Vermont Legislature SmartTranscripts:

[Rep. Dara Torre (Clerk)]: It wasn't meeting. Oh, wait.

[Rep. R. Scott Campbell (Vice Chair)]: I believe it said. It

[Rep. Kathleen James (Chair)]: says I see. This meeting

[Rep. Dara Torre (Clerk)]: Good morning. I like hearing. I don't

[Rep. Kathleen James (Chair)]: think Joe, are we good?

[Rep. R. Scott Campbell (Vice Chair)]: I believe we should be good.

[Rep. Kathleen James (Chair)]: Alright. Welcome, everybody, to the 2026 iteration of House Energy and Digital Infrastructure. We are kicking off 2026 by checking in on the state of funding and work for weatherization in Vermont. So, I'm representative Kathleen James from Manchester.

[Rep. R. Scott Campbell (Vice Chair)]: Scott Campbell from Saint Johnsbury.

[Rep. Richard Bailey (Member)]: Richard Bailey, memorial two. Chris Morrow, Windham, Windsor Bennington. Michael Southworth, Caledonia two. Christopher Howland, Rutland four.

[Rep. Dara Torre (Clerk)]: Dara Torre, Washington two.

[Rep. Bram Kleppner (Member)]: Bram Kleppner, Chittenden Thirteen, Burlington.

[Rep. Laura Sibilia (Ranking Member)]: Laura Sibilia, one two.

[Rep. Kathleen James (Chair)]: Alright. And let's see. Couple we have a couple housekeeping things, I think. We've got a new committee assistant, Joe, who will be here this week. And then we'll have a new, new committee assistant next week. Joe's done a great job. I just want to thank you live, Joe, for pitching in before you go start your new job at DFR to help us get an agenda up and posted for this week. And we're starting to work on one for next week as well. So that's it. And R. Kleppner.

[Rep. Bram Kleppner (Member)]: Thank you, Madam Chair and members. I have sent an email to my fellow committee members previously and

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

[Rep. Bram Kleppner (Member)]: had conversations with ledge counsel. But I do want to say for the record and for the millions of adoring fans of this committee who are watching live, that in September, I did take a full time position with a clean energy company called Clean Tech Industry Resources, and we are a service provider to the energy sector, and I will ask once again remind my committee members of my request to you that if you ever have the faintest concern that I am in conflict of interest, please let me know immediately. Thank you.

[Rep. Kathleen James (Chair)]: Great. Thanks, Rob Kleppner. Appreciate the transparency. Alright. So we are kicking off this year by checking in on the state of weatherization work and funding in Vermont. And this was a topic that a couple of us, I think a lot of people on the committee are interested in, but a couple of us worked on over the summer just to make sure we were staying in touch with folks and that we could kick off this session with a good look at the numbers that was all ready to roll. So some of the folks who worked so hard on that over the summer are here to give us a scoop. So Neil, are you up first?

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: I am. If you'd like, happy. Yeah. Okay. Good. Well, hello, everyone. Happy New Year. Great to see you all again. Hope you had a wonderful New Year. Happy holidays to everyone. My name is Neil Lunderville. I'm President and CEO of VGS, Vermont Gas Systems. I'm actually not here today. I'm always here in that role in one way. That's my job. As part of this job for the last five years, I've been the co chair of the Energy Action Network Weatherization at Scale Network Action Teams. Energy Action Network, as you all know well, they have a number of network action teams that explore various issues about energy and energy transformation. Five years ago, at their summit, we pitched an idea of how do we get weatherization at scale, meaning how do we hit ambitious goals for weatherization across the state, something that I was involved in pitching. Out of that formed this team. I've been co chair of that ever since. I have two co chairs. One is Richard Bailey, Energy Futures Group, and the other is Carl Rebichek, who's Deputy Director at EAN. We have a presentation that I shared with Joe and that you'll see here today. I've listed out a number of folks. There are dozens of other organizations and people who are involved in the Reservation at Scale coalition, who come to meetings on the regular, including some, some legislators here, which is great to see. Really, we all share one goal in mind, which is how do we do more weatherization in the state? Very, very straightforward. I'll talk a little bit more about that goal. I also say today that I'm joined by Alex Reiss over here. Alex is one of our newer members at Vermont Gas. He is a senior energy policy analyst and he helped us compile the numbers that I will be sharing today. So I wanted to give him credit and all of our partners who worked on this. I am reporting on the work that other people did. So that is really important to give Alex credit for that work.

[Unidentified Committee Member (Speaker 3 main)]: Do you want me to follow-up? When you are ready.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: So we, I was asked by, by the chair to, give an overview of an analysis that we did, which I'm gonna get into in just a moment, of a comprehensive look at the weatherization funding picture across all the different areas. Often we're looking at low income or moderate income or certain programs. What we try to do in this analysis, which we'll get into, is really look at across all the programs. And I'll share today some good news and some bad news because there's a little bit of both in it. We'll go on to the next slide, please, Joe. First, let me say just talk to you about what are our weatherization at scale goals. Back in 2020, we launched a really ambitious goal, which was to see how we might weatherize 120,000 Vermont homes by 2030. That goal is hugely ambitious, which you'll see later. But of course, you got to have big goals if you want to get these big results. We And think weatherization is one of those things that where we need a big goal. Why? It's because weatherization, when it comes to energy transformation, is an evergreen strategy. It's a no regret strategy. We have we know we have an old house in stock in Vermont. We know that these homes are leaking, that their energy bills are high regardless of what energy source that they're using. Weatherization really delivers on the promise for them because, first and foremost, particularly in this era where we care so much about affordability, it cuts their monthly bills. We see that again and again. You'll hear that, Greg. You've heard it many times from other witnesses in this committee, is that weatherization jobs put money back in customers' pockets right away, every month. That a primary benefit. But it's not the only benefit. It reduces greenhouse gas emissions in nearly every case. If you have heat pumps, boosts heat pump performance. I think an unheralded benefit of weatherization that we can't forget is that it does improve the health and comfort for Vermonters. We talk to a lot of Vermonters who have their thermostats set at 58 degrees. Is a hard way to live or 55. That is a hard way to live in your home. When they weatherize, what they might find is they can comfortably and affordably put their thermostat up at 68 and be okay. That is a much better way. Particularly in the last couple of weeks, we know from our guests, phones have been ringing because people are getting their systems don't work. Our temperatures are in the single digits. This is the time of year where we really know the power of weatherization. Providers understand that they love this and they love weatherization and in part they do because we're doing a lot more of the seasonal numbers that because of the work the legislature and the administration, the governor have done over the last few years to put more money into weatherization, particularly into low income weatherization, we are doing more weatherization work than we ever have before. I think this is a great result. This is excellent. The good news is that we're doing it. That news will come a little bit later is that we're only going to go do it for so long with the federal money that comes through. But I think I want to highlight an important piece about the uptick in weatherization funding. It has allowed weatherization crews to staff up and keep those staffs so that we can keep the backlogs as low as we can. Now, there's still backlog because a lot of people want weatherization, but the contractors that we talk to and the community action agencies that do this work, they're able to hire people and put teams in place to be able to do it. That is because of certainty and funding that they have seen over a number of years. That certainly goes away. It will be harder to keep those contracting crews in place. I wanted to flag that because it is an important part of the next point, which is that you'll see we were having an uptick, a continued upsurge in weatherization funding, but that is going to start to drop off after 2027. And then if it does start to drop off, then we start to enter the danger territory again, where it starts to get lumpy. When it gets lumpy, it becomes a lot harder to get those jobs done. We do fewer jobs, contractors have a harder time doing them, and we lose the great momentum that we've been building over the last three or four years. Okay. I should say too, Madam Chair, I'm happy to stop at any point for questions if committee has them. So maybe we'll go to the next slide, please. So over the summer, as part of our weatherization scale work, we were pondering the question of just what does the weatherization funding picture look like? And the reason that came up is because we know that we've had a lot of federal funds that have come through the system that the legislature and the administration have applied to weatherization, but at some point those will expire. There's a worry about a funding cliff. And so what we sought to do was to develop a comprehensive picture of weatherization funding across all different streams. This is important. We did not and I didn't do this in a vacuum. Really, Alex didn't do this in a vacuum. We worked with all the partners who are responsible for various parts of this, including OER, you'll hear from Jeff Wilcox a little bit later today. EDT, Peter Walk, you'll hear from after me. Vermont Gas, we run an efficiency program ourselves. And the Department of Public Service, you'll hear from Melissa too. And to try to get a shared common operating picture, a shared understanding of what that weatherization looks like. What we looked at was all different types, different flavors of funding. The Weatherization Assistance Program, PEPF, EEC, we looked at federal funding sources, ARPA, IIJA, and IRA. Wow, that's a big acronym soup. So I actually saw next slide, Joe, if you would, to define what those means because yeah. Because I'm

