Vermont Legislature SmartTranscripts:

[Rep. Kathleen James (Chair)]: You're left. Yeah. All righty. Welcome back to House Energy and Digital Infrastructure. And we will quickly go around the table and just introduce ourselves. But we won't do our usual practice of having everybody in the room introduce themselves so that we can stay on time today. And then we'll turn it over to our esteemed guest, the attorney general. So I'm representative Kathleen James from Bennington four.

[Rep. R. Scott Campbell (Vice Chair)]: Scott Campbell from John Scoraim. Richard Bailey from Lemoyle, two. Tamara Winds in Windsor, Bennington.

[Rep. Michael "Mike" Southworth (Member)]: Michael Southworth, Caledonia, two. Christopher Howland, Roland, four.

[Candice Morgan (Green Mountain Power)]: Territory, Washington, two.

[Rep. Bram Kleppner (Member)]: Graham Plutner, Chittenden, 13, Berlin.

[Rep. Laura Sibilia (Ranking Member)]: Doris Villa, one, two. For the record.

[Charity Clark (Vermont Attorney General)]: I am Charity Clark, attorney general. It's so nice to be here. I don't get to come to the State House too much in October. I do. I go to the gift shop. That's where I am. So for Christmas shopping. So we've got half an hour to hear from you today. So no huge rush. We've got time for your presentation and questions, I'm sure. Well, I know that there was a request for written testimony. So we have submitted that. What I have to say isn't a lot more than what you have already read if you've read our written testimony. But I will start from the top. I guess I should begin by saying it has been an unusual year for the attorney general. We have spent a lot of time bringing lawsuits against the federal administration for violation of the constitution and federal law. It has taken up quite a lot of the focus of me personally. And there are a couple of lawsuits that are included in the work that we have done at this point. I think we've sued 33 times. And then there's just a couple of other things I wanted to notice. There has been a dramatic shift, as I think everyone realizes, in the dynamic between the federal administration and this topic on the state level. So we are experiencing that from the role of being the office obligated to bring a lawsuit when there is a violation of the constitution or federal law. So with that being said, I will begin by noting one of the lawsuits that we brought that was covered by the newspaper, so you probably have heard of it, was the NEVI lawsuit. The NEVI lawsuit had a basis of the program that brought $16,000,000 in federal funds to use for the EV infrastructure, primarily. And I'm probably repeating things that other people have said this morning, so forgive me if I have. But Not much. Okay, good. So this is mostly for charging stations. For those of you who are unable to attend Governor Scott's State of the State, he's mentioned this in his State of the State at least once. I remember maybe a couple of times that we all want to move to a more climate friendly transportation mode, but charging stations can be a challenge. So this was a great program that was going to help with charging stations. However, in February, the federal government withdrew all plan approvals and guidance for the approvals, saying they want to renew the guidance. So at that point, we had started thinking about bringing a lawsuit. When a guidance wasn't issued, we did bring a lawsuit, and that was in early May. In late June, the court issued a preliminary injunction that required the federal government to fund the plans as previously approved. However, we were not included in the list of states that received the relief because we did not have a declaration at that time. Since that time, we had moved for summary judgment, which summary judgment is, like, on the facts. And we were lucky enough to have Senator Perchlich provide a declaration that described the harms here in Vermont at that time. So that was helpful. And then after we filed the motion, the Federal Highway Administration issued the new guidance that reapproved all the plans, including Vermont's. This was a roller coaster. I'm just taking you on the ride. So we did get our money eventually. And we're still briefing on the motion for summary judgment that we can make sure we're protected moving forward. So that's the tale of Neve.

[Rep. Kathleen James (Chair)]: Is that money in the

[Charity Clark (Vermont Attorney General)]: where is the money? That, I don't know that we can do. I just know we got the money. I don't know exactly logistically what that means. But this is not the journey that I just took you on isn't totally foreign to us, where we could have just started in the beginning and left things as they were, but then we have to fight. Then in the end, just end up where we were in the beginning. So it's a happy ending, but it was kind of a necessary journey that we all had to go on. So should I move on to the next lawsuit, which is a Solar for All lawsuit? Questions about NEVI? Yeah. Okay. So Solar For All is a $7,000,000,000 program nationally that was conceived by our very own Senator Sanders. So very cool program. Vermont was set to receive and did receive $62,000,000, a lot of money. Think of all the lawsuits we brought. I'm struggling to think of one that by itself was that much money. It's just a ton of money. It was designed essentially to put solar panels on the roofs of lower income people. The number of households that would have benefited was 8,300. So a lot, a lot of money, a lot of households. The state had already started, we'd already invested money in standing up the program, which had been years in the making, because this was passed, I think in 2022. So we were very frustrated by this development. We were fortunate to have the cooperation of the governor's office. So we worked with the administration to provide a necessary declaration. The lawsuit was filed maybe two weeks ago. And I'm saying lawsuit, but actually it was three lawsuits. Not to get into the weeds, but just because it is noteworthy. We had a recent Supreme Court decision that is unusual, I'll just try to be polite and say it's unusual, that said these kinds of claims that are about basically a contract, like we had an agreement with the government, the federal government, that we were gonna do this. And they needed to be, instead of regular federal court, they had to go to the Court of Federal Claims. So we sued first in the Court of Federal Claims on the contract dispute. We had this agreement, they breached the agreement, that kind of argument. And then the very next day, we sued in regular federal court. And I think that was in Massachusetts, but it could have been Washington. I can't remember exactly which federal court. But it was a lot of the states. So far, only Democratic states have joined in these lawsuits. I keep thinking that's going to change. But so far So maybe there was 20 of us who sued. We also, if I'm remembering correctly, nope, that was a snap lawsuit. Sometimes we have cases where, like in Pennsylvania and Kentucky, the governors of those states used to be attorneys general. And in those states, the governor has power to bring a lawsuit in a way that in our state, the governor doesn't have that power. So sometimes you'll see the number is higher than the number of Democratic attorneys generals because former attorneys general who are now governors want to bring a lawsuit. So that's just a fun fact for you. So the Solar for All case was filed. We have not filed a motion for preliminary injunction. I should have said this in the beginning. A motion for preliminary injunction is a way to have the court stop the harm right away. What you have to do when you're filing one of those is you have to like standard you have to meet. Do you have to say? This is creating a harm and we are likely to win at the end of the day. And so this harm shouldn't continue for the three years, four years, five years that this case is going to take to resolve. You should just put a pause on this action these defendants are taking right now. So we have not yet filed a motion for pulmonary injunction in the Solar For All case. We're looking into that and whether that's feasible. So stay tuned on that one. And I mentioned two cases, but I forgot the last one. More recently, we had to file a third case in the Sole For All case in the DC Circuit. That's a different court than the initial the second lawsuit we filed. So and that's only necessary if the court decides that the grant cancellation is an action under the Clean Air Act. If you have a Clean Air Act case, that's the court you have to file in. You can see how we're benefiting greatly from having so many lawyers across the country working on these, because if it was just our office, it would really be a nightmare. So we benefited from the economies of scale and the collaboration that has been taking place all these many months. And actually, last year, we started long before Donald Trump was elected and changed so many of these policies. So that's the Solar for All case. Any questions about Solar for All?

[Rep. Kathleen James (Chair)]: You said on this one you did not file a preliminary injunction?

[Charity Clark (Vermont Attorney General)]: That's right, not yet. We are looking at that. Okay. Sure.

[Rep. Kathleen James (Chair)]: And how quickly are you said that these cases can take years? Mean, I'm we have curious about the timeline.

[Charity Clark (Vermont Attorney General)]: You never know. We had cases that we filed during the first Trump administration that were still going on, many actually, that were still going on when Joe Biden took office. And he had to decide, Okay, we're going dismiss this one. We'll hold on to this one. I mean, so it's I'm sure that's going to happen again this year, especially because there's so many more cases. The first time Donald Trump was in office, we sued 62 times the entire four years. We're already at 33 cases, and it's only October. So and the cases were of a really different flavor. During the first Trump administration, they were environmental cases. Like half of them were environmental cases, trying to unwind environmental policies and statutes. Right now, all the cases relate to the rule of law. Some of them also relate to the environment, but there's just topically, they're diverse. But the violations are very much the same. It's doing the job that Congress is supposed to be doing. That's the legislative branch's job. But the Trump administration wants to do it themselves. They're trying to unwind grants that have been given by Congress and that kind of thing.

[Rep. Laura Sibilia (Ranking Member)]: So. Yeah, the

[Rep. Christopher Howland (Member)]: solar for all, I think that was essentially a fifty fifty split that the last 50% of that silver for all was gonna come out of state funds. Am I correct?

[Charity Clark (Vermont Attorney General)]: I don't think so. No.

[Rep. Christopher Howland (Member)]: That was all federal money then.

[Charity Clark (Vermont Attorney General)]: Yeah. I don't know what the state end of it was, but it

[Rep. Laura Sibilia (Ranking Member)]: was $62,000,000

[Rep. Christopher Howland (Member)]: 63,000,000 is the federal.

[Charity Clark (Vermont Attorney General)]: 62, yeah. And we what happened with that case is we had received the money was in our account. And I think $59,000,000 was liquidated from our account. It was already in our account.

[Rep. Christopher Howland (Member)]: Was drawn back. Yep.

[Charity Clark (Vermont Attorney General)]: I know. Should have put it in a coffee can under the bed.

[Rep. Christopher Howland (Member)]: Where do you live?

[Charity Clark (Vermont Attorney General)]: All right, shall we move on to the next one?

[Rep. Kathleen James (Chair)]: Yep, I

[Charity Clark (Vermont Attorney General)]: think we're good. So this is not a lawsuit, but I'm just going to mention it because I think it's worth mentioning. The Department of Energy had capped its indirect cost rate, and that's the rate it pays for overhead when it's doing a grant. So it was capped at 15%. And that is a lot lower 15% of the grant. That is a lot lower than it had been in past in traditional rates. So we would defer to the Department of Public Service on this generally. We haven't filed a lawsuit. I don't know that we could. The grants that were listed when that change was made are not wait, I'm conflating this with another one. We didn't join that case because we were not able to join that case. That was a case that we couldn't read about in the newspaper, but we weren't able to join it. So if you want to know why, can ask the Public Service Department. The court did issue a preliminary injunction from the bench, stopping the harm. So the people who did sue got their money. We didn't sue, so we didn't get our money. Sometimes I should note that because it's Democratic states that are suing and Democratic states that are winning, we win, like, 80% of the time. Democratic states are getting their money and Republican states aren't. The only way Republican states, after the United States Supreme Court ruled that there can't be nationwide injunctions, basically, the only way the Republican states can get their money is if Donald Trump has mercy or he's politically savvy and realizes he's never going to win the midterm elections if he doesn't give the Republican states their money. So he'll act like there's a nationwide injunction, although there isn't a nationwide injunction. So sometimes if we aren't able to sue because we don't have cooperation from the administration, we might get our money anyway because the Republican states get the money because Donald Trump decides to make that happen. But it's not. So it's kind of

[Rep. Kathleen James (Chair)]: a Yes.

