The Affordable Heat Act (AHA) – S.5

“An act relating to affordably meeting the mandated greenhouse gas reductions for the thermal sector through electrification, decarbonization, efficiency, and weatherization measures” 

What is AHA, and what is it intended to do? 

The Affordable Heat Act will help Vermonters reduce their dependence on high-cost, price-volatile, and polluting fossil heating fuels. The Act does this by establishing a Clean Heat Standard that will require importers of fossil heating fuels to reduce pollution over time, in line with science-based pollution-reduction requirements of the Global Warming Solutions Act. To do so, fossil fuel importers will have to deliver or pay for cleaner heat options — mostly for lower and middle income Vermonters — and especially with solutions that cut costs over time, like weatherization, heat pumps, and advanced wood heat. 

73% of the energy in the thermal sector comes from fossil fuels. This policy would create a blueprint for a sector-wide transition for fossil fuel heating providers, requiring them to help their customers stay warm with cleaner, renewable energy sources and phase out the use of fossil fuels over time. 

The Affordable Heat Act:

  1. Is a performance standard. The Affordable Heat Act would create a market mechanism intended to drive an energy transition at the wholesale provider level. It will not create an additional cost for the average Vermonter on their heating bill through a tax, and it will not generate revenue for the State. 
  2. Creates requirements for fossil fuel providers, not homeowners. No one is coming to take away our fossil fuel heating equipment nor will you be compelled or forced to transition if you don’t choose. Rather, this policy would incentivize the delivery of those cleaner energy options for fuel providers, so that they can become increasingly available and affordable for Vermonters who want cleaner, less price-volatile ways to heat their homes or businesses, other than fossil fuels. 
  3. Will benefit the economy. A recent independent analysis estimated that, by 2030, the clean heat services that could result from the Act are estimated to reduce the overall heating costs of Vermonters by $2 billion, or an average of $7,500 per household. That is, in part, because Vermont imports all of the fossil fuels we collectively combust to heat and cool our homes and buildings – with over 70% of every dollar we spend on fossil fuels leaving the state each year. 

How has the policy notably improved from last session’s Clean Heat Standard bill? 

  1. Equity, Access and Affordability 
    • a) The policy requires that the majority of clean heat services at the residential level go toward lower- and middle-income (LMI) households. Additionally, it requires that no less than half of those heating services provided to LMI households be “installed measures” that reduce heating costs over time, i.e. weatherization, heat pumps, etc. 
    • b) This policy builds on the $100+ million in weatherization and electrification funding for LMI households from Vermont’s 2022 state budget, as well as the $60 million in efficiency and electrification grants for LMI households from the federal Inflation Reduction Act. 
  2. Increased Focus on Weatherization and Electrification – While Limiting Biofuels & Renewable Natural Gas (RNG) 
    • a) The policy specifies that options like network, grid, and micro-grid geothermal, ground-source heat pumps, solar hot water heaters, on-site and community renewable electricity paired with heat pumps – are all eligible clean heat measures.  
    • b) The policy also puts restrictions on eligible biofuels and RNG that ramp these energy options down over time, ensuring that the market eventually moves towards only the most clean and renewable energy sources available. 
  3. Improved Climate Accountability and Transparency 
    • a) Calculating and adhering to the lifecycle greenhouse gas emissions of our various energy sources is a critical component in ensuring that our clean energy transition is truly clean and renewable. 
    • b) In addition to the limits on biofuels and RNG (see 2b above), the bill explicitly lays out several key components of how lifecycle greenhouse gas emissions will be calculated, especially around methane emissions and capture, and fugitive emissions. How these energy sources will be measured and scored in terms of clean heat credits will be transparent and accountable, and will ensure that any emissions from extraction, production and use are accounted for. 

How can I support the policy’s development and eventual passage by the Legislature? 

Make sure your legislators know that you strongly support climate action – and a well-designed Affordable Heat Act (S.5) is one critical tool to reduce climate pollution in our second most carbon-intensive sector.

Other recent resources on S.5, An Affordable Heat Act: 

  1. Energy Action Network’s Overview of S.5, and Frequently Asked Questions page 
  2. VNRC and VCV’s January 2023 Climate Dispatch with Senator Chris Bray, Chair of the Senate Natural Resources & Energy Committee (currently working on S.5)
  3. 2023 Legislative landscape Webinar with VNRC & partners, overviewing the details of AHA and answering questions, and providing resources