Vermont Legislature SmartTranscripts:

[Rep. Kathleen James (Chair)]: We're live. Welcome back to House Energy and Digital Infrastructure. We are wrapping up our work on S 213. I'm Kathleen James from Manchester.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Richard Bailey, Lamoille too. There's Morrow, Windham, Windsor, Bennington. Michael Southworth, Caledonia two.

[Rep. Kathleen James (Chair)]: Christopher Howland, Rutland four. Dara Torre, Washington two. Graham Colby.

[Rep. Laura Sibilia (Ranking Member)]: Claire Chittenden, 13. It's Burlington.

[Rep. Kathleen James (Chair)]: Morris, Bailia, Windham, two. Great. Andrea Cohen, Vermont Electric Cooperate.

[Rep. R. Scott Campbell (Vice Chair)]: Super. For the record.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Lewis Porter, general manager of Washington Electric Cooperative.

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

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Thank you for having me. Appreciate it. Yeah. Don't know how much, background on our metering system would be helpful, but I'll just give a brief one and then happy to answer any questions. Washington Electric Co op, as you know, is a rural nonprofit cooperative that provides electricity, a 100% renewable electricity in 40 the rural parts of 41 towns. We are created because the it was not a profitable territory to serve. It's a very, very rural area with very few members per mile. We have about eight between eight and nine members per mile of power of power line. I think Braun Electric Co op is the next closest with about 15. So we're we're in extremely rural territory. That also means that smart meters are a big advantage for us because it's a lot of miles to drive to read to read meters with a meter tech in

[Rep. Christopher Howland (Member)]: a in a pickup truck.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Right now, Washington Electric has what are called power line carrier meters, which communicate through the power lines themselves similar to a telephone, well, landline telephone. We are in the process starting this year of deploying radio frequency meters, which will communicate through radio through radios instead of through the power line carrier. That has a lot of advantages. The power line carrier meters are good for billing data. They're good for getting how much power is used and billing members for that power. They are not good for the many other things that modern utilities now use meters for, including very accurate and responsive outage information, power quality information, other types of of specialized usages that can be identified to the meter. And those RF meters also have the added advantage of not being thrown off by net metering systems, batteries, heat pump variable drives. All of these things can interfere with the power line carrier meter's ability to communicate to us. And We are in the fortunate position of having received a federal grant arranged by senator Sanders, and that has been very it's very wonderful thing for our members. Obviously, that's 2 and a half million dollars that our members will not have to pay for modernizing our meter infrastructure. It's also meant that it took us between a year and two years as is typical to organize the grant agreement, get all the paperwork signed with the with the Department of Energy. We have now done that and are in the process of finalizing our contract with a vendor to install the meters. So all of that is background of of our metering system, current and the future one. We anticipate better ability to identify correct outages, better ability to do various kinds

[Rep. Bram Kleppner (Member)]: of

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: specialized time of use or other rates that members would like us to to have and the ability to warn us if there's a power quality issue at a member's house, which might be you know, it has the potential to be very important, significant. So let me talk a little bit about opt outs right now and the opt out situation under RF meters. Although the power line carrier meters we've used now do not have any radio signal, any radio frequency, at all. They they they are just like a landline telephone, essentially, in in the way they communicate. Under state law, we provide the ability at no cost for people to opt out of the usage of those meters. The way we've done that with power line carrier meters is we leave the meter off until once a month, we turn it on, do the read, and then turn it off again. And so that has, that is our our solution to for those who do not wish to have a a advanced meter at their at their house. We have about 32 members who opt out. That was my pleasure to assist. However, under the RF meters, they are not built to be able to do that turning on and turn off system. And and in large part, that's because they are built to operate in a network, in a in a what we call a mesh network where they all talk to each other. And so you can have one that has no smart meter capabilities. We turn that. We eliminate that provision altogether, that ability altogether, or you can have one that's on it. Those are those are the two choices on the RF on the RF meters. We are very supportive of members' ability to opt out of smart meters if they choose. However, I do not I would prefer not to charge the rest of the membership the cost of doing that. So our plan for reading those meters of those members who opt out under the RF meters will be to send a truck with a person in it. They'll read the meter. And and while I'm fine doing that, I do not think the rest of the membership should bear the cost of doing that. And that's essentially what this provision in this bill would do. It would allow us to present a tariff to the PUC. Well, I don't think the bill specifies the path, but the the path we would take and the path that I think we would be obligated to take would be presenting a tariff to the PUC for the actual cost, average cost of reading the meters in our territory manually, and then assigning those that average cost monthly to each member who opted out. Yes. You

[Rep. R. Scott Campbell (Vice Chair)]: answered my question, but I wanna make sure I heard what I heard. Because it'll it'll be my question question for GMP, and then I have the same question about the water utilities, which you guys probably can't answer, but maybe you can because maybe you know. Which was that the only concern that's been raised to me by somebody who you know, an advocate who supports the the ability to opt out is was kind of on the lines of how does each individual how does each individual utility decide what they're gonna charge? How do we know it's fair and that they aren't gonna set, you know, an exorbitantly high price to discourage people from opting out? And I thought that was worth considering. So would each individual electric utility have to go through the PUC for this?

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: That would be my recommendation. I mean, we do tariffs all the time. We would probably combine it with another tariff process and do it at the same time. But I think it's let me just back up and say, many states, coops, and municipal electric departments aren't regulated at all. Their regulation is if the members think they're doing things wrong, they rise up and oust the board and the general manager. I don't I wouldn't advocate for Vermont going down that route. I don't think I think it's reasonable that we have regulations in the state, including on on public power entities. Whether those regulations sometimes are a bit cumbersome and expensive is a topic for another conversation. But but we're very comfortable and familiar with going through the POC tariff process, and I think you can be assured that the DPS oversight of that process and the POC itself would ensure that we were billing people at at actual average cost to read it.

[Rep. Kathleen James (Chair)]: Yeah. Perfect. Okay. Whoo. Very okay. Yeah. Get off the board.

[Tim Ashe, Deputy State Auditor]: So for the people who choose

[Rep. Laura Sibilia (Ranking Member)]: to opt out of the radio frequency events meters, instead of someone driving around with a truck, can you not leave the current power line advance meter in and just turn on and off the way you have so far?

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: So originally, that was our plan, and we were gonna contract for RF meters with the current the provide our current provider of PLC meters for that exact reason. Unfortunately, they are not gonna support the PLC meters going forward. So, originally, that was our plan, we and we are not able to do that because the people are the the companies are not over the long term gonna support those continuation of those meters. I

[Rep. R. Scott Campbell (Vice Chair)]: don't know who's next, Rick Bailey.

[Rep. Richard Bailey (Member)]: Oh, yeah. Can you do this already through the PUC, or do you No. You can't just say I need a tariff for Nope. Statute says it shall be at no cost. So, I mean, we could try, but we wouldn't get very far.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Okay. Okay. And I believe we're the I did some quick online research. I believe we're the only state that allows opt outs at no cost. There are states that don't charge an upfront cost for a for a a non smart meter, but they allow a service charge for that. I believe we're the only one. There are, oh, between fifteen and twenty states that allow opt outs, but I believe we're the only one that does that at no no charge. Although, I would defer to your alleged counsel whose research abilities is great are greater than mine.

