? [Jude Newman]: Right. Okay. [Michael O'Grady]: Do you still want that? Or [Chair Anne Watson]: No. I guess then it doesn't matter. It's then we I guess it implies that all of them it doesn't imply. It says all of them have to be covered either way. Right. So, yeah, I guess, moving does have another part of [Speaker 5 ]: the hundred garage. Three hundred feet. I know a lot of municipalities, power garages. They don't they're lots of three hundred feet. So if we told them they have to be a hundred yards away, they're gonna have to go procure another piece of land and put them on. [Michael O'Grady]: Well, that's part of what Pete was saying. Right. Three hundred yard [Speaker 5 ]: three hundred feet is bigger than most from garage area where they got to solve the. [Chair Anne Watson]: But if they're not near a water source, then They are. [Speaker 5 ]: Most of them are. [Michael O'Grady]: Most of them are. I I have a town in my district, They had an uncovered salt, and it ended up in nearby at the very well. You know? It's a big problem. Yeah. There you go. And it's not near water. No. You can Yeah. It was Yeah. [Speaker 6 ]: It's very interesting. We [Speaker 5 ]: we're creating problems with the municipalities. In here. [Chair Anne Watson]: Well and perhaps this is something that Yep. The transportation's amendment with a study to see what the scope of the problem is could address. Yeah. Because maybe it's not even just covering that. Maybe it's also the base part of it. [Michael O'Grady]: Well [Chair Anne Watson]: Yeah. The the runoff is But on bare ground, it goes in. So I wonder if it is we're saying that even by twenty thirty five, they need to be covered and this and the runoff needs to be contained. Does that That's what it does that make sense? Yeah. Does that [Speaker 5 ]: If you were running a wreck [Michael O'Grady]: a structure that prevents all liquid already from getting on it [Speaker 5 ]: Yeah. [Michael O'Grady]: You're not going to have a stall even if it's on dirt [Speaker 4 ]: and grease. [Chair Anne Watson]: Is it managed to contain runoff? That that's the language that you want. Yeah. But for that, you in the that should apply to both or at least by twenty three five. Okay. Right. Because that doesn't or the salts. Oh, that's what's sand not mixed with salt. Right. So we want it to apply to To both. To both. Yeah. Yeah. Okay. Is is that a change that we can make right now? Or if we move this, we could say [Michael O'Grady]: together with that. Continue on that change. [Chair Anne Watson]: Continue on that change. Okay. Okay. And but everyone's okay with me. Okay. Okay. Let me help you. Go ahead. If you have a response. Okay. [Michael O'Grady]: Okay. Moving moving forward from there, on page eight, line eighteen in the the report, there is the striking of reference to the initial application of Sol. And then on page nine, this is to reflect the first yellow line we've done before November one twenty six. A and R collaboration payout, he identifies some exchanges in the Vermont local growth curriculum needed to support municipal salt advocate for commuting purposes of the athlete doing training for best management practices for spreading salt and rose parking lots on the side of the woods. [Chair Anne Watson]: That was my attempt at beefing up the language for what they need to move [Michael O'Grady]: And then you have the definition municipal sole allocator that's moved here, and then you have the liability language on page nine. And and now it's standing twenty four nine zero one a, which is says municipality represents municipal employee to have the drops of immunity. The municipal employee shall not be subject to any civil liability for acts or emissions. The employee can access municipal sought applicator. If they completed the local roads curriculum and provided best management practices for spreading salt and sidewalks in that calendar year, if those damage is caused solely by hazards from snow or ice and any failure or delay in removing or mitigating the hazard as a result of the application's implementation of the best management practices learned. I'm sure there's a model of the doors. [Chair Anne Watson]: So sorry. Sorry. Do we need to include anything about gross negative but in except [Michael O'Grady]: in the [Chair Anne Watson]: case of gross negligence or something? [Michael O'Grady]: I can add that if you would like. Sure. [Chair Anne Watson]: Does just thinking back to the language that we have for the other part of the program Mhmm. Which I was just reviewing. Let's take them to the judiciary. But go ahead. The the employee or agent of a town or a municipality does not include state employees. So this would include school district employees then because a school district is a municipality. [Michael O'Grady]: That's a big area municipality. Yeah. [Chair Anne Watson]: Yeah. So do they participate in the municipal roads program? [Michael O'Grady]: I I doubt that they do. [Speaker 3 ]: Do you do you? You came [Chair Anne Watson]: them out if they wanted to. [Speaker 5 ]: It depends on some of these talents that actually Yeah. Saying that solve for the school that's Yeah. So they would they would receive it. Or if they hire a private contractor, we'll do it. [Chair Anne Watson]: Or do it themselves. Yeah. [Speaker 3 ]: Yeah. Or, again, credit to VTrans, and generally, if some of the municipalities parks and rec staff might implement that. That's what I heard from our our all of those folks about. [Chair Anne Watson]: I think it's a mix. Some school districts is private, some it's their own staff, and some are might be the municipal staff. Right. So if it is their own staff and they wanted to do this program, would you be like, if it's a school district employee who's working for just pick my own district, Middlebury High School, would they be allowed to do your municipal rose program to get this training? [Speaker 3 ]: Not sure I can answer that question from finance net and model of growth program, but I think the line is in here for our a and r and b trends to make sure that that it's covered. [Chair Anne Watson]: Yeah. I mean, I think it would too. So I just wanna make sure you guys are okay with that because they have huge parking lots the [Speaker 5 ]: in a lot [Chair Anne Watson]: of the high schools. So wanting to make sure they get the opportunity to participate. Yeah. [Speaker 3 ]: I I think it's really a a matter of finding source that we might be tapping into, collaborating with A and R. It's not a federal survey now that restricts us from from the sort of frank for our offender? [Chair Anne Watson]: One potential solution would that would be that we could say in terms of the regular program [Michael O'Grady]: that [Chair Anne Watson]: for who is eligible because I think it said private contractors, but we could expand who's eligible to anyone private contractors and anyone who is not eligible for the Vermont Rhodes curriculum. Do you see what I'm saying then? Yeah. Yeah. That way I just wonder if that opens I'm trying to think of who anyone might might be. Like, they're not independent. So I'm saying anyone. Yeah. I mean, I think we can keep it. If you could just verify that a school district employee could do it, We could also do an amendment later on as soon as we have time. [Michael O'Grady]: But [Speaker 3 ]: I can verify right now that under your current funding, and I'm stating that we cannot. [Chair Anne Watson]: Oh, under your current funding. So you would have to use a different funding source. I see. I'm I'm not so worried about unintended consequences with people, you know, expanding the who's eligible because we've already said private contractors, and that is That's true. A very large universe. So where are you suggesting that? [Jude Newman]: Well, I thought it would be [Chair Anne Watson]: well, actually, I guess, it would be page one under commercial. It's like commercial under commercial sold applicator. [Jude Newman]: Then it could say, and if not [Chair Anne Watson]: anyone who is not eligible for the the model of the script. [Michael O'Grady]: So you're now mixing the liability production you're providing for the product applicators with municipal sovereign immunity. [Chair Anne Watson]: Mhmm. Yeah. I know. Okay. Okay. And and we believe a school district is a municipality, and so are water districts. And all you remember from Yes. All the things. All the things. There are lots of little entities. Let's Maybe this is a point about which we just put a pin in it. We flag this as an issue, and then we can either, you know, have an amendment or do nothing. But Yeah. Yeah. Because I I hate to leave them out. Or tell them that But it is Figured. Exactly. Feeds. Figured. And I I think that would be a reasonable thing to say, because that is gonna take so much time. And I'd also acknowledge that you are over time right now, so we are very close. Can we burn oh, I'm sorry. I'm just saying Just real quick. Yeah. [Speaker 5 ]: Didn't know New Hampshire, green snowfall. Didn't they have a contractor doing all the show thing? They used they used the They're on stream. Correct. I mean, I'm I'm thinking that it would keep adding things to their plate that they hired a contractor. [Chair Anne Watson]: Yeah. Well, let's keep chewing on it, and we'll come back to that. I think it's a good question, but we're we're almost done. [Michael O'Grady]: So the next changes are about the appropriations. Now first, there's the language about how they're going to solicit interest from third party centers. Okay. There's a lot of language there that they basically just wanna solicit and submit to you a fee for the charge. It'll be January fifteenth and twenty sixth. And then their appropriation for the classified position you had at one twenty five, they wanted to be one fifty, and then they wanted two hundred and fifty for the purpose of contacting with the executive organization to establish a certification training. [Chair Anne Watson]: Yeah. So my question on that two fifty is if they're not doing bids until January, do they need the full two fifty? [Michael O'Grady]: Well, this is to establish the program. So it's not necessarily that the the the for the third party vendor. [Chair Anne Watson]: Well, it says for contracting with an external organization to establish a certification treaty. [Michael O'Grady]: So it's not actually administered as [Chair Anne Watson]: Oh, just to create it? [Michael O'Grady]: Yeah. Yeah. [Chair Anne Watson]: Damn. I mean seeing it now. That's that seems like a lot. And, also, they're not gonna get that ready or at least partway through the year. So I wonder this part is also gonna be reviewed by appropriations. [Michael O'Grady]: Yes. So they also need to know they have money because if we go higher, and I'm trying to use the current numbers. They'd be taxed, and they need the agency needs to have some money. Mhmm. Because we've been breaking up in the two years, which we might as well do. And they won't know they have it, so probably they don't have it. [Chair Anne Watson]: Mhmm. Mhmm. Yeah. I'm okay with keeping it for now. We can be [Jude Newman]: right. Well, you'll be there to Yeah. [Chair Anne Watson]: Ask about it. We'll talk more about it. It depends a lot to me. I agree. Okay. So I think that's that's it. Yes? [Speaker 5 ]: So That's [Michael O'Grady]: yeah. That's it. Probably, you do want changes, specifically on the coverage. You want it to basically say manage to contain runoff by the relevant dates for category. Mhmm. And then you want a gross negligence exception to the liability exception. Right. [Chair Anne Watson]: Is that proven to our remaining thing, gross negligence exception? [Michael O'Grady]: But remember, you're basically saying municipal employee that can be liable is not gonna be liable. And so you can say when they're gonna be liable [Chair Anne Watson]: again. Okay. Yeah. Right. Right. So The extension's as intended. [Speaker 4 ]: Yeah. [Michael O'Grady]: Yeah. [Chair Anne Watson]: Okay. Okay. Alright, team. Are we in a place where you're feeling okay to vote? Okay. So I think we need a motion to we probably need to do this in two parts. Yes? So one is to amend the bill in version four point four with the changes discussed, and then we'll vote on the amend to recommended, updated version. So I will move that we approve graph four point four with this discussed changes of s twenty nine. K. So I'm doing this both ways. Right? So alright. Go ahead, Stuart. [Speaker 4 ]: K. Senator Mann. Yes. Senator Bombard. Yes. Senator Harvey. Yes. Senator Boley. Senator Watson. Yes. [Chair Anne Watson]: K. We were one zero. Okay. And so is there a motion to recommend this to the floor? Yes. I recommend waiting to we have to do this twice. We're we're we're just doing it. We we amended the draft to be under Okay. Though the analysis of passage, I move passage of four point four as amended. Mhmm. K. Go ahead. That's what we're just [Speaker 4 ]: voting on. Senator Betts. Yes. Senator Butler. Yes. Senator Hartigan. Yes. Senator Williams. Senator Watson. Yes. [Chair Anne Watson]: Okay. Very good. And I just ask for senator Ferguson to get here. Okay. I mean, I assume that I will be here recording this unless somebody else wants to. I usually do it. We sound so much time. Yeah. I'm actually now. Fair's job. Yeah. Happy to report it. So, put that on my radar. And anticipating that we'll have Senator Burchill joining us shortly, but maybe let's take a break until he arrives. We're not live. Okay. Alright. So just a quick break here. We're joined by senator Partschlek with the amended deaths fifty. Welcome. [Speaker 4 ]: Thank you. [Chair Anne Watson]: Yeah. Tell us about what you've got. [Speaker 4 ]: Okay. So this is three instances of amendment or the work you've done on this fifty, which I appreciate. Thank you for moving on that. The first one is language about how you just list twenty five kilowatts or less or up to twenty five kilowatts. You know, one way, twenty five kilowatts is involved if they're allowed and be able to get a link with that, kilowatt with Optima, you'd only be able to go to twenty four point nine. [Michael O'Grady]: Not a big deal, but it's it's good. Yeah. Yeah. It's a whole number. Yeah. Hold on. [Chair Anne Watson]: One was inconsistent. Right? Like, one point that up to and I [Speaker 4 ]: Yeah. So this Is [Chair Anne Watson]: that the difference? [Speaker 4 ]: One of the yeah. Polarized in those three different