Vermont Legislature SmartTranscripts:

[Kathleen James (Chair)]: We're live. Alright, welcome everybody to House Energy and Digital Infrastructure. It is Wednesday, the twenty fifth. And we are talking to TJ Poor of the Department of Public Service again. And we have a couple topics on our mind. So we'll just go around and quickly introduce ourselves. I'm representative Kathleen James from Manchester.

[R. Scott Campbell (Vice Chair)]: Scott Campbell from St. Johnsbury.

[Michael "Mike" Southworth (Member)]: Richard Bailey, Lamoille, Miss Mara Windham, Windsor Bennington. Michael Southworth, Caledonia, two. Christopher Howland, Rutland Fuller.

[Bram Kleppner (Member)]: Bram Kleppner, Chittenden, 13, Burlington.

[Kathleen James (Chair)]: Great. In the room.

[TJ Poor (Department of Public Service)]: Dana Lee Perry, the Crassing Group.

[Kathleen James (Chair)]: Audrey Leda, interning with representative Burke. Great.

[TJ Poor (Department of Public Service)]: John Cotto with Meadow Hill.

[Kathleen James (Chair)]: Super. Repertory. Repertory, Washington two. Great. For the record

[TJ Poor (Department of Public Service)]: TJ Poor, public service department.

[Kathleen James (Chair)]: Super. Okay. Couple things. One is you and I spoke earlier, and I apologize. Can you explain to my committee members that you had, in fact, sent the suggested language on our committee bill about act one seventy four about the energy plans. And so that should not have in fact been a surprise to me or to the committee. So my apologies. So we took some testimony from Catherine earlier today and she walked us through your suggested language. And we are gonna have a little bit of a committee discussion, not necessarily we don't need to do it right now, but personally, I'm feeling more comfortable with the idea of including this in our committee bill. I feel like I get it now in a way that I didn't yesterday. And so I'm gonna need to be hearing from folks if they agree because it's a definite crossroads for our committee bill in or out. And this bill, the other test, the other sections of the bill, I believe we've got kind of locked down. We've, we understand them. We've taken testimony. We've received some written testimony. We know what's up. So, what we could do is look at a revised version of the bill tomorrow morning at 09:00. We've got Wait. Nope. Tomorrow morning at 10:00, Ledge Council is gonna be here, and we could look at a bill that incorporates that language if committee members are comfortable with me adding that to the draft. But we'll need to let them know. So I guess unless I hear a strong objection from folks before floor, I'll probably ask Evelyn to add that in. And then I would need to hear from folks about who else we need to hear from. So we heard from the department yesterday. We've heard from one RPC. We could certainly get written testimony from the Chittenden County RPC, Charlie Baker. I know he was supposed to join us and wasn't able to. And then, director Port, have you did you say you've vetted this with the LERB already?

[TJ Poor (Department of Public Service)]: We have. So they've seen the language, and my understanding is that they were okay with it, but you should hear that directly from them.

[Kathleen James (Chair)]: Okay. So I'll request that from. And with that set, I would think this bill would be pretty much locked down and we could bring it to a vote, you know, before town meeting break or right week. So and great. So any more thoughts on that plan?

[TJ Poor (Department of Public Service)]: May thank you. That's really helpful for us to to streamlines and makes more meaningful public engagement on this arrangement. Great.

[Kathleen James (Chair)]: Yeah. I'm sorry about the mix up. That was me a culpa. Emphasis on me. Alrighty. So, moving along, the comprehensive energy plan. TJ, you and I spoke so that you could understand why we've asked you to come back and talk about testimony that you took last year. But just to reiterate for everybody, we have talked a lot about some sort of more thorny issues or issues that might take benefit from the focus of some kind of a summer or fall task force study committee, more time, deeper testimony to come back to the legislature with maybe some recommendations in December. And we had talked informally about trying to stand up a task force, but that is complicated and takes budget, which is in tight supply this year. And so we discovered an existing committee, the Joint Carbon Emissions Reduction Committee, which is an existing legislative committee that basically simply hasn't been meeting, isn't fully appointed with its members. But we've walked through the statutory language that established that committee and we heard from Ledge Council that budget already exists. So, I think where we're heading as a committee is before crossover to maybe amend that statute if we want to. And that would be probably simply to take a look at who's on it, not people wise, but what committees are there and how many times they meet. So, that would be sort of a permanent change to the underlying statute. And then, as a committee, we could either through set the law or through a letter, basically direct the committee to accomplish some specific task that we feel would be helpful and doable between now and December. So, that's where you come in because as committee and also rep Southworth had specifically pointed out that if we do this and give this committee something to do, that we wanna make sure that it doesn't conflict with, undermine, take away from, or in in any other way sort of mess up your ongoing work with the comprehensive energy plan. So that is where we're at, and that's why we thought it would be helpful to hear from you today. Right.

[TJ Poor (Department of Public Service)]: Okay. Thank you for having me back. I am going to start just by giving a review, a quick review of the comprehensive energy plan and the, really, the key recommendations that were in it last time. So it's for grounding, and then we can talk more generally about the potential for a committee. You know, we're in the midst of planning the next energy plan. It's due January 2028. And so I'll give you a sense of the timeline here that we went through last time. We're actually going to give ourselves more time this time, which is which is good, or we're gonna try to. Anyway, I'll start with the energy plan. So what is it? It's really a twenty year analysis and projections of the use, supply, cost, environmental effects of all energy sources used in Vermont. It's driven by, title 30, section two zero two. You know, we've never actually fully updated the statute. It's it's called the electric plan, and then it there's an electric plan section and an energy plan section. And the energy plan is in effect the electric plan also, and you'll see that it goes into a couple of chapters really on electricity as a core component of the energy plan, but it is it does include, transportation, thermal energy. It reflects the administration at the time's priorities who's in charge. And the last one, it was governor Scott and reflecting affordability, protecting the most vulnerable, and economic development. The plan has to be consistent with our greenhouse gas emissions reduction requirements of the and the climate action plan, and I'll go into more detail on that. And then, other relevant goals of, title 24, which it's been a while since I've given this presentation. I think those are

[R. Scott Campbell (Vice Chair)]: it's been agreed. Is that the green s is that Global Warming Solutions Act? Level 24 is municipal, isn't it? It's what? Municipalities. It's Right.