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

[Rep. Bram Kleppner (Member)]: So with the new RF meters, how do those get rich? Just towers around?

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Yep. Well, not towers, but we'll attach to there'll be there'll be backhaul points attached. There'll be repeaters attached to our poles, and then there'll be backhaul points at various locations, primarily our substations, which will bring the information back. Primarily, it'll be done through the RF signals itself. In some cases, it may be done through fiber at the substations. Some cases, it may be read through a cell phone signal. So there are variety of variety of communication backhaul once you get to an aggregation point. And and make you can imagine in our in our hilly landscape with lots of trees, it's gonna take quite a bit of work to get a network that can talk to each other. One of the things we are gonna educate members about is the benefits of not opting out and just having that network be stronger. But if they opt out, that's their choice.

[Rep. Bram Kleppner (Member)]: So those going on the outside of the houses? Or Yeah.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: It's going on the outside of the house at the meter.

[Rep. R. Scott Campbell (Vice Chair)]: Rex Southworth?

[Rep. Michael “Mike” Southworth (Member)]: Do you have a sense from the people that you serve if you're gonna see an increase in opt outs?

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: I don't know. I can't answer that definitively. I would say I expect so because we've done a lot of education to let members know that our current smart meters, the dumb smart meters, if you if you are okay putting it that way, do not use any RF signals. And so I think we've reduced the number of opt outs we have significantly through that educational effort to tell them that it's it's no different really than than having a landline telephone line. Okay. So I expect there will be more when they when we go to

[Tim Ashe, Deputy State Auditor]: the RF system. Thank you.

[Rep. R. Scott Campbell (Vice Chair)]: Quickly, and then I wanna make sure we've got our next witness at eleven, and GMP is here.

[Rep. Christopher Howland (Member)]: The FCC had a couple of bandwidths for RF. Do you know what bandwidth you're gonna be in? I don't know. I'll get

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: you that information. I'll go, Mark. Well, it may be different. It may be different vendors. She gave

[Rep. Christopher Howland (Member)]: me better than was it m m z or k z?

[Rep. Kathleen James (Chair)]: M z.

[Rep. Christopher Howland (Member)]: M z. But I asked that so that it they would the answer was 900 to 920 megahertz. K. And then the last thing was the wattage of the of the radio. There's a group of people that are afraid of radio frequency. Yep. And

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: so And to be clear, I I I'm supportive of their ability to opt out if they choose. I just think they should pay for it rather than the rest of the members. Okay.

[Rep. Kathleen James (Chair)]: Yep. Right. Bailey?

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Yeah. Well, on the frequency when it's on the meter, is that where the issue is? The radio frequency on the house at the meter? Yeah. I believe so. Okay. And if you can move your meter to a pole, is that People like my utility move my meter my meter off my house to the pole so they could just drive on it and re hit. Yeah. We we tried very hard to get away from meters on poles. It makes it hard to climb the pole, makes them exposed to different kinds of damage. I I suppose that's a possibility. I think the cost of doing that would probably dwarf manual reads. Okay. So in that case, I suspect we just turn the, turn not have a smart meter at that location and and rather than the expensive moving meter to the pole.

[Rep. Kathleen James (Chair)]: Alright. Yep. Do you, have a sense of, and I'm sure we've gotten testimony on this, what the exposure is similar to? I don't wanna

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: present myself as an RF expert, because I'm definitely not. What I will say is, it's many times, because of the proximity and the location of them and the wattage and the frequency, it's many times less than a cell phone. Many, many times less than a cell phone.

[Rep. Kathleen James (Chair)]: Okay. Thank you. Yeah. And and I also support

[Rep. Christopher Howland (Member)]: folks opting out of that. Thanks. Yeah. Right?

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Just one quick. Do do you have, like, an estimated cost? What's your thoughts? Might be a fair call. I I knew you were

[Rep. Bram Kleppner (Member)]: gonna ask

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: that, so I did a back of the envelope, but I wanna just be very upfront that that we will do actual costs for any for PUC tariff. But our estimate is around 10 or $11 a month per meter. That's a that's an average cost across our territory. Obviously, some some locations that, you know, way out at the end of a dirt road, at the end of a long long theater will be more, and some will be less. But but around $10, a month per meter is our is our best guess, but that's very much a back of the envelope and Okay. Not something I would take to the POC.

[Rep. Bram Kleppner (Member)]: Thank you. Yeah. That's cheap.

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

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: And I thought it was gonna be a lot more. Right. But it but over, you know, every month, it adds up.

[Rep. Christopher Howland (Member)]: Yeah. Yeah. Wait. Would would they consider going to,

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: remember, put down an additional deposit and meet read every six months or every three months?

[Rep. Christopher Howland (Member)]: Sure. And, I mean, if people aren't getting a bill every month, they tend to leave a use a little more till the bill comes in higher.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: So better. Would have been my experience. So we do have the ability we don't currently do it, but we do have the ability to do to I think we would have the ability to do a a system where the member reads their own meter, and then we true up periodically. It makes me a little nervous because you can get in a bad situate we we know this through budgets. We give people budgeting, budget budget accounts where they can pay over the entire year a set amount so it spreads out the cost. And we know that when those budgets are off and people end up with a big bill, it can cause a big problem for them, and they can end up taking them a long time to work those costs down. So that's I have a little bit of reluctance about doing that system for that reason, but we might we could do something like that, have members read. Of course, that would then book until them emailing us in the reads, us truing them off periodically a few times a year and

[Rep. Christopher Howland (Member)]: handling them even.

[Rep. R. Scott Campbell (Vice Chair)]: Lewis, thank you for being here. Yep. Camden, you're up. Okay. Thank you. Appreciate your time. Good morning. And this is

[Rep. Kathleen James (Chair)]: Morgan from Green Mountain Power. I do have a short written testimony, which I will send. I just haven't posted yet. So I'll follow-up with that. Overall, really don't have a ton to add to how Lewis was describing both how current our current AMI system works in terms of what it is that they're putting in.