instances that is twenty five kilowatts and less. So that's the first the first instance by which is all the all the different times that that's what's happened. And then the second one is well, basically, when you're going through the registration process, it is just a registration process. You get the registration, if I remember correctly, ten days. It's you don't have to wait even that long. You just send in paperwork, wait ten days, then install the system, and then it's a legal installation. We had an instance after registration happened before where at least one that I know of in this popular and just anecdotally heard others where they install it within the within the right of way or within what would be the normal setup requirements for a town. And then they said, well, sorry. Like, I have a legal state permit to put it there. You can't make me take it down. So, like, I looked at Montpelier's regs last night. They have a, you know, certain amount of feet away from the property line for any structure, and then they have a a regulation about height. But the higher it is, the further it has to be away. So you could put in seven and a half kilowatt tracker, which is about point in the air right on the property. There's an issue about whether the tracker itself goes over the line, but but take that out of effect. And so you can have it very close to the property line, which normally would not be allowed under bylaws. So this is make sure that you have to follow the bylaws about setbacks even though you're getting a registration. So that if it happens, the land a budding landowner or the town could say, we know you got this CPG, basically, but you should be you have to move it back. That'd be whatever. So that's exactly what you do there. So we've [Speaker 5 ]: got a local locals are already so we don't make it safe, but we we we have to Yeah. Environment. [Speaker 4 ]: But yeah. Yeah. There is local building. And the local by not all towns. Like, I looked in my town, and I didn't see a setback for all property lines. I think they just do it on a day by day basis. So this is, like, if they had a setback environment Right. The solar system [Speaker 5 ]: I believe it. I was doing my research to verify report that. Yeah. And I I found that case where they actually have Yeah. It was all in there. So Mhmm. [Speaker 4 ]: So I thought that just we just want people to at least I want people to be supportive of solar installations, and I don't want people, you know, getting mad about solar installation just because somebody installed a few close to the property on. Or using an excuse to say, I'm gonna put the solar on the shed. The shed is not dead. It is it's holding up the solar panel so I can go through the registration process. And now I have a shed that normally wouldn't meet the setback requirements, but it isn't because it's a solar Mhmm. System. [Speaker 5 ]: Yeah. Hey. [Michael O'Grady]: There's the so on that setback, I mean, are they let's say you got a rotator. Is it the base that matters, or is it the the wingspan? Mine's in the wingspan. The wingspan? Okay. [Speaker 4 ]: Yeah. Then you can't, like, you can't have things that go over the property line. Then there is that vertical plane. There are air rights. Yeah. Yeah. Okay. [Michael O'Grady]: It's [Chair Anne Watson]: not the aperture. I was saying something on that. That's okay. Yeah. [Speaker 6 ]: So [Speaker 5 ]: if there's a procedure, I'm sure from the board, you're gonna amend this on the floor. [Speaker 4 ]: Yeah. That's my point. [Chair Anne Watson]: Okay. So the the intent, of course, was to hear from Senator Birch Lake now, see how the committee feels about the amendment before on the floor. Yes. I have a question for just a little thing. So in the first incident of the of amendment or the first through fourth, you're adding the language of twenty five kilowatts and less. And then in the other amended, it that is twenty five kilowatts or less. So I don't know if and and or make a difference. But if we're trying to be consistent, we might wanna pick and or or. [Speaker 4 ]: Good point. Yeah. That that would be a question for Alan Yen. But you [Speaker 5 ]: brought up originally when we're narrowing to the saying that should be [Speaker 4 ]: yeah. And lastly, you see Possibly. Total. [Chair Anne Watson]: Exactly. It seems like it worth less support than that. Yeah. Right. [Speaker 4 ]: Change the twenty five kilowatts. Never mind. [Chair Anne Watson]: So that would be Or if it's a And I think you can just go ask Alan to change that Okay. On a draft because it's your amendment. Right? Yeah. I might have. So this is something you can potentially resolve before Yeah. Mark? [Speaker 4 ]: I'll check it with her before I submit the final. So Unless there's a reason she wanted to say it again. Yeah. But if if so, I agree. [Michael O'Grady]: We just put that like that here. [Chair Anne Watson]: I'd just be confusing for regulators. There's no connection or Yeah. Anything we have here changing advanced or it's not fewer. It's not that Alright. [Michael O'Grady]: That. It [Speaker 6 ]: beta on this one. [Speaker 4 ]: Clarify. Well, the third instance is an issue that has come up. I think I have bill on this. I think this committee might have what's this language last year? [Alek Antczak]: We did. We brought it [Speaker 4 ]: to the house. We did talk about it a [Chair Anne Watson]: little bit. We it it appeared in a draft, and then that draft got amended. So it was briefly in a bill, and then it wasn't. So that's how I remember it. But [Speaker 4 ]: So this is the issue with all net metering, but since this this bill deal with the registration, and I think just dealing with the systems that are gonna go through the registration process is fine. And that is when you get a registration, I don't know if you look at the registration form when you talk about this bill, but there's a checkbox that you have to make whether you want to retain ownership of the racks, the renewable energy credits, or you want them to go to the utility. The public utility commission has decided if you whatever box you check, that's an irrevocable decision. And so that they have they have said that you just can't change. You made a mistake. Too bad. You're living with that for the life of the system for twenty, thirty years. I think that's a little too stringent for some just members of the public that are filling out filling out these forms even though they have some explanations there and saying it's irrevocable. But I had an example of a electrician who doesn't do a lot of solar systems. The master electrician did a solar system thought, well, of course, you know, they would wanna keep the rest. Why would they give them away? Like, didn't know anything about the in the financial impact of the cost. But then they they so they just thought when they found out the financial impact, they thought, surely, I can change it. And then they were really surprised in the course. So now you mentioned that's a lot of that work sent to per kilowatt hour for the life of the system. So that customer was pretty mad. They basically wanted the electrician, but pay him that four cents to the right of the boat, like, the system. And so this would allow us to be smaller systems to change one time if they manage it. And we and I presented it as an amendment to the house energy committee last year. They were supportive, but it was kind of, like, a timeline. So they were gonna send a letter to the PUC because the PUC in the room said they were supportive of a one time change, but they said we they were gonna go through an amended rule change. They said if you send us a letter, we'll make a change. The letter never got sent, so they didn't make the change in the when they updated the rule. So this would forever define. It won't. [Chair Anne Watson]: And just for these very small systems, which I suppose are perhaps more prone to an error, and that's sort of what this is intended to, that you grace for. Because there's this [Speaker 4 ]: you check a box and you send it in, there's no chance. But if you're going through the full two forty eight process, you're gonna have a lot. Yeah. [Speaker 6 ]: That's a really good checker box. [Speaker 5 ]: Yeah. Yep. [Chair Anne Watson]: Okay. I'll just say I am fine with all three of these edits. Other thoughts from the committee? Okay. How many of them? Great. So I don't think we need any vote particularly on this. Well, I'm on the floor. Do we vote. Good because [Speaker 4 ]: I think it's saying set [Michael O'Grady]: up say the committee voted. [Chair Anne Watson]: Okay. Yeah. It's good. But Okay. Vote, Megan? Yeah. Do No. [Speaker 5 ]: Tonight. Let's do it. [Chair Anne Watson]: Yeah. We can do a a straw poll. That's fine. So, yeah, if this is just a straw poll, we don't need a motion or anything. So all in favor of the amendment. Okay. That is everybody. Fantastic. So we'll we'll have one of us stand up to say maybe through the amendment. [Speaker 4 ]: So Okay. I'll work with that one, but maybe make that other Ors. [Alek Antczak]: Yeah. The ors. The [Chair Anne Watson]: ors. What is the rhyme in sum? Which are, like, twenty five, twenty four from, like, to, like, it's a cascading with decreasing amount of salt. Anyway. Alright. Thank you. The fish holes in the park. Thank you for noting out with me, Brian. Sorry to bother. [Speaker 5 ]: I have a question. Yes. So if we we see the technology's improving, we're getting more we're getting smaller, more efficient panels. Everybody [Michael O'Grady]: that had [Speaker 5 ]: a metering project decided today or changed their their panels. Do we have any provision in there for what are we what are we gonna do with them all? [Chair Anne Watson]: Oh, like, what happens to them? [Michael O'Grady]: I think we don't [Chair Anne Watson]: have Well, I think did I did you have some conversation with mister Sterling about panel recycling or the end of life stuff? So I think that's what When I was when I was [Speaker 5 ]: on the regional planning commission, I always asked when when we had a two forty eight project Mhmm. What should be activation? Mhmm. So and nobody had ever considered. Mhmm. So at at some point, I mean, we we took every home NetWeird panel and put it in, so we'd have to have another. I'm just concerned about it. I'm wondering if we already have some provision covered. [Chair Anne Watson]: I don't think that we do, but we can flag that. And You may be doing a thing on. Yeah. It can [Speaker 5 ]: be recycled by the middleweight, but nobody does it. Yeah. [Michael O'Grady]: Tell you, I wonder about the battery we have. [Speaker 5 ]: Yeah. I think that what's gonna happen, man. [Chair Anne Watson]: I think there's I I would suspect that there's more concern about end of life for batteries than for solar panels, particularly because of For the the risks. Yeah. But and it's not the same as, like, needing a decommissioning fund, like, for nuclear, which is a whole different set of issues if you don't properly manage it post So [Speaker 5 ]: a lot of these companies, they they set up the solar, and then they sell [Chair Anne Watson]: Yeah. [Speaker 5 ]: In somebody else. So [Chair Anne Watson]: Yeah. Well, so we're gonna move on. Okay. That's okay. But thank you for raising that. Okay. So we are joined by James Duffy from the Joint Fiscal Office. Welcome. And so, yeah, so walk us through I actually have not seen the fiscal note yet, but we'll we'll do it now. [Speaker 4 ]: We'll walk through it. [Chair Anne Watson]: We'll walk through it. Is this something that we have literally Sure. It's on the screen. [Speaker 6 ]: I'm kinda pissed. Alright? [Chair Anne Watson]: Yeah. No. No. The jacks in the sour and the blood fill. Oh, sorry. This is for a sixty five. Oh. Yeah. [Speaker 6 ]: I'll join the meeting. I don't [Alek Antczak]: know. Screen. Oh, [Speaker 6 ]: June, can you please take forward the the Zoom [Speaker 4 ]: invitations and the meeting? [Chair Anne Watson]: What are you thinking about taking just, like, a yeah. Four minute break. Can't be great. Is that okay? That's true. [411 seconds of silence] We're ready to go? Okay. Alright. So let's go back live. Where are we live? Yes. Oh, okay. Alright. Yeah. Welcome. [Speaker 6 ]: Thank you, chair Wazett, and the committee members for the record. My name is James Duffy, fiscal analyst with the Legislative Joint Fiscal Office, here today to walk through a fiscal note that JFO has compiled or has drafted for our s sixty five MAC relating to energy efficiency utility jurisdiction. I have an own screen behind me, but I believe folks have access to it through the committee website. So I'll just start by saying, you know, JFO's traditional area of expertise is to comment on and analyze direct impacts of legislation on the state budget. So it can take direct state expenditures, appropriations, that sort of thing. And so this fiscal note takes the pieces of f sixty five that will have a foreseeable direct impact on the state budget and really spend most of its time talking about those. JFO recommends that there are other Vermont wide and economy wide questions about, you know, the the impacts of the spill that are certainly in this. The Cisco note does not go into detail on those. However, some of the dynamics at play between demand and retail prices that apply for the state budget are still applicable to those broader statewide and economy wide questions. So our hope is in going through these direct impacts to the state can also help guide the the broader conversations along. So that being said, I'll dive in here. Cheryl Watson, [Speaker 4 ]: do you want me to go through the those top line? You're listening. Okay. [Speaker 6 ]: So the bill does a number of things, but the top line kind of highlights that JFO I don't see that. Elevated in this fiscal note is expanding, obviously, energy efficiency utility jurisdictions to include greenhouse gas emission reductions and electrification projects. The bill would also elevate the priority placed on greenhouse gas emission reductions and electrification projects within the EDA. We've got a lot of energy efficiency utility program delivery. This is referred as PEUs. It would increase efficiency utilities flexibility to use the energy efficiency charge, revenue for projects that reduce full energy use across multiple types. So right now, the energy efficiency charge is largely limited to projects that, reduce electricity use. This bill would, increase