[Peter Walk (Efficiency Vermont)]: I'm gonna, you know, go through

[Rep. R. Scott Campbell (Vice Chair)]: this and I say,

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: oh my gosh. What is what is all how does all that make any sense? This was one of the hardest parts. I mean, there's a lot of different funding streams that we have rated into how we look at weatherization. And so I wanted to just spend a moment to talk about each of those. I will also say that I am not an expert on any one of these. You will have the experts that follow me today that can talk in more detail about different parts of this, but I wanted to give you a sense of what the overall picture looks like. At the core of the Low Income Program is the Weatherization Assistance Fund or Program, WAP. These are the recurring state funds that come from the fuel surcharge plus other federal funds that come to the program. These are targeted for low income households. Then we have sort of three tranches of one time federal money that come in that served a lot of low income households. The first was the ARPA, the American Rescue Plan. That funded low income from 2022 through 2026, the year that we're in. The second tranche came through IIJA, previously known as the BIPARTH BIL, Bipartisan Infrastructure Law. There are so many acronyms in this, but those are funds that are still being used '24 through '27. And then the last piece of it is the Inflation Reduction Act or IRA funds. Those will start this year and run through 2026. As you'll hear from Jeff, those funds have not been received yet and there is uncertainty about whether we will have those funds. I put a big asterisk next to that one because we've assumed that they'll come, we have no reason to believe that they won't. Jeff and Melissa can speak to that in more detail. But this analysis assumes that this is $29,000,000 that could come in for low income homes through the HOMES program. Our analysis assumes that money is going to come in. If it doesn't, we have a very different picture. But we will assume it for this. There are also two other pots of money that are in here. One is the EEPF, Thermal Energy and Process Fuels Fund. Peter can speak to this in a lot more detail because the money runs through EBT. It's money from the Regional Greenhouse Gas Initiative, RGGI, and the capacity markets. That's very Peter can speak to it, but that funds weatherization for various low, moderate, and market rate. And then finally, the energy efficiency charge, which are primarily through EBT, Efficiency Vermont and Vermont Gas. These are through the energy efficiency charge that our own customers fills. They fund various income levels, both in moderate and market rate. Should also pause and say that we really think about three different ways of looking at what's funding what for weatherization. Low income, which is really, you know, if you think about it in simple terms, 80% of area median income and below. There's some different definitions the Federal Program also uses Federal Poverty Level at 200%, but let's use AMI, area median income for now. 80% below is low income. 80% to 120 AMI is moderate income. Anything above 120% AMI is what we call market rate. These generally have a fairly low subsidy. You think about the subsidy going from low income at 100%, median income is more and at the market income, s a

[Rep. R. Scott Campbell (Vice Chair)]: lot less. A quick question on the years that you have here. Are they calendar years or are they calendar They are calendar years. Efficiency generally runs on the calendar year. Well, the WAP runs on the state and then

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: fiscal year. These are on a calendar year basis. That's a good question. I'll also say too that one of the trickier parts of this analysis was agreeing on when we thought the money was going come because the the federal money comes in different ways at different times. Because of holdups in Washington, there is uncertainty about uncertain cost of money, particularly that IRA money will come in. Right now, we have assumed that it will come in in the calendar year that we are in, which is 2026. Okay. So let me give you the good news and bad news. Next slide.

[Rep. Dara Torre (Clerk)]: This is

[Rep. Kathleen James (Chair)]: a really helpful chart, by the way. Not sure I've seen it laid out quite this Yeah. Clearly.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: I think you're

[Unidentified Committee Member (Speaker 3 main)]: reading hard copies.

[Rep. Kathleen James (Chair)]: Yeah. Absolutely. Joe, I think some folks would want hard copies.

[Rep. R. Scott Campbell (Vice Chair)]: Mhmm. Do you want me to put that off now or later?

[Rep. Kathleen James (Chair)]: I don't. Bring it along. Okay. Later's good.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: So let's start with the good news. The good news is because of the work we've already talked about putting this federal funds into weatherization, we are actually seeing an uptick in weatherization funding. We expect one through next calendar year 2027. We see that it goes from a total funding package of about 28,000,000 in 2026 to up to about 33,500,000.0 in 2027. This is good news. But after 2027, the one time federal funding money starts to come down. And what we see is that low income funding, which is being funded by this federal money, starts to decline in the years that go from 2028 through 2030. There's a big drop off from 2029 to 2030 because that's when the last of the IRA money, the Inflation Reduction Act money will fall, is projected to fall off. It has to be spent by the 2029. So, you're really going from a high watermark of low income homes weatherized at 2,700, about 1,500 homes, to less than half of that in 2030 without additional funding coming forward. So, put another way, the good news is that we don't have an immediate funding challenge for weatherization. But we do have a long term funding challenge for weatherization. And without additional funds from some source, there will be a big drop off over the next couple of years.

[Rep. R. Scott Campbell (Vice Chair)]: This is a very specific question having to do with the meetings that we had over the summer and fall and the data that we had at the time. One of the specialists, I guess maybe Alex had prepared, had a difference of funding projections based on whether the numbers came from Public Service Department versus whether they came from Ophysicians of Vermont. Is this reconciled now?

