Vermont Legislature SmartTranscripts:

[Rep. Dara Torre (Clerk)]: We're live. Oh, that's right. Forgot. Hi, Kim. Okay. Welcome back, everybody, to House Energy and Digital Infrastructure.

[Rep. Kathleen James (Chair)]: We are working on H600 and acts relating to affine sufficiency. I'm Kathleen James from Manchester.

[Rep. Richard Bailey]: Scott Campbell from St. Johnsbury. Richard Bailey, Lamoille two. Michael Southworth, Caledonia two. Christopher Howland, Maryland four.

[Rep. Dara Torre (Clerk)]: Dara Torre, Washington two.

[Rep. Bram Kleppner]: Bram Kleppner, Chittenden 13, Burlington.

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

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

[Rep. Richard Bailey]: Alan Sibilia. Bennington.

[Rep. Dara Torre (Clerk)]: For the record, thanks for joining us.

[Dylan Giambatista (Director of Public Affairs, Vermont Gas Systems)]: For the record, Dylan Giambatis. I'm the director of public affairs for Vermont Gas, EGS. I'm joined here today with my colleague Tim, and Tim will introduce himself in just a moment if that's alright. He's our subject matter expert. And Tim, I should let you know, runs our energy efficiency programs, and so he would be keenly interested in the humidity and heat control here in the State House. It gets very balmy in this ancient It

[Rep. Kathleen James (Chair)]: is very balmy in this ancient building. Yeah.

[Dylan Giambatista (Director of Public Affairs, Vermont Gas Systems)]: So real quick, thank you for inviting us to speak about applying standards legislation. This is something that we know a great deal about. I suppose I should introduce Vermont Gas once more for the committee. I have not visited this year, and we've not been in the committee room. I know that we've submitted some written testimony. So Vermont Gas, we are a fully regulated distribution utility. Of course, you're very familiar with electric distribution utilities. If you don't live in Northwest Vermont, you might be a little less familiar that there is a fully regulated thermal distribution utility. We serve natural gas to residents in Franklin, Chittenden, and Addison Counties. So we are a utility. We've been serving customers now for six decades. We actually began serving the first molecules of gas back in 1966, so it's been sixty years. And we also, over the years, have supported customer needs in their homes as it relates to thermal energy improvements. So we've worked behind the meter in customer homes, servicing, installing all sorts of thermal energy equipment. So that includes furnaces, boilers, water heaters, heat pump water heaters, ductless mini split heat pumps, essentially ducted heat pumps. And then recently, we've actually also been doing quite a bit of work in the space of geothermal, which is promising technology for new construction. And we're excited about some of the possible applications in the area that we service. So as a distribution utility that works with customers every day, we have a lot of familiarity with the appliances that are out there. We wanna make sure that we're installing the most efficient, cost effective appliances that give consumers the best bang for their buck. So this is a topic area that Tim in particular has a lot of experience with. It's also worth pointing out that we're one of three energy efficiency utilities in the state. So by order of appointment in 2016, we became an energy efficiency utility. So our natural gas customers, on their bills, pay a charge that is part of our energy efficiency funds. And with that, we're able to offer incentives, rebates. We have a team of energy auditors who work in customers' homes. So we do all sorts of support for weatherization, air sealing, and of course, the appliances themselves. So that's a little Vermont Gas 101. We have 56,000 customers, so it's not an insignificant amount of Vermonters who receive these services. And we have overlap with electric utilities, so we work with our partner DUs as we try to provide the best incentive package as consumers make these upgrades. Now Tim is a real expert. He's worked at BEIC. He's worked at Vermont Gas for years now, and he runs the energy efficiency programs and is very familiar as well with all of the products that we work with customers to install. And representative Campbell will know Tim is very active with things with building energy codes and so forth, serves on some working groups at the state level. So he can answer all of your technical questions. And I'll just make note that we did submit written testimony. We're not gonna put that up on the screen because it's just a boring memo. But it does indicate our relative comfort with the proposal, in part because last decade, the state took this approach in terms of setting a date by which the federal energy standards would tie to the state. So there's a precedent for doing it. And Tim can explain our relative comfort with the proposal as you go about looking at it. So with that, Tim, I might turn it over to you for the record. Tell them who you are.