[Candace (Candice) Morgan, Green Mountain Power]: And then also, similarly, we support the ability for folks to opt out of having a smart meter should they choose to for, whatever reason they have there. Under current statute, we're not allowed to assess any kind of fee associated with that choice. We also have not done work papers or sort of the necessary review that would be requisite before we file the tariff at the Public Utility Commission, but it would require a tariff filing to assess any fee that we would want to associate with this choice. It would likely be an update to our overall terms and conditions for electrical service, which is where we talk about the process for folks to opt out right now. And so, that would likely be where we would amend the tariff to account for any fee based on the actual costs in that space. At the time that we would propose it, it would then kick off the typical tariff review, which includes a department of public service recommendations, so they review anything that's before the PU's DNS space and would, you know, have the opportunity to ask any questions or, you know, poke at the proposal or or consider and ask any, changes that they would want to see. And then they would file a recommendation and then the PUC would then, you know, take that into account in combination with what we recommended and issue an order, which then would be effective, I think typically forty five days afterwards. So there's a pretty well prescribed process at the time that we file that would allow for public review and folks to review and also certainly the department and their public advocate have to consider what that cost would be to the customers that are opting out. In GMP service territory, we have deployed smart meters using the radio technology for about a decade now, think, maybe a little bit more. I have to lose track of the years that we're in, but think just probably a little bit more than a decade now. We have about 8,000 customers, give or take in a year, that have opted out of having a smart meter. That number has come down over time, and every year we see some churn between folks who have a smart meter opting out and then folks that have opted out, opting back in. So there's a little bit of back and forth that happens in that space and under the current process, it's just you call and ask and we roll a truck and make that switch happen at whatever time folks request that. When folks have chosen to opt out but have generation on their house, they receive a digital meter because it's a little bit more complicated, obviously, if you've got solar and net metering in that space and it gets a little bit more complicated for billing purposes, but it's not communicating anywhere. It's a digital If they're if you have no generation on-site, it's more of just a traditional mechanical meter, but all of them do require meter readers to go out and review and and take a look at that usage. So it's not an insignificant amount of drive time and other logistics for that team that's doing that work.

[Rep. R. Scott Campbell (Vice Chair)]: Do you have any idea what that's costing you across your 8,000 customers?

[Candace (Candice) Morgan, Green Mountain Power]: I don't. I mean, we have a sense they're doing other work as well. Right? Yeah. It's not as if if this were to go away tomorrow that that would just but, yeah, it's it's not an insignificant amount of teammates that are doing that work. So I could include a little bit of that in my follow-up written testimony.

[Rep. R. Scott Campbell (Vice Chair)]: That'd be great. Mhmm.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: And is it concentrated, or is it all over the state?

[Candace (Candice) Morgan, Green Mountain Power]: It's all over. Yeah. Yep. There probably are some areas that have a little bit more concentration, but I haven't taken a look at that. But there is some in all of our district office catchment areas. How

[Rep. Bram Kleppner (Member)]: often does GMP submit for a a new tariff anyway? And do you know if there are any plans to do that in the near future?

[Candace (Candice) Morgan, Green Mountain Power]: You know, we often, in terms of our specific terms and conditions, Tara, where this would be, it's probably every couple of years that we find small tweaks that we want to make or something in that space.

[Rep. Bram Kleppner (Member)]: So this is separate from a rate?

[Candace (Candice) Morgan, Green Mountain Power]: Correct. Yeah. That's right. This would I think largely be in our probably covered I mean, we have to look at it and consider it once the bill if the bill passes and becomes law. But that was a quick thought that our our manager of rates and tariffs would be that it would we would amend our terms and conditions to include this. Super.

[Rep. Bram Kleppner (Member)]: When was the last time?

[Candace (Candice) Morgan, Green Mountain Power]: It was probably a couple years ago now, but I remember mostly because we were updating some small format changes and just trying to make those bit more easy to read. We haven't done a more substantive review of that in at least the last couple of years. There might be some smaller other things similar to what Lewis said that we would bundle together, right? Should we go through something like this? Okay, thanks. So, for these 8,000 or so customers, they don't have access to time of use rates? Correct. And also not access to our energy storage programs or EV rates. I mean, is often where we see folks that might not even really have remembered that they had an opt out. Know what I mean? They might have and then they are interested in engaging in some of our other programs that that's often when a switch gets made, or the person that owned the house before then had an opt out or something like that too. So that is sometimes when it changes for folks or if they make a different decision. So they're probably losing out more on their side than the cost of men reading. Yeah. That's something that they would otherwise be insulated Yeah. And I think to give up. Right. And that's what mean, I think typically that's why even though 8,000 is not an insignificant amount, obviously, it's a small percentage of our overall customer base. And I think it's because not even even if you're not doing or signed up for one of those rates, just having access to that, like granular information on your GMP app or on our website to see your usage and other things. It provides the customer as well as the utility with a lot of information to help make decisions. So by and large, it's a technology that folks appreciate having and having that access to as well. Rick Howland?

[Rep. Christopher Howland (Member)]: Could you research the wattage of the meters that you're using? Also,

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: are there any industrial or commercial customers that opt out

[Rep. Christopher Howland (Member)]: or is it not available?

[Candace (Candice) Morgan, Green Mountain Power]: Think there are some. And it

[Rep. Christopher Howland (Member)]: is available to them That's correct.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Or you don't know the reason why. I

[Rep. Bram Kleppner (Member)]: don't know.

[Rep. R. Scott Campbell (Vice Chair)]: Yeah, this one final question from you out of your wheelhouse, I know. We may have heard this in testimony. Do water utilities go through the same tariff process for setting their rates? Would the same apply to I can ask. Yeah. I was

[Candace (Candice) Morgan, Green Mountain Power]: gonna say I don't even wanna have the the fact that I don't know.

[Rep. R. Scott Campbell (Vice Chair)]: Alright. We we can ask, like, cancel the department.

[Rep. Christopher Howland (Member)]: Yeah. The guy from Champlain said they they controlled by

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: the PUC. They don't make PUC files.

[Candace (Candice) Morgan, Green Mountain Power]: Yeah. That was just a handful of private Smaller

[Rep. Christopher Howland (Member)]: private one. They will have to go through the PUC. Okay.

[Candace (Candice) Morgan, Green Mountain Power]: Candice, thank yeah. Just a

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: quick one. Yeah. Total customers for GMP.

[Candace (Candice) Morgan, Green Mountain Power]: 245 to 250,000. Okay. Yep.

[Tim Ashe, Deputy State Auditor]: I see.

[Candace (Candice) Morgan, Green Mountain Power]: I'll include that in my final Yeah. In written as well just to get that percentage in there for you all too.

[Rep. R. Scott Campbell (Vice Chair)]: That's great. Candice, thank you so much for being here.

[Candace (Candice) Morgan, Green Mountain Power]: Good to see you all again.

[Rep. Christopher Howland (Member)]: But do you know if new systems can eliminate the hot water meter, new somebody put in heat exchanger, hot water and heat exchanger in their home, one meter rather than the reason there's two meters is because

[Candace (Candice) Morgan, Green Mountain Power]: the wiring inside the house is Yes.

[Rep. Christopher Howland (Member)]: Is because you'd have to change the wiring inside the house to get by the meter, but I didn't know if the smart meters could

[Candace (Candice) Morgan, Green Mountain Power]: We do still have have some folks that have volt meters who are in that vintage, or that older the heat I'm sorry. Water heater rate program, but I know it's on our list to try to, yeah, make a change there, but I don't think that I think you still have to have both meters.

[Rep. Christopher Howland (Member)]: We have to have two meters because of the wire the initial wiring for the meter sockets to the device. But if somebody when you get children leave and Mhmm. That's the 30 a day hot water daily rate may offset the savings you have over the

[Rep. Bram Kleppner (Member)]: between Yep. It's It's a good

[Candace (Candice) Morgan, Green Mountain Power]: a reminder, and I'm happy to follow-up on that one in Thank you. Yes. Okay.

[Rep. R. Scott Campbell (Vice Chair)]: Thank you so much for being here. Really appreciate it. Let's see. We have testimony at eleven from the doctor. I'm not sure if he's here. Thanks for being here.