[TJ Poor (Department of Public Service)]: So thank you. Act one it's related to act one seventy four inciting. Thank you. Yeah. Yeah. Sorry. I I don't know why I blanked on that. Importantly, it implements state energy policies in two zero two a, title 30, section two zero two a, and I pull this slide up a lot in a lot of presentations. I'm sure you've seen it before. But it really has some of these conflicting priorities. I talked about this a little bit yesterday, but affordability, efficiency, achieving our greenhouse gas emissions reduction requirements, economic vitality, adequate, reliable, secure, and sustainable service. And so those things sometimes are at odds and an energy plan is looking to balance those objectives. Also rooted in the work that we do is really rooted in lease cost planning. This two eighteen applies to electric utilities. It's the integrated resource planning statute, but we take it to heart also, where we need to meet the public's need for energy service at the lowest present value life cycle cost, environmental and economic costs. It talks about how we should assess economic costs, including, meeting our greenhouse gas inventory requirements, greenhouse gas reduction goals, the value of financial risks, and our make they're consistent with renewable energy goals. Go back to kind of that kind of analysis for a second in a second, but I really just wanted to point out, especially when these were happening at the same time, was really important to know where the overlap is and where the separation is between the comprehensive energy plan and the climate action plan. There is a whole lot of overlap, Right? Greenhouse gas emissions, climate action plan talks a lot about energy because it's 80% of our greenhouse gas additions are from our energy use. So greenhouse gas reduction requirements are a huge overlap. Our energy sector analysis, policy technology pathways, scenarios are modeling. We've aligned and, use the same modeling. Public engagement and modeling efforts, think we both do that or public engagement, and, we're doing better now and working together to kind of overlap and use use each other in terms of the climate action office and public service department to better engage and more meaningfully engage the the public. And equitable transitions is a big overlap. The time of the last energy plan, I'll get into it, but equity was a theme of our energy plan. And this is before Act twenty fifty four of 2022, which was our environmental justice legislation. So we made that a real key theme of the energy plan. State hazard mitigation plan adaptation, some non energy greenhouse gases, and a broad resilience implementation strategy, more than the electric sector really are part of the climate action plan. And energy plan really looks more closely at cost effectiveness, renewable energy deployment, electric plan, really including reliability and resilience there, our distribution system planning, and then, again, the standards for local planning so that we have kind of local planning happening and building up to the statewide planning. I wanted to talk a little bit about decision making framework here because it it did come up yesterday in terms of what we look at in cost effectiveness, for various perspectives. So I talked about the look at economics, but, with consideration of environmental. And there was a comment yesterday that I've been thinking about since that, you know, we don't often actually do that. And I I was thinking about it, and in my career, I was I was actually the one that made sure Efficiency Vermont put in a $100 a ton of carbon to be used in its societal screening, like, over a decade ago so that we could then recommend approval as a department at the time to use that screening. I chaired the science and data committee during the development of the climate action where we brought in and they urged that we use the social cost of carbon as, developed in a really in-depth process in New York that we were able to adopt to use a updated social cost of carbon, which was actually a lot higher value than a $100 a ton. And, we've continually encouraged utilities to not only look at the rate payer perspective, but also the societal perspective that why before we had a 100% renewable standard, utilities are looking in their integrated resource plans and saying, hey. Especially when those wrecks were, you know, 25¢ a megawatt hour, it's really not that much more expensive to, get a really far away. That calculus has changed a little bit, but, but to make huge progress on climate, it was not that expensive and we encourage utilities to look at that. And the point is is that we continually wanna look from a societal perspective and a rate payer perspective and other kind of in between where you draw the borders in order to make policy decisions. And then there's a range of outcomes. And then policymakers get you as the administration, right, get to put emphasis, where they feel emphasis, should be placed in that range of reasonable outcomes. And from an analytical perspective and from a comprehensive energy plan perspective, we wanna make sure that all of those perspectives are out there and we can see that, and then we can and then we can make rational decisions and say, hey. We're emphasizing, as representative Kleppner pointed out yesterday, it's, like, short term versus long term sometimes. We're we're emphasizing short term or vice versa. We're gonna emphasize, you know, the whole, like, you know, forty years of the life cycle of a project because we can we can it it's cost effective. And those are all trade offs that we need to do. And so I I think we do really do that, and we we do a really pretty good job of it. Now everybody wants to argue over the numbers, and that's that's okay. And but the framework is is there, and we're happy to argue over the numbers. But the important thing, I think, is that the framework is out there, that we're looking at all perspectives so that we can understand if we're in an affordability crisis, if we wanna, emphasize short term or if we have, you know, a huge budget surplus, maybe that's a time where we can emphasize, a longer term approach. And there's no right or wrong answer in that, I think. And it it it's a a matter of perspective and timing. And I think the the answers from any one perspective can change over time also. And so the important thing is to have those perspectives clearly articulated and out there, and then we can make rational good decisions for homeowners. I I I guess I I would have it. I appreciate that. It seems to me that looking at cost effectiveness from from from different perspectives,

[R. Scott Campbell (Vice Chair)]: from the societal perspective versus the customer consumer perspective they inform each other so the value of look looking at it from a societal perspective that is impeding social costs of carbon and other benefits, health benefits perhaps helps to justify societal investment in those goals. Societal investment translates in terms of the consumer perspective into incentives or investment in consumer options that reduce the cost of consumers and therefore improves the cost effectiveness calculation for consumers. Right? So that's I think I had having worked on cognitive effectiveness calculations for all my life and weatherization at three d thermal, I thought a lot about this and what should be included and what should be what is not included. And I just sort of feel like that's a useful thing for people to keep in mind when they're talking about quantum vectors. There are different ways of looking at it, you have said. I'm just restating it in a way. There are different ways of looking at it depending on, you know, whose pocketbook is involved. And and and so that's the the social perspective helps to justify the incentives that that that that help the consumer perspective.

