Vermont Legislature SmartTranscripts:

[Speaker 0]: Good afternoon. This is the House Appropriations Committee. It's Thursday, 02/05/2026. It's about 04:15PM. We are back from an unexpected roll call, And we'll find the story out later. But thank you so much to the Department of Public Service for your patience. This is life in the legislature sometimes. So reorient us as

[Speaker 1]: to where we are now,

[Speaker 2]: please. Okay. We are on slide 16, engineering division. And again, just some high level numbers here. So the engineering division is made up of nuclear engineering, electrical, and then gas line pipeline safety. And so here are just some, again, high level numbers over the years so you can have a sense for how it's tracked over the last four years.

[Speaker 0]: It's also helpful to see some of the things you do.

[Speaker 2]: Slide 17, public advocacy division. This is our division of lawyers and they, the division is the public advocate. They're the ones that are testifying in front of the PUC and representing Vermonters in those cases. So

[Speaker 0]: what kind of appeals? Successful. Do you know what those were about?

[Speaker 2]: We were just saying,

[Speaker 3]: I'm like

[Speaker 0]: Yeah, I was gonna ask you that question.

[Speaker 2]: We were just thinking, I'm like, you know, I don't recall off the top of my head what those are, and I should know, but

[Speaker 3]: We can get back to you if you would like.

[Speaker 0]: Curious about what sort of things you do to get to the Supreme Court.

[Speaker 3]: I will make a note.

[Speaker 2]: I'll get back to you. Just curious. And I guess overall, generally, I'd just say the department and division has been participating a lot. There's been a lot more cases, and a lot more electric rate cases coming from the department because of all the pressures that are coming in on utilities. Just like any other business, there's a lot of variables and a lot of pressures, and there's also regional pressures. And so there have been more infrequent, and so a lot of work going on. Next slide, 18, State Energy Office. This is just a glimpse of some of the federal funding and the programs that that division was working on over the last fiscal year. That is not an exhaustive list. I could actually get you a different list here that I can provide afterwards, which shows more of the like all of the federal funding and the programs running through that division. But for the purposes of the fiscal 'twenty six accomplishments slides, that is just the short list of some of the things that they were working on. And so we can go over this in more detail if wanted or to the extent that I can. But as I mentioned, there is this longer list of federal programs that runs through the Department. We have a nice code here, which shows the programs that are moving forward. There's a few here you'll see in yellow. Those are having a few more challenges, some pending. Some of those programs are conditional. And so funding has not been released. And frankly, we don't expect it to under this administration.

[Speaker 0]: So this is federal. Is that chart in this book? It not. Apologize. We'll follow-up. So this is mail it to Autumn and then she can post it so we can have it. So that's different from the ARPA stuff. But then you have this federal funding uncertainty. So that's some of what you're talking about.

[Speaker 2]: Right. So, this list then shows kind of the programs, but more specifically on slide 19, home electric rebate program, 29,000,000, and then a couple of smaller programs as well. Again, those are conditional. We don't expect to receive those.

[Speaker 0]: You don't expect to receive. So what are they conditional upon?

[Speaker 2]: That's a good question. I don't know how to answer that other than they're not guaranteed, they're not in our coffers, they're not programs we've been working on.

[Speaker 1]: Okay.

[Speaker 2]: And then as you all have probably heard, Trump administration terminated the $62,500,000 Solar For All program that we had been working on and starting to deploy, setting up programs, getting MOUs and contracts executed, and then it was terminated. And so we worked with the Attorney General's office to work on the documentation for suing, and that is still pending. And I don't have a great update there. It's been

[Speaker 0]: It's a year from the courts, right? That's what we're going to hear. Yeah.

[Speaker 2]: Slide 20. This is how the breakdown of our fiscal 'twenty seven budget of looks like. So as you all probably know, the department is special funds department, gross receipts tax. That's where we collect the vast majority of our revenue, and then net metering fees. So that's this special fund column there. Our fiscal 'twenty seven budget request has said $12,600,000 spending authority for special funds, and then 18.5 in federal funds, 1.5 in term of adult. Next slide. This actually breaks down the $18,500,000 in federal dollars. This is what it looks like. So 16,300,000.0 of that spending request authority is going out in grants and programs. And then you'll see the other breakdown of the operational costs, contracts, salaries, and benefits. How many people are in the department? So there are a total of 64 positions.