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: Yeah, I don't want speak for all the groups, but we've shared this. We sought to build a consensus picture

[Rep. R. Scott Campbell (Vice Chair)]: as close as we could.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: Think there will be some of them rely on assumptions like when we get the federal money. Another big assumption is both Vermont Gas Efficiency and Vermont have filed their triennial plans, their demand resource plans as part of efficiency. Those plans need to

[Unidentified Committee Member (Speaker 7)]: be reviewed and approved by

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: the Public Utility Commission. That's another assumption that's in there. And there can be disagreement inside of that process, which could change these numbers. But

[Rep. R. Scott Campbell (Vice Chair)]: this is the best we have reconciling both EMT and PFD at the moment. And we try to keep it live to keep updated as needed. Great. Thanks.

[Rep. Kathleen James (Chair)]: And so once the federal funds phase out in the coming couple years, then we're back down to the sustained or ongoing funding streams, were the efficiency Vermont charge, RGGI, and the fuel surcharge.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: That's right. So I'm I'm not If you go back, go back slide. I could have color coded these, but you're right. It's the first one, the reoccurring state funds from the fuel surcharge plus the federal funds that are pulled in.

[Rep. Kathleen James (Chair)]: The RGGI money.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: The RGGI money, the TEPF and the energy efficiency charges. These three here, here, and here form the baseline of weatherization funding. Okay. And a small amount from USDA. Yeah. Yes. Right.

[Rep. Kathleen James (Chair)]: That's right. Yeah. We're

[Rep. R. Scott Campbell (Vice Chair)]: gonna A talk little bit of money, a lot of the boons. Yes.

[Rep. Kathleen James (Chair)]: What's that? From USDA,

[Rep. Dara Torre (Clerk)]: you said?

[Rep. R. Scott Campbell (Vice Chair)]: No, USDAOE.

[Rep. Kathleen James (Chair)]: Oh, I thought you said USDA. Okay.

[Rep. Bram Kleppner (Member)]: Do those numbers include weatherization undertaken entirely with private funds?

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: We this this does not. This is this is only jobs that are receiving some subsidy, in part for incentives, in part because we wanted to really look at what the state could do there. There are jobs that are done fully with private money.

[Rep. R. Scott Campbell (Vice Chair)]: It's just not something that we capture ourselves. If

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: you go two slides ahead now, Joe, please. This is actually

[Rep. R. Scott Campbell (Vice Chair)]: If I could just answer a little bit more about that. So a lot of these jobs, especially at the 80 to 120 and above 120, they rely a lot on owner or private investment too. These are just incentives. This is just public money goes towards those incentives. For example, in the M3D, only 25% of the job might be paid for by public funds, the rest of it is private. So, there's a lot more investments.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: This is just another way to look at the same data. But in this case, this gets at the heart of the last question that you asked, Madam Chair, that the green bars represent the underlying funding for the lab program. The blue bars represent funding for EU incentives and the orange bars represent funding for one time federal money. You see the ramp up. There is some variation in the blue bars with EU incentives, which we can discuss. It has to do with sort of the timing with the triennial plans. The orange bars ramp up through 2027 and then quickly ramp down through 2030. The major impact for the ramp down for these weatherization funds will be on low income jobs. That's to be really, I think that's an important point that we've developed out of this data, is that the additional money that we have put in over the last several years has gone primarily to low income, and that money will be pulled back. And we know we have a very high demand there.

[Rep. Bram Kleppner (Member)]: Just peel that water bottle off the top there. Is

[Rep. R. Scott Campbell (Vice Chair)]: this all weatherization? Yes. This is all weatherization. Okay. All

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: of these three charts are all weatherization. This is just three different looks. Is

[Unidentified Committee Member (Speaker 7)]: the income based on the income of the tenant or the income of the owner?

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: It's based on income of the household that's occupying it. Rentals are a unique challenge in this space because of something we call a split incentive program, a split incentive problem where a renter, you know, pays for the energy, but the building owner owns the building. And it's hard to apply an incentive to make it work for the building owner if they're not paying for the energy. However, there are programs like three d thermal and others and other of our EBT and VGS programs, where we've sought to go after those rental programs. It's just rental rental weatherization is a hard nut to crack. We've been we've done a better job in the last five, five to seven years, but it's still a long way to go.

[Unidentified Committee Member (Speaker 7)]: So to sum that up, it doesn't apply to non owner occupied, houses that had been converted, the old homes Mhmm. 1946, age stock that's Yep. Been converted from a large family home with children with seven, eight, to four rental units and not eligible? In

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: the cases where we're able to do rental jobs, we're looking at the income of the folks occupying the units, not the income of the owner. Right. They're paying the it's the person the renters are paying the energy bills. And so they're the they're the applying party. It's just a little more complicated because they don't own the space. And so the value of the weatherization is going to the building owner, even if the benefit from the weatherization is going to the renter.

[Unidentified Committee Member (Speaker 7)]: I don't have a good feeling for my constituents area of how many are owned or supplied, how many are individual, I would think, from a standpoint of living up an old house where they wouldn't replumb it for four different hot water zones. I'm not don't

[Rep. Bram Kleppner (Member)]: don't do that work either.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: Yeah. I think what we've heard though, a lot of units are individually metered in part because we've heard that building owners don't want to pay for

[Unidentified Committee Member (Speaker 7)]: their windows. On

[Rep. R. Scott Campbell (Vice Chair)]: this slide, it looks like the table at the bottom doesn't I'm trying to relate it to the graphic.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: It's not there. The table at the bottom actually references the previous slide, which is about the income By income level. Not by the funding bucket. Alright. Yeah.

[Rep. R. Scott Campbell (Vice Chair)]: So that is Okay. Yeah.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: But the bottom line does reference the the size of each of the bars. The yeah.

[Rep. R. Scott Campbell (Vice Chair)]: But I'm a little bit confused about it because the the all of the low income work is is being done through web. Yeah. Basically. Right? And and the and the web funding in the table is showing it it going down from 26,000 26,000,000 in '20 and 2027 to '12 and '13 1330. And and and that seems like that should be reflected in the WAP recurring funding bar in the graph. Right, it looks flat.

[Rep. Kathleen James (Chair)]: Is that what you're saying?

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: Yeah, I just think the table at the bottom here better reflects the previous set of charts, where it does show overall by income. So low income does go up to 26. If you look at this and then drops out on right here. This is reflected at a $26,000,000 level, and then it drops to 13.

