Vermont Legislature SmartTranscripts:

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: We're live.

[Rep. Kathleen James (Chair)]: Alrighty. We are live. Welcome everybody to House Energy and Digital Infrastructure. It is Thursday, February 5, and we are here continuing to take testimony on h seven forty, an act relating to the greenhouse gas inventory and registry. Matt, we'll go around the room and introduce ourselves and then ask folks to introduce and then we'll turn it over to you. So I'm representative Kathleen James from Manchester.

[Unidentified Committee Member]: Scott Campbell from Saint Johnsbury. Richard Bailey, I'm loyal to. Chris Morrow, Windham, Windsor, Bennington. Michael Southworth, Caledonia. Christopher Howland. Bram Kleppner, Chittenden Thirteen, Burlington. Morrisville, I'm with

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: that too.

[Unidentified Committee Member]: Dean Lee Perry with McCrassinger. Nathaniel Eisen, freelance journalist.

[Joanna Miller]: Joanna Miller from Monetary Resources Center.

[Richard Dubay]: Richard Dubay, Huntington.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: Allison Descartes, Vermont with Berkeley Environment.

[Rep. Kathleen James (Chair)]: Great. Alright. For the record.

[Matt Cota]: Matt Tota with Meadow Hill. Great. If I could announce all my disclosures.

[Rep. Kathleen James (Chair)]: Yes.

[Matt Cota]: Because I wear a lot of different hats, and I do wear the hat as indicated in the schedule, manager, director of the Vermont Vehicle and Automotive Distribution Association. And there is some nexus with issues that they have with this committee, but perhaps not this bill that that I did not suggest.

[Rep. Kathleen James (Chair)]: I know, I just noticed that. I go ahead. Go ahead with the disclosure again.

[Matt Cota]: I serve on the climate council appointed by the speaker of the house to represent the fuel sector. I previously served on the Clean Heat Technical Advisory Group and the Clean Heat Equity Advisory Group. My lobby firm represents the Vermont Fuel Dealers Association, which is retailers of heating oil and propane. Propane Gas Association of New England, which represents propane distributors across New England. The Vermont Retail and Grocers Association, which represents gasoline and diesel fuel suppliers. Right. And the heating cooling contractors of Vermont, they represent the people that sell and install heating liquid fuel.

[Rep. Kathleen James (Chair)]: Great. And I apologize. I I had noticed that on the agenda. I had thought to invite you to testify on this bill in relationship to your position on the climate council and also as the lobbyist for the Fuel Dealers Association. I thought those were the two Yep. Most relevant. Okay. Sorry. I didn't I didn't catch that.

[Matt Cota]: And and certainly, my role representing gasoline and diesel distributors Right.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: In the states, which should

[Unidentified Committee Member]: be relevant to the register.

[Rep. Kathleen James (Chair)]: Super. Great. Well, you know, I know that you

[Unidentified Committee Member (technical questions)]: know, had signed a dissenting statement to the climate plan, so

[Rep. Kathleen James (Chair)]: I don't know if you're gonna talk about that, but we just wanna get your thoughts on July.

[Matt Cota]: Exactly. Well, thank you for reading the statement that I wrote in June 23 when the climate council passed. It wasn't unanimous. There were five dissenting votes, including mine. I'm just the only one who wrote a four page sign statement

[Rep. Kathleen James (Chair)]: and talked about it. Alright. So seven forty.

[Matt Cota]: Seven forty, a registry. So specific to the bill and the language in it. If I could, it'd be helpful and point out some of the issues that we see with the language as written, and then also provide an opportunity to understand how fuel comes into Vermont, how that data is tracked, and how we monitor it at the trade association, how the state collects it, and perhaps solutions going forward. First of all, there are 139 different bonded and licensed motor fuel distributors in the state of Vermont. All of their information is collected by the Department of Motor Vehicles. Motor fuel distributor means that they sell gasoline and or diesel fuel. They import it into the state and pay the excise tax to the Department of Motor Vehicles. Those gallons are reported, and that tax is collected by the Department of Motor Vehicles on the twenty fifth of the month.

[Unidentified Committee Member (technical questions)]: You

[Matt Cota]: can see, see, we just updated this morning using D and B data. I don't have any inside track here. The gallons tracked over the past ten years sold in Vermont at meadowhillmedia.com. You click on the fuel index. We update it every month, and we have December's numbers. So we know definitively what was sold in Vermont. But the data, when it comes to motor fuels, should be noted. It is the distributor. It is the person that holds title to that gallon the moment it crosses over to Vermont. As you know, we have no ocean, no sea terminal, and no pipeline. All of our fuel comes by railcar or by tanker truck. The 280,000,000 gallons of gasoline and the 60,000,000 gallons of diesel fuel that we sell every year in Vermont, we know definitively which entity held title to that gallon the moment it crossed into Vermont. We know this because they're required to pay excise taxes on the Department of Motor Vehicles, failure to do so involves significant fines.

[Rep. Kathleen James (Chair)]: You said, Matt, they pay excise tax and report gallons. This is the data that goes to tax. Right? Gallons?