[Speaker 1]: 63. 63?

[Speaker 0]: Thanks. Wayne?

[Speaker 4]: Just who are the usual recipients of your grants? What types of activities?

[Speaker 2]: Well, would depend on the program. As I mentioned, have kind of a long list of grants and programs here. And so distribution utilities for grid enhancement grants, there were some grants going out to public schools for renewable heating. There was a large grant going to Efficiency Vermont for weatherization.

[Speaker 4]: That's a

[Speaker 3]: general idea.

[Speaker 2]: Slide 22, this further actually of leads into your question there. This further breaks down the 16.3 in grants going out. These are the actual programs that we are looking to deploy federal dollars out of in fiscal twenty twenty seven.

[Speaker 0]: So the big one is the home energy efficiency rebate. So if I buy a refrigerator that's more efficient, I might get a rebate? Or is this heat pumps? Or what is this for?

[Speaker 3]: So this is

[Speaker 2]: homes. So this is the $29,000,000 This is part of the 29,000,000 we're getting from the federal government. But we're going to grant it directly to OEO for modernization. Yep. So low income home modernization.

[Speaker 3]: Yep.

[Speaker 2]: Slide 23. This is a pie chart that shows that orange column two slides back that showed the $12,600,000 in our budget. This is just a further breakdown of that, those special funds. And as you can see, vast majority coming from the gross receipts tax.

[Speaker 0]: Is that radioactive waste compact, is that the stuff that's still left at Vermont Yankee?

[Speaker 2]: Yes, so that fund is Something else? So there's also waste that come from hospitals that's shipped to Texas. So it's not necessarily revenue. A fund. We pay the bills. We bill back for those bills. So it's kind of money in, money out.

[Speaker 0]: Not revenue. So it's really

[Speaker 1]: poor hospital waste. Has that caught you?

[Speaker 2]: Yeah, I actually need to check because I'm not sure if NorthStar pays directly. Do we pay them and we bill them back to North Star or are they separate? North

[Speaker 3]: Star pays us directly toward the amount that we bill them back.

[Speaker 2]: It is $3.70. It's the

[Speaker 1]: Yep. That's what Dorian

[Speaker 4]: Statewide all the way through.

[Speaker 2]: Yep. So there's a little bit that comes from hospitals.

[Speaker 4]: University research hospitals, x-ray machines, so that kind of stuff. But

[Speaker 2]: the vast majority being Okay. Slide 24 had some good questions in house energy last week about the gross receipts tax, what it was, and what it looked like in terms of revenue collection. So '24 shows a little bit about the revenue we've collected from electric utilities. We lumped non electric altogether. It's a small number. And so when you start to break it out between cable and gas and water, which we can provide more of a breakdown, but just so you can see a majority, twothree of that really comes from electric utilities paying in their gross receipts tax. So we collect roughly 10,000,011 million dollars over the course of the last few years from gross receipts. That is then divine between the department and the PUC. The department receives 60% of revenues, and the PUC receives 40%, which you've any

[Speaker 1]: You used those ratios in the last couple of years. Was there a conversation about that?

[Speaker 0]: I may be thinking of something else.

[Speaker 2]: No, you did, but it

[Speaker 3]: was more than the last few years.

[Speaker 0]: I'm fading myself.

[Speaker 2]: You were on ways and means and I was on appropriate.

[Speaker 0]: So, it was a while, yes. Okay. Time flies. All right.

[Speaker 2]: Sure the PUC commissioner would be happy to take

[Speaker 0]: a I'm curious because I can have some memory about that stressing and figuring out who

[Speaker 3]: got what percentage. I believe the split between the department and the commission was looked at, at the same time, the rates that the utilities paid was looked at.

[Speaker 2]: Slide 25, because there was a specific ask about remaining ARPA funds. We do have a small amount of ARPA, 130,000. This is fully encumbered or allotted to GMP. And it's just a matter of getting the invoices to pay the rest of that

[Speaker 0]: out.

[Speaker 3]: So you

[Speaker 0]: think it will be fully expended by December this year?