[Rep. Laura Sibilia (Ranking Member)]: Attorney General Clark, deeply appreciative of your work and your team's work, and how much work there is to do to defend the rule of law. I do want to say it is a personal challenge for me as an independent, and knowing that many Americans consider themselves to be independent when we label states as red or blue, Democrat or Republican, because, of course, there are people of all political persuasions And in I recognize the leadership that the Democratic attorneys general have been playing. And I wonder if that's what you mean.

[Charity Clark (Vermont Attorney General)]: I think, I mean, the leadership of the states is Democrat or Republican. What I have found, because I'm friends with a lot of the Republican attorneys general, is their decision is not necessarily based on their conviction about the value of the Constitution or the importance of state sovereignty. It's more based on the fear of retribution and punishment they will receive. And they'll receive it in a way that I won't because I'm a Democrat. So it really is based on politics and party. And that's not a choice that I'm I see your point, but I think this is an unusual situation that it really is Well, it's a mess. But I think it is really motivated not by have, as you know, we have people in this state who may say that they are Republican here. But if they were in another state, it would be not just a Democrat, but like a liberal, liberal Democrat. And I think so the label in this environment, unfortunately, does matter how people are treated and how states are treated on the national level.

[Rep. Kathleen James (Chair)]: Well, you probably have more.

[Charity Clark (Vermont Attorney General)]: We do. So this was I just wanted to note this. This is not a case that we brought, or I don't know that we even could bring it, because it involves the cancellation of grants that are direct to organizations or companies and not through the state. So the state can't bring a lawsuit unless we have standing and standing means if I got my foot run over by a car, Cath couldn't sue. Right. It would be me. I would be the one with standing and I could sue. So in this case, earlier this month, the Department of Energy announced the cancellation of 7,500,000,000 in grants. And they've listed the grants. And two of the grants listed were from Vermont entities, UVM and Beta. We're monitoring this. It's not clear if that cancellation has taken place, but I just wanted to flag that for you as an area you should be aware of. And with that, I have one last item on my list, and that is our it's a different category. It's our Defense of the Climate Superfund Act. So I just wanted to give you an update on that. So recall that you had passed this wonderful law that I had been supportive of and excited about. We were sued very surprisingly quickly December 30 by the US Chamber of Commerce and the American Petroleum Institute. And then in April, West Virginia and 23 states intervened in the case. So they also had to file a complaint. And then in May, The United States and the EPA filed a separate case. And this was all in federal court here in Vermont. So the cases are separate cases, and they're not consolidated, but they're on the same briefing schedule. So we're kind of treating them all together. And they're cases against the Climate Superfund Act. So these are kind of going apace. We filed a motion to dismiss this summer. In the fall, the three different plaintiff groups I mentioned filed an opposition to the motion to dismiss and then some motions for summary judgment on some of their claims were filed. So we have next month, we have various filings due. This is motions practice standard procedure in a case. So I don't really have a lot of interesting updates. These are public records. So if you're interested in reading any of these documents, I'm happy to provide them to you. And the briefing for all of these should be done in January, and then we'll be ready for oral argument in front of the court. And we'll see what the court says about our law. Interesting. Yeah. And so oral arguments in January. That's when everything's due. So they'll tell us hopefully in January, they'll set oral arguments. Sometimes it takes months for each even get the oral argument. Sometimes you have oral argument and it takes months to get a decision. So we'll but we'll be back over here, and we can keep you posted during the session, too.

[Rep. Kathleen James (Chair)]: And that's in what court?

[Charity Clark (Vermont Attorney General)]: Sorry, not being an attorney. I get very No. And I'm sorry if

[Rep. Kathleen James (Chair)]: I'm talking It's about sports. Yeah.

[Candice Morgan (Green Mountain Power)]: Can I just because I

[Charity Clark (Vermont Attorney General)]: think it's useful to when you picture, we have the state courts, federal courts? The federal courts, they all start with a trial court. That's the court that you see on TV because it's the most exciting. That's a trial court. There's a jury. And then after that, the appellate courts. So in the federal court, we have Vermont. That's our trial court, the Vermont Federal Court. And then we would appeal to the Second Circuit Court of Appeals. And that's in New York. New York, Connecticut, and Vermont were all a part of the Second Circuit. All the states are divided up and more in the Second Circuit. And then after the circuit courts, that's when you go to the United States Supreme Court if you appeal. So it's just three layers, basically. Layers. Yeah. Brett Campbell.

[Unidentified Committee Member]: You mentioned that thank you. You mentioned that Vermont doesn't have standing and that issue with DOE canceling billions of dollars in grants including grants, in UCF and paper technologies. It of prompts me to wonder why West Virginia and 23 other states have standing in this issue.

[Charity Clark (Vermont Attorney General)]: Indeed? Why indeed? That is right in the brief. Well put.

[Rep. Kathleen James (Chair)]: Very impressive.

[Unidentified Committee Member]: I'm a regular law school, I guess. So there's no answer to that question.

[Charity Clark (Vermont Attorney General)]: Yeah. Well, we'll see what the court has to say to that question because we have that question too.

[Unidentified Committee Member]: Okay.

[Rep. Kathleen James (Chair)]: Clifford.

[Rep. Christopher Howland (Member)]: And is there a likelihood that the 23 states in The US, all those lawsuits will get consolidated into one?

[Charity Clark (Vermont Attorney General)]: Maybe. I don't know.

[Rep. Christopher Howland (Member)]: They're all alleging the exact same thing.

[Charity Clark (Vermont Attorney General)]: Well, they come at it from a different place. We'll see.

[Rep. Christopher Howland (Member)]: Yeah, okay.

[Rep. Kathleen James (Chair)]: I'm kind of curious to know, and the answer is probably obvious to you, which is why you're the attorney general. How do you guys, what rubric do you consider when deciding whether to sue the Trump administration for all of these actions? You mentioned earlier that you see, in many cases, clear violations of the Constitution or the rule of law. Is that the underpinning to every single suit? Or is there some other area where you're looking at harm done or financial damages? Or is it all of the above? How do you decide?

[Charity Clark (Vermont Attorney General)]: Yeah, I don't prioritize. If we have standing and the law has been broken, the constitution violated, we sue. The only way the only reason why you wouldn't sue is if the stakeholder involved didn't want us to. So that would be the reason to say, Okay, you're good. All right. Well, we'll just keep out of it then. But that's very rare. We are always talking to the stakeholders who are involved and making sure that they're kind of on board and feeling good about how we move ahead. But from my perspective, as the attorney general representing the state, protecting the state, the money is important. And we have already brought back to the state tens of millions of dollars that we have saved, that if we had had a Republican or some other attorney attorney general who didn't want to bring these lawsuits would just be lost to the state. But we have them back because of the work that we've done. And the money is really important. But as the attorney general, it's not just about the money to me. It is about the rule of law and holding the structure of democracy in place that is being threatened right now and upholding the Constitution, which I swore an oath. I think you guys might have swore the same oath to do when I was sworn in January. And I take it very seriously. It's that's my job. I take it very seriously. We kind of forget because the federal government is so powerful. But I never forget that the state of Vermont is a sovereign state with our own powers. And as attorney general, it's my job to use those powers to uphold the system that we have in place in America.

[Rep. Kathleen James (Chair)]: Thank you. Thank you. Thank you so much for joining us. My pleasure. We are eight minutes ahead

[Candice Morgan (Green Mountain Power)]: of schedule. But if

[Rep. Kathleen James (Chair)]: folks are here, we could just move along, because we do have four folks who we've crammed into three minutes. So do people want to just move ahead?

[Charity Clark (Vermont Attorney General)]: Okay, onward.

