Vermont § 8124 - Clean Heat Standard compliance

§ 8124. Clean Heat Standard compliance

• (a) Required amounts. (1) The Commission shall establish the number of clean heat credits that each obligated
  party is required to retire each calendar year. The size of the annual requirement
  shall be set at a pace sufficient for Vermont’s thermal sector to achieve lifecycle
  carbon dioxide equivalent (CO2e) emission reductions consistent with the requirements
  of 10 V.S.A. § 578(a)(2) and (3) expressed as lifecycle greenhouse gas emissions pursuant to subsection 8127(g) of this title. (2) Annual requirements shall be expressed as a percent of each obligated party’s contribution
  to the thermal sector’s lifecycle CO2e emissions in the previous year. The annual
  percentage reduction shall be the same for all obligated parties. To ensure understanding
  among obligated parties, the Commission shall publicly provide a description of the
  annual requirements in plain terms. (3) To support the ability of the obligated parties to plan for the future, the Commission
  shall establish and update annual clean heat credit requirements for the next 10 years.
  Every three years, the Commission shall extend the requirements three years; shall
  assess emission reductions actually achieved in the thermal sector; and, if necessary,
  revise the pace of clean heat credit requirements for future years to ensure that
  the thermal sector portion of the emission reduction requirements of 10 V.S.A. § 578(a)(2) and (3) for 2030 and 2050 will be achieved. (4) The Commission may temporarily, for a period not to exceed 36 months, adjust the annual
  requirements for good cause after notice and opportunity for public process. Good
  cause may include a shortage of clean heat credits, market conditions as identified
  by the Department’s potential study conducted pursuant to section 8125 of this title, or undue adverse financial impacts on particular customers or demographic segments.
  The Commission shall ensure that any downward adjustment has the minimum impact possible
  on the State’s ability to comply with the thermal sector portion of the requirements
  of 10 V.S.A. § 578(a)(2) and (3). (b) Annual registration. (1) Each entity that sells heating fuel into or in Vermont shall register annually with
  the Commission by an annual deadline established by the Commission. The first registration
  deadline is January 31, 2024, and the annual deadline shall be June 30 of each year
  after. The form and information required in the registration shall be determined by
  the Commission and shall include all data necessary to establish annual requirements
  under this chapter. The Commission shall use the information provided in the registration
  to determine whether the entity shall be considered an obligated party and the amount
  of its annual requirement. (2) At a minimum, the Commission shall require registration information to include legal
  name; doing business as name, if applicable; municipality; state; types of heating
  fuel sold; and the exact amount of gallons of each type of heating fuels sold into
  or in the State for final sale or consumption in the State in the calendar year immediately
  preceding the calendar year in which the entity is registering with the Commission,
  separated by type, that was purchased by the submitting entity and the name and location
  of the entity from which it was purchased. (3) Each year, and not later than 30 days following the annual registration deadline established
  by the Commission, the Commission shall share complete registration information of
  obligated parties with the Agency of Natural Resources and the Department of Public
  Service for purposes of updating the Vermont Greenhouse Gas Emissions Inventory and
  Forecast and meeting the requirements of 10 V.S.A. § 591(b)(3). (4) The Commission shall maintain, and update annually, a list of registered entities
  on its website. (5) For any entity not registered on or before January 31, 2024, the first registration
  form shall be due 30 days after the first sale of heating fuel to a location in Vermont. (6) Clean heat requirements shall transfer to entities that acquire an obligated party. (7) Entities that cease to operate shall retain their clean heat requirement for their
  final year of operation. (c) Early action credits. Beginning on January 1, 2023, clean heat measures that are installed and provide
  emission reductions are creditable. Upon the establishment of the clean heat credit
  system, entities may register credits for actions taken starting in 2023. (d) Equitable distribution of clean heat measures. (1) The Clean Heat Standard shall be designed and implemented to enhance social equity
  by prioritizing customers with low income, moderate income, those households with
  the highest energy burdens, residents of manufactured homes, and renter households
  with tenant-paid energy bills. The design shall ensure all customers have an equitable
  opportunity to participate in, and benefit from, clean heat measures regardless of
  heating fuel used, income level, geographic location, residential building type, or
  homeownership status. (2) Of their annual requirement, each obligated party shall retire at least 16 percent
  from customers with low income and an additional 16 percent from customers with low
  or moderate income. For each of these groups, at least one-half of these credits shall
  be from installed clean heat measures that require capital investments in homes, have
  measure lives of 10 years or more, and are estimated by the Technical Advisory Group
  to lower annual energy bills. Examples shall include weatherization improvements and
  installation of heat pumps, heat pump water heaters, and advanced wood heating systems.
