In June 1999, Vermont enacted legislation authorizing the Vermont Public Service Board (PSB) to establish a volumetric charge on all electric customers' bills to support energy efficiency programs. As a result, in 2000 the PSB established Efficiency Vermont and a funding mechanism to support it. The funding mechanism, which varies by utility, is based on factors unique to each utility's service territory and is reviewed periodically and adjusted as necessary by the PSB.* It should be noted that Burlington Electric Department is not required to fund Efficiency Vermont; it collects its funds and implements its programs directly under a separate agreement with the PSB. Many of Burlington Electric Department programs are identical to Efficiency Vermont programs.
The cap on the annual budget was set at $17.5 million until 2005, when legislation removed the cap. The current PSB-ordered energy efficiency budgets are as follows:
- 2015: Electrical Budget: $52.2 million; Thermal Energy and Process Fuels Budget: $7.1 million
- 2016: Electrical Budget: $56.2 million; Thermal Energy and Process Fuels Budget: $7.7 million
- 2017: Electrical Budget: $58.7 million; Thermal Energy and Process Fuels Budget: $8.3 million
These budgets include funds collected from the volumetric charge as well as other funds, such as those from the Regional Greenhouse Gas Initiative and the ISO New England Forward Capacity Market. Current Energy Efficiency Charge rates are posted here.
By statute, the funds collected for Efficiency Vermont may not be used to meet the general obligations of the state. Efficiency Vermont provides technical assistance and financial incentives for energy-efficient building design, construction, renovation, equipment, lighting, and appliances. Its primary priorities are reducing the size of future power purchases, reducing the generation of greenhouse gases, limiting the need to upgrade the state's transmission and distribution infrastructure, and minimizing the costs of electricity.
Efficiency Vermont is administered by the Vermont Energy Investment Corporation (VEIC), an independent nonprofit energy services organization. Efficiency Vermont's programs undergo review and verification through an independent financial audit, a savings verification process conducted by the Vermont Public Service Department (PSD), and a triennial independent audit mandated by the Vermont Legislature. In December 2010, the Efficiency Vermont contract structure to both Vermont Energy Investment Corporation and Burlington Electric Department was replaced with a franchise-like "Order of Appointment" structure with a duration of 12 years. For more information, see the PSB's website.
Efficiency Vermont annual reports and plans include additional details on the fund, the types of projects it has funded, and its plans for the future. Efficiency Vermont's latest three-year plan covering 2015 to 2017 can be found here.
The Vermont Energy Act of 2009 (H. 446) amended Efficiency Vermont and directed the PSD (with subsequent PSB approval and enactment) to develop a self-managed energy efficiency program (SMEEP) for eligible transmission and industrial electric ratepayers. The program began January 1, 2010 and became permanent with the Vermont Energy Act of 2011 (H. 56). Eligible program participants include customers within the transmission and industrial rate class whose charges to the statewide Energy Efficiency Utility (EEU) were $1.5 million or more in 2008. In addition, these customers must have a comprehensive energy management program (ISO-14001 certification satisfies the requirement, other programs are also eligible). Finally, they must commit at least $1 million/year (on average) to each three-year period in which it participates in SMEEP. The only company eligible for SMEEP is Global Foundries. SMEEP program participants are not required to pay into the Efficiency Vermont as long as they comply with SMEEP requirements.
In addition to the SMEEP program, another self-management program called the Energy Savings Accounts (ESA) are available to commercial customers that contribute at least $5,000 per year to the EEU fund (via the energy efficiency charge).
* The PSB is authorized to allow customers that implement an "extraordinary amount of cost-effective energy efficiency" at their own expense or that incurred "extraordinary costs on those measures" to apply for an exemption from some or all of the charge assessed.