[Rep. Kathleen James (Chair)]: Hi. Good to see

[Candice Morgan (Green Mountain Power)]: you, everyone. Candice Morgan with Green Mountain Power. I did send ahead some slides, but it looks like you all have a hard copy. So I'm not going to share my screen, if that feels Okay, because I know it gets for weird folks. Thanks for folks following along at home. Appreciate the opportunity to come in and speak to you all ahead of the January session. As you've heard throughout your morning, and I'm sure have been following as well throughout the last nine months or so, it has certainly been a very busy time in terms of what those federal impacts are going to look like for the state and for utilities and different folks in the energy space. It's certainly a big part of our focus, just following the bouncing ball of various federal policies and making sure that we're well positioned and informed to do whatever we can to help protect our customers and mitigate any increase in costs that might otherwise be borne to them. So it's certainly front and center for us. I would say there's a few things of the areas we can control and what we can't control. And on the areas that we can control, I'm going to talk about those things that are going to be able to continue happening that we're already doing and that we've spoken to your committee about for the last couple of years. Then certainly those areas that feel more out of control a little bit, and certainly also just more changes as we can expect from both what has happened and what could continue to happen in this space. So the slides that I provided, one is just sort of our overview of who we are and where we serve. But the first slide that I'll really start with focuses on our customer programs and the areas of those that are going to continue to be offered to our customers, largely because they are supported by state policy or have been approved by regulators or are from grants that are not at this point at risk because they were kind of done a couple of years prior and not sort of in that flux of things that you heard about from the attorney general and from others, being a little bit more at risk. So the first item is our Tier three program, which I know you've heard about from other utilities too throughout your time taking testimony. And certainly, those of you that have engaged with your own utility, I'm sure potentially you're aware of those different incentives that are offered. It's part of the renewable energy standard. Last year, we had more than 10,000 customers participate in a tier three program that takes the form of various incentives, whether it's for a heat pump rebate or an electric vehicle rebate or other programs like a custom incentive for commercial and industrial customers who are looking to get off of fossil fuel or find a different way of heating their business. We work with various partners to help deploy those incentives directly to customers that are interested and engaged in that process. That's continuing as part of the general state policy. So there is some sort of state support for different things that otherwise maybe you've heard about some of the incentives that are going away federal level. We're also continuing our energy storage programs. This takes the form, as we've talked about, of both our lease program and the Bring Your Own Device program too. There has been a lot of changes at the federal level related to eligibility for certain types of systems related to those tax credits. Energy storage was not captured in those bigger changes related to renewables, but there have been certainly other changes imposed related to foreign entities of interest in areas that energy storage companies are going to have to find ways to comply to make sure they're not engaging with those other foreign entities. We're continuing to watch that. But those programs and those tax credits are still available for energy storage systems. We've also partnered with the Department of Public Service to fund using ARPA dollars, which predates some of the initial flurry, her latest flurry, an energy storage assistance program, which helps provide energy storage systems for low income customers or income qualified customers, particularly focusing on ones that have medical needs in their home or have experienced a high number of outages. And so that program is starting to roll out now, which is pretty cool. And we're also continuing to implement the ACRE pilot, which is the Affordable Community Renewable Energy pilot, which was also funded through the ARPA program. And that is connecting income eligible customers directly with a bill reduction. So new solar projects are being built and we're able to connect the benefits of that project directly with customers who qualify. And that's also starting to roll out now for those customers. The other really important work that we're doing, and we've talked to this committee about and have appreciated the support for some of the flexibility around permitting to make this work happen quickly is our resiliency work. And that's really focused in our central and southern part of our territory at the moment. You've heard from my colleague Mike Burke at different points in time about the severity of storms and the impacts that our customers are seeing. Whether or not storms hit and kind of what that damage looks like is one of those things that is outside of our control. But what we can control is how we're building our system to help better withstand the impacts of that severe weather. And so that takes the shape of storm hardening solutions such as spacer cable, which is above ground, or the underground work that we're doing. And we've done a lot of that over the last eighteen months and are going to be continuing that work throughout our central and southern counties. And I've listed all the towns that we have completed projects in to date. We have completed over 70 miles of underground and 39 miles of overhead storm hardening in the last year, which is pretty cool. And the customers that directly benefits those customers that are served by the system down there, they're not experiencing outages where they otherwise would have. But it also helps our overall customers as well, because it's not going to cost us much money when storms roll through. So that helps save all of our customers. All right. Now we turn to our sort of, I think, what the main point of your hearing today was and sort of what I alluded to at the beginning, which is really the federal energy policy and what that outlook looks like. As I mentioned and as you've heard, there have been major shifts since the last time we all met and talked related to and really focused on the construction of renewable projects across the state as well as in the Northeast. And that is leading to delays in projects at points in time and certainly will be driving up costs as we look out into the future. The elimination of federal EV and heat pump tax credits. We haven't seen a shift yet in terms of the number of tier three claims made in that space. But as those tax incentives start to officially wind down, I think we'll be tracking that to see where customer interest is and what that looks like for those programs as well. And as I mentioned, the phase down of tax credits to support renewable projects like you heard about earlier this morning too. But our focus is on our customers and really with an eye towards reliability, resiliency and affordability. And what are the ways that we can deliver that to our customers. As I mentioned, those grid investments and the work happening in that space is really critical for us as we look ahead to the reliability and resiliency that will be needed in helping preparing Vermont for continued electrification and really just for all of the ways that people use and rely on electricity now more than ever. I'm happy to take any questions, but that was my overview. And I know you have a long list of witnesses, I didn't want to take too much of your

[Rep. Laura Sibilia (Ranking Member)]: Yeah.

[Rep. Christopher Howland (Member)]: With regards to what's happened in the last year, you say you're 100% renewable, but you use your RECs to buy energy that's produced by fossil fuel.

[Candice Morgan (Green Mountain Power)]: Just to clarify, we're not 100% renewable yet. We are 100% carbon free on an annual basis.

[Rep. Christopher Howland (Member)]: But that carbon free status comes from your buying, trading RECs for carbon produced energy. And being a local Rutland person, you're retiring some of the fossil fuel generators of the gas turbine, me, they call it the gas turbine in Rutland with the renewable. When you retire your existing or your past fossil fuel generation, you can still replace that with new fossil generators. My concern is when the wind doesn't blow, the East Rutland storage facility failed, is no longer in service. I'm worried about that period of time when be it voltage reduction or curtailment of load because of lack of ability for energy.

[Candice Morgan (Green Mountain Power)]: Sure. And one thing that I didn't touch on in term but you've heard from my colleague, Josh Castingay, last year about our what we call

[Unidentified Committee Member]: our

[Candice Morgan (Green Mountain Power)]: virtual power plant, but it's not virtual. It's very real. And that is our fleet of flexible resources, including energy storage, like I mentioned, directly customer homes, and also just our other flexible loads that we're able to help tap into when we need those resources and the grid needs that to help balance what is on the system. We're almost up to 80 megawatts. I think we're at 79 megawatts of stored energy or flexible resources, which we are able to use to do exactly that, which is to help balance the system when we see that there is increased needs in that space. I'm happy to send you some information about a story that was done. One example of this was in June past year. It was a really hot day. Stayed really hot in Boston for a very long time. So the region was facing a need for additional resources. And our virtual power plant delivered and helped save our customers about $3,000,000 and also helped provide that grid stability. So it's about how we want to deploy those resources that we do have. And it is going to look different than it used to back in the day. But this is a really forward looking space and an ever growing space in terms of how our health people manage all of that together. So I'm happy to send that over to you as well.

[Rep. Christopher Howland (Member)]: The other issue there's a very large issue on 20 megawatts down in the Bennington area, and I guess it got a little confused and thought it was part of the standard offer program, but apparently it is not. There was some confusion a couple of days ago in Vermont Diggers article on that. What impact does that have when that goes out of state? They talked about two substations, upgrade to the 46 k b line and ultimate to Woodford Road or Bennington Belco project. Where are those? Do those that does that generator pay all those upgrades and all that is all included so there's no burden on the Green Mountain powerhouse while we're talking about rate payer, but I guess there's a big portion.

[Candice Morgan (Green Mountain Power)]: Correct. Yes. In that area, we are the interconnecting utility. So we have done all the work and the studies and review to figure out what would be needed if that project goes through. But it is borne by the developer and that saves the cost for those upgrades.

[Rep. Christopher Howland (Member)]: And one last thing, there's some Internet is talking about everything. I guess they call it alcony, solar. My concern, or I feel the concern is the protectability or the ability for not to back feed and so forth. And when solar first came along, many of the inverters had what's called a UL rating, underwrite laboratories. But UL removed their certification of these inverters, but all the inverters still got the UL tag on the side. You don't know which ones were recalled and which ones weren't.

[Rep. Kathleen James (Chair)]: I

[Rep. Christopher Howland (Member)]: Be concerned about protection of utility workers from the possibility of back feed and so forth. I realize it's pretty small amount of energy that's being produced, but it's not the voltage that kills you. It's the current.

[Candice Morgan (Green Mountain Power)]: Absolutely. And we're certainly we've also seen the interest growing in conversations related to portable or balcony solar. I understand, I think that that's an issue that the legislature is going to be looking at in January. And I think some of the concerns that you raised are important considerations to talk about at that point in time. I think having items BUL rated is important. And also, of the other safety concerns for sure. But we're happy to come back and talk about that when you all consider that bill as well. I think that might be a good discussion to have at that time.

[Rep. Kathleen James (Chair)]: Representative, did you hear me on time? I did. Yeah, Representative Torre.

[Rep. Dara Torre (Clerk)]: On tier three, you're going to continue. Does that mean that you're thinking you'll also be able to sort of be counted as yours?

[Rep. Kathleen James (Chair)]: Well, it's a little bit

[Candice Morgan (Green Mountain Power)]: of how many customers in tier three that we're anticipating serving going forward. That's a great question. I mean, a lot of it is customer driven, right? So whether if the loss of the federal tax credits sort of reduces demand, we probably will see. And so we are assuming a little bit fewer numbers just based on what we're seeing in that space as well. And the custom commercial and industrial projects, other things are often also very customer. They're all customer driven. And so sometimes the timing of that can look different. But this year will be a little bit of a transition as we see what that impact is. But we're still hoping to be close to that, but maybe I think predicting just a little bit lower based on those changes.

[Rep. Laura Sibilia (Ranking Member)]: Just to flag, I don't know if you were here if Elko testified.

[Rep. Dara Torre (Clerk)]: I was listening. Okay.

[Rep. Laura Sibilia (Ranking Member)]: So the question around the benefit to Vermont ratepayers for that connection with three ISOs, Just something I'm very interested in and want to come back to from the utilities about. So if you have information, that would be great

[Candice Morgan (Green Mountain Power)]: to have. Can check-in with the team and follow-up as appropriate.

[Rep. Kathleen James (Chair)]: Thank you. All right. Thank you. Who is next? Ken.

[Ken Nolan (Vermont Public Power Supply Authority)]: Good morning, madam chair, committee. Excuse me. Ken Nolan from Vermont Public Power Supply Authority. Thank you for the flexibility to testify remotely. I am gonna share my screen here.

[Rep. Kathleen James (Chair)]: Great.

[Ken Nolan (Vermont Public Power Supply Authority)]: If I can figure it out. Just one second.

[Rep. Kathleen James (Chair)]: You have the technology.

[Ken Nolan (Vermont Public Power Supply Authority)]: Okay. I will be fairly brief. I agree with much of what Green Mountain Power stated earlier. Our programs are continuing as under state policy without really any modification. The tier three in particular, we're active in. I did want to share with the committee our guiding principles, same as the other utilities you hear from, affordability, reliability, sustainability, with one added, which is our local energy democracy. We like wanna make sure decisions are made as close to the customer as they possibly can be. It's kind of a hallmark of municipal utilities. Just quickly, I usually come and speak to you about the 11 full VEPSA member utilities. Our list of folks we work with is changing, so I wanna just put that in front of you as well. The 11 full VEPSA members are still listed in black here. We've also added Burlington Electric and Stowe Electric who have joined us as strategic members. So they they work closely with us, but they don't take the full suite of services. On the right hand side under contract, we do some work for for Washington Electric Co op for power supply. We also just about six months ago signed an agreement with Global Foundries. So we're managing the power supply for their new utility, GF Power. And just in the last month, we've signed a contract with Hyde Park Electric to help them with some financial and other issues that they're dealing with. And we also do work in New Hampshire and Maine with small utilities there. So just to give you a kind of an idea of our footprint at this point. I won't go into this, but I wanted to remind you that we we do offer a broad array of services, everything from power supply to financial support to IT management, renewable energy standard. We're seeing the whole landscape here as it affects the small municipals. As far as the federal level, I think we've ended up with a number of grants under the previous federal administration that are moving forward in pretty rapid succession here. All of these grants have an expiration date of December of next year, December 26. So we're we're trying to move a bunch of stuff simultaneously at the same time that the policies are changing at the federal level. So you may remember the legislature awarded, I think it was $11,000,000 was set aside for advanced metering infrastructure to the Department of Public Service. 5,000,000 of that was given to VEPSA to use for our Smart Utilities. That project is in the midst of deployment right now where we have about eight of the utilities deploying at the same time and expect to be done that within the next year. We also got a federal congressionally directed spending allocation from Senator Sanders in the appropriations bill in 2022. Our intent was to set that up as a revolving loan fund to support our tier three efforts. So it would be a revolving loan fund dedicated to fossil fuel reduction amongst commercial and industrial customers in particular. As Candice had mentioned, the affordable community renewable energy or ACRE program, we got a million and a half dollars of that money and we're about to turn on our solar project and make those memberships available to low income folks to take power off that solar plant. We're also in the middle of deploying two grants under what's called the energy storage access program, both of those in conjunction with Burlington Electric and Washington Electric Co op. And we have just over a million dollar grant to look at distributed energy resource management software and about 3,000,000 specifically earmarked to deploy small scale batteries, residential, small commercial, or municipal batteries. That project's just getting off the ground. We've just picked the derms vendor and have an RFP out for the battery deployment. And the last item we're getting from federal funding is called the grid program. It's grants specifically for grid resiliency. They're dedicated to each of the individual utilities to deploy technology improvements or operational improvements on their systems. Across our 11 full members, that equates to just under $3,500,000 So those funds were earmarked under previous legislation with the previous administration. We're now trying to wade through how the policy changes are affecting those. And really three messages I wanna leave you with here. What we're finding is the congressionally directed spending funds that we got are becoming almost impossible to deploy. We took two years with the Department of Energy to negotiate what that would look like. We recently, I would say they kind of disappeared for three months. And when they came back, we were told that our revolving loan fund, while we could proceed, the administrative requirements made it almost impossible. So we've decided to try to convert that to a grant instead of a loan, spend the money down once and not have to continually report to the federal government. But even then we're told, be careful. The money was given to us with very broad discretion to deploy clean energy, and we're being told to avoid any technologies that the new administration opposes, in particular solar, EV chargers, and batteries. So we're struggling a little bit to figure out how to convert that.

