PUC tells House panel raising fuel tax and more LIHEAP funds could expand weatherization; declines to recommend statewide discounted electricity rate
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Summary
PUC staff told lawmakers their Act 142 review recommends increasing the per-gallon fuel tax to fund expanded weatherization, and considering general-fund support for LIHEAP; the commission stopped short of recommending a mandatory statewide discounted utility rate because of administrative burdens and uneven uptake.
PUC staff briefed the House Energy and Digital Infrastructure committee on their Act 142 study examining whether Vermont should create a statewide program to reduce household energy burden. Jake Marin, an attorney for the Public Utility Commission, said the commission’s review weighed two primary program types: direct bill assistance and investments that reduce demand through weatherization and efficiency.
"The overall arching question is whether the commission should recommend, the creation of a statewide program to reduce energy burden in Vermont," Marin said. Staff described a large stakeholder process (three workshops, interviews and public comments) and said energy burden in the study includes electric, heating and transportation costs, using AMI-style income definitions for percent-of-income calculations.
The commission’s recommendation prioritized expanding proven statewide programs rather than creating a wholly new delivery system. To fund expanded weatherization assistance, the PUC recommended increasing the per-gallon tax on heating oil, propane, kerosene and similar fuels to create a steady revenue stream for the Weatherization Assistance Program (WAP). Marin acknowledged the current statutory per-gallon charge cited in testimony is 2¢ and noted past attempts to raise it have stalled.
PUC staff also recommended the Legislature consider adding general-fund support for the Low-Income Home Energy Assistance Program (LIHEAP) to provide direct, immediate assistance while weatherization investments reduce long-term bills. The commission evaluated existing utility low-income programs and community renewable initiatives (ACRE) as less administratively risky ways to extend benefits but declined to recommend a mandatory, statewide discounted electricity rate because participation rates are low (PUC cited about 45% uptake among eligible customers in programs where they exist) and small municipal/cooperative utilities would face administrative burdens.
Policy options the commission discussed for the committee included tiered discounts, percentage-of-income payment plans, arrearage-management programs, budget-billing, and prepay models. Staff noted trade-offs: percentage-of-income plans can be highly targeted but are administratively complex; prepay/budget billing help smoothing but do not by themselves reduce arrears without accompanying measures; arrearage forgiveness programs and EAPs vary by utility.
Members asked about program outcomes (disconnections, arrearages) and data availability. PUC staff said arrearages and disconnection notices have risen since 2020 in some utilities and that outcomes from similar programs in other states are often hard to measure directly because of shifting baselines and program differences.
The PUC left several design choices to the Legislature: whether to fund weatherization via a fuel-tax increase, how to offset regressivity for low-income households (tax credits or point-of-sale rebates were suggested), and whether to require or facilitate standardized low-income offerings across utilities. Staff offered to return with further detail, and provided contact emails for follow-up questions.