the flexibility of those energy efficiency utilities to use that revenue on other objects, skills for chain. And then finally, we highlighted that the bill also caps the annual revenue raised by the energy efficiency charge to an equivalent to the inflation invested twenty twenty six efficiency budget for Yeah. [Speaker 4 ]: So that's the Audi EPM. [Speaker 6 ]: So Yeah. I'll surely go into those direct state fiscal impacts, potential direct state fiscal impacts, the JFO and the DAN five. But I think one top line policy implication to build that JFO that we could highlight is so build maintains these efficiency authority to implement energy efficiency projects of the historical traditional variety that they always have. However, the proposed prioritization of emission reductions combined with the fact that, you know, corporations' resources revenue for these activities are held constant would likely result in less investments in those traditional historical energy efficiency projects and more investment going forward in other services like electrification relative to today's baseline. So diving into those direct impacts potential direct impacts in the state budget, there are really three areas of state budget that could be directly affected by [Speaker 4 ]: the storm. So there's there are costs that [Speaker 6 ]: the state pays for electricity and its buildings and its facilities across the state. It's like a, you know, residential retail consumer, and it pays for the electricity units. So to the extent that this bill would have an effect on retail electricity prices, that would aid limits the state budget. Revenue raised. And then there are two taxes levied by the state on that are that are based on electricity consumption. One is the monthly gross receipts tax, which is levied on the retail sale of electricity. And the other is, tax levied on the gross operating revenues of electricity providers. And so to the extent that this bill, would increase electricity consumption through activities like electrification and fuel switching, it would potentially increase because it increases electricity consumption, would potentially also increase the revenue collected from those two those two taxes. Just to emphasize, again, as proposed, it still doesn't levy any new taxes or fees or authorized new state expenditures. Any impacts to the state budget that JFO has currently identified would be caused by, again, any impacts to what the state pays for energy and which increases electricity demand and, therefore, those revenue sources. [Speaker 4 ]: So this bill kind of walks [Speaker 6 ]: the line of the sort of bill that JFO would usually do a full disclosure. Right? It is slight on direct appropriations expenditures from state budget, but it does potentially have these threats that could, affect those revenue sources and state expenditures going forward. So, again, Jvo, is it at this time or very moment on some of those broader, audio wide, Vermont wide questions, that other testimonies are focused on committee, but, some of the dynamics of play have similar principles involved. Right? So on the top of your state energy costs, electricity efficiency programs decrease energy consumption. They decrease electricity consumption. By lowering demand, they hurt downward pressure on rates. Additionally, by lowering electricity demand, efficiency programs reduce the cost of grid upgrades, or avoid the need to perform grid upgrades and maintenance. On the flip side, electrification of thermal transportation fuels does increase electricity demand. That exerts upward pressure on rates, right, increases demand, increases price. At the same time, increased lack of load can require upgrades to transmission and distribution infrastructure, which are costs that are ultimately passed on to regulators. There are other strategies that can be employed, which this still speaks to that can accommodate those costs, things like demand management that can avoid those upgrades to change the distribution infrastructure. But in general, it is a short end think of increased electrification, initial load, actual additional infrastructure costs associated with ratepayers such as. Another kind of dynamic to note here is that the increased EEU jurisdiction I'm sorry. Electricity energy efficiency utility jurisdiction that's proposed in the bill could exert downward pressure on electricity rates paid by the state through that very increase in load. If you're seeing electricity demand go up across the state up until transmission or distribution infrastructure requirements are needed, that's increasing demand, increasing revenue going to utilities above and beyond what they require to recover their costs and which can then directly be returned to ratepayers. Again, that is up until more investments are needed to upgrade the grid. And I think, you know, there are lots of indicators out there that there will be additional spending needed on transmission and distribution infrastructure in Vermont nationally and across New England grid in the next few years. So that's not to discount the the very good possibility of increased infrastructure build out costs. But up until that point, right, you could see higher prioritization of things with electrification actually exerting downward rate pressure through increasing demand. Finally, to be said that the state is able to benefit from projects that result in expanded efficiency utility jurisdiction that could also see reduced costs to state energy expenditures. Right? So you said this enables the state to take advantage of fuel switching programs in state buildings that we downward pressure on on needed state sectors to pay for state energy. However, I should note that of the potential new activities undertaken by efficiency utilities in this bill, electrification is just one. There are other activities the EUs could undertake with this extended jurisdiction that wouldn't notably decrease sorry. Would would not decrease electricity demand if you're looking at things like switching from a higher intensity fuel to a lower intensity fuel, for example, which I believe would be something that might be authorized under this bill. That really doesn't have an impact on electricity consumption and, therefore, wouldn't really exert down the structure problems. So that would be an upward pressure on rates, but we have any direct benefits to electricity ratepayers. [Speaker 4 ]: So that covers the I'll pause [Speaker 6 ]: there on the the I just touched on a couple of different pieces connected to state energy expenditures. The last piece is much more straightforward. It just talks about potential to reduce revenues from the street pass sources. I'll pause for any if any questions [Michael O'Grady]: on the section of this review. [Chair Anne Watson]: I don't have any questions, but I do appreciate you outlining all of the the the pressures. I think that's a soft pull. [Speaker 6 ]: Yeah. I think yeah. Using the direct cost to the state that might arise from this bill has kind of a window until looking at the various threats that play here, this is actually not welcome. [Chair Anne Watson]: Any other questions or comments, heard so far? K. Great. [Speaker 6 ]: Great. As I mentioned before, there are two state taxes, I. E. Revenue sources, so the state budget, that are collected based on, electricity retail electricity sales. The first is the gross receipts tax. So electricity distribution utilities pay a gross receipts tax on, a monthly basis, state of Vermont, based on how much electricity they they sold, how much their gross receipts were that month. And then the other is the revenue is collected from an annual look back tax, which is levied on gross operating revenues of electricity providers. So if you are looking at expanding efficiency utilities' ability to increase such efficient warehouse state, increase fuel switching, key comp adoption, easy infrastructure installation, all that kind of thing, all of those things increase demand, increase retail electricity sales, increase the task base for these two revenue sources, and could increase, revenues to the state. So you're seeing two kind of countervailing forces to the city, to stay out there. One that increased [Jude Newman]: Go ahead. Sorry. [Chair Anne Watson]: It would also potentially decrease revenue from the other fuel sources and the taxes on the other fuel sources. Right? Yes. Exactly. So just like with the previous section where there are sort of changes in consumer behavior because of what kind of energy they're using, it's the same for this as well. [Speaker 6 ]: Right. So, actually, the gross receipts tax or electricity sales is a subset of of [Michael O'Grady]: the the [Speaker 6 ]: fuel tax or, ultimately, umbrella of the fuel tax. So you might see additional receipts from there. That's the same amount that you're seeing fewer receipts on, [Speaker 3 ]: yeah, fewer sales. Yeah. Yeah. I agree. Same thing. [Speaker 5 ]: It's a good question. [Chair Anne Watson]: And are you this says s sixty five. I don't know if it matters, but we have at least one updated version that we were looking at. Did you just use as introduced for your analysis? Or I [Speaker 6 ]: used the most recent draft You did? That that I could find. [Chair Anne Watson]: Yeah. Yeah. And so back this morning after he Oh. Yes. We have another draft. There is the Okay. Gonna be a new draft, which I believe you haven't seen yet. So I probably won't [Speaker 4 ]: see a draft. [Speaker 6 ]: That being said, because given the level that this system is operating on, I don't know what changes are in in this new draft, but I don't know if it would change the the basic system. I love it. But I yeah. Which leads me to my next point. So there are more detailed analyses, quantitative analyses that we've done to, you know, put a firmer number estimate on direct costs or net debt that's in the city budget. JBO hasn't prepared those at this time, but, you know, can do so if that's I think that's helpful. Excuse me. [Chair Anne Watson]: Any other questions at this point? [Michael O'Grady]: Yeah. Just gonna ask [Speaker 5 ]: you. If [Michael O'Grady]: if we if we're selling more electricity, why would why would that why the prices up? It's normally when you may have a system and you're selling more and actually often drives the price down. So what are the factors you consider when you said it might make the prices go up? [Speaker 6 ]: The one factor at play is as we increase demand, right, in increase the amount of electricity that we need as a state, unless you're seeing a lot of new generation built within either Vermont or the New England regional grid, that could increase the need to import electricity from elsewhere, which which may have to be more expensive to the sources more it might be more across all the distances. Right? So the more there might be two efficiencies generated for you. So that that energy, for example, could be more expensive. [Speaker 3 ]: Might increase the peak. That I go [Michael O'Grady]: on the two I get the trends Yeah. Which is important. [Speaker 6 ]: And, yeah, and to your point, Claire, to the exhibit, you are increasing key demand, which is the time in which energy is is most expensive to provide. That that's also driving cost out. You should note that, you know, retail electricity rates have a lot of cost drivers behind that. You know, the program run by the Fishers Utilities are simply one. Right? There are if you wanna model them, there's the cost of the fuel. There's cost of the meeting administration. There's costs to update the infrastructure. Right? There are are many things that drive retail electricity prices. So in this fiscal note, when JFO says that something exert upward pressure or downward pressure on rates, that isn't to say it will increase rates. You would have to say it would increase rates, all else being held constant. And that's how all things being held constant in the energy market these days. [Chair Anne Watson]: And I I do wanna point out too that I I feel like you you had mentioned that, but you'd also mentioned that increased demand for the very reasons that you were identifying, that it also has this this downwind pressure as well, like increasing the base. Yeah. So it was kind of doing both. There there's reasons why it could do both. [Speaker 3 ]: Yeah. Yeah. Yeah. [Speaker 6 ]: And, you know, there would be more detail at on some level of modeling that would be required at, I think, JPOs and to speak more informatively about that. Other, you know, speakers certainly can. One thing that I think JPO feels fairly confident in expressing is that, you know, energy efficiency is a very cost energy efficiency programs are a very cost effective way of reducing demand. I think Efficiency Vermont's most recent kind of three year performance report said for every one dollar of energy efficiency programs, that was a dollar and forty cents of system wide, you know, benefits. I think we're super monitory. I mean, it's a that's incorrect. But, you know, there are very positive ways of reducing demand. And so to the extent that you switch away from those to these other programs, which might be less cost effective at reducing demand or might just cost more period, that might very well be an increased system wide cost just given how incredibly cost effective energy efficiency products can be and how particularly successful they've been in Vermont over the last couple of decades. [Chair Anne Watson]: Great. And I know you had your hand up a pencil. Maybe No. I assume you sort of made the point of that. I was Okay. Because I had the same question that you did, senator, until I saw your paragraph that said, however and you sort of clarified. So Yeah. Right. And it's kind of there's reasons to think that it it continue to work with. Yes. [Speaker 4 ]: Yeah. There's [Speaker 6 ]: kind of counterdailing forces at a lot of different angles here. Yeah. So like I said, Jay always is happy to dig in on the direct seat budget impacts in more detail if the committee would like. [Chair Anne Watson]: Great. Okay. Super. Any further questions at this point? K. Thank you so much. Thanks. [Speaker 4 ]: Yeah. [Chair Anne Watson]: Sure. Okay. We are running a little ahead of schedule. I don't see an app at this point. So we are gonna take another recap, folks. We do. Yeah. I'm gonna wait. Oh, okay. Well, I don't have to wait. Okay. And we'll we'll take a quick break until we're joined