[Rep. Kathleen James (Chair)]: We have a question, Russ Feeley.

[Rep. Laura Sibilia (Ranking Member)]: Yeah, on that point, Ken, what's leading the path in terms of alternatives?

[Ken Nolan (Vermont Public Power Supply Authority)]: Yeah, we're focusing more on heating systems, commercial production, efficiencies, things like building insulation, roof insulation, improvements to commercial process, pipe insulation or new equipment inside buildings. But anything to do with solar or helping electric vehicles really were being pushed away from.

[Rep. Kathleen James (Chair)]: Thanks.

[Ken Nolan (Vermont Public Power Supply Authority)]: Yeah. The other thing we're seeing, it's always been a struggle with FEMA funding. It's a reimbursable program and it takes a year or more to get reimbursed for expenses. We're seeing that even worse. And a lot of times it's difficult to even get contact with the administrators or they turn over every six weeks so you can actually get your applications processed. So some of the municipalities that had damage to their hydroelectric plants or infrastructure in the flooding last couple of years, they're having to carry the expenses on their books and hope they get reimbursed, but there's no real timeline as to when that's going to happen. And the last thing for us is this growing concern about clawbacks, in particular, the the grid program grants. We've seen throughout the country, municipalities take a grant approval and start to expend money and then find out that the grant disappeared when they were halfway done the project. So we're struggling with how to handle that and frankly looking for the grid program in particular, trying to make sure we're spending that grant money on projects that were planned to do anyway, but accelerating them from their normal timeline. That if that clawback occurs, we're not out additional funds that the rate payers weren't expecting to have to fund anyway. So it's becoming kind of tricky to manage the grant actions at this point.

[Rep. Laura Sibilia (Ranking Member)]: Ken, this is representative Cecilia. Have another question and Madam Chair also for you. In terms of the FEMA reimbursements, I understand that the munis and I believe the co ops are all eligible for FEMA reimbursement. We know that climate change is causing more significant stronger storms and we're seeing more intense damages. I think it's imperative that the legislature maintain some level of knowledge about what delays are looking like and what the holes are that are being created for the new names and the co ops in terms of FEMA reimbursement. And I don't know if there's some way, Madam Chair, that we could talk about getting regular updates on that, but I do think it's important for us to understand that that's potentially pretty

[Rep. Kathleen James (Chair)]: significant. Noted.

[Ken Nolan (Vermont Public Power Supply Authority)]: Yeah, we're happy to work with you on that. We're also seeing, instead of mitigation funding, the funding the funding we are getting is really targeted toward just replacing what was there before. Mitigation projects are having a hard time getting through FEMA at this point. As far as broader policy, we're seeing a few things, and Candace touched on a few of these. We're actually seeing a near term acceleration in renewable energy and battery deployments. Projects that we thought were uneconomical or not feasible, all of a sudden have become our top priorities. And the developer is looking to get contracts in place and permits in place in six months. So we're having to devote a lot of resources to try to move these near term projects forward while the federal tax incentives are still viable. But what we're also seeing is once this initial bubble gets through, there's not a lot being proposed for the future. So we're seeing kind of a lot of effort now and then getting a little concerned about what's going to be available after this gets, after the new tax credits really take effect. We're also seeing with the change in, offshore wind being canceled and delayed, and the whole interaction with Canada that's going on, we're seeing less interest from Canadian utilities to sell power out in The US. That's really got us rethinking how we're going to meet the tier four. That's the new renewable requirement that was passed in the renewable energy standard last year. And we're having to accelerate our timelines a little bit and trying to figure out what to do there. We're actually looking toward combined tier two, tier four qualifying resources as our likely path forward at this point. And then on the broader market impacts, we are seeing, as was said earlier, we're seeing forward prices starting to reflect this lack of generation out there and uncertainty that people have. We're seeing the transmission proposals start to be revised. There was a lot of focus on the offshore wind and what transmission would have to be built to accommodate that. And now we're seeing those projects kind of pull back and others being brought forward, ISO New England doing an RFP for needs requirements. So we're expecting quite a bit of change in what the transmission proposals are going to be. And then the federal support for data centers and AI is leaving starting to create some concern about the ability for those AI developers to pull existing resources out of the ISO New England market. In particular, some of the larger nuclear plants who could be courted to just leave the market and serve one particular customer at a much higher price than what they can get within the New England wholesale market. We're actually I was on a call before I joined you talking about how we're gonna respond to FERC on this issue. You you may have seen the Department of Energy secretary put in a proposed rulemaking last week, and and FERC is now required to act on that. So we're trying to get ahead of it.

[Unidentified Committee Member]: In Congress Yes?

[Rep. Laura Sibilia (Ranking Member)]: This is Rex Abili. I have another question related to this. Were

[Charity Clark (Vermont Attorney General)]: you listening when we had Velco in?

[Ken Nolan (Vermont Public Power Supply Authority)]: Was not, Okay. Unfortunately,

[Rep. Laura Sibilia (Ranking Member)]: So, I asked a question about the interconnection of the three ISOs and what impact that could have on ratepayers. And we don't have time today, but I'm very interested in this item that you're putting on the table about potential impacts on power purchasing that whole market related to the data centers, thank you, Madam Chair, that interconnection and really making sure, Madam Chair, that we understand kind of what's happening within that market. I know, Ken, we had talked about this earlier. So interested in additional insight that you can shed.

[Ken Nolan (Vermont Public Power Supply Authority)]: Okay, happy to. Last item I'll leave you with is on the other side, we are I'm getting outreach from the other joint action agencies in New England. So in Massachusetts and Connecticut in particular, the federal support for nuclear power and fusion has the utilities and the joint action agencies starting to look at whether there's a consortium to to promote small modular nuclear reactors, the new technology, and whether we can get to get that off the ground. Massachusetts seems to be growing growing interest there to do something like that. So that's the layland as we see it, and I will leave whatever time left to the coops. Thanks for your patience.

[Rep. Kathleen James (Chair)]: Oh, sorry, we have one more question.

[Rep. Richard Bailey (Member)]: Yeah, it's Russ Bailey from Lemoil two. Just wanted to get a little further explanation on payments. Haven't FEMA payments always been slow repayments?

[Ken Nolan (Vermont Public Power Supply Authority)]: They have. They typically take a year to eighteen months. We're now seeing that slide out to two years, two and a half years. I know there's some utilities on their hydro plants. They've taken out bridge loans from the bond bank, paying interest only, expecting FEMA reimbursement, and they don't actually have a timeline as to when that money will come. So it's always been slow, but it seems to be much worse now.

[Rep. R. Scott Campbell (Vice Chair)]: Thank you.

[Rep. Kathleen James (Chair)]: Thank you very much for joining us.

[Darren Springer (General Manager, Burlington Electric Department)]: Great. Thank you.

[Unidentified Committee Member]: Am I next?

[Rep. Laura Sibilia (Ranking Member)]: Yes.

[Rep. Christopher Howland (Member)]: Good morning.

[Louis Porter (General Manager, Washington Electric Co-op)]: Morning. Morning. Lewis Porter, general manager of Washington Electric Co op. I sent a couple of slides just so you'd have something for your records, but I I'll just give you a brief point of view from from the from the co op that serves the 41 the rural parts of the 41 towns that we cover, which are sort of on the Eastern Central Part of Vermont. We have about 12,000 members, a very highly residential territory, about 95% residential, and the most rural territory in aggregate in the state and and perhaps in the Northeast, about nine members per mile of of line. So we have a a very challenging territory to serve both physically and financially, and we've been reliant on federal assistance and federal help since our founding in in 1938. In the thirties, the federal government led in in part by George Aiken was instrumental in creating a lot of rural electrical cooperatives to serve territories that could not be served economically by for profit electric utilities. And they did this in a number of ways, but the probably the most important was by giving low interest loans to the cooperatives, a practice that continues through today. So we are very dependent on federal, our federal relationship and our federal work with federal partners, especially in the rural utility service, in order to serve our members at reasonable rates, and that continues to be true. So this is a an issue, a topic that matters a tremendous amount to our members and is of great importance to us. We just we're lucky enough to sign a grant agreement for a 2 and a half million dollars that US senator Bernie Sanders championed for us to help replace our metering technology. We just in January completed an $11,000,000 low interest loan with real utility service to rebuild infrastructure in our territory. And we have a long standing dependence on both those those low interest loans from the feds, but also FEMA reimbursement, which is, as Ken mentioned, you know, the municipal and cooperative electric utilities in the state can can avail themselves of if they have damage that exceeds the FEMA thresholds. So all of this is a long way of saying that we and like, as Ken mentioned, we also have about $1,400,000 in expected grid grants to do rebuilding as well. As you can tell, this is all very important ways to in which we provide service to our members without the members directly having to pay for the full cost of it. To put that in perspective, a $180,000 is about 1% on our rates. So you can imagine that this mean is a significant benefit to to all of our members in something that we're, grateful for and that enables us to serve our territory. So fast forward from that from that background to the last year, we have been very fortunate in the ability to duck and dodge and weave and get lucky and not see a direct significant impact to any of those federal programs or or funding opportunities. We've been worried about it many times and have been have been lying awake at night worried about various things that have happened at the federal level ever since last year, but have been have been lucky enough that and and our folks have been skilled enough to avoid those. So some of those are the successful authorization of our RUS loan for $11,000,000 that that happened, I think, about a week before the freeze on on those federal loan programs was put in place, so we got lucky there. Then the congressionally directed spending grant that we've been working on for metering. We've had a series of people leave, get furloughed, come back, quit, be replaced, that we've worked with, as Ken mentioned, been able to navigate that successfully and have a grant agreement in place there, still have a number of grant and other funding opportunities out there that we are so far moving forward on. So we we count ourselves very lucky. Oh, and and a major one was the lack of certainty about what the Canadian energy tariffs meant for those utilities, including ours, that import Hydro Quebec electricity or or actually that purchase hydroelectricity that's been imported by Hydro Quebec US, which as it turns out may make a significant difference. So we've been we've been we've been on the edge of our seats a number of times. So far, things have come through, and we have been able to continue offering all of the benefits that all those funding sources and programs give to our members And happy to and and and as Ken mentioned, FEMA reimbursement is a significant concern for us over the we've had four FEMA events, qualified FEMA events in the last four years and received roughly a million dollars in reimbursement from FEMA for those, which otherwise we would have recovered in rates on our on our ratepayers. So it makes a big difference to us. It makes a big difference to our members whether they whether they realize the import of it or not. We've been lucky so far, but are still still have some some trepidation about about a lot of these sources. So happy to answer any questions or talk about any

[Rep. Christopher Howland (Member)]: of that.

