Vermont Gas Systems, Inc Annual Report. Prepared for the Vermont Public service Board, April 1, 2016

Vermont Gas Systems, Inc. 2015 Annual Report Prepared for the Vermont Public service Board, April 1, 2016 VGS Annual Report 2015 1

Contents I. Background Information... 3 II. Transition to EEU Structure... 4 III. Introduction... 4 IV. Overall Accomplishments... 5 V. Program Descriptions... 8 1. Residential Equipment Replacement (RER)... 8 2. Residential Retrofit Program (RIR)... 12 3. Residential New Construction Program (RNC)... 15 4. Commercial Equipment Replacement Program (CER)... 18 5. Commercial Retrofit Program (CSR)... 21 6. Commercial New Construction Program (CNC)... 23 VI. Appendix A: Sample Target Marketing and Advertising... 25 VII. Appendix B: FOOTNOTES... 28 2

Background Information Vermont s only natural gas utility Currently serving 50,000 customers in Franklin and Chittenden Counties Established in 1965 after a state initiative to bring an alternative energy source to Vermont to support economic development Regulated by the VT PSB Holds the franchise for all of Vermont Committed to bringing the economic and environmental benefits of natural gas to more Vermonters Vermont Gas Systems ( VGS ) currently provides service to approximately 50,000 residential, commercial and industrial customers in Northwestern Vermont. The residential sector makes up the majority of customers with just over 44,000 residential customers. However, from a sales perspective the market is roughly one-third from residential, one-quarter commercial and the remainder industrial, including wholesale compressed natural gas ( CNG ) sales. Vermont Gas has a diverse portfolio of customers which includes single family, multi-family and the condominium market on the residential front as well as both large and small customers on the commercial front. Industrial customers run the gamut from institutional customers such as hospitals, colleges and universities to manufacturing companies. 3

The Company s customer base is currently located in Franklin and Chittenden counties. In 2015, the Company began serving customers in Addison County utilizing CNG through an innovative natural gas island. Through the construction of the Addison Natural Gas Project ( ANGP ) Vermont Gas will bring pipeline natural gas service to these CNG customers as well as to residential and commercial customers in Vergennes, Middlebury, Bristol, New Haven, East Middlebury and Monkton. Customers who sign a sales application for natural gas service in Addison County will meet the definition of eligible customer as outlined in the Board s April 17, 2015 Order and will be able to participate in VGS Energy Efficiency Utility ( EEU ) activities in advance of pipeline service. Natural gas competes with alternative fuel choices that include oil, propane, kerosene, electricity and wood or wood pellets. As a result, VGS is committed to exemplary service, safety and energy conservation as well as keeping our rates low and affordable. In addition to its energy efficiency programs, VGS offers customers several other tools to help manage their bills and ensure safe, reliable natural gas service. These include budget plans, a low income discount for income-eligible customers, rental of natural gas equipment, and service contracts to assist customers with maintaining the safe operation of their natural gas equipment. Transition to EEU Structure Effective January of 2016 VGS is an EEU. Accordingly this is the last annual report under the old energy efficiency structure. Going forward VGS will be submitting monthly, quarterly and annual reports pursuant to the obligations outlined in the Process and Administration ( P&A ) document. As a result, calendar year projections for 2016 and 2017 reflect the VGS Transition Period Plan ( TPP ) previously filed with the Board and exclude nonresource acquisition costs. Introduction Vermont Gas currently offers six energy efficiency programs. It has two distinct market sectors: residential and commercial/industrial ( C&I ) customers. There are three residential programs offered to residential properties (rental and owner-occupied) while the three C&I programs provide energy efficiency services to C&I customers of all sizes, including interruptible. 1 Both the residential and commercial programs have an equipment replacement program, a new construction program and a retrofit program. Each Program is described in more detail below. In keeping with our diversified customer base, VGS is committed to serving all customers through its energy efficiency programs. All six programs strive to not only cost effectively improve a home or building s performance by saving energy but quite frequently increase comfort levels, lower carbon emissions and save Vermonter s money over the lifetime of the measures. 1 Only wholesale CNG customers served under one of VGS CNG tariffs and customers participating in self-managed energy efficiency programs are ineligible for VGS programs. 4

Overall Accomplishments VGS projected that 2015 spending would be just over $2.4 million and realize just over 60,000 annualized Mcf savings. In 2015 VGS had almost 1,600 participants, spent just over $2.2 million and realized over 80,000 annualized Mcf savings. The 2015 annualized savings alone eliminates almost 4,500 tons of carbon dioxide per year. With a projected weighted lifetime of 19 years the 2015 energy savings will eliminate over 85,000 tons of carbon dioxide over the life of the measures. The programs as a whole were about 95% of projected 2015 participation levels, almost 10% underspent but were able to exceed savings levels by over 30% of budget. The decrease in participation levels is directly attributed to a decrease in the residential equipment replacement rental program which is elaborated further in the RER section. The significant increase in savings from expected levels is due to one very large project in the commercial equipment replacement program that enabled the programs to not only achieve expected savings levels but to exceed them. The graphs below show the combined savings and costs of the six programs. As would be expected with mature programs, the costs to operate the programs continue to increase as harder-to-reach markets are explored. 120,000 TOTAL ANNUAL SAVINGS $2,500,000 TOTAL ANNUAL PROGRAM COST 100,000 $2,000,000 80,000 MCF 60,000 COST $1,500,000 40,000 $1,000,000 20,000 $500,000 0 2005 2007 2009 2011 2013 2015 $0 2005 2007 2009 2011 2013 2015 5

$35 COST PER MCF SAVED 70 MCF SAVED PER PARTICIPANT COST PER MCF $30 $25 $20 $15 $10 $5 MCF PER PARTICIPANT 60 50 40 30 20 10 $0 2005 2007 2009 2011 2013 2015-2005 2007 2009 2011 2013 2015 Other key energy efficiency initiatives during 2015 include: Launching the successful Energy Champ Challenge with Burlington Electric Department to retrofit historically hard-to-serve multi-family buildings. Partnering with the South Burlington Energy Committee on the South Burlington Energy Prize effort. An example of the target mailer is located in Appendix A of this document. Partnering with Efficiency Vermont to fund an energy efficiency position at West-Rock Participation at Better Builders by Design, the St. Albans Home and Recreation Show, and the Vermont Home and Garden Show. The following table reflects the summary page for all six programs combined and each individual program is presented in the following sections. 6