by our next Okay. We are back from our break, and I don't wanna mispronounce your last name. [Michael O'Grady]: Incek. [Chair Anne Watson]: Incek. Okay. We are joined by Alec Incek. Welcome from the public service department giving us an update. We know we've had you here before, but it was a squished amount of time. So I'm happy to [Speaker 5 ]: have you back. [Alek Antczak]: I appreciate the have. [Speaker 4 ]: Come back. [Alek Antczak]: So I'll just jump right in. And so what I've I've been wanting to just kinda revisit some of the things that I mentioned the first time I was here. I'm just gonna expand on that a little bit. I think there are a couple of points I just wanna reiterate, but [Michael O'Grady]: I can hopefully do that fairly quickly. And then [Alek Antczak]: I just wanna talk about some of our thoughts, concerns of the department about s sixty five, particularly the implications for weatherization versus prioritizing issues reductions and affordability considerations. And then if there's time to question, you know, try to accept them, give me half of time. So, anyway, I think I wanna reiterate again that we support the urgency of climate action. I'm not we're not here to dispute that, and we're not here to dispute the value of what EBT provides to our monitors and charter. We all agree that that's a critical resource, and so I don't wanna keep them in any way. And I also think we agree that EBT probably has a role to play in any GHG reduction strategy. Would go out. The know how, they know the measures, they know the trade allies and contractors, they you know, without the systems out. There's a lot of overlap in that that bag. So, again, I wanna be clear about that. But the position I'm here to articulate is that we don't support the use of EEC funds, the electric efficiency charge for greenhouse gas emission reductions. And I think, you know, again, as I said, there are significant implications for the types of measures that that will incentivize in the market, and there are some concerns about affordability of the knockoff pass. So I'll extend it. Again, just to rehash, the grid is expensive, the the the context of the EEC, and so we can't have redundant systems. You need to have a monopoly utility and and and exchange for that monopoly control. [Speaker 4 ]: They have to [Alek Antczak]: provide reliability, nondiscriminatory access, and prudent expenditure of their credit. And so the first two are fairly easy to check up on. Outages, you know, wants electricity in their business to their own. They get it. But the third one's pretty tricky to figure out. Each utility has a new context, different resources available, different, you know, geographic considerations, all that stuff. So one of the key ways that system operators address this to try to provide some transparency into the pricing is with a tool called supply curve. And what that does is, basically, you take all the resources you have available, whatever time you need the energy resource, and you stack them up. And you the the width of the bar is the amount of resource that that particular asset can provide. The height of the bar is the cost per unit of that resource. And you stack them in ascending order, and you plot where the amount of energy resource you need is and where that line process that sets your price. So energy efficiency effectively reduces that demand. You would put you at a lower price, and and that puts downward pressure on rates. [Speaker 3 ]: Yeah. Yeah. [Chair Anne Watson]: This is called a supply curve. Of course. So that's the name of it. [Alek Antczak]: Yeah. I think maybe you they're call based in Meredith or Charter [Michael O'Grady]: or Meredith orders. [Chair Anne Watson]: And these are for just [Speaker 5 ]: I just wanna make sure [Chair Anne Watson]: I'm not sure. I think these are just sources that are on demand. [Alek Antczak]: It could be energy or either when all markets sort of operate under the same supplier in the Philippines. I mean, it's I'll I'll be honest. It's more nuanced than that. Like, there's No. [Michael O'Grady]: For sure. [Alek Antczak]: Well, it's settlements product. [Speaker 4 ]: I'm sorry. [Chair Anne Watson]: Thinking about this in the context of, like, peak demand. You gotta turn something on. What else are you gonna do? Here are your options. [Michael O'Grady]: Yep. [Jude Newman]: That kind of Absolutely. Out [Speaker 4 ]: of there. [Chair Anne Watson]: And, like, just thinking about how, like, we we don't see in this in the curve, like, wind or solar or Yeah. Well, these [Alek Antczak]: are just illustrative. I mean, this is not the [Speaker 4 ]: ice and windmills [Speaker 5 ]: of light. [Alek Antczak]: It's much different. I'm just Okay. Trying to keep this [Chair Anne Watson]: same word. It's not because I'm I'm trying to think, like, you know, where those other sources would fall [Michael O'Grady]: off and, [Chair Anne Watson]: like, why they would not be included, but that's it's a different they could be potentially [Alek Antczak]: They they yeah. They are. With one direction. [Speaker 4 ]: As far as ISO [Alek Antczak]: New England's concerned, they're all [Speaker 4 ]: there, and it looks very [Alek Antczak]: different than this. It's much more detailed than Right. [Chair Anne Watson]: I was, like, trying to make excuses for, like, why those things weren't showing up. [Speaker 6 ]: But then No. No. No. [Chair Anne Watson]: No. No. No. [Michael O'Grady]: No. It's it's it's it's it's it's it's [Speaker 4 ]: it's it's [Speaker 6 ]: it's it's it's it's it's it's it's it's it's it's it's it's it's it's it's it's it's it's it's it's [Speaker 4 ]: it's it's it's [Alek Antczak]: it's it it it reduces that demand. Or, I guess, if you wanna think of it another way, it inserts itself in that resource stack and then pushes it over so that either way, the price point falls at a a lower price point. That's the value of energy efficiency, and that's the downward pressure on rates it provides for all rate payers. And these and this is your base road. This is I'm not talking about the EEC chartering here. This is like your you know, the majority of your electric bills determine the truth. So what happens if you, you know, refurbish the EEC? Basically, you take it out of that stack and your the cost snaps back. And I think in the latest annual report for EPT, for every dollar EPT spends, it returns a dollar forty and avoided energy costs. And so if you take that you know, if it's they spend roughly fifty million Yeah. So if we take the fifty million out, you then need to go to the supply market and buy about seventy million dollars worth of of of supplies. So that's the problem right there. We got fifty million that's already been paid [Speaker 6 ]: by rate payers that just that goes [Alek Antczak]: to something else, and then we need to pay an additional seventy million to get [Michael O'Grady]: the energy back that they're no longer requiring. [Alek Antczak]: So further comment on the hat, if you'd spend it on GHG reduction, we've we had a lengthy exercise potential estimate for the clean heat or the affordable heat map. And that basically said that the best way to do GHG reduction was cost effective way is is labor fuels, you know, low carbon intensity electric fuels and fuel switching, switching thermal fossil thermal to electric, so heat pumps. And that's load building. And so not only have you removed efficiency, but you've also added this other kind of load that's gonna drive prices potentially even higher. And I have heard said on this committee, and I believe it's a quote from my own department, that, you know, if you increase the amount of energy that gets sold on the grid, you can spread utilities can spread their fixed costs over more units, and that will necessitate downward pressure improving the cost. And while that is true, that is there's a major caveat to that that's, you know, basically, as long as you don't need to invest more of the t d infrastructure. So, you know, if you can keep rid of the same, then that's true. It's spreading this fossil and you miss in the past. But if you electrify anywhere near the scale that the the potential study that we, you know, did identified, it's inevitable that you'll have to maintain the upgrades. You'll need bigger wires, carry all those electrons in those policy. And so that, again, will create an upgrade. So just to summarize, diverting the EEC to GHG away from electric efficiency doesn't necessarily put up a pressure on rates and prioritizing cost effective GHG will promote fuel switching and low carbon fuels, and the the low building from the fuel switching will also put proper pressure on this as a team. Yes. Oh. [Chair Anne Watson]: Sorry to interrupt. I'm gonna. Theoretically, if the direction that we know we need to go is electrification anyway [Speaker 5 ]: Mhmm. For [Chair Anne Watson]: a lot of reasons, is that isn't that inevitable? [Alek Antczak]: Yeah. I mean, it is, but I think there there are some problems when you it can't it should be either or, I guess, would be my opinion. If you divert the EEC, you take away a major tool to mitigate those debts. And that's [Michael O'Grady]: where we really have problems. So I think back to my original point, [Alek Antczak]: we don't necessarily skew the need to reduce greenhouse gases. They have that tools which you can use bad and can guarantee. It's just this mechanism proves the [Chair Anne Watson]: problem. Mhmm. Mhmm. Mhmm. There's another question here. Yeah. Yeah. I'm I'm just free looking back through the draft. [Speaker 3 ]: I don't know. [Chair Anne Watson]: We're gonna look through another version later, but the bill doesn't it sounds like from your testimony that the way you're reading the bill is that it fully diverts it all to electrification and greenhouse gas emissions. And my reading is it does not. It just adds that into the mix of things that or the EGT can do. Sure. So I think your assumptions are an all or nothing kind of assumption rather than a, oh, there's gonna be some of it used for that, but some of it is still probably most of it will still be used for the current uses, the energy efficiency uses. [Alek Antczak]: Well, I think that the problem is that by by by putting GHG cost effective GHG reduction at the top of the list, that immediately comes the focus. And, yes, I'm gonna take your point that some of the money may stay in electric efficiency programs, but by by reducing that amount at all, you you start to precipitate that effect that I described. [Speaker 4 ]: So [Chair Anne Watson]: Yeah. I guess I wouldn't play it. Just swear in the draft to use it. Oh, is it this language right here that that right that with priority given this one? [Alek Antczak]: Yes. [Chair Anne Watson]: Okay. So I'm just trying to my reading of it of the bill, and if that's the language that is precipitating your black and white testimony of, like, everything's gonna go to greenhouse gas emissions reductions Mhmm. Mhmm. Then maybe we can look at that. But it it seems to me that the intent of the bill is to just create another option, to create another way that they can use the money. Not at all or nothing, which your testimony kind of is an all or nothing testimony. [Alek Antczak]: I mean, that's fair. But I you know, I think we already have fuel switching programs, which are meant to address, like, a more comprehensive view, and they are pretty much exclusively used for fuel switching for that very reason. So that's, I think, where my concern comes from. Uh-huh. But I think you're going to be [Speaker 5 ]: What are [Chair Anne Watson]: your what are those programs? [Alek Antczak]: The The tier three programs under the [Chair Anne Watson]: Oh, I see. Oh, yeah. Okay. [Speaker 5 ]: That that [Alek Antczak]: So then and they're I think then to take [Speaker 4 ]: it full circle, I think, [Alek Antczak]: my original quote about the the net of spreading cost out over more, you know, human soul, that's in context of the tier three programs, which are fairly modest, admittedly, but it's, you know, it's still the same mechanism in that sort of alley. [Chair Anne Watson]: Doesn't a lot of that tier three work actually get done by Efficiency Vermont, and then they just transfer the reps [Alek Antczak]: over to the Some of it does. Yes. Yeah. Yeah. [Chair Anne Watson]: And doesn't the tier three rate pressure isn't there significant downward pressure on rates because of tier three? [Alek Antczak]: There is. But, again, it's because it's a very modest amount of fuel switching that's done, and it's fairly diffuse from this game. [Chair Anne Watson]: The the other thing that I don't know the thought, but it's gone. But, anyway okay. Thank you. Oh, as well. No. I got it. The another program that comes to mind is the energy efficiency modernization. Did did your department support the energy efficiency modernization? [Speaker 5 ]: I don't have to look back. [Chair Anne Watson]: Okay. Okay. And that was [Alek Antczak]: do it out there. [Chair Anne Watson]: You know, that that was, actually, I I would just say, like, that was a small attempt to do what we're doing now. You know what I mean? That was like, can we use this money in a more flexible way that addresses reduction of carbon? And, anyway, this is best. I I think of that as very successful. But, anyway, sorry. [Alek Antczak]: That's good. Yeah. That's a good point. So, you know, you know, so now getting the subsets of the bill, I think I guess a lot of this stems from the parallels that that we have seen with the Affordable Key Act and sort of it it it seems similar. And I think there are the the key distinctions are sort of that it swaps the market mechanism for, like, a cost effectiveness formula to direct investment. And I think there's also the the sort of unclear limits to what the end game is. And, again, coming back to that sort of cost effective greenhouse gas potential is what the key driver of this all is, so we talk priority. I know that the the the bill puts a cap on spending the twenty twenty six levels for a couple of years and and adjusted for inflation. But after that, it sort of leads it up to a potential study to determine what the next appropriate level of funding is. And we've done that potential study through the the process. So I said with community, the department added things that can be about touch of study and treat all of them. It's contentious. You know, a lot of issues with it. [Speaker 5 ]: But it's [Alek