Questioning the Highly Questionable ESSEX Carbon Tax

By Rob Roper

The Vermont House Committee on Energy and Technology will start taking testimony on the ESSEX Carbon Tax bill today. Here are some questions our legislators (and all Vermonters) should ask regarding the bill….

What’s the real benefit here?

662. (1) Allocation to classes. The mechanism shall allocate the total revenues received by the collection date among three customer classes, based on the estimated percentage contribution of each class to those total revenues. The classes shall be commercial, industrial, and residential.

Q. What percentage of the total revenue collected (50% of the estimated $240 million when fully implemented, will be allocated to each class? How much will be available for residential customers vs. commercial and industrial? What’s the real potential financial benefit to average Vermont families on their electric bills vs. increased costs for driving and heating their homes? It would appear to be pretty minimal.

662. (iv) With the monthly bill to a customer who has demonstrated eligibility for this income-based rebate, the provider shall include a check to the customer if,…

662. (c) … A person seeking one or both of the rural residential and income-based rebates established under this section shall demonstrate eligibility. The Commission shall create a mechanism to be used for the self-certification of eligibility for these rebates.

Q. The implications here are that rural and low-income Vermonters will have to actively apply for these rebates, and update that application on a monthly basis. A) does this mean that Vermonters who don’t apply for these rebates will not receive them? B) This logistical burden on low income and rural Vermonters appears daunting. Is this really fair?

Cost of Implementation

Q. Given the above language implying that rebate seekers must demonstrate eligibility and continue to do so on a monthly basis, tracking and verifying this information by the state and effectively communicating it to electricity providers would appear to be an incredibly complicated bureaucratic process on a level exceeding that of Vermont Health Connect – a program that has cost taxpayers hundreds of millions of dollars to implement. How much is this Carbon Tax going to cost to collect, distribute, continuously track, and enforce? If, as the statement of purpose asserts, the goal is to “to return all of the revenues from that charge to customers on their electric bills,” where will the revenue come from to do this?

663. (a) The Auditor of Accounts of the State may conduct audits of the activities under this chapter to ensure that all of the monies raised by the carbon charge are returned to customers. The Auditor shall conduct two such audits… (b) The Auditor and his or her authorized representatives may at any time examine the accounts and books of a Vermont retail electricity provider 3 relating to this chapter, including its receipts, disbursements, contracts, funds, 4 investments, and any other relevant matters.

Q. What are the estimated costs of these audits? Again, as noted above, where will the money come from to pay for them?

663. (a) … A Vermont retail electricity provider shall show each rebate received by a customer pursuant to section 662 of this title as a separate line item on the customer’s bill…

(e) In addition to the duties specified in this 12 chapter, the Commission may specify such other duties of retail electricity providers that it considers necessary in implementing this chapter.

(c) … A Vermont retail electricity provider shall have the opportunity to recover in retail rates its necessary and reasonable expenses, other than rebates, in implementing this chapter.

Q. This language seems to understand that retail electricity providers will also have considerable cost burdens associated with implementing this Carbon Tax and authorizes them to raise their rates in order to cover these costs. What are the estimated costs to providers, and what are the implications for electricity rates. Is this really just a scheme of putting money into one pocket of Vermonters (if they apply for rebates) while taking it out of another?

 Q. Will this Carbon Tax, especially in its early phases, cost more to collect that it will take in?

General Questions

The Transportation Fund. If this Carbon Tax works as intended and people use significantly less gasoline and diesel for transportation, what will be the impact on Transportation Fund revenues? Will revenue from this tax necessarily have to be utilized to pay for roads and bridges? Or will another tax have to be raised to offset losses in the T-Fund? In either case, how can this Carbon Tax be honestly called “revenue neutral?”

Winners & Losers. Global Foundries and the ski industry are named in the ESSEX Plan document as potential big winners in this scheme. Ben & Jerry’s has presented that it will be a big winner. Who are the losers? Landscaping businesses that rely on pick up trucks, lawn mowers, chain saws, etc.? Plumbers, electricians, contractors, etc. with vans and customers that require driving many miles? Are we looking at a program that subsidizes large, wealthy companies at the expense of small, blue collar workers?