[Speaker 3]: Oh, yes. I am hoping it will be fully expended by March. Thank you.

[Speaker 2]: Slide '26. These are the ARB book programs that were reverted to general fund and the remaining amounts there.

[Speaker 3]: Those you have a little

[Speaker 0]: bit beyond December 2026. I think we gave an extra six months or

[Speaker 3]: Yeah. Yes, because there some cleanup, some administrative work that has to get done after December.

[Speaker 2]: So all those are, again, fully, fully obligated. Plans are in place. Things moving. Okay, slide 27. These are a couple of budget requests, I guess. One is in the governor's recommend. This is the conversion of one limited service position to a permanent classified position. This is for we created, we reclassified a position that we had, and we created a director for our admin services division. There was not a distinct director. One, actually the CAPI director was leading two divisions. And so we wanted to kind of true it up and ensure that there was a director for the business office. There's a lot of money, as you can see from our list going through the department, a lot of work happening. And so it was important for us to have a director. But what we had for positions were limited service. And so we've requested that that be converted to permanent in the budget. The other item is actually a policy ask, but it has a financial impact on our budget. It's changing the cadence of the ten year telecom plan. An update is due every three years, and that comes at a fairly significant price tag. That's roughly like a half $1,000,000 for us to do those updates. There are several reasons why pushing it out a few years would be a good idea. Technology is not moving as rapidly. A large portion of that update is already done through the BCBB. That work is delegated to them. And then the public engagement process that we conduct. The three years is kind of just like, we know more, get done doing the process and running a plan. It's like we're reengaging the public on the so the timing is a little bit too close together at a pretty significant price. The way we've built our 'twenty seven budget, we've accounted for and we're hopeful for this policy change happening. So if that doesn't happen, we'll have a little bit of pressure on our fiscal 'twenty seven budget, which could be somewhat easy to manage or could be a little bit more difficult. That's how all things play out.

[Speaker 0]: I remember hearing about this. I guess it was a bunch Budget. Of

[Speaker 2]: Yeah. When is the current plan expiring? I wonder if you do miss it. Fiscal twenty seven is when that

[Speaker 3]: That's when they grow. Yep.

[Speaker 1]: Right.

[Speaker 0]: You spend all your time adopting new plants and not actually doing the other work you do. You

[Speaker 3]: get done writing some of those actions before you can do the actions. Exactly.

[Speaker 2]: There was even a conversation in House Energy the other day about whether or not there's even validity in doing it the way that we have been. Does it need to be changed? Is it worth doing it? Are we still going to get the information that we need? To which the answer was yes from our telecom director. So at the very least, pushing it out. And there may be even more conversations about whether or not that or a different version of it is needed. Slide 28. This just identifies a few budget pressures. So we have the comprehensive energy plan, which needs to happen every six years. And that also has a very robust stakeholder process. We have budgeted that in fiscal 'twenty seven, but that too comes at about a half $1,000,000 price tag. So just wanted to identify that as a one time up for us, but we have it baked in. The EPSDEPUC database and CRM, the portal, the customer interaction portal, and the way that we track things. That is also something that we will be paying for quite a bit of anyway in fiscal twenty seven. There's also been some other one time pressures here and there from federal funding changes that we've needed to account for. And so that comes with a little bit of one time pressure here and there to make up for there was a cap on fringe benefits. And so we had to change the way that we had our federal budgets, our state energy plan budgets for federal dollars. We had switch some things and cover more with GRT. So I just mentioned that as there's little one off pressures here and there that we've identified. But then also, there's some relief in that we've removed four unused unfilled positions. Two are related to the clean heat standard, and then two were the emergency rental assistance program, ERAP program. Those are being removed in this budget. And then as I already mentioned, it's a near telecom plan. Could be a pressure if that's not changed.

[Speaker 1]: Yeah, sure. Physicians, what were they doing in the

[Speaker 3]: wildlife public service? That was before my time with you. I do know. They were given to the department at the beginning of the pandemic to help facilitate and stand up the emergency rental assistance program, where we, in effect, paid for utility bills for people who were in arrears.

[Speaker 2]: So it was just pandemic specific?

[Speaker 3]: Yes. Yes. And we've tried to repurpose those positions to other things, and we've been told that we cannot repurpose them, we cannot fill them. So this is more of a housekeeping thing.