[Matt Cota]: Okay. Just the department of order. This is this is where and I I wanna answer your questions that I wanna be able to to point out because this is what's confounding. There are two different pools of taxation. One is the motor fuel pool, and one is the heating fuel pool. Right. And sometimes they blend in together where we get lots of questions saying, well, why is that going there and that's going there? But when it comes to clear on highway diesel, that's the stuff that goes into an engine that has a green plate, not a red plate, green plate, or gasoline, that's all collected by the Department of Motor Vehicles on the twenty fifth of the month. And we know definitively who those entities are that held title to that gallon because it's publicly available and reported to the DMV. What we don't know, and this gets back to the the text of the bill, is what county it's sold in. That is not data that I mean, we're not we don't have any county wide statistics in terms of where it goes. When it crosses into Vermont, it could go. You have a 9,000 gallon tanker truck going to Montreal, going to Montreal, stopping by Enisburg and dropping off 2,000 gallons of gasoline, then stopping by Colchester and dropping another 4,000 gallons off. Same truck, doing the haul back to Montreal and coming back three times a day every day. But there's no idea which part of those gallons. We know that 9,000 gallons came in and taxes will be paid on the twenty fifth of the month, but we don't know if it was done in Franklin County or Chittenden County, and we certainly don't know whether someone from New York bought that gallon and then, you know, burned 1% of it in Vermont and then went back to New York and burned the rest of the 99% of it. So in terms of tracking emitters because the emitters aren't the fuel dealers. Emitters

[Rep. Kathleen James (Chair)]: are They people that buy know where it's delivered, you're saying? Court said they know where it's delivered.

[Matt Cota]: They know where it's delivered, but that is not the county of which it might be emitted. I mean, the whole the point of know what we want. We want better data. What I'm here to tell you is we have a significant set of data at our disposal that is imperfect. But what I'm concerned about is we're creating a system in which we will have a different set of data that is just as imperfect than what we really want. And I know this because I spent 18 months on the Clean Eats Standard Technical Advisory Group, and I saw what happened to the Clean Eats Standard Registry and how that hadn't effectively sunk that program because it couldn't figure out what they actually were tracking.

[Rep. Kathleen James (Chair)]: I think that's what sunk the program, but we could talk about that some other time.

[Rep. R. Scott Campbell (Vice Chair)]: I just have a couple questions. So you said that we know how many gallons because we know the excise tax. The excise tax is paid on dollars, is it not, or are they paid on gallons?

[Matt Cota]: Excess tax paid on gallons. 32¢ a gallon goes to the feed and feed.

[Rep. R. Scott Campbell (Vice Chair)]: Okay, excellent. So that's how we drop in gallons. Are the gallons dropped at a regional distributor, or are they dropped at a Is that they are dropping? Yes. So from there, it might go to a gas station somewhere else. So it's

[Unidentified Committee Member]: all of the above. Okay.

[Matt Cota]: You can't have a teenager with AI fix this. I'm sorry. This is very complicated stuff. That's why I'm asking. We have gals that roll in by rail car or by tanker truck. They either go directly to an underground storage tank, which then is dispensed to the traveling public Yep. Or it goes to a regional facility in which is then picked up by a smaller truck. Right. Okay. It's That's that's Any of the above could have happened. And one of the things that if we're going forward with a registry, have better set of data than we currently have in our hands, we wanna know going into this what you're trying to collect. Yeah.

[Rep. R. Scott Campbell (Vice Chair)]: I think we always realize that motor fuels are going to be difficult to try and apply any kind of geographical boundary. Right. But we know how much is coming into the state because we have excise taxes on that fuel, and those excise taxes are tied to the number of gallons. Yes. That's correct. We know that. Yep. Good. Switching

[Matt Cota]: gears. Uh-huh. Heating fuels and sometimes transportation fuels are collected at the Vermont Department of Taxes. That list, thanks to the work of previous version of this committee, has greatly improved, and their collection system now before, you had to file a Freedom of Information Act. I did it every month, get them data. Now it's now it's graphically presented. They have done a tremendous job in terms of providing that data to the public, in terms of how many gallons month to month are sold. Again, because of the fuel tax, the 2¢ a gallon paid on the twenty fifth of the month, all those gallons are reported, not by individual distributor, but in aggregate. And part of that is the distribution network for heating fuel is slightly different than it is for gasoline. And how it is then sold and resold is different in gasoline. When gasoline comes to the state, it may be sold, as representative Campbell put out to a regional terminal and then redelivered again. It's the whoever owns title when it crosses the border, they're the ones that are paying the tax, right, not the individual small gas station owner. But in heating fuel, heating fuel can come into the state and then travel outside of the state. Happens quite often. That was the problem we were having with the clean heat standard registry. What exactly are we tracking? Are we tracking the carbon molecule from the moment it crosses into Vermont to the moment the moment is consumed? Because that might change hands eight times. It might go across the border twice in a day. It might come from across the border, come into Vermont, then go back into New Hampshire. This is the is the trail that we were trying to to trying to ascertain as we're trying to develop a clean heat registry, and I see the same challenges forming when we try to create this new registry.

[Rep. R. Scott Campbell (Vice Chair)]: On heating fuels, we have the fuel pack truck that funds weatherization, but I think it's also 2¢ a gallon, right, to gallon per gallon tax. In state dealers, or actually any dealers, out of state dealers, anybody delivering in New Braun would have a record of how many gallons are getting delivered in New Braun. Is that correct?