Revenue Neutrality. Proponents of this Carbon Tax tout that it is “revenue neutral.” If the money to cover the costs of implementing this Carbon Tax do not come from the revenues generated by the tax, where will they come from, and how much are they expected to be?

Climate Change. In its Statement of Purpose this bill says one of its objectives is “to address climate change.” What real world impacts will this bill have on mitigating future temperatures and future extreme weather events in Vermont, if any?

Rob Roper is president of the Ethan Allen Institute

{ 4 comments… read them below or add one }

H. Brooke Paige February 7, 2018 at 6:00 am

Reverse Robin Hood ?

Under the proposed scheme, It appears that a dollar taken in as Carbon Tax Revenue will pass through so many hands that, by the time is distributed to the electric customer, only a small portion of the original dollar will remain – possibly as little as a quarter !

Here is a better idea, a voluntary carbon tax ! Those who are so keen on paying extra for their fossil fuels can keep track of their own purchases, calculate their tax owed and give the amount they have calculated as their “carbon tax fair share” to a neighbor who they know is in need !

The voluntary tax will eliminate a whole lot of middlemen and regulatory oversight while the individual paying the carbon tax will have the personal satisfaction of knowing that their tax payment has gone to a worthy recipient !

Problem Solved !


Willem Post February 7, 2018 at 4:21 pm

How would Democrats and Progressive be able to garner more votes to get re-elected?

They love their government programs to aid their dependent constituents.

The more government programs the better.

They do not give a hoot about the private sector, especially one that would show healthy growth with many good paying jobs with benefits. Their government programs would pale by comparison.

Vermont has been sliding backwards regarding economic growth, compared to other NE states during 2012-2016, because of various expensive follies, such as:

– The huge adverse impact of all the state mandated, expensive, subsidized renewables
– The state usurping dominance in controlling education, instead of local control of education
– Socialist-style experimenting with healthcare systems

They have become an increasing headwind that further reduces the near-zero, real-growth of the anemic Vermont economy.


Doug Richmond February 10, 2018 at 2:47 am

It was use of carbon that got us out of the caves.
carbon put us Into warm housing
Gave us employment other than back breaking manual labors labors
Gave us useful tools
Gave us ability to go beyond our village borders, way beyond
Gave us the ability to join the world
gave us the free time to invent, to improve, to produce
We are a carbon life form.

Therefore Carbon is bad ???????


William Hays February 10, 2018 at 5:21 pm

Of course carbon is bad! Just ask the “Three Stooges” of the Vermont Congressional Delegation or any other Progressive-Socialist in Chittinden or Washington Counties.


Leave a Comment

Previous post:

Next post:

About Us

The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.

Latest News

VT Left Wing Media Bias Unmasks Itself

July 24, 2020 By Rob Roper Dave Gram was a long time reporter for the Associated Press, is currently the host of what’s billed on WDEV as a...

Using Guns for Self Defense – 3 Recent Examples

July 24, 2020 By John McClaughry  The Heritage Foundation’s Daily Signal last week published eleven news stories about citizens using a firearm to stop a crime. Here are...

FERC ruling on solar subsidies could help Vermont ratepayers

July 21, 2020 By John McClaughry Last Thursday, the Federal Energy Regulatory Commission finalized its updates to the Public Utility Regulatory Policies Act (PURPA), in what the majority...

The Moderate Left’s Stand for Free Speech

July 17, 2020 By David Flemming Harper’s Magazine, a long-running monthly magazine of literature, politics, culture, finance, and the arts, is hardly what you would call a ‘politically...

Trump’s Regulatory Bill of Rights

July 16, 2020 by John McClaughry “President Trump [last May] issued an executive order entitled  ‘Regulatory Relief to Support Economic Recovery.’ The executive order includes a regulatory bill...