[Timothy Perrin (Director of Energy Management, Vermont Gas Systems)]: Great. Thanks, Dylan. Helpful background and context. For the record, my name is Timothy Perrin. I'm the director of energy management at Vermont Gas Systems. I've been in the energy space for around twenty years, formerly at VIC in the last five years managing our energy efficiency programs at Vermont Gas. With the tens of thousands of customer interactions that our entire team has with our customers, whether it's engaging with customer care reps, members of our field service team, or folks delivering energy audits within our energy efficiency program, clarity and consistency is incredibly important. And H600 effectively provides that by codifying the federal standards that were in place as of January 2025 to be able to give a clear signal to consumers as well as contractors in terms of what the standard is for equipment efficiency. With our role as a natural gas distribution utility, an energy efficiency utility, and a contractor, we interact with these equipment standards from a variety of different perspectives and touch points. For energy efficiency programs, these equipment standards effectively establish the baseline of which our program can then support things that achieve or exceed those standards through incentives, 0% financing, and the technical support that we offer. Importantly, this H600 provides consumer protections, ensuring that there isn't backsliding, which Chris Granda had mentioned during his testimony yesterday, as well as giving a clearer signal to consumers and contractors as to what is the legal limit, kind of the lowest efficiency level that you can install with the energy efficiency programs that we offer, as well as through Efficiency Vermont and Burlington Electric, with being able to kind of go above and beyond that with higher efficiency performance. And in the case of working with Representative Campbell, also in space of building energy codes for both residential and commercial buildings. I'll note that there are precedents for doing this, a Vermont specific standard that is often tied to federal standards based on a specific date. Chris Granda had mentioned many of those yesterday, maybe most recently, really being able to kind of elevate the lighting market, which didn't impact Vermont Gas, but did for Efficiency Vermont and Burlington Electric, ensuring that there's a proper transition period for our energy efficiency programs to continue to be able to educate the marketplace, educate consumers, educate contractors, answer lots of questions as these codes and standards take effect, and also be able to provide some level of incentive support, even when those standards are in effect, to ensure that we're continuing to move the market to high efficiency, high performance design, and the best in class equipment that exists out there. We've been monitoring these federal standards for a number of years, and as part of our demand resources plan, which effectively guides what our energy savings targets, budgets and plans are for the 2027 through 2032 performance period, we've already modeled the fact that these standards will be phased in over our first performance period and will be taking effect. So we've already developed some of the plans, engagement strategies, outreach, education, contemplating that these federal standards would effectively be state law, and we'd be continuing to raise the bar as it relates to equipment performance and how to basically design and deliver our energy efficiency programs in response to that. So brief testimony today, just wanted to offer our support for H600. Feel like it provides a variety of different benefits for clarity, consistency, and just making sure that consumers and contractors are educated as to what the standard effectively is.

[Rep. Kathleen James (Chair)]: Thinking about the consistency part of it and just thinking about hypotheticals, which is that I think someone mentioned a testimony yesterday or maybe it was a written testimony that even if the standards do get rolled back at the federal level now, they'd be likely to be then reinstated. Right? So if a if a new administration is selected in 2028, they would they would be reinstated, probably. So I'm just hypothetically thinking about from the point of view of the industry and manufacturers and consumers that you you mentioned consistency, that the consistent path would be to here in Vermont, signal now that we're sticking with the ones we've got. So there's not gonna be a rollback, a reinstatement over the period of some number of three years or something. Is that am thinking about that the way you would think about it?

[Timothy Perrin (Director of Energy Management, Vermont Gas Systems)]: Absolutely. Now we can't speculate what a future federal administration may do, but by being able to codify the standards within state law, it gives a clear signal to everybody who's either installing, maintaining or purchasing equipment as to what those minimum performance standards are.

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

[Dylan Giambatista (Director of Public Affairs, Vermont Gas Systems)]: Yeah. And I suppose I should also just put a fine point on this. Our written testimony says that Tim mentioned h 600. So we were looking at draft 1.1 specifically Yeah. As the date changed. So that piece of legislation, that amendment is the one that we've been about queuing our comments off of today. But And it is interesting, you know, at the national level. I also don't wanna look into my crystal ball because it broke quite a long time ago and isn't very accurate these days. But a lot of legislation in thermal space has passed in congress. It's moved through one chamber, the house. It doesn't appear that there's much of a path for many of these proposals in DC through the senate. And so to the extent that the federal standards, might have moments where, there could be changes entertained, if it's done unilaterally by, the administration in DC, it's unclear to me, how durable that would be without an act of congress. And so that's another factor here as we look to it. We just want predictability for the marketplace in general, for our customers. And as Tim noted, critically, through our regulated demand resource plan process, we actually have modeled based upon the existing standards as they

[Rep. Dara Torre (Clerk)]: are. Okay.