[Rep. Kathleen James (Chair)]: And they are here. Alright. Great. Yeah. I'll be right back. Why are we

[Rep. R. Scott Campbell (Vice Chair)]: Pat, maybe you could get stuff started since we're still on live.

[Rep. Bram Kleppner (Member)]: Yep.

[Rep. Kathleen James (Chair)]: Alright. I'll be right back.

[Rep. Bram Kleppner (Member)]: So yeah. But It's only one of the the rates that has got confused. But, know Jim, was Doug gonna come

[Tim Ashe, Deputy State Auditor]: to He's gonna be able There was a lot

[Rep. Bram Kleppner (Member)]: of b rates. Yeah. Well, IV rates, but they're they're not times they're not connected to time of use.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: So They're they're connected through your power and meter. So you're all wired out of each other.

[Rep. Bram Kleppner (Member)]: We're ready to go. Not

[Rep. Christopher Howland (Member)]: with Are ready to go?

[Tim Ashe, Deputy State Auditor]: To let them monitor. I'm gonna email Okay. Something. So I need a couple minutes. Alright. Two minutes.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Alright. Let's

[Rep. Christopher Howland (Member)]: see. Because I mean,

[Rep. Bram Kleppner (Member)]: it's something they should be doing more time with these rates. I I hear about the Folks at home, they're gonna have to wait two more minutes. They are. Yeah.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Well, I think they have.

[Rep. Bram Kleppner (Member)]: They should be. No. I mean, I'm talking about incentives for people to use less juice. Like, I would say

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: a lot more time to pay more. Well, you'd also have the ability to use your battery. Right. Unfortunately, we would Exactly.

[Rep. Christopher Howland (Member)]: Be able to take

[Tim Ashe, Deputy State Auditor]: In point more money.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Your battery could be quicker.

[Rep. Laura Sibilia (Ranking Member)]: It's not at 8 That's 4.

[Rep. Christopher Howland (Member)]: More of it.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: At peak. The end of the solar.

[Rep. Christopher Howland (Member)]: The heat is when you move in the evening when you turn on your electric stove and turn on your electric lights, turn down at 10AM to

[Rep. Bram Kleppner (Member)]: to 2PM when I can use my batteries for No. Thank hours during peak.

[Rep. Christopher Howland (Member)]: And The old peak was the industrial demand.

[Rep. Bram Kleppner (Member)]: There's a peak shift. Yeah. And let's see. Do we have this report? I don't know how

[Rep. Christopher Howland (Member)]: Most did it. Days.

[Tim Ashe, Deputy State Auditor]: It came out in early January, so it could if Yeah. By date, it would

[Rep. Bram Kleppner (Member)]: be maybe Alright. Thank you. I did

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

[Tim Ashe, Deputy State Auditor]: Alex, you have you received

[Rep. Kathleen James (Chair)]: this? What is it?

[Rep. Bram Kleppner (Member)]: Is it the state auditor will correspond

[Rep. Christopher Howland (Member)]: And then there. The seventh program, state genergy management.

[Tim Ashe, Deputy State Auditor]: Think they in break up the board here.

[Rep. Kathleen James (Chair)]: See the 2025

[Rep. Christopher Howland (Member)]: So I don't know. But The

[Rep. Bram Kleppner (Member)]: date on it was 01/20/2026. Okay. But I think I can. We're all I mean, this and that and brain, you know, like most of you recognize some

[Rep. Christopher Howland (Member)]: of it. Right. Different frequency. Yeah. Right. But yeah. So so right. So they're

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: If if that bans are

[Rep. Christopher Howland (Member)]: I think the volume is It's

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: not like your side of town. Oh, my side of the 5,000 miles. And, you know,

[Rep. Christopher Howland (Member)]: you see, you know, 5,000 miles. Yeah. Yeah.

[Rep. Bram Kleppner (Member)]: The big tower? The big

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: the big. Right? That's 5,000.

[Rep. Christopher Howland (Member)]: Don't know. Probably 50,000. 50,000. I'll take that out of the WABC out of New York.

[Rep. Bram Kleppner (Member)]: And you and and all of this is your separate quality. Your testimony. I don't mind your saying.

[Tim Ashe, Deputy State Auditor]: How are you doing, doctor? I'm just trying to get that volume. Screw something up. That's good.

[Rep. Christopher Howland (Member)]: That's the governor's office people.

[Rep. Bram Kleppner (Member)]: Gonna hang up. You're on speaker.

[Rep. Christopher Howland (Member)]: No, I had a question either.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: It's just smaller information. Alright.

[Rep. Bram Kleppner (Member)]: So, the public is getting to

[Tim Ashe, Deputy State Auditor]: see the inner workings of the community. The digital infrastructure.

[Rep. Bram Kleppner (Member)]: And digital infrastructure. And we have, like, two, three, four, five. Think I might have a slide. Just barely. It just needs it. And then you're good. Good. Good. I get

[Tim Ashe, Deputy State Auditor]: I'm not getting an echo. I'm not hearing it.

[Rep. Bram Kleppner (Member)]: Sorry. Yeah. So are you gonna post the presentation? Yeah. Right. You could also send it to the palettes of the palettes.

[Tim Ashe, Deputy State Auditor]: I did do, like, two palettes. Okay. With that illustrious thinking, you tell

[Rep. Bram Kleppner (Member)]: me when you're ready. Are ready. Alright. And I think we have everyone in the room here, and we've we've already introduced ourselves to the audience at home. So if you would just introduce yourself for the record, should I say?

[Tim Ashe, Deputy State Auditor]: Good morning. Tim Nash, deputy state auditor.

