January 21, 2025
Required Reading
Legislators spent the weekend reviewing key reports on education, housing, energy, and the environment. They are also going over details on legislation to be introduced this week. Later this month, Governor Scott will deliver his budget address to the legislature and unveil omnibus proposals addressing education, public safety, and affordability, with expected measures to tackle crime and recidivism.
Here are some highlights so far that set the stage for the next four months of work in Montpelier.
Education Funding
The Commission on the Future of Education report provided limited actionable recommendations, underscoring the complexity of education reform. Vermont's education spending has reached $2.2 billion, comprising nearly 25% of the state's $8.7 billion budget. Property taxes, the primary funding source, rose by 14% last year, with an additional 6% hike expected in 2025.
Clean Heat Standard
The Public Utility Commission’s Second Check Back Report to the Legislature estimates that a Clean Heat Standard (CHS) could cost $1 billion over the next decade, which could add $0.58 per gallon to heating fuel by year ten. Most of the economic benefits of a Clean Heat Standard come from the sale of biofuels such as renewable propane, biodiesel, and biomass because they are the "least expensive clean heat measures.” The Equity Advisory Group Report warned of disproportionate impacts on low-income Vermonters, who may struggle to benefit from the program while bearing higher costs. The Public Utility Commission Chair noted the CHS may not align with Vermont’s needs. Legislation to repeal the law (H.16) has been introduced in the House. Learn more at CleanHeatVT.com.
Housing Initiatives
The Agency of Commerce and Community Development (ACCD) is crafting a housing proposal to address barriers like water and sewer capacity, prioritizing rural areas. A new coalition called “Let’s Build Homes” aims to tackle the housing crisis by increasing development at all income levels.
Land Use and Infrastructure
Updates to Vermont’s Tax Increment Financing (TIF) law are under consideration, including lifting caps and extending timelines for infrastructure projects. Governor Scott appointed members to the new Land Use Review Board (LURB), created under Act 181 to streamline Act 250 permitting and support responsible development. Lawmakers are exploring disaster recovery measures, including post-disaster municipal buyout programs.
Transportation Funding
Vermont’s transportation budget for FY 2025 is $879 million. Vermont’s transportation system is funded through taxes on gasoline and diesel fuel, DMV Fees, and the Vehicle Purchase and Use Tax. More than half of the money comes from the federal government. With insufficient funding for transportation needs, the Vermont Agency of Transportation is evaluating new revenue streams, including an increase in motor fuel taxes, mileage-based user fees (MBUF) for light- and heavy-duty vehicles, along with a new retail delivery fee, and an increase in tire fees. Learn more here.
Climate Report
The Vermont Climate Council's annual report highlights aggressive greenhouse gas (GHG) reduction mandates under the Vermont Global Warming Solutions Act (GWSA). Vermont businesses may be concerned about certain aspects of these programs, particularly their financial implications. Over $524 million is allocated for FY25 climate initiatives, primarily funded by federal programs like the Inflation Reduction Act. However, as federal funds decrease post-FY25, the burden of financing could shift to state resources, potentially impacting local businesses through increased taxes or operational costs. The report emphasizes extensive investments in programs such as electric vehicle incentives, heat pump installations, and renewable energy initiatives, which may increase utility and infrastructure expenses for businesses. Learn more here.
How Cold Is It?
3508 heating degree days have been recorded outside our office since July 1. That’s 9% more than what we had over the same period last year. It’s about 10% less than what we usually have at this point in the heating season.
Truck Trouble
President Trump's declaration that he intends to remove the federal EV mandate and California’s decision to give up on its “Clean Fleet Standard” does not impact the regulation that is in effect here in Vermont. California still has permission under a 1970 law to enforce the Advanced Clean Car 2 and Advanced Clean Truck Regulation, which were adopted in Vermont three years ago. This requires vehicle manufacturers to deliver to Vermont an increasing percentage of zero-emission vehicles (ZEVs) starting with the 2026 model year. Learn more here. State regulators are hosting a virtual information session about the Clean Truck Regulation on Tuesday, January 28, at noon via Zoom. If you sell trucks, buy trucks, drive trucks, or depend on trucks, you should attend this meeting. Register here.