VGS Energy Efficiency Program Summary SUMMARY OF PARTICIPATION [1] 2014 [1] 2015 2015 [21] 2016 [22] 2017 # Pending [2, 2a, 2b] 62 98 n/a n/a n/a n/a # of Analysis/Audits No Installs [3] 313 406 n/a n/a n/a n/a # Customers with Installations [4, 4a] 2,098 1,599 1,665 1,768 1,833 31,440 # Analyses/Audits [5, 5a] 1,448 1,480 1,311 1,279 1,312 20,842 SUMMARY OF COSTS Utility [6] $2,250,854 $2,236,286 $2,423,382 $2,513,464 $2,720,276 $32,605,995 Administrative [7] $439,073 $504,281 $543,460 $524,956 $547,615 $6,844,276 Incentives [8] $1,395,592 $1,230,799 $1,252,691 $1,553,145 $1,718,325 $20,315,292 Audit [9] $363,982 $465,565 $462,360 $435,363 $454,336 $5,046,556 Evaluation [10] $52,207 $35,642 $164,871 $0 $0 $399,873 Participant [11, 27, 27a] $0 $0 $0 $0 $0 $732,740 Total $2,250,854 $2,236,286 $2,423,382 $2,513,464 $2,720,276 $33,338,734 SUMMARY OF BENEFITS [12,12a,12b] Total Program Reported to Date [18] Annualized Mcf [13] 92,358 82,478 60,547 69,000 77,385 1,391,113 [19] Lifetime Mcf [14] 1,596,095 1,580,394 1,110,405 1,243,596 1,387,852 26,602,874 [19] Peak Day Mcf [15] 555.3 415.9 436.3 346.7 387.2 9,076.3 [19] Annualized Mcf/Participant [16] 44.0 51.6 36.4 39.0 42.2 44.2 Weighted Lifetime (years) [17] 17.8 19.2 18.3 18.3 18.4 19.0 END-USE BREAKDOWN [12,12a,12b] 2015 ACTIVITY (JANUARY - DECEMBER) Annualized Mcf Saved [13] Peak Day Mcf Savings [15] Number of Customers with Installations [20] Weighted Lifetime [17] Air Infiltration 966.6 13.4 143 16.1 Heat Recovery 5,242.9 61.3 16 15.0 Heating 58,844.0 218.7 1,094 19.7 Process 615.3 1.7 5 12.1 Shell (envelope) 7,529.3 98.0 322 24.8 Slam Dunk 80.3 1.1 44 10.0 Water Heating 9,199.1 21.7 846 14.6 Total 82,477.6 416.0 2,470 [23] 19.2 2,250 Customers with Installations [4, 4a] 100,000 Annualized Savings (Mcf) [13] $2,500,000 Utility Expenditures ($000) [6] 2,000 90,000 1,750 80,000 $2,000,000 1,500 70,000 # of Customers 1,250 1,000 750 Mcf/yr 60,000 50,000 40,000 30,000 Costs $1,500,000 $1,000,000 500 20,000 $500,000 250 10,000 0 0 $0 7

Program Descriptions 1. Residential Equipment Replacement (RER) The point at which consumers either add or replace natural gas-fired equipment presents a critical opportunity for influencing choices to reduce usage. Vermont Gas Residential Equipment Replacement (RER) program offers rebates on qualifying high efficiency space and water heating equipment. The RER program encourages customers to install water and space heating equipment that exceeds the standards established by the National Appliance Energy Conservation Act (NAECA) or the de facto baseline efficiency for the specific equipment type. These replacements typically occur when the equipment has failed and can no longer be repaired, has reached the end of its useful life, or when the fuel source for heating the home is being switched to natural gas. Customers receive incentives to help offset the average incremental cost of the high-efficiency equipment. Fixed rebates have been established for equipment that has a societal benefit-to-cost ratio greater than one across a wide band of usage levels. The current fixed rebate schedule is shown in the following table and may be revised from time to time in response to changing markets. Table 1.1 RER- Fixed Rebate Schedule (new rebates effective 2/1/2016) Eligible Equipment (must be purchased new) Required Efficiency (as listed in GAMA) Rebate Hot Air Furnace 94%+ AFUE $400.00 Hot Water Boiler 90% - 94.9% AFUE $600.00 Hot Water Boiler 95 %+ AFUE $800.00 Direct Vent Space Heater.81 %+ AFUE $200.00 Water Heater.70 EF $200.00 Tankless Water Heater.70 EF $300.00 Tankless Water Heater.90+ EF $500.00 Indirect-Fired Storage Tank On 92% + AFUE $100.00 Drain Water Heat Recovery Call for further details $300.00 Solar Hot Water Call for further details $950.00 Solar Furnace Call for further details $200.00 The following changes were modified from annual plan 2014, are reflected in Table 1.1 above and implemented effective 2/1/2016; Space Heater rebates were added in response to instances of either gas fireplaces or lower efficient space heaters being installed by customers. Boiler tiers as well as AFUE minimums were modified and rebates were adjusted to encourage higher AFUE installations Solar hot water heaters do not pass the societal cost effective screening for an average VGS customer, however it does screen for higher users. To minimize market barriers for this new offering, Vermont Gas is offering the solar 8

water heater incentive as a prescriptive rebate without a minimum usage requirement. VGS will track the loads of customers installing these units and may implement a minimum usage requirement in the future. Solar furnaces were screened as cost effective and as a result fixed rebates were added Stand Alone water heater energy factors and rebates were increased to reflect the higher incremental costs On-Demand water heaters had a higher tier added to the fixed rebate schedule to encourage the higher energy factor installation. Rebates were modified to reflect higher costs. Drain water heat recovery unit rebates were increased from $200 to $300 in hopes of spurring participation. In addition to the rebates listed above, VGS offers customers reduced interest loans, up to $10,000, for high efficiency equipment through its partnership with Green Mountain Credit Union. Finally, Vermont Gas will on a case-by-case basis, screen custom residential equipment and offer appropriate rebates. Rebates will not exceed the incremental cost of the high efficiency equipment. RER program summary results and modifications for 2015 Mid-2015 saw welcome legislation that increased the minimum energy factor of stand-alone water heaters to.62. Previously, VGS offered.62 energy factor and above water heaters for purchase or lease. As a result of the new increased baseline, VGS now also has available for purchase or lease.70 energy factor water heaters. As a result of this change, from 2014 to 2015 VGS saw a dramatic decrease in high efficiency rental water heater installations with 734 high efficiency units (defined as.62 or greater) being installed in 2014 and only 283 being installed in 2015 (now defined as.70 or greater). 2015 also saw a decrease in the total number of rental units being installed with approximately only 80% of 2014 numbers. As a result, VGS increased the rebate amount from $100 to $200 and is offering more options with the hopes of spurring additional participation for 2016. Currently there are only a limited number of water heater models available at the higher energy efficiency factor. As the market matures, it is likely that additional choices will be available for customers. It should be noted that many customer are still installing the.62 water heaters, but these customers are no longer considered participants in the RER program. The following tables below reflect the participant levels by end use as well as the associated annualized Mcf savings. The premise of the equipment replacement program is to encourage a customer to install a higher efficient piece of equipment than they would have without the program. These expectations will change over time as prevailing baselines are revised either in response to changes in code or market. For example, as recently as 2011, VGS offered rebates on furnaces with an AFUE of.90. As VGS recognized that the RER program indeed had transformed the market, it moved the AFUE up to a minimum of.92. Then in 2013 only 17 furnaces had an AFUE in the range of.92 to.939, then 5 in 2014 and only 3 in 2015. As a result, VGS dropped the bottom tier on furnaces and is now only offering furnace rebates with an AFUE of.94 or above. 9