[Matt Cota]: So if you are a retailer of heating fuels? Yes. So motor fuels, DMV, distributor. Right. Big trucks and trains. Right. Heating fuel, retailer. That's what so a a major company that's bringing in well, I just gaze over out the window, and you'll see Alliance Energy, or the largest distributors of propane in Vermont. Rail cars come in every day, and they fill up the tanks there, and then smaller trucks come in and move move that gallons elsewhere. They don't pay the fuel tax. The fuel tax is not paid by the wholesaler in the case or the distributor in the case of heating fuels, and in fact, bar by the retailer, which makes it distinctly different, not just where you pay it, but who pays it. Right. Motor fuels from heating fuels. Yes. Further complicating it is the weatherization tax, the 2¢ a gallon. It doesn't matter what the purpose is. If it is one of the fuels that is where the tax is paid to the Department of Tax, they don't care if it's residential, commercial, industrial. They don't

[Unidentified Committee Member (technical questions)]: care if it's a

[Matt Cota]: nonprofit or a government entity. It's 2¢ on every gallon. Right. In fact, and I pointed this out, since it was created, the tax paid on dye diesel, dye diesel, which goes into school buses, which goes into your municipal plow trucks, which goes into the farmer's tractor, That dyed diesel tax is not an excise tax. It is a weatherization tax that goes to the tax department. So we we live in a world where where it's actually selling diesel fuel, a dyed product, which is not doesn't is not excitacable, but we do capture the weatherization tax on every gallon of dyed diesel sold to a school bus operator or to a town or for a burning plow trucks or for a farmer's tractor.

[Rep. R. Scott Campbell (Vice Chair)]: But what I'm getting to is, so we know the number of gallons by retailer, right, because we know because of the fuel tax, the weatherization fuel tax. Can correct the record?

[Matt Cota]: We are publicly available and posted every month. We have the aggregate number of gallons of dye diesel, propane, heating oil, and kerosene sold in state of Vermont. At

[Rep. R. Scott Campbell (Vice Chair)]: the retailer level, have records of how many gallons are sold. Those retailers also know where they have delivered that fuel system. Right, because that's how they bill them.

[Matt Cota]: Yes, then the delivery tickets for the retailer, correct. So if a retailer were audited for compliance with the fuel tax, they would have to distribute like in any audit that take tax audit that that some of you may have gone through. They have to they have to create or the the tax auditor will wanna see a basket full of tickets to determine whether or not they're in compliance. If

[Rep. R. Scott Campbell (Vice Chair)]: a system were set up so that that data, which exists, of how many gallons are delivered to what address, if a system were set

[Matt Cota]: up to collect that data, we would have that data. The tax department does not have that data No. Unless it unless it's audit.

[Rep. R. Scott Campbell (Vice Chair)]: That data would exist in a form that could be used. Yeah. There would

[Matt Cota]: be significant challenge in getting remember, most fuel dealers, most gasoline sellers too, are are small dealers. Yeah.

[Rep. R. Scott Campbell (Vice Chair)]: But they have to have records about

[Matt Cota]: They have to have How

[Rep. R. Scott Campbell (Vice Chair)]: many gallons are delivered to what address?

[Matt Cota]: They have they have to fully have records, and they have to provide it under audit by the tax department. Good. And that and that information remains confidential.

[Rep. Kathleen James (Chair)]: Sibilia and then Kleppner?

[Rep. Laura Sibilia (Ranking Member)]: I have two questions. First, trends. So, I think you told us that there

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: are now

[Rep. Laura Sibilia (Ranking Member)]: 139 bonded motor fuel distributors. How many heating fuel?

[Matt Cota]: 137 heating fuel suppliers. The number's actually grown. Whether or it represents Sibilia, the number of of of heating fuel suppliers in Vermont has, I've done this twenty years. Every time an out of state company purchases a bunch of small companies, it is a personal gut punch to me. As a kid that grew up in

[Rep. Laura Sibilia (Ranking Member)]: a heating fuel family. I'm lot of time with you, so I just want to thank you for answering that question. How many were there ten years ago? The same. So, we've lost none.

[Matt Cota]: We lose them. It's a mature industry. We lose them and we gain them. Mhmm. Every time every time a a a Suburban comes in or AmeriGas comes in and purchases a small dealer Yeah. It you know, Peter Bourne, he sold his business. It is his right to sell his business to another company. However, in that wake, what happens is small companies pop up. On-site, Alco, all these, Fox Fuel, eight zero two.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: This this is Can you provide us with a list?

[Rep. Laura Sibilia (Ranking Member)]: Perfect. My second question is, with regard to the bill, then we have you here testifying on, which is h seven forty. When we in section one well, I'm wondering if you have suggestions, specific suggestions of language to improve this bill for us.

[Rep. Kathleen James (Chair)]: Yeah. And I have a related but different question.

[Matt Cota]: So the three edits with regards to they're not edits as much as flags. So including fuel suppliers is called up as a source of emission.

[Rep. R. Scott Campbell (Vice Chair)]: What what line are you on? Sorry.

[Matt Cota]: I am on blind six on page two. Yes. And I was confused by that. I think I know what we're after. We wanna make sure fuel suppliers are counted, but we're not counting fuel supplier emissions. Fuel supplier emissions would be the gallons or the greenhouse gas emissions that are released from the tailpipe from those diesel trucks when they deliver fuel.

[Rep. Laura Sibilia (Ranking Member)]: So do you have specific language? Well, will be a rule making process. Just delete it.

