EV Incentives on Fumes
October 12, 2024
Several programs that offer Vermonters incentives to buy or lease electric vehicles are now closed. The New Plug-In Electric Vehicle (PEV), the Replace Your Ride, and the MileageSmart High-Efficiency Used Vehicle Program are no longer accepting applications as of Tuesday, October 8. Why? The program has officially run out of money. According to the Center for Sustainable Energy (CSE), these programs received more applications for EV incentives in September than in any other month. The volume of applications during the first week of October also increased, causing state officials to pull the plug on the program.
While the “carrots” to convince Vermonters to drive electric have run out, the “big stick” is around the corner. This is the Vermont Advanced Clean Car Regulation, which is modeled after the California zero-emission vehicle requirement. Starting with model year 2026, 35% of the vehicles that manufacturers are required to deliver to Vermont must have a plug. That requirement quickly scales up to 100% in 2035.
Clean Heat Considerations
The Clean Heat Standard is no longer a curiosity of the 2024 campaign. Propelled by a series of reports issued by the Public Utility Commission, it is now taking center stage with less than 90 days before a final draft rule is delivered to the legislature for consideration.
While a final price tag hasn’t been attached to the program, experts say it will cost about $10 billion over the next 25 years. Most of that money will come from propane and heating oil users. Once the legislature reviews the draft regulation, they can accept it, reject it, or amend it. Even though the PUC is required to produce a regulation for consideration, they aren’t exactly recommending that it become law. According to the PUC:
"The Clean Heat Standard, as currently conceived, requires substantial additional costs and regulatory complexity above the funding needed to accomplish Vermont’s greenhouse gas emission reduction goals.”
“The Clean Heat Standard would require establishing a credit marketplace managed by what is likely to be a costly credit platform” with “the potential for fraud and market manipulation.”
“Our work over the past year and a half on the Clean Heat Standard demonstrates that it does not make sense for Vermont, as a lone small state, to develop a clean heat credit market and the associated clean heat credit trading system to register, sell, transfer, and trade credits.”
What Comes Next
The next big climate policy idea in Vermont is a “Cap and Invest” program. This would place a declining cap on greenhouse gas emissions and reinvest the proceeds in energy efficiency and clean energy. This could be “economy-wide,” meaning it would add a fee to all fossil fuel consumed in Vermont for transportation and heating. Click here to review the slide deck from a recent public hearing.