[Tim Ashe, Deputy State Auditor]: We released an audit back in late January of this year, related to buildings the auditee was buildings and general services, and the specific, inquiry was around the extent to which BGS was managing energy use consumption at state owned, well, state operated, state leased facilities to comply with several legislative directives, over the years that were intended to get state energy's use down over time. Sort of queue it up. There isI don't want to use a bunch of acronyms because the high level point is really all that matters, and you'll have BGS, I think, in later in this week. But when I'm talking about state energies, I'm talking about state building energies, not the global effort of all private, profit, and public energy consumers. And so every six years, the state puts together a so called state agency energy plan, which is about our own energy performance. And I think this passage from it kind of cues up to why should anyone care, which is that the state itself often makes mandates for private entities and families, and so I think the legislature has had a long interest in saying, Why don't we model the behavior that we're asking of others, not only because it's good for the environment, because it also saves taxpayers money? So that's the short story. We had three specific objectives when we were looking at this, and I'm gonna walk through each of these in a, hopefully, just the right amount of detail in a bit. What we call an objective is the sort of clear, measurable thing that we're going to judge the state's performance against. It's not do we like this idea or not. It's state said you're supposed to do the following things. Have you done those things? Have you done them well? And so here, what you can see is we're looking to see is the state measuring whether it is in fact achieving the goals that were set out in the state agency energy plan and other legislative directives? Is BGS's energy office, which is the sort of subunit within BGS who manages this effort in state building space, picking the types of projects that have the best cost benefit for the state. And then finally, once these projects, these efficiency projects and conservation projects are completed, it's VGS making sure that we've actually gotten what we expected to out of them. Are they validating the results of this? This is just to give you some sense of scale of the amount of energy, consumption in state buildings that we're talking about. It is not a totally complete number for reasons I'll explain in a moment. But you'll see that over the course of about nine fiscal years, we're in the $138,000,000 for building energy, and then in addition to that, the second chart on the lower right is states' gasoline and other fuel costs in millions. You notice that on the state building energy graph, the one on your left, there's that little dip, which is largely COVID because there was just a lot less utilization of state building space, so that makes some sense. The same on the fuel side when you didn't have people coming and going from work to the same extent. So I'm going to briefly kind of explain what was it that we were trying to see if they're performing well against the SAEP, the State Agency Energy Plan, which has been updated every six years, you'll see that I just put from the audit the 2016 and 2022 goals. These are what BGS is supposed to be sort of coordinating across state government to see, in terms of objectives. The State Energy Management Program, which sends a report that you guys may see in committee once a year, which kind of lays out specific projects that BGS has done. That's largely communicating what the State Energy Management Program, which is the BGS unit that kind of goes after these opportunities for savings. So the specific targets were set in place, the wisdom of legislators and administrators at the time. But the key finding that we had when it comes to determining whether the state is actually achieving those objectives is that they don't know. They don't know in part because they haven't been measuring progress against those goals. They have not created baselines, meaning if you're going to reduce your energy from one year to the next by 5%, you actually need to know what that first year is. If you're trying to reduce greenhouse gas emissions from a nineteen ninety level, you need to know what the 90 level was in order to determine whether you're making progress on that. Another piece is that the the BGS unit has only been looking to BGS owned and operated properties, and I think many people think, well, BGS owns all of the properties in state government, but, AOT and other agencies actually own and operate their own properties. So BGS has limited efficiency work toward meeting these goals just to the ones in its wheelhouse. And as you'll see in the have any of you seen the the Spacebook before? The 20 the BGS Spacebook. It's, if you're in state government, we would have seen it. It is basically the tally of all the buildings, square footage, and so on. But only 60% of the, building space in that is actually BGS, owned and operated. So if you're only looking at the BGS component but not the totality of it means you have no idea what's going on in those other buildings. When I say ignorance, don't mean this in a pejorative term, but the state currently is not tracking how much energy is being consumed in the leased space that's used by state entities. I'll show you the scale of leased space out of the total amount of space being used by the state in a second. And then transportation fuels, which is part of the state agency energy plan, trying to make sure that we're reducing unnecessary use of transportation fuels wherever possible. BGS doesn't have a system to know what the total amount being consumed is. So

[Rep. Michael “Mike” Southworth (Member)]: that kind of piques my curiosity because how can we not have captured that because everything is on the BGS gas card, all the gallons are are captured. How can we not have that information?

[Tim Ashe, Deputy State Auditor]: It's a good question. One of the things in the audit is that the there's a conversion that is done from the gas cards, is taking the price and trying to convert it into a gallon unit, but it is discouraged by, the feds and others because it's not a very good way to capture how many actual gallons of fuel are being used. So it captures how much the cost is, but it's not capturing necessarily how much fuel is being consumed. And the audit goes into more detail about because

[Rep. Michael “Mike” Southworth (Member)]: years back, you used to have to fill out a card every time you filled out mileage, gallons used, date, where. Yeah. So everything was tracked, and you'd hand

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: it in, and then who knows where it

[Rep. Christopher Howland (Member)]: was going.

[Rep. Michael “Mike” Southworth (Member)]: Yeah. But it would track all of the gallons used.

[Tim Ashe, Deputy State Auditor]: Yeah. I'll I'll I can have the person who who worked on that piece of the audit get in touch with you, but it's it's it's conversion factor, which is not viewed as a particularly accurate measure. Okay. Alright. No. Thanks. Thank you. This is the issue of not including leased space in the total effort of the energy office. This just puts it in some sense of scale, that it's about 12% of all the space being used by state agencies, so it's not a small amount. Obviously, the state has much more control over the buildings it owns itself, But leased space is a significant piece. You know, 12% is not negligible. Did you just say

[Rep. Bram Kleppner (Member)]: that 60% of the total space is owned by BGS? Think you said.

[Tim Ashe, Deputy State Auditor]: That's of the state owned buildings. Yeah. 60% of the square footage is under BGS's direct control. 40% is under AOT. I see. Okay. So another agency. Guard or the veterans home, other entities. So this would be, That would be the 88%, be That the 12%, the additional lease amount. What path do you see for reducing energy use in buildings that we lease? There's a set of procedures. One of the details of the audit that I didn't put in here is that there are procedures that BGS developed but has not implemented, which would say that the energy office's efforts could be directed towards leased spaces that have more than 5,000 square feet and for which there's a lease of greater than five years. I think the idea there is we're in a bit of a long term partnership here, so there may be an opportunity to work with the private building owner in a way that works for both the state's interest and the private building owner, but that hasn't been implemented. It would be these long term relationships. Work with means the state puts some money in. Doing the energy, either paying for the energy audit that would be conducted to identify opportunities, or possibly paying a share of the costs. The second audit objective, and this is related to are they picking the most cost efficient

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: sorry. I'm just curious why ALT's buildings aren't in this audit. We No. I know they're not under BGS control, and and maybe that up there where it says state owned, should say, BGS.

[Tim Ashe, Deputy State Auditor]: Well, this this this includes all buildings, including but if you took the 7,000,000, square feet Yeah. What I'm saying is that BGS owns 60% of that.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Oh, 60%? Okay. That is all the entire

[Rep. Christopher Howland (Member)]: Yep. So

[Tim Ashe, Deputy State Auditor]: the the y a o t isn't receiving the same level of access, if you will, to the energy audits and potential investments that the energy audits may make is a very good question. I think BGS will have to answer that. One of the things that I glossed over on this previous piece at the very top, because it sort of gets to those broader issues of when I say executive accountability, it's not about this governor or the previous governor, but oftentimes, the legislation will say, okay, the units that are gonna go about doing all this important work are sort of at the direction of a particular agency secretary or something. In this case, there's supposed to be a once every two year report to the secretary administration basically saying, here's the totality of what we're doing. Here's how we're here's how it looks in terms of our meeting, our goals. They haven't been doing that report. So in theory, the secretary administration is the one who was supposed to be receiving enough information to hold the the constituent units of government accountable, but, subsequent or consecutive secretaries haven't even been receiving that report. So either they haven't been asking for it or haven't been receiving it, but either way, there's a missing link there in terms of the overarching accountability. You know, and AOT in particular, I mean, a lot of their buildings might be salt shed kind of garages. So whether there's a huge amount of opportunity there, that's a fair question. But there are a lot of I mean, there are

[Rep. Bram Kleppner (Member)]: hundreds of of AMT buildings. Oh, well, actually, that that begs the question. Of the 7,000,000 square feet, does that include unconditioned buildings? I think that's a good question, Amit. I'll have to get back to

[Tim Ashe, Deputy State Auditor]: you on that. But one of the things that the DGS Energy Office does do is they they usually hire contractors to go out and do energy audits. They're gonna pick the ones that they perceive to have real opportunities. So it's not to say that

[Rep. Bram Kleppner (Member)]: every square foot is the same same opportunity. Yeah. Where where does the number come from? So this is just what auditors report to reported reported to you or report to whoever the agency they that they're under? K. Which which The 7,000,000 square feet or

[Tim Ashe, Deputy State Auditor]: the It's coming from the space book. It's coming from space book. Yeah. Right. So it's in it's in a huge asset space. Okay. And

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: and does the 7,000,000 include corrections?