Antczak]: nice to say, it was pretty clear about what the, you know, sort of low law estimate, what potential was, and it's, you know, like, a billion dollars a year. And I you know, nobody's suggesting that PUC would billion dollar program. It's honestly ridiculous, but I do wanna say that just to illustrate the scale of the problem that this is going to have. It's a significant amount of money that could potentially be needed to address. So I just would exercise caution there, and it's not clear how that's supposed to be addressed. I think the other piece of this is the deprioritize excuse me. The deprioritization of weatherization. Weatherization is not super cost effective. It does save greenhouse gases. There is an efficiency component to it. So it checks all the boxes, but it doesn't do any one of them pretty well, unfortunately, which is pretty tragic because I think weatherization provides a tremendous amount of other benefits. Bill savings that, you know, can be seen as sort of economic development, particularly for a lot of them are, but really for anybody. You know, improvements to those environment, mitigating toxins, amygdala, like, mold, all that kind of stuff, reducing air infiltrations, health outcomes. Right? The list goes on. I think we all kinda know roughly. And so deprioritizing weatherization sort of deprioritize its license too. It isn't I've unfortunately recognized that. And then I think the flip side of that coin Thanks. [Speaker 5 ]: Yeah. Sure. [Jude Newman]: So where where how do [Chair Anne Watson]: you see it deprioritizing weatherization? [Alek Antczak]: Because weatherization is not very cost effective in any by any metric whether it's [Michael O'Grady]: Yeah. [Chair Anne Watson]: But in this bill I know I understand. I understand the cost effectiveness of weatherization. I also understand the benefits. We all love it. [Speaker 4 ]: Yeah. [Chair Anne Watson]: Do it. We have to have the money. Be great. [Speaker 4 ]: It would be. [Michael O'Grady]: And how [Chair Anne Watson]: does this bill deprioritized it? Where specifically? Like like, I wanna see the lag. Which lag? [Alek Antczak]: I think you just discussed the prioritizing cost effective greenhouse gas reductions and then the second one being efficiency, like, if it's not cost effective, so it just will fall on the bottom of the list. It's not that [Chair Anne Watson]: the There's nothing there's nothing in the bill that says Yeah. That's not a weatherization Yeah. It doesn't matter. Stops. [Alek Antczak]: Right. It it just because it will fall at the bottom of the board. Okay. So it's [Chair Anne Watson]: not specifically prioritized. You see it as being deprioritized. Correct. I see. Okay. [Alek Antczak]: And if if, you know, QPIs for for EBT to deliver this were based around cost factor GHG and then cost effective efficiency and all those things, that would just that would mean that weatherization would be the last used resource because it doesn't it doesn't improve any of those metrics. [Chair Anne Watson]: Well, I mean, efficiency Vermont right now [Jude Newman]: where [Chair Anne Watson]: does this change what is the current status of what of weatherization for Efficiency Vermont? [Alek Antczak]: I mean, weather so Efficiency Vermont does do a little bit of weatherization, restriction, but it's all market rate, [Speaker 4 ]: I think. So it's [Chair Anne Watson]: Yeah. So this isn't changing that. So there's nothing in here that changes. Yeah. [Alek Antczak]: Yeah. Not really. Except for the fact that, you know, the it it changes the relationship with the folks who do deliver weatherization, I guess, by, you know, the because the services no longer fall they're they're available under this umbrella finally, but they're not really on the electric side because the grid is already very clean, and so there's virtually no GHG savings from weatherization. You know, the electric benefits from weatherization are pretty minimal as opposed to increase the thermal sector. And so once you have a heat pump already, which is very, very basic, you know, there there is no incentive to do that right now. [Chair Anne Watson]: Right. But I I guess you're trying to make the argument that it deprioritizes weatherization. You have it right there. It doesn't Right. Doesn't deprioritize it. It just doesn't [Alek Antczak]: I guess it we use it where it is already. But but [Chair Anne Watson]: because status quo. [Alek Antczak]: Right. But because you're addressing the thermal sector, there is an opportunity to do weatherization now, especially if, like, a thermal charge were to be can stay with. [Michael O'Grady]: Right. [Chair Anne Watson]: But there's no of just weatherization. [Alek Antczak]: No. Absolutely. I'm asking [Chair Anne Watson]: you I just wanna be clear. Alright. Thank you. [Alek Antczak]: Yes. That's that's that's a good verification. I'm not suggesting that it explicitly says you can't be recognized saying that in the order of cost effective and stable fall out of [Chair Anne Watson]: Got it. Okay. [Alek Antczak]: And I think the flip side of that is that there's also not a really specific language about affordability in here. I know it there is a low income carve out, and it is exempted from cost effectiveness, which I think maybe indicates that it could be used for weatherization. But I think there's also a lot of language about invasion and electric vehicles and other things that are competing priorities for weatherization. And weatherization is also not the things you said about that. It's it's just not sexy. Right? Like, nobody it's not innovating particularly. Like, there's nothing it's just, you know, really sort of eating potatoes that you need for a rate of efficiency. And, unfortunately, it doesn't fall out here with other tablets, which I think, you know, makes the the approach, particularly for low income monitors, a little bit more vision case. Any without the benefit of the electric efficiencies and without benefit of weatherization, if if rates go up, that puts vulnerable monitors in an awkward place because they have limited options for maintenance. [Michael O'Grady]: Sorry. [Chair Anne Watson]: It's okay. I'm not doing retirement. I know. I'm not doing that. So I'm gonna page twelve on the bill. So, again, like, the provision of equity and justice services, any appointed entity should show on sugar equitable adjust provision of services no less than twenty five percent. So this is, like, new language Mhmm. That that I see as actually requiring that there be a focus on affordability. And this is this is new. This isn't part of the charge current fee. So Correct. And if there's an improvement on affordability? [Alek Antczak]: Again, it depends on you know, the devil's in the details of that. And it's just a spending requirement. So it doesn't stipulate that it needs to reduce energy burdens for anyone. They'd be spent on things that actually increase energy burdens potentially if fuel switching is prioritized, for example. And at the very least, if there's no participation path and rates go up, then [Chair Anne Watson]: Do you really think that they're gonna do implement things that make energy costs higher for people with lower incomes? Like, do you do that? [Alek Antczak]: If you just do the fuel switching and there's no intervention for low income people, their cost will go up regardless whether it's good or not. [Chair Anne Watson]: Yeah. But that would be counter to what's actually in the law. How so? Because it it there's the provision of equity and justice and then targeted to residentials with customers with low or moderate income. Do you I mean, [Alek Antczak]: I mean, like That amount of spending doesn't compensate for the fact that rates across the board will go up. So, yes, some people will get relief, but in general, everyone's cost will go up. That's a different part of trending [Chair Anne Watson]: on the right. It's a And I'm fixing that. Okay. It's an interesting point about the the purpose that that the twenty five percent is a carve out of spending. Spending. And I wanna take another look at, like, which do we need to stay too much for us with that? [Alek Antczak]: Yeah. Yeah. That's fair point. [Speaker 3 ]: Yep. Yeah. [Alek Antczak]: And I think, you know, just a quick note on flexibility. I don't wanna deliver this, and this is an ongoing study we're still doing. But the the one of the key factors for electrification has come under scrutiny recently, and I think we started to socialize this. And I you know, Vermont is kind of the last state to take up this issue, and New England, I think, has already moved past. So there's some defaults in Massachusetts, which kinda get very specific rules about where they can be applied. Vermont still has sort of a just a midstream program in place. But, basically, we're finding that unless you completely remove the legacy heating system, heat pumps aren't really a viable solution for saving these or, you know, MMBT savings greenhouse gas production and heat tasks just because of the ability for customers to continue to use that legacy system even if it's just in, like, a supplementary fashion. It breaks the economics of cost effective decision pumps. And so it it's not to say that fuel switching, again, can't work. I think there is a plenty of opportunity for all home systems, but they are extremely expensive. And that at least that's just a problem that I have here with the company. So I think, again, to summarize, weatherization has a host of participant benefits, not sexy, not terribly cost effective, unfortunately, and it doesn't get quite as much GHG savings as just straight up real searching. But I think all of those benefits should be still be considered. That may be on the flip side, fuel switching, GHG liquid fuels, the two key drivers of GHG reduction represent mostly cost increase. And there are some cases where it's not clear cut, but if you're a natural gas customer, there's no reason why you ever lost such a huge time, only double your cost. So they're they're you know, that creates a bit of conflict. And I think the unintended consequence of that is, you know, it's it's gonna potentially put vulnerable Vermonters in jeopardy. But I think the bigger piece of it is that if it does make electrification more expensive, it makes fuel switching less attractive economically, which sort of controls the purpose of that. [Michael O'Grady]: And I'm sorry [Alek Antczak]: to admit that. [Chair Anne Watson]: Well, we asked a lot of questions. So thank you. Super. Any any further questions at this point? Okay. Awesome. Well, thank you so much. [Alek Antczak]: Thank you. [Chair Anne Watson]: Yeah. For sure. Thanks for taking all of our questions. Appreciate that. And, mister Wach, if you would like to Sure. Come and chat with us. Great. Welcome. [Speaker 4 ]: For the [Michael O'Grady]: record, Peter Walk. I need to make sure I [Speaker 4 ]: have your impressions in your mind. Again, very my VAC hat, be very clear on the roles that we play. I appreciate Alan having the opportunity to provide the rest of his testimony as he was had to speed through the the last time. I have to say that I agree with where your line of questioning was going. There is nothing in this bill that would be prioritized weatherization that would require all of this money to go to greenhouse gas emissions production. It is adding to the bucket of tools. We have provided you with some written testimony earlier this week because I knew you're gonna have limited time, but that goes through a list of measures that are cost effective under electric efficiency and thermal efficiency measures now that also reduce greenhouse gases. Right? There is it's not one or the other. It's overlap. Overlap everywhere. And so there's you and we do weatherization now. We do we have a units weatherized requirement in our main resource plan. Everything that we do starts with a proposed plan, and it gets worked out at the PUC with the public service department's input throughout the process. So if there are things that that and and and the rest of the team would like to see, they have that opportunity and as sort of coregulators in that process to be able to offer alternatives, offer suggestions. We do that. That process is well established now for the last twenty five years and creates outcomes that balances all of those factors that we've got for. So I I just wanna reiterate the most points. We are still committed to weatherization. Still committed to low income and moderate income weatherization. Over half of the weatherization that we are doing at this point in time, and twenty nine percent of of all of it is low lows twenty nine percent is low income. Over half is low and moderate income. So we are we are doing in weatherization that is helping the most vulnerable monitor right now, working through that process. And as the ARPA dollars grab, we will continue to do that. That's incredibly important work. The equity provisions, Senator already has mentioned, are really focused on how do we do those whole home efficiency work for those among us who need the most help, right, and make sure that we can do and give that attention, the necessary attention to be able to do that work well. The other provision that hasn't really been discussed in that equity section is the idea of the creation of a low income EEC rate, which would further drive down cost for low income for for hunters. And so that hasn't really gotten much testimony here. But if you're talking about affordability, you gotta do two things. You gotta collect less money from people who can't afford it on the front end, and you gotta give more money to them on the back end to help them change. And this bill does both of those things. I just wanted to remind you, I think, the broader point about electrification and the cost that are gonna be created. You have created a a climate, you know, a climate council and a climate action plan that has said that electrification is a key path for us moving forward to be able to reduce our issues. That electrification is going to occur whether s sixty five occurs or not. You are offer you are bring you are bringing additional tools to help that process along, not changing the outcomes that you have directed to to [Michael O'Grady]: it to occur. So I I [Speaker 4 ]: think we need to be careful of of cause and effect here. And the nice thing about having energy efficiency along with electrification is that we're really good