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State PBF/USF History, Legislation, Implementation

Vermont

Last Updated: April 2017
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Rate Assistance

For electric customers, the Green Mountain Energy Assistance Program (EAP) went into effect Dec. 15, 2012. Eligible households (up to 150 percent of federal poverty guidelines) can receive a 25 percent discount off their monthly bills for the first 600 kilowatt hours used, which comes out to a potential savings of about $300 per year. Applicants who applied by Oct. 31, 2015, were eligible for one-time arrearage forgiveness. EAP participants who acquire past due balances after their initial arrearage forgiveness will not have those additional arrears forgiven by the company. The state's LIHEAP office, the Department of Children and Families (DCF), screens and verifies the customers applying for the program. Following the end of the initial arrearage-forgiveness offering, Green Mountain began automatically renewing customers into the EAP to decrease some of the administrative burden on DCF.

Green Mountain, after merging with Central Vermont in 2012, serves about 70 percent of electrical ratepayers in the state, and as of July 2011, it was estimated that over 36,000 residential customers would be eligible for the EAP. Estimates also predicted that a surcharge on electric bills of all ratepayers would generate about $7-$8 million annually for the program. The real numbers have not been quite as high. In 2015, the EAP provided over $2.53 million in credits to over 9,100 low-income households.

In 2015, Green Mountain reported to the Vermont Public Service Board (PSB) that, during 2013 and 2014, it had collected over $6 million of unexpended funds for the EAP. The PSB approved a proposal for Green Mountain to refund over $6.2 million of the funds to its customers as a one-time bill credit. Residential and commercial Green Mountain Power customers received EAP Fee Refunds ranging from $17.87 to $29.78. The remaining $450,000 will be used to offer arrearage forgiveness again to new EAP enrollees. In order to not obtain such a large amount of unused funding again, the PSB also allowed Green Mountain to lower the EAP surcharge on its customers.

In addition to electric customers, low-income natural gas users also get some relief. Based on a PSB order in January 2013, the Low-Income Assistance Program, or LIAP, was created. Applicable to Vermont Gas Systems, the only PSB-regulated gas utility in the state, those eligible are customers with incomes no greater than 185 percent of the federal poverty level or who meet DCF's income eligibility guidelines for LIHEAP crisis assistance.

The discount is 25 percent off a customer's bill. The program is funded by an "Assistance Program Fee" that is based on a percentage of meter usage and assessed monthly on all customers' bills. In 2015, LIAP served over 19,199 households with $335,882 in discounts.

History

Efforts toward rate assistance for electric customers started back in 1987, when the Vermont legislature directed the PSB to "develop a long-term program to address the comprehensive energy needs of low-income persons." This was followed by a 1997 bill passed by the Senate that would have restructured Vermont's electric industry and created a statewide ratepayer program. The bill passed the Senate, but it died when the House did not take it up.

In 2005, the legislature directed the PSB to conduct a workshop and design proposed legislation for an affordable electricity program. After several workshops involving key stakeholders, the PSB brought a proposal to the 2007 legislature in the form of S 189. It sought to create a statewide ratepayer-funded assistance program. Senate leadership abandoned the bill, deciding a utility-by-utility approach was better. The legislature changed the PSB's authoring statute to move in that direction. The bill passed both legislative chambers, but Vermont's governor vetoed it.

Finally, in 2008, the legislature passed Act 92, which allowed the PSB to order the creation of a program to provide reduced rates for low-income electric consumers. The new law defined low-income as a customer or household whose income was at or below 150 percent of the current federal poverty level. In May 2009, the AARP filed a petition asking the PSB to create such a program.

AARP proposed a 25 percent discount and retirement of any arrearages for customers at or below 150 percent of federal poverty guidelines. It also recommended funding the discount through a surcharge on all ratepayers of Green Mountain Power and Central Vermont Public Service Corp (the two merged into one company in June 2012). At the time of AARP's petition, the two companies served over 70 percent of electrical ratepayers in the state.

The PSB didn't end up recommending the specific AARP proposal. However, it used the proposal in establishing components required for the program. These included: a monthly rate discount of 25 percent; eligibility based on household income up to 150 percent of the federal poverty level; one-time arrearage forgiveness during the first three months of the first year of the program; and a funding mechanism based on a fixed, per-meter charge for all ratepayers. The PSB determined that, at the time, it would not make municipal, cooperatives, and other smaller utilities adopt similar programs. It believed more study was needed to assess the impact it might have on them.