[Rep. R. Scott Campbell (Vice Chair)]: Yeah. See. I I see that, but I guess I'm I'm I'm but there seems like there's a disconnect here because they in in an earlier table that we had looked at during the summer and fall, the weatherization funding was pretty much flat. Weatherization being the the fuel fuel receipts Yep. And DOE money. Right. As far

[Peter Walk (Efficiency Vermont)]: as we know, it's it's it's it's

[Rep. R. Scott Campbell (Vice Chair)]: it's flat because it seems that's what it's been for forever. And, yeah, this this the table at the bottom of the next slide shows it declining by the amount we just talked about and by 50% between 2027 and 2030. Why is that? That s because of

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: the one time money that s being applied. You look at the table in 2030 with the low income, which is effectively the WAC program, roughly $13,000,000 that s about the baseline for the Okay, 13,000,000

[Peter Walk (Efficiency Vermont)]: is

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: about the baseline. It's not exactly that, just to be clear, but it's roughly that. In this table, if you took it two more years back, March, you would still have federal one time money being applied

[Rep. R. Scott Campbell (Vice Chair)]: to low income. So you have

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: to go back and sort of apples to apples to look at '21 or something like that to get a sense of where the baseline funding is. I think Jeff Wilcox could probably give you chapter and verse on this. But this represents about 10,000,011 million dollars in the state revenue through fuel surcharge and another $1,800,000 through federal money that's applied to the WAP program that's consistent with the reoccurring level. I'm sorry I didn't come back.

[Rep. R. Scott Campbell (Vice Chair)]: Nope. We see much detail here. You're not. Great questions. Well,

[Rep. Kathleen James (Chair)]: Bailey had a question first

[Rep. Dara Torre (Clerk)]: and then Peter. Yep. So

[Unidentified Committee Member (Speaker 3 main)]: my understanding and my memory is correct. We've been weather doing weatherization for many, many years. Fifty plus or 40 plus? 40 plus. Yeah. How many are these repeat customers, And are we doing repeat customers? Yeah. It does.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: Weatherization I don't have the exact numbers. I think the broad answer is yes. Weatherization work doesn't last forever. The materials themselves degrade. They become less effective to be able to keep the house sealed. And so you have to go back and do it again after a period. It really depends on the type of work that you do. Some last fifteen years, some might last thirty. The others on the committee, I'm sure can speak to it properly. That's but yes, we are. We do have repeat work here. Over a long period, I mean, it's like doing a bridge project or paving.

[Rep. R. Scott Campbell (Vice Chair)]: It's a good long term investment. Also, quality of the work that's done now is much higher than what was done thirty years ago.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: The technology has to prove.

[Rep. Bram Kleppner (Member)]: Different materials. Right? Yeah. Peter?

[Peter Walk (Efficiency Vermont)]: For the record, Peter Walk managing director efficiency reminders wanna kinda I think part of the other challenge with these charts is that the WAPs aren't the only ones doing low income weatherization. A portion, I think, of your program, a portion of our program are low income customers. Even though we may refer them, the WAPs, they may choose to come through our program because they wanna work with a certain contractor or they they do whatever. And so we have designed programs that enable that to happen. I think the other piece to recognize is all of those orange funds are either going to moderate income or low income customers. So one time federal funds are precisely designed to meet those income qualifying customers. And so that's why some of the, like, decision that you're saying and why the apples to apples are just don't perfectly work. But I'm I'm just helping my No, you're so sorry to interrupt. And we are

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: trying to summarize a lot of spreadsheets into this. So apologies if there's some things that aren't perfectly detailed, we'd be happy to provide the committee with all the detail.

[Rep. Dara Torre (Clerk)]: Right? I

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: did try to give the key takeaways for a policy discussion on this side, I you just have a couple more items I want to mention. Just really quickly, one thing we look at as part of the EAN, whether they should scale coalition is where are we toward our 120,000 goal? We thought, look, we're a long way off, but that's we knew would be a very ambitious goal. We update this chart every year. The good news is that we looked at last year, we would have shown 2,000 less homes for our overall goal. It doesn't seem like a lot, but it's 2,000 homes that are going to get more weatherized because of the work that all of the partners who have been involved in this are doing to focus on weatherization. So there's still a long way to go toward 120,000 homes, but we are, with all the numbers that we have in our projection, we are 2,000 more. So let me just get slide couple issues on the last slide, if you would, to finish this up. I think I've already mentioned that really this one time federal money becomes the issue as this money gets spent. A lot is being spent, when it gets spent, there's nothing to backfill in. And so after '27, if we don't identify other pots of revenue, appropriation for this work, that we'll see the number of weatherization jobs overall go down. More importantly, most importantly, is the number of low income jobs go down. A big caveat is the federal funding. Like, do we are we collectively anticipate that we will see the 29,000,000. But there has been a lot of uncertainty with regard to federal money. There have been rescissions of programs, and that money hasn't always come through the way we expected it. Well, Melissa and Jeff can speak to where we are with the federal money, but that's a big flag. As I before, if that $29,000,000 gets pulled back, then we have a very different challenge. I also want to mention something that think Jeff and probably all of us will mention a bit is that pre weatherization is something that could have probably heard about before. This is work that needs to be done to a home or residence before the weatherization work can happen. This is if a home has a leaky roof, has a moisture problem, if they have vermiculite or asbestos, moisture mold, they have non tube wiring, you name it. There's a lot of stuff that could happen that needs to be fixed before the weatherization work can be done. Funding for this pre weatherization work is starting to dry out there. There are things that Peter will discuss where we're trying to backfill it. This is particularly important for low income folks because they're usually in the homes where we need to do some pre weatherization work. And if we don't fund pre weatherization work, then we start to build a deferral up of homes that really need the work. And I would say with pre weatherization work, it's really to make the home livable. I mean, in a lot of cases, you can't live with a leaky roof and vermiculite or asbestos or mold. So this is work that needs to be done almost in any case to make home livable. It also needs to be work done before we get to the weatherization work. We have been doing an additional round of analysis on ideas around pre weatherization. We haven't completed that work yet, but we'd be happy to talk to the committee more as we do that. And I think Peter will discuss that more. EBT is looking at some really interesting things in their demand research plan when it comes

[Rep. R. Scott Campbell (Vice Chair)]: to pre weatherization. And just the scale of money we're talking about for pre weatherization is something like 1 or $2,000,000 a year. I think that's

[Peter Walk (Efficiency Vermont)]: That's what about 1,000,001 half is what Jeff has told us that need is for the WAPs.

[Rep. R. Scott Campbell (Vice Chair)]: Yeah. And as I recall, Jeff was talking about that money running out for WAP in this program here, which ends June 30, actually, they're gonna start winding it down in March because they don't want to overspend. I think the

[Peter Walk (Efficiency Vermont)]: March piece is a it's a state government restriction to make sure if there anything needs to be reallocated before you all go home Yeah. Of the remaining ARPA dollars. So those aren't Okay. Unspent. But they are running low. There are some fund there is some funding available for some of the WAPs still through Efficiency Vermont through a partnership there, and we're looking to rebuild that for 2027 through 2029. Yeah. So we may have a a bit of a gap to consider, but it's definitely a part of our plan. As Neil mentioned, that's we see that partnership and that work as critically important.

[Rep. R. Scott Campbell (Vice Chair)]: Sure. Okay.