[TJ Poor (Department of Public Service)]: Yeah. I I I agree with you. I think especially when you talk about whose pocketbooks evolve both in the you know, and and it's not just necessarily dollars, but it you know, your your health, like you mentioned, etcetera, and that gets to equity environmental justice issues of who pays, who benefits, who bears the burden of the policy, and so it all it does. They inform one another. Yeah. Yeah. A couple other things just to point out here. Technological feasibility is one with risk and uncertainty, But then my one thing that we articulated in the energy plan is milestones to trigger policy shifts. And I think this is you know, we had a net metering discussion earlier today, and I don't wanna see tread that. But just in terms of a milestone as we're making policy to say, okay, where's the check-in? How do we know that, when it's time to shift shift gears or we claim success or we need to, double down. Right? And so making sure we have those check ins and milestones along the way is, really important. Okay. Really quickly, just a brief reminder on the structure of the energy plan. Two themes, equity, I talked about a little bit. Another one, grid evolution, or at a time a huge change for the grid. We started, if you start in the bottom, with the principles and goals from statute, from the administration, administration's priorities, and build that into a number of pathways. And we'll see those, for example, reduce use in energy building energy use in buildings, and then we develop strategies and then make recommendations. The strategy in that example is weatherization at scale, and then recommendations could be to direct fund federal funding at weatherization. That's a that's a real example that happens. In terms of equity, I I don't wanna spend too long at this, but really, it's it's just ensuring that the benefits and the burdens of our energy policy are equitably distributed. Think we've been doing a much better job since the energy plan, least at at the department, on procedural equity. It really included making policy with Vermonters as opposed to just for them. We and keeping in mind kind of the impacts of policy. Every every time we, make a policy recommendation for the legislature, the internal process for the Department of Public Service, we have an equity assessment form that we fill out. It's many pages, and it is, to kind of be a check on, are we considering the impacts to different groups and different impacted individuals? And, you know, sometimes the answer is no, and that, right, causes us to kind of go back and think, okay, well, is this real? Have we thought through this policy? Terms of grid evolution, we put forth a vision in the energy plan for a secure and affordable grid that integrates and optimizes higher penetration of distributed energy resource. I I think I'll talk about it a little bit, but we've since you all allocated money after, we requested and the utilities requested advanced metering infrastructure money for municipal utilities, you heard mister Nolan talk about that. That's actually happening over the next couple of years. Distributed energy manage distributed energy resource management software, DERMS, is kind of tools to actually put that to best use. That is that's happening as well. And so and also, we at the department are pushing the utilities to better plan their distribution utility system. We do this a lot through their integrated resource plans. But, you know, knowing exactly where or predicting where their, heat pumps, electric vehicles are going to land on their system so that they can better plan their, their infrastructure investments.

[R. Scott Campbell (Vice Chair)]: Okay.

[TJ Poor (Department of Public Service)]: Those are the themes. I'm gonna get to the recommendations really quickly, just four more slides here. On the electric sector recommendations, we really just had one core recommendation and it was a pathway that we wanted to do a comprehensive review of the renewable energy standard design and complementary programs. And we did that. We did our eighteen month engagement process, polling focus groups, technical analysis supported by stakeholder advisory group to get if, you know, at least comfort with where the numbers were coming from, if not agreement on numbers. We engaged with regional planning commissions, and that resulted in the comprehensive proposal that the department put forward for renewable energy standard, changes. A different proposal ultimately, was passed, and that that's where we are. We don't need to get into that. We I talked about, advanced metering infrastructure. That's what AMI on the slide stands for, and the derms. There should be another bullet here. Solar for all, we proposed in in a competitive solicitation money for to receive money for solar for all. We got $63,000,000, as you know. Unfortunately, that's in the courts right now. We, in the past year, have led a proceeding to, electric utility system resilience, before the public utility commit commission, and that's really identifying ways for, utilities to address vulnerabilities, address climate risks, understand climate risks before them, plan for them, do a benefit cost analysis on on on investments to may be made, whether undergrounding or the spacer cable that you see, if that is in the interest of Vermonters and kinda try to understand the value of reduced outages. And again, this is an area where there's there's ratepayer. If you put the cost effectiveness analysis lens on ratepayers, there's a lot of ratepayer investment, and there's some ratepayer benefits in terms of reduced vegetation management, reduced storm restoration, and then there's a societal benefit of the customers that receive less outages. There's a value of lost load and that is a societal benefit that some, you know, all customers pay for, some customers get in and working through those trade offs, understanding them, clearly understanding what they are and working through them. We're kinda I I would say we we got assistance from the Lawrence Berkeley National Labs in this proceeding, and I think I'm safe to say that deputy director Anne Margolis on my team was, in many ways, equal to or teaching labs on what we're doing because Vermont is leading edge in this area. And so a huge credit to miss. This proceeding is underway. We're gonna have recommendations coming out in the next few weeks that go to kind of move forward in the utility framework on supporting on how to think about supporting resilience investments in the grid. And then I'll just add what we've been doing since in terms of regional advocacy, cost reduction. You've heard about this in terms of asset condition projects from other utilities, but also optionality for utilities. We're keeping Vermont in the game with, regional procurements and ensuring our utilities have the option to participate in these procurements. And considering we're we're considering all options for for Vermont utilities, including on and offshore wind, nuclear energy. Other states are very much keeping that. And I I put gas and oil in here because this is a very real thing that's happened over the last few years where the states have actually, ISO New England has kept the Mystic Generating Station on, for example, liquefied natural gas in order for resource adequacy, and to ensure that the bulk transmission system, the bulk grid keeps keeps the lights on. So I'm I'm not saying this for, like, locating in Vermont or anything like that, but we we need to understand the cost and benefits of each resource in order to really make the case for the resources we want. And, you know, we're we're very much in the game and have supported transmission projects, or consideration of con transmission projects to get to onshore wind in Northern Maine. We've supported work, to build the system, to to interconnect offshore wind in Southern New England that will all help. And, you know, we didn't have a choice, but we ended up Vermonters ended up paying for keeping that Mystic Generating Station on. And so that's that's the reason that that line is on here, but it because it's a reality of of the system. And I'll stop there.