[Rep. Laura Sibilia (Ranking Member)]: Yeah. Just are you right now owed any FEMA funding? Have you received at all?

[Louis Porter (General Manager, Washington Electric Co-op)]: We have a little bit, a couple $100,000 maybe that's still lingering in reimbursement amounts, maybe a little less than that, but but expected to come through. It's just the delays that Ken mentioned. We also were fortunate enough to get a think about a I'm too I'm too vain to get reading glasses, so bear

[Rep. R. Scott Campbell (Vice Chair)]: with me for a second.

[Louis Porter (General Manager, Washington Electric Co-op)]: We we have a FEMA mitigation project that is it's about a $700,000 project, I think the FEMA is paying something in the neighborhood of half 1,000,000 of that. We have gotten approvals for that and fully expect that the money will be there when we go to draw it down, but we are now just just completing that project.

[Rep. Christopher Howland (Member)]: Thank you.

[Rep. Laura Sibilia (Ranking Member)]: You can borrow my glasses. Okay.

[Rep. Kathleen James (Chair)]: Two quick questions. I'm the WAC member. Thank you.

[Candice Morgan (Green Mountain Power)]: Yep. Thank you.

[Rep. Dara Torre (Clerk)]: So these grants and the storage, are you expecting to have operational benefits once that's all implemented that you might see reflected in rates in the future?

[Louis Porter (General Manager, Washington Electric Co-op)]: Well, certainly there'll be benefits that will be reflected in rates. Yes,

[Rep. R. Scott Campbell (Vice Chair)]: for sure.

[Louis Porter (General Manager, Washington Electric Co-op)]: The given the nature of our territory, we're working on both considering both a utility scale battery at a substation and also working on homeowner scale batteries that will be basically first a pilot program through the ESAP grants, and then hopefully, we'll continue that with what we learned through that program. The homeowner batteries will have an outage benefit for those members where the houses in whose houses they're located, whether that's a, what we call a bring your own battery program, where they have a battery that they own and they participate in a program with us that provides them and us both benefits, or whether it's a battery that we own that we give through our grant program, that will have outage benefits for them. Our territory makes using a utility scale battery for outage assistance somewhat difficult because the nature of our territories, we have almost no densely settled areas. Almost all the villages and town centers in our territory are served by another utility. So it makes it a challenge to think about how you would use there. There may be we're still in the early stages of working on a utility scale battery project, there may be some opportunity to use that on particular feeders from a substation. But the way outages work is you work from the transmission line to the substation and then from this and our transmission lines primarily come from Green Mountain Power, so they do that part of the restoration. And then from the substation, you work out. And that means that a battery located at a substation, which is where it makes sense for a lot

[Ken Nolan (Vermont Public Power Supply Authority)]: of other

[Louis Porter (General Manager, Washington Electric Co-op)]: reasons, doesn't have as much benefit as it would be it could have if it was located in a village center that was way out on a feeder, because you're working, restoring things from the substation out, and so very rapidly, you're getting to those you're getting beyond the battery into those areas. So we've thought a little bit about where we might locate a larger battery for for outage restoration that really is not a we face a similar problem actually with public car chargers in our territory. They just say very we have very few densely settled village centers in our in our area. But certainly, we would not go into a battery program of either kind unless it was going to offer great benefits to all the membership. So our approach to that would be to kind of split the benefit between the homeowner and the rest of the membership. I don't know if I really answered

[Rep. Christopher Howland (Member)]: the question or not, Ben.

[Rep. Kathleen James (Chair)]: We are running behind. So if we could move expeditiously through any final questions, we have one more witness. Okay. Representative

[Rep. R. Scott Campbell (Vice Chair)]: Could you just re explain? I didn't quite follow. You said you can raise 180,000,000 on a 10¢ increase?

[Louis Porter (General Manager, Washington Electric Co-op)]: No. 180,000 is 1% of our rates, rough terms. So for every 180,000 of necessary spending that we get from the federal government in a given year, that would be a 1% on our rates. Now, of course, the 1% of your rates continues year after year. So it's not an exact comparison. But but yeah, about 180,000 represents 1% on our rates.

[Rep. R. Scott Campbell (Vice Chair)]: Thank you.

[Rep. Kathleen James (Chair)]: Thank you for your time.

[Louis Porter (General Manager, Washington Electric Co-op)]: Thank you all. Appreciate it.

[Rebecca Towne (CEO, Vermont Electric Co-op)]: Hello there. Good morning.

[Rep. Kathleen James (Chair)]: Thanks for joining us.

[Rebecca Towne (CEO, Vermont Electric Co-op)]: Yes, thanks for hosting this important conversation. And in the interest of time, I will I provided some slides to you and some of those programs you will see you have already heard about from some of the other utilities. So I am going to hit on just two areas that came up and are on our big worry list. 2025 has been a fascinating year as we've been thinking about federal impacts much more than years in the past. And BEC for all of you, Vermont Electric Co op is in the Northern part of Vermont. We share a border with Canada and we go to the islands all the way over to the Northeast Kingdom. We are the second largest utility in Vermont serving just over 40,000 meters and about 8% of the load in Vermont. We are eligible for FEMA. So I wanted to hit on FEMA just really quickly. I know that has been a question and I included some information in there. So over the last fifteen years, there have been 10 FEMA events that VEC has participated in and submitted for storm reimbursement and also hazard mitigation. The most recent to give you a sense of timelines was for winter storms Finn and Jerry in January 2024. We submitted for about $4,000,000 Approximately half of that was for reimbursement of storm damage costs. And the other half of that was for hazard mitigation projects, which are projects that they in areas that were impacted by that storm, FEMA will invest in resiliency projects so that they don't have to help pay to put it back up again. And we've taken full advantage of that. And then you have a few years to complete those capital projects and improve the reliability. We've had great success with those. They improve frequency and duration quite significantly. For Fin and Jerry, so we were just granted those dollars. We don't have the money yet but to give you a sense of timeline, it's about two years and and also, it's important, well, we don't have the money yet. So, we're waiting but we're we're we're talking to the state about getting that into our bank account. And we have not had any FEMA storm since then, but it is definitely on our worry list, particularly noting the most recent news this past week where some FEMA events that would have been approved in the past were not approved and recognized as events. So if we had to recognize over those fifteen years, it's been about $23,000,000 we've received in benefit through FEMA. And so that is definitely of concern knowing that the next storm is likely right around the corner. I will note that in the materials, so we are part of NRECA, National Rural Electric Cooperative Association. They represent 900 co ops around the country, including us and Washington Electric Co op, have been doing a lot of federal advocacy and there is a bill working its way through the house that we've been working with the federal delegation on. I gave you a link to a podcast in my materials and that will give you a good, it's about half an hour. I'm on there and also someone from Florida to give you a flavor of sort of the value of FEMA, what that legislation is proposing, and will provide a little more insight into some of the challenges around the timelines, which is definitely one of the pieces we are hoping that legislation will fix.

[Rep. Kathleen James (Chair)]: Just a question. Do you have any sense of the prospects for that legislation in Congress or?

[Rebecca Towne (CEO, Vermont Electric Co-op)]: It's in committee in the house. So it passed out of the committee. I forget the name of the committee. Transportation Committee. 57 to three. So it certainly has bipartisan support. There have been FEMA events across the country in every congressional district. So it's a good one of the many or one of the few bipartisan I think supported issues. So we are hopeful but what NRECA is trying to do is just get it attached to a must pass bill, but we'll see.

[Rep. Laura Sibilia (Ranking Member)]: Okay. Representative Sevelia. Good morning, Rebecca. Thank you very much for your testimony. With the latest denial from FEMA, were there any Vermont electric impacts? We did

[Rebecca Towne (CEO, Vermont Electric Co-op)]: not have any costs incurred during that flooding event, no.

[Rep. Laura Sibilia (Ranking Member)]: Thank you.

[Rebecca Towne (CEO, Vermont Electric Co-op)]: Next, I want to move on, this was my last slide, and really just talk about power supply and how that world is really shifting right around us. You heard a lot from folks who've already been on the witnesses to you or testifying to you and I just want to say that as we look forward, there's a few things we are doing now but we see that world changing pretty dramatically in a couple ways. One is the investment tax credits going away. So, we are accelerating in state solar projects to see if we can get under the wire things we otherwise would not have done until '28 or '29. So I expect we will see a flurry of solar and then certainly for us expecting to not do some for a period of time. And also the offshore wind being canceled and how we anticipated that being part of our portfolio at some time into the 2030s. Now that will not be the case is also something we are thinking about in terms of what our longer term power portfolio looks like. And then just the overall power supply market in general particularly with the massive growth from data centers. And while we do not expect to see data centers soon in New England, certainly nationwide those trends and that desire to take all of the additional capacity and then pay top dollar for more capacity will indeed impact us over the coming years. We're not seeing that yet. And as we look at power supply those decisions we make are five year decisions, ten year decisions, thirty year decisions. So thinking about what the late 2020s and 2030s look like is something that we're starting to really think about in terms of how are we going to get clean power in a way that is affordable. And the paths that we thought we were planning to go down just last year no longer look like the paths that are going to be available to us. So the question you probably have is what path are you going to take? And the answer is we're just asking that question right now. But we know that that world is shifting around us and it is not an easy question to answer. And certainly something that we hope to be in conversation with lots of folks including you as our stakeholders as we move toward those future years.

