Efficiency Vermont

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Program Summary:

In 1999, Vermont´s Public Service Board (PSB) consolidated the efficiency acquisition programs of all of Vermont utilities into a single, state-wide energy efficiency utility (EEU) - Efficiency Vermont - and a smaller EEU, covering Burlington, Vermon't largest city. This was the first implementation of a third-party administered state-wide resource acquisition program in North America.

Efficiency Vermont is paid for through an Energy Efficiency Charge (EEC) assessed on all customer energy bills and has been operated since its inception by the Vermont Energy Investment Corporation (VEIC), an independent non-profit entity. The PSB sets annual and three-year efficiency acquisition targets and budgets for Efficiency Vermont while Vermont's Public Service Department (PSD), an agency within the executive branch of the Vermont state government, is responsible for monitoring and evaluating service offerings. Performance against targets determines VEIC´s compensation.

Industry accounts for approximately 16% of energy use in Vermont. Programs for industrial customers include technical assistance in the form of auditing, project development, energy management training, and employee energy efficiency awareness. Financial incentives are available for investments in common-technologies such as lighting and motors, and for customized energy efficiency projects. Customized projects are the dominant source of efficiency acquisition, accounting for approximately 90% of the industrial project total.

Program information

Program Type:
Resource Acquisition
Target Group - Size:
Any Size
Target Group - Industry Focus:
Cross Sectoral
Target Group - Description:

Industry accounts for approximately 16% of energy use in Vermont.

in operation
GHG emission source covered:
Natural Gas
Other Energy Sources

To acquire cost effective energy resources to meet future load growth, reduce environmental impacts, and avoid or delay the need for additional transmission and generation

Program Funding Source:

"Energy Efficiency Charge" on consumer electric bills, limited funding from other sources

Total Program Funding:

$41 million (2012)

Implementation details

Operating Mechanism:

Vermont´s statewide Energy Efficiency Utility (EEU) is called "Efficiency Vermont" and is operated by an independent non-profit entity, the Vermont Energy Investment Corporation (VEIC). This entity was contracted following competitive procedures in 1999 and the contractual relationship between VEIC and the PSB was revised to a long-term appointment in 2010.

The Vermont Public Service Board (PSB) is responsible for the overall oversight of Efficiency Vermont. In the beginning of the program, the PSB contracted three entities, through competitive solicitation, to operate the new state-wide EEU program.

  • Operator of the Efficiency Vermont EEU. It has the responsibility of acquiring energy efficiency resources from electricity customers.
  • Contract Administrator: It is required to help the PSB to administer the contract with the Efficiency Vermont operator and is responsible for tracking the operator´s compliance with contract terms and mediating any disputes arising with the EEU
  • Fiscal Agent: It collects Energy Efficiency Charge (EEC) funds collected by the distribution utilities and disburse them to the EEU and other budget-line entities with assignments relating to the EEU program (e.g., the Contract Administrator and the Public Service Department)

The Vermont Public Service Department (PSD) is an agency within the executive branch of state government and it is responsible for monitoring and evaluating Efficiency Vermont´s service offerings.  It represents the public’s interest at PSB hearings and oversees long-term energy planning.

Program Offerings for Industry:

Efficiency Vermont´s programs for industrial customers include technical assistance in the form of auditing, project development, training on basic energy management techniques, and employee energy efficiency awareness.

Financial assistance is provided for the purchase and installation of efficient common technologies such as lighting, motors, variable speed drives on a prescriptive ($/unit) basis.  More complex projects are eligible for custom incentives that are negotiated with program staff and linked to annual energy savings.

Efficiency Vermont launched a new Energy Leadership Challenge in July 2011. Under this challenge, Vermont's largest energy consumers are asked to commit to saving 7.5% of their energy use over a two-year period. Efficiency Vermont provides special technical assistance to these customers, especially on energy management and employee engagement, with a view to generating continuous improvement programs that may be synchronized with ISO 50001 in the future.

Efficiency Vermont does not currently offer training or implementation assistance in any specific Energy Management System (EnMS).

Supervising Entity:
Vermont Public Service Board (PSB)
Implementing Entity:
Vermont Energy Investment Corporation (VEIC)
Implementing Entity Type:
Private Non-profit organization
M&V requirements on industry:

Vermont´s Department of Public Service (DPS) is responsible for evaluating the energy savings and other performance indicator claims of Efficiency Vermont.   Monitoring and verification procedures are laid out in the Procedure and Administration document (*2). The DPS is required to annual certify progress towards QPI and EEU performance relative on QPI relative to budget expenditures to the PSD, and to provide full assessments each three-year cycle. The EEUs are required to establish and maintain a Technical Reference Manual (TRM) that provides up-to-date documentation on all measure and program assumptions and algorithms used to calculate savings for prescriptive energy savings measures (*3) . For customized measures or projects, EEUs are required to keep careful documentation and the PSD undertakes sample on-site reviews as part of its verification process.

Evaluation of Program:
Monitoring and verification of energy savings, peak load reduction and total resource benefits have been key mandated parts of Vermont´s EEU program, to ensure accountability, allow proper planning, and as a requirement for the EEU performance-tied compensation system. Vermont law requires the PSB to provide for the independent evaluation of programs delivered by the EEUs funded through the EEC. The PSB appointed the state government´s Department of Public Service (DPS) to undertake this function. The DPS has evaluated the achievement on performance indicators of the EEUs from 2000-8, using consultant assistance.

Program flow chart

Program Flow Chart

Efficiency Vermont flowchart.jpg

Impacts and Results

366 GWh (2009-2011 total)
Analytic base for target (or target setting mechanism):

Vermont’s 2011 Long-term Demand Resource Plan (DRP) includes a new foundation for setting targets and budgets for Efficiency Vermont. Key elements of the DRP are annual electricity efficiency acquisition goals and budgets for a 20-year period, annual provisional heating-and-process fuels efficiency goals and budgets for a 10-year period, and performance indicators, budgets and compensation structures for the EEUs for the upcoming three years.

Targets are justified by two electricity efficiency potential studies for the state of Vermont that were prepared for the PSB. The studies found an economically achievable energy efficiency potential of about 30% by 2031.

Savings (program total):
287 GWh per year over three years (2006-2008)
Average unit cost of energy saved:

4.1 cents/kWh (2010)

Non-energy benefits (co-benefits):

Not reported

Other useful information

Useful reports: