Week 10 and 11: March 7th to March 17th

Half time and beyond

The end of Town Meeting break brought legislators back to Montpelier for the second half of the session. The pace continues to pick up as more bills come over from the Senate and House bills are debated, voted upon, and sent to the Senate. Though there have been only a couple controversial bills, the outlines of conflicts between the House and Senate are taking shape. The end-of-session may not be pretty.

What are the big issues?


What's in the Bottle? . . . Bill

The "bottle bill" is actually the "Beverage Container Redemption System" bill, or more concisely "H.158." Vermont has had a deposit/refund system for nearly forty years. This bill does not significantly change what has been a well functioning system for returning and recycling beverage containers. H.158 expands the type of containers that will carry a deposit. It does not change the deposit amount (currently 5 cents) . The most recent version of the bill was voted out of House Ways & Means last week with a vote of 9-3-0 (For, Against, Absent) pretty much along party lines. Here's a diagram of how the bill will work if it is passed along with an amendment by House Ways & Means. It's a busy diagram!


Two Proposed Changes

The most important part of H.158 is in the Definitions. This portion of the bill clearly defines what beverages and what beverage containers are covered by the bill.


What Beverages?

Here's how the definition of a Beverage is changed by the bill:


(A) “Beverage” means beer or other malt beverages and mineral waters, mixed wine drink, soda water and carbonated soft all drinks in liquid form and intended for human consumption, except for milk, dairy products, plant-based beverages, infant formula, meal replacement drinks, or nonalcoholic cider.


(B) “Beverage” also means liquor and ready-to-drink spirits beverage.


(C) Notwithstanding subdivision (A) of this subdivision (1), “beverage” does not include vinous beverages until January 1, 2027.


The words that are struck out are being removed. The words that are underlined are being added. The definition of Beverage has been expanded to mean all drinks except those at the end of the sentence (milk, dairy products, etc.). Part (C) means that wine does not become a beverage until 2027.


That change in definition of a Beverage means that water containers as well as beer and soft drink containers will be subject to the deposit and refund. The small plastic "nip" bottles of alcohol are not in the bill. 


What containers?

A change in the definition of "Containers" keeps large water-cooler size bottles of water, soda or beer out of the redemption system.


Producer Responsibility Organization (PRO)

The new bottle bill enables and requires the establishment of a Producer Responsibility Organization. This is an entity set up by the manufactures who want to sell products in the Vermont. In order to sell a beverage in Vermont after March 1st of 2025 a manufacturer must register with a Producer Responsibility Organization. That organization creates Stewardship Plans that describe and implement the beverage redemption system. There are requirements to make the redeeming of empty cans convenient throughout the State.


How the money flows

The flow of funds through the deposit/refund system would seem to be easy enough to understand: the consumer pays 5 cents a can to retailer when purchasing the product. The consumer gets 5 cents back when empty container is returned. Easy enough. But the purpose of the Bottle Bill is not just to reduce roadside litter. The whole idea is to get the container material back to the manufacturer for reuse. To do that, the manufacturer charges the retailer that same 5 cent deposit. The retailer would rather collect the refund from the manufacturer than throw all those returned empty cans in the landfill. There is the same deposit/refund relationship between the manufacturer and the retailer as there is between the retailer and the customer, with one important difference: the Handling Fee.


Handling Fee

The retailer and manufacturer have to handle all those empty cans. The cans must be stored, picked up, or delivered, trucked around the countryside. For that, there is a Handling Fee. The law allows the manufacturer to charge the retailer a several cent handling fee along with the 5 cent deposit. The retailer may chose to pass that fee on to the customer in the price of the beverage, but the customer does not get the Handling Fee back when the can is returned.


Redemption centers are another important part of the flow of funds. A redemption center purchases the empties from the customer. Usually the purchase amount is the same as the deposit, but it need not be. Redemption centers compete with each other, so one center might offer more than the 5 cents deposit paid when purchasing a can from a customer. The redemption center than returns the can to the manufacturer, collecting the 5 cent refund and the handling from the manufacturer.


Escheats (pronounced Us'cheets) 

All cans do not make it back to the retailer or redemption center. If the retailer sells three cans of soda, 15 cents worth of deposit is collected (and perhaps the handling fee as well). If only one of those cans is returned, the retailer is 10 cents to the good. That 10 cents is referred to as the escheats. Statewide, the escheats can amount to three million dollars. A few years back the Legislature decided that the State could use those several million dollars in the Clean Water Fund to help cleanup the State's waterways, so now the escheats go there. In H.158 and with an amendment proposed by the Ways & Means committee changes are made for the way escheats are handled. The idea is that expanding the type of containers that will carry a deposit will bring in more escheat revenue. That extra revenue will be used to help get the revised Beverage Container Redemption program set up and, after 2031,  will be put in a Waste Management Assistance Fund,


Timeline

There is a rather complicated implementation timeline. Expansion of the types of beverages subject to deposit/refund does not really happen until January 1st of 2027. The hope is to spread everything out over the years. Here's the schedule in the current proposal. 


Affordable Heating Standard

S.5 has now left the Senate and is in the Environment and Energy committee and along with it, a lot of confusion about costs.  

Goals: There are four goals for S.5

How it Works

The basic idea is to encourage heating fuel providers to upgrade their customers to cleaner home heating solutions. The world, and those that can afford it, are already buying heat pumps, weatherizing their homes, and finding ways to reduce heating costs and keep their future heating needs away from the volatility of carbon based fuels. S.5 provides a mechanism enabling lower and middle income users to afford such changes. 

Clean Heat Measures

Clean heat measures are the fuels and technologies needed to reduce greenhouse gas emissions from the heating sector of the economy. Examples are: heat pumps, heat pump water heaters, utility-controlled electric water heaters, solar hot water systems, advanced wood heating, and replacement of manufactured homes with high efficiency manufactured homes.. The Public Utilities Commission (PUC) will further develop the list. 

Clean Heat Credits

Here's the tricky part. A Credit is a "tradable, nontangible commodity" like a bitcoin or a debt or credit. It's just a number that is tracked through the system The PUC will develop the means of tracking these credits.

Who does what?

Those that provide customers with heating fuel will be required to produce a specific number of Clean Heat Credits each year.  The PUC will determine how many credits are needed. The fuel provider has a choices as to how they reach the required number of credits. 

The Unknowns

There is much speculation about how much all this will cost and what the hit will be to the consumer. Unfortunately there are a lot of unknowns. If the bill passes as it is now, the implementation timeline is as follows:

The program will not begin until final rules have been submitted and approved. However, there may well be a method for those to have installed Clean Heat Measures to receive credits for work done before the whole system is working.

The unknowns are how all this will play out. There is some consolation in the fact that the bill states clearly that the PUC "shall not file proposed rules with the Secretary of State or issue any orders implementing the Clean Heat Standard without specific authorization enacted by the General Assembly."  There wuill be another opportunity to look at it all and decide to proceed or not.

Coming up

Time spent in the House chamber debating and voting is going to steadily increase as more bills, and more important bills, come up. This coming week it could well be Paid Family Medical Leave and the Bottle Bill. The Senate will be sending us a bill on Child Care and the House Suicide Prevention bill should be coming up for a vote soon.

In my committee things do not, as yet, look too exciting, but you never know.