[Kathleen James (Chair)]: Yeah. R. Sibilia? Can you

[Laura Sibilia (Ranking Member)]: can help us understand kind of in as real time as possible what is happening, in terms of generators. I'm sure you saw my face wince, in the ISO region because I also understand we have to utilize. But I'm very concerned about large loads and other and, you know, federal actions that are making it difficult that are, you know, making it very easy for gas and oil or trying to and hard for renewables. So who can help us understand in real time in the ISO region or as close to real time as possible. What's happening in terms of the mix of power and and I'm certain that that exists. Is it ISO themselves? Like, who who can help us with that? Help me if that's not of interest to the committee.

[Kathleen James (Chair)]: I

[TJ Poor (Department of Public Service)]: think it it it depends on your specific question. So ISO will talk in general terms. They won't talk about specific generators or because they they don't wanna be at risk of kinda giving away market information or anything like that. But I think there's there's I I think our office, I think I I can help, depending on your specific question in terms of the mix of generators and what's going on with different efforts to procure new clean energy and and discussions happening about other resources as well. I I don't know if that's a today question or if there's specifics that I can, like It's not

[Kathleen James (Chair)]: a today question. Okay.

[Laura Sibilia (Ranking Member)]: No. It it's but it's, you know I mean, certainly, I would not wanna see us expanding gas and oil generation. And if that was necessary, that would be that would feel like urgent information to understand Yeah. What necessary meant and if it was happening.

[TJ Poor (Department of Public Service)]: Right. I I mean, I will tell you that there's discussions on, you know, there are natural gas generators now that, have dual fuel capability and they're not using it. What that means is that they can also operate on oil. And, right? And there's discussions on the and they need investments in order to actually use it. They haven't used it for, you know, decades. And, or you could just add even ones that don't have that capability, you could add it. And there are discussions on it that is an option for resource adequacy concerns. In particular, given the delays on offshore wind caused by the federal government, and so and the expectations that we had. And so that is a a discussion that is happening regionally on do we, it does the region or do does ISO New England support, investments in those facilities to ensure that they can run through a long cold snap in the winter with without interruption. Mhmm. And those discussions do do happen. And, you know, and and they But current. Those Yeah.

[Laura Sibilia (Ranking Member)]: That that's not what I'm talking.

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

[Laura Sibilia (Ranking Member)]: I'm talking about new Sorry. Expand.

[TJ Poor (Department of Public Service)]: No. I well, it's it's a kind of expanding that capability of, like, making investments to either natural gas plants that don't have it to make investments to give them a dual fuel capability, you know, or, if they have it and it's kinda mothballed or hasn't been used, to make investments to kinda get it back up to speed.

[Laura Sibilia (Ranking Member)]: So is the effect of that expanding fossil fuel related energy generation in the iso knowing the region? Sounds like it.

[TJ Poor (Department of Public Service)]: It it it's I would say it's going it's expanding the

[Laura Sibilia (Ranking Member)]: I mean, if you're expanding gas to reduce oil

[TJ Poor (Department of Public Service)]: Well, I I I think it's it's expanding actually oil to supplement gas is actually the what what I'm talking about. So they're gas generators now, And then what happens in New England in the winter in these long cold snaps is that the Southern New England also uses natural gas for heating. And those gas companies for those thermal companies, portions of the companies, sometimes they're the same company, but the thermal side of the company has firm contracts for that gas. So the the gas all goes to, heat, and then the electric generators don't have firm contracts, and that's when prices spike, and they have to buy it on the spots. And so, and there's times, and this hasn't happened for since, I think, 2014, but there's times when the their supplies are low and we're at risk, of not having enough to meet those cold winter snaps. Boy,

[Michael "Mike" Southworth (Member)]: in command.

[Kathleen James (Chair)]: Yep. And I wanna make sure we allow TJ enough time to get through his 24 slides. So There's

[TJ Poor (Department of Public Service)]: a lot of extra one slide, so

[Kathleen James (Chair)]: I only have three slides. Yeah. We can always come back to stuff after crossover if we have areas we wanna understand more. Do we have quick questions before

[R. Scott Campbell (Vice Chair)]: we move on? Well, the first of the question to me is what's driving the the the expansion or the diversification into oil. Is it is it and what we don't want it to be is is say data centers or or something like that. We don't we don't want to be diversifying into into into more fossil fuel use if that can be if if what we should be focusing on is is is more renewables

[TJ Poor (Department of Public Service)]: Right. Generation. So first of all, I want to be clear that those investments are not being made today. They're kinda it's a it's a kind of a continual discussion that is happening on how do we get resource adequacy. And we have, like, a near term, early twenty thirties according to ISO forecast concern, and then maybe a longer term one where that's where the expectation is that offshore wind or potentially nuclear could support those that don't have emissions at the stack. You know, it the question is, is there a period where for several years where there's a where there's a need? And That's what's driving it.

[R. Scott Campbell (Vice Chair)]: The anti that's what's driving it. Right. Is is the is the gap between now and, say, offshore wind, which is a big a big generator.

[TJ Poor (Department of Public Service)]: Right. Yep. And an unknown of the timing. And an unknown We thought we knew.

[R. Scott Campbell (Vice Chair)]: Yes.

[TJ Poor (Department of Public Service)]: Right. And and I will say it's not I mean, these discussions have been happening for some time, and it's not necessarily driven by data centers. They've been happening before the data center discussion. So Yeah. Okay. And so I I don't know. I wanted to bring it up so you're aware. I didn't mean to dwell on it so long here, but I I think it's important for you all to understand the discussions that are happening and that need to happen. Yeah.

[Kathleen James (Chair)]: Rectory, you mentioned heating in Southern New England. They also just got a pretty nice grant for their heat pump expansion in Southern New England. Are is their modeling, like, how successful they are in that transition will have benefits for all of our Right? Because that would take pressure off using natural gas versus heat.

[TJ Poor (Department of Public Service)]: It it depends. I think that's it's still an implementation, so I don't know that there's any results yet.