[Tim Ashe, Deputy State Auditor]: It it should include corrections. Yes. Yeah. Sure. Okay. The space book itself, as through the course of our audit, found that there were actually buildings that were not in there that should have been. For instance, right near my house, there's a Department of Labor building on Pearl Street in Burlington, and it wasn't in there, and so we alerted BGS that the list was not as complete as it it was. Was. So I think some of it is these lists over time. Someone develops it, for some reason, was either inclusive or not inclusive of certain things, and then each year it just kinda passes on as different people hold that position. They are making improvements to this Facebook itself. They should change the names. I'll

[Rep. Bram Kleppner (Member)]: show

[Tim Ashe, Deputy State Auditor]: you in a second the number of projects that have been occurring, that have been being completed each year. But the thing that we noticed is that there has been a significant drop in the last few years, which has been attributed largely to difficulty BGS says they've had in hiring people for these project manager positions. I think they're now being a little bit more aggressive in terms of trying to recruit for those positions. And then I mentioned already the piece about land. But one of the things so on the one hand, we found that most of the projects they were picking were cost effective projects. So they're picking appropriate projects that meet the intent of the legislature to, you know, go forward and do projects that save more money than they cost. But we did find a couple anomalies, and I just want to give this one example, and I don't want to suggest that this was rampant. This was one example that we found out of the number that we reviewed. And basically, in simple terms, work was done at one building that was not cost effective, but BGS lumped it in with a series of cost effective measures at a completely different site. And then when putting them all together, the cost benefit worked. So BGS has their own reasons for why they might have wanted to bundle these projects together, but what it meant was that money that was meant to be used specifically to reduce energy consumption and save people money was being used on something that was a money loser. It might have been worth doing for other reasons, building comfort, mechanical needs that end of useful life of a particular piece of equipment. But one of the audit recommendations was that they clarify the circumstances under which this kind of bundling could occur and make sure that energy saving money wasn't being used for things that don't save energy. This is just a simple tally.

[Rep. Bram Kleppner (Member)]: One other quick question on that. That slide mentioned EBT's lifetime savings calculation. I'm assuming that that is a life cycle cost. In other words, it includes a comparison between the, let's say, a fifteen year life of a lighting measure, for example, as compared to, including maintenance and replacement, as compared to the existing situation prior to a record fit.

[Tim Ashe, Deputy State Auditor]: EBTs I I believe EBT does not include maintenance costs, when they do their projected, lifetime savings. And so we actually had to pull out from BGSs their maintenance costs so that we had an apples to apples comparison for something I'm gonna show you Okay. In a second.

[Rep. Bram Kleppner (Member)]: Yeah. That that would seem to be important because so for example, if you're replacing all the fluorescent lighting in a in a in a building with LED lighting, presumably, there's less replacement during the course of the fifteen years, the replacement of of tubes. Yeah. So that would reduce maintenance cost. Yeah. Things like that. Right? Yeah. Been a

[Tim Ashe, Deputy State Auditor]: long time since I've I was when I was a housing developer, I used to have to get these energy audits, and I was This going with all of is the just grand total number of projects that have been occurring on an annual basis are being completed. You see the, you know, it's pretty unique in the last three years. As I said, the failure to fill two of the positions that manage these projects, I would take BGS at their word, that that probably largely explains this. The legislature, I think, has to talk with BGS about whether it wants a more robust effort. What are the lost opportunities as a result of having these positions vacant? Just for, I think, for everybody in this room, you likely would have been here. When this enterprise was first fundedit's actually the two project managers, at least, are funded with Efficiency Vermont funding. Basically, the state used to pay out of an internal service fund to hire these project managers in an attempt, I think, to save money and to get value back for the amount we pay into Efficiency Vermont. There was a funding switch where Efficiency Vermont's actually the one who pays for those positions. So there's no benefit to the state's bottom line of having those positions be vacant. When BGS says they're having trouble filling them, it's not like they're doing it because it helps their own department bottom line. We have to take it on good faith that they're truly having trouble finding people who fill those prescriptions. The final piece, and I'll show you one slide in a second which speaks to this, this gets to kind of a bit of a transparency point. So every year, BGS sends out a SEMP report, basically, state energy management program report, which says, Here's what we did in the last year. Here are the projects we did. Here's how much money we saved. I used to receive those reports. I was always really heartened by them. What we found is that there's a pretty significant problem in that BGS, after a project's completed, are not having efficiency. Vermont go back and validate that the reported savings or the projected savings have actually come true. As a result, the amount of savings that have been reported to the legislature, to the public and others, has been pretty grossly overstated. It's not an argument against doing things that save money, but just to say that the amount of money that have been saved by these projects for different reasons has been overstated, as you see in the bolded sentence here, by about 1,600,000 in the period we reviewed. That's obviously a big number. From a legislative point of view, knowing that it's been overstated can feel discouraging because you wish you'd receive more benefits than the investment. On the other hand, it allows you to say, What's going on here? How can we have more kind of truth in advertising about what we're getting for those projects? And here's a few examples of projects we reviewed. Before you go on to that, your final

[Rep. Laura Sibilia (Ranking Member)]: Oh, sorry. This may answer it, but let just remind me just thinking.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Okay. Got it.

[Rep. Laura Sibilia (Ranking Member)]: BGS was estimating 4,000,000. That was overstated by 1.6. So that's a pretty big percent Yeah. As it turns out.

[Tim Ashe, Deputy State Auditor]: Yes. Now, it's still good to say 2,300,000.

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

[Tim Ashe, Deputy State Auditor]: But, you know, the legislature and others were hearing a different number, and it wasn't, I think, well, it was a different number, and the primary problem was they were not going back to efficiency Vermont saying, We need you to close the deal here and tell us what actually happened. Now, sometimes that can be because the original projections, the project changed a little, and so it's not that something didn't work right or that the system wasn't installed properly, it's just that things changed. Other times, it's that efficiency program had better information in the end of the project and was able to come up with a more accurate thing. I think you want to on the more conservative side when you're assuming how this is saved. But this is a pretty serious you know, it's a pretty significant miss on the reported savings, and so And and how does this compare with costs for these projects? Well, if if you start with the assumption in the first column there, the BGS lifetime savings, that they're supposed to be doing projects that save more than they cost, I think the assumption would be that the cost of the projects was less than $4,000,000 It

[Rep. Laura Sibilia (Ranking Member)]: could have been $3,000,000 Yes. And then overall, these would have lost money.

[Tim Ashe, Deputy State Auditor]: Yeah, and we found that some of the projects wound up not having the same cost benefit calculus after using EDT's efficiency revised numbers, so a few of the projects wound up not saving more than they cost.

