Vermont Legislature SmartTranscripts:

[Ellen Jay Coussey, Office of Legislative Counsel]: Good

[Robin Scheu (Chair)]: morning. This is the House Appropriations Committee. It is Tuesday, 03/17/2020. Happy St. Patrick's Day for the February 1. I guess this is the day that everyone is Irish. It is 08:30AM, and we are seeing a lot of bills today, listening to a lot of bills today. And the first one up now has a number, H940. We will have possession of the bill once the floor starts in about an hour or so. So we'll probably vote on this a little later today. But in the meantime, we will hear it. And we have from the council. So welcome, and take it away. We'll set up the bill.

[Ellen Jay Coussey, Office of Legislative Counsel]: Thank you. Ellen Jay Coussey, Office of Legislative Council. Page nine forty is one of House Energy's committee bills. It's a miscellaneous case, so it's miscellaneous public utility subjects. But there are only three topics in here. Section one is a session law provision about how Burlington Electric Department can spend their thermal energy and process fuel funds. So as we have three electric efficiency utilities in the state, there are three utilities that do efficiency programs. Vermont Gas has its own, Efficiency Vermont, and Burlington Electric Department have their own. There is a specific pot of money for thermal energy and process fuel efficiency. And the nature of Burlington Electric Department's work is a little bit niche compared to what Efficiency Vermont does, and that is because of the overlapping jurisdiction with Vermont gas systems. So the energy efficiency utilities are allocated funds either for electric efficiency and or thermal process fuel efficiency. Burlington Electric has been participating in this pilot program for the last six years that you all created called the Energy Efficiency Modernization Act, or EMA. That pilot program was scheduled to end this year, and what that did was allow Efficiency Vermont and Burlington Electric to expand the type of projects they're allowed to spend those funds on. So the pilot is coming to an end. Efficiency Vermont has not asked for further extension, but Burlington Electric Department would like at least one more cycle of being able to spend their thermal energy to process fuel funds on more types of projects because Vermont Gas Systems already does a lot of thermal efficiency work in their territory. So the language on page one through three, those are setting up that BED specifically can use a portion of their thermal funds to do other types of services, including

[Eileen “Lynn” Dickinson (Member)]: it's

[Ellen Jay Coussey, Office of Legislative Counsel]: going to allow them to do some transportation measures as well as weatherization. They need to use at least 60% of their budget of these funds on weatherization. Offered to their customers regardless of their existing fuel source. Yes. So it is a pretty narrow allowance for the Burlington Electric Department to spend these funds on additional programs they're not currently authorized to under law. Okay.

[Robin Scheu (Chair)]: So no new money here. Correct. Okay. We'll go into section two. We're going to wait till the end to ask for questions. Okay. We have to practice this today, but that's what we're going to do. We're going wait till the end.

[Ellen Jay Coussey, Office of Legislative Counsel]: So sections two, three, and four are updating the enhanced energy planning statutes to have that process merge with the new regional plan adoption process that was created as part of ACC 01/1981. So it's adding to the regional planning process that you all passed two years ago, making sure that the energy planning process is also part of that. So the amendments across a couple of different statutes are that title. And then finally, section five, this is technically Maria Royal's area of expertise, but section five is repealing the Telecommunications and Connectivity Advisory Board. That board has not met in a number of years, and I believe they asked to not be in statute anymore because they are no longer meeting. And I don't know a ton about that. If you want to hear about that, Maria, I could probably tell you.

[Robin Scheu (Chair)]: And I think that's why this came to us, because there was an advisory board, and they were per diems, and they're all going away. So there's no money in this bill at all. So, Okay. Well, why don't we hear from James? Don't go away. Don't stay there. James joins at the table and maybe confirm what I just said out loud. A question after James. We can ask questions after James.

[James (Joint Fiscal Office analyst)]: James Stephanie joined fiscal office. And yes, Sanchia, that's correct. Section five of the bill would repeal the telecommunications and connectivity advisory board. This is an eight member board, five members of which are nonstate employees that are eligible for per diem and expense reimbursement. So once this board is repealed, those per diem expenses no longer exist. Although the board hasn't met since March 2024, so the elimination of per diem and expense payments wouldn't represent significant savings in fiscal year twenty seven over the last couple of fiscal years. And then the other piece of the bill that has a minimal fiscal impact is section one, which Alan just discussed. This deals with the permissible use of thermal energy and process fuel efficiency funds by the Burlington Electric Department. This doesn't raise any additional funds or enable any additional expenditures by Burlington Electric Department for those projects, but it continues existing authorization that gives Burlington Electric additional flexibility to use those funds in their customer base, given their unique geographic overlap with the Vermont Gas Systems transition as well.