[Rep. Kathleen James (Chair)]: And I want to focus everybody on the steps that this bill would envision, which is that ANR will be engaged in a rule making process. I'm sure plenty of chance for everybody to provide feedback there. So

[Matt Cota]: a comprehensive greenhouse gas emission reporting program understood that, but singling out fuel suppliers, or including fuel suppliers is confusing in that I read that as counting the gallons we use in order to perform the services that we provide, not in terms of counting gallons. If it was if it were if all we're doing is counting gallons and creating a better reporting system, then I think we should say that. So when we go through the rulemaking process, we understand that we're not gonna count the amount of gallons it takes for company a versus company b in order to deliver the products that they do they deliver.

[Rep. Laura Sibilia (Ranking Member)]: So if we were to make this a more inclusive list so I read this as making sure that we're including specifically that we if we were to expand on that list of including, would that would be better?

[Matt Cota]: No. This reads to me as fuel dealers, count how many gallons of fossil fuel that you use in order to deliver your products. That does not say if we're if all we're doing is creating a better system, a more a more distinct system of counting gallons, I think we should say that, and I think we should have specific guidance for ANR before they begin their rule making on what actually you want. Do you want every gallon that crosses the border?

[Rep. Laura Sibilia (Ranking Member)]: So it doesn't actually say that, though. So it talks about creating a comprehensive greenhouse gas emission reporting program that covers all sources of emissions, including fuel suppliers.

[Matt Cota]: With all due respect, fuel dealers are not the source of emissions. The customers that burn their products are.

[Rep. Kathleen James (Chair)]: Rutland?

[Unidentified Committee Member]: So when you say fuel suppliers and fuel dealers are interchangeable language, because it says here suppliers, you said dealers.

[Matt Cota]: Suppliers is, yeah, suppliers and dealers are interchangeable. Distributors is a different terminology, distributor versus retailer. Wholesaler, distributor, retailer, those are distinct things in my mind. Suppliers and dealers are largely the same.

[Unidentified Committee Member]: Yeah. So I do understand Mr. Coda's suggestion that this is unclear, including fuel suppliers, does sound like the emissions that the truck delivering the fuel produces, not the emissions produced by burning the fuel that the truck delivers. But

[Matt Cota]: that was my question.

[Unidentified Committee Member]: My question was, with the retailers for heating fuels, Do we have a sense for how many of them, have customers across the various borders of Vermont and sort of as a percent? I mean, can we rough cut how much of it gets burned in Vermont is my real question?

[Matt Cota]: Well, that's a really good question. And and what's complicated, having gone through the clean wheat registry dilemma, is that so say you've got that facility right there in Berlin, one of the largest propane wholesalers in Vermont. We You've also got one in Bells Falls in Rocky, Vermont. Both those, you would think, well, one's in Bells Falls and one's in Montpelier. You'd think they would just be Vermont companies. A lot of those gallons are coming in because of the way that our rails are set up. And and we rely on rails, and we need rails to move commerce around the state, goods and serve goods around the state. A lot of the gallons that you you watch the trucks that come out of Berlin or you watch the trucks that come out of Bells Falls, they're not stopping at a regional plant in Vermont. They're going to Massachusetts. Some are going

[Unidentified Committee Member (technical questions)]: to Connecticut. A lot of

[Matt Cota]: them are going to New Hampshire. A lot are going to New Hampshire. So even gallons that come in, are just here pausing and then leaving. With regards to individual retailers and how much of their percentage, it it varies greatly depending on retailers. We have New Hampshire retailers that sell some of their product to Vermont. Vermont retails some some of their product in New Hampshire. That is the most porous border. Yeah. Clearly, rather than New York or Massachusetts. Or Quebec.

[Unidentified Committee Member]: Yeah. So the stuff that gets trans shipped, are we collecting 2¢ a gallon on that? Only the re this is where if

[Matt Cota]: I could design it again, we have what we have. Motor fuels collected on title at the point of into Vermont. Heating fuels collected at the retail level. So so so as

[Unidentified Committee Member]: the big wholesalers, stuff that gets trans shipped, we don't collect them.

[Matt Cota]: If it's coming into Vermont, if a propane gal is coming back from Quebec to Berlin, put on a 9,000 gallon tanker truck and driven into Massachusetts, nothing.

[Unidentified Committee Member]: Yeah. Okay. But if it's but

[Matt Cota]: it was purchased by Gillespie in in Northfield Yeah. And then they deliver it to your house in Montpelier, yes.

[Unidentified Committee Member (technical questions)]: 2¢. Yeah.

[Unidentified Committee Member]: And if they pick it up here and deliver you know, if they fill some houses, tanks between here and the river and then they cross the river and fill some more, we're collecting 2¢ on all of that?

[Matt Cota]: No. You're only collecting on the on the on the the gallon that's delivered into Vermont. The the

[Unidentified Committee Member]: so the stuff delivered to Vermont homes. Right. So they keep track of how much they're delivering in Vermont, how much they're going across the bridge.

[Matt Cota]: Well, they certainly can pay for the 2¢ per gallon sold in New Hampshire, but they're not required to by law. Okay. So simple math would be sell 90% of my product in Vermont. I'll just multiply my gallons sold this month by two and then send in a check. But if you have the wherewithal, you go, well, no. 10% of those gallons are sold in New Hampshire. I can prove that under audit, and then and then you only send in what you sell in Vermont. Got it.