[Rep. Kathleen James (Chair)]: I had a question about the workforce. And I don't know if somebody else is gonna talk about that later today, but I just wondered if if you have a sense, Neil, of how demand you know, are we at capacities or wait list? Like, how demand right now is matching up with workforce? Because I as I look at all the charts and see, you know, the drop off in the coming year, I wonder what that means for, like program capacity, waitlist and demands, and

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

[Rep. Kathleen James (Chair)]: also contractors that are out there, you know, staffing up and training people and doing the work.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: Yeah, it's a great question. There are probably others who can speak to it more specifically. Think in general, what we've heard is that the contractors or businesses may want certainty. If they look at the funding picture and see that the funding is continuing to grow and be steady, they're going to be willing to make an investment to ramp up and build, put a team on to do that work because they know the work's going be there. And if they look at this graph and see that the funding is starting to fall off, it'll be a lot harder for them to be able to keep that staff. We're lucky that been fortunate in the state to stand up our weatherization training center, the View Center over in Barrie, so we were able to train weatherization contractors. What So we've heard is that that's a successful program that our weatherization contractors will pull from that program. There are other programs that do this as well, but we're adding additional capacity to build a workforce capable of this. I think the key is going to be, from my view, is the key is going to be the certainty of funding. If that funding starts to fall off, it'll be a signal to market to pull back on weatherization contracting because there won't be work there. It's just like solar or any other energy work. The market's going to start to move based on what it projects the demand will be. There's still, I think, demand remains very high. I mean, there is still plenty of work that needs to be done in customer homes. Great. Do

[Rep. Kathleen James (Chair)]: we have any more questions for Neil? Great. You said you were continuing to do more analysis on the pre weatherization. Will you just give us a heads up? Will.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: Yeah.

[Rep. Kathleen James (Chair)]: Ready to roll?

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: Yeah, we've got some great work on it, we haven't maybe got a consensus picture yet, which we want to know.

[Rep. Kathleen James (Chair)]: Okay. Thanks. Great. Alright.

[Rep. Dara Torre (Clerk)]: Thank you. Thank you all. Yeah. Peter.

[Peter Walk (Efficiency Vermont)]: Thank you.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: Second one is to go. Stay

[Rep. R. Scott Campbell (Vice Chair)]: if I can remember how to do this. You turn shearing on for me. Open.

[Peter Walk (Efficiency Vermont)]: While I'm doing this, for the record, my name is Barry. I'm Peter Wark from efficiency Vermont. Very happy to be with you all again this session. Happy that that you're leading with this incredibly important conversation and happy to provide some overview of of what we do and help answer questions to the broader picture. The getting our arms around the weatherization picture had been something that has been a that project of Biden deals for for many years back when I was a state agency official. We tried to get our arms around sort of what is what does the complete funding picture look like? And those types of slides didn't exist. Right? You had disparate programs working in disparate areas, and nobody owned the kind of concept of what the full funding picture is. So this is a vast improvement and something I'm pretty excited about seeing. Want to before I get started, wanted to echo Neil's point about the funding picture and clarity for contractors. We've seen this we've seen this decline before in the Ara funding of 2008, 2009. We asked contractors to ramp up to prepare for weatherization work, and the state was gonna backfill that funding, and then it disappeared. State didn't backfill that funding, and contractors were left in a challenging position. We are in the process now of doing all sorts of good work with contractors to stand up more workforce between the view training center. We're helping folks buy more equipment so they could bring on new crews, all those things. And that is contingent upon the level of of of public investment because these projects are hard to pencil out simply as a as a homeowner making the investment themselves or a or a blame lawyer to remember. So as you think about it, that's a good lens to remember because while we are thinking about this as a hopefully for, you know, kind of three or four years out funding the client picture, getting on ahead of it and starting to think about it now and and what we what you might do is really important because it will send that long term signal. Yeah, that that's especially true for the for the non weatherization assistance program funded programs because those are all private contractor led. Right? And so we only need to make the the WAPs have a little bit of a different, special sauce that Jeff can talk about in terms of how they stand up crews and and and shift around work. But the key the in the in the private market, that's key to be able to know that that funding is coming.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: Alright. K. That changed. Good.

[Peter Walk (Efficiency Vermont)]: So we've we've been doing this work for a while now, not as long as the labs. I can't claim forty years. But when the state joined the regional greenhouse gas initiative, that funding combined with, the efficiency work that Efficiency Vermont bids into the regional ISO's for capacity market. Don't know. I didn't really understand what that means. It earns additional money for the efficiency work that's done. And and the state, in working with the PUC, we've determined that we should best spend those dollars on additional thermal work. So both the RGGI funding and the forward capacity market funding are electric rate payer adjacently derived funds. Right? They come from work done in the electric sector because that's what Reggie works in. But they are used in the thermal sector. The piece that Danielle mentioned, we do a small amount of our energy efficiency charge, which is on electric repairs we are allowed to use when we are weatherizing a home that has heat pumps or is being more heated by more than 50% electric heat. Therefore, it makes sense to offset that heating load, and the use of DEC funds. So, since 2002, some of the funkiness that you saw in the chart is also we we received a tranche, two tranches of ARPA funds, which I'll talk about a moment, the American Rescue Plan Act funds, that we have shifted the weatherization incentives for because as you'll see in a moment, the thermal funding doesn't just fund weatherization. Right? It charge it funds different programs in both the residential and the commercial sector to drive additional thermal efficiency, which has great benefit for Vermonters across the board. The and as we move forward, as you know, mentioned, we are in discussions now with the public service department on what the the nature of support furlough income weatherization from our three year plan should look like in that associated budget. One of those key things that we think is important and and and we're working towards agreement with them on is the idea of that pre weatherization work, what we call the home repair program, which allows those those property owners who otherwise wouldn't be able to weatherize their homes because they don't have the money sitting around to be able to fix a roof or fix a foundation or address a mold issue or what have you to be able to move through the weatherization. As Neil said multiple times outside of this venue, that is a housing initiative. Right? Think about the value of that program combined with weatherization or housing stock at Vermont. You take a house that was tough for its occupants to live in and unhealthy in many ways, depending on what the issue was. And now you have a healthy home that's fully weatherized and cost less for them to occupy. That's a great deal for our housing crisis as far as I'm concerned. So it's something that we should it's it's there's lots of lots of potential benefits, something that we need to be thinking about as we're moving forward. So that funding piece.

[Rep. Dara Torre (Clerk)]: Sorry, Peter.

[Unidentified Committee Member (Speaker 3 main)]: Yep. So

[Rep. Kathleen James (Chair)]: Could you go back a Yeah.

[Unidentified Committee Member (Speaker 3 main)]: The ARPA this is a different chunk of ARPA money that you're getting versus

[Peter Walk (Efficiency Vermont)]: it wasn't in that other So that that chart included those those dollars as well. Both the the WAPs and deficiency Vermont received ARPA weatherization funding, and I'll go through some of the details of that in a moment. But ours was designed for the moderate income side of the ledger and to to to go alongside the low income work that the labs are doing. In point of fact, turns out about 30% of our projects in 2024 were low income customers, or who came through our doors for whatever reason, even though we had given them the opportunity to get a fully paid for weatherization process through the state.