Equipment Type Participant Levels Annual Mcf Savings by Equipment Type 4,000 20,000 3,500 17,500 3,000 15,000 2,500 12,500 2,000 10,000 1,500 7,500 1,000 5,000 500 2,500 - CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 Boilers Furnaces WH Rentals Space Heaters - CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 Boilers Furnaces WH Rentals Space Heaters Recognizing that the boiler market was not transforming as quickly as the furnace market, VGS increased the minimum AFUE of tier one on a boiler from an AFUE range of.87 to.90 and on tier two from.92 to.95. The respective rebates were also adjusted from $400 to $600 and $600 to $800. Going forward the participation, costs and savings projections in the equipment replacement program will be challenging. Just the right amount of pushing the envelope to attain a higher degree of efficiency without eroding participation levels is required. VGS will continually review participation, rebates and savings to ensure maximum participation with realistic saving levels. The residential equipment replacement program achieved just over 95% of projected participants but, exceeded savings levels by over 40%. The lower participant levels was directly attributed to fewer rental participants, while the increase in savings was furthered by a significant custom project involving a 64 unit residential building as well as the higher tiers on both the boilers and the on-demand tankless heaters which garnered higher savings per end use than projected. It should also be noted that VGS is continuing its collaboration with EVT regarding the NEST thermostat study for select single and multi-family homes. 250 homes participated in the set-back thermostat study and results are expected during 2016. The table below excludes any savings associated with the NEST pilot. The following table summarizes the RER program. 10

Residential Equipment Replacement Program Summary Program Start Date: 12/1/1992 Gross to Net Adjustment Factor [12b]: 7% [1] 2014 [1] 2015 2015 [21] 2016 [22] 2017 Total Program Reported to Date [18] SUMMARY OF PARTICIPATION # Pending [2, 2b] 3 32 n/a n/a n/a n/a # of Analysis/Audits No Installs [3] 36 33 n/a n/a n/a n/a # Customers with Installations [4] 1,704 1,184 1,239 1,367 1,432 23,254 # Analyses/Audits [5] 988 906 890 820 859 11,158 SUMMARY OF COSTS Utility [6] $577,846 $543,676 $494,545 $613,685 $651,972 $6,599,846 Administrative [7] $69,785 $67,099 $74,443 $80,761 $83,987 $856,493 Incentives [8] $481,394 $451,558 $373,325 $512,734 $546,988 $5,603,813 Audit [9] $17,446 $16,775 $18,611 $20,190 $20,997 $85,562 Evaluation [10] $9,220 $8,245 $28,165 $0 $0 $53,978 Participant [11, 27, 27a] $0 $0 $0 $0 $0 $0 Total $577,846 $543,676 $494,545 $613,685 $651,972 $6,599,846 SUMMARY OF BENEFITS [12,12b] Annualized Mcf [13] 14,910.0 12,728.9 8,822.4 11,755.0 11,939.1 201,207 [19] Lifetime Mcf [14] 287,763 246,940 174,095 228,831 232,548 3,771,383 [19] Peak Day Mcf [15] 129.3 111.0 73.0 11.8 11.9 1,703.6 [19] Annualized Mcf/Participant [16] 8.7 10.8 7.1 8.6 8.3 8.7 Weighted Lifetime (years) [17] 19.3 19.4 19.7 19.5 19.5 18.7 END-USE BREAKDOWN [12,12b] 2015 ACTIVITY (JANUARY - DECEMBER) Annualized Mcf Saved [13] Peak Day Mcf Savings [15] Number of Customers with Installations [20] Weighted Lifetime [17] Heating 7,993.2 93.1 867 22.1 Shell (envelope) 283.0 3.3 2 25.0 Water Heating 4,452.7 14.5 687 14.2 Total 12,728.9 111.0 1,556 [23] 19.4 1,750 Customers with Installations [4] 17,500 Annualized Savings (Mcf) [13] $800,000 Utility Expenditures ($000) [6] 1,500 15,000 $700,000 1,250 12,500 $600,000 $500,000 # of Customers 1,000 750 MCF/yr 10,000 7,500 Costs $400,000 $300,000 500 5,000 $200,000 250 2,500 $100,000 0 0 $0 11

