Senate committee backs amendment to S.65 to clarify Efficiency Vermont priorities, sends bill forward

A Senate committee voted to amend and then advance S.65, a bill that revises how funds under Vermont’s electric efficiency framework may be used and measured.

The Senate Natural Resources Committee on a late-session motion adopted a strike-all amendment to S.65 and then voted to move the bill as amended out of committee. The amendment clarified how the Public Utilities Commission (PUC) and Efficiency Vermont may account for building-code attainment, prioritized greenhouse-gas reductions in program design, and added provisions about participating in forward capacity markets. The amendment also set spending expectations for customers with low and moderate incomes and for small businesses and nonprofits.

The changes are intended to clarify language the committee and stakeholders said was confusing, and to fold findings from the ongoing Energy Efficiency Modernization Act pilot into the committee’s review of long-term practice.

Senator Hardy, the senator who presented the amendment, said the draft was produced quickly "at the request of the majority leader" and that it was intended to address concerns heard from senators rather than to be a negotiated compromise among all stakeholders. The amendment is a strike-all rewrite that, among other adjustments, removes redundant text, corrects cross-references and restates several PUC responsibilities in a bulleted list to reduce long, compound sentences.

Key provisions in the amendment include: Efficiency Vermont may be allowed to count energy savings from building-code attainment toward its quantitative savings targets if the PUC approves a methodology; the text retains language that gives “priority consideration” to greenhouse-gas emissions reductions (while placing that objective among other factors the PUC must balance); explicit authority for Efficiency Vermont to pursue participation that yields forward capacity-market revenues (for example, participation in ISO New England markets); and a requirement that an appointed entity ensure a portion of annual program budgets be spent on services for customers with low and moderate incomes and on small businesses and nonprofits.

The amendment specifies that up to 25% of an appointed entity’s annual budget should be directed to residential services for low- and moderate-income customers and 12.5% to small businesses and nonprofits. The amendment supplies statutory definitions for low- and moderate-income customers that mirror those used internally by Efficiency Vermont: low income up to 80% of area median income (AMI) and moderate income between 80% and 120% of AMI.

Committee members and stakeholders also discussed the existing pilot under the Energy Efficiency Modernization Act, which runs through 2026; the amendment requires the PUC to include recommendations based on the pilot’s results in the PUC’s report due on or before April 30, 2026. Committee members asked whether the pilot work would continue if the legislature takes no further action; staff said the pilot has been authorized for a defined term and any continuation beyond that would require separate action.

Representatives of the Department of Public Service and distribution utilities said they had not had time to fully analyze the new draft and continued to have concerns. Andrea Cohen, who identified herself as with the Vermont Electric Cooperative, said the cooperative and other distribution utilities remain "not comfortable" with the draft and would prefer more time and a report on pilot results before making permanent changes. A Department of Public Service representative told the committee the department remained concerned that prioritizing greenhouse-gas reductions could raise costs for some ratepayers without additional review.

Committee votes reflected those mixed views. The committee adopted the amendment by voice and roll call, recorded in committee as 6 yes, 1 no, 0 abstain. Later, the committee voted to report S.65 as amended favorably to the next step of consideration, recorded as 5 yes, 2 no, 0 abstain.

The amendment retains a provision that sets the initial electric efficiency revenue requirement equal to an inflation-adjusted, commission-approved electric efficiency budget from 2026; committee discussion indicated that provision helps the PUC set multi-year budgets that run on a three-year cycle rather than adjusting automatically every year for inflation.

Committee members who expressed reservations said they were willing to move the bill forward to allow further review on the floor and in other venues; several members said they expected additional reports and analyses would accompany future debate. The PUC, the Department of Public Service and distribution utilities urged more time for review and recommended reliance on the EMMA/EEMA pilot reports before making permanent statutory changes.

With the committee’s favorable report, S.65 will proceed in the legislative process as the sponsor and stakeholders continue to seek clarity on budget mechanics, the interaction with existing weatherization and low-income programs, and the proper funding sources for greenhouse-gas reduction activities.