Heating Fuel Tax Fuels Hot Debate

 NOTE: You can also read the related VBSR press release

 MONTPELIER – A national series of rallies this weekend to urge action on climate change would seem to come at a good time for advocates in Vermont, who are pushing for an aggressive proposal now in the House of Representatives to reduce the use of heating fuels in the state.

More than 1,300 rallies and other events are scheduled across the United States, among them 60 in Vermont, including in Montpelier, Rutland, Barre and Brattleboro on Saturday.

The proposal to create a statewide heating fuels efficiency system, like the current program to reduce electricity use, to lower the cost and pollution of warming homes in Vermont has already passed the Senate, and is now in the House Natural Resources and Energy Committee.

A group of state companies, Vermont Businesses for Social Responsibility, released a study Thursday arguing that such a program would save businesses $200 million and households $300 million, while creating at least 180 jobs.

Opponents of the idea have said in the past that such estimates might be difficult to achieve in reality.

But the problem is how to pay for such an efficiency program. Gov. James Douglas and others around the state – including business groups – came out firmly and early against a surcharge on heating fuels to cover the expense of the program, an estimated $6 million a year in its first years. And when the Senate passed the bill earlier this year it essentially deferred dealing with how it would be funded, something the House is now grappling with.

Douglas said Thursday he might support such an effi-ciency program, but not if it was covered by a broad-based tax.

"That is a fair conversation to have. But we don't need to raise taxes to do it," he said.

Douglas said he does not expect to attend the global warming rallies this Saturday, and he has not signed onto a pledge connected to the effort which would call for an efficiency program like the one in the bill.

"I am very proud of what I have done on climate change," Douglas said, pointing to efforts like the state's early participation in the Regional Greenhouse Gas Initiative and adoption of California's stringent car emissions standards, now the subject of a lawsuit in federal court in Vermont.

He does not have time to attend the global warming rallies, the largest of which is expected in Montpelier, said Douglas.

"I have a full day of other events," he said.

Advocates organizing the event said that shows a lack of real commitment to the issue on Douglas' part.

"There are more than 1,300 rallies across the nation on global climate change and 60 in Vermont, clearly demonstrating the public's interest in substantive and bold action," said Johanna Miller, outreach director for Vermont Natural Resources Council. "Now we need the political will to match. We need him to be leading the way."

James Moore of Vermont Public Interest Research Group agreed.

"The fact that he is going to four public events on Saturday and none on global warming when thousands of Vermonters are gathering around the state, including some in towns he is going to be in, is very telling," Moore said.

What remains to be seen is if lawmakers will find a way to fund their "all fuels" efficiency program that would pay for weatherization of houses and other efforts in a way that Douglas will find palatable.

A recent version of the bill would leave finding funding the measure up to the Public Service Board, but Rep. Robert Dostis, chairman of the House committee now working on the bill, said he does not expect to pass the program without some money with it.

"I would not delegate that responsibility to the Public Service Board," he said. "I believe that is the Legislature's responsibility."

Ideally, a windfall profits tax could be levied on large oil corporations to cover the expense, Dostis said.

"I am not sure we can do that," he said.

But the efficiency idea, based on the electricity program run by Efficiency Vermont, can save money and pollution, Dostis said.

"There is a lot we can do to reduce costs to home owners and to reduce our contribution to global warming," he said.

But Matt Cota of the Vermont Fuel Dealers Association said the program raises concerns, even if it is not funded with a surcharge on fuel sold in Vermont, as was originally proposed.

Dealers worry that even if some money is found for the program it could eventually lead to a surcharge on fuel. And there are some real differences between such a program for electricity and in an unregulated system like propane and fuel oil, Cota said.

"What happens when you increase the cost of fuel oil, it is the smaller dealers who suffer," he said. "They don't have the advantages of the large utilities, there is no guaranteed profit."

Instead more money – if it can be found – should go into more weatherization for the state's poor, Cota said.

"I would rather that magical pot of money go to those who are really having trouble paying their bills," he said.

"The fuel dealers aren't against the idea of efficiency," he said.

Efficient use of fuels has already increased over recent decades, just because people and businesses are trying to save money, Cota added.

The Vermont Businesses for Social Responsibility group's study – based on a report prepared for the Department of Public Service – makes the argument that such a program would lead to more economic activity and tax revenue for the state, not less.

That is because contractors would be hired to do the improvements necessary and the reduction in heating costs would mean more money for Vermonters and Vermont businesses to spend on other things.

"Investing in efficiency makes good business sense," said Don Mayer, chief executive officer of Small Dog Electronics and chairman of the socially responsible business group. And such a program fits in with Vermont values, he said.

"Waste not, want not was born in New England."