[Rep. R. Scott Campbell (Vice Chair)]: Thank you. Can I get back to motor fuels for a second? So if You said, if I recall correctly, that when a motor fuel is imported into Vermont, that's when tax is paid, when it's delivered into Vermont.

[Matt Cota]: Motorized title when it crosses into Vermont.

[Rep. R. Scott Campbell (Vice Chair)]: Yeah. So

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: Gotcha. The

[Rep. R. Scott Campbell (Vice Chair)]: if if if if the and some number of those gallons, some portion of those gallons are transshipped from a district distribution point in Vermont outside of Vermont, is there a credit for that, or what happened there? Or that excise tax has been paid, and that's just how it goes.

[Matt Cota]: Yeah. And so if okay, I have to show you the form in which you indicate which gallons stayed in Vermont. Okay. So they're in way that we it's a CBO form. They're in the way of knowing. Anyway

[Rep. R. Scott Campbell (Vice Chair)]: Yeah. Of how much stays in Vermont.

[Matt Cota]: It it's similar to if you deliver a gallon of clear diesel to a customer a such as a school bus operator or or a municipality, if you deliver a gallon of clear diesel, there's a way to get the money back on

[Rep. R. Scott Campbell (Vice Chair)]: behalf of your customer as well.

[Matt Cota]: There's a whole debit and credit system.

[Rep. R. Scott Campbell (Vice Chair)]: I wanna clarify that one point. You've got

[Matt Cota]: You've been very generous with your time. Can I just make two real quick points? I'm happy to stay as long as you want, but

[Rep. Kathleen James (Chair)]: Well, we have other witnesses coming in at 01:30. I had a final Just Yeah. Go ahead.

[Matt Cota]: If if I may. Yeah. I'll be very quick. County doesn't work. ZIP codes? Sure. Counties. I've been asking drivers to know what county they're in versus knowing who they know what the town they're in, but but I don't know why we have county. I don't know what what what benefit does this serve having a county as a as another line on your code that will cost money. The other is we don't track whether it is I know understand how greenhouse gas emissions, how the EIA calculates, how it would be nice if they it would neatly lined up with residential, commercial, industrial, RCI. We do not know in most cases what if it's RCI or not. Even transportation. We're selling a gallon of distillate. That same gallon of distillate, taxed differently, different purposes, could be for a vehicle, could be for outdoor use as in the tractors, or could be for heat. It's the same gallon, same thing, but we don't track in our data what if it was residential, commercial, industrial. It's a guessing game. So I understand why that is wanted because it helps match up to the previously collected data from e a EIA that is horribly late. I agree with secretary Barr. It comes way too late. This comes on twenty fifth of the month, every month, available forty five days later. However, us getting to a county wide level or a RCI level, it seems I don't know how that happens. And the second point is and the last point is confidentiality. If we know exactly how much, which gas station, and which company sold, there would be some concerns about the competitiveness for some of the small companies.

[Rep. R. Scott Campbell (Vice Chair)]: Alright.

[Matt Cota]: Thank you. Is

[Rep. Kathleen James (Chair)]: it related to the bill? It's related to

[Rep. Laura Sibilia (Ranking Member)]: this, which was just so I noted that there are New Hampshire companies in here. Are you counting that as the 139?

[Matt Cota]: I only count them if they deliver into Vermont.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: So okay. Thank you.

[Rep. Kathleen James (Chair)]: Great. So just I I guess just a well, I mean, just a reminder, you know, for the committee mostly, which is that the we asked ANR to develop a memo to look this greenhouse gas reporting framework idea because folks agree it's important.

[Matt Cota]: And

[Rep. Kathleen James (Chair)]: I think you agree it's important. Or maybe you don't agree it's important. Want to put words in your mouth. But a wide range of entities agree that this expanded or improved reporting framework would be a foundational step to build better climate policy, which I think we all share an interest in doing. And so this bill does not flesh out or develop that policy. The only reason we need a bill is that ANR has done significant research and ANR would like to engage in the rule making process to use existing data and engage with all the stakeholders to hear these kinds of comments and develop a reporting framework that uses existing data that will be useful. And so we are not designing the program here. ANR has said specifically that it would be helpful to them to have specific legislative authority to embark on the process of a rule making step. So I just wanna remind folks, ANR wants us to say, go do this. We are not designing the program ourselves. And so I I guess I I felt like it was important to just remind folks as we get into our questions and stuff. This is a and r saying, we've researched an idea. We think we can make it work. Will you please give us permission to go and do the rule making work, which is when we really dive into the nitty gritty. So anyway, I just hope that was an important reminder. So, and I'm sure as part of the rule making process, you know, what data fuel dealers have available would be critical consideration. So alright. Thank

[Rep. Laura Sibilia (Ranking Member)]: you for your time.

[Rep. Kathleen James (Chair)]: Yeah. Thank you. Thank you. Matt, I'm sorry I didn't see. Did you submit written testimony? Okay.

[Matt Cota]: Although I can submit my June 23 signing statement. Think it's already I

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: have it.

[Matt Cota]: It's seven months stale. It's stale by seven months.

[Rep. Kathleen James (Chair)]: I'll make sure it's posted. I have it. I'll make sure it's posted on our website if it's not already.