[Rep. Laura Sibilia (Ranking Member)]: And I can see that Brattleboro Courthouse, for instance, expected it to save a $180,000. You'd be happy spending $90,000 on that. Yeah.

[Tim Ashe, Deputy State Auditor]: And the audit the audit the audit speaks to the ones. The range was the range of projects that initially appeared to save more than they cost after using efficiency vermants validated numbers. The handful that kind of flipped and wound up costing more than they saved ranged from like $10,000 to somewhere in the mid-150s or something like that. But it doesn't mean you can always avoid it, but it means that having the system in place where Efficiency Vermont comes in as the sort of independent analyst at the end is really important. I'm not going to walk through all the recommendations. I'm happy to, you know, feel questions about them, but in short, we provided 14 recommendations, which is a little more than typical but, you know, results in, but basically speaks to all these things, creating kind of key baselines so that we know if BGS is meeting them, including all properties in the totals, kind of fulfilling that set of procedures which they drafted but hadn't implemented about possibly engaging with leased properties, and kind of a variety of other more mechanical pieces. BGS, in there, there's at the end of every audit when we meet, we we do two things that you may be unaware of. One, we meet with the auditee, and we say, here are all the facts we're about to present. Is there anything that you think is not right? Okay. So that process happens before we issue the final draft. Then when we issue a draft for the final review by the auditee, we have all the recommendations in there, and we basically say, tell us if you are going, if you agree with the recommendation with them. Do you think that these are reasonable things that you should do to help resolve some of these issues? And BGS has essentially agreed with all the recommendations, so all 14. That's always very good news. Some of their recommendations, their responses, which are found at the back of the audit, speak to some conversation that probably needs to happen with this committee about how they're gonna fulfill that. Like, where do they set baselines? Do they set new targets for energy reduction in state buildings that are maybe more realistic than what had been put in place in 2016 or 2022? So they'll want to speak a little bit about the path moving forward. But I just wanna acknowledge that their response was positive in the sense that they accepted all the recommendations and intend to make progress on it.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: When you backed up to that savings thing, the one that was bundled, was that in there? The Rutland?

[Tim Ashe, Deputy State Auditor]: Sorry. Tell me. Oh, there. Head's been here for a second. Let me yeah. It was Barry Courthouse And Rutland Parking Garage. Yeah.

[Rep. Christopher Howland (Member)]: So

[Tim Ashe, Deputy State Auditor]: the parking garage is definitely in there, so that'll I don't think it would be listed twice, so that would have been a piece that was added to the Rutland parking garage component.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Alright. Thank you.

[Tim Ashe, Deputy State Auditor]: And as and I just wanna also point out, as you can see from the range of years, this is two administrations. So this isn't something that developed in the last few years. This has been just some process issues over time.

[Rep. Bram Kleppner (Member)]: How many people does BGS have working on energy issues?

[Tim Ashe, Deputy State Auditor]: The unit itself, I think, has three, and two of them are, I think, somehow sort of moved somewhere else, but are sort of also responsible for the project vanish. So it's basically three empties if I've gotten rid Not big. Now other BGS activity will include energy elements that are not specific to this particular program. If they do a new building or a huge renovation, I mean, that's obviously energy components of that. Yeah. So, it's lot of opportunity. Yeah. And a lot of kind of untapped. They've got many audits, energy audits that have already been completed. Some of them probably showed that it would not be a great use of states' money to try to make energy retrofits or improvements. Some of them do offer opportunities, They need some bodies, obviously, to manage through that, or they need to contract with other people who could project manage, which is another option. At least, there's so much going on with building space right now anyways. Also like that bit of commotion. So I think BGS might say, you know, in some cases, we didn't move forward because we weren't quite sure what was gonna happen. That's a fair amount of point. Just

[Rep. Bram Kleppner (Member)]: looking at this table, I think it would be really useful to know what the what the estimated cost and actual cost were for each for each of these projects to the extent that that can be sort of abstracted out of Yeah. I can I'll have I'll

[Tim Ashe, Deputy State Auditor]: have our lead auditor get that.

[Rep. Bram Kleppner (Member)]: Because I have to imagine that, for example, courthouse and the the project might have changed. Yeah. They these

[Tim Ashe, Deputy State Auditor]: are big projects oftentimes. I'm sure. So Yeah.

[Rep. Bram Kleppner (Member)]: You know, they they did they did they did, whatever, value engineering and cut and cut some measures out or something like that. You know? Yeah.

[Rep. Christopher Howland (Member)]: You might have done any include any benefits of it? Auxiliary benefits like better lighting, better

[Tim Ashe, Deputy State Auditor]: This would just be on the dollars

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: and cents. Dollars and cents.

[Rep. Christopher Howland (Member)]: Yes. Dollars in and savings of energy out and without other necessity.

[Tim Ashe, Deputy State Auditor]: Yeah. These these dollars are there's two there's two funds, and I I I have trouble not having a nervous laugh when I say them. The SURF and the SMRF. So these are the SURF is the treasurer has, I believe it's an $8,000,000, fund with specific lending requirements for use on these kinds of projects. There's a It used to be that there had to be either a seven or eight year payback. Now I think he's expanded it to fifteen years. So a project just has to have a fifteen year payback, so much more opportunity for projects to fit in that way. And then there's an administrative fee and so on. The SMRF is controlled by BGS that has a different set of lending requirements. Those other benefits are really meant for other capital dollars in a way, right? BGS has lots of reasons to do improvements to buildings. That's what their major maintenance funds are for and everything else. These funds are specifically for energy improvements, even if they might have some additional So

[Rep. Christopher Howland (Member)]: they came out of the energy improvement bucket. Yes. Yes.

[Rep. Bram Kleppner (Member)]: Yeah. Well, it's very interesting. And, you know, having worked in this space trying to figure out what's cost effective and what's not cost effective for many, many years, it's not that easy to tell. Oh, that's right.

[Tim Ashe, Deputy State Auditor]: And I I will tell you, I I believe I introduced the legislation to make the state energy management program permanent. Yeah. In part because I used to receive the reports, which I found so heartening. And the truth is I know that the there's goodwill behind the work and so on. Yeah. But definitely would have preferred, if I'd known some of the level of additional rigor that was needed to make us more confident, I would have benefited at the time. We don't have any questions.

[Rep. Kathleen James (Chair)]: Yes. To my right. Somebody's jumped in here.

[Rep. R. Scott Campbell (Vice Chair)]: I hear breathing. I know.

[Rep. Kathleen James (Chair)]: And and I came in late, madam chair and vice chair.

[Tim Ashe, Deputy State Auditor]: That's the best time to ask a question when you've heard one.

[Rep. Kathleen James (Chair)]: Right. But the question keeps sitting with me, which is, is there any cost that we're that's happening as a result of this. So I'm just thinking about, these projects aren't part of any bids for energy savings.

