Gov. Phil Scott delivering his second budget address
Gov. Phil Scott’s administration is proposing a budget cut that would stymie a program dedicated to developing Vermont’s renewable energy economy.
The Clean Energy Development Fund is a state-administered initiative within the Department of Public Service that offers financial incentives for homes, businesses and other institutions to reduce their reliance on fossil fuels.
Andy Perchlik, the fund's manager, said that it has focused primarily on “advanced wood heating” in recent years. Unlike old-fashioned wood stoves and early pellet stoves, according to Perchlik, such systems have the convenience and technological sophistication of fossil fuel-powered heating systems but run on wood fuel that can be purchased locally.
The Scott administration’s proposal to remove $500,000 from the fund would effectively end that work, Perchlik said.
“We think it’s going to be very disruptive to the advanced wood heating sector in Vermont that we’ve been nurturing,” he said. “I think this will be a backwards step and a real blow to this industry we’re trying to build.”
Scott said in his budget address in January that he, too, would like to increase the use of that energy source in Vermont.
“Our Clean Energy Plan identified wood heat as a critical way to achieve Vermont’s goal of 90 percent renewable energy by 2050,” Scott said. “So, at the recommendation of my Climate Action Commission, we will invest $300,000 to help homeowners replace old, non-EPA certified wood stoves with modern efficient ones.”
In the budget proposal Scott submitted to the legislature, that investment actually consisted of a $200,000 addition to an existing $100,000 appropriation that the CEDF has administered.
But even if those funds materialize, according to Perchlik, he would be unable to make use of them. That's because the $500,000 cut would leave the fund with about $2 million — just enough money to meet its current obligations and pay the administrative costs of closing down the program. There wouldn't be enough for new grants or incentives, he said.
In the governor’s original budget proposal, $500,000 was to come out of DPS coffers and move to the general fund. After the budget passed the House, Finance Commissioner Adam Greshin sent a memo to Senate Appropriations Committee chair Jane Kitchel (D-Caledonia) describing some “technical issues” with the budget. One of those issues: The $500,000 should come out of the clean energy fund, not the Department of Public Service.
The Vermont Public Interest Research Group caught wind of the change and wrote Kitchel a letter opposing the move. In the letter, the group argues that Vermont’s climate change and energy goals require about 40,000 advanced wood heating systems in the state by 2050. There are fewer than 500 currently in place.
“The CEDF has the opportunity to continue positive momentum, but that will stop if funds are withdrawn or withheld,” wrote VPIRG lobbyist Ben Walsh. “This will jeopardize local businesses and jobs and our ability to meet our clean energy goals.”
Perchlik said the proposal to strip the funding didn’t come from him or DPS. He said he’s been working with grantees and telling local businesses that incentives will likely be in place next year. If approved, the cuts would change that.
Wood-heating companies are telling customers, "'Yeah, there's gonna be incentives,'" according to Perchlik, "So we don't want to pull the rug out from beneath them."
Reached Wednesday afternoon, Greshin didn’t appear familiar with the issue.
“They’d taken it out of the wrong special fund, I think,” Greshin said. “I have not spoken with VPIRG. Honestly, I don’t know what they’re referring to.”
Greshin referred further inquiries to Perchlik and the Department of Public Service.
The proposal’s fate will be decided as part of the larger debate around the state budget, which is currently under consideration by the Senate Appropriations Committee.