[Rep. Kathleen James (Chair)]: Thank you very much. We appreciate your time.

[Rebecca Towne (CEO, Vermont Electric Co-op)]: Thank you.

[Rep. Kathleen James (Chair)]: All right, on we go.

[Rep. R. Scott Campbell (Vice Chair)]: Good morning. For the record, Peter Walk, managing director of Efficiency Vermont. I appreciate that the doctor has been removed from my name. I am not actually a doctor, although I loved the fact that somehow that got into the scheduling I have to come clean. I do not have either a PhD or M.

[Peter Walk (Managing Director, Efficiency Vermont)]: D. Or any of the above.

[Rep. Laura Sibilia (Ranking Member)]: -I was super impressed.

[Peter Walk (Managing Director, Efficiency Vermont)]: -My spare time. No, given where you are in your schedule and agenda and the time you have, I'm not gonna go side for side. We've provided a lot of detail in here for you to consider. I will hit the high points and happy to answer any questions that folks may have. There's a lot of good stuff in there. Encourage you to take a look. I want to talk about both the impact of federal funding cuts, but also the overall environment that we're seeing from customers, what we're seeing in the policy landscape, and what that means for the overall picture for the energy world, because it is not limited to simply a reduction in the availability of federal funds. You all know who Efficiency Vermont is. We are the statewide energy efficiency utility. We work with all of the partners you've heard from today to build an energy system in Vermont that helps to deliver on behalf of customers, working across all of the various ways in which you and others have asked Vermont's energy system to deliver. We appreciate the opportunity to work closely together with all the partners involved. Regency Vermont has received extensive federal funding since the pandemic began, starting with CARES Act funding to help with air quality monitoring in schools as schools went back in session with indoor air quality work, changing ventilation adding ventilation systems to schools around the state in partnership with the Agency of Education. We've done low and moderate income weatherization in partner with the Weatherization Assistance Program offices and the state, as well as flood relief. Worked with the utilities on upgrading people's panels in their homes and switching out for heat pump hot water heaters. The work has been extensive. Most of that was ARPA funded. Those monies were in hand. In fact, they started out as ARPA funding, then they have been sort of gone through the process of being changed over to primarily state funds at this point. So they are not in jeopardy at this point, and we are near to completion of spending most of those dollars or will be by the 2026, which is when the state requirements for the spending of those were now. They were put in place to match the federal requirements. Now that the federal requirements don't apply, you could potentially extend them. But we don't believe there's a need to at this point. We were due to work with the Public Service Department on a component of their home electrification assistance rebate program, the HEAR program, which was for additional heat pump incentives for moderate income, low and moderate income Vermonters. That money is not flowing at present. We believe the homes money that is going to the Weatherization Assistance Program through the Office of Economic Opportunity will flow. That application was in sort of it prior to some of the changes at the federal level. We have not heard much of anything about the Home Electrification Assistance Rebate Program and so we do not have plans to continue to to move that forward. I will remind you that you made the choice to make stable, consistent investments at the state level that are not impacted by federal changes. The work that we do in partnership with the utilities to support and the weatherization system program across the state to be able to do that work is funded by ratepayers and other dollars that are not impacted by changes at the federal level. So much of the work can continue regardless of the fact that federal changes have occurred. We do have a couple of DOE congressional directed spending pieces that are moving slowly. We believe one of them had already been issued and there's been process along the way. One, we think we're close to, and those seem to be moving. But to give you a perspective, that second one was Senator Leahy, congressionally directed spending. And so the fact that we have not yet even reached agreement with the Department of Education gives you a sense of the timing of some of those opportunities.

[Rep. Kathleen James (Chair)]: Just to let folks know, we've pushed our afternoon testimony back until we're going to start at long. So it's just

[Rep. Laura Sibilia (Ranking Member)]: a little bit more breathing.

[Rep. Kathleen James (Chair)]: Okay. On your go.

[Peter Walk (Managing Director, Efficiency Vermont)]: But I did want to highlight that we are getting a lot of feedback from our customers, from the supply chain partners we work with, from the businesses in Vermont who are feeling a very challenging sense of where to make investments. Energy efficiency improvements are investments. They have to be prioritized against other things that are needed within homes and businesses. And in a world where folks don't know what the financial picture is going to look like down the road, it's hard to make what is often seen as a nice to have versus a necessary investment. And so the economic chaos, and I use that word intentionally, that we have heard from the business community in Vermont that we are operating in makes it very hard for those folks who want to pursue energy efficiency work, who see the economic value in pursuing that energy efficiency work, be able to prioritize that against hedging against future uncertainty or rising costs or tariffs that change on a day to day basis. That chaos is the primary driver of uncertainty in our normally funded investments. And we're seeing it on an everyday. We're seeing continued sourcing delays. As you will recall, there was significant supply chain disruption during the pandemic. We are starting to see similar sorts of activities because traditional supply chains often don't involve manufacturing in America. And so those prices have either gone up, or people who could afford to pre buy them so that they didn't face tariffs have done so and cornered something of the market. And so we need to be very careful about how we think about this picture. It is more than just at the state level. It is way more than the lack of federal funding. We are seeing things like the cost of weatherization projects are continuing to increase. The average project cost in 2020 was just below $8,000 It's now over 12. If we're going to make the kind of progress that we need, we're not in sescois. You've heard on housing construction, doubling of prices to build units, especially at affordable housing levels, the same is true across all the pieces. And in many ways, efficiency projects are building sector projects. They are part of the basic shell and operation of most buildings. We are seeing in conversations with the folks who sell heat pumps around the state, that people are making a mad dash to take advantage of the end of the federal tax credit that happens at the end of the year. And the supply chain partners and the installers are really worried about what 2026 is going look like. We have built a market in Vermont that has been successful. We need to continue to refine it to drive the heating savings that we want to see. But folks are going to have a hard time installing a heat pump when a huge chunk of federal tax credit is not going to be available for I believe it's something in the order of I applied for my last year, was something like $2,500 in tax credits for the installation of heat pumps, up to 30% of the project cost, I believe. So it's massive. We've been working closely with DU partners to work on what the future of the heat pump market looks like. We've been very successful in transforming the market in the early stages, getting high efficiency pumps available to Vermonters. Now we need to transition with everybody working together to make sure that those heat pumps are providing the energy offsets that we want them to in as many cases as possible. A lot of folks have installed them mostly for cooling or shoulder season heating. We have not intentionally designed programs to make sure that they are changing the heating load where most of the fossil fuel savings come. So there's opportunities there. We're working very closely with partners because we all have a role in the process. As I mentioned, a lot of our direct feedback comes from our close engagement with Vermont's commercial and industrial customers, who many of the folks that we work with are often the facilities managers or if somebody is big enough to have a sort of on-site energy person who are competing with all of their colleagues for limited capital resources. So building large scale projects has been more and more challenging because people don't want to risk taking on a huge project that may end up with delays, that if their supply chain gets disrupted or prices go up, they may change the nature of those projects. And so we're out there beating the drums and helping folks get along. We've offered a doubling of incentives to commercial and industrial projects up to $50,000 to be able to try to goose the system a bit. But ultimately, at the end of the day, it has to make sense from the organization's perspective to be able to move forward with those projects. We see a real need to continue to work on the supply chain, as we've talked about both from the availability of technology but also the workforce. The successful launch of the Vue Weatherization Training Center that the Office of Economic Opportunity runs, that we helped involve both the business planning, the funding, all of the pieces of, because we see the need. It's a great opportunity. If you haven't Chair James, if you haven't taken a tour of the facility with your committee, it would be a great place to go do. It's just over in Barrie at the short right of way when you're here during this session. It's a house in a neighborhood in Barrie where you can actually do and learn how to do weatherization at a scale that is similar to lots of Vermont opportunities. So I would encourage you to do that as a way to really get into the details of what we're trying to accomplish together. I also want to flag that there are issues at the federal level that aren't just funding in nature. There has been a lot of conversation about the ENERGY STAR program and about whether the ENERGY STAR program is going to go away. The ENERGY STAR program does any number of things. A lot of it, we think of it as the consumer facing when you're going to buy a range or a refrigerator or a washing machine. You see where things rack, where that unit racks and stacks against other models available and whether it qualifies as being efficient. That is, first and foremost, the most positive tool of ENERGY STAR. The piece that it does as the backbone to the energy efficiency system is that it provides a list of all of the pieces of equipment that qualify as being efficient so that each state doesn't have to maintain that list on its own. Because you can imagine what it would mean to be actually go in and test all of those pieces of equipment. So having that done nationally is much more cost effective. If those lists go away, we won't have an update. We can run it based on the current lists. But as new technology comes online, all states are going have to figure out how to understand how to update those lists. And a 50 state solution for that is stupid. So as we think about changes at the federal level, money gets everybody's attention. This would be a more significant change in the long run, given that it would break the capacity of many of states' efficiency programs. As we've talked about a little bit, the data centers and AI driven increase in generation continuing to have longer term impacts on what the grid looks like and how we're going to address it. And the New England overall energy efficiency programs are some of the best in the country. Year after year, you see that those, as we've seen cost pressures hit the New England grid, a backsliding in energy efficiency will only make the cost to customers go up. Thinking, I do want to leave you with some level of recommendation. I know you're not really looking for this at some point, but want to leave you with a few thoughts. Vermont has, in recent years, have been heavily reliant upon one time federal funding to augment traditional programs and to meet the Global Warming Solutions Act requirements. We often talk about it being a bridge. I think of it as an abutment and part of a span. If you don't build another abutment or the rest of the span, it's not a bridge. And so as you think about going forward, one time federal funding can't be the long term solution if you're going to make investments of this nature. Funding is only one piece. The lack of coherent economic strategy for businesses and Vermonters to be able to operate in, make it very difficult for people to make hard choices about their hard earned dollars. We're talking about the energy sector here, but all of the same cost pressures exist across every facet of people's businesses and homes, whether that be health care costs, food costs. Other costs are all going up. And so we can think of ourselves as an island, but we are only part of the pocketbook spending of homes and businesses across the state. And I will continue to make a plug for the electricity we do not use, or energy we do not use generally, is the most cost effective model going forward. And so energy efficiency and the other you use your ear pump, we all stand ready to do our part to help address the affordability issue across state of Vermont. With that, I'm happy to answer questions. I know I kind of

[Rep. Laura Sibilia (Ranking Member)]: rushed through that. Thanks. Thanks, Peter, for your testimony. So we've heard from the DEUs, I think all of them, most of them have indicated some pressure in the tier three space for the res. To what extent are you all coordinating the EUs and the DUs coordinating around that to maximize effect and dollars?