[Kathleen James (Chair)]: Mhmm.

[TJ Poor (Department of Public Service)]: And it depends because then, a, if they're heat pumps like we've seen the operation of heat pumps in Vermont is that they're actually not being used as much in the winter as we expected. And and even those cold snaps, they're going to their, kinda backup heating source, which is fossil. And so if that happens, maybe we're still on fossil. On the other hand, if it's all electric, then that's adding to the constraint on the electric grid or creating more demand at the peak period than the electric grid. And so there's It's unknown exactly how how, you know, that money will shake out. It should over the course of a year, I think it will, you know, help with emissions. Right? Especially Southern New England uses even more for cooling. So electric for cooling is good and they're more efficient than, you know, window units. And so much more efficient than window units.

[Kathleen James (Chair)]: Alright. Let's move on.

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

[TJ Poor (Department of Public Service)]: Okay. I think these will be a little faster on the thermal sector. We have the goals that I can't see on my screen, to increase renewable supply in the thermal sector to 45% by 2032 and seventy percent by 2042. Two pathways to get there, reduce energy demand, recommendation for weatherization at scale. In implementing that, we've directed a significant amount of federal funding toward weatherization programs and workforce. Bailey

[R. Scott Campbell (Vice Chair)]: has

[TJ Poor (Department of Public Service)]: been in here to talk about that. This year, we're proposing additional funds, not legislatively, but for low income weatherization through our thermal efficiency programs, directing more of the TEPF, thermal efficiency and process fuel dollars to weatherization. Also efficient buildings. This is smaller given the small amount of new buildings that are constructed in Vermont, but also important. We the energy plan called for new building standards. We have put forth new building standards, and they are on a path toward net zero ready by 2030. Now, again, one of these trade offs that, as you all know, there was an executive order allowing for compliance from the last Building Energy Standard Code. And that's kind of one of the trade offs between upfront cost and long term cost and benefit. On the fuel side, the pathway of low carbon technologies, fuel choices, we did in our energy plan, say, consider a clean heat standard. We all and and if it was reasonable, then propose. We'll know what the legislature enacted it, and then and then the PUC process reviewed it, and we know where that landed. The energy plan also called for support for clean fuels and technologies. What what's happened there has spent largely a lot of it on renewable natural gas side. Vermont gas is up 4% from renewable natural gas now, and their alt reg plan supports, supports consideration of that. And as they make those investments, we've again pushed for, we need to understand the impact to ratepayers, and here's the social cost of carbon, your investments have to, at a minimum, be under that, and we need to understand the balance of how much investment to make versus

[Kathleen James (Chair)]: cost. Sorry. I don't know what a few of those initials are. CCHP, GSE

[TJ Poor (Department of Public Service)]: Cold climate heat pumps Oh. And ground source heat

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

[TJ Poor (Department of Public Service)]: And then thermal energy networks. There has been ongoing investigation of the PUC and opportunities. They are really expensive. And even on a societal test, they often come out expensive. But there are pilots and opportunities that we've supported to test and try and bring down those costs.

[Kathleen James (Chair)]: Yeah, Rutland, quick question. Have you heard of any thermal energy networks, colocating with data centers? Colocating with Data centers.

[Laura Sibilia (Ranking Member)]: Because of the heat? I have not.

[TJ Poor (Department of Public Service)]: K. Two slides on the transportation side, and I'll go fast because, this is probably the area I know at least about. But, we had two pathways, vehicle electrification and cleaner vehicles and fuels, vehicle incentives. We've had state incentives for the last several years, although you may know that they're run out for electric vehicles. We had MileageSmart and Replace Your Ride programs to help low incomes. In terms of infrastructure and policy to support vehicle electrification, rate design, and load controls are real option that, can help. Utilities are implementing advanced metering infrastructure for the smaller utilities. We have EV rates, that are have been really successful in managing load in some utility territories. All utilities now have EV rates, at least in a pilot stage. So Okay. We're making progress there for managing managing our load. And then in terms of cleaner vehicles and fuels, we implemented the California advanced clean cars and clean trucks regulations version two, but the federal government has really put a barrier up for clean cars. We also recommended to monitor biofuels and low carbon fuel development. We'll say not a lot, has happened in that area since the

[R. Scott Campbell (Vice Chair)]: last That's that's very nice. And

[TJ Poor (Department of Public Service)]: then transportation and land use, the land use side of things, I I feel like this is really important, and we don't talk about this a lot a lot. Talk about long term benefit, upfront costs or long term benefit. Land use planning is really, really important, but often, it's smaller small progress towards greenhouse gas emissions. It's really hard. And things like land use patterns and invest and settlement patterns are really a slow slow book to change directions here. But we did have, recommendations in the plan on integration of land use planning into transportation decision making frameworks, including support for compact development, smart growth destination programs. Our agency or commerce and community development really leads that work. I know they've, has continued to have support for downtown development, continued implementation of complete streets, which is a requirement of when when you're ripping up a street in a town, you need to consider the options for including, pedestrian, like, sidewalks and bike lanes, and alternative modes of transport. And so ACCD has been really pushing on that for a long time now and has been implementing that portion. And then transportation choices, public and active transportation options, public transit, rail, Viking, walking, etcetera. Kinda very related. Again, there's been money in the transportation budget. It's a small portion of the state's transportation budget, but that that's probably an issue not necessarily for this committee. But So that's one of the overview of the key recommendations. The rest of the slides in the deck that you have and that's posted are support slides for, and you've seen them all before, most of them are from the annual energy report, but I just have them handy in case you have questions. You mentioned, a mystic station that ISO kept on. Is that just one of several of the stations since they had kept on and they retired? Many of the other oil stations of the I mean, domestic's gotta be 50 years old. Yeah. That one, they ultimately let it retire. So there was a couple of years that it kept it, and then they ran more analyses and ultimately determined it was no longer needed for resource adequacy. So so then they let market forces take effect and mystic station then put in direct to. Oh, so mystic is retiring. Either is or is on the path. Sometimes it takes a couple of years to actually retire. Yes. But they're not getting a special contract like they were for two winters that ultimately turned out to be expensive. Where they just got a paper capacity and didn't generate? Generated very little. And they they did generate. I think one of the reasons it's expensive is because the they would they basically would have an LNG taker out in the bay waiting to kinda fill up, and and that was expensive to have that out there. And so then, they did they did generate over the winter, but it it was, expensive power.

