Vermont's Energy-Savings Program Overstated Its Own Numbers

Vermont's Department of Buildings and General Services (BGS) runs a state program built on a simple promise: borrow money to upgrade a building's lighting or heating, and the energy savings pay the loan back with room to spare.▸ Vermont's State Auditor⧉ checked that promise against the one independent number available -- the lifetime savings the state's energy-efficiency utility, Efficiency Vermont (EVT), actually validated for each project -- and found BGS's own reported savings ran 71% higher than EVT's validated figures across the 13 projects checked, a total overstatement of $1,666,511.

The clearest failures are two projects where the checked number isn't smaller than reported -- it's negative.▸ A lighting retrofit at the Barre Courthouse was approved even though it cost $72,749 more than BGS itself said it would save over the project's useful life; using EVT's lower, validated savings estimate, the project actually costs $143,170 more than it will ever save. It was allowed to proceed under state law -- which requires SEMP projects to generate net savings -- only because BGS "bundled" it into a single loan with a separate, profitable lighting upgrade at the Rutland Parking Garage, so the combined pair showed a positive return even though the Barre project alone did not.

The second is worse and harder to excuse as a bundling loophole.▸ BGS told the Legislature a lighting upgrade at 133 State Street in Montpelier would save $303,174 more than it cost. The auditor found BGS had misstated both numbers: it changed the project's scope mid-stream from a cheaper retrofit to a full fixture replacement, then paid part of the difference with separate maintenance funds it never rolled into the reported project cost. Correctly accounted for, the project actually costs $550,686 more than it will ever save.

Bundling and scope changes explain the two outright losers, but they don't explain the rest.▸ The auditor pulled the EVT-validated incentive agreements for 13 SEMP projects completed between fiscal 2018 and 2025 and compared them line by line to what BGS reported to the Legislature. BGS's number ran more than 30% above EVT's validated figure for 9 of the 13 projects -- and ran high, not low, in 12 of the 13. The worst gap belongs to 133 State Street again: BGS's own project-level ledger claimed $802,174 in lifetime savings before its cost was corrected, versus $280,136 EVT actually validated, a 186% overstatement on that line alone. The auditor's explanation is procedural rather than deliberate: after EVT finishes its verification inspection and finalizes savings numbers, BGS's process doesn't require it to go get that finalized figure -- so unfinalized, inflated numbers sit in the public record BGS reports to the Legislature and Vermont taxpayers.

The overstatement compounds a second problem: BGS is barely completing any projects at all.▸ It finished 14 in fiscal 2018; it finished 1 in fiscal 2025. The shortfall isn't a lack of candidates -- BGS handed auditors 51 completed energy audits from 2016 through 2024 identifying a pipeline of eligible projects, and has acted on only 15 of them, work the audits estimate would save the state $2.9 million more than it costs. BGS's own explanation is a staffing gap it hasn't tried hard to fix: of the two project-manager positions that scope and coordinate SEMP work, one has sat vacant since 2021 and both have been vacant since December 2024 -- despite Efficiency Vermont funding the positions when filled, meaning there is no budget reason for the vacancy. BGS told auditors it had trouble finding candidates but did not advertise the openings continuously.

Underneath the project-level errors is a bigger gap: Vermont doesn't actually know its own energy consumption.▸ State law requires BGS to report every two years to the Secretary of Administration on progress toward the State Agency Energy Plan's⧉ targets -- a 40% cut in total energy use by 2025, 35% of remaining needs from renewables by 2025, and a 40% cut in greenhouse gas emissions below 1990 levels by 2030. BGS hasn't filed that report, has no documented baseline for two of the three goals, and has never implemented the tracking procedures it wrote in 2014 for energy use in leased buildings -- 12% of all state building space, where the state still pays the utility bills. Separately, the memorandum of understanding that governs how BGS and Efficiency Vermont validate savings expired in 2019; the Legislature has ordered it renewed twice, in 2019 and again in 2022, and six years on it still hasn't been.

Not every SEMP project fails this test.▸ A lighting upgrade at the Rutland Parking Garage cost $79,640 and delivered $414,457 in EVT-validated lifetime savings -- a 420% return, and proof the program can work exactly as designed when BGS follows its own process through to a validated finish. The auditor's 14 recommendations, most accepted by BGS in its written response, amount to a request that the department do for every project what it already did for that one: track actual energy use, hold projects to a positive return on the full investment (not just the part BGS chooses to report), and get EVT's final numbers before telling the Legislature what a project saved.