2. Residential Retrofit Program (RIR) The VGS Retrofit Program (RIR) reduces natural gas/thermal consumption and peak day demand in residential buildings that use natural gas, or are converting to natural gas, for space heating. Where cost-effective, domestic hot water conservation measures are also installed. In 2015, all residential buildings that consumed in excess of 50,000 btus per square foot per year were eligible for a free energy audit. For customers that did not meet the usage requirements, VGS has available a complimentary copy of the Consumer s Guide to Home Energy Savings published by ACEEE. https://www.homeenergy.org/store/consumer-guide-savings. A free energy audit is performed by a VGS staff auditor to identify cost-effective energy saving measures. The building's previous consumption patterns and potential improvements were modeled using a computer audit tool developed by VGS. Building owners were provided a written report summarizing the audit results and detailing the financial incentives available. VGS auditors identified electric saving measures and directed the customer to Efficiency Vermont and Burlington Electric for possible additional incentives. In addition to financial incentives, building owners were provided with technical assistance and project management services at no cost to encourage the installation of the efficiency measures identified in the audit report. Customers had the choice of obtaining competitive bids, or having VGS assign a pre-screened contractor through the "FastTrack" option. For the past several years, approximately 90% of customers have chosen the FastTrack option. VGS offered assistance in obtaining bids for those customers who prefer not to use the "FastTrack" option. VGS provided cash incentives equaling 33% of the estimated installed measure cost where the building owner pays the heating bill or 50% of the installed measure cost if the tenant pays the heating bill. VGS offers reduced interest financing for the balance of the installed measure cost through Green Mountain Credit Union. During the Annual Plan, customers were offered the following choice of rates and terms: 0% for three years, 2% for five years, or 4% for up to ten years. Low income customers who were served primarily through a partnership with Champlain Valley Office of Economic Opportunity Weatherization (CVOEO-Wx) CVOEO-Wx verified the customer's income status and eligibility to perform the energy audit, and coordinated the installation of the recommended measures. VGS contributed a portion of the income verification, auditing, project management, and measure costs. VGS took part in 2015 and will continue its partnership with Efficiency Vermont regarding the Home Performance with Energy Star program (HPwES) program. Natural gas customers who elect to receive energy audits through Efficiency Vermont or Burlington Electric s consortium of HPwES contractors took advantage of and will continue to be able to take advantage of VGS incentives for cost effective natural gas measures. RIR program summary results and modifications for 2015 In Burlington, VGS will continue its Energy Champ Challenge partnership with Burlington Electric Department to encourage multi-family building owners to invest in weatherization measures. Under this pilot program, 12

VGS covers 75% of measure costs provided the building owner installs all recommended measures. Vermont Gas originally set a goal of performing 50 audits, but due to high interest updated the goal to 100 with 50 projected completions prior to end of calendar year 2016. By the end of calendar year 2015 VGS had already completed 98 audits and 6 buildings had completed the recommended installations. This represented 25 units and approximately 200 Mcf in annualized savings. During 2015, Vermont Gas saw 20 single family, 2 multi-family and 1 condominium participant in the join VGS/CVWS program which saw slightly fewer single family completions than the prior year with 23 and considerably fewer than the 15 multi-family completions in 2014. The joint VGS/EVT home performance program family completions in 2015. realized 38 single During calendar year 2015 VGS also started an initiative that targeted the condominium market which has also been historically hard to serve. Appendix A contains a copy of the target letter that was sent out to condominium associations and owners. In calendar year 2014 VGS completed only 1 condominium installation and was able to increase that to 14 in 2015. VGS will continue to offer its Condo Initiative through 2016. VGS is promoting air-sealing and attic insulation to condominiums. Under the condo initiative VGS will; 1) Visit condominium to conduct a walk-through audit to look for additional efficiency upgrades; 2) Review both natural gas and electric usage to compare to other units in the building; 3) Offer a $600 rebate for work completed; 4) VGS also offers financing or rebates for any equipment that is installed that falls under the equipment replacement fixed rebate schedule; and 5) Inspect the installation at no cost to the homeowner. Also during 2015 VGS served a low income multi-unit building that represented 41 units, representing over 700 Mcf in annual savings. VGS did this project outside the scope of the joint program between CVWS and VGS. For 2015 VGS saw a slight drop in savings in both CVWS low income projects as well as the HPwES projects as seen in the table below by percent of savings. The following table summarizes the RIR program. Please note that the RIR program adjusts the final savings based on the weighted average of the most recent evaluation results based upon the category of completion. The combined RIR modified adjustment to savings reduction was 29% for 2014 and for 2015 it was reduced to 22% as a result of having a higher percent of VGS savings during calendar year 2015. 13

Residential Retrofit Program Summary Program Start Date: 2/1/1993 Gross to Net Adjustment Factor(weighted Mcf - VGS 11%, HPwES 40%, Low Income 38%)[12a]: 22% [1] 2014 [1] 2015 2015 [21] 2016 [22] 2017 Total Program Reported to Date [18] SUMMARY OF PARTICIPATION # Pending [2] 47 62 n/a n/a n/a n/a # of Analysis/Audits No Installs [3] 231 317 n/a n/a n/a n/a # Customers with Installations [4, 4a] 220 209 265 203 202 3,368 # Analyses/Audits [5] 359 470 323 333 327 6,685 SUMMARY OF COSTS Utility [6] $691,725 840,901 $887,746 $837,054 $878,201 $9,374,282 Administrative [7] $120,413 188,802 $157,286 $142,851 $149,105 $2,133,842 Incentives [8] $381,573 360,650 $465,634 $479,926 $505,439 $4,696,079 Audit [9] $180,619 283,204 $235,928 $214,277 $223,657 $2,383,576 Evaluation [10] $9,120 8,245 $28,897 $0 $0 $160,786 Participant [11, 27, 27a] $0 $0 $0 $0 $0 $666,188 Total $691,725 $840,901 $887,746 $837,054 $878,201 $10,040,470 SUMMARY OF BENEFITS [12,12a] Annualized Mcf [13] 5,660.8 4,636.5 5,403.2 3,836.8 4,016.4 139,870 [19] Lifetime Mcf [14] 146,614 100,149 119,590 87,351 93,225 2,955,590 [19] Peak Day Mcf [15] 54.8 61.7 57.8 33.9 35.9 1,689.6 [19] Annualized Mcf/Participant [16] 25.7 22.2 20.4 18.9 19.8 41.5 Weighted Lifetime (years) [17] 25.9 21.6 22.1 22.8 23.2 21.1 END-USE BREAKDOWN [12,12a] 2015 ACTIVITY (JANUARY - DECEMBER) Annualized Mcf Saved [13] Peak Day Mcf Savings [15] Number of Customers with Installations [20] Weighted Lifetime [17] Air Infiltration 886.6 12.5 142.0 15.3 Heat Recovery 33.5 0.4 1.0 15.0 Heating 845.2 9.8 46 21.2 Shell (envelope) 2,676.0 37.5 184 24.5 Slam Dunk 80.3 1.1 44 10.0 Water Heating 115.0 0.4 9 15.0 Total 4,636.5 61.7 426 [23] 21.6 300 Customers with Installations [4, 4a] 7,000 Annualized Savings (Mcf) [13] $1,000,000 Utility Expenditures ($000) [6] 250 6,000 $900,000 $800,000 200 5,000 $700,000 # of Customers 150 100 4,000 Mcf/yr 3,000 2,000 Costs $600,000 $500,000 $400,000 $300,000 50 1,000 $200,000 $100,000 0 0 $0 14