[Robin Scheu (Chair)]: Okay, so I have Lynn, Wayne, and John.

[Eileen “Lynn” Dickinson (Member)]: I guess this is a question for Ellen.

[Robin Scheu (Chair)]: Come on back.

[Eileen “Lynn” Dickinson (Member)]: Exactly is thermal efficiency and thermal? I mean, what

[Ellen Jay Coussey, Office of Legislative Counsel]: is the energy source or what does it do? Thermal energy is heating energy. So it's typically it's building energy usually.

[Eileen “Lynn” Dickinson (Member)]: So when you have gas or oil, that's still Yep. So what are thermal test wells? Thermal test well funding? Geothermal. Geothermal. Oh, that's under the ground? Yep.

[Ellen Jay Coussey, Office of Legislative Counsel]: You need to drill a test well if you're interested in putting geothermal energy in your building.

[Eileen “Lynn” Dickinson (Member)]: And the other question is, what does BE do? It says they're going to continue to use these funds now that pilot is done, but they have excess funds? Or how does that work?

[Ellen Jay Coussey, Office of Legislative Counsel]: No, it was a pilot in just that for that limited period of time, there was flexibility to use these funds for both Efficiency Vermont and BED. Efficiency Vermont is not asking to continue that. At some point, if Burlington Electric wants to continue doing this, it probably should just have the statute amended. But this is, again, a one time for their next budget cycle, which starts in it's from 2027 to 2029 is their next budget cycle. So for that, it gives them flexibility. So they still are getting the same portion of the funds they already get, but this is allowing them to

[Robin Scheu (Chair)]: use it on different programs. So it's expanding allowable uses, same money.

[Eileen “Lynn” Dickinson (Member)]: Is that out of their normal everyday revenue, or is this special? It's out

[Ellen Jay Coussey, Office of Legislative Counsel]: of their normal rate? It's out of the fuel efficiency fund that is divided every cycle between Burlington Electric, Vermont Gas Systems, Efficiency Vermont.

[Eileen “Lynn” Dickinson (Member)]: So the other two aren't going use

[Ellen Jay Coussey, Office of Legislative Counsel]: it at all? No, they are. They're going to use their normal chair and under their normal procedures on what they can spend it on.

[Eileen “Lynn” Dickinson (Member)]: Okay, so the pilot is Okay, so they did it. They all have BED wants to continue the pilot. So what's the difference between what efficiency Vermont Gas does with the money and what BED is doing with the money?

[Ellen Jay Coussey, Office of Legislative Counsel]: So part of it is transportation. They have an EV incentive program. Thermal energy is usually only to be spent on thermal energy projects, like geothermal upgrades or heat pumps. But because BED operates with an overlapping district with Vermont Gas Systems, Vermont Gas Systems already does that type of work. And so that's why they need to their customers overlap. So BED would like to do other things for money other than what Vermont Gas Systems is doing.

[Eileen “Lynn” Dickinson (Member)]: How long does the thermal fund go on for? Is this something that ends like No.

[Ellen Jay Coussey, Office of Legislative Counsel]: They get funding every year from it.

[Robin Scheu (Chair)]: They get it. You. What do need to adjust?

[Wayne Laroche (Member)]: So, you might just so so if they next year, if it's over, it's money still just stays in the fund? Yep. And for us, it's over. Any possibility for increasing rates coming out of anything in this bill?

[Robin Scheu (Chair)]: No.

[Eileen “Lynn” Dickinson (Member)]: John? So transportation,

[Wayne Laroche (Member)]: the EVPs that are

[John Kascenska (Member)]: installing additional charging stations, is that the No. Or

[James (Joint Fiscal Office analyst)]: is that

[Ellen Jay Coussey, Office of Legislative Counsel]: They use all this largely for incentives for their customers. So they have an incentive on electric vehicles currently. And then they do some other work like geothermal test wells. So

[John Kascenska (Member)]: that, transportation, weatherization, and then just other energy project kinds of things.