[Rep. R. Scott Campbell (Vice Chair)]: Sure.

[Rep. Laura Sibilia (Ranking Member)]: Thank you.

[Rep. Kathleen James (Chair)]: Alright. Thank you for being here. Alright. Who put you next? Are our next folks here? Great. Oh, there. Hi. Hi, Victor. Alrighty. I think we can just move on ahead.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: I don't think we need

[Rep. Kathleen James (Chair)]: a break. We just got started. So we are turning our attention. Everybody has to do a mental shift. We're gonna turn our attention back to h seven ten, which is our bill of the definition of a plant. And I think I know that I or I believe that our attorneys at the your the attorneys at the UC have been in touch with ledge counsel to try to work on updated language. That's correct. And that's what we're talking about now. Right? Okay. Okay. For the record, if you could introduce yourselves. Yes.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: Thank you, chair James and committee members. I'm Steph Hoffman. I'm the general counsel of the Public Utility Commission. And with with me today is West Skiadmore, a staff attorney. I apologize. I'm trying to connect here and share my presentation.

[Rep. Kathleen James (Chair)]: No problem. Did you did did you submit this? I'm just wondering if we have it. Sorry.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: Did you get submitted?

[Unidentified Committee Member]: Yes.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: I did share it yesterday Did do that? Early in the day.

[Rep. Kathleen James (Chair)]: It's probably posted then. Let me just look. Yep, it's on our website.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: I see two documents. One might be I just refreshed. I'm re sharing the report again just so we all have that readily

[Rep. Kathleen James (Chair)]: accessible. There are some slides. Okey dokey. Do you want to share your screen or do you want us to follow-up?

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: I'm happy to share my screen. My computer is somewhat clocked right now. See if can see it. Okay. Sorry. Okay. Yeah.

[Rep. Kathleen James (Chair)]: I do see we posted your November 12 recommendation, the the legislative language that was workshopped. And then I see you need to do testimony from today that looks like four slides? That's correct. Okay. Super. If you're not able to share your screen, we can all pull it up.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: I will get started here, and, Wes, if he's gonna join in.

[Wes Skidmore (Staff Attorney, Vermont Public Utility Commission)]: Just be about one minute.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: K. So we heard the testimony last week, and so we know it was discussed then, and we wanted to come back to you with some language to address the concerns that we were hearing, in particular clarifying exception c. Before I present the language that we have been talking with Ledge Council about, I wanted to walk through what that exception is meant to do in hopefully some clear terms and then show the new proposed language to capture what that definition exception is supposed to do. Okay. So as a reminder, this is the exception that overall deals with what happens when you wanna place a metering system, a standard offer system, and then other forms of solar generation technologies on the same parcel or contiguous parcels. This definition at a high level is meant to prevent more than 500 kw of net metering capacity or 2.2 megawatts of standard offer project capacity on a parcel. So meaning we were preserving the statutory caps without any additional capacity on those sites that could be looked at in aggregate and then violate those capacity caps. But to allow projects that are basically under the res or have PPA contracts and other forms of contracts with utilities to exist as many as are appropriate for the parcel under the criteria so long as they have different points of interconnection. Basically, under this current definition, not the one that's being proposed to change it, you can't have additional capacity when you have a net metering system or a standard offer system, because we have to look at under that definition the total amount of capacity on a parcel and say, Does this violate the program? If the answer to that is yes, because they're proximate, it violates the definition and that screams them out from being able to co locate. Under the new definition, the attempt here is to say, so long as compensation for capacity at the program level is capped at the appropriate amount, 500 kw net metering, 2.2 standard offer, Beyond that, you can put more capacity on the site. Just can't be compensated under those programs. You can have additional PPA projects on that site. And by the way, if you don't have net metering or standard offer, we we are not using this as a screening mechanism and we're not gonna put we're not gonna prohibit more capacity.

[Rep. Kathleen James (Chair)]: Okay. Two things. One is I it looks like we have somebody wanting to enter

[Wes Skidmore (Staff Attorney, Vermont Public Utility Commission)]: That's that's me. Yeah.

[Rep. Kathleen James (Chair)]: Okay.

[Matt Cota]: You just

[Rep. Kathleen James (Chair)]: need a minute. Just press

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: You can also just hear. This one.

[Rep. R. Scott Campbell (Vice Chair)]: Actually,

[Rep. Kathleen James (Chair)]: Yeah. If you don't mind. Sorry. I just I find that so distracting.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: Thank you.

[Rep. Kathleen James (Chair)]: If you could just say it again fully.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: It helps if you're able to look at when using the pull up too. This first slide here is going to show you under the proposed definition what can be cited on a parcel. If you- So, is what we're You're going to walk us through