at saving people electricity at the same time. All of the key homes that are on the market now are the most cost effective ones because we work with suppliers directly and manufacturers to make sure that they have those available for Vermonters to buy so they are saving electricity every time they use their heat pump because there are lots of more on the market that wouldn't do the job as well in the cost of the monitor's mark. I'll leave you there in a little more time, but I just wanted to reiterate that you're not you're not changing you're not changing the way things work in a drastic fashion. You are simply setting more tools in place to help you get to where you've already said you wanna go. [Chair Anne Watson]: Any questions or comments? Yes. Go ahead. So I just wanna ask you about those two sessions that I asked mister Anachek about. So I I knew when they had a graphed, so but I was looking at the whole kind of old one, but I think it's page four. I'm just that because the language on aligns eleven and twelve, the priority consideration. I think that's one of the areas that there was he was concerned about. And I'm just wondering if there are you have ideas for tweaking that to make it a little I don't know, but a little less concerning. [Speaker 4 ]: I would offer that you had priority consideration given to greenhouse gases already, and it has not been prioritized to the regulatory process in mind. It was supposed to be one of the top four priorities Mhmm. Of equal weight amongst the top right four priorities and has not been treated as such. And so if you are if you want to make clear that that is a priority, then you [Michael O'Grady]: should be very clear about that. [Chair Anne Watson]: And then on the bottom of page twelve, these the equity provisions is I think there is a way to make this more clear that this is That it includes weatherization? That includes weatherization, and it also includes, like, what you do should not increase their rate the rates of the people who are you know, the cost of energy for the people you're trying to help. [Michael O'Grady]: K. I can certainly I try to figure out that question. [Speaker 4 ]: Just so I can everybody's career, we don't take on we we don't we there's no forcing mechanisms for people to take on budgets. They only take on the credits they want to. That are going to save the money. [Chair Anne Watson]: Right. [Speaker 4 ]: Right? And so That's kinda it's kinda the, like, basic nature of who we are, and that's in the testimony you provided as well as what I like about this bill, it doesn't change that process. We still have to have a willing buyer, willing seller relationship. If if somebody sees that economic value with the change that we are helping to incentivize, they'll go forward with a project that makes sense for them. If it doesn't, [Speaker 5 ]: they're not going to, [Speaker 4 ]: and that still doesn't change. And that's the way it exists now, and it's a good model for making sure that the customers have benefits through that process. [Chair Anne Watson]: K? Yeah. Viv, just to follow-up on that, I'm just thinking about in in that equity provision, if it would be useful to have any guiding language around, like, you know, we're spending this money, and it it, you know, it says any appointed entities ensure an equitable and just provision of services. We targeted for residential services for customers with low and moderate income. I'm I'm, you know, just gonna wonder out loud if we need something that's, like, for the purposes of whatever. Yeah. And I think equitable and justice. Yeah. So a little vague to me. So, anyway, I'm just stuck in, but, also happy to be talking to them. [Speaker 4 ]: I I I I guess I'm I'm unclear what the why there's [Michael O'Grady]: a question that you like anyway. [Chair Anne Watson]: Oh. Sorry. I'm not sure that I have a clear question. So we can keep going for now. [Speaker 4 ]: Remember, this is where this like, the the very basic this is the start of a year and a half long process to determine what the twenty the at the beginning, like, what the twenty twenty seven through twenty twenty nine demand resources plan look like for the use. EDS. We will start that work in earnest this summer. It will get filed sometime in December, and then there will be the full calendar year of review at the BDC to determine what the final plan looks like. This is all there are a lot of details that get worked out. You this statute is relatively on a number of detail, but the underlying statute is quite on a number of details that have long standing regulatory practice that the PUC and the department and the the all of the utilities understand when they interact. So I I I trust that that can be resolved. [Chair Anne Watson]: Fair enough. Okay. Any other questions at this point? Okay. Thank you so much. Alright. And we do have our legislative counsel, Alan Chaykowski, to come and walk us through a new draft. And just to thank you. Sorry. Just to give a little context for this, the intent with this new draft is that we're incorporating some of the ideas from s sixty eight, which we had previously discussed, particularly some of the ideas about fuel dealer registry from yesterday itself. Thank you. Welcome. [Jude Newman]: I'm sorry. I was the office of legislative council. I'm here on s sixty sixty five, graph three point one in March twelfth, eight twenty two AM. So last time I was here, you requested a couple of very small changes to the to section one, they're highlighted in yellow. They're primarily penguins. And then starting with section two, all the new languages, all the languages new and it's highlighted in yellow. So on page one oh, and I also am new with another committee at eleven thirty, just so you know. So on page one, this was just you asked to make these two separate sentences. [Chair Anne Watson]: So [Jude Newman]: I think that's the clarification in yellow there. Okay. [Chair Anne Watson]: Yeah. And then I think [Jude Newman]: and then there was a on page six, similar grammar balances in the efficiency funds shall be rate payer funds and be used to support activities operating in the sub division for the reduction of total energy across all fuel sources without a requirement for proportional allocation, a cost, or significant specific fuel price. On, like, nineteen, it previously was fossil fuels and biological fuels. So now it just says and electric. So now it just says all fuels. Similar on page thirteen, This is more of a a little bit of a typo. By deleting the first sentence, starting with in addition to the make sense, the network has reached the commission may authorize an entity, etcetera. Alright. So those are the changes to s sixty five as we have been working on it. So starting on page eighteen of section two, there are a series of changes related to the clean heat standard. So do you did you wanna give any more context, or do you just want me to Sure. [Chair Anne Watson]: I can give a little bit more context, I suppose. So thinking about the parts that are that the PC had some concern over, continuing and, you know, knowing some of the the intent with, nineteen sixty eight. So the the thought was that, you know, we we have this technical advisory group and the edit the equity advisory group. But for now, since the since we're not moving forward with the Affordable Heat Act or with, I should say, with the Clean Heat Standard, then I could not think of, like, a reason why we need to keep those groups in existence if I mean, I am also happy to pause them, or say that they can't meet, until, you know, whatever time or whatever. But, for now, since I I don't have a a purpose for them, it removes the it basically re reveals the statutes that created them. And then there are there the intent of others that was to repeal the clean heat standard language and then also look at the the field dealer registry. And based on the testimony that we heard yesterday, I'll try to modify it so that it was more functional and provided better data. Or I should say, tailored in more towards the data that could be useful and built on the on the work that the tax department is already doing. So keeping all of trying to, like, keep all of those things in in mind and drive towards the data that we want, that would be useful. So that's that is the intent there. Is that is that helpful? Well, so I [Jude Newman]: just wanted to point out, I don't think that what I wrote matches what you're trying [Chair Anne Watson]: to do. Oh, it's a word I need to do. So That's okay. I'm I'm anticipating that it's not it's not a draft that we're gonna vote. K. And so if we need to just, like, skip some stuff for now, it's and when this is gonna experience some more edits, that is okay. Does that make sense? Yes. I wonder if that makes sense to [Jude Newman]: everyone else. So I wrote something. I don't so this is where we are right now in this draft. So the first section reveals just the technical advisory group and then the equity the technical advisory group and the [Chair Anne Watson]: equity advisory group. [Jude Newman]: Throughout the other sections, so the references to them are struck as well. In section three, this is the section currently with the senior that has the annual registration process. So the language here has that amended, and it does sort of reflect your conversation. So starting on line nine, each entity that sells heating fuel in Vermont shall register annually with the commission, except for any entity that sells heating fuel in quantities of less than five gallons at a time to consumers. [Chair Anne Watson]: I just wanna note that I had a good conversation with mister Cohen and Pauling about this particular definition, and he said that the I mean, we can have him in to say this also, but, he was recommending that we just define it as bulk deliveries, because that's an industry term, of that that he said that the tax department and field dealers would understand. The intent of the five gallons at a time was an attempt to get at excluding grocery stores that sell a little, like, camping or, you know, places that sell a little camping canisters or whatever. And the if you're gonna buy a twenty pound propane tank for your barbecue, that holds more than six gallons. And so saying less than five gallons was intended to exclude those. But I I I think changing it deliveries. Both deliveries as licensure. Yeah. And I I don't have a specific suggestion around language there, but just wanted to flag that it's [Speaker 5 ]: potential alternative. Yeah. Yeah. Cool. [Jude Newman]: So the last sentence of this paragraph is also struck, I mean, based I'm not entirely sure if you're gonna wanna keep any of the rest of the language in this section, but I think the headlines that the chair is interested in having this change. The heating fuel sold in the state except for those STDs that sell small class seats. This permitted currently does have this requirement that [Chair Anne Watson]: it'd be June thirtieth for [Jude Newman]: a registration deadline every year. Not sure if you wanna keep that deadline. It doesn't amend the required information in the next paragraph, which has already been part of the statute. So legal name during business as a state, heating fuel sold, exact gallons sold for the prior calendar year. [Chair Anne Watson]: Can I just comment on the date? The the date had been a matter of discussion when we were going through the Affordable Heat Act originally and particularly the fuel dealers did not want it to be in January because that is their busiest time. So that's that's sort of the off session. So Steve. [Jude Newman]: I was on page nineteen. There is this provision that does have that TUC sharing their registration data with ANR and the Department of Public Service for the purposes of updating the greenhouse gas emissions inventory and forecast. And then it does strike the reference to the Global Renewal Solutions Act. [Michael O'Grady]: K. [Jude Newman]: It keeps the language requiring them to update the list manually, and that's for an entity not registered by January thirty first, it requires them to register within thirty days. So that the cleaning requires transfer to other obligated parties, and then entities just keep their cleaning department to the time of the year. This week. [Chair Anne Watson]: Maybe Yes. And this I mean, this This is like a section. Yeah. This is like a half baked idea because I didn't [Jude Newman]: know what was gonna happen. I I [Chair Anne Watson]: would say is my fault. Uh-huh. It seems to me that maybe you wanna change the title of this section to not be thinking standard compliance rather to be something like dual dealer registry compliance or something if you wanted to that as that. So stand alone. And then it's and just getting rid of the concept of, whatever it's called, obligated parties and just having it be registrants [Speaker 5 ]: or something like that. Mhmm. [Chair Anne Watson]: Sorry. Maybe I was just taking the obvious element. [Jude Newman]: Apologize. No. I'm sorry. I wrote something that is not accurate. Yeah. The the air's goal is. So I believe what's happening is that this entire chapter [Chair Anne Watson]: is being repealed. I think he's saying they're being [Jude Newman]: repealed in the next version, and, yes, you will need to move this language somewhere else. So, yes, it would need a new title, for this section if if, so, yes, you'll need to make us tell me what that means to be. Mhmm. [Chair Anne Watson]: And, yes, all other references between these and it will be reversed. [Jude Newman]: Great. Thank you. Yeah. So, like, you don't even need [Speaker 5 ]: to talk about subsection d [Chair Anne Watson]: or subsection four for that matter. [Jude Newman]: Mhmm. Five as well. So yes. I know there is this language doesn't matter because all of it's going away. There is a provision on page twenty two that so section six, this is the language that was included about data sharing with the tax department and the public utility commission and the department of public service. In this version, it has not been amended, and I have started drafting what I think you might want me to say. But I guess the question is, do you want to continue to have there a tax share tax data sharing between the PUC and the Department of Taxes and the Department of Public Service? And for what purpose is that data sharing? [Chair Anne Watson]: My default is to say yes, but for the purpose of