Energy committee drops new spending on thermal efficiency

by Nat Rudarakanchana March 13, 2013 vtdigger.org The House Natural Resources and Energy committee dropped $6 million in new spending on thermal efficiency on Wednesday, after committee members changed their minds about taking $11 million from the Education and General Fund by diverting sales tax revenue.
H.216, a 54-page bill which aims to weatherize homes and combat climate change, is morphing on a daily and even hourly basis, with a committee vote needed by the end of the week.
VTDigger reported last week that the committee faces a host of programs to potentially fund, despite major uncertainties about finding revenue. Options from a tax on break-open tickets to an excise tax on heating fuel have appeared and disappeared in recent weeks.
The committee has cut back from $17 million in needed revenue at the beginning of this week to $5 million.
The committee has ‘ jettisoned’ the responsibility of handling $6 million in Low Income Home Energy Assistance Program funds to the House Appropriations committee, according to committee chair Tony Klein. The lawmakers have also decided to drop $6 million in proposed new spending, suggested by Gov. Peter Shumlin in his budget.
That leaves lawmakers musing over how to raise $5 million for the state’ sClean Energy Development Fund (CEDF), which promotes renewable energy and energy efficiency through grants, loans, and other incentives.
A 55 cent monthly tax on electric meters in homes is under consideration, though this is thought to raise only $2 million to $3 million at most.
Klein told VTDigger that it’ s time to stop scrambling for revenues each year to fund energy efficiency and fight climate change. He wants the Public Service Board and the Public Service Department to devise a plan pinpointing a permanent and sustainable revenue source for these causes sometime next year.
‘ We’ ve been fighting this battle year after year after year, piecemealing revenue sources to support programs,’ said Klein. ‘ Bridging the gap between believing in all of those things and finding the wherewithal to raise the revenue has been a difficult task.’
Klein said that plan could likely involve regulating the fossil fuel industry to some extent, as is already done with electricity and natural gas, but wouldn’ t comment on whether that would involve new taxes on fossil fuel companies.
He emphasized that funding for existing weatherization programs would remain level-funded for next year, thanks to about $10 million in one-time funds from last year’ s $21 million CVPS/Green Mountain Power merger, along with a longtime gross receipts tax on certain fuels, worth about $6 million.
The level-funding comes despite the loss of generous federal stimulus (ARRA) funds of about $20 million from 2009-2012, devoted to weatherization. The $10 million will also only cover about 60 percent of Vermonters who are previous CVPS customers, which Klein argued wouldn’ t be ideal, but would be acceptable for one year.
As Vermont Press Bureau’ s Peter Hirschfeld reported on Wednesday, the committee also sought to seize $11 million from a sales tax on heating fuel for commercial customers, leaving questionable holes in both the general and education funds that House budget lawmakers would have confronted uneasily.
The committee dropped that language this afternoon, saying it wouldn’ t be worth the political fight that would ensue.
Ben Walsh, an energy advocate for VPIRG, had previously hoped for more efficiency funding, but declined to comment this afternoon, citing the ongoing and fast-paced changes in the legislation.
Klein said he is ‘ disappointed,’ but he is dealing with the political reality.
‘ This committee has brought this problem to the attention of folks,’ Klein said. ‘ I think we’ ve made some people feel uncomfortable, and I think they should be uncomfortable, and I think that the spotlight should remain on this.’
A state statute created in 2008 explicitly sets out to weatherize 80,000 homes by 2020, with a recent study recommending $267 million in new funds over seven years to achieve this.
Committee documents show that the state helped weatherize about 2,000 homes in 2012 to 2013, at an average cost of just under $7,000 per home. The previously cited study estimated that at current rates, the state will fall short of its goal of 80,000 homes by almost 40,000 come 2020.