Governor Scott Signs Budget, Vetoes Renewable Energy Standards Act

On Thursday, May 23, Governor Phil Scott, as expected, signed H.833 into law while vetoing H.289, the Renewable Energy Standard Act.

Scott has long expressed his opposition to the Renewable Energy Act due to the cost and complexity of how the law is enforced, as well as the ultimate cost to consumers. Meanwhile, the governor and lawmakers found enough middle ground on the budget for him to sign it.

For the bills he vetoed, the Legislature will hold a “veto session” on June 17. In the case of the H.289 renewal bill, the vote will be close on whether his veto will be overridden in both chambers.

H.883, Budget Bill

In signing Budget Bill H.883, Governor Scott sent the following letter to the General Assembly:

“The work on this budget in particular shows that when we work together – and both sides are willing to give a little – we can create a budget that meets the needs of Vermonters without increasing their tax burden.

“This budget makes key investments in the priority areas I outlined in my budget proposal… This includes long-term housing, economic development, public safety and assistance for our vulnerable populations. Importantly, it does not rely on new or higher taxes, achieving balance without increasing the significant tax burden that Vermonters already shoulder.

“But compromise means accepting some things that I don’t support. In this Budget this includes some fee increases which I continue to believe are unnecessary and… I remain concerned about the significant increases in core spending that are unsustainable in more modest – and typical – income conditions. For example, H.883 creates 43 permanent positions and another 35 limited-service positions. These are in addition to the 70 permanent and 32 limited service posts created in last year’s budget.

“This budget is also overly dependent on one-off and conditional funding. It uses projected contingent surplus, ARPA refunds, and special fund transfers to support important programs that will create unsustainable expectations if further one-time funds are unavailable. By not making difficult choices this year and focusing limited resources on programs we will not be able to sustain, we are setting a very challenging budget development for FY26.

Despite these concerns, I am returning H.883 with my signature because, overall, this budget does more good than harm. The people of Vermont elected and re-elected me, in part, to provide me with financial responsibility in Montpelier. I urge the Legislature to work with me next year to achieve our shared goals while living within our means.”

H.289, Revised Renewable Energy Standard

On May 23, Governor Scott vetoed H.289, a renewable energy standard bill.

In a letter to the General Assembly he wrote the following:

“I don’t think there’s any debate that H.289 will raise utility rates for Vermonters, probably by hundreds of millions of dollars. And while that alone is reason enough to merit a veto, the frustration becomes even more frustrating when you consider that our Department of Public Service has proposed a much stronger plan to the Legislature at a fraction of the cost.

“Their proposal comes after 18 months of engaging with Vermonters about what they want their energy policy to look like. This will get us where we all want to go faster, cheaper and more equitably than H.289.

“For the reasons stated above, and given all the other taxes, fees and higher costs passed by the Legislature over the last two years, I simply cannot allow this bill to become law.

It is my sincere hope that with a better alternative to this bill available, the Legislature will think about Vermonters and the cost of living and uphold this veto.”

Leaders respond to veto

Pro tem Phil Baruth issued the following statement: “Unfortunately, Governor Scott and his party automatically oppose any policy that moves the needle on fossil fuel addiction. Each session, we introduce carefully crafted legislation to reduce Vermont’s greenhouse gas emissions and protect lower-income Vermonters; Then Governor Scott and his allies do everything in their power to defeat the bill. This is a shameful dynamic, especially in a world where our state capital still does not have a functioning U.S. Post Office due to persistent climate-related flooding.

“H.289 would enable Vermont to achieve 100% renewable energy by 2035, dramatically reducing planet-warming carbon pollution and saving Vermonters real money over time. Governor Scott chose to reject this bill without offering anything in its place. But as last year’s child welfare bill showed, even if the governor says no, people can still say yes.

Baruth referred to the Legislature’s rejection of the 2023 Child Care Act.

House Speaker Jill Krowinski and House Member Amy Sheldon addressed the actions taken by Governor Scott to veto H.289, the updated Renewable Energy Standards Act. The legislation accelerates Vermont’s transition to 100% renewable energy while supporting the development of national and regional renewable energy sources, ensuring price stability and affordability for utilities and ratepayers, and implementing protections against double counting on renewable energy credits. The bill is a collaborative effort with Vermonters, utilities, energy developers, environmentalists, housing advocates and legislators.

“Having the vision in the Global Warming Solutions Act and the plan in the Climate Action Plan and taking action to implement the plan is the leadership Vermonters expect from us on addressing climate change,” said Rep. Amy Sheldon, D-Chair House Environment and Energy Committee. “Accelerating the pace of cleaning up the electricity grid is key to reducing greenhouse gas emissions and slowing climate change. “Transitioning to 100% renewable energy for the majority of Vermonters by 2030, while meeting the needs of our diverse utilities, is a hallmark of H.289 and represents the hard work of many stakeholders.”

“Today’s veto undermines Vermont’s commitment to a sustainable future,” said Vermont House Speaker Jill Krowinski. “Our collective efforts to create H.289 embody the cooperation needed to combat climate change. We must remain steadfast in our resolve to accelerate the use of renewable energy, ensuring a resilient and cleaner future for future generations. As Speaker of the House, I am committed to ensuring that the people’s will and urgency to address climate change are not derailed, which is why we will take up this bill during the June veto override session.”