New Vermont Law Includes GHPs for Efficiency Funding

The Vermont Senate and House of Representatives have passed and sent S. 202 to Gov. Peter Shumlin (D) for signature. Introduced by State Sen. Robert Hartwell (D), the legislation allows for money raised through its energy efficiency charge to be used for high-efficiency electric heating equipment.

Efficiency Vermont implements energy efficiency policy for the state. It provides technical assistance, rebates, and other financial incentives to help citizens reduce their energy costs with energy-efficient equipment, lighting, construction and renovation. Operated as a private nonprofit organization under an appointment by the Vermont Public Service Board, Efficiency Vermont uses money collected through the energy efficiency charge, a fee added to utility customer bills, to provide support for various projects. The organization ended 2013 with a $4 million budget surplus—about 12% of its 2013 budget—and is seeking approval to carry over that amount.

The new law allows Efficiency Vermont to use those funds to subsidize installations of efficient heat pump technologies (including both geothermal and air source) if certain established criteria are met. Those requirements include (among other things) that the technology will:

• Benefit ratepayers;
• Result in cost-effective energy savings;
• Reduce greenhouse gases on a life-cycle basis;
• Improve building energy performance; and,
• Use the most efficient equipment available.

According to the Vermont Department of Public Service’s April fuel price report, heat pumps costs $14 per million Btu (MMBtu), the same as heating a home with wood. That is less than half the cost of other heating fuels, such as propane, gas and oil, which cost between $35 and $45 per MMBtu.

Lawmakers grasped the opportunity to reduce energy costs and consumption while reducing total carbon emissions from homes with heat pumps. They also saw the legislation as a way to help reduce summer peaks for power producers facing the cooling season. When electricity demand peaks, more expensive fossil fuel-powered generation plants are called upon to meet that demand on short notice. This drives up rates because those fuels cost more to generate electricity.

Clean energy and environmental groups as well as thermal energy interests supported the legislation. The GHP industry stood solidly behind the bill, through members of the New England Geothermal Professional Association (NEGPA). After the governor signs the bill, it will take effect on July 1, 2014, followed by a Public Service Board proceeding. Program launch will occur in the first quarter of 2015.