3. Residential New Construction Program (RNC) During 2015 VGS jointly implemented the statewide Residential New Construction program offered by Vermont Gas and Efficiency Vermont (EVT). Vermont Gas delivered the service for its customers and EVT delivered the service in the remainder of the state. All residential new construction projects in Vermont were eligible for technical assistance and incentives from EVT, but projects that used natural gas were also eligible for enhanced services and rebates from VGS. This program was and will continue to be administered in two separate tiers; Energy Star and Code Plus homes. Each is described further below. These programs have two participant tracks. The single family track is for individually metered (for gas) stand-alone single family homes, and for individually metered attached dwellings such as condominiums and row houses. All single-family track participants receive a Home Energy Rating ( HERS ) at no cost. The multi-family building track is for large, master metered, centrally heated multi-family buildings. All participants whether single or multi-family are encouraged to have their buildings receive energy ratings. For multi-family buildings heated by natural gas, VGS performs analyses of mechanical, thermal, and domestic hot water energy efficiency measures, and partners with EVT when appropriate to maximize the savings opportunities in these projects. Multi-family projects that are designated for occupancy by low-income populations are co-administered with CVOEO as described above. 3.1 Vermont ENERGY STAR and CODE PLUS Homes To qualify for the ENERGY STAR label and related incentives in the single family track, participants must build a home to the following specifications; 1. Achieve a Home Energy Rating score of 60 points or less. 2. Install controlled mechanical ventilation. 3. Meet or exceed the requirements of the Thermal Enclosure, HVAC, and Water Management checklists. 4. Install Energy Star rated heating and cooling equipment. 5. 80% of the home s lighting must be energy efficient. 6. Installed appliances must be Energy Star rated. To qualify for the Code Plus label and related incentives in the single family track, participants must build a home to the following specifications; 1. Achieve a Home Energy Rating score of 75 points or less. 2. Install controlled mechanical ventilation. 3. Install Energy Star rated heating and cooling equipment. 4. 50% of the home s lighting must be energy efficient. 5. Installed appliances must be Energy Star rated. 3.2 RNC Rebates All ENERGY STAR labeled Homes in Vermont Gas service territory that utilize natural gas as the primary fuel receives a total incentive of up to $650 based upon the HERS score. 15

CODE PLUS LABELED Homes in Vermont Gas service territory that utilize natural gas as the primary fuel receive a total incentive of up to $400 based upon the HERS score. In addition to the rebates listed above, Vermont Gas covers the HERS cost of $312 per home. RNC program summary results During calendar year 2015 VGS realized 129 Code Plus completions that combined to make up almost 2,700 in Mcf annual savings. There were no Energy Star completions in 2015 compared to 9 Energy Star in 2014 and 90 Code Plus in 2014. The custom residential new construction market had 8 multi-family buildings that represented 319 units and approximately 4,700 Mcf annual savings. 2015 saw an increase in Code Plus building participants, but the Energy Star participants continues to lag. The following table summarizes the RNC program. 16

Residential New Construction Program Summary Program Start Date: 1/1/1993 Gross to Net Adjustment Factor: 3% [1] 2014 [1] 2015 2015 [21] 2016 [22] 2017 Total Program Reported to Date [18] SUMMARY OF PARTICIPATION # Pending [2, 2a] n/a n/a n/a n/a n/a n/a # of Analysis/Audits No Installs [3] 3 16 n/a n/a n/a n/a # Customers with Installations [4] 106 136 83 118 119 3,365 # Analyses/Audits [5, 5a] 4 19 8 4 4 556 SUMMARY OF COSTS Utility [6] $267,159 $292,362 $244,521 $255,804 $277,104 $5,731,361 Administrative [7] $68,330 $73,015 $75,704 $67,018 $69,357 $1,272,385 Incentives [8] $144,855 $156,937 $95,037 $144,107 $161,509 $3,358,399 Audit [9] $45,553 $48,677 $50,469 $44,679 $46,238 $1,028,420 Evaluation [10] $8,421 $13,734 $23,312 $0 $0 $72,158 Participant [11, 27, 27a] $0 $0 $0 $0 $0 $0 Total $267,159 $292,362 $244,521 $255,804 $277,104 $5,731,361 SUMMARY OF BENEFITS [12] Annualized Mcf [13] 9,050.7 7,390.0 6,841.6 8,626.6 8,926.6 155,340 [19] Lifetime Mcf [14] 189,160 152,974 133,412 175,407 181,805 3,417,972 [19] Peak Day Mcf [15] 103.3 85.5 75.7 69.0 71.4 1,553.3 [19] Annualized Mcf/Participant [16] 85.4 54.3 82.4 72.9 75.2 46.2 Weighted Lifetime (years) [17] 20.9 20.7 19.5 20.3 20.4 22.0 END-USE BREAKDOWN [12] 2015 ACTIVITY (JANUARY - DECEMBER) Annualized Mcf Saved [13] Peak Day Mcf Savings [15] Number of Customers with Installations [20] Weighted Lifetime [17] Heat Recovery 1,038.7 12.2 4.00 15.0 Heating 2,425.2 28.4 133 19.8 Shell (envelope) 3,095.5 42.2 129 24.7 Water Heating 830.6 2.7 131 15.5 Total 7,390.0 85.5 397 [23] 20.7 160 Customers with Installations [4] 10,000 Annualized Savings (Mcf) [13] $350,000 Utility Expenditures ($000) [6] 140 9,000 $300,000 8,000 120 7,000 $250,000 # of Customers 100 80 60 MCF/yr 6,000 5,000 4,000 $200,000 Costs $150,000 40 3,000 $100,000 2,000 20 1,000 $50,000 0 0 $0 17