Regarding assistance for low-income natural gas customers, in 2012, the Vermont legislature passed H 730 requiring the PSB to make regulated gas suppliers provide discounts to low-income customers with incomes no greater than 200 percent of the federal poverty level or that meet DCF's income guidelines for LIHEAP crisis fuel assistance. The law required DCF to verify eligibility for the discount. It required the PSB to implement the program by January 15, 2013, and report back to lawmakers.

Energy Efficiency

Although Vermont hasn't adopted utility restructuring legislation — the usual route for funding statewide energy efficiency programs — the PSB established Efficiency Vermont as an energy efficiency "utility" in 1999. Its chartered purposes include increasing the level of energy efficiency savings in Vermont; providing integrated and consistent electric energy efficiency services statewide; and ensuring that all Vermont consumers are given the opportunity to participate in and benefit from a comprehensive set of cost-effective energy efficiency services.

Efficiency Vermont (EVT) is funded through a separately stated, non-bypassable volumetric systems benefits charge on all utility customers' bills. State legislation in 2000, S. 137, authorized the PSB to create EVT and to fund it through the charge. The size of the systems benefits charge varies from one utility to the next. Each utility negotiated its contribution to energy efficiency based on factors unique to its service territory.

EVT's services, administered by Vermont Energy Investment Corporation (VEIC), replaced the individual demand-side management programs that Vermont's 22 utilities had conducted for about a decade. A range of energy efficiency services are available for all customer classes (residential, including low-income multifamily and single family; commercial; industrial and agriculture). The PSB allowed the Burlington Electric Department to continue operating as the "electric efficiency utility" in its service area.

As stated in EVT's annual plan for 2013, it continues its relationship with the five community-based weatherization agencies to provide maximum cost-effective electric efficiency measures, at no cost, to low-income households. While the federally-funded Weatherization Assistance Program (WAP) traditionally focuses on the thermal shell of the customer's home and the reduction of fossil fuel energy use, EVT provides financial and technical assistance for cost-effective electrical efficiency improvements. Qualifying measures include efficient lighting and water conservation products; conversion of electric space and/or water heating equipment to less costly natural gas systems; and replacement of inefficient refrigerators, freezers and clothes washers with high-efficiency ENERGY STAR models.

In 2015, EVT spent over $700,000 on services for over 750 low-income households. During the 2012-2014 term, the minimum spending requirement for EVT on low-income customers was $7.5 million, a 19 percent increase over the previous three-year period. EVT exceeded this minimum for low-income households, spending over $9.8 million on low-income services.

Most of the costs of the electric efficiency measures done by EVT and the community-based weatherization agencies are paid for by EVT, with any remaining balances covered by WAP. Unique to Vermont, other funding for WAP comes from the state's Weatherization Trust Fund, which was created in 1990 through legislative enactment of a gross-receipts tax of 0.5 percent on all non-transportation fuels sold in the state. The legislature designated over $9.8 million from the fund for FY 2015 to support weatherization activities for low-income conservation programs. This funding served over 900 homes.

As specified by Vermont Law, 50 percent of the net proceeds from the sale of carbon credits through the Regional Greenhouse Gas Initiative (RGGI) are deposited into a fuel efficiency fund to provide energy efficiency services to residential consumers who have incomes up to and including 80 percent of the state median income. In 2015, the state received approximately $3.09 million in RGGI funds.

An evaluation of EVT's programs for its first six years was conducted in 2005 and included an assessment, key findings, conclusions and recommendations for each residential component: lighting program, appliance program and new construction. In an October 2015 order, the PSB found that there was no reason to solicit proposals from other entities to run EVT, and it appointed VEIC the administrator for an 11-year term starting January 1, 2016. The appointment resulted from the PSB examining VEIC's record of running EVT from 2009 to 2014 and finding that VEIC "met or exceeded" its goals

More information:

Efficiency Vermont, annual reports and plans

The memorandum of understanding, which outlines many features of Efficiency Vermont, the order that created it, and other materials can be accessed at: www.state.vt.us/psb/news/EEU_info.htm

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