[Dylan Giambatista (Director of Public Affairs, Vermont Gas Systems)]: So if they were to be repealed, revoked, or in the courts in some state of limbo, from a management standpoint for us, operationalizing all this, sticking to our plan at the state level that's gone through the regulatory wringer, that to us strikes us as the best and most sensible path forward.

[Rep. Kathleen James (Chair)]: Super. Questions? Yeah.

[Rep. Laura Sibilia (Ranking Member)]: I think we've heard this, but I can't recall. How many other states have instituted a backstop like this? Does anybody know that?

[Dylan Giambatista (Director of Public Affairs, Vermont Gas Systems)]: I'm I'm not aware. Tim, do you happen to know of

[Timothy Perrin (Director of Energy Management, Vermont Gas Systems)]: doctor Chittenden?

[Rep. Laura Sibilia (Ranking Member)]: I had.

[Timothy Perrin (Director of Energy Management, Vermont Gas Systems)]: I didn't conduct any research, so I I can't answer that question.

[Unidentified committee member]: Yeah. Yeah. Yeah.

[Rep. Laura Sibilia (Ranking Member)]: The presentation before you were here said they were six or seven five or six. Did anybody know whether there are whether there's legislation pending in other states? Deputies mentioned? Okay.

[Unidentified committee member]: Just

[Rep. Laura Sibilia (Ranking Member)]: curious. So it feels like being part of the of a backstop movement is a good is a good thing. Especially

[Rep. Dara Torre (Clerk)]: in New York and California.

[Timothy Perrin (Director of Energy Management, Vermont Gas Systems)]: Yes. Agreed. Yes. We we are very small here.

[Unidentified committee member]: Couple more looking at it. Yeah.

[Rep. Dara Torre (Clerk)]: Oklahoma. Illinois. Yep. Yeah.

[Rep. Richard Bailey]: Maybe this is not a question for you guys, but would you really find that the manufacturers of with back would roll back since when they're already tooled up to a special energy efficiency, even if the rules were revealed that you would see that they would to me, it doesn't make any sense for them to retool and go backwards.

[Timothy Perrin (Director of Energy Management, Vermont Gas Systems)]: That's an important point. We've talked about consistency from the consumer end, from the contracting end, but I failed to mention just the manufacturers of equipment or being able to give them some level of assurance, certainty, planning and lead time is incredibly important for them to retool manufacturing operations to be producing products that meet a certain efficiency standard. Granted, Vermont is a small player in global marketplace, and it's definitely beneficial for us to have a coalition of other large states and jurisdictions that can continue to signal to manufacturers that we are serious about maintaining those efficiency standards that will help inform and probably accelerate some of the changes for some of their manufacturing standards and what products they're producing. But with that being said, some manufacturers may decide that perhaps with the new administration coming in, if something were rolled back, would they snap back again and maybe planning around just delivering those standard meeting efficient pieces of equipment as part of their normal business operations. I think every manufacturer is a little bit different in terms of business strategy and ultimately what they may decide to do. But I do believe that, you know, with with this legislation here in Vermont, it does send an important signal that we care about these types of things, and we want to be able to stay the course based on the standards that were in place as of early twenty twenty five.

[Rep. Dara Torre (Clerk)]: I just wanna express support again for moving the date forward. I mean, I think it provides certainty. You know, I think it's a fair question, representative Bailey. You know, I think about the scale of the attempted rollbacks that we are seeing right now in terms of efficiency and in the energy sector. And so I I I just wonder a little bit about that, but I I do think it's I like the certainty from you. Let's just keep doing And what we're doing? Doing what we're doing.

[Rep. Bram Kleppner]: And, you know, to add a bit to R. Bailey's question, it's a little hard for me to imagine. I Keep forgetting we're not on the floor. I'm allowed to actually talk to you. No. It's a little hard to imagine American manufacturers retooling, but I would be concerned that, low cost markets like China where they can retool pretty quickly and cheaply might say, oh, look. If we retool to the less efficient standards, we can bring it in cheaper to the market. And then American manufacturers are kinda stuck with this choice. Are we going to let our prices get undercut by these imports or are we also going to start presumably cheaper to manufacture to the lower standards? You can see that kind of problem evolving.