[Unidentified Committee Member (Speaker 3 main)]: But that but that chunk of money is not in that orange. It is. It yeah. That's paid directly to you guys.

[Peter Walk (Efficiency Vermont)]: It goes through the public service department to us. Yes. Okay. So actually two tranches ARPA dollars that flowed. The first was a small one as the state was figuring out the initial picture of where to spend ARPA dollars. So that was $5,000,000 that increased incentives starting in 2022. And then the larger tranche that was originally a $35,000,000 allocation proposed by the governor, approved by you all, that has since been reverted to be a smaller number, not you know, part of that was $10,000,000 that went towards, the flood recovery, that, we worked with the emergency board on after the flooding of twenty twenty three, 2023, and then there was a reversion of some level of ARPA dollars in support of additional needs around the state. And so that's and that's that second tranche is where that home repair program came from, which I'll give more detail in a moment. We also were able to really go in-depth in terms of creating a both not only a low, but a low and moderate income tiers of incentive levels to help drive more projects and drive more benefit for Vermonters. The thermal energy and process fuels funding is the bread and butter of the thermal funding that Efficiency Vermont uses. We'll say Burlington Electric Department as the energy efficiency utility for Burlington, does get some as well, although theirs is somewhat limited because there are because of the overlap of the VGS territory with the VED territory, there's very few homes that are not served by natural gas. And so those are the homes that are the target for EBT.

[Rep. Kathleen James (Chair)]: So the I know you said this earlier, but the the t the TEPF money, that RGG money is sounds pretty flexible in terms of its use for low and moderate income weatherization.

[Peter Walk (Efficiency Vermont)]: It it is it goes through a you know, so so in establishing Vermont's participation in RGGI, the legislature in 02/2009 determined that the PUC should, should direct where those funds should go. You said you wanted them to go towards weatherization and let the PUC manage that process Okay. Or thermal work in general and let the PUC manage that process. So that's so it goes through as part of our three year plan.

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

[Peter Walk (Efficiency Vermont)]: It goes through a fully regulated process. You have the public advocate, work of the Department of Public Service that you'll hear from analyzing that plan, determining whether or not it's in the best interest of the state, and then the PUC ultimately determines it. So you can be confident that it is fully vetted and verified along

[Rep. Kathleen James (Chair)]: the way. Yep. And then the money from the from the efficiency charge, you said that can only be used for thermal work. It sounded to me like if there's a a nexus to energy efficiency.

[Peter Walk (Efficiency Vermont)]: Essentially, Did

[Rep. Kathleen James (Chair)]: I boil that down right?

[Peter Walk (Efficiency Vermont)]: If if somebody uses heat pumps in their homes to to heat more than 51% of that home Then then it's appropriate to use electric efficiency monies to pay for the weatherization work.

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

[Peter Walk (Efficiency Vermont)]: You're saving electric dollars.

[Rep. Kathleen James (Chair)]: Okay. Got it.

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: That that's

[Peter Walk (Efficiency Vermont)]: what I'd say. And that's

[Unidentified Committee Member (Speaker 3 main)]: the only place the EU the efficiency money is used in modernization. That's the

[Peter Walk (Efficiency Vermont)]: only electric efficiency money is Right.

[Unidentified Committee Member (Speaker 3 main)]: Yes. The rest of it stays in doing electrical efficiency.

[Rep. R. Scott Campbell (Vice Chair)]: So So That reminds me of another question. Yeah. Which is about tier three, how that intersects with this. Are you gonna do that? Or

[Peter Walk (Efficiency Vermont)]: or How long do we have?

[Rep. R. Scott Campbell (Vice Chair)]: Another layer of multi multidimensional chest.

[Rep. Kathleen James (Chair)]: I don't know. We haven't till two thirty. Sorry.

[Rep. R. Scott Campbell (Vice Chair)]: Maybe we'll get it at another time.

[Peter Walk (Efficiency Vermont)]: So the so the 2025 numbers in here are incomplete because we haven't finished the accounting for it as obviously we're on day six of the new year. But as you can see, there's a significant ramp up in the spending incentive dollars. Those are almost exclusively ARPA dollars. So we have really pulled back on the use of TPF funds through the 2026 when the ARPA dollars expire. Then we will transition into the new three year performance period and that demand resources plan that we have filed in December that will ramp up funding for weatherization in the absence of that federal funding, but it will not replace it. And I need to be clear about that. The total budget for the for the next three year period will be about $13,000,000 a year. So as we look at that number, it's a significant value that we won't be when we think about, and I'll show you in a moment what else TEPF is being used for, there won't be sufficient funding to be able to achieve those levels. Alright. So going to that proposal, key, along with continuing our weatherization work and to ensure that Vermonters are getting supported in the ways that they would like to be, we are including a total of $1,750,000 a year in that pre weatherization home repair work. That, 1.5 of that would go to go to the weatherization assistance program to fund the low income component. The remainder would support moderate income. Right? Because as we know for Vermonters, just because you've reached an 80% AMI threshold doesn't mean your ability to pay significantly increases. And so we want to be able to help folks along who need help, and get over the threshold of whether or not they can take on a weatherization project because the benefits are in are outstanding, setting aside the the, you know, the energy savings, just getting to the comfort and overall well-being and some result.

[Rep. Kathleen James (Chair)]: So so in your current budget approval process, the DRP process with the PUC, what you've proposed would keep that pre weatherization funding level essentially for the WAPs?

[Peter Walk (Efficiency Vermont)]: It actually increases it significantly. The WAPs don't have one and a half million dollars a year now

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: to spend.

[Peter Walk (Efficiency Vermont)]: So this is saying what would you actually need to fully support all of those.

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

[Peter Walk (Efficiency Vermont)]: We only had about I think we had $2,250,000 total in the second tranche of ARPA between us and the WAFs. And so we're gonna do that in a year and a half here. Right? And so that's it's doubling essentially what, what we were doing before, what we're we just started to do. So this is a significant improvement and can help address major needs and backlogs, that the that the WAPs are facing. So it's pretty exciting to me to really be having this conversation. Oftentimes, in the energy efficiency world, we get really caught up in making sure everything is driving as cost effective savings as possible. We leave people from being able to participate when we do that. Because if you if you asked a it asked a regulator to review a project where you had to do a weatherization project and a home repair project and you got this much energy savings out of it, they go that that that's not the highest and best use of our dollars. Mhmm. But when we think about what's really necessary to hit these goals, that's really helpful.

[Rep. Kathleen James (Chair)]: Because I feel like at the end of last session and one of the reasons why, you know, I think I wanted to make sure we circle back around to this is that we were hearing a slightly different fear, right, which is that that money was gonna dry up immediately and

[Peter Walk (Efficiency Vermont)]: Yeah. There there has been some concern.

[Rep. Kathleen James (Chair)]: And I know we're gonna hear from Jeff.

