This commentary is by Don Keelan of Arlington, a retired certified public accountant.
Many Vermonters do not know what Efficiency Vermont accomplishes and have even less of a clue about what its parent company, Vermont Energy Investment Corp., does.
According to the company’s Form 990, 2020 tax filing, Vermont Energy Investment, a nonprofit corporation, had revenues of about $121 million, assets of $42 million, 292 employees, and headquarters in Winooski, Vermont. For additional information on VEIC, see my commentary from August 2019.
The company divides its operations among three divisions: Efficiency Vermont, Efficiency Smart, and the DC Sustainable Energy Utility.
The DC Sustainable Energy Utility operates in Washington, D.C., and according to Form 990, it “is the only utility in the country that combines energy savings goals with social equity goals.” Its 2020 revenues were $33,911,912.
Efficiency Smart, as noted in the tax filing, “helps participating municipal electric utilities and their customers reduce their energy use and save money through technical assistance and financial incentives.” It has revenues of $11,485,641.
Now for the third and most significant revenue-generating unit, Efficiency Vermont. Its purpose is to “provide Vermonters with objective guidance and incentives to improve the affordability and comfort of their homes, businesses, institutions, and communities through energy efficiency.” Efficiency Vermont collected revenues of $59,879,013.
In addition to the above revenue sources, Vermont Energy Investment received a $16.4 million grant from the federal government to assist schools in Vermont in monitoring air quality. A sampling of the allocation to 129 schools noted that the Arlington School District, Burr & Burton Academy and St. Johnsbury Academy received $31,523, $17,845, and $1,252,578.
It should be clear that Efficiency Vermont does not do the physical work or provide the material to make a home, business, or institution more energy efficient; it is a consulting service that offers generous financial rebates.
In the past several years, Vermont Energy Investment has expanded, operating and providing consulting services in over 25 states as far away as Hawaii. In doing so, it has attracted some high-level professionals, as noted on its tax return.
The company’s director of distributed utility services was compensated $210,729 in 2020. I can only assume he deserves the compensation, which seems higher than other positions. For example, in 2021, the Vermont interim commissioner of corrections was compensated at an annual salary of $127,000. Or the Step 1 deputy state’s attorney salary is now $59,842, effective last July 3.
The executive compensation at Vermont Energy Investment is a flanking issue. What is puzzling is the sizable annual payment made to Vermont Energy Investment by Vermont utilities.
Between February 2022 and February 2023, Green Mountain Power, Vermont’s largest supplier of electricity with 270,000 plus customers, paid Vermont Energy Investment $39,899,174.70 that it had collected from its customers. Five years earlier, a similar payment was $23 million.
For the uninitiated, each customer pays every month about 1.1 cents for each kilowatt of energy consumed. Customers of other utilities also pay Vermont Energy Investment, except Burlington Electric Department, which is an energy-efficient utility.
Efficiency Vermont is another classic Vermont case whereby a nonprofit can capture large sums of money, in the hundreds of millions of dollars over the past and next five years, with little input from the public on where funds are expended. The state Public Utility Commission has jurisdiction, but to what extent is it involved?
Vermont needs to redirect the $50 million sent to Vermont Energy Investment and put the funds into an enterprise that will hire, train, design, install and purchase the equipment and supplies to weatherize and replace inadequate heating systems in tens of thousands of state homes and businesses. We need “boots on the ground” replacing windows, installing insulation, and removing inefficient furnaces and lighting systems.
The new entity could bill for its professional and construction services and materials. When the recipient needs financial support, the entity could be authorized to adjust its billing accordingly.
Electric ratepayers don’t need a company with zero control over (don’t count on the PUC) collecting tens of millions of dollars and whose leadership is focused elsewhere. We need a construction company, not a consulting company.
Correction: Due to inaccurate information Vermont Energy Investment Corporation included in its Form 990 for tax year 2020, an earlier version of this commentary overstated the compensation of three VEIC employees. Following publication, a VEIC spokesperson provided VTDigger a revised version of the filing.
