Energy policy in Vermont

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Energy policy in Vermont
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Quick facts
Energy department:
Vermont Public Service Department[1]
State population:
0.6 million
Per capita income:
Energy consumption
Total energy consumption:
149 trillion BTU [2][3]
Per capita energy consumption:
238 million BTU
Energy spending
Total state energy spending:
$3.151 million
Per capita energy spending:
Residential natural gas price:
$15.17 per thousand cubic foot
Residential electricity price:
17.54 cents per kWh
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Energy PolicyEnergy policy in the United StatesFracking in VermontEnergy and environmental news
Energy policy in Vermont depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in Vermont aggressively focuses on decreasing emissions and dependence on fossil fuels by increasing energy efficiency and promoting the use of renewable energy. As the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, these policies often require subsidies to make the produced energy affordable, and their effects are difficult to measure.

Energy policy involves trade-offs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: Energy policy in the United States for more information on energy policy.
See also: Fracking in Vermont

Energy overview

State facts

Below are quick facts about Vermont's energy climate.


  • has vast forested areas that provide renewable energy sources.
  • does not have any petroleum refineries or petroleum production facilities.
  • does not have any natural gas production or mining facilities.
  • does not have any coal reserves or coal-fired power plants.
  • gets a higher amount of its net electricity from nuclear power than any other state.
  • is a net importer of electricity.
  • consumes the least amount of energy in the nation, in part due to its small population.
  • is the only state in the New England area without a renewable portfolio standard (RPS).[4]

In Vermont

  • three-quarters of the energy consumed in Vermont is petroleum-based.
  • hydropower makes up a significant portion of the electricity generated.
  • almost one-fourth of all energy consumed comes from renewable resources.
  • 47.7 percent of homes use fuel oil as their source of heat.
  • over a third of the total energy consumed in the state is consumed by the transportation sector.[4]

Available energy resources

Vermont has no demonstrated traditional energy resources such as oil, coal or natural gas. The state mainly consumes petroleum-based energy, but, according to the U.S. Energy Information Administration (EIA), "it neither produces nor refines petroleum." The lack of resources in Vermont explains why it imports most of its energy.[4]

Three-fourths of Vermont is forested, and the forests provide ample renewable wood products for electricity and heating. The state uses traditional wood products and biomass generation. Almost one-fourth of all energy consumed in Vermont comes from renewable sources. The state has policies in place to encourage the use of renewable energy for both heating and electricity. Almost half of all electricity consumed comes from renewable sources, most from hydroelectric generators in Canada and New York. Vermont also has about a dozen of its own hydroelectric dams that provide for about one-tenth of state consumption.[4]

Consumption and prices

Energy consumption in Vermont
VT energy consumption chart.png

     Transportation       Residential     Industrial       Commercial
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A third of total energy consumption in Vermont goes to the transportation sector, and mainly in some form of petroleum. The next largest sector is residential, with a little over 30 percent of net energy consumed by residents of Vermont. Vermont ranks 41st in per capita consumption, meaning that consumption in Vermont is well below the national average. The sector consuming the least amount of energy in Vermont is the industrial sector, with about 16 percent of total consumption. This can be explained by the fact that the major industries in Vermont are not energy intensive.[4]

Vermont's gas price generally tracks the national average, but it is usually slightly more expensive. The higher price may be explained by Vermont's lack of any petroleum producing facilities and thus the state has to import petroleum.[6][7] According to the EIA's February 2014 report, the federal excise tax is 18.40 cents per gallon of gasoline and 24.40 cents per gallon of diesel fuel. In addition to that, Vermont collects a total tax of 26.7 cents on every gallon of gasoline, gasohol diesel fuel, which ranks it at the 23rd highest in the United States.[8][9]