[Rep. Kathleen James (Chair)]: what we're and trying to then we'll talk about the language.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: Yes, exactly. Okay. So, this definition, the proposed definition under, for exception C, this is what it's trying to achieve. What can be cited? Pretend those rectangles are a parcel of land and we're looking at what can be located on them. So under the definition of plant, the general definition that's proposed, you can have a single facility of any type can be cited on a parcel presuming it meets the other statutory criteria. Once you have more than one facility on a site, you have to ask whether it meets the exception, right? Because we're looking at, are you on the same parcel or contiguous parcels? And are you the same generating technology? If so, then we have to find an exception. That's where we are, we're in exception C. All we're using in exception C to screen additional projects is the capacity caps for net metering and standard offer. Otherwise, we just look at point of interconnection. Example A, this shows the green box is an example of a 500 kW metering project. Under the new definition, you can cite a five megawatt res PPA project on that site so long as they have different points of interconnection, which is almost always going to be the case for two facilities that are applied for separately. They they don't share points of interconnection. That's an engineering issue. Can't share the point of interconnection, really. So that's one example that in the status quo's definition, you can't do this. You can't have that second PPA project on the same parcel. But under this new definition, exception a is allowable because you're not exceeding the 500 kw cap. Exception b sorry. Example b of exception c, 2.2 megawatt standard offer program facility. You can also cite a five megawatt PPA on the site. By the way, you could cite ten five megawatt PPAs on the site, presuming the site supports that, the other statutory criteria are satisfied, and you have different points of interconnection. But I'm just showing this as a simplified example of that scenario. Status quo does not allow this. The definition currently would not allow that PPA to be cited on that parcel. And then example C is showing multiple PPAs on the site. Again, two is just one example, but you can have more than two as well. So what is new about all of these examples?

[Rep. Kathleen James (Chair)]: Oh, sorry. Did you have

[Rep. R. Scott Campbell (Vice Chair)]: a question? Don't if I I don't wanna interrupt you.

[Rep. Kathleen James (Chair)]: I don't either. I wanna hear what's new.

[Rep. R. Scott Campbell (Vice Chair)]: Yeah. Go ahead, and then I'll I'll try to remember my question.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: Sure. So what is new here is when you're looking at these parcels, seeing multiple projects on the same parcel under the current definition, if there's a statutory capacity cap that's being violated by putting those multiple projects, it's screened out. It cannot exist. So if you've gotten that meter in your standard offer, there's no question of that. If you have multiple res projects, it's a gray area because we are using the same definition in that category, and so we have to apply it essentially the same way. There's not really an exception within that definition currently for res projects. So we end up screening out some multiple res projects that

[Unidentified Committee Member (technical questions)]: are on the same parcel. Okay.

[Rep. R. Scott Campbell (Vice Chair)]: Okay. Let's see. If you have a a net metering project or a project has not the capacity of the of of existing the existing facility does not is less than the the statutory cap. Can you add to those projects Yeah. Now? You can't under current rules.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: Yes. And I'll say yes. And it's not but and no in these circumstances. It's always yes up to the capacity cap. However, the definition is used not to screen projects out, meaning you can't build that project, but instead to determine what application is necessary based on the capacity size and what rate will that project receive. So whether whether the additional capacity needs to have your current rate as opposed to the rate of the original of the original facility? That, but also different level sized net metering projects get different matters. So the credits are tiered. And so once you exceed a certain capacity amount, you're in a different rate credit calculation. And so we have to use some method of determining what is the project that is going to be given those credits. And that's decided based on if they're the same project, then we look at the aggregate capacity, and that's what application process you need to use, and that's what rate you'll receive.

[Rep. R. Scott Campbell (Vice Chair)]: And what and standard offer and Standard offer is a little more with the go ahead. Is that different? Or, I mean, is it simpler, is it more complicated?

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: It's less complicated because the contract is decided before the project is applied for, and you can't violate the terms of the contract. So if your contract is for a one point zero megawatt project, that's the project you can build. You can't alter or amend that contract's capacity after the fact. They bid into the contract process. They receive their contract at the capacity they bid at, and then they can apply for the petition to get a CPG with us, and that's a separate siting process. They've already got the contract in Plenty of.

[Rep. R. Scott Campbell (Vice Chair)]: So that would be a separate contract, but it would still be limited by the 2.2 megawatts for the site.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: Yes. So technically, could put two smaller standard offer projects on the same site without maxing out the cap in certain circumstances. Yeah.

[Rep. R. Scott Campbell (Vice Chair)]: Okay. And this and this five megawatts, is that is that a is that limit for a project on PPA? It is if it's attempting to be renewable energy standard qualified.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: The R. E. S. Statute has a five megawatt capacity cap for R. E. S. Qualification. Is

[Unidentified Committee Member (technical questions)]: there any standard offer capacity left that has many filters already not contracted to it.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: There's a small part of the standard offer contracts that were issued that has not been built or

[Unidentified Committee Member (technical questions)]: applied Not been built, nor applied for. Yeah.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: On the next slide, I'm showing the one case that cannot exist under the new exception, which is you cannot put net metering and standard offer on the safe site, even though technically each of those plans would meet the capacity cap for that facility. Because the policy rationales here are these are programs that were intended to encourage dispersed generations and citing of dispersed generation, co locating them risks aggregating that capacity and violating both programs. And so the thinking here is when there's an economic incentive for the capacity, you shouldn't be allowed to co locate more than the capacity limits for those programs on a single site. So that is we're prohibiting still the co location of

[Unidentified Committee Member]: a net metering facility and a standard offer facility. And I'm sorry, that's same parcel, also adjacent parcels, right? Correct. Thank you.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: So with that in mind, what we're trying to allow and what we're still preventing, we have proposed a new definition exception C language. Oh, sorry. This is not the right this is not the right language. Language. It's not no.

[Unidentified Committee Member]: I have a PDF I can pull up. Okay.

[Rep. R. Scott Campbell (Vice Chair)]: And where it's different.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: Yes. So there should just be two Alright.