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January 12, 2025
Back to Work
The Vermont Statehouse is buzzing as newly elected lawmakers settle into their roles. This session marks a significant shift in leadership: for the first time in over 20 years, Republicans chair both Transportation Committees. Representative Matthew Walker (R-Swanton) leads in the House, while Senator Richard Westman (R-Lamoille) chairs in the Senate. New leadership is also in place for key committees like the House Energy Committee, led by Representative Kathleen James (D-Manchester), and the Senate Natural Resources and Energy Committee, chaired by Senator Anne Watson (D-Washington).
Legislative Priorities
The spotlight is on the repeal of Act 18, the Affordable Heat Act. Over 50 lawmakers support a repeal bill (H.16), but it will need 76 votes to pass. Meanwhile, Vermont’s housing crisis and public education reforms are expected to take center stage. Governor Phil Scott, in his inaugural address, called for a course correction, emphasizing affordability as the top concern of Vermonters. Comparing the past four years of legislative decisions to being “lost in the woods,” Scott urged lawmakers to focus on practical solutions.
Course Correction on Climate Policy
Vermont faces mounting pressure under the Global Warming Solutions Act (GWSA), which mandates a 26% reduction in greenhouse gas emissions by 2025. Falling short of these goals could force the state to implement stringent policies, such as the Clean Heat Standard and vehicle emissions regulations. Critics argue the timeline is unrealistic, while advocates push for swift action to meet these ambitious targets. A state Superior Court ruling against Vermont could compel the Agency of Natural Resources (ANR) to implement the Vermont Climate Action Plan, which includes regulations like the Clean Heat Standard and the Clean Car and Truck Regulations.
What are these Rules?
The Vermont Advanced Clean Car Regulation requires that 35% of new cars delivered to Vermont dealers must be battery-electric or plug-in hybrids by 2026, increasing to 100% by 2035. Auto manufacturers say this will take “a miracle” to achieve. Manufacturers failing to meet these targets face fines or may reduce allocations of combustion-engine vehicles to Vermont, limiting consumer choices and affecting local dealer sales.
What Are These Rules?
The Advanced Clean Car Regulation requires 35% of new vehicle sales in Vermont to be electric or plug-in hybrids by 2026, ramping up to 100% by 2035. Auto manufacturers have expressed skepticism, warning of potential fines and limited inventory. The Advanced Clean Truck Regulation takes aim at zero-emission trucks, including pickups and heavy-duty vehicles. By 2035, manufacturers must hit sales targets of 40–75% across various truck categories. Infrastructure, range limitations, and higher costs have prompted concerns, especially following Daimler Trucks’ decision to halt diesel truck sales in Oregon—a state with similar mandates to Vermont. Daimler, through its Freightliner and Western Star brands, is the leading producer of large trucks in the U.S., accounting for 40% of all new Class 8 trucks sold in 2023.
Have Your Say
State regulators will host a virtual session on the Clean Truck Regulation on Tuesday, January 28, at noon. Whether you sell, buy, or rely on trucks, this is your opportunity to weigh in Register here.
By the Numbers
— Discover what we're driving in the Vermont Vehicle Index
— Get the latest on oil heat and propane sales in the Vermont Heating Fuel Index
— Gasoline and diesel trends are on the Motor Fuels Index.
— Check out the Vermont Fuel Price Report
Media Matters
— The Meadow Hill Report: Catch the latest from Montpelier with Matt Cota every Tuesday on WVMT’s The Morning Drive with Kurt and Anthony. Listen here.
— Ben, Pat and Matt explain Vermont energy policy and what's coming next. Watch here.
— Senator Welch delivers fuel in Woodstock this winter. Watch here.
— Vermont ViewPoint: Matt Cota discusses Vermont’s climate policy and EV mandates. Listen here.
— Volunteers in Waterbury come together to help a neighbor in need. Watch here.
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News of Note
As of January 1, EV owners in Vermont pay a new annual fee. Battery electric vehicles will cost an extra $89 annually, and plug-in hybrids will get charged an additional $44.50. This is expected to raise $1.7 million in 2026. Money from the fees on EVs will be set aside to fund more electric vehicle chargers. None would go to fix Vermont’s roads. At least not until the state creates a Mileage-Based User Fee (MBUF), which won’t happen until at least 2026. No new forms accompany the new fee. At this time, the fees are lumped together. When DMV staff enter the Vehicle Identification Number, the system identifies the type of vehicle and the associated fees.