Comparisons tables

The table below compares Vermont's consumption and spending for energy, as well as prices for gas and electricity, and carbon emissions to those of New Hampshire, which has similar population, resources and consumption needs because of climate and geography. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • Vermont's rank of 50th in carbon emissions means that it emits less carbon than does New Hampshire with a rank of 45th.
  • Per capita income in New Hampshire is higher than the national average, and much higher than in Vermont, which at 22nd, ranks 12 places behind New Hampshire's ranking of 10th in per capita income.
  • Per capita spending in Vermont is somewhat similar to New Hampshire, Vermont is 17th in the nation, compared to New Hampshire's rank of 25th.
  • Vermont ranks fourth in the nation for the price of natural gas, meaning that only three states have higher prices.
  • On the other hand, New Hampshire has similar rankings for prices to those in Vermont. New Hampshire ranks seventh for electricity prices and seventh for the price of natural gas. These higher prices may be due to the source of production in the states, as neither state employs cheap sources of energy like coal.[4][10]
Consumption and Expenditures Comparisons Summary
Type VermontNew HampshireU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population0.6 million501.3 million42313.9 million
Per Capita Income Average$42,99422$47,05810$42,693
Total Consumption149 trillion BTU51292 trillion BTU4697,301 quadrillion BTU
Per Capita Energy Consumption238 million BTU41222 million BTU43312 million BTU
Total Spending on Energy$3.151 million50$5.965 million44$1,394,088 million
Per Capita Spending on Energy$5,02917$4,52625$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$15.104$14.257$12.48
Price of Electricity, cents per kWh17.54516.43712.31
Total Carbon Dioxide Emissions, million metric tons (2010)65017455,631
*Rank is from highest to lowest.

Nearly half of Vermont residents employ fuel oil, derived from petroleum, to heat their homes. Only 4 percent of Vermont's residents use electricity to heat their homes. Both natural gas and liquified petroleum gases (LPG) make up about 15 percent of the consumption of energy for home heating.[4]

See also: State Energy Rankings to compare all 50 states
Consumption of energy for heating homes in Vermont
Source Vermont 2011 U.S. average 2011
Natural gas 15.2% 49.5%
Fuel oil 47.7% 6.5%
Electricity 4.2% 35.4%
Liquid Petroleum Gases (LPG) 15.4% 5%
Other/none 17.4% 3.6%

Production and transmission

Vermont produces energy in the form of nuclear power (62.84 percent) and what the U.S. Energy Information Administration classifies as 'other,' (37.29 percent) which is "assumed to equal consumption of all renewable energies except biofuels." Because the state does not produce natural gas it has to import its supply from Canada and New York. The majority comes from a small pipeline from Canada. The crude oil that Vermont depends on comes from Maine, Canada and North Dakota. Some of the pipelines have been constrained because of ecological concerns about environmentally sensitive areas.[4]

Energy production by type in Vermont, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Nuclear 51.4 62.84% 0.62%
Other 30.5 37.29% 0.43%

Vermont has only one natural gas distribution company, Vermont Gas Systems (VGS). The Vermont Public Service Board (PSB), regulates this company.[11] Vermont has three types of electric utilities: investor-owned, municipal and member-owned rural electric cooperatives. There are seventeen utilities in total, one investor owned, 14 municipal and two cooperatives. The companies are technically regulated monopolies and operate under a Certificate of Public Good, which means the rates the companies charge are subject to review by the Public Service Department. The transmission system in Vermont is of special importance because about half of the energy consumed is imported. The Vermont transmission system consists of 534 miles of power lines and 25 substations. The entire transmission system is operated by the Vermont Electric Power Company (VELCO). VELCO is a member of the Vermont Energy Partnership, which is also responsible for building and maintaining the system statewide.[12][13]

Where electricity comes from in Vermont[14]
Type Amount generated (MWh) % of state** % of U.S.**
Nuclear 448,000 72.85% 0.06%
Hydroelectric 9,600 1.56% 0%
Other renewables 69,000 11.22% 0.03%
Total net electricity generation 615,000 100% 0.01%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

Energy policy

Policy Issues
Vermont has already met its non-binding renewable portfolio requirement that 20 percent of electricity be generated from renewables by 2017, but if those numbers slip below the required levels before 2017, existing legislation will kick-in and require a renewable energy portfolio standard.
See also: Fracking in Vermont

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves trade-offs in which energy production and prices are weighed against environmental concerns and efficiency. Energy policy in Vermont is driven by efficiency, probably because the prices for electricity and natural gas are among the top 10 highest in the nation. Vermont has an atypical renewable portfolio standard (RPS). The standard is a non-binding goal of 20 percent by 2017, which it has already met, but if it slips before 2017 legislation already in place will kick-in and create a binding Renewable Energy Portfolio standard. This program, Vermont's Sustainably Priced Energy Enterprise Development (SPEED), was enacted in 2005. Utilities can meet the goal by providing energy produced from renewable technologies such as, solar, landfill gas, wind and hydroelectric. Companies can also meet the requirement by implementing more efficient systems.[15] A report required by the legislation that created SPEED evaluated the possibility of requiring an RPS standard. The report concluded that a requirement of 75 percent renewables by 2034 was reasonable.[16] A 2011 report by Vermont's Public Service Department encourages the residents of Vermont to work towards a 90 percent renewable energy goal by 2050.[17][18][19][20]