[Speaker 2]: Slide 30, this is the start of ups and downs. Take it away.

[Speaker 3]: Oh, this is me.

[Speaker 0]: Yeah, so if there are

[Speaker 3]: big things, there really isn't anything overly exciting about this budget.

[Speaker 0]: We don't need to talk about salaries and fee for space and I will point out

[Speaker 3]: two things. You can see the removal of the two clean E and two EREP positions is a decrease. Those four positions were half $1,000,000. But two lines down is the comprehensive energy plan, which is going to cost us around our best estimate is $500,000 So between the two, they pretty much cancel each other out, and we're left at a, increase of special funds of just half $1,000,000. So you could say that our our increase is due to the comprehensive energy plan, which is not an every year thing. It is a once every six years or so. Are you comfortable with your vacancy savings target set, like 20 positions? It is not at 20 positions.

[Speaker 1]: That's about two. Two positions. It's two people.

[Speaker 3]: Oh, I'm sorry. That's a good number. Yes, yes. Yes, I toss and turn about that number a lot.

[Speaker 2]: For comparison, we had 533,000 in fiscal 'twenty six. So

[Speaker 1]: Should be extremely big.

[Speaker 0]: Yeah. Yeah. Any other questions?

[Speaker 3]: Fantastic. I spoke too soon. Lynn?

[Speaker 1]: It's on page 14, market studies, and the heat pump evaluation shows they're useless in savings or less than expected, and the electrical efficiency studies showed a decrease in potential from 26 to 27 for a couple of reasons. These have been two big effort pushes to save electricity or to save fossil fuels or Is this a success? Or if the heat pumps are used less, what's going on with that? Probably

[Speaker 2]: my team in the division is better to speak to this, but I will just say that I I don't know if it's better or worse. I think it's important information. I think there was hope that heat pumps would reduce energy burden. It's certainly reducing greenhouse gas emissions, but it's not panning out to the actual savings from a consumer's perspective. But that is largely in part due to actual behavior and when they're being used and how they're being used. So there's a secret sauce to using them so that it equates to cheaper. But when it's summertime and it's hot and you flip it on for AC, that's consumption being used that wasn't necessarily factored into lowering overall. So I think the overall department has found that these are useful in the right times at the right places, used in the right ways. And perhaps even full home systems are better, but those are expensive too. So I think the programs and the money that we're using to deploy them probably need to be reassessed to make sure that we're deploying them in the right way and not adding to folks' burden, but they're used in a way that can reduce the burden. Well, offsets. You might lower

[Speaker 1]: your summer, if you use it for ground conditioning, you're increasing your electric load. You're paying for that. And then if you're using it, because we have a couple of these, and we use them a lot in shoulder seasons, if it's not too cold in the winter, so you lower your heat costs in the oil, but you raise your electric. I mean, it offsets. It's almost like it's not saving, except that it's a different fuel.

[Speaker 2]: Which is good. I mean, we're lowering greenhouse gas emissions doing it that way. But yeah, I think the ideal situation would be it doesn't get used in summer if folks weren't using air conditioners already, right? And then it's only being used at those right moments in the off season to lower fossil fuel use.

[Speaker 1]: So the electric efficiency, is that something where we maximize everything we can get out of that, or is there more to be done?

[Speaker 2]: It's a good question for EBT, but I think essentially the good news is that it's been working, and so there's just less potential out there right now. Thank

[Speaker 1]: you.

[Speaker 0]: The questions. So thank you so much for coming in. Appreciate it. Thanks for your flexibility. We'll leave for a moment. John is your contact, right? John, this is

[Speaker 3]: your Yep, we met in a while. Okay, great. You like to talk

[Speaker 0]: to committee too if there's questions?

[Speaker 3]: Would you like me to send the answers to Representative Kascenska?

[Speaker 0]: I'll to Autumn, and then we can she'll post it so we can all get Thank you. Great, thank you so much. Yep. So committee, that's it for today. That's good. Tomorrow, we have a lighter day. We have Agency of Agriculture at 09:30, Center for Crime Victim Services at 10:15, and then we have the White Fiscal Committee, which is going to go from 12:15 to about 02:00. And that's what we did. So