verification of the data that they're collecting. Does that that that's my initial [Speaker 6 ]: thought on that. [Speaker 5 ]: Open to The aggregate [Michael O'Grady]: fuel bond type. Mhmm. That's what we're looking for. Right? [Jude Newman]: No. That's not what this says. So this is having the list of, the NFTs that sell eating fuel as indicated by the bank attacks. So it's not specifically about the data on the fuel as it itself, but the entities that pay the the tax. [Chair Anne Watson]: It's a very limited list Yeah. Of people. Yeah. And is there one of the things we talked about yesterday that might be potentially helpful is to get it by ZIP code or something like that by area or county or [Speaker 5 ]: oh, [Chair Anne Watson]: it is? Yeah. Okay. Yeah. [Jude Newman]: So next, there are two new sections. [Speaker 5 ]: You want page twenty three? [Jude Newman]: On page twenty four. Okay. Yes. So starting with section seven off of twenty three, This is adding a new section to the, to thirty three VSA chapter with the, the weatherization fuel tax is located, and it's adding a report on this tax. And so on or before January fifteenth annually, the commissioner of taxes shall publish a report on fuel tax collected pursuant to twenty five zero three of this chapter. The report shall include the aggregated data of the volumes and types of heating fuels sold, including dyed and undyed, and the number of entities that paid. The provisions of the two VSA section two twenty b shall not apply to this report, which is, the provision that says reports expire for five years. [Chair Anne Watson]: Can you how how is the report mix? What does that mean? They they stop issuing it. Oh, there's a general Oh, I see what you mean. I'm like, yeah. I mean, to get rid of reports for Right. Sorry. I was hearing that it's like, in five years, this data is no longer valid. But now it's just the report because we require all those reports. Now we forget about them and agencies can do them. It's a waste of time. Right. Right. But for this Yeah. For this one. Well, I'll say, like, why I know this is another one. I'm gonna keep going. Okay. And we are gonna hear from someone from tax tomorrow. We could have them in today, unfortunately. But what because one of the things that I want to make sure that we include is something about codifying into statute the changes that they voluntarily made to their data collection that was more that was more granular. That was better data. And so, would not allow someone you know, a new tax commissioner coming in and saying, we're just gonna go back to the version that we had before. So let's make it clear that we actually we want them to keep collecting that data. And and so this might capture that, and we can verify that with number twelve. [Jude Newman]: Alright. Section eight in another report. So on and I saw page twenty three. On your report, January fifteenth twenty twenty six, the Public Utility Commission, after consultation with the Vermont Fuel Dealers Association, shall report to [Chair Anne Watson]: the Senate Committee on Natural Resources and Energy [Jude Newman]: and the house committee on energy and digital infrastructure recommendations on the best way to collect data on heating fuel delivery on a time by time basis, including the volume and types of fossil heating fuel used. The collection of this data would be to support the enhanced energy planning conducted by regional planning commission [Chair Anne Watson]: by municipalities to sewage by for BSA. That's where the enhanced energy planning lives? Yeah. Okay. So getting at this idea of of the locations of delivery, like where is the fuel going, that's what this is intended to get at because we we could just ask for that, but I I think it is worth taking some time to figure out, like, how is what is the best way to go about that? Is it by zip code? Is it by municipality? What kind of technology would we need? You know, there's just it's probably good to do a little checking before we [Michael O'Grady]: launch [Speaker 5 ]: into that. And to find out how burdensome or not, [Michael O'Grady]: I guess, for the you'll deliver people into that. [Chair Anne Watson]: Yeah. Mhmm. Yeah. For sure. [Michael O'Grady]: Like, really hard. Might be really easy. I don't know. [Speaker 5 ]: Yeah. So this is in January? [Chair Anne Watson]: Well, the this is I mean, the this is for the public utilities commission report. They would I would also expect if we were to ask them to do this, that it [Speaker 5 ]: would be in June. [Chair Anne Watson]: It would not if we're gonna do it on a manual basis, it would be in June. Yeah. We'll close it. Yeah. Yeah. Or, yeah, right at the end of this one. When they would hopefully not be busy. But for now, it's that report would be cheaper. Okay. So that's what we're looking at at the moment. Yes. I'm trying to find it in here. The first section, the original s sixty five. I think it's on the bottom of page twelve. This just and equitable thing. And then we we talked about adding something adding something to the effect of tell me what you think, for the purpose of reducing the customer's energy full energy cost, making like that, to make it clear that it's or to, like, reduce energy burden or well, we yeah. Trying to reduce energy costs. Though in a yeah. It is one of the things that I thought was was interesting was there is a comment that no one would ever wanna switch to a if you had natural gas, you would never wanna switch to a heat pump. And I that for finance reasons, that may that may be true. But if you were like, I am just trying to get off of fossil fuels. You know what I mean? Like, there may [Michael O'Grady]: be reasons. There may [Chair Anne Watson]: be reasons. I guess that's true. But this is for the lower moderate income folks. Right. But probably Right. Right. You know, the the lower Yeah. [Speaker 5 ]: Unless you're salt of blueberry, it won't happen. [Chair Anne Watson]: Right. Exactly. Yeah. I mean, we don't have natural gas in our field. [Speaker 5 ]: Yeah. And and [Chair Anne Watson]: Most of the Exactly. Yeah. Anywhere outside of acid or chicken. The. [Michael O'Grady]: Anyway Maybe a little bit. Yes. Not there. [Chair Anne Watson]: So sorry. So this is just trying to get to the like, what the feds mister Uncheck got to about Yeah. About oh, there's nothing to reduce the cost for low income people. And and I think that language implies that. I'm just trying to make it more clear. And I don't know if there's the equity and equitable adjust or equity and justice and service requirements, if there's a way to say that more directly. Just let's It's supposed to help lower the Yeah. Yeah. Pay their They're debuff them. Just be, like, straightforward about it. Yeah. So any way to ensure it's equitable and just provisions of service. And this is [Michael O'Grady]: is [Chair Anne Watson]: yeah. I'm wondering about, you know, should we say something like to to reduce energy cost or energy burden or but it could also be, you know, to to to further the purpose, you know, to the to the purposes of this chapter or something. Yeah. Was there a definition, statute around energy burden stat defined somewhere? [Jude Newman]: Does it define everything you said? [Chair Anne Watson]: Because you you need the concept of energy burden and I get to it. Right. Can we we can come back to it and and I have to figure out how to meet the order of things direct while we could take that definition and Well, keep that evidentiary. I mean, yeah. [Speaker 4 ]: We can [Chair Anne Watson]: do it with keep it up there. Okay. Well, thank you for for reading me to flag that as well. Just trying to be responsive to some of the concerns. Yeah. Yeah. That's fair. Hey. Any other questions or comments at this point? Okay. Wonderful. Alright. Thank you so much. I'm getting you out of here. Good time for your next thing. Okay. Alright. Thank you, team. So just to say, I I think we may try to shift some of the testimony that we have scheduled for tomorrow to try to hear some folks on this new draft. So I would like to get this out. I think the goal is by Friday. I think that is the goal. So what you see in the agenda for tomorrow may may have some changes. But we are shifting gears right now. So you know, it says s fifty seven, on the this next part. We're we're gonna welcome, mister McNamara back to the chair from the Public Utilities Commission. It's been here a lot. We're so grateful, and specifically, wanting to talk about the community solar aspect of s fifty seven. And because the committee is still interested in finding some successor program too, virtual group net metering. And, you had some great questions and thoughts, and I I want us to spend a little bit more time. And and, if you have ideas, would love to, hear them. So you're welcome. [Speaker 4 ]: Great. Thank you. Thanks for having me. So I just [Speaker 6 ]: wait two minutes. [Speaker 4 ]: Sorry. Do you have slides? It was not. [Chair Anne Watson]: We have we're not in a rush. [Speaker 4 ]: It's more like a lack of immunizations bothering me. I'm actually just gonna speed off the slides, and then I'll see that slides are extremely boring anyway. And I'll send you to get that. So you're not you're not having a good time. Alright. So for the record, I'm McNamara chair of Public Utility Commission and providing some preliminary thoughts on community solar. I'm not saying, like, here's the best idea ever. Just throwing out different ideas for consideration. Most servicing context, mentioned this at least once before. Mini solar is not a GHG mitigation measure. Electric rates are regressive means advancing social policy. So I've said those before. I just wanna reiterate. And I wanna focus on the progressive piece a little bit as well. So you said that you target subsidies. It minimizes the regressive impact. So in other words, it's the number of people actually receiving subsidies is relatively small. People the number of people who might qualify or who might let's just say, if you're creating a low income program, you're not gonna reach every single person in first year, second year. It's gonna take a long time, if ever. So the more targeted the program is, the less impact on low income Vermonters who are not participating in the program. So long way around about saying, suggest that you consider community solar in two different buckets. One is a low income focus, and then the second is market. And I'll get into both as we go. And when I say market, essentially, non low income folks can't afford to participate in community solar and just being run by. I will say that I'm flagging this in part because I remember a discussion several years back about group net metering, and somebody made the argument that's needed and make sense, which is group net metering needs to have where it's high enough that low income folks can participate. And to me, that's insane because then everybody else is getting a gigantic subsidy so that a relatively small number of people can participate. So, again, target, bring up the idea of community support in some different bodies. Also, thinking about costs. So there's lots of different costs associated with program. How much and who pays needs to be a consideration. Direct costs, those are paid to program participants. There's administrative costs as well. And depending on the program complexity, this depends on the administrative costs. You can do something incredibly complex and really cool and might not be worth the cost. And then the last piece is a cost, but depending on the structure, regulatory costs. I mean, this means I'm also the essential for litigation, those kind of aspects as well. So just depends on the clarity of the legislation. In terms of a regulatory context, so community solar, that term is not currently defined in statute. Different people that I talk to, it means different things. One thing I would strongly suggest is there the expectation of having at least two hundred and forty seven community solar projects? In other words, does each town get their own community solar projects? I'm saying no. But I just they're flagging like that. What is the granularity of community that you're talking about? And that is to program complexity, program design, all of that. Another important consideration, PUC does not regulate solar developers. We regulate or we set the prices to pay to net meters customers. We don't actually oversee the solar developers directly at all. So if somebody has a complaint against and I'm not saying this is common. I'm just sort [Michael O'Grady]: of making sure folks are aware of the framework. [Speaker 4 ]: If somebody has a complaint against a solo developer, we occasionally hear that and say, we we direct them to the attorney general's office because Okta would be an issue of fraud. We don't have the ability to actually reach in and say, sorry. Your solo project didn't work out the way you thought, but let us fix this for you. We can't do that. It's it's not [Michael O'Grady]: part of our regular. [Speaker 4 ]: So I'm just gonna jump in. It's probably on a couple different ideas. Community solar for Vermonters with low income. So first, need a definition of who is eligible, whether that's eighty percent of AMI, you know, something like that, whatever as long as it's clarity there. I would also suggest that there you look at the appropriate privacy protections surrounding the application process. As soon as somebody apply as soon as somebody gets into sort of a government system, there's an expectation that it's a public record, and that record is therefore, you know, anybody can ask for that. So ensuring that there's appropriate protections around them is something that we often think about as an afterthought, and then it ends up we do all sorts of legal gymnastics to try to protect those in those circumstances. I also wanna know, last year, legislature passed act one forty two. It was sort of a miscellaneous energy bill, but one of the provisions requires us to to build a rate stabilization study with this is a quote from the the act focused on reducing or stabilizing energy costs for low or moderate income households. So this is something that we are starting to work on now. We will have a report in the center for you on our it is primarily thinking about like, GMP has their energy assistance program. So bring on power energy assistance program on both of us, providing rates for lowering rates for customers with low