VTDigger
Stuart Blood: Affordable Heat Act would be a gift to Vermont Gas Systems
7 March 2023
Affordable Heat Act would be a gift to Vermont Gas Systems
Stuart Blood, op-ed
Almost 99% of the natural gas that Vermont Gas Systems delivers to customers is fossil fuel. The ironically misnamed Affordable Heat Act, with its special provisions to uniquely benefit Vermont Gas Systems, won’t change that.
What will change if the bill is enacted as voted out of committee is that Vermont Gas will acquire “clean heat credits” for selling some of that fossil gas, mostly from fracking wells, because it will be relabeled as “renewable natural gas.”
Currently, Vermont Gas buys a small percentage of its gas supply from out-of-state landfills and waste treatment plants and thus acquires renewable “attributes.” The Vermont Public Utility Commission recently approved a contract for Vermont Gas to buy a lot more of it from a landfill in New York, with which Vermont Gas projects its “supply” of renewable natural gas will increase to more than 13% by 2030 and about 1% per year after that.
That renewable gas itself is injected into a pipeline that takes it west. It’s burned somewhere else, not in Vermont. It’s the renewable attributes, abstractions that will be counted by the Affordable Heat Act as if they reduce greenhouse gas emissions, that Vermont Gas will deliver to customers, along with mostly fracked gas.
The Global Warming Solutions Act of 2020 changed Vermont’s emissions goals to legal mandates. It requires a 40% reduction below 1990 levels by 2030 and an 80% reduction, as well as zero net emissions, by 2050. The Affordable Heat Act’s supposed purpose is a reduction of emissions from heating buildings, at minimal cost to customers. It proposes to do this by requiring fuel dealers to “retire” other abstractions it calls “tradeable clean heat credits.” It’s a fabulously complicated system that the PUC will design and administer. By design, it will reduce emissions — on paper, if not in the atmosphere.
Fuel dealers will be required to obtain these credits “through delivery of eligible clean heat measures,” or by paying a third party to deliver those measures, or by just buying credits on a market that the PUC will create. Eligible measures would include weatherization, heat pumps, solar hot water systems, hydrogen and biofuels.
Renewable natural gas delivered by pipeline, as only Vermont Gas does in Vermont, gets special treatment in the bill. While other fuels would need to be burned in Vermont buildings to qualify for credits, Vermont Gas would get a special allowance for credits simply by “delivering” renewable attributes.
The PUC has previously interpreted contract language that’s nearly identical to the bill’s by declaring that “the out-of-state (renewable natural gas) need not and may never enter the VGS pipeline. The out-of-state RNG will enter a pipeline system to be used by others with VGS being credited for the RNG attributes.”
As one of the world’s most prominent experts in the field, Cornell Professor Robert Howarth, told the Senate Natural Resources Committee, renewable natural gas burned elsewhere is counterproductive to the requirements of Vermont’s emission reduction mandates. Renewable natural gas is refined from biogas, which is produced in anaerobic digesters and landfills. The lowest-emissions energy that can be generated from biogas comes from burning it where it is produced — to generate electricity, for instance.
Renewable natural gas is almost 100% methane, a greenhouse gas more than 80 times worse than carbon dioxide. Purifying methane from biogas, compressing it, and injecting it into a pipeline that has even minimal leaks creates more emissions than the alternative of burning the biogas for energy where it is produced. It may even result in higher emissions than fossil gas.
Biofuels generally, and renewable natural gas in particular, cost far more than fossil fuels to produce. During the recent contract case at the PUC, the Department of Public Service testified that renewable natural gas from the New York landfill “is one of the most expensive means for VGS to reduce emissions.”
The Vermont Gas plan, approved by the PUC, is to “blend” renewable (attributes) into its (fossil) supply gradually over the next decades. To reduce the rate shock, the PUC has also approved the Vermont Gas plan to sell some of its renewable gas into the transportation market in states like California, where the price is higher than what Vermont Gas is allowed to charge its Vermont customers. Vermont Gas can use that extra revenue to keep rates lower as it ramps up its supply of renewable attributes.
In fact, Vermont Gas has notified the PUC that it intends to sell two-thirds of those renewable attributes into the transportation market this year so that its rates will actually be lower than they would be otherwise. It’s a bait-and-switch scam timed to coincide with the Legislature’s consideration of the Affordable Heat Act.
Every clean heat credit that Vermont Gas acquires by buying expensive attributes and delivering fracked gas represents real money leaving the state, money that’s not being spent to weatherize a Vermont home or to install energy-efficient appliances.
Imagine for a moment an alternative to this gimmick-laden deception. Instead of spending for abstractions assigned to gas that will never be burned in Vermont, gas that in any case isn’t being used to reduce emissions, imagine that money being spent on real things that actually reduce energy consumption. That’s the kind of legislation we need in Vermont.
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