In energy efficiency, Vermont ranks seventh in the nation according to the American Council for an Energy-Efficient Economy's (ACEEE) 2013 rankings. This is a two position drop for Vermont since 2012, but only a one point loss in the scoring system.[21] There are differing estimates about the economic impact of these mandates in terms of costs that may affect prices and jobs, as well as the impact on the environment and pollution. Thus, for example, there are many new studies of what is called the "rebound effect" which refers to the fact that "some of the theoretically estimated gains in energy efficiency will be eroded as consumers consume additional goods and services."[22][23]

Major legislation

  • House Bill 446 (2009) imposes a feed-in tariff requiring utilities to purchase renewable energy generated out of state at a higher price. Feed-in tariffs are policy mechanisms designed to accelerate investment in renewable energies. The bill is part of the RPS requirements in Vermont. The Institute for Energy Research, a free-market think tank, attributes higher prices for energy in Vermont to tariffs like this.[24][25]
  • Vermont's Sustainably Priced Energy Enterprise Development (SPEED) Program was created by legislation in 2005. The program itself does not establish a renewable portfolio standard or goal, but if the Vermont Public Service Board determines that the established minimum obligations of the SPEED program are not met, then the state's utilities will be required to meet a binding RPS goal. The SPEED program encourages utilities to sell renewable energy sources to consumers.[26]
  • 24 V.S.A. Chapter 87, Section 3261 et seq. creates Vermont's Property-Assessed Clean Energy (PACE) program. The program allows individuals to borrow money from the local government in order to finance energy improvements to their property. The PACE legislation covers such things as installing solar panels and small hydroelectric projects. PACE legislation must be enacted by local governments in order for those interested in receiving the rebate to qualify.[27][28]
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Government agencies and committees

  • The Natural Resources Conservation Service of Vermont, under the purview of the United States Department of Agriculture, works with agricultural producers and landowners to improve agricultural energy conservation and efficiency.[31]
  • The Vermont Public Service Department (PSD) of Vermont works to advance quality of life, economy and security for Vermont residents by using sound statewide energy goals. The PSD is also charged with representing the public interests in energy, telecommunications, water and wastewater, and utility matters.[32]
  • The Vermont System Planning Committee (VSPC) works to improve the utilities in Vermont and make sure new developments are cost-effective. The committee focuses on the long-term, and encourages public involvement by educating the public and providing a transparent process for all aspects of the VSPC's activities. The VSPC is made up of representatives of each electric distribution and transmission utility in the state, three public members representing the interests of residential consumers, commercial and industrial consumers, and environmental protection respectively. There are also three non-voting members that participate in the VSPC, including Vermont's Energy Efficiency Utility, the Sustainably Priced Energy Enterprise Development Facilitator and the Vermont Department of Public Service.[33][34]
  • The Vermont Public Power Supply Authority (VPPSA) is a private authority of the state of Vermont empowered under 30 VSA, Chapter 84 with the power to buy and sell power within and outside Vermont. VPPSA provides wholesale power supply to municipals and cooperatives in and outside of Vermont, as well as a many other services including tax free financing of certain capital projects.[35]
  • The Vermont Department of Environmental Conservation's (DEC) mission is to preserve, restore and conserve Vermont's natural resources and protect the health of Vermont residents. The DEC regulates waste and works with companies to reduce pollution.[36]
  • The Agency of Natural Resources is responsible for protecting Vermont's environment, natural resources and wildlife and maintaining the state's forests and parks. The agency is managed by the Vermont Secretary of Natural Resources. The agency regulates air and water quality, state lands, and state dams.[37]

Major organizations

  • The Vermont Energy Partnership hopes to keep Vermont a great place to live and work. The organization collaboratively advocates for sensible solutions that ensure Vermont has reliable, affordable and clean energy. They educate the public by doing research and holding public forums.[38]
  • Efficiency Vermont strives to lower energy costs and increase the strength of the local economy, all while protecting the environment by making businesses and homes more energy efficient.[39]
  • Renewable Energy Vermont is a nonprofit, nonpartisan, trade association that represents about 300 businesses, individuals and colleges committed to reducing our reliance on fossil fuels as well as increasing the availability of renewable energy options.[40]
  • The Renewable Energy Atlas of Vermont is a group dedicated to analyzing existing and possible locations for renewable energy projects. The group was designed to help town energy committees, policymakers, businesses and Vermont citizens further their knowledge of environmental issues. The organization provides research and makes recommendations about areas with potential for development of renewable energies.[41]
  • The Vermont Energy and Climate Action Network (VECAN) works to energize Vermont communities in order to provide grassroots support for policies that will reduce energy costs and the human impact on the climate. VECAN serves as an information conduit for the public, connecting towns to resources and tools they would not otherwise have access to, and providing direct technical assistance and education.[42]

