Between 2023 and early 2026, Vermont spent nearly $2 million and more than two years developing a statewide Clean Heat Standard, a credit-trading system intended to reduce reliance on fossil-fuel heating. Throughout the process, legislators, experts, fuel dealers, and Vermonters warned that the proposal would increase costs for households already struggling with affordability. After extensive modeling and review, the Public Utility Commission ultimately recommended abandoning the original design, concluding that it was too complex and too expensive to implement. The Legislature never took the vote necessary to put the program into effect.
That debate is particularly relevant because Two Rivers-Ottauquechee Regional Commission’s (TRORC) 2025 Draft Regional Plan pursues a similar objective for new development by prohibiting fossil-fuel combustion as the primary heating source for many projects subject to Act 250.
More broadly, however, it includes a series of other energy and land-use policies that were never subjected to the same level of statewide analysis, cost-benefit review, or legislative debate before becoming part of a regional planning document that carries significant weight during the permitting process.
Act 250 District Environmental Commissions and the Public Utility Commission give many of its energy policies substantial deference during permit reviews. While the plan is not law, it carries enough regulatory weight to shape how homes, businesses, and infrastructure are built across 30 Vermont towns.
Home Heating Choices:
The draft prohibits new residential, commercial, and industrial developments subject to Act 250 from using fossil-fuel combustion as their primary heating source. In much of the region, homeowners and businesses have long relied on delivered propane or fuel oil because those fuels are widely available and well-suited to rural communities. By effectively eliminating those options in favor of electric heating systems, the Plan narrows consumer choice and directs builders toward a more expensive option, regardless individual circumstances.
Cold-climate air-source heat pumps typically cost more to install than replacing an oil or propane furnace, and the federal tax credit that once helped narrow that gap expired at the end of 2025. Efficiency Vermont rebates remain available, but they were designed to supplement, not replace, that credit. Heat pumps also become less efficient during extended periods of single-digit temperatures, meaning many Vermont homes still require backup heat during the coldest parts of winter. Markets typically allow homeowners and builders to weigh these tradeoffs based on their own circumstances. A mandate removes that flexibility, requiring the same outcome regardless of a building’s characteristics or a household’s financial situation.
Other Policies That Affect Development:
The heating mandate is only one part of the draft Regional Plan. It also encourages or requires developers to meet a number of other energy and land-use objectives (not all of which are mentioned here).
Geothermal and heat-recovery studies. Developers must demonstrate they gave “due consideration” to ground-source geothermal systems and heat-recovery technologies, even when those systems are plainly impractical for a project. That adds engineering work, documentation, and permitting costs without guaranteeing a better outcome.
Electric vehicle charging. Most developments with five or more off-street parking spaces “shall install level 2 (240V) EV chargers at a rate of one port for every five employees or residential units.” Whether future residents or employees actually need the chargers is largely irrelevant. The cost simply becomes part of the project’s budget, ultimately increasing home prices, commercial lease rates, or apartment rents.
Fuel stations. The Plan states that “the development of new fossil fuel service stations is strongly discouraged.” While not an outright prohibition, that policy can still influence permitting by placing applicants at odds with stated regional policy. Whether a community needs another fuel station should be a market decision driven by local demand, yet the draft discourages additional fuel infrastructure even though most vehicles, farm equipment, generators, and emergency vehicles in rural Vermont still rely on gasoline or diesel.
Private property. Act 250 subdivisions on parcels larger than 30 acres within Forest-Based Resource Areas “shall minimize impacts on forestry potential and habitat values of undeveloped areas by concentrating development at the forest edge near other development and roads; use small lot sizes and shapes so that at least 80 percent of the land remains in a large undeveloped tract.” Rather than allowing landowners to decide which portions of their property are best suited for development, the draft dictates both how much land must remain undeveloped and how it must be arranged.
Together, these policies reveal the commission’s central planning approach. Decisions that would ordinarily be made by homeowners, builders, businesses, and landowners are increasingly shaped by regional policy preferences rather than market demand, individual circumstances, or local judgment.
If implemented, there will be economic consequences. Every additional requirement is an unnecessary barrier that increases the cost of building homes, expanding businesses, or developing private property. Those costs then become higher home prices, higher rents, or projects that are never move forward.
Affordability is already one of Vermont’s defining economic challenges. A 2026 University of New Hampshire survey found that 86 percent of Vermonters consider the state at least somewhat unaffordable. Roughly four in ten said they were likely to leave within five years, rising to more than 60 percent among adults ages 18 to 34, the highest share recorded in any New England state included in the survey. Meanwhile, Vermont’s median home prices continue to outpace household income growth. At a time when Vermont desperately needs more housing and investment, policies that increase the cost and complexity of development move the state in the wrong direction.
Planning or Policymaking?
Vermont already spent years debating whether to mandate a transition away from fossil-fuel heating through the Clean Heat Standard. After extensive analysis, regulators and lawmakers concluded the proposal was too costly and too complicated to move forward. Yet TRORC’s Regional Plan advances a similar heating requirement for new development, along with additional mandates involving EV infrastructure, geothermal systems, fuel stations, and land use, through a regional planning process rather than through statewide legislation.
These policies carry real consequences for housing costs, private investment, and property rights, but they were not subjected to the same level of statewide review and legislative debate as other major policy changes. Regional planning should help communities coordinate growth and infrastructure, not substitute for the Legislature or direct private decisions. In a free-market system, the people making the investment and bearing the costs are generally best positioned to decide how to heat a home, where to invest, and how to use their own property.
