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Energy-Efficiency Funds and Demand Response Programs, Vermont

Updated June 2007

What public-purpose-funded energy efficiency programs are available in my state?

In 1999, Vermont's state legislature approved legislation giving the Public Service Board (PSB) the authority to establish a systems benefit charge to fund statewide energy efficiency programs via a non-utility entity (in lieu of utility-specific programs). Subsequently, the PSB approved the creation of an "Energy Efficiency Utility" to run energy efficiency programs in the state. The energy efficiency program administrator, Efficiency Vermont, is funded by a charge stated separately on consumers' bills. Efficiency Vermont, which began administering the state's energy efficiency programs in 2000, had its budget increased by the PSB in August, 2006 such that funding levels will move from roughly $19 million in 2006 to almost $31 million in 2008. Revenues are collected through a statewide charge of to about 4 mills/kWh (2007); this will rise to nearly 5 mills by 2008.

Efficiency Vermont offers commercial and industrial customers an extensive rebates program covering equipment ranging from air conditioners to vending machines. Other programs that may be of interest to federal customers include:

  • Customized design and construction incentives that promote energy-efficient design for new construction and major renovation projects and cover up to 50% of the incremental costs of efficiency upgrades. Commissioning incentives are also available.
  • Technical assistance and incentives for HVAC equipment (including gas efficiency products such as high-efficiency furnace and boiler retrofits) and energy-efficient lighting.

What utility energy efficiency programs are available to me?

Burlington Electric Department (BED) offers a variety of energy efficiency programs for commercial and industrial customers:

  • The Business Existing Facilities provides free energy audits to help facilities identify cost-effective energy efficiency improvements. The program also offers financing options and assistance with project development and implementation.
  • The Top Ten program provides large commercial and industrial customers with a free energy audit, up-front payment for an engineering study, and assistance with project development and implementation.
  • The Business New Construction Program offers free consultation and design assistance, up-front payments for engineering studies and design services, financial assistance with energy efficiency measures, as well as assistance with various other aspects of project development and implementation.

Vermont Gas's WorkPlace programs provide technical assistance and incentives on selected applications to commercial and industrial customers seeking to reduce natural gas consumption in new and existing buildings.

What load management/demand response options are available to me?

The Independent System Operator New England Inc. (ISO-NE) offers its Demand Response Programs, which provide payments to electricity users for load reductions (of as little as 100 kW), either by reducing usage or by operating on-site generation during periods of high demand. Customers may participate in the program through any participating member ("Enrolling Participant") of the New England Power Pool, such as a utility company, power marketer, or competitive energy supplier. ISO-NE offers several options:

  • The Real-Time Demand Response Program provides an opportunity for customers to receive payments for voluntarily responding to system emergencies. Participants are paid for actual load reductions, based on the higher of the real time locational marginal price (LMP) or a guaranteed floor price ($350/MWh for customers that can respond within 2 hours and $500/MWh for those that can respond within 30 minutes). Participants may receive additional incentives by qualifying as an installed capacity (ICAP) resource for their load reduction capacity, although response to system emergencies then becomes mandatory. In order to facilitate notification of emergency events and verification of load curtailments, customers must have an approved Internet-Based Communication System (IBCS) installed.
  • The Real-Time Profile Response Program provides remuneration to customers without interval metering for voluntarily responding to system emergencies. The enrolling participant must have the physical ability to interrupt loads at the customer's facility within 30-minutes' notice of a system emergency. Payment for verified load reductions is based on the real-time LMP, with a $100/MWh floor price. Participants may receive additional incentives by qualifying as an ICAP Resource for their load reduction capacity, although response to system emergencies then becomes mandatory.
  • The Real-Time Price Response Program provides customers with the opportunity to receive payments for voluntarily reducing load during periods when the real-time LMP is projected to be high. ISO-NE will notify participants either the night before or day of an event if the LMP is expected to exceed $100/MWh ($0.10/kWh). Participants can voluntarily respond to the notification and submit load data to verify their load reductions. Payment for verified load reductions is based on the real-time LMP, with a $100/MWh floor price. Customers must have interval metering installed at their facility to participate in this program.
  • The Day-Ahead Option is a more sophisticated variant of the Real-Time Price Response Program. Customers submit offers of hourly load reductions into the day-ahead market and are then notified by their enrolling participant if the offers are accepted. If so, the customer must drop load during the cleared hours but is remunerated by the greater of its bid or the actual clearing price for those hours.

In 2007, ISO-NE is embarking on a new initiative, the Forward Capacity Market, which will allow customers to bid their load reduction capabilities—whether constant (such as an indoor lighting retrofit project), seasonal (such as a new energy-efficient chiller plant), or dispatchible (such as a back-up generator)—into a forward capacity auction that will pit demand-side resources against supply-side ones. The first auction, for resources whose contribution to the grid must begin in June, 2010, will take place on February 1st, 2008, but "Show of Interest" forms for demand-side resources were due by the end of February, 2007 (future auction dates will be announced on the ISO-NE web site). However, in the "Transition Period," which is in effect until June 1, 2010, non-dispatchible demand resources (such as energy-efficiency, load management, or distributed generation) of at least 100 kW are eligible for fixed "installed capacity" payments from NE-ISO. The rate of remuneration is $3.05/kW-month until June of 2008, $3.75/kW-month in 2008-9, and $4.05/kW-month in 2009-10. Applications must include a measurement and verification plan to assure ISO-NE of the ability to perform.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewable Energy (DSIRE) website provides information on programs that offer incentives for renewable distributed generation. The Vermont Department of Public Service offers rebates of up to $20,000 (or 50% of project cost, whichever is less) for wind, solar water heating, and photovoltaic installations through the Vermont Solar and Small Wind Incentive Program.

Are there energy efficiency programs sponsored by the state government?

For information on energy efficiency programs sponsored by the state, refer to Vermont's public-purpose programs above. For further information contact the Energy Efficiency Division of the Department of Public Service.

What additional opportunities are available to me?

No utilities in Vermont have area-wide contracts with the GSA.