Vermont Gas warns potential 25% Canadian tariff could add about $11 million to customer gas costs

Vermont Gas Systems told the House Energy and Digital Infrastructure Committee on Jan. 30 that a proposed federal tariff on Canadian goods—if applied at 25%—could materially raise commodity natural-gas costs passed through to customers.

Neil Lunderville, president and CEO of Vermont Gas Systems, said the company relies on a single pipeline feed that connects to Canada and that nearly all of its commodity gas could be affected by a broad tariff on Canadian goods. "We pass all of our gas cost directly through to our customers," Lunderville said, explaining that commodity-cost increases are borne by ratepayers under current cost‑recovery practices.

Lunderville presented a preliminary company estimate that a 25% tariff on imported Canadian gas could add about $11,000,000 in annual gas cost—an increase the company said would amount to roughly a 10% increase in customer gas bills. He cautioned the analysis is preliminary and depends on the final structure of any federal tariff, which had not been proposed in detail at the time of testimony.

Committee members asked about who pays such tariffs; company representatives confirmed the utility would collect the increased commodity cost from customers under existing pass‑through mechanisms. Lunderville and others told the committee they will reserve final analysis until a concrete federal proposal is available and emphasized uncertainty about whether and how a tariff would be applied to pipeline natural gas.

The company also noted that renewable natural gas and local supplies are a small portion of its portfolio today, and that broader diversification of supply and demand-side programs are part of its long-term strategy to limit customer exposure to commodity price shocks.