Vermont Clean Heat Standard to Raise Propane Prices

From the NPGA Bobtail newsletter. The Vermont Department of Public Service recently released its final potential study of the marketplace impacts of implementing a Clean Heat Standard (CHS) in the Green Mountain State. Under the CHS, businesses that import propane for consumption within the state must retire specific amounts of clean heat credits over a set time frame. These credits can be obtained through various clean heat measures, such as the installation of heat pumps or the delivery of qualifying renewable fuels. The Standard itself is designed to financially penalize the use of conventional thermal fuels like propane and heating oil. Proponents of the CHS believe its implementation is necessary in order for the thermal sector to reduce its share of greenhouse gas emissions, consistent with state law.

Under various modeled scenarios, the cost impact on propane would range from $10.3 per million Btu to $23.2 per million Btu. This added carbon fee would equate to approximately an extra $0.94 – $2.12 per gallon of propane. The report acknowledges that program costs will be passed through to thermal sector customers.

Leslie Anderson, executive director of the Propane Gas Association of New England (PGANE), has been combating the Clean Heat Standard since it was originally proposed. “Our Vermont members have been working tirelessly with PGANE and VFDA to protect our customers, especially those on a fixed income or in environmental justice communities,” said Anderson. “The VT legislature’s CHS plan is misguided and does not balance decarbonization efforts with the needs of society to have reliable, resilient, and affordable energy. Hopefully, facing a $2/gallon tax on propane and a $4/gallon additional tax on heating oil will finally convince voters to pressure Vermont legislators to abandon their “Rube Goldberg” carbon tax scheme.”

State lawmakers still must take a final authorizing vote in January 2025 for the CHS to have legal effect. As of the 2022 industry sales report, Vermont was 36th largest propane market in the country, with 105 million gallons sold. For more information, contact NPGA’s Director of State Affairs, Jacob Peterson.