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

[Unidentified committee member]: No. To their point, I think a lot of consumers buy on price. And and so that if you have only seven or eight ten states that are participating, even with the larger populated states, you have a lot of other states that are going to buy off the Internet, Korean, Chinese, Indian manufactured appliances. The last time I went and dropped them, that's what I saw that you couldn't buy a small freezer that wasn't manufactured. There were no domestic manufacturers of the small freezer that I could find.

[Rep. Kathleen James (Chair)]: So and so

[Unidentified committee member]: So that they cut $20, $30, $50 off of appliance that that's gonna be sold in those states that don't have these appliances. That brings up the other question. How do we control? How does this legislation control what is sold in Vermont versus something that's ordered from the Home Depot in New Hampshire or

[Rep. Kathleen James (Chair)]: Yeah. It would be so sounds like we'd be in lockstep with New York. So that's one border taken care of. New Hampshire, I mean, yeah, that's interesting. I mean, we I've seen the the border question comes up in so many different bills, you know, so many different bills we look at in so many different contexts. You know, somebody could always go run across the border to Home Depot in Claremont to buy a car or buy a cheaper fridge. And, yeah, we can't we can't there's no legislation we could pass that could control that. We could provide certainty for within Vermont. You know, for beyond, I think for reasons that go beyond, that help consumers, but also it sounds like to me, retailers and manufacturers and our efficiency utilities.

[Rep. Bram Kleppner]: Well, there

[Unidentified committee member]: was that mentioned yesterday by somebody that they were allowed to sell what they had in stock.

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

[Unidentified committee member]: And what the definition of in stock is, is anywhere in the where the supply chain be it redefined the start of in stock? Is it?

[Rep. Kathleen James (Chair)]: I think I'm the one who said in stock. I I assume that the rules address that. Maybe Ben maybe this is something that right? In stock was my that was my phrase. Alright. Any more questions for Vermont Gas? Oh, yeah. Perfect.

[Rep. Richard Bailey]: So the other question I have is how much further up do you think these efficiency can go? Are we at where they can with all the technology we have today, are we at the peak level where Mhmm. Do you think there can be additional efficiencies made on these products?

[Dylan Giambatista (Director of Public Affairs, Vermont Gas Systems)]: Great question for Tim here.

[Timothy Perrin (Director of Energy Management, Vermont Gas Systems)]: Sure. Yeah. I appreciate that question for sure. So with the the standards that would be codified as part of H 600, it effectively raises the bar for residential furnaces, commercial heating systems, as well as water heating to what's known as condensing technology. So generally in the 93, 94, 95% efficient or above. You can only get to 100 with kind of traditional combustion based systems, so there's diminishing marginal returns in terms of, you know, the efficiency gain that you're able to get from something that may be 95% efficient up to 98% efficient. There manufacturers that can produce equipment that can achieve those efficiency levels, but this standard would effectively probably be the last one to really kind of set the bar as high as it can reasonably go as it relates to the efficiency of combustion based technology.

[Rep. Richard Bailey]: Thank you.

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

[Rep. Laura Sibilia (Ranking Member)]: Great. Thanks for

[Rep. Dara Torre (Clerk)]: having us. Alright.

[Rep. Kathleen James (Chair)]: Thank you so much for coming in. Appreciate it.

[Timothy Perrin (Director of Energy Management, Vermont Gas Systems)]: Thanks, everybody. Take care.

[Rep. Kathleen James (Chair)]: Thank you.

[Rep. Richard Bailey]: Thank you.

[Rep. Kathleen James (Chair)]: Alex, I'm still going off an old agenda probably. I see Lewis Porter invited. Is he coming? He is not coming.

[Rep. Dara Torre (Clerk)]: We have a committee discussion on S213 scheduled for ten.

[Rep. Kathleen James (Chair)]: Oh, that's right. Committee discussion on S213. Alright. Why don't we go up five, take a

[Rep. Dara Torre (Clerk)]: break, come back at

[Rep. Kathleen James (Chair)]: let's come back at 10:05.