Energy Efficiency Utility

Audit Title

Performance Audit of the Energy Efficiency Utility (EEU) in Vermont: Cost-Effectiveness and Customer Equity

Objective:

To determine whether the programs funded by the Vermont Energy Efficiency Utility (EEU), primarily implemented by Efficiency Vermont, are achieving the legislatively mandated goals of cost-effective energy savings for ratepayers and equitable participation across income levels and geographic areas in the state.

Scope:

A review of spending and program outcomes will be conducted for the three largest EEU-funded residential programs, covering the two most recent full fiscal years (e.g., FY 2024 and FY 2025).

  1. Home Performance with ENERGY STAR (Weatherization) Program

  2. Heat Pump/Cold-Climate Air Source Heat Pump Incentive Program

  3. Heat Pump Water Heater Incentive Program.

Key Audit Areas and Procedures

Verification of Cost-Effectiveness and Savings Realization:

Auditors will review Public Utility Commission (PUC) documentation to confirm the methodology for calculating the Total Resource Cost (TRC) test and net present value (NPV) of energy savings meets state standards. They will sample completed weatherization and heat pump projects, comparing actual realized energy savings (via utility bill analysis) against projected savings to verify the EEU’s savings models, and will confirm that all claimed savings are non-duplicative.

Equity and Access Assessment:

The audit team will compare the percentage of energy savings and rebate dollars distributed to income-eligible participants against EEU-set equity targets, including analysis of the average rebate amount per income group. Auditors will analyze the geographical distribution of rebate recipients to identify systemic underutilization or access gaps in rural or unserved areas. Finally, a sample of income-eligible applicants will be interviewed and program materials reviewed to document administrative barriers hindering participation.

Internal Control and Oversight Effectiveness:

Internal controls related to rebate disbursement will be reviewed and tested to ensure payments were made only to eligible customers for equipment meeting efficiency specifications. The audit will assess the quality and timeliness of data submitted by the EEU to the PUC and the Legislature to ensure transparency and compliance. A final procedure will confirm proper licensing of participating contractors and the rigor of the EEU’s quality assurance review process.

Funding and Expenditure Compliance:

Auditors will trace a sample of the Energy Efficiency Charge revenue collected from ratepayers to confirm these funds were used strictly for authorized EEU program expenses, and not diverted for non-efficiency operational costs. The audit will test for proper segregation of accounts and confirm compliance with state laws regarding the use of these dedicated ratepayer funds.

Expected Value of the Audit:

This audit provides independent assurance to the Public Utility Commission and Vermont ratepayers regarding the stewardship of the dedicated Energy Efficiency Charge funds. It will enhance accountability by providing objective data on whether the EEU programs are meeting their primary mission of cost-effective energy savings, justifying the charge collected. It will improve equity by highlighting program design or outreach shortcomings that prevent equitable access, allowing the EEU to better serve low-income and isolated Vermonters. Ultimately, the audit will optimize future spending by offering actionable recommendations to the EEU and PUC on how to improve program efficiency and maximize energy savings per dollar spent.