A new report by Energy Futures Group takes a look at a fairly recent component of Vermont’s energy policy. The report focuses on “Tier 3” of Vermont’s Renewable Energy Standard, which the legislature passed in 2015. This set of policies requires utility companies to draw a certain amount of energy from renewable sources. While other pieces, or tiers, of the Renewable Energy Standard increase renewable energy in the electrical grid, Tier 3 is about helping Vermonters clean up heating and transportation. High Meadows provided support for this report because we wanted to better understand how Tier 3 works and what the policy looks like in practice.
The report refers to Tier 3 as the “Statewide Total Energy Program,” or STEP, to emphasize that this provision is about more than just electric energy— for the rest of this post, we’ll also use the name STEP. STEP was designed to replace fossil fuels with cleaner, renewably-sourced electricity, local wood fuels, biofuels and to increase efficiency to reduce net carbon emissions.
Many of Vermont’s previous energy policies and programs have focused on saving electricity as a means of reducing greenhouse gas emissions. Today, renewable sources like hydropower, wind and solar are providing cleaner kilowatts. However, 75% of Vermont’s total greenhouse gas emissions are generated from driving our cars and trucks, as well as heating our water and homes.
STEP requires Vermont’s electric utilities to help their customers reduce fossil fuel consumption. For example, utilities can provide a price-break for their customers to purchase cold climate heat pumps and electric vehicles. Customers can also use new incentives to lower energy bills by weatherizing their homes or switching to advanced wood heat, like automated wood pellet stoves.
The report estimates STEP could lead to as much as $300 million in lifetime savings from measures put in place over the next 15 years. Those savings are equivalent to about 148 million gallons of oil, or about double the amount of oil Vermonters used in 2016 to heat their homes.
While the legislation that established STEP sets out specific targets for utilities, it leaves discretion as to how those utilities can achieve those goals. The report gives some examples of the utilities’ different approaches, reflecting the different regions of the state they serve. For example, the Burlington Electric Department is subsidizing the cost of electric transit buses. More rural utilities, such as Vermont Electric Coop and Washington Electric Coop, have focused on residential heating improvements or converting maple sugar producers from propane to electric energy. Green Mountain Power has focused on commercial and industrial customers, as well as electric vehicles.
It’s exciting to see how this policy is taking shape and helping Vermont homeowners, commuters, and businesses lower their contributions to greenhouse gas emissions. If you’d like to learn more about how you can do that too, we encourage you to contact your electric utility or Efficiency Vermont.