4. Commercial Equipment Replacement Program (CER) The Commercial Equipment Replacement (CER) Program reduces natural-gas consumption and peak-day demand by encouraging the installation of high-efficiency natural-gas equipment. The goal of this program is to encourage commercial and industrial customers to install appropriate equipment that exceeds minimum energy efficiency standards established by federal, state and local codes where it is cost-effective to do so. This program is available to all commercial and industrial customers, or potential customers, that are replacing failed or end-of-life natural-gas space, water, or process heating and cooling equipment or C&I customers that are fuel switching to natural gas or purchasing new equipment. To be eligible, equipment must be either listed on the fixed rebate schedule or pass a custom costeffectiveness screening. For smaller residential sized equipment, the National Appliance Energy Conservation Act (NAECA) establishes minimum energy efficiency standards for furnaces, hot water and steam boilers, and tank-type water heaters. However, for commercial equipment, the 2011 Vermont Commercial Building Energy Standard is utilized as well as the ASHRAE 90.1-2007 which establish baselines for equipment minimum efficiency levels. C&I customers receive cash rebates to reduce the incremental cost of purchasing and installing cost-effective high-efficient natural gas equipment. The following table outlines current fixed rebates to be offered during 2016. Table 4.1 CER - Fixed rebate schedule (new rebates effective 2/1/2016) ELIGIBLE EQUIPMENT REQUIRED EFFICIENCY REBATE AMOUNT Hot Air Furnace 94%+ AFUE $400.00 Water Heater, 75 MBH 0.70 Energy Factor $200.00 Water Heater, 75 to 300 MBH 0.82-0.89 Thermal Efficiency $300.00 Water Heater, 75 to 300 MBH 90% Thermal Efficiency $500.00 Indirect-fired Water Heater Standby loss 2 F/Hr., must connect to 92% AFUE boiler. $100.00 Unit Heaters up to 130,000 BTU/H > 90% Thermal Efficiency $300.00 Unit Heaters >130,000 BTU/H > 90% Thermal Efficiency $400.00 Infrared Radiant Heaters Power Vent, Inter. Ignition $400.00 Boilers 300 MBH 90%+ AFUE $600.00 Boilers 300 MBH 95%+ AFUE $1000.00 Carbon Dioxide Sensor Control * Equipment must be field verifiable. Reset of ventilation air based on HVAC zone CO 2 levels $250.00 Commercial Combination or Convection Oven Energy Star listed $750.00 Commercial Steam Cooker Energy Star listed $500.00 Fryer (per vat) Energy Star listed $500/vat Commercial Griddle Energy Star listed $125 18

The following changes to Table 4.1 CER rebate schedule were modified from annual plan 2014; Boiler tiers as well as AFUE minimums were modified and rebates were adjusted to encourage higher AFUE installations Stand Alone water heater energy factors and rebates were increased to reflect the higher incremental costs On-Demand water heaters had a higher tier added to the fixed rebate schedule to encourage the higher energy factor installation. Rebates were modified to reflect higher costs. The commercial combination convection oven had an increase in rebate to better reflect market conditions The commercial steam cooker had a decrease in rebate to better reflect market conditions For other types of high-efficiency natural-gas equipment not listed in the fixed rebate schedule, or in unique circumstances, VGS uses a custom screening tool to evaluate measures for cost-effectiveness. Equipment with a benefit-to-cost ratio of greater than 1 is eligible for custom rebates. In addition to rebates, VGS provides engineering and analytic support at no charge to customers. For projects where specialized engineering assistance is required, VGS provides assistance to customers in locating and selecting qualified consulting engineers, and helps offset the cost of engineering analyses. Energy efficiency projects for interruptible customers are treated no differently than projects for firm customers, with the exception that no peak day savings are projected in the cost-effectiveness screening. CER program summary results The commercial equipment replacement program had 40 completions that made up 42 different measures. It should be noted that the CER program significantly exceeded budgeted MCF savings as a result of one significant project for an interruptible customer. This project represented 90% of the estimated savings. The following table summarizes the CER program. 19

Commercial Equipment Replacement Program Summary Program Start Date: 6/1/1993 Gross to Net Adjustment Factor: 0% [1] 2014 [1] 2015 2015 [21] 2016 [22] 2017 Total Program Reported to Date [18] SUMMARY OF PARTICIPATION # Pending [2, 2b] 7 0 n/a n/a n/a n/a # of Analysis/Audits No Installs [3] 17 10 n/a n/a n/a n/a # Customers with Installations [4] 38 40 38 42 42 715 # Analyses/Audits [5] 56 41 40 63 63 992 SUMMARY OF COSTS Utility [6] $185,671 $179,489 $254,221 $259,146 $279,596 $2,865,085 Administrative [7] $38,484 $34,072 $59,505 $79,693 $83,246 $540,343 Incentives [8] $112,410 $120,340 $126,881 $126,325 $140,852 $1,946,550 Audit [9] $25,656 $22,715 $39,670 $53,128 $55,498 $337,443 Evaluation [10] $9,120 $2,361 $28,165 $0 $0 $40,749 Participant [11, 27, 27a] $0 $0 $0 $0 $0 $0 Total $185,671 $179,489 $254,221 $259,146 $279,596 $2,865,085 SUMMARY OF BENEFITS [12] Annualized Mcf [13] 17,171.8 40,787.2 13,512.0 14,999.0 15,999.0 256,327 [19] Lifetime Mcf [14] 300,507 799,429 256,728 270,482 299,181 4,846,689 [19] Peak Day Mcf [15] 42.7 44.0 85.1 75.0 80.0 1,039.7 [19] Annualized Mcf/Participant [16] 451.9 1,019.7 355.6 357.2 381.0 358.5 Weighted Lifetime (years) [17] 17.5 19.6 19.0 18.0 18.7 18.9 END-USE BREAKDOWN 2015 ACTIVITY (JANUARY - DECEMBER) Annualized Mcf Saved [13] Peak Day Mcf Savings [15] Number of Customers with Installations [20] Weighted Lifetime [17] Heating 40,412.6 42.8 31.0 19.7 Process 116.2 0.3 1.0 12.0 Water Heating 258.4 0.8 10.0 15.0 Total 40,787.2 44.0 42 [23] 19.6 50 Customers with Installations [4] 45,000 Annualized Savings (Mcf) [13] $300,000 Utility Expenditures ($000) [6] 45 40,000 40 35,000 $250,000 35 30,000 $200,000 # of Customers 30 25 20 MCF/yr 25,000 20,000 Costs $150,000 15 15,000 $100,000 10 5 10,000 5,000 $50,000 0 0 $0 20

5. Commercial Retrofit Program (CSR) The Commercial Retrofit (CR) Program reduces natural gas consumption and peak day demand by encouraging VGS' commercial and industrial customers (building owners or occupants) to install cost-effective, natural gassaving space, water and/or process heating measures. Existing and prospective commercial and industrial customers that use or may be considering the use of natural gas for space, water and/or process heating are eligible for the CR program. VGS provides customers with a free walk-through audit of their facility to identify potentially cost-effective energy efficiency measures. Engineering assistance is provided by VGS for the measures identified. When outside engineering assistance is appropriate, VGS assists with the cost of the engineering study. VGS offers financial incentives, typically in the form of rebates for the installation of energy efficiency measures. Rebate amounts are project specific based on customer's savings and payback as well as the value of the avoided cost savings to VGS ratepayers. Retrofit projects for interruptible customers are treated no differently than projects for firm customers in the program, with the exception that no peak day savings are projected for interruptible customers. CSR program summary results During calendar year 2015 VGS performed 26 audits and completed 13 projects representing 15 measures at locations that included an educational facility, food sales and service, lodging, public order and safety as well as an office building. Also during 2015, VGS and EVT entered into a joint agreement with WestRock Converting Company (Formerly Rock-Tenn) for the purpose of developing a Superior Energy Performance ( SEP ) certification pursuant to the standards and protocols established by the Department of Energy. VGS and EVT will cost share 50% of the addition of (1) Energy Project Manager position for (2) years. This Energy Project Manager will be a WestRock employee and is responsible for the day-to-day interactions with VGS and EVT and coordinating the SEPrelated work. The following table summarizes the CSR program. 21