[Kathleen James (Chair)]: Yeah. Perhaps Southworth?

[Michael "Mike" Southworth (Member)]: So I think you will know kind of what we're trying to do and utilize the Joint Carbon Emissions Reduction Committee to use this report to come back with recommendations on the best path forward maybe so to speak that you've already outlined. Do you feel there is a better path to follow rather than going through utilizing that committee? Yeah. Thanks for that. I a question. I, you know, when

[TJ Poor (Department of Public Service)]: I think about this, I think about all the different things that are happening. Right? There's a climate council that has, meetings every quarter with subcommittee meetings, throughout the year. And then, there's a resilience implementation strategy effort, and there's the, and there's our comprehensive energy plan effort and and many other, efforts as well throughout of a year. What I didn't get into is the timeline. One of my other slides was the last year's timeline. We're we're developing the timeline for the comprehensive energy plan now and expecting public engagement, including surveying, broad based, you know, representative sample type survey, focus groups, more regional meetings to happen throughout the summer, late spring, early summer. At the same time, we're updating our model that we've used for the cap and the CEP in the past and updating updating the baseline assumptions for that model now. Things like heat pumps cost twice as much as were was assumed in the last long version of the model. Weatherization is more everything's more expensive these days. Right? And, you know, savings, just so we know more about savings in terms of how people are using heat pumps, etcetera. So we're updating kind of the baseline model and expect to have that be part of the engagement process as well through towards the fall. And so there are, you know, in this process, I think there's there's areas where we also, hope to do some separate technical analysis. We haven't kinda honed in exactly what that analysis would be. It's yet, but I I you know, on the table are things like better understanding the impacts of the federal government decisions on offshore wind, what that does to our renewable energy standard. There's things like that we've recommended in the past, like better patching supply and demand of our renewable resources. Another way to put that is should our renewable energy standard be, instead of an annual compliance, be quarterly, so that would then or even hourly at a more extreme, to better match, like when the renewals come online to when we need it and kinda studying the impacts of that for both the ratepayers and society and understands kind of the the impacts there. And those are kind of a couple things. I just put those out in terms of our brainstorming process on what we might specifically study because, one, I think it's interesting, and I'd like to get in the weeds, but just to give you a sense of the types of things that we're we're thinking about for over the course of the year. And so what could a a joint committee do that would be helpful here? I I'm think I expressed to the chair some trepidation about another, another thing that would, you know, take resources away from what is a really intensive effort on that comprehensive energy plan, both engagement and technical side. There could be if the scope was narrow and very specific, know, there could be areas we we could think about where there could really be some value in the committee, commit convening some hearings and taking testimony. But I worry about five or six, you know, full day meetings to, you know, prepare for and devote myself or and some of my staff to, and that it could be a a challenge as well. So I worry about that.

[Michael "Mike" Southworth (Member)]: So part of the energy reading, the plan before the whole plan, and said we're clean energy could work in tandem and not against the rest. Is that something that could be taken, action could be taken on and show and prove that it doesn't contradict the res and it doesn't affect the res in any way?

[TJ Poor (Department of Public Service)]: So not I think that one, I think, is the that leads to our proposal for, the clean energy standard. And I think that one, I think, is really I I would offer that one's really ripe for discussion today, not over the summer, I think. And that's where when we say it it's not really in conflict, we have contracts with nuclear power now, and we can go to the energy standard that just immediately save honors money, you know, or say immediately, but the money would be saved from 2030 to 2035. It it would allow our utilities with the immediate impact of that would be it would allow our utilities to actually think about and have options going forward for whether it's extending those contracts, which discussions are underway now or looking at other options for clean energy. And it is you know, it it's kind of a barrier for those utilities now. I talked to some some utilities say we're it's off the table for us. We're not even looking at it. Some of them say, well, yeah, we price in a risk of we may contract for nuclear from the existing plants that will deliver energy into New England, whether Vermont does it or not, contracts with them or not. Yeah. We we're considered a contract, but then we have to price in a risk that we have to, you know, get rid of the attributes somehow or just eat, you know, or just cover them up with renewable energy credits. And so there's a real cost to that that happens right now that I've been articulated before in this committee. That's still part of the integrated, you know, long term power supply planning process of a utility. Some utilities are just taking stuff off the table that could have lower costs for Vermonters and not impact our emissions profile. So that was a really long winded answer. I'm sorry. That's is there a

[Michael "Mike" Southworth (Member)]: way that right now we could look at making it so that if a utility had purchased nuclear energy that they don't have to purchase credits to go live up? Is there a way that that can affect? Is it only by identifying as a clean energy? Is that the only way that that could happen?

[TJ Poor (Department of Public Service)]: No. I mean, I think you could that that was the proposal in 08/06/2001, but I think you could you could structure it a different way where the you you create some sort of an exemption. It's a 100% renewable, but you don't have to have renewable credits if you have a carbon free source. You don't have to have as many renewable energy credits. And so it kinda gets to the same end result, but it wouldn't you wouldn't have to designate the you wouldn't have to call nuclear clean or, you know, people could worry about Patrick's in that way.

[Michael "Mike" Southworth (Member)]: Yeah. Just I'm worried that the more we I get into looking into this with the joint committee that it's duplicative of what's already been done, and I'm starting to kinda really try to understand the best path. I just I don't wanna do something and duplicate what's already been done, which is what we're known for doing.