[Tim Ashe, Deputy State Auditor]: The cost to the state is that wherever there is an improvement that can be made that reduces the operating expenses by reducing the energy consumption, if we're not taking those opportunities, we're paying unnecessarily to heat the buildings or have energy or electricity. That's that's really the opportunity cost. So the question for BGS when you have them in is, could you be more aggressive about this work? Like, what is what is stopping you from doing more projects? And what part that you missed, and I'll just briefly sum it, is that they're only focused on BGS controlled properties, which is only 60% of all the states own buildings. So there's a whole another universe of buildings which are sort of untapped potential. And anytime you're doing I mean, this is one of those rare bipartisan issues in the global sense of no one wants to just heat the outdoors or, you know, have wasteful systems that are unnecessarily, you know, power. So if there are opportunities that we're not grabbing, that's the only benefit cost.

[Rep. Kathleen James (Chair)]: I think I spoke I did not frame my question. I phrased my other question. Are there costs associated with the overstatement of sales? The no. Thank you. No. Yeah. But, Morrow?

[Tim Ashe, Deputy State Auditor]: I was ready with the longer answer. The answer is no. Because it say it's paying what it's paying. So it's not like we budget. We're not we're not We didn't budget and screw it up. And

[Rep. Kathleen James (Chair)]: Projecting that to get something else is what That's great.

[Rep. Bram Kleppner (Member)]: Yeah. It it seems your first point about getting accurate data on gallons and kilowatt hours and all that is really fundamental. I mean, the dollars, is all based on assumptions, right, of future use, right, the future price of oil or right? So and then there's been so much variability in fuel costs over the last ten years. You know, like, looking at dollars, it's very hard to make Part

[Tim Ashe, Deputy State Auditor]: of that's out of state control. Right? Well, if

[Rep. Bram Kleppner (Member)]: we were looking at at gallons and kilowatt hours instead of dollars, then we'd have proper, way to assess it. You know? It could be that we actually did save a lot of gallons, but price fuel doubled, and so the costs are

[Tim Ashe, Deputy State Auditor]: you know what I'm saying? Yeah. Yeah. The the amount of consumed fuel or power is the thing that's within the state's control. Exactly. And one of the detailed elements of the audit is that not all agencies are inputting their power consumption and cost into a system that BGS can look at to determine how we're doing collectively. So that's That's going to

[Rep. Bram Kleppner (Member)]: be a step one.

[Tim Ashe, Deputy State Auditor]: That's a conversation that BGS, the secretary of administration and finance and management really have to be having, the same. We've we've instructed agencies about how they can put the information, and if they put it in, how to do

[Rep. Bram Kleppner (Member)]: it properly. The question is why aren't they being required to do it? That that situation. Is there is there any are there any agencies or or anybody who is using an energy management system? If there's a there's a GUE and I can't I'm not remembering the name of it right now, where you can enter you can basically figure out what whether you're how your building measures up against other buildings of that type. And Yeah. I don't know. And and then track track your your your energy usage in in that ZIP code. Yeah. I don't

[Tim Ashe, Deputy State Auditor]: know if DGS is using it. The acronyms also get me a little bit torn with grids based on their systems that Washington used to have, and sometimes they've let them

[Rep. Bram Kleppner (Member)]: sort of, yeah, win their own design in recent years. You don't know whether you can put

[Tim Ashe, Deputy State Auditor]: this thing to find out. Pardon for BGS. You.

[Rep. Laura Sibilia (Ranking Member)]: I hear you saying that you've coached these agencies on here where to put in the kilowatts, here to put in the gallons, and if they were doing it, BGS would have the info. Can't that be automated? Why does someone have to put it in? It just seems to me that the data should flow without a human ever touching it. Certainly, the electric information is already digital. Now the gallons used may not be automatically digital, but, like, a watts, no one should have to input that by hand. Right? Good question.

[Tim Ashe, Deputy State Auditor]: Yeah. I didn't say we coach them. Finance and management have given instruction about, like, how to enter enter into these systems, and then it just it's not happening in the comprehensive way that would allow us to know the answer to questions.

[Rep. Bram Kleppner (Member)]: I should implement ERP across the

[Rep. Kathleen James (Chair)]: That is a great idea. Oh, yeah.

[Rep. Bram Kleppner (Member)]: They don't pay

[Tim Ashe, Deputy State Auditor]: any. Yeah. I don't

[Rep. Bram Kleppner (Member)]: I don't

[Rep. Christopher Howland (Member)]: know how how do you get information from a power bill into the CCS system without entering in the kilowatt hours?

[Rep. Laura Sibilia (Ranking Member)]: By hand? By hand. Power company knows how much it is. Right? They I mean, they don't have someone entering it

[Rep. Christopher Howland (Member)]: by hand. No. But they don't So They don't report for the power company's data to the state. But they could. Okay.

[Rep. Laura Sibilia (Ranking Member)]: You know, it's it's three lines of code.

[Rep. Christopher Howland (Member)]: Alright. Oh, let's go ahead. Brent Bailey?

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Could you reexplain the EVT portion of them being project managers? So so you said that they pay

[Tim Ashe, Deputy State Auditor]: for it? So Efficiency Vermont funds two two at least two positions, and VGS can clarify whether all of them are just two, but they basically pay for the positions Okay. In the energy office that are meant to perform these project management activities.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Okay. And BGS is having trouble filling those or EBTs have problems? BGS BGS is the one who does the it's they're kind

[Tim Ashe, Deputy State Auditor]: of go through the state's HR system.

[Louis (Louis) Porter, General Manager, Washington Electric Cooperative]: Okay.

[Rep. Bram Kleppner (Member)]: Yeah.

[Rep. Kathleen James (Chair)]: How does the public service department been being a consumer advocate around energy issues?

[Tim Ashe, Deputy State Auditor]: It's outside of the audit. I mean, it I would say that they could but don't. And we haven't uncovered them alerting the universe that there is opportunity being missed here. You may have missed that the BGS is supposed to report every two years to the secretary of administration about how we're doing meeting this state agency energy plan. That's just not been happening. So public service is off to the side of the agency of administration, but somewhere there's a missing link here. There's not been the kind of executive leadership over time to say, we should not be passing out easy savings wherever we can find them, especially in a time of tight budgets, but it gets to the top of the BGS line, and then it's not expanding out to make sure this is a state government enterprise rather than a BGS enterprise. It doesn't affect race in so much as the state budget, if that makes sense.

[Rep. Bram Kleppner (Member)]: Yeah, thank you very much, Alan. Thank you. Appreciate it,

[Tim Ashe, Deputy State Auditor]: aren't you? And if you haven't, the audit itself goes into more detail about all these points. Yeah. I would say, I don't wanna say it's fun, but it's very interesting for people on this committee, for sure.

[Rep. R. Scott Campbell (Vice Chair)]: Great. Thank you so much for being here.

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

[Rep. R. Scott Campbell (Vice Chair)]: Committee, we are going to actually come back fifteen minutes after the floor to have a committee discussion of the bills that we've been working on. I just want want to quickly talk about where we're at with everyone, what testimony we might need or whether we're done, when we could vote, etcetera, etcetera. So fifteen minutes after floor, please be back and we'll have that

[Rep. Kathleen James (Chair)]: committee conversation and then we have

[Rep. R. Scott Campbell (Vice Chair)]: That's it. We can go off live.