Commentary: The “Thermal Energy Efficiency” Tax

For five years now the climate change movement couldn’t get a vote on a politically dangerous carbon tax to reduce fossil fuel consumption, and produce millions of dollars to finance climate-worthy investments like home weatherization.  Now they’re trying push through a $1.3 billion over ten years “Thermal Energy Efficiency Charge”, formerly known as a tax. It will be levied not by accountable legislators, but unconstitutionally by the “unaccountable strangers” at the Public Utility Commission.

A majority of the Vermont legislature believes that “a climate emergency threatens our communities, State, and region and poses a significant threat to human health and safety, infrastructure, biodiversity, our common environment, and our economy.” (Act 156, 2020).

The chair of the Senate Natural Resources and Energy Committee, Sen. Christopher Bray (D-Addison), expounds further: “The devastating consequences of climate change, however hard to perceive and respond to, cannot be overstated: it wreaks havoc on all living things in the form of extreme storm, droughts and floods, massive wildfires, failed crops, extinctions, damaging invasive species, and the creation of climate refugees.”

Today’s climate warriors believe that because of our ignorance, selfishness and greed,  human-caused “climate change” has put Earth  in desperate straits, and only a desperate remedy holds any hope of fending off the “horrid future” facing our grandchildren.  (Sen. Shumlin, 2007).

Politicians determined to make everyone suffer atonement for our collective sins have discovered the Great Solution to defeat climate change: the carbon tax. That’s a heavy and increasing tax on all carbon-based fuels, like gasoline, diesel fuel, heating oil, propane and natural gas. The higher fuel prices will drive people to find other ways to heat their homes and get to work, school, church, and medical care.  And all the time the carbon tax is marching upwards to force more atonement, it’s producing tax dollars that politicians can spend! What a wonderful and virtuous idea!

But a straight-up carbon tax has one great vulnerability: aside from those who have enrolled themselves in the climate change movement, Vermonters do not want their politicians to saddle them with new taxes on their carbon-based fuels, especially when they’re battling a real menace, the pandemic.

After the push for the carbon tax fizzled out in 2018, the “climate change” game turned to enacting a carbon tax by disguising it as something else. The latest version is called “the Thermal Energy Efficiency Charge”, and Sen. Bray has become its most ardent promoter.

The new feature is that Sen. Bray & Co., mindful of what happened to earlier carbon tax schemes, changed the name of the tax to “Thermal Energy Efficiency Charge”.

In fact, Sen. Bray’s draft bill systematically replaces the word “tax” with “charge”, to make sure no one gets the silly idea that this is another carbon tax. Sen. Bray wants the “charge” set high enough to extract $1.3 billion over ten years, to fund 120,000 home weatherization projects that even he concedes could be financed from the efficiency savings that homeowners would enjoy..

The new Senate leadership repopulated Sen. Bray’s committee in January to make sure that none of its members is likely to raise any serious questions about the menace of climate change and the need for never-ending streams of tax dollars to defeat it.

Veteran Sen. Dick Mc Cormack (D-Windsor) has long been an ardent climate warrior. But to his credit, at a meeting of the Committee last month he balked at the dissimulation. “Do we want to call this money that we’re going to be charging people an efficiency fee? I think it’s a tax …It’s going to be seen as a carbon pollution tax and I think that’s accurate and we’re going to end up having to defend that policy anyway,.. in which case maybe we should own it and come out swinging.”

If Sen. Bray’s misnamed “charge” is a tax – and it is – two other problems appear. First, our Constitution requires that bills for raising revenue must originate in the House, not the Senate. Further, Sen. Bray’s “charge” would be levied not by the legislature, but by the appointive Public Utility Commission, a practice I have described as “taxation by unaccountable strangers.”

That practice dates to 1999, when the legislature gave the PUC the power to levy an energy efficiency charge on your power bill, in whatever amount it might find necessary to promote electricity conservation. Sen. Bray’s “Vermonter’s Enhanced Energy Savings Act” would give the PUC similar power to levy his “Thermal Energy Efficiency Charge”. That tax would bear little or no relationship to the PUC’s duty to regulate the electricity system.

The Bray bill is an unconstitutional delegation of the legislature’s power to tax. The bill is designed to allow the “unaccountable strangers” of the PUC to raise taxes that our Constitution says can only be done by elected legislators accountable to the people. Legislators who took an oath to support the Constitution need to reacquaint themselves with that provision – and their constituents need to remind them to do it.  

John McClaughry is vice president of the Ethan Allen Institute


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