  The Commission may identify additional measures that qualify as installed measures. (3) The Commission shall, to the extent reasonably possible, frontload the credit requirements
  for customers with low income and moderate income so that the greatest proportion
  of clean heat measures reach Vermonters with low income and moderate income in the
  earlier years. (4) With consideration to how to best serve customers with low income and moderate income,
  the Commission shall have authority to change the percentages established in subdivision
  (2) of this subsection for good cause after notice and opportunity for public process.
  Good cause may include a shortage of clean heat credits or undue adverse financial
  impacts on particular customers or demographic segments. (5) In determining whether to exceed the minimum percentages of clean heat measures that
  must be delivered to customers with low income and moderate income, the Commission
  shall take into account participation in other government-sponsored low-income and
  moderate-income weatherization programs. Participation in other government-sponsored
  low-income and moderate-income weatherization programs shall not limit the ability
  of those households to participate in programs under this chapter. (6) A clean heat measure delivered to a customer qualifying for a government-sponsored,
  low-income energy subsidy shall qualify for clean heat credits required by subdivision
  (2) of this subsection. (7) Customer income data collected shall be kept confidential by the Commission, the Department
  of Public Service, the obligated parties, and any entity that delivers clean heat
  measures. (e) Credit banking. The Commission shall allow an obligated party that has met its annual requirement
  in a given year to retain clean heat credits in excess of that amount for future sale
  or application to the obligated party’s annual requirements in future compliance periods,
  as determined by the Commission. (f) Enforcement. (1) The Commission shall have the authority to enforce the requirements of this chapter
  and any rules or orders adopted to implement the provisions of this chapter. The Commission
  may use its existing authority under this title. As part of an enforcement order,
  the Commission may order penalties and injunctive relief. (2) The Commission shall order an obligated party that fails to retire the number of clean
  heat credits required in a given year, including the required amounts from customers
  with low income and moderate income, to make a noncompliance payment to the default
  delivery agent for the number of credits deficient. The per-credit amount of the noncompliance
  payment shall be two times the amount established by the Commission for timely per-credit
  payments to the default delivery agent. (3) However, the Commission may waive the noncompliance payment required by subdivision
  (2) of this subsection for an obligated party if the Commission: (A) finds that the obligated party made a good faith effort to acquire the required amount
  and its failure resulted from market factors beyond its control; and (B) directs the obligated party to add the number of credits deficient to one or more
  future years. (4) False or misleading statements or other representations made to the Commission by
  obligated parties related to compliance with the Clean Heat Standard are subject to
  the Commission’s enforcement authority, including the power to investigate and assess
  penalties, under this title. (5) The Commission’s enforcement authority does not in any way impede the enforcement
  authority of other entities such as the Attorney General’s office. (6) Failure to register with the Commission as required by this section is a violation
  of the Consumer Protection Act in 9 V.S.A. chapter 63. (g) Records. The Commission shall establish requirements for the types of records to be submitted
  by obligated parties, a record retention schedule for required records, and a process
  for verification of records and data submitted in compliance with the requirements
  of this chapter. (h) Reports. (1) As used in this subsection, “standing committees” means the House Committee on Environment
  and Energy and the Senate Committees on Finance and on Natural Resources and Energy. (2) After the adoption of the rules implementing this chapter, the Commission shall submit
  a written report to the standing committees detailing the efforts undertaken to establish
  the Clean Heat Standard pursuant to this chapter. (3) On or before January 15 of each year following the year in which the rules are first
  adopted under this chapter, the Commission shall submit to the standing committees
  a written report detailing the implementation and operation of the Clean Heat Standard.
  This report shall include an assessment on the equitable adoption of clean heat measures
  required by subsection (d) of this section, along with recommendations to increase
  participation for the households with the highest energy burdens. The provisions of
  2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this
  subsection. (i) LIHEAP pricing. The Margin Over Rack pricing program for fuel assistance shall reflect the default
  delivery agent credit cost established by the Commission. (Added 2023, No. 18, § 3, eff. May 12, 2023; amended 2023, No. 142 (Adj. Sess.), § 8, eff. May 30, 2024.)