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House Energy committee advances S.138 draft, adds resiliency and water conservation to CPACE-style program and refers bill to Commerce
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Summary
The House Committee on Energy and Digital Infrastructure reviewed draft amendments to S.138 to expand commercial-property assessed clean energy financing to include resiliency and water conservation projects, agreed to substitute CPACE Alliance appraisal language, and referred the bill to the House Commerce committee for economic review and administration planning.
The House Committee on Energy and Digital Infrastructure on Thursday completed a final walkthrough of S.138, a proposal to expand a CPACE-style financing program to include resiliency and water-conservation projects, and agreed to send the bill to the House Commerce committee for further work.
The committee chair opened the session saying the goal was "to do a final walk through of S 138" and to take a straw poll before transferring the economic elements to Commerce. Committee members raised questions about program design and financing, including whether the measure would duplicate services offered by Efficiency Vermont and how loan terms might affect local municipal finances.
Ellen, the drafter who presented draft 1.1, detailed several changes to the bill. She said the amendment clarifies eligible project types to include "renewable energy projects, energy efficiency projects, water conservation projects, and resiliency improvement projects," expands the definitions section for clarity and moves certain definitions to a consolidated definitions subsection for the subchapter. On certification, Ellen read a new requirement that "for new construction [there be] certification by a licensed professional engineer or engineering firm, stating that the proposed qualified improvements will enable the project to meet or exceed the energy efficiency or water efficiency ... requirements of the current building code." The committee debated whether to reference a "commercial building energy code" specifically or leave a broader phrasing.
Members discussed the statutory definition of resilience and how prescriptive the statute should be. The drafter said the bill uses "resiliency improvement" to describe measures such as stormwater and flood mitigation, energy storage and microgrids, and vehicle charging infrastructure. One member urged flexibility so that engineer analyses can determine appropriate resilience measures for each property; another warned against narrowing language so that natural or site-based floodplain management would not be excluded.
On financing detail, Ellen described proposed subsection (f), which would cap the combined amount of the assessment plus any outstanding mortgage at "90% of the as-completed appraised value or the stabilized appraised value" of the property. Committee members debated phrasing and agreed to substitute language suggested by the CPACE Alliance (the committee cited a submission from Michael Yaki) to clarify which appraised values apply.
The bill also adds an administrative step: "The Department of Financial Regulation shall consult with relevant stakeholders, including Vermont League of Cities and Towns, the Vermont Economic Development Authority, Efficiency Vermont, [and regional development corporations], and on or before 12/15/2026, the department shall submit a report on recommended program administrators" to the House committees on Commerce and Economic Development and Energy and Digital Infrastructure and the Senate Committee on Natural Resources and Energy, Ellen read.
A committee member asked that the committee pause the straw poll until Efficiency Vermont could weigh in on program overlap; that member said such guidance "would change your vote." The committee declined to delay and, after discussing wording changes and circulating the CPACE Alliance text, agreed to move the draft to Commerce for the economic-development and administration work.
The committee did not record a roll-call vote on the referral; members indicated assent in discussion and said staff would circulate the revised language and the CPACE Alliance suggestion to Commerce and to committee members. Ellen offered to finalize the edits and circulate them; the committee planned to reconvene later that afternoon to continue if necessary.
The next procedural step is referral of S.138 to the House Commerce committee for review of economic provisions and for the Department of Financial Regulation to consult stakeholders and report back by Dec. 15, 2026.
