The Vermont Energy Efficiency Charge

Assessing the Distribution of Program Costs and Benefits
PRS Briefs
PRS Policy Brief 1415-06
Wednesday, April 15, 2015

Created in 2000, the Energy Efficiency Charge in Vermont funds incentives and subsidies aimed at reducing energy consumption and electricity costs for residents and businesses throughout Vermont. Promoting energy efficiency through the Energy Efficiency Charge remains an important policy goal in the state. In 2011, Governor Shumlin and the Vermont Department of Public Service released a Comprehensive Energy Plan that emphasizes “efficiency and conservation as first priorities in all energy  sectors.”

Despite strong public support for Vermont’s energy efficiency programs, some policymakers, businesses, and residents express concern that the costs may be disproportionately borne by certain customer classes. The distribution of costs and benefits of Vermont’s energy efficiency policies has received little systematic research attention to date. This report examines the savings and costs associated with the Energy Efficiency Charge for residents at different income levels, and small and large businesses. We analyze data on all Vermont towns from 2006 to 2011 to assess the distributional effects of the Charge. Additionally, we report the results of interviews with a diverse sample of business representatives to qualitatively assess the perceived impact of the Charge on the business community. While the quantitative results suggest that the Energy Efficiency Charge has similar effects in low and high-income areas, interviews with  business representatives indicate that the Charge is perceived to disproportionately benefit larger businesses.