[Peter Walk (Efficiency Vermont)]: Yeah. So it'll be interesting. Yeah. So I'm I'm excited about that. Obviously, that starts January. If if approved by the PUC, that would start January 1 year. So whatever the need is between now and then, I don't have the ability to help meet that, but I want to be able to help me that need going forward because I think it's really important. The the other yeah. So so where we are in the process right now is, you know, we've been talking with the Department of Public Service all fall about the proposal. You know, there are, you know, differences in how much and how the spending should go, but we're we are aligned on what the thermal budget generally should look like. And so there has there's a real opportunity to ramp up a little bit due to increased regi revenue, and actually, we're anticipate we were anticipating some some changes in the forward capacity market that would decrease our revenue, and we think it actually may go the other way. Not a lot, but we may get a little bit more revenue out of it. So overall, we've taken we and the Department of Public Service have taken a relatively conservative stance in terms of projecting out those funds, and now we can really be more confident that we can ramp up to that because we've got going from about $8,000,000 a year of total in TVF funding to 13, which is exciting to be able to to work on those projects. Just a little detail. I think what's really important, and this is these numbers this is this is 2024, I think, trying to remember what precisely the numbers look like, but the existing homes is essentially weatherization. Right? So what the efficient product products would be support for. Sometimes we support heat pumps through the shared program with the DUs in tier three if it's if either the DU isn't participating or it's an unallocated project, something like that. Commercial industrial represents about a quarter. But as you can see, those commercial industrial projects are the bang for the buck. Right? And so as we think about the other efficient project we might use from there is something like wood stubs, right, to help focus it. You're seeing that sort of work a long way, but the So as we drive more weatherization, which is great, is gonna you know, it is a relatively cost, inefficient way to drive thermal savings. But it's incredibly important and a great starting point for many people along the along this sort of energy transition journey to be able to be thinking about, alright, now my shell and my insulation are great. Now I can think about other things so that I can size the equipment that's going into my house appropriately rather than having to heat the outside too. So good news along the way, but just wanted to put some of that in the context. We talk about weatherization as, you know, as as as the one of the most important things we can do. It's just important to note in context where it kind of helpful.

[Rep. Bram Kleppner (Member)]: What's included in the efficiency products segment?

[Peter Walk (Efficiency Vermont)]: So mostly wood stuffs and some heat pumps as well.

[Rep. Bram Kleppner (Member)]: Got it. So is that also relatively small investment for a reasonably large energy savings? Yep.

[Rep. Kathleen James (Chair)]: Wood stoves like advanced wood heat. Is that what you

[Peter Walk (Efficiency Vermont)]: Yes. To be able to yeah. To help people transition from an older inefficient model into something.

[Rep. Dara Torre (Clerk)]: Okay. Rutland? Just a quick question. So that's energy savings. What about bill savings? What's the average bill savings? Is that something Oh. It's a bit probably depends on square footage and how kind does that one.

[Rep. R. Scott Campbell (Vice Chair)]: To do. Let me see if that How would I get back to it then? Okay.

[Peter Walk (Efficiency Vermont)]: So, yeah, again, it's it's if you went if say thinking back to that public investment component to it, if you just asked somebody to look at it straight on a return on investment basis, it would

[Rep. Bram Kleppner (Member)]: be difficult for the period of payback would be probably to the point where they need to come back into the system again, right, along the way. So Although, I would say, in more nuanced analysis would also factor in the reduced health care costs and the social cost of carbon. And if you did that, I suspect you'll see a very different paper.

[Peter Walk (Efficiency Vermont)]: I would love for the energy system not to bear the full cost of weatherization. It is something we've talked about for years. Yeah. There have been a couple of pilots that have been done. Rutland Regional Medical Center did a great project where they they essentially prescribed weatherization for chronic respiratory issues. Turns out it takes for itself. Yeah. But getting switching over the insurance world to do that is difficult. It's something that the state could think about through the global whatever waiver that in Medicaid

[Rep. R. Scott Campbell (Vice Chair)]: terms. Yeah.

[Peter Walk (Efficiency Vermont)]: But there are 900 other things that are in the list for that as well because there are lots of things that improve health without being directly being healthcare. So, yes, I would love for that to occur. I think think you're asking for the energy system to pay for the kind of full freight while everybody else gets the positive externalities from it. Every other system gets positive externalities. But those positive externalities are good generally for the public person anyways, right? When we have lower health care costs across the board, that tends to be a positive outcome. Just quickly, this is a projection of sort of where we are now. We're able to offer low income and moderate income incentive structures as well as the sort of market rate that Neil mentioned. That we are going to have to change with the loss of funds. What it looks like, we don't know. We are we are planning to have some still income differentiation. It's not gonna be in regards to these levels, and we're seeing the cost of projects go up because of the cost of goods and materials and and labor as well. That is you know, it's gonna be a it it our money doesn't go as far. Our state money doesn't go as far as it used to because projects are more yeah. I shouldn't be doing this daily, but here everybody's seen the cost of things. The home repair, I mentioned it briefly not really briefly, but we've talked about it all right. We still have some level of funding through the ARPA funds available to support FWAP projects. What we essentially have worked on with Jeff Wilcox and team is to have that be another one of the funds set of funds they can braid. So as they work down through their IIJ funding and state funding whatnot, it gives them another flexible tool to fund that. So there's some available, but it is not it's not it's not gonna last forever and certainly not to this tune of $1,500,000. So I think as we think about what the need is, I'm excited about the future. This is could be a bit of a bridge year without additional funding. But it's a bridge well, it's not really a bridge year because there isn't that funding now.

[Rep. R. Scott Campbell (Vice Chair)]: It's a gap year. Yeah.

[Rep. Kathleen James (Chair)]: A gap year.

[Peter Walk (Efficiency Vermont)]: So and we work very closely with OAPs. I think one of the things that it always impresses me is the interconnection between weatherization agencies and and the efficiency services because of the incredible value you get from having a low income customer work with one one organization. When somebody walks through the doors of Capstone or CBOEO or Brock, SEMCA or Nido, they can access services that extend beyond what the weatherization agencies themselves are able to offer. And so those energy coaches, the LEAP and the THU program, the Targeted High Youth program really are ways that we help not only do weatherization work in the low income space, but also then expand that into other ways for folks to be able to save money on their energy bills. And so that partnership is really important and key. So think about it, The each WAP has been as energy coaches who are working directly with, low income customers, we help to fund those, so they can continue that great work. Because as everybody gets constrained in terms of funding, often those, like, that soft support is the first thing to go. The targeted Hawaii use and the low income, electric efficiency programs are those, you know, sort of applying and plants and lighting upgrades and other things that happen while a, you know, a customer is interacting with one of the weather's agent agencies. And then the work with three thermal, which is often considered the sixth lap, is really doing that work with the multifamily housing units. And this helps them go even deeper to be able to do that work most effect more effectively. So really helpful across the board. We do we help the fund the View Weatherization Training Center. We help to provide tools and trainings that it's it's all the

[Neil Lunderville (President & CEO, Vermont Gas Systems; Co-chair, EAN Weatherization at Scale Team)]: same

[Peter Walk (Efficiency Vermont)]: ecosystem. And I think now that we have a better picture of the overall sort of funding and how that all works, you can start to see how the funding supports the broader ecosystem. The ecosystem is already working together, and now we can think about what the true funding picture looks like. And I would be remiss in not reiterating Neil's point that, you know, while you see a a tailing off in the available funding after a significant surge in funding made possible by the federal funding, it's still inadequate to get to that final push to a 120,000 homes that you see on the chart. Right? So we're gonna get closer than we thought, but we're still gonna miss significantly. And so in this funding environment that we're we're operating in right now, doing no harm is important, but it's important to keep our eyes on the prize in terms of what, what would actually be needed to get to the $120,000. That, I'm happy to take any questions or additional questions.

