Vermont Lawmakers Spent Four Years and $1.7 Million to Realize the Affordable Heat Act Was Never Affordable

Can Vermont meet its ambitious carbon mandates through incentive-based models, or will the “saving the world” mindset inevitably return to mandates that penalize those who can least afford them?

On January 30, 2026, the Vermont Public Utility Commission (PUC) issued a final order officially concluding work on the Clean Heat Standard (CHS). The decision effectively ended a four-year legislative and regulatory effort to overhaul Vermont’s thermal energy economy. State regulators ultimately characterized the program’s administrative complexity as insurmountable and its economic impact on Vermont residents as untenable.

The Legal Framework of the Global Warming Solutions Act

The foundation for the Affordable Heat Act (Act 18) was the Global Warming Solutions Act of 2020. This statute turned Vermont’s greenhouse gas reduction goals into legally binding mandates, requiring a 40% reduction below 1990 levels by 2030. Because the thermal sector—heating for homes and businesses—accounts for approximately 34% to 40% of the state’s emissions, lawmakers prioritized a performance-based market system to meet these targets.

“We don’t do things based on helping poor people. We’re doing things based on saving the world.”

This quote from former Senator Mark MacDonald (D-Orange) became a focal point for critics who argued the legislation prioritized global carbon metrics over the immediate financial stability of rural Vermonters. The CHS was designed as a credit-trading system where wholesalers of fossil heating fuels were required to earn or buy “clean heat credits.” While the program included a mandate that 32% of credits benefit low- and moderate-income households, the administrative cost of verifying income and managing the market added significant overhead.

The $1.7 Million Design Phase

To design the program, the Joint Fiscal Office estimated an initial impact of $1.725 million on the General Fund for fiscal year 2024. This funding supported the creation of six new full-time positions within the PUC and the Department of Public Service (DPS), along with the hiring of multiple specialized consulting firms.

Technical studies conducted by firms like NV5 and E3 were tasked with determining the feasibility of the carbon reduction targets. Initial modeling from these consultants projected economy-wide costs as high as $17.3 billion, later revised to roughly $9.6 billion. However, a 2025 PUC report later revealed that the program-related costs of $956 million were nearly double the calculated value of the actual greenhouse gas reductions.

“Get a blanket for Christ’s sake.”

As the potential costs to consumers became clearer, public and political tension escalated. Senator MacDonald’s comments regarding those struggling with heating costs fueled a narrative that the policy was out of touch with the economic realities of the state.

By January 2025, the PUC confirmed that the CHS would inevitably raise fuel prices. Projections suggested that within ten years, the program would add between 58 and 88 cents to every gallon of heating oil, propane, and natural gas. These price increases were intended to fund weatherization and heat pump installations, but they offered no guarantee of immediate relief for residents unable to afford the upfront costs of those upgrades.

Internal Discord and Regulatory Dissolution

Opposition also emerged from within the state’s own advisory infrastructure. Members of the Equity Advisory Group expressed concerns that the system was designed to favor “entrenched interests” rather than marginalized communities. Following the 2025 “checkback” report, which detailed the “financially untenable” nature of the program, the legislature declined to provide the final authorization required to move the rules forward.

What Happens Next

With the PUC’s 2026 order ending the rulemaking process, the focus has shifted to dismantling the associated bureaucracy and seeking alternative climate strategies.

The dissolution of the Affordable Heat Act leaves a significant policy vacuum regarding Vermont’s legally binding climate obligations. The central question remains whether lawmakers most committed to the Global Warming Solutions Act will now pivot toward strategies—such as the Thermal Efficiency Benefit Charge or the rebranding of the Renewable Energy Standard—that do not carry regressive financial penalties for the state’s most vulnerable residents.

This policy pivot highlights a deep philosophical divide: can Vermont meet its ambitious carbon mandates through incentive-based models, or will the “saving the world” mindset inevitably return to mandates that penalize those who can least afford the transition? After four years and $1.7 million, the state’s energy regulators have signaled that the cost of complexity is a burden Vermont can no longer sustain.