[Kathleen James (Chair)]: So just a few thoughts, then I know R. Sibilia had some comments. About the committee versus the work of the department, think it would be important to make sure that we're not off on our own reinventing the wheel. But it's equally and perhaps even more important to just remind folks that the legislature is a separate and equal branch of the government. We're not like an ancillary pod of DPS. And so we have our own process of building consensus, bringing issues to light, trying to develop legislation that has brought buy in, taking testimony that's independent from whatever the department is doing or concluding. And so I I just wanna hit the the reset button on that conversation. I I think it's really important that we not be, you know, paralleling your work, but it's even more important to remember that any of the policies we're talking about would need to be considered, developed, and voted on by the legislature. And so work that's happening over in the administration informs our work, but it's not the work. And so when we receive reports, you know, just to be very clear about it, it's an election year. And so the people around this table could look very different next year. And so when a bill drops that, you know, people don't even start working on bills really as much in advance. So when a bill drops or a report drops in December or January, and there hasn't been that ongoing process to kind of say, hey, this is what we're thinking about for next year within our body, you know, with our bills and the people who have to actually take the votes, you can't get as much done. So I I just wanna make sure it's really important that we understand that we're talking about a a committee made up of legislators that we would be doing legislative work that could try to help us prepare for next January. So there's that. And then I I had some comments on the res and and the CES, but your hand went up. So go ahead. I'll chime in later.

[Laura Sibilia (Ranking Member)]: Yeah. So just a couple of clarifying for a few things that I heard just because I think it's important to make sure we are accurate. So, if I say something inaccurate in this moment, correct that. So I think I heard that the clean energy standard would not materially change the rest. I think that I heard that as a statement and perhaps I misunderstood what was happening there, but it would actually change the requirements of the mix that the utilities are required to purchase. Right? So it would low they're now we have them on a path for 100% renewable, which is not clean. And so a clean energy standard would make it clean and renewable. So it would change the requirements for me. That's the point of the clean energy standard, which I am very open to considering when we get to that place, you know, and think about where to go. Am I correct? Right. I mean, it would definitely change.

[TJ Poor (Department of Public Service)]: I yes. See, that is correct. I think I was thinking about it in terms of the electrons that are purchased right now from from nuclear facilities that those would still be purchased just like they are under the res. And so that when I answered that question,

[Kathleen James (Chair)]: that was my my frame. So but you're correct that the requirements would be would be different. Significantly. Actually, it drops those renewable credits down from 75 to make room for 25% nukes. So it's pretty significant shift.

[TJ Poor (Department of Public Service)]: Well, you could it it's,

[Michael "Mike" Southworth (Member)]: right, shape.

[Laura Sibilia (Ranking Member)]: Yeah. I'm not I don't I

[TJ Poor (Department of Public Service)]: don't need I I that's that's that's accurate. There's nuance in that also, I think, in terms of what might actually happen, but it starts to get the speculation. But your statement is correct.

[Laura Sibilia (Ranking Member)]: And I don't intend for me to debate Right. The whole policy just to make sure that we're speaking accurately about the debate potentially. Right. Right. And the other was I am well, I think there's a it's very dynamic right now. So I would say to the last point I'll I'll wait for that. To the point on nuclear credits and what the utilities hold right now. So given the very dynamic changes that we've seen, I don't know. Did did did you all anticipate, you know, seeing, like, this massive, change with this new administration. I I did not know. And I think probably a lot of our utilities who are extremely conservative and careful and thoughtful and do long term planning, as does the department, as do our transmission utilities and others, we should modernize it working with the department. The other piece that I am really concerned about that you talked about, TJ, I wanna make sure I'm clear on is with regard to the current nuclear contracts. And I think you talked about utilities taking things off the table. That is not clear to me that they are doing that, and I would wanna understand. I I under I believe those contracts are until the thirties, And, I think we have a year or so or two to really think about if we might need to make any changes, before we are materially impacting the utilities. That's been my understanding from my repeated queries to make sure that I understood the pressures that the utilities were feeling. So can you help me understand about taking options off the table?

[TJ Poor (Department of Public Service)]: Right. So the I mean, the contracts that they have are the contracts that they have, so that's that's not what I'm talking about. Those ones are they're not doing anything different with those. It's it's really, for example, Connecticut issued a solicitation for clean energy going forward, which would include nuclear. And our utilities are participating in

[Laura Sibilia (Ranking Member)]: Like to build planetary?

[TJ Poor (Department of Public Service)]: Either from existing nuclear or to build. So it's it's kinda open ended or or for renewables. It's it's it's pretty open on the resource. So existing or new nuclear plus any renewables. So and our utilities, we've facilitated their participation in it so that, you know, we're able to kinda actually be arm's length to so we can have our our review and a regulatory process if they if they do enter into a contract. But from my discussion with utilities, this is this is what I'm talking about is those contracts may go long term, and they have real past twenty thirty Current contracts that Connecticut has put out a solicitation. The solicitation. Yes. Which they could get a piece of, but they have to either, some utilities are saying, well, we don't want to participate because after 2035, we're a 100% renewable, right, for, and other utilities are saying, well, we wanna participate and see what this looks like, but we need to really there's an additional layer of an uncertainty and risk associated with our 100% renewable requirement that maybe we could maybe we could, contract lack long term and then, you know, cover up the attributes like we, we do that now, or we will in 2030. And that's really the what's either a, going off the table or b, just like pricing in additional risk. And then, so that's, you know, my understanding of how they're participating in in those contracts. So I

[Laura Sibilia (Ranking Member)]: That's helpful. Yeah. Not something I was aware of.

[TJ Poor (Department of Public Service)]: Right. And so that's yeah. Those discussions are happening now. You know, there's several months before that solicitation. I presume there'll be another solicitation at some point as well, a similar one regionally that hopefully we can get involved in. But those are real decisions that are are happening today that will impact the modernist long term. Thank you for that clarification.

[Michael "Mike" Southworth (Member)]: Perhaps so we understand why I was asking the questions I did. It wasn't to get anybody's up and cause hate and discontent or anything like that. I am trying to find a path that we can give ratepayers relief now because our renewable energy right now is is in a quagmire. And and we all know that just based on all the testimony we had heard. If there's any little sliver that we could give ratepayers, why not explore it? Not saying the committee isn't a bad idea because I was I'm still all for that. I just don't wanna keep going down the same road everybody else does and go nowhere. I mean, we've seen that time and time again in here. That's all we do. And it's time that we really look at everything as a whole and take a path that actually gives people a little relief from the rates that they're they're paying until such time as we can hit the renewable goals with a good path. And right now, we don't have that. And it's not just because of the state, it's because of the feds. I mean, it we see what that has done to us. It's impacted us greatly.

