Consultants suggest $1.5 billion energy efficiency program

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(Host) Vermonters could save $1.5 billion over 10 years by making their homes and buildings more energy efficient.

That was the conclusion reached today by a pair of consultants working for the legislature.

They recommended an increase in the tax on heating fuels – and a one million dollar state appropriation – to help launch the program.

VPR’s John Dillon reports:

(Dillon) The consultants are two former state officials with expertise in energy and utility issues. Rich Sedano ran the Department of Public Service – which represents consumers – in the Howard Dean administration. Richard Cowart chaired the Public Service Board, which oversees utilities.

Now they both work for the Regulatory Assistance Project, a non-profit with offices in Montpelier. The Legislature asked them to research ways to expand efficiency programs that are aimed at cutting electricity use to cover heating fuels such as oil and propane.

First came the bad news.

(Sedano) “The economy is simply bleeding money to other places instead of circulating into Vermont.”

(Dillon) Sedano said the fuel bill to heat homes and buildings is about $800 million a year – that’s up about $340 million in four years.

So he says the sooner the state acts to help people make homes and buildings more efficient, the better off the public will be.

He said the average household spends about $3,000 a year on heating fuel. Weatherization improvements to tighten up the home could save around $600 to $1,000. Cowart says money spent on weatherization stays in Vermont and creates jobs.

(Cowart)“So energy efficiency for fossil fuels in Vermont is a very powerful economic development tool.”

(Dillon) But the two big questions for lawmakers – and for the consultants – were how to expand the efficiency programs, and then how to pay for it.

Sedano and Cowart had several ideas.

First, they said, existing weatherization programs that help low income people should be doubled. Cowart pointed to strong potential savings.

(Cowart) “On the fuel bills alone, the cost-benefit ratio is about two to 1, $2 dollars saved for every dollar spent, just on the fuel bill.”

(Dillon) The consultants also said Efficiency Vermont – which works on the electricity side – could be given a new role to help make residential and commercial buildings more efficient. Vermont Gas Systems – which serves about 40,000 customers – could also triple its efficiency assistance programs.

And the state should support strong efficiency standards for new building construction.

But that left the money question.

The new funds needed for efficiency would ramp up over time – from about $1.7 million next year to $24 million in 2017.

They suggested that the Legislature allocate about $1 million from the general fund to launch the effort, and increase the existing tax on heating fuels to cover additional costs. The tax is now one-half of one percent.

(Cowart) “It’s been in effect since 1990 – and it has been dedicated to the weatherization trust fund, so you should think of this as asking and answering the question: How do we raise the money needed to double the weatherization program. That’s the focus of our thinking.”

(Dillon) Cowart said doubling the gross receipts tax would still leave the unregulated fuel providers paying less for efficiency services than the state’s electric utilities.

Because the proposal involves a tax, it must be considered by the House Ways and Means Committee.

For VPR News, I’m John Dillon in Montpelier.

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