[Eileen “Lynn” Dickinson (Member)]: Yeah.

[James (Joint Fiscal Office analyst)]: I'll also add that the funds involved in this work are very specific. It's a very specific pot of money. This is another reason why, in addition to the kind of minimal fiscal impact, why in the past, committee hasn't received fiscal notes from JFO on this topic, but drive bys the last few times program has been renewed. The funding that supports this work comes from three sources. One is the energy efficiency charge charged to electric rate payers in Vermont. The second is proceeds from the sale of capacity by our energy efficiency utilities into the New England for capacity markets. So basically, energy capacity that's freed up by these efficiency utilities through their work is sold back into the New England grid, and those efficiency utilities are are compensated for that capacity. Can you go

[John Kascenska (Member)]: a little slower and Sure. Write a few things down. Sure. The sale of Of

[James (Joint Fiscal Office analyst)]: of capacity into the New England electric grid. And the third is Reggie, yes. Proceeds from Vermont's participation in the regional greenhouse gas initiative. So that's the multistate compact in which states or certain power generators have to buy allowances for the emission of greenhouse gases. And the proceeds from the sale of those credits is then distributed among existing states within the RGGI compact. And so that's a lot of explanation exposition for those three streams of revenue, all to say that these aren't state funds. These are funds that are either raised and or collected and deposited directly to the energy efficiency utilities to support this work. And in statute, it's specified that these funds are not available to meet the general obligations of the state. Are to be used only for the efficiency projects that authorized in statutes. So it's a very specific amount of money. These are state funds in a sense in that they reside in the electric or energy efficiency utility fund. The fuel efficiency fund. Yeah. But these are are monies that are are not raised to state taxes or fees, and they're specifically identified as not being available for general law. The first

[John Kascenska (Member)]: thing you mentioned is not funded by fees. Those are rate

[James (Joint Fiscal Office analyst)]: payer those are rate payer charges charged by the electric utilities and Holiday or just through the government and the

[Eileen “Lynn” Dickinson (Member)]: All they all pay. All pay. Men, you have other questions? I didn't realize we're doing still work. So we still have it, we're still paying into it. Are they still selling things to it? The credits. Okay, that lowers the rates.

[James (Joint Fiscal Office analyst)]: So I live in New Hampshire. I can tell you on electricity bill, every month I have a $7 Reggie rebate that I receive on my utility bill. Also supports the funds from Reggie support administration programs, ANR. So RGGI funds are deposited to the Vermont Energy Investment Corporation,

[Robin Scheu (Chair)]: which

[James (Joint Fiscal Office analyst)]: is the RGGI trustee for Vermont. So they receive and manage those funds. Some of them are given to ANR for administrative work that it does in support of RGGI. And then the others are distributed to energy efficiency utilities to support efficiency projects. Yeah, I would like to

[Eileen “Lynn” Dickinson (Member)]: say that efficiency of my charges outweigh payments. A lot of people think that's tax. It's not a problem, and you can chew that up. Businesses have been trying to get out of it because they do their own energy efficiency, just like Brompton does.

[Robin Scheu (Chair)]: Well, we're not going to relitigate that, because that's what it is. So I don't need to spend time on that.

[Eileen “Lynn” Dickinson (Member)]: Just to clarify, there are people who consider that a tax.

[Robin Scheu (Chair)]: People consider lots of things tax. Okay, do we have any other questions on this bill? I am not seeing any. It came out of committee eight ten out of HEDI. And as soon as we have possession later this morning, we will vote on this bill and get it out of here. So thank you very much, both of you. That was short and sweet. And I think Marty, this might be yours if it's department. No, John.

[Ellen Jay Coussey, Office of Legislative Counsel]: All the same letter. Right,

[Robin Scheu (Chair)]: Department of Public Safety. So that's why it's the same initials. I'm safety. Right, I mean service. It's the initials that just said. Yeah, Okay. So John, this will be yours when get to that. Okay. So we have Representative Malone coming at nine and I wonder if we can get it here. Guess, unless we have anything else anybody wants to talk about, we can just go off live and

[Ellen Jay Coussey, Office of Legislative Counsel]: we'll