A Look at the Valuable Investment of Energy Efficiency

This post was written by Liz Gamache, Director of Efficiency Vermont, and was originally published on Efficiency Vermont's blog.

Before joining the Efficiency Vermont team last January I worked for an electric utility in Johnson, VT – Vermont Electric Cooperative (VEC). My seven years at VEC taught me firsthand the challenge of building a strong and reliable electric supply portfolio while keeping costs down. It helped me to understand the integral role that efficiency plays in Vermont’s electric grid and it was one of the many reasons I was excited to become the Director of Efficiency Vermont when the opportunity arose in January 2015.

Building power capacity and transmitting electricity is costly. Each year, Vermont’s utilities work hard to purchase power from reliable, low cost resources, and bring the best value to their customers. This means that the less power we use thanks to energy efficiency, the less power they have to purchase.

ISO New England Inc. (ISO-NE), the operator of the New England power system and wholesale electricity markets, works to ensure that the region has enough electricity to keep the lights on year round. In their 2015 Regional System Plan, ISO-NE stated that from 2002 through June 2015 634 transmission projects were completed in New England states in order to maintain the reliability of the electric grid. Those projects cost $7.2 billion. These costs are shared by each New England state and the amount each state pays is directly influenced by the amount of electricity they require. So by lowering our power needs, we keep Vermont’s share of the cost of these transmission projects down.


Over the past year I have learned that energy efficiency is not only integral, but crucial to Vermont’s energy landscape. Recently, the Public Service Department (PSD) delivered a report to the Legislature’s Joint Energy Committee showing the dramatic impact that efficiency has had on Vermonters over the past 15 years.

The PSD report focuses on the results of Vermont’s two electric energy efficiency utilities (EEUs) – Efficiency Vermont and Burlington Electric Department (BED). The detailed analysis provides insight on historic energy savings from 2000 to 2014 and projected savings from efficiency activities for the next decade. The findings are exciting and demonstrate just how worthwhile energy efficiency is.

Here are some of the key highlights:

  • Vermonters are saving more than they are spending on efficiency. The report states that “from 2000 to 2014, ongoing reductions in electricity consumption attributable to EEU programs has so far saved a cumulative total of $473 million in wholesale costs, approximately $50 million more than ratepayers have paid to fund EEU programs.”
  • Vermont’s electric utilities have not had to buy as much power, thanks to energy efficiency. The reductions in electric consumption attributable to EEU programs have allowed utilities to maintain a reliable power supply for their customers without having to purchase as much electricity from wholesale markets. The PSD report quantifies savings from electricity and capacity purchases that utilities would have had to make if Vermont did not have energy efficiency programs. These costs would have been passed along to their customers.
  • Past efficiency projects continue to deliver savings year after year. Over the next ten years, efficiency projects completed between 2000 and 2014 are expected to deliver an additional $435 million in savings. The overall return on investment for Vermont ratepayers will be 113% by 2025.
  • Vermonters' electric bills are lower because of energy efficiency. PSD found that individual utility customers have reduced their consumption of electricity by an average of 13%, and are now paying an average of 5% less on their electricity bills as a result.


A vast majority of Vermonters (an estimated 90%) have participated in energy efficiency programs. We have been able to reduce our electric costs because of smart investments and because we know how to work together toward a shared commonsense goal. The more we make an effort to incorporate energy efficiency into our businesses and households, the more we help our fellow Vermonters by keeping everyone’s costs low.

When I look at Vermont’s energy landscape, I see efficiency continuing to play a vital role over the next decade - there is still so much more we can do to use our energy in smart ways, reduce our impact on the planet, and increase our shared savings. I’m excited to keep working with Vermonters and my great team to help build a clean energy future and to continue proving the value of energy efficiency.

Read the full PSD report.

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