[Rep. Kathleen James (Chair)]: Any more questions? Yeah.

[Unidentified Committee Member (Speaker 7)]: Are these weatherization how do the contracts get awarded to do this weatherization? Is these weatherization people kind of like the PUC got the thumbs on top of the cost of the project so that they don't get out of scale to you fall in moderate income. You got $9,700. Well, this blue board around your foundation is gonna be $9,700.

[Peter Walk (Efficiency Vermont)]: So so we work closely with the efficiency excellence network, which is the network of contractors that we help stand up where they come in and voluntarily work with the program and they everything happens between the customer and that contractor. Right? And we provide the backup support, the training support for that contractor, tools to be able to analyze the work and be able to go into somebody's home, do that blower door test, understand what the highest value pieces might be, and then help that, you know, work that project too. But that that customer contractor relationship is really important and something you've asked us to include as part of it. I'm not sure if any of you are around in ninety nine, two thousand when was stood up, but that was one of the key goals. Right? Don't there are efficiency models where the efficiency organization is vertically integrated and so does all of the work from planning to installation. And you asked us to think differently and have not push out the contractors who are who already work in the space. And so we've helped instead build them up to be able to do that work, Tyler. Is there sort of perfect control of each of the cost pieces? No, that's a relative weakness of that model. But it's certainly something that we work very closely with and keep an eye on what the projects are because ultimately at the end of the day, if something costs a lot to do a very relatively small energy savings project, that impacts the energy savings claims that we can make to the PUC and it kind of the system falls apart. So it's not perfect,

[Rep. R. Scott Campbell (Vice Chair)]: it's kind of how this

[Rep. Bram Kleppner (Member)]: Are people getting training at the new center in Barrie mostly existing builders who are adding that qualification to what they do, or are they kids coming out of the CTEs? I would How does it work?

[Peter Walk (Efficiency Vermont)]: Jeff Wilcox, who you're gonna hear from next, probably have the best answer for that. Okay. It was built for to make sure that the crews who were doing the WAP based work were ready to go. And then what we realized as we move forward is you needed more funding streams, and you needed to bring in private contractors to kinda fill out the network and keep it flowing. It's a great space. I think, Ruben and James, I encouraged you to go on a tour.

[Rep. Kathleen James (Chair)]: I think we should absolutely Yeah. Jump in It's

[Peter Walk (Efficiency Vermont)]: twenty minutes away. It's a small house in Vermont. Right? It's a small it's like any house you would go into, and they've cracked open different walls to show where things are, and people do real work in a real home, and it's incredibly valuable. Know, it's not some highfalutin play you know, big training facility. It's a home, and it's it's really cool to see that scale. And so Jeff can give you some more of those details, but it's it's it's a real upgrade from my perspective in terms of our ability to work.

[Rep. Kathleen James (Chair)]: Great. Brett Campbell?

[Rep. R. Scott Campbell (Vice Chair)]: Yeah. I have scheduled to do a little little bit more detail around the TEPF projected revenues and you mentioned that your proposed DRP is around $13,000,000 a year expenditures. Can you talk about what you have in your head, what you expect in terms of revenue from RGGI and forward capacity?

[Peter Walk (Efficiency Vermont)]: So all of those projections are based on what those revenues should be, Right? So we anticipate that some of that is spending down some of the conservative as we've been conservative in our projections Yeah. There has been a buffer that's that's ready to be spent down. And so both the public service department and efficiency monitoring agreement that we shouldn't wait. We should spend those dollars and do the good work to see that because the sooner you do weatherization, the more better it has. Right? And so Yeah.

[Rep. R. Scott Campbell (Vice Chair)]: So that's what I'm wondering. So we we had something in excess of $9,000,000 that accumulated in in there and and ready.

[Peter Walk (Efficiency Vermont)]: And so now that's being built into the next plan.

[Rep. R. Scott Campbell (Vice Chair)]: That's what I'm that's what I'm asking. Do you have that in your head, or do you

[Peter Walk (Efficiency Vermont)]: So if if I can't remember but I'll I'll give it to you in this context. I used to be one of the Reggie board members for the state. We anticipated roughly $2,000,000 in auction proceeds each year. Right. In the past couple years, each of the auctions themselves, which run quarterly, have generated $2,000,000. And so the RGGI money is significantly higher. The forward capacity market, we're still working on what that's gonna look like, but it it should be better than we had what we anticipated, which was you're anticipating pretty significant cliff as the ISO considered what to how to treat efficiency in that model. Because of the approach that they're gonna take, we actually think it's gonna be, in our favor, which is appropriate. Right? So it'll be now you're happy grow a little bit. Not a lot.

[Rep. R. Scott Campbell (Vice Chair)]: Nothing is going be higher than you had estimated when you put together the DRP.

[Peter Walk (Efficiency Vermont)]: Yes, not significantly. I think the other piece to remember is that the efficiency charge is tuned to a set budget. Right? So the electric side, you tune the charge up and down to get to the number you need to create the savings you need. Right? Thermal, we are passive acceptors of the revenue that gets generated. And so you need to leave some amount of buffer in the account. Sure. In case revenues fall through the floor. Sure.

[Rep. R. Scott Campbell (Vice Chair)]: So, so glad that's so

[Peter Walk (Efficiency Vermont)]: yeah, let me get maybe detail. Yeah.

[Rep. R. Scott Campbell (Vice Chair)]: I guess I'm just interested in what you're projecting for revenues for for for capacity that's behind your your projected ex expenditures for the next ERP. Sure. Okay. And and then how much of that those projected expenditures or those proposed expenditures are spending

[Peter Walk (Efficiency Vermont)]: down that 9 plus million dollars? Yeah, propose to spend all, I can tell you that, that we're proposed, that $13,000,000 would spend that down to a much more reasonable number. So it's it's not just the increased revenue. It's the spending down the the so I'll what I'll get and give you what the projected revenue is and also what the proposed kind of balance would be at the end of the That'd

[Rep. R. Scott Campbell (Vice Chair)]: be great. That would be great.

[Rep. Kathleen James (Chair)]: Alright. That was really helpful. I think we should probably take a we have our next witness at 02:30, so I

[Rep. Dara Torre (Clerk)]: think we

[Rep. Kathleen James (Chair)]: should probably take a break and go off live for a minute. Everybody's okay with that, no more questions for Peter?