[Peter Walk (Managing Director, Efficiency Vermont)]: So I think we do that across the board. There are two primary. We run a joint program across the state to maintain the heat pump incentives, which are done at the midstream level with the fancy way of saying you never see that price from your contractor because they got it as a rebate from the FW Webs and Granite Groups of the world. Excuse me.

[Rep. Laura Sibilia (Ranking Member)]: Are you installing all of the is Efficiency Vermont

[Peter Walk (Managing Director, Efficiency Vermont)]: These are

[Rep. Laura Sibilia (Ranking Member)]: for all the DUs? Is that who's Yes. With the incentives?

[Peter Walk (Managing Director, Efficiency Vermont)]: The installation is done by private contractors. That was one of the key founding principles of Efficiency Vermont. Are vertically integrated efficiency programs where the efficiency program runs the contractor as well, and will go into business and say, we'd like to install this for you. That's not the model that Vermont wanted. And so we work through the efficiency excellence network, which is the network of contractors. So you guys meet every year in the reception in the cafeteria who are out there every day doing the installation work. But we provide the backbone, and the utilities can opt in to the programs as they see fit. There are two separate heat pump programs, one for ducted and one for ductless heat pumps. And based upon the individual utility tier three needs and how much savings they've already banked and what their customers and members want, they can choose whether to participate in that. We then use for those who don't participate, we then offset the missed portion that the utility would pay from our thermal funding to make sure that the Overmont has a different incentive than any other at a baseline level short of what a utility might offer for a low income tier three additional incentive. Does that make sense?

[Rep. Laura Sibilia (Ranking Member)]: I think so. Let me see if I shorthand have this. So both the DUs and the EUs are offering incentives on key bumps.

[Peter Walk (Managing Director, Efficiency Vermont)]: It's actually one incentive. And the cost of it is split. So the customer sees no difference between the two, unless they're going after the fact to utility for an additional incentive to help a DU meet their low income tier three requirements.

[Rep. Laura Sibilia (Ranking Member)]: Okay. So there's not competition between the EUs and DUs where the performance standard is. That's what I'm trying to understand.

[Peter Walk (Managing Director, Efficiency Vermont)]: Yes. They get the fossil fuel savings, and we claim the electric efficiency savings because it's better than an alternative model.

[Rep. Laura Sibilia (Ranking Member)]: Thank you.

[Rep. Kathleen James (Chair)]: Thank you so much, Doctor. Wappel.

[Louis Porter (General Manager, Washington Electric Co-op)]: Forevermore. Yeah.

[Rep. Kathleen James (Chair)]: Just to double down. Darren.

[Darren Springer (General Manager, Burlington Electric Department)]: Good afternoon. Darren Springer, general manager with Burlington Electric. We are both a distribution utility and an efficiency utility. And, we offer tier three programs as well as efficiency programs, for our customers, including rebates on all the different electrification technologies, everything from EVs to e bikes to heat pumps, induction cook stoves, electric transit buses, anything we can think of that can be electrified. We're supportive of providing incentives. We also, thanks to legislation that's been in place for several years now, the Energy Efficiency Modernization Act, we're able to utilize some of our efficiency funds in new and innovative ways that includes geothermal test well support. So, for example, the new high school in Burlington, we were able to support a geothermal test well that led to them adopting geothermal heating system for that new campus. So that supports only possible through this pilot legislation. And we are seeing or we have seen very strong demand for these different electrification technologies. We also run public charging system in the city of Burlington. So we own, manage, and operate level two and level three chargers within the city. We had a speaking of federal impacts, we had a federal grant that we had competed for and been the only entity in Vermont during that round to be selected for just under 5,000,000 under the bipartisan infrastructure law that would have supported a build out significant build out of EV charging in the city. That grant was all the different reviews were done, the paperwork was done, was sitting on the desk in Washington DC in January, and it has been frozen ever since. So that's one specific impact that I wanted to call out. We've worked with the attorney general's office and a coalition that includes other entities that are in the same boat in the same program and we are still hopeful that we'll be able to eventually unfreeze those funds. Voters in Burlington approved net zero energy revenue bond that would be matching funds for this federal funding in part such that we could build out up to 200 new chargers in the city, about a six x increase in our public charging network. We're still investing in public charging through our revenue bond funds, but we're not gonna be able to do as much without the federal match. So that's a very discreet impact that we're seeing for our service territory. The other two impacts that I wanted to call out, one is I agree with a lot of the testimony that's been shared around renewable energy impacts. I'm concerned that we, as a region, had been counting on additional offshore wind to be coming in, additional potentially additional energy coming in from Canada. A lot of those different projects have been jeopardized for various reasons. And I shared a link to some analysis in my written testimony that all things equal, not bringing in that offshore wind is gonna have upward cost pressure for ratepayers in New England. Particularly, think about the winter every single winter in New England. We see that we are over reliant on natural gas, that we don't have enough natural gas to run the power plants, the prices spike, and if we had more offshore wind, for example, during that time, that would all things equal, put some downward pressure on supply costs, as well as help various states meet their different renewable energy standards. So we share that concern that the various federal incentives are being eliminated or phased out, as well as offshore wind projects, I think have been ordered to halt construction in some cases. There are impacts there that are not unique to BED, but we share the concern. And then also the federal incentives, basically, if you're a residential customer, and about 75% of our customers are residential customers, you are gonna see every single meaningful electrification or efficiency incentive eliminated at the end of this year. And we were seeing those programs just getting underway, and they were very much creating a possibility of stacking our incentive with a federal incentive and giving a customer who wants to make a switch a much more affordable way to do so. So we're concerned about the impacts of those incentives being taken away. The most abrupt change in that market was with electric vehicles. So we went from a bill passing in July to having the federal incentive that had been on the books eliminated by the September. And one of the things that the Efficiency Modernization Act gave us flexibility to do is to take some of our what we call the TEPF, thermal energy process fuel funds, which typically statewide are dedicated to unregulated fuel customers. In Burlington, almost all of our customers are regulated fuel customers with natural gas service. So we've had flexibility through this program to spend those funds to benefit our ratepayers in other ways. One of the ways we're doing that is we are going to partially offset some of the loss of the federal credit by boosting our electric vehicle incentives on a temporary basis through the 2026. So it used to be you could get a $2,300 incentive for an electric vehicle from us. You could get 7,500 from the federal government. You could get 4,000 from the state of Vermont. The 4,000 is gone. The 7,500 is gone. We're boosting our incentive to 5,000 temporarily to try to support customers in continuing to access electric vehicles. For income qualified customers, we've boosted it to $5,700. Pretty much all of our programs, we provide a boosted incentive for income qualified customers. And in the electric vehicle space, actually, almost a quarter of our incentives are going to income qualified So there's significant interest and uptake there that we wanna continue to support. So one of my biggest takeaways, and it's a very straightforward one, is if you all are able next session to extend this Efficiency Modernization Act program, literally just some date changes. It's a no cost to the state, no new revenue, but it enables us to use our efficiency funds in flexible ways to benefit our customers, and it will help us not fully offset the impact of these federal changes, but at least make strategic decisions to partially offset them in certain ways like we've done with the EV tax credit. So that's sort of our top and main recommendation to the committee at this point in time would be we would love to see that legislation just extended with no needed changes. We would then be able to continue to have flexibility during the next three year budget for our efficiency utility, which is going to kick in in 2027. And there are things we'd like to do to be even more innovative in that space. One thing that comes to mind is we might want to pursue a program to help customers who are income qualified, upgrade their electric panel, if that's a necessity in order for them to access a heat pump or to add an EV or to do something at their home, we know that's a significant barrier. We know there are no programs currently that can really fill that gap and help those customers. So we think the Efficiency Modernization Act, if it's extended, could help us to do that, just as one example. So anyhow, that was our main recommendation. I wanted to highlight a few of those discrete impacts on our customers and happy to answer any questions for both our distribution utility and our efficiency utility work.

[Rep. Christopher Howland (Member)]: I have a quick question.

[Unidentified Committee Member]: Is there any office or agency that that has oversight regulatory oversight on on electric vehicle charging?

[Darren Springer (General Manager, Burlington Electric Department)]: I believe that the I actually have seen at our chargers that the I believe it's the agriculture agency comes in to do the kind of weights and measures and make sure that the the station is dispensing energy correctly. So I've seen them testing in Burlington for that purpose. Certainly, when it comes to rates, the PUC and the Department of Public Service are involved in the electric vehicle rate setting, at least for us as a public utility. There may be private entities that have their own structure in terms of rates.

[Rep. Kathleen James (Chair)]: Can you talk just explain a little bit more about that TEPF revenue?

[Darren Springer (General Manager, Burlington Electric Department)]: Yes, I'd be glad to. So TEPF is funded two ways. It's not general ratepayer funds and it's not efficiency charge funds. It's funds that come into the state through our participation in the regional greenhouse gas initiative, and it's funds we get from bidding energy efficiency projects in the ISO New England forward capacity market and getting value back. So every, Vermonter essentially has some benefit from this program. Unfortunately, the way it was set up, it was really aimed at unregulated fuel customers. So for a while in Burlington, we really didn't have a market to address with those funds. And back in the 2018, 2019 time frame, the legislature gave us flexibility to use those funds to support feasibility work on a district energy system. And then more recently in 2020 during the pandemic, the legislature created the first version of the Energy Efficiency Modernization Act, gave us flexibility to use those funds to support essentially emission reduction projects, regardless of the underlying fuel of the customer, whether they're a propane customer, oil heat customer, or a natural gas customer. Something between 9899% of our service territory is natural gas customers who are served by their own efficiency utility through Vermont Gas. We partner very closely, but we had been prohibited from spending the TPF funds to support those customers under the idea that they had their own services through gas. Now with this program, we can use those funds to address gaps that might exist in some of our current programs.

[Rep. Kathleen James (Chair)]: Does it flow into the state and go into a central pot and then it gets allocated?

[Darren Springer (General Manager, Burlington Electric Department)]: Essentially, we get through the public utility process, public utility commission process, we can look at what revenues are available for, you know, Burlington Electric, what revenues are available to Efficiency Vermont for all the customers in the state, And we update those projections as we see whether the ISO New England market is providing more or less revenue. But more or less, that's where

[Unidentified Committee Member]: it goes. And how much does Burlington Electric get from that fund?

[Darren Springer (General Manager, Burlington Electric Department)]: It definitely varies, but it can be over a three year efficiency cycle. It can be a few million dollars potentially. So the ability to access it and use it for our customers is very, very important for us. Thank you. Absolutely.

[Rep. Dara Torre (Clerk)]: And follow-up to that. I mean, maybe it's possible to predict, but with the conversation today about risk did you see a potential for the market for efficiency to go up in this setting?

