DPS outlines demand forecast, efficiency programs and Renewable Energy Standard compliance to House energy committee

TJ Poor, director of regulated utility planning at the Vermont Department of Public Service, told the House Committee on Energy and Digital Infrastructure on Feb. 4, 2025, that Vermont expects increasing electric demand as transportation and heating electrify but that efficiency programs have kept recent statewide demand relatively flat.

Why it matters: Forecasts, efficiency program budgets and Renewable Energy Standard rules determine what resources utilities buy, how much they pay, and how quickly Vermont moves toward decarbonization. Those choices affect customer rates, local clean‑energy development and the state’s greenhouse‑gas outcomes.

Poor reviewed long‑range load forecasts and said the state has been winter peaking and could become more strongly winter‑peaking under aggressive electrification scenarios unless load‑management and storage offset new winter heating demand. He said statewide peak demand has been roughly at or below 1,000 megawatts for two decades but that forecasts show growth if electrification proceeds without broader mitigation.

Efficiency programs: Poor described Vermont’s long‑running efficiency framework. Efficiency Vermont funds energy efficiency outside Burlington Electric’s service territory from a small charge on customers’ bills; Burlington operates its own efficiency services. Poor said the state spends about $50 million a year on electric efficiency programs (not counting thermal/process fuel efficiency) and another $6–9 million a year on thermal/process programs funded by Regional Greenhouse Gas Initiative proceeds and other revenues. He said efficiency is a major reason demand has remained flat and estimated cumulative acquired savings equal roughly a 15% reduction of what demand would otherwise be.

Renewable Energy Standard (RES): Poor summarized the RES tiers and compliance mechanics. Key points he gave to the committee:

- Tier 1 (total renewable supply): covers a large share of load and may include legacy resources; utilities must meet a statewide percent target over time. - Tier 2 (distributed generation): requires a growing share of in‑state, distribution‑connected resources (≤5 MW) — recently increased to 20% for some utilities by 2032/2035. - Tier 4 (new regional renewables): added in most recent legislation; requires utilities to secure additional new renewable generation anywhere in New England (timing and shares differ by utility). - Tier 3 (beneficial electrification/fossil‑fuel reduction): requires utilities to invest in programs that reduce fossil fuel consumption in buildings and processes; much of Tier 3 compliance has been heat‑pump installations.

Poor explained Renewable Energy Credits (RECs) mechanics: each megawatt‑hour of renewable generation creates a REC and utilities may buy, bank (limited multi‑year banking), or retire RECs to meet tier obligations. He said Vermont’s small Tier‑2 market often tracks Massachusetts Class I REC pricing as a regional proxy; recently that proxy has been near about $40 per MWh. Existing (Tier‑1) REC prices historically have been low (under $1/MWh) but spiked in 2022 (approaching $10/MWh) and have subsequently moderated to roughly $3–4/MWh according to broker quotes used in department modeling.

Poor also noted that the department conducts efficiency potential studies to set budgets; a full potential study typically costs on the order of $150,000–$200,000. He said the department uses a social‑cost‑of‑carbon approach when performing societal‑scale benefit assessments and offered to return with slides quantifying greenhouse‑gas reductions and monetized societal benefits.

Committee members asked about how RES costs translate to rates, how much of current in‑state generation is banked for compliance, and whether distributed technologies and AI can reduce transmission losses. Poor said some benefits and costs can be monetized (hedging value, avoided capacity and transmission costs, emissions reductions) and that departmental analyses include many such values, though some benefits are harder to quantify precisely.

Ending: Poor said he would provide additional slides on the social‑cost‑of‑carbon analysis, generation and REC holdings on request and offered to return to present further detail on standard‑offer, net metering and load‑management programs. No committee votes were taken during the briefing.