[Laura Sibilia (Ranking Member)]: I I do wanna just say, I think it's important to be clear that if we were to pass six zero one today, it would not save ratepayers 1 dime this year.

[Michael "Mike" Southworth (Member)]: Did I say anything about six zero one did I represent in Sibilia?

[Laura Sibilia (Ranking Member)]: You did not.

[Michael "Mike" Southworth (Member)]: Thank you.

[Laura Sibilia (Ranking Member)]: But

[Michael "Mike" Southworth (Member)]: No. No. No. Butts. I did not bring that up. I'm I'm trying to find a path where we save ratepayers some money immediately instead of kicking that can down the road constantly until we meet the perfect solution, which takes time to get to.

[Kathleen James (Chair)]: Russ, I was just gonna ask. I think I heard 2030 is when that would come in. Would be

[Laura Sibilia (Ranking Member)]: starting in.

[Kathleen James (Chair)]: Am I right?

[TJ Poor (Department of Public Service)]: Right. That's when our renewable requirement jumps from I think it's either in the 60% range to a 100% in twenty twenty thirty. And that's when it's a 100% renewable and we have these renewable nuclear contracts that we then have to purchase renewable energy credits to to cover.

[Kathleen James (Chair)]: So so oh, yeah. Rick Morrow?

[Christopher Morrow (Member)]: That's the renewable energy credit market changed much. Well, what time frame are you? Just just, you know, the last couple of years and what are we looking at in the future? I mean, it's, like, presumably well, I just

[Michael "Mike" Southworth (Member)]: Yeah. So several, you know, three

[TJ Poor (Department of Public Service)]: we have different tiers of the renewable energy standard. Right? One is tier one is existing renewables, and anything renewable qualifies for that, whether it's existing or new, really. But and that includes kind of our existing hydros. In Vermont, we have our hydro Quebec power to count towards that. Anything that can be imported into New England. Years ago, when the res first passed, you know, set ten years ago now, but and for the first four or five years of that, those renewable energy credits were really not expensive, like 25¢ a megawatt hour. Over the last few years, there's one year that they spiked almost the alternative compliance payment, $10 a megawatt hour. They have settled over the last eighteen months, two years at at around 4 to $5 an megawatt hour. Now other states have put other requirements in that that interim as well that drive up or create more demand for those existing resources. And there's not additional supply really of those resources because the you know, that's all like the old existing hydro. And so it does create a little market pressure. So what all that leading to is from what I can tell and when we contracted with Sustainable Energy Advantage, who's really a consultant that really does a lot of work on renewables. In the past, they say, yeah, dollars 5 now and likely to slowly increase over time for those renewable energy credits. Other markets, kind of the new renewable regionally have been in the 35 to $40 a megawatt hour range for a while. Massachusetts put a cap on their alternative compliance payment, and so kept it at $40 a megawatt hour. You know, two years ago, consultants were saying expecting kind of the cost of those wrecks to continue to increase or and then when when they other states in the region put the cap on just to be at that cap. So $40 a megawatt hour, 4¢ a kilowatt hour for for the renewable energy credits, and those are, the the new right. Just new generation of any size anywhere like that. You know, I think that's a challenging cap, honestly. And and in Vermont, our tier four is around I think it started at 40, and it's increasing with inflation. We're, as I mentioned, kinda involved in the onshore wind projects in Maine, and we'll see in a in a month or two what the bids come back at. But when you add up the cost of the generation and the cost of the transmission to get there, it might be difficult to actually procure that power at a price that is lower than the alternative compliance payment, which then, you know, then we have to turn to other options again. It's one of the reasons we did propose kinda I I mentioned it today already, but moving up that study of what are the implications of the regional marketplace and what's the availability of renewable resources in New England or that can be delivered into New England and doing that sooner rather than later. No. Not changing the res now, but just better understanding what the implications are because we didn't expect, offshore wind to to have so many barriers, as enough barriers as it is. And we can buy RECs only in New England to meet RECs requirements, or is that a national It needs to be able to be delivered into New England. So there's some projects in in New York and in Quebec that they can deliver the power. So

[Kathleen James (Chair)]: yeah?

[Laura Sibilia (Ranking Member)]: Before, director Borg, thank you for all of this information. I apologize if I and it appeared that I got my eye up. I'm certainly I'm very cognizant that there's a lot of attention paid to our meetings and and the meaning of our words and that they can be twisted, and it's important to be clear. And so that was my concern, which may have come across more aggressively than I intended. And I think you're both talking about things that are very important in the matter

[R. Scott Campbell (Vice Chair)]: to what was going on.

[TJ Poor (Department of Public Service)]: Thank Thank you. And if I I could just say too, you know, throughout the course of the year, I think if there's opportunities, you know, after the session for the department to update or provide testimony to a committee to make sure that you all know what is going on and not only with our energy plan process and engagement and analysis, but just things are moving pretty fast regionally and nationally. So right, because I I do agree that things seem to go better when everybody's more informed and have, you know, a common baseline of information. So I don't wanna when I said I had trepidation, it's not for that because I really do appreciate the opportunity to have kind of dialogue and engagement and to the extent our role is to and help inform what's going on to do that as well. So split that out there as well.

[Kathleen James (Chair)]: Great. Well, thanks, everybody. I we're not even we are not the spiciest committee. I'll tell you that right now. So these are issues everybody cares about a lot. So it's all good. Alright. So, TJ, thanks for being here.

[TJ Poor (Department of Public Service)]: Thank you TJ.

[Laura Sibilia (Ranking Member)]: You TJ.

[TJ Poor (Department of Public Service)]: Yep, thank you.

[Kathleen James (Chair)]: Everybody, here on the agenda because we we were on and we're all, now we're back on again at 09:00. So just check out the tomorrow morning. So just check out the agenda. Make sure you're following along. Alright. We can go off live.