Commercial Retrofit Program Summary Program Start Date: 7/2/1993 Gross to Net Adjustment Factor: 0% [1] 2014 [1] 2015 2015 [21] 2016 [22] 2017 Total Program Reported to Date [18] SUMMARY OF PARTICIPATION # Pending [2] 2 3 n/a n/a n/a n/a # of Analysis/Audits No Installs [3] 12 19 n/a n/a n/a n/a # Customers with Installations [4] 19 13 22 23 23 335 # Analyses/Audits [5] 22 26 36 28 28 837 SUMMARY OF COSTS Utility [6] $320,514 $220,162 $305,618 $275,801 $321,659 $4,475,744 Administrative [7] $89,864 $88,368 $102,354 $74,669 $78,478 $1,250,576 Incentives [8] $158,942 $69,825 $106,863 $151,353 $190,863 $2,507,330 Audit [9] $59,910 $58,912 $68,236 $49,779 $52,318 $671,143 Evaluation [10] $11,798 $3,056 $28,165 $0 $0 $46,695 Participant [11, 27, 27a] $0 $0 $0 $0 $0 $33,739 Total $320,514 $220,162 $305,618 $275,801 $321,659 $4,509,484 SUMMARY OF BENEFITS [12] Annualized Mcf [13] 27,999.7 9,027.9 15,318.0 15,783.0 19,904.0 384,600 [19] Lifetime Mcf [14] 375,196 141,738 243,046 243,058 298,339 6,723,642 [19] Peak Day Mcf [15] 55.9 26.8 33.1 31.0 39.0 1,111.4 [19] Annualized Mcf/Participant [16] 1,473.7 694.5 696.3 701.3 884.4 1,148.1 Weighted Lifetime (years) [17] 13.4 15.7 15.9 15.4 15.0 17.5 2015 ACTIVITY (JANUARY - DECEMBER) END-USE BREAKDOWN Annualized Mcf Saved [13] Peak Day Mcf Savings [15] Number of Customers with Installations [20] Weighted Lifetime [17] Heat Recovery 1,730.6 20.2 3.0 15.0 Heating 3,361.8 0.0 4.0 15.0 Process 262.0 0.7 1.0 12.0 Shell (envelope) 667.3 4.4 3.0 25.0 Water Heating 3,006.2 1.5 3.0 15.0 Total 9,027.9 26.8 14 [23] 15.7 25 Customers with Installations [4] 30,000 Annualized Savings (Mcf) [13] $350,000 Utility Expenditures ($000) [6] 20 25,000 $300,000 $250,000 # of Customers 15 10 MCF/yr 20,000 15,000 10,000 Costs $200,000 $150,000 $100,000 5 5,000 $50,000 0 0 $0 22

6. Commercial New Construction Program (CNC) The Commercial New Construction (CNC) Program is designed to reduce natural gas consumption and peakday demand by encouraging commercial and industrial building owners to incorporate cost-effective natural gas saving measures in both the design and construction of new buildings and in the expansion, renovation, or remodeling of existing buildings. All commercial and industrial customers who are building new facilities or who are substantially expanding, renovating or remodeling existing buildings using natural gas for space, water and/or process energy needs may participate in the CNC program. VGS provides customers with a review of the building plans and, as needed, energy analysis of potentially costeffective natural gas saving measures. In addition, VGS supplies the customer and/or their design team with energy efficient equipment information, technical assistance, lists of manufacturers, and information about improved construction techniques and building materials. VGS provides technical assistance to both Act 250 permit applicants and projects not under Act 250 provisions that have chosen natural gas as a fuel source. This technical assistance may include a plan review and life cycle cost analysis for interested customers. VGS actively assists customers in their efforts to comply with the Act 250 permit criteria, and strongly encourages them to exceed these minimum requirements where cost effective. For measures that exceed the energy code baseline, VGS provides financial incentives. Occasionally, VGS provides an incentive up to 50% of the incremental cost of the measure for relatively new technology that requires additional encouragement for a successful installation. The baseline efficiency and cost, proposed efficiency and cost as well as fuel savings are reviewed and analyzed on a case-by-case basis. This higher incentive is reserved for measures that may be new to the marketplace. Incentives are determined on a case by case basis. Local, state and/or federal energy and building construction codes establish the baseline for comparing the cost-effectiveness of the proposed natural gas saving measure(s). The 2011Vermont Commercial Building Energy Standard (hereinafter "Act 250 Guidelines") as well as ASHRAE 90.1-2007 establishes the baseline. New construction projects for interruptible customers are treated no differently than projects for firm customers, with the exception that no peak day savings are projected in the cost-effectiveness screening. For projects located in the City of Burlington, VGS and BED work together on projects, sharing information and meeting jointly with customers. When projects are located outside of the City of Burlington, VGS works closely with Efficiency Vermont to provide customers with energy efficiency assistance. CNC program summary results The commercial new construction program performed 18 audits/analysis and completed 17 projects that represented 44 measure installations. The following table summarizes the CNC program. 23