[Rep. R. Scott Campbell (Vice Chair)]: Yeah. What we have.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: So if you have that in front of you, I can walk you through that. So exception C now says exception for colocation of facilities other than net metering program or standard offer program facilities. Applies if the facilities have separate points of interconnection so long as one, a net metering facility and a standard offer program facility are not cited on the same parcel or contiguous parcels, and two, the statutory capacity cap for the net metering program or the standard offer program is not exceeded on the same parcel or contiguous parcels. So what you have there is essentially when you're adding capacity, a system capacity to a site where you have net metering or standard offer, then you need to have separate points of interconnection and you can't violate one or two. So you can't have net metering and standard offer on the same site, which is what number one is. And you can't exceed the capacity cap for either program. That's what number two is. And that definition effectuates the allows us to apply it so that all the examples we just shared are positive.

[Unidentified Committee Member]: So, I'm not

[Rep. R. Scott Campbell (Vice Chair)]: super language.

[Rep. Kathleen James (Chair)]: And that's acceptable to the PC, obviously, you worked on it. And I think that we will need to ensure that it's acceptable to some of the other stakeholders that participated in the workshop. Yeah.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: So for number two, if you had an existing 500 net metering, you would not be able to add a PPA for 500? You can. You can Anything outside of those two You couldn't add You couldn't add net metering. More standard offer. Which number one already helps. So why do you need them? Number two deals with the situation where the capacity cap for the systems can be exceeded. So if you have a net metering facility on a site and you want to add another one to the question before, that's still allowed so long as you don't have the capacity cap being exceeded. Are so many permutations here that that's why this language gets very complicated because we have to guard against various different scenarios that could exist, and we have seen. And so we're attempting here to thread all those needles, recognizing it is very repetitive sounding, and we're trying to limit the complexity of as much as we can.

[Unidentified Committee Member]: Did you see the language that we wrote to simplify that? I didn't. No. Send it to Ellen. Let me just find it and see whether it's better or worse than this language.

[Rep. Kathleen James (Chair)]: Well, I think alleged counsel has been working with our attorneys have been working on the language. So

[Unidentified Committee Member]: You like this better than what I sent you?

[Rep. Kathleen James (Chair)]: Yeah. I thought yeah. I mean

[Unidentified Committee Member]: That's an EDS. Great. Like, this is better. Great. Yes. Excellent. Thank you. Try to find it. Were

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: we awaiting decommissioning language? Thought

[Rep. Kathleen James (Chair)]: we decided that we weren't gonna go there. Okay. For power?

[Unidentified Committee Member (technical questions)]: So any of the costs of losses for these parcels being on the same circuit in close proximity to each other is dependent on the utility to recover in their PPP, in their purchase power agreement.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: I'll make sure I understand the question. When a new development is proposed, any type, not metering standard offer, PPA, the cost of inter of interconnection falls on that developer to upgrade the system. Correct.

[Unidentified Committee Member (technical questions)]: But if you have outside of a city, a user that the same electricity, the same amps are gonna flow from the same region area in facility to the lobe that's located back to the east. As the same amperage flows through the wires, the amount of losses increase. And that's why we like distributed generation, meaning that it's actually at one point in time the utility said it was cheaper to put distributed generation out in the boonies than it was to build the power plant out to the boonies. So, and that's the concept of distributed generation. And when you put this to two sites in post proximity, you're feeding that concept of distributed generation. And that's for the ability to respond.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: K. I just love it. Is It's a lot more

[Matt Cota]: clear to me.

[Rep. Kathleen James (Chair)]: Yep. The folks have folks have questions about the language. So not on the we we don't have him on the agenda, but I see renewable energy for a lot in the morning. Peter, is this have you had a chance to review this language, or are you looking at it now for the first time?

[Rep. R. Scott Campbell (Vice Chair)]: Peter Sterling, I'm looking at it for

[Peter Sterling (Renewable Energy Vermont)]: the first time. It looks fine. Appreciate that. Yep. Okay.

[Rep. Kathleen James (Chair)]: Maybe if you wanna send a little letter to that effect. 100%. Super. I think if we're if we've got language that ledge counsel, the PUC, and the primary stakeholders find acceptable, I think we could probably do an updated draft of the bill. Unless you already have. Yes. Okay. Super. Alrighty. Great. Well, I will take a look at our calendar and see when we can I will I'll keep committee members posted, see when we can bring this to a vote?

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: Great.

[Rep. Kathleen James (Chair)]: I can't remember if you had other any other feedback on the bill from the first from your first presentation. I don't think so because our first draft was taken directly from the workshop and then okay. So I don't think we're missing anything. Jill has.

[Stephanie (Steph) Hoffman (General Counsel, Vermont Public Utility Commission)]: Thank you very much for this opportunity. Yep. Thank you for the opportunity as well.

[Unidentified Committee Member]: Thanks, Steph. Thanks, Leslie.

[Unidentified Committee Member (technical questions)]: So all these blue ones are are res. The five megawatts of renewable energy Well, that just simplifies that. Yes. And not mega, 20 megawatt. Yeah. These are just five megawatt res. Okay. Thank you.

[Rep. Kathleen James (Chair)]: Right? Thanks very much. Alright. Well, we we can actually go off live. We're back at 02:30 with some more testimony on 07:53.