Did you know... Most car horns beep in the key of “F.
That’s all for today’s Meadow Hill View. Thanks for reading, and we’ll see you next time!
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January 1, 2025
The First of Three: Vermont’s GWSA Mandates and What’s Ahead
The start of the new year marks a key milestone under the Vermont Global Warming Solutions Act (GWSA), a landmark law passed in 2020. The GWSA mandates that Vermont reduce its greenhouse gas emissions by 26% from 2005 levels by 2025, setting the stage for even more ambitious goals in the future. By 2030, emissions must be reduced by 40% compared to 1990 levels and by 80% by 2050. While we just passed the first deadline, the state is already being sued for non-compliance. An environmental organization has filed a lawsuit that claims not enough has been done. If a state Superior Court judge rules against Vermont, the Agency of Natural Resources could be required to implement the “Vermont Climate Action Plan.” This plan includes key regulations like the Clean Heat Standard and the Advanced Clean Car and Truck Rule, which mandates that fuel dealers sell less fuel and that vehicle manufacturers sell fewer gas-powered cars and trucks.
In response, newly elected Republican leaders in the Vermont House and Senate are pushing to limit the state’s legal exposure by making it harder to sue over non-compliance. They argue that these mandates, if enforced, could cause “undue damage” to Vermont families and the state’s economy. Auto manufacturers have expressed skepticism as well, with some saying it would take a “miracle” to comply with Vermont’s Clean Car Regulation, especially now that state funding for EV incentives has run out. Learn more about why it will take "a miracle." Complying with the truck mandate will take much more than a miracle. Half of all new Class 2b-8 trucks sold in Vermont must have zero emissions by the end of the decade. Less than 1% of commercial vehicle sales are ZEVs. New electric trucks cost two to three times more than comparable diesel vehicles and do not offer comparative performance and range capabilities. Additionally, there is no commercial vehicle charging network, which makes customer adoption of heavy-duty ZEVs and their day-to-day use impractical until the charging network is built.
The push to reduce gasoline and diesel consumption goes beyond vehicle mandates. The Climate Action Plan, which will be updated in June 2025, is expected to propose Vermont’s participation in a regional Cap and Invest program that would further limit the sale of motor fuels— or increase the cost. Unless the GWSA is amended, these policies could be enforced by court order at a significant expense to Vermonters.
Cleaning Up the Clean Heat Standard
The Vermont Legislature could decide this year to enact a Clean Heat Standard. While the results of the November election make that increasingly unlikely, parts of the law will remain in place even if no action is taken. This includes the Fuel Dealer Registry. Failure to register could be considered a violation of the Vermont Consumer Protection Act, which is enforceable by the Vermont Attorney General and carries a fine of up to $10,000. This is required of all fuel sellers, including small retail stores that fill or exchange propane BBQ tanks. Or sell kerosene from a stationary pump.
New Fees for EVs
As of January 1, 2025, registered electric vehicle (EV) owners in Vermont will pay a new annual fee. Battery electric vehicles will incur an additional $89 registration fee, while plug-in hybrids will be charged $44.50. With the growing number of EVs on the road, this change is expected to raise approximately $1.7 million by 2026. The revenue from these fees will be used to expand Vermont’s EV charging infrastructure. None goes to fix Vermont’s roads. At least not until the state creates a Mileage-Based User Fee (MBUF), which won’t happen until at least 2026.
Click here to watch an overieview of Vermont's Clean Heat Standard and EV Mandates from Matt Cota of Meadow Hill.
Counting Gallons and Taxes
Vermont’s gasoline tax is down slightly in Q1 2025 by about half a penny a gallon. That's because the average price per gallon has gone down. Sales are up slightly compared to the six-year average and where we were last year. For more information on taxes and sales of gasoline and diesel, go to the Motor Fuel Index. Information on heating fuel sales in Vermont an be found on Heating Fuel Index.
Time to Split
The Split the Ticket Fund has delivered over 100,000 gallons of free heating fuel in Vermont since it was founded in 2007. Check out ticketsplit.org and find out how you can donate dollars or gallons this winter. Thanks to Senator Peter Welch for showcasing how Vermont energy companies are helping their Neighbors in need. Watch the MeadowHill Media report here.