Vermont regulators tell lawmakers grid will stay up if U.S. energy import tariff is imposed, but rate impacts remain uncertain

For the record, Department of Public Service Commissioner Carrick Joffin told the House Committee on Energy and Digital Infrastructure on Feb. 4, 2025, that a proposed U.S. energy-import tariff — currently described in public sources as a 10% levy — has provoked intense analysis but that key details are not yet available.

Joffin told the panel the most immediate, critical question was reliability: “the grid will remain reliable,” he said, adding that Vermont Electric Power Company (VELCO) and distribution utilities run frequent scenario analyses and were assuring the department that the lights would stay on even under constrained supplies. But he emphasized that the federal notice of the tariff had been published and withdrawn from the Federal Register and that the department still lacked the final tariff language needed to judge legal and rate impacts.

Why it matters: New federal trade measures affecting electricity imports could raise wholesale power prices across New England and change how Vermont utilities buy power. Vermont relies on a mix of long-term contracts and market purchases; how the tariff applies to specific contracts or to intermediary subsidiaries could determine whether customers see immediate increases.

Joffin summarized the picture utilities and the department are now trying to clarify. He said Vermont Gas Systems (VGS) estimates an additional gross cost to recover of about $6 million to $7 million per year if the tariff applies to its supply chain; the company is exploring tariff- and rate-structure options and alternative fuel sourcing to mitigate that exposure. On the state’s large Hydro‑Québec contract, Joffin said that contract represents roughly 24% of Vermont’s generation portfolio and amounts to about 218–225 megawatts per year through 2035, stepping down to about 56 megawatts by 2038; he cited a total of roughly 1.3 terawatt‑hours covered by the agreement.

Joffin told lawmakers that whether the executive‑order driven tariff would apply to the Hydro‑Québec arrangement was not clear. He said the Vermont contract is with HQUS (a Hydro‑Québec subsidiary) and structured as an internal bilateral transaction not tied to a single physical delivery point — legal features that may affect whether the tariff is triggered.

On exposure to the spot market, Joffin provided a utility snapshot, which he described as illustrative and preliminary: Green Mountain Power — 0% exposure to wholesale market purchases; Stowe — 12%; Washington Electric Co‑op — 1%; Hyde Park — 3.5%; Vermont Public Power Supply Authority (VPSA) — 5%; Vermont Electric Cooperative — 10%. He also said Vermont Electric Cooperative’s preliminary estimate of a tariff applied at the 10% level could translate to about $2 million per year for that co‑op, roughly a 2% rate increase, subject to clarifications and mitigation steps.

Committee members pressed how Vermonters would be notified. Joffin said the department and the governor’s office are part of a cabinet‑level task force and that the department has urged utilities to communicate directly with customers: “They have the clearest relationship with their own customers,” he said, and the department will convene, analyze, and advise. He said the department is gathering data, pressing utilities for clarifying analyses, and will propose mitigation strategies as facts firm up.

No formal committee action or vote was taken. Joffin and staff said the department will continue stress testing scenarios, provide follow‑up materials to the committee, and participate in the cabinet task force to coordinate communication and strategy.

Ending: Joffin told the committee the department will continue work as if the tariff could take effect and will return with more detail; meanwhile utilities were asked to prepare customers and pursue mitigation options.