In the news

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See also

External links


  1. Public Service Department, "Energy Efficiency," accessed March 14, 2014
  2. These figures come from the U.S. Energy Information Administration's State Profiles and Energy Estimates, Vermont Overview. Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for November 2013. Updated pricing information is available on the state's EIA profile. Prices will be updated on this page biannually.
  3. U.S. Energy Information Administration, "Vermont Overview," accessed February 5, 2014
  4. 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7 U.S. Energy Information Administration, "Vermont Overview," accessed February 28, 2014
  5. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  6., "Vermont," accessed February 28, 2014
  7. To compare current gasoline prices in Vermont to the U.S averages, go to
  8. U.S. Energy Information Administration, "Petroleum Marketing Monthly," February 2014
  9. The Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013
  10. U.S. Energy Information Administration, "New Hampshire Overview," accessed February 28, 2014
  11. Public Service Department, "Natural Gas and Propane," accessed February 28, 2014
  12. Public Service Department, "Electric," accessed February 28, 2014
  13. Vermont Energy Partnership, "Vermont's Electric Transmission System: What You Need to Know," November 9, 2006
  14. These figures come from the EIA State Profiles and Energy Estimates U.S. Energy Information Administration, "Vermont Overview," accessed February 5, 2014
  15. Database of State Incentives for Renewables and Efficiency, "Vermont: Sustainably Priced Energy Enterprise Development (SPEED) Goals," May 20, 2013
  16. Vermont Government, "Study on Renewable Electricity Requirements Prepared by the Vermont Public Service Board," October 3, 2011
  17. Public Service Department, "Comprehensive Energy Plan," accessed February 28, 2014
  18. According to a report called "The Status of Renewable Electricity Mandates in the States," by the free-market Institute for Energy Research, the cost of electricity in states with RPS were on average 38 percent higher in 2010 than in states without a RPS.
  19. Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
  20. Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
  21. American Council for an Energy-Efficient Economy, "2013 State Energy Efficiency Scorecard," November 2013
  22. International Risk Governance Council, "The Rebound Effect: Implications of Consumer Behavior for Robust Energy Policies," accessed March 3, 2014
  23. Scientific American, "How Bad Is the Rebound from Energy Efficiency Efforts?," May 21, 2013, accessed March 3, 2014
  24. National Renewable Energy Laboratory, "A Policymaker's Guide to Feed-in Tariff Policy Design," July 2010
  25. Institute for Energy Research, "Vermont," accessed February 28, 2004
  26. Database of State Incentives for Renewables and Efficiency, "Vermont: Sustainably Priced Energy Enterprise Development (SPEED) Goals," May 20, 2013
  27. Database of State Incentives for Renewables and Efficiency, "Local Option - Property Assessed Clean Energy," May 20, 2013," accessed February 28, 2014
  28. Vermont Legislature, "Title 24: Municipal and County Government," accessed March 14, 2014
  29. Vermont Legislature, "Legislative Directory: 2013 - 2014 Legislative Session," accessed March 17, 2014
  30. Vermont Legislature, "Legislative Directory: 2013 - 2014 Legislative Session," accessed March 17, 2014
  31. Natural Resources Conservation Service Vermont, "Energy," accessed February 28, 2014
  32. Public Service Department State of Vermont, "Welcome!," accessed February 28, 2014
  33. Vermont System Planning Committee, "About the Vermont System Planning Committee," accessed March 14, 2014
  34. Vermont System Planning Committee, "Default," accessed March 14, 2014
  35. Vermont Public Power Supply Authority, "About Us," accessed February 28, 2014
  36. Department of Environmental Conservation, "Welcome to the DEC," accessed February 28, 2014
  37., "Secretary Markowitz's biography," accessed November 28, 2011
  38. Vermont Energy Partnership, "About Us," accessed February 28, 2014
  39. Efficiency Vermont, "About Efficiency Vermont," accessed February 28, 2014
  40. Renewable Energy Vermont, "About Us," accessed February 28, 2014
  41. Renewable Energy Atlas of Vermont, "About Us," accessed February 28, 2014
  42. Vermont Energy and Climate Action Network, "About VECAN," accessed February 28, 2014