The Transportation and Climate Initiative, or TCI, is a program that aims to reduce carbon emissions and increase investments in greener solutions. After facing multiple setbacks in their attempts to pass the TCI Gas Tax and the more extreme "TCI on Steroids," the organization has now turned its focus to a new tax proposal. The latest initiative is the Clean Heat Standard (CHS), a policy that aims to impose a tax on home heating fuel.
What is the Clean Heat Standard?
Acadia Center, an environmental advocacy group based in the Northeast, has taken the lead in rallying support for the implementation of CHS across the Northeastern states. Described as a credit-based performance standard, the Clean Heat Standard targets heating energy suppliers -- specifically gas utilities, heating oil and propane providers, and possibly even electricity suppliers in certain cases.
In simple terms, the CHS will require heat providers to either generate or purchase clean heat "credits" in order to legally sell their products. These credits act as an additional tax on fossil-based home heating fuels, which will ultimately be passed on to consumers, resulting in higher costs for those who rely on these fuels to heat their homes.
How does it work?
Heating fuel suppliers will be required to keep track of the amount of fossil fuels they distribute. To offset the environmental impact of heating households, these suppliers must generate clean heat credits, which can be achieved through the installation of environmentally friendly heating systems, such as heat pumps.
Suppliers who do not have enough credits will be obligated to purchase the necessary credits. Over time, the number of credits required for each heat provider will increase to align with state-level greenhouse gas reduction targets. Failure to comply with the CHS can lead to penalties and fines.
When will it affect homeowners?
Although there is currently no concrete plan outlining how the CHS will be implemented, the Department of Energy and Environmental Protection (DEEP) has already expressed interest in adopting this standard.
Fortunately, the "TCI on Steroids" bill did not receive enough votes to pass the Appropriations Committee this year, but we can expect DEEP to advocate for this bill in the 2024 session.
During a press conference on July 26 to announce the proposed regulation to ban the sale of gas cars by 2035, Katie Dykes, Commissioner of DEEP, led the discussion and declared her need for more "regulatory authority" to "reduce emissions and provide cleaner options for consumers."
While the Clean Heat Standard is often presented as a credit-based performance standard, some may argue that it shares similarities with a tax rather than a credit system. This perspective stems from the mandatory nature of obtaining credits, which aligns with the concept of taxation.
At ECI Comfort, we do everything we can to keep costs low and our customers' homes warm. If you have any questions about saving money on heating oil, give us a call today.
If you live in the Delaware Valley/Greater Philadelphia area and would like to find comfort within your home, visit our website or give us a call at 215 - 245 - 3200 to learn more.