income. There's California is looking at all sorts of interesting things and the same thing as that a couple of times. So the study had been primarily focused on that. However, there's enough interesting things going on with sort of low income and so that you'll probably be taking a look at that at least. Another aspect that I think part of the public service is much better able to speak to affordable community renewable energy programs called AIGER. It's the AIGER program. There's something that DPS receives ARPA monies or federal money to actually implement. They had a version one point o a couple of years ago. There was some second round of monies in doing a version two point o. They're in great position to be able to say what that program looks like. I'm not gonna try to explain it for them, but I think that's an interesting program to take a look at. The initial funding piece is always an issue, and that's, of course, something I need to overcome. But it's a potential interesting model. And then lastly, it's the program design really matters. If you do something badly out of the gate, it doesn't work well. And so I suggest really taking the time and not having something highly prescriptive you know, developing something that's highly prescriptive in the next twelve months. It's like, generally, not a great policy comes out. [Jude Newman]: You only have three days. [Speaker 5 ]: I don't [Jude Newman]: know. I got a problem. [Speaker 4 ]: Alright. So this is low income. I really suggest talking to the postal department. I think they're gonna have some interesting ideas about the acre. And then they, of course, have their r whatever it's called, r d four c program as well that has some components of low income. And so I wanna actually go back and provide a little bit history. Throwing out some market based programs or program ideas. So there's something called Cal Power, and that was from two thousand six or so. Central and Mobile Service came up with this idea. Mhmm. So I think it actually technically is still around. Participation rates significantly dropped because that majoring was a better deal. So a lot of people gravitated towards that program instead. The program is still out there, and there's still a stash for authorization that utilities can do voluntary renewable programs renewable pricing programs like. So, basically, the idea looks like everyone's which is for the record, any customer can sign up and pay four cents for a certain portion of their kilowatt hours on their bill. Could be ten I think it was twenty five percent, fifty percent, or a hundred percent, something like that. Used to say, for every kilowatt hour I use, I'm gonna give four cents. And that CVPS then collected that money. I think GMB is doing it now. Collects that money and uses it to help build capital projects, pharma things. So it was a highly successful for a very short period of time until the net metering adder went into effect in two thousand and nine and two thousand ten. Not that sort of build participation. So one possibility, repurpose this voluntary renewable pricing program to allow customers to support community solar projects. Just pay a set amount on your bill to support community solar or to support low income community solar participation as well. So it's a simple incredibly simple, very straightforward. We already have all the existing statutory authority. We'd be directing utilities. We want you to do this. Are there anything else to make utilities sooner? Because right now, utilities may not show up. Wanna talk a little bit I've been thinking about, say, a CSA model and community solar. For whatever reason, I started thinking about community support agriculture CSA. So I'm definitely not an expert on this, but what I do know, it's entirely voluntary. Individual customers choose to support the farmer directly, and they can select the food type. It can be a meat CSA, vegetable CSA, both, something like that. They can prefer to have a local farm, somebody who has that specific product that they want that's thirty miles away or whatever it is. And then organizations like NOFA, Northeast Organic Farmers Association of Vermont, they actually can they will support they actually have a great website that helps you connect with farmers if you're interested in jumping to CSA. And I was thinking about this in part because of the idea of how do you minimize the cost shift associated with group net metering if we're gonna go forward with some kind of successor program. So under CSA, individual's choice does not impact anybody else. It is the prices at a grocery store are not impacted at all by the relationship between the individual and the CSA, the living farmer. So thinking about that, so two different potential models that fall out. First one, sort of CSA model one, reflects the reality that community solar is a purely financial arrangement It's disconnected from the customer's meter that doesn't tie into customers' usage at all. So in this model, the developer contracts with the utility for a solar project. They go out. They get a solar project built. But then they also get people to sign up and sponsor their solo projects in the same way. Just they have folks pay in. So individuals under this model contract directly with the developer, not with the utility they work with, directly with the developer. And then the developer then provides payments or shares associated with it to the individuals that are paying in. So this under this model, there's no connection to the electric bill. So it's not community solar in any way I've heard it. I'm stretching the definition of community solar, and I fully acknowledge that. But I'm providing it as a sort of one maybe I'm not gonna call it an extreme, but it's sort of one variation that I think folks should at least be thinking about. So even though it doesn't sound like an electric bill, it means it also provides significant flexibility with customers as well. They can choose where that money goes. They can also choose what kind of solar or what maybe needs to be solar. There's some small wind projects. Somebody loves small wind. They can support that. They can support projects in their specific neighborhood. They can figure out what projects they want to support and have absolute choice to do so. [Chair Anne Watson]: One question on that. Because that arrangement is sort of disconnected from the what the PUC or the distribution utilities may be doing. Is that kind of arrangement currently allowable? Or would because it's it's monopoly, it's, you know, there's a lot of it's highly regulated sector. So would you need a statue change to allow something like that to happen? [Speaker 4 ]: Yeah. It's an interesting question. I remember years ago when community or group net metering first started, there was the question of, is it becoming its own little mini utility if it's providing incentives to customers based on, like, the LIR? I cannot honestly remember that was so long ago now. I can't remember what the resolution was on that. There might need to be a provision. There's a provision related to electric vehicle charging stations, sort of a little charge pointer, with those folks. There's a provision in law, I think it was act fifty five or a couple of years ago that specifically said charge point in those folks can charge on per KWH basis without being regulated with an envelope. There might need to be some variation of that for this kind of thing, and I really see it as much more of just the financial arrangement that's entirely outside of utility, the PUC, and PSC, jurisdiction. It really is how the interaction is putting into the place into the banks. Very similar to a CSO concepts of the individual on the bottom. So Mhmm. [Michael O'Grady]: Yeah. Thanks. [Speaker 4 ]: Second sort of model, I'd suggest having Vermont Electric Co op come in. So they've got something called the Co op Community Solar Program, and they have so under this model, BEC contracts to develop a project. So they actually go out and it's not customers involved to set up the community solar. It really is the utility saying, we can contract with x, y, and z solar projects. And then the solar developers have it at that point, and then it becomes a relationship between the customers and the utilities. So the customer can make an upfront payment to basically sponsor that solar project, [Michael O'Grady]: and [Speaker 4 ]: then customers receive a bill credit after that. For the life of the project, there's mechanisms to be able to if you move, you can drop out of it, you know, those kind of things. I don't know the details. But it's it's another model. It's one that's currently in use. [Michael O'Grady]: I would [Speaker 4 ]: yes. I just wanna comment on this, though. Well, it's probably more along the lines of community solar model that folks are used to. By necessity, it needs to be less suitable. Utility can't go out and just contract it because somebody wants to sell a project from the it's neighborhood. Like, that's just the cost would be unreasonable. So you need to be able to actually allow the utility to identify the projects. It might be an accounting level or whatever. Somebody can just have to look and what's the closest topic to them and then try to sign up for that particular one. So this model, generally more more accepted or more in use, but it has some limitations compared to, like, the more market based, more flexible type that I was just talking about where it really is just the individual developer. Also, I wanna know that if this is something that you're requiring involving utilities, we have a couple of various small utilities, and you may want to rely on some aggregation for those folks. So it doesn't have to be the individual utility that actually goes out. Each utility offers around for maintenance or it might be there as an aggregation of x number of utilities as long as some as long as customers have an ability to operate. So, again, this is these are not, like, here's how to do it. I've thrown out some ideas for you, some general considerations, and see where to go. So I'm curious as to how what you folks are interested in and what other folks are interested in. [Chair Anne Watson]: Yeah. Thank you. That it this is helpful. We have these two potential models that we could further explore or build on and then also to just have some, guidelines just in general, just like thinking of things to consider as we move forward with with something. I I'm hoping that we will move forward with something. I I'm feeling we're not probably gonna get to it by Friday, unfortunately. But but, like, but it is worth talking about. It is worth doing. And I am appreciating what you were saying about, like, don't try to rush it. Good policy matters. Mhmm. And so we I I I mentioned that we're probably going to be moving the schedule up for tomorrow. You know, just as an example, like, we have, support coming in to have more, this morning about [Speaker 6 ]: the reaper [Chair Anne Watson]: seed program, do a little bit of a deeper dive. I may just move that to next week. Like, I wanted to give that time to, to actually be able to chew on it and come up with something [Speaker 5 ]: useful. I'm good. Well, not on. [Speaker 4 ]: And thanks. If you wanna just also note that you're not specifically testifying today on the r a four c model. At least I personally have some concerns, but we as a commission have not talked to all the way through. And so if you're going as you sort of develop this further, I'd love to come back and give more first thoughts on specific ideas that you have. At the moment, it seems like you're in the sort of searching phase. [Michael O'Grady]: What is [Chair Anne Watson]: the art course? [Speaker 4 ]: That's the department was required under excellence that we wanted to develop through. [Speaker 5 ]: Got it. Yeah. [Speaker 6 ]: Yeah. Got it. [Chair Anne Watson]: Okay. And I guess I'll just say this out loud too. I am open to there being multiple solutions if we can get them to be sufficiently, you know, owned. But I I guess I'm seeing that there's there's maybe space for multiple solutions. So I'd rather do one really well than multiple poorly, but, well, just at least I know that there's space in my ring for that. I'm just wanting a lot of rings. I would do all the things. [Speaker 4 ]: And I will just reiterate in my mind, at minimum, you need low income in in the market. I've and trying to fit a low income solution is into a market based solution is extremely difficult and ends up impinging either on the cautious side or on the ability of low income folks. So doing both at once never seems to work. Yes. Yeah. Yep. Okay. Awesome. Great. [Chair Anne Watson]: Alright. Well, thank you so much. [Michael O'Grady]: Thank [Chair Anne Watson]: you. And, yes, go ahead. Yeah. [Speaker 5 ]: Oh, so we're [Speaker 4 ]: not on this. I'm sorry. [Michael O'Grady]: So sixty five. We're gonna [Speaker 5 ]: see a new draft tomorrow? [Chair Anne Watson]: Yes. Okay. Yes. [Michael O'Grady]: Are are we expecting that that's gonna be till thirty one at the the finance? Is that [Chair Anne Watson]: We are I'm confirming this. Okay. Hopefully, right after this, we have some reason to believe that it probably would get rule thirty one, in which case we have till Friday. If we don't, then well, we have We'll go Friday. We have till Friday. [Speaker 6 ]: Yeah. [Chair Anne Watson]: And if it's rule thirty has [Speaker 6 ]: to go there for me. [Chair Anne Watson]: Even if it's not if it's not rule thirty. We have to go Friday in both cases. Right. We do. Yeah. Yeah. Okay. And then next week, finance, you know, for rule thirty one. [Michael O'Grady]: We have yeah. We have. [Chair Anne Watson]: Yeah. Yep. Of next week. Yeah. The finance stuff. [Speaker 6 ]: Finance stuff. Yeah. [Michael O'Grady]: We have [Chair Anne Watson]: to be Friday of this week. So we're we're good at Hill Friday regardless of the Yeah. [Speaker 5 ]: Yeah. And [Chair Anne Watson]: Okay. I get into that answer? Yeah. Just yeah. I just wanna make sure. Super. And we are well, actually, before we adjourn, I will say, just anticipating that we're gonna, go over gubernatorial appointees next week, probably if you could Thursday or Friday, so to speak. Okay. So to prepare for that.

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SmartTranscript of Senate Natural Resources and Energy 2025-03-12 9:00 AM

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