[Darren Springer (General Manager, Burlington Electric Department)]: I think it's possible, but I think to the extent we're seeing upward price pressure in the capacity market or in the forward energy market, even if there is a benefit for our our our limited portion of the efficiency projects that are going in, I think we would see cost pressures that would more than offset that, unfortunately, potentially. I mean, that's why it's important, I think, to note that Vermont's number one in the region in terms of lowest rates now, and not only for our region in New England, but we have lower rates than New York, lower rates than New Jersey, because we are one of the few states that retained an integrated vertically integrated utility model. We've had a long standing practice of encouraging long term renewable supply that's stably priced, and I think that that insulates us by and large from some of the market impacts that we're likely to see, but it doesn't insulate us fully. So I'd I'd hate to see that future play out, but you're correct that if it did, we might be able to get more revenue from some of the efficiency forward capacity projects.

[Rep. Kathleen James (Chair)]: Thank you so much for joining us.

[Rep. R. Scott Campbell (Vice Chair)]: Thank you

[Darren Springer (General Manager, Burlington Electric Department)]: for having us. Thank you.

[Rep. Laura Sibilia (Ranking Member)]: Dylan. Yes. Still over there.

[Dylan Giambatista (Director of Public Affairs, Vermont Gas Systems)]: I just want at the end of the testimony train here for the morning, so I'll endeavor to be quick. For the record, my name is Dylan Giamattiso. I'm the director of public affairs for Vermont Gas or VGS. We are a natural gas distribution utility. We serve three counties in Northwest Vermont, Addison, Chitin, and Franklin Counties. We have 56,000 gas customers. And in addition to that, for well over three decades now, we provided a range of efficiency services. In 2016, we were appointed one of the state's three energy efficiency utilities. And just to give you a sense of the range of, customer interactions we have, we're not just delivering gas to a residence. We have a team of energy auditors who go and complete energy audits for the purpose of weatherization spec. We do a variety of installation of equipment, servicing of equipment that includes both, furnaces, boilers, but then also the installation of cold climate heat pumps, of different types. Just real quick, I I provided you a memo with some, takeaways on the situation as it relates to federal changes. And I'll just say I I feel as though we're seated on a seesaw, and every four years or so, recently, we've had a a real shift in energy policy. And we've also seen shifts in energy policy in the region here at the local level with state policy and so forth. But, certainly, the the most the most different shifts we've seen have come recently with the thrust of federal policy, and I've outlined some of that. So I won't dive into all of it. You heard already from a colleague at Efficiency Vermont about some of the, equipment standards, Energy Star. That's something that we're monitoring very closely as an energy efficiency service provider. We're we're well steeped in the technical process that occurs at the state level, for providing energy efficiency services and rating those appliances. So there are additional conversations. We'd be happy to participate in that. In general, though, I want to leave you with a sense of the affordability concern that exists out there with our customers. In particular, when you have big changes at the federal level that change fundamental benefits such as potentially health care coverage, Perhaps it's the confidence that your LIHEAP benefit will be delivered by your fuel delivery company or your energy provider or other changes. It causes a great deal of fear and anxiety and concern. So we have seen that. Our customer care reps have seen that, and it's something that we're trying to approach with a good deal of sensitivity to try to help folks understand the latest information. Also, on the affordability front, the impact of import duties, this is tariffs, on commodity gas and the discussion about those, in the early days of the current administration caused a lot of concern that we might see increased costs. Fortunately, that seems to have stabilized, and gas has been exempt under the USMCA existing trade agreements with Mexico and Canada, and we haven't heard a lot of changes in that regard. But, obviously, that was a a big source of concern for our customers. Some other things worth noting here. Efficiency Vermont's testimony spoke to this a bit, but we have seen a lot of volatility when we are trying to estimate HVAC costs. So whether it be repairing appliances or providing new appliances, we try to provide estimates to customers and we always are encouraging them, get a couple of quotes. It's a good idea. But because of the impact of tariffs and some changes in the marketplace, you could provide a estimate one week and several weeks later, it may have changed dramatically. That could potentially not be favorable for the consumer. It could also not be favorable for the installer. And so that volatility does not contribute to affordability. So we have that concern in general as we try to work through that process. And I'm sure that the other HVAC installation companies and, trade associations in the state would say similar things. In terms of, affordability and the cost that consumers will pay, you've heard a bit about this impact of the sunsetting of, incentives that will occur at the end of the year. Certainly for our consumers, we too are seeing a push with lots of questions about the availability, and we are working with our partners to get the word out. You can still take advantage of these incentives provided the work was completed this year. So that is an ongoing challenge for our customers and they are eager to understand what that means. We're trying to help them through that process. I should note that I put a blip in our testimony here that we do provide 0% financing. We have an agreement with Green Mountain Credit Union in which we actually, backstop some of that and help with the underwriting such that we are able to provide that very low nonexistent financing so folks have a more attractive option over time to buy something such as an essential appliance or weatherization. That is something that we offer and we backstop, and we think it's an opportunity for our customers certainly as they work through their options. I do wanna talk a little bit about canceled grants. I know I'm moving a mile a minute, but here we are at the end of your testimony. It's you you gotta eat lunch. Cancel grants. I provided an example that relates to our exploration of community scale renewable thermal solutions. I think I visited the committee in the past and mentioned geothermal energy systems, thermal energy networks. We have been actively exploring geothermal technologies because some of our developers and communities, particularly those communities that might have imposed renewable energy requirements for new systems, have come to us and they want to explore the most cost effective option. We think that geothermal energy systems, in particular for new development and for affordable housing development, present an excellent opportunity, and we're well positioned to do it. We work with pipe. The polyethylene pipe that carries gas molecules in Vermont is not that different than the polyethylene pipe that carries, the the system the loop design for a geothermal system. Recently, we've had a really optimistic process over the last couple of years, with an affordable housing developer in Hinesburg, Chittenden Housing Trust. And, we participated, applied for, and received a grant couple of years ago in 2023 to do a community engagement process with the Heinzburg community to gauge their interest in geothermal energy systems, that development, and also thermal energy networks, which is a larger form of a system that uses one loop to serve multiple premises. Our work apparently was so good that the federal government, actually went ahead and conferred upon us a second phase of that grant award, which included $3,000,000 to construct a thermal energy network at this affordable housing development in Hinesburg. That was late twenty twenty four. The grant was awarded, and then things very much changed in January 2025. We saw an executive order that had the effect of halting disbursement of those grants. And then additionally, we had some challenges accessing department staff at the US Department of Energy in their energy demonstrations division that had been working with us on this previously. As a result, we're working with a developer here. They have a timeline, money's at play, and the the mission of providing permanently affordable housing is at play. So we had to work creatively with them and redevelop a system design for the geothermal system that would not make use of those $3,000,000 in grant funds. That had the the effect of shrinking the system from a true thermal energy network using one loop serving multiple buildings, to creating individual loop systems that will serve seven affordable housing complexes on the site. So we continue to work through that, but that was a delay. That was a loss in funding, and it was a loss of an opportunity to test a thermal energy network, a technology that we're very eager to explore. Nevertheless, there is a positive here with geothermal, and that is that the reconciliation process and legislation that was enacted over the summer actually preserved some flexibility for geothermal. It appears to be a technology of preference for this administration and the Department of Energy as outlined in some of the executive orders we saw early last year. And those credits phase on a much longer time horizon to the mid twenty thirties. So there's a lot of opportunity with geothermal technology, thermal energy networks, the like. And if you haven't read it yet, you received a report from the Public Utility Commission on a study that was set about by the legislature in act one forty two of 2020 before, I think it was. I don't know. I'm losing track of time. So there's more work to be done there, and we're eager to testify on that. I've got a lot of experts and national experts who would love to chat with you about the opportunities. Finally, you know, there's lots that's been said, lots that has written, but I do wanna restate this, that when you have a large percentage of Americans and Vermonters who rely upon federal subsidies or benefits that have existed for many, many years, and there are mixed signals about what is going away and when, people begin to get anxious. And most pressing for our customers, it was lying. That was a real concern. It seems as though there's agreement in Vermont to backstop those dollars. And once the federal government gets things in order, hopefully, we have a funding package that fully restores that funding. But at the same time, if you think about the essential needs living in this state, it's not just LIHEAP. It's health care costs. It's a number of things that contribute to overall affordability. And loss of those federal benefits could result in a situation where customers are less likely or able to pay their rent, pay their mortgages, or pay their utility bills. And so we, of course, are gonna work with them through that as best we can. We have a variety of assistance programs, but it is an area of concern for us. And I I just feel as though, to represent our customers well and those who are very energy or cost burdened, it's really important to bring that to policymakers. So I've said a lot.

[Rep. Christopher Howland (Member)]: Here we are. Please.

[Rep. Kathleen James (Chair)]: So, sorry.

[Rep. Dara Torre (Clerk)]: Good to hear from you. On the Heisenberg project, one thought came to mind, that's the new CHIP program, which would fund something like an internal energy net. I mean, there's a delay in when it's going to be available, but was that something you thought?

[Dylan Giambatista (Director of Public Affairs, Vermont Gas Systems)]: Yeah. Actually, I'm glad you brought up CHIP, which I thought was a real success for the general assembly last session. We we have participated in the process before the Vermont Economic Progress Council in which they have sought input on their guidelines that they have developed. And we made recommendations and offered recommendations specifically around geothermal waste heat recovery and thermal energy networks. The VEPC, the council overseeing this process, they did vote to approve those guidelines and incorporated that language, which could be a positive. We're interested to see what opportunity it presents for developers and others. But yes, the answer is yes. The timeline would not have worked on the timeline that we were on. And and with all of our development partners, they have to pencil it out on a timeline that works, and every day lost is lost money. And, you know, they wanna make it work, particularly for affordable housing. Really important to do it timely. So we think we're moving in the right direction. You know, we we've actually cleared a regulatory hurdle, and we'll see if we can finalize some project details and and get those drills drilling for a geothermal system.

[Rep. Kathleen James (Chair)]: So bottom line is that geothermal is like

[Dylan Giambatista (Director of Public Affairs, Vermont Gas Systems)]: an approved proof use of chip funding. It it is a I wanna get this straight, an eligible use under the infrastructure. So it could be an eligible infrastructure type. How that might be, I would say, like, proceduralized and worked out by a developer under the program remains to be seen, but these guidelines have been created.

[Rep. Kathleen James (Chair)]: Great. Wow. Dylan, thank you so much.

[Rep. Christopher Howland (Member)]: Thank you.

[Rep. Kathleen James (Chair)]: God, thanks everybody. That was an action packed morning. We bought ourselves a little bit of time. We will be back at 01:00 with Commissioner Johnson and TJ Porter from DPA