Commercial New Construction Program Summary Program Start Date: 5/1/1993 Gross to Net Adjustment Factor: 0% [1] 2014 [1] 2015 2015 [21] 2016 [22] 2017 Total Program Reported to Date [18] SUMMARY OF PARTICIPATION # Pending [2] 3 1 n/a n/a n/a n/a # of Analysis/Audits No Installs [3] 14 11 n/a n/a n/a n/a # Customers with Installations [4] 11 17 18 16 16 403 # Analyses/Audits [5] 19 18 14 31 31 614 SUMMARY OF COSTS Utility [6] $207,940 $159,697 $236,731 $271,974 $311,744 $3,559,675 Administrative [7] $52,196 $52,924 $74,169 $79,964 $83,442 $790,637 Incentives [8] $116,418 $71,490 $84,950 $138,700 $172,674 $2,203,121 Audit [9] $34,798 $35,283 $49,446 $53,310 $55,628 $540,411 Evaluation [10] $4,528 $0 $28,165 $0 $0 $25,506 Participant [11, 27, 27a] $0 $0 $0 $0 $0 $32,812 Total $207,940 $159,697 $236,731 $271,974 $311,744 $3,592,488 SUMMARY OF BENEFITS [12] Annualized Mcf [13] 17,565.4 7,907.0 10,650.0 14,000.0 16,600.0 253,769 [19] Lifetime Mcf [14] 296,855 139,163 183,535 238,467 282,753 4,887,597 [19] Peak Day Mcf [15] 169.4 86.9 111.6 126.0 149.0 1,978.7 [19] Annualized Mcf/Participant [16] 1,596.9 465.1 591.7 897.4 1,064.1 629.7 Weighted Lifetime (years) [17] 16.9 17.6 17.2 17.0 17.0 19.3 2015 ACTIVITY (JANUARY - DECEMBER) END-USE BREAKDOWN Annualized Mcf Saved [13] Peak Day Mcf Savings [15] Number of Customers with Installations [20] Weighted Lifetime [17] Air Infiltration 80.0 0.9 1.0 25.0 Heat Recovery 2,440.2 28.6 8.0 15.0 Heating 3,806.0 44.5 13.0 18.2 Process 237.1 0.6 3.0 12.3 Shell (envelope) 807.5 10.5 4.0 26.0 Water Heating 536.2 1.8 6.0 13.6 Total 7,907.0 86.9 35 [23] 17.6 20 Customers with Installations [4] 20,000 Annualized Savings (Mcf) [13] $300,000 Utility Expenditures ($000) [6] 18 18,000 16 16,000 $250,000 14 14,000 # of Customers 12 10 8 6 MCF/yr 12,000 10,000 8,000 6,000 Costs $200,000 $150,000 $100,000 4 2 4,000 2,000 $50,000 0 0 $0 24

Appendix A: Sample Target Marketing and Advertising Below is a sample target letter that was generated and merged to potential condominium owners and associations. Dear Condominum Owner: Thank you for your interest in Vermont Gas Systems energy efficiency programs. As a pilot program Vermont Gas Systems is offering a $600 incentive for air-sealing and insulating the attic(s) of your condominium to meet or exceed the minimums required by the latest version of the Vermont Building Energy Standards (the RBES energy code). If you upgrade the attics to exceed the minimums required by the energy code, Vermont Gas will; Pay a $600 rebate/unit for work completed before 12/31/2015 Have a VGS energy auditor visit your condominium to look for additional efficiency upgrades that you may wish to consider and to review your natural gas, electrical, and other fuel usage to help you gain perspective on energy usage as compared with other units in your complex and other Vermont homes Inspect the completed work at no cost to you Provide a reduced interest loan through the Green Mountain Credit Union for up to $10,000 toward your share of the work. VGS buys down the interest rates on the GMCU loan at closing. Rates vary from 0% for a 3 year loan, 2% for a 5 year loan, or 4% for a 7 to 10 year loan. The amount of natural gas used in condominiums varies widely and as a result the amount of energy (and dollars) savings that may be realized will also vary. The units that are likely to realize the most benefits from the energy upgrade are those with the highest natural gas usage. To proceed with your project, please call me at (802) 951-0324. I look forward to hearing from you soon. Sincerely, Jeremy King Vermont Gas Systems Energy Services Residential Energy Auditor Certified Building Performance Specialist jking@vermontgas.com 25

SPECIFICATIONS FOR THE CONTRACTOR BIDDING Vermont Gas Systems offers a $600 rebate for making all components of the condominium s attics meet or exceed the requirements of the 2015 Vermont Residential Building Energy Code. Typical upgrades may include: Comprehensive air sealing in the attics shall include the sealing of all wall to ceiling sheet rock joints; all wiring, fan, light and electrical box penetrations; all plumbing penetrations; the tops of the firewalls at the plane of the insulated ceilings and any other leaks or bypasses through the plane of the insulated ceilings. The offer of incentives from VGS is contingent upon inspection of the air sealing by a VGS Energy Services department representative before the insulation is upgraded. Attic insulation shall be upgraded to R50+ with open-blown cellulose after all air sealing or other repairs in the attics have been completed. All chimneys must be isolated from insulation or other combustibles to exceed the minimum distance specified by code and all relevant insulation manufacturer s or chimney manufacture s specifications. A durable wooden scuttle that exceeds the finished depth of the attic insulation shall be installed. The attic hatch shall be weather-stripped and insulated with securely attached R20+ foam. Additional insulation shall be installed above the attic hatch to satisfy the level required by RBES. 1 Fire-rated Isocynanurate shall be installed to cover the exposed fiberglass on walls between heated spaces and the attic. All seams shall be sealed and wall tops shall be capped. The contractor SHALL perform a worst case-scenario of draft conditions test on any chimney vented equipment remaining and complete the combustion safety exit test protocol as supplied by VGS. Completion of these tests will be a condition of payment. Contractor is responsible for disposal of any waste materials resulting from this energy efficiency project. Site shall be left in a broom clean condition. 26

Vermont Gas has some exciting news for South Burlington condominium owners. We are now offering a variety of new services that will make converting your heating system to natural gas easier and even more appealing for home owners. Space Heaters Rentals Vermont Gas has begun to offer space heater rentals. This service will allow most condominium owners to convert to natural gas with no upfront costs and to quickly begin savings 25%-50% on their heating bills. This service also comes with free 24 hour emergency service. See the attached flyer for more details. Energy Efficiency Offering Vermont Gas is pleased to offer a pilot project to South Burlington customers with Townhouse styled units. This program offers a $600 incentive for air sealing and insulation improvements in attics. Not only will you receive a financial rebate to improve the efficiency of your home you will also benefit from savings on your home heating costs. South Burlington Energy Committee The South Burlington Energy Committee and Vermont Gas Systems have partnered together on the South Burlington Energy Prize effort with a chance to win $5,000,000 dollars for our community. All that we need to do is save more energy than 52 other communities across the country. It is being sponsored by the Georgetown University and many partners nationwide to bring extra focus on the benefits of reducing our energy use, saving money for homeowners, boosting our local economy and doing our part to reduce the effects of climate change. By switching to natural gas and taking advantage of our energy saving programs you can help in this effort! There has never been a better time to make the switch to natural gas. To express your interest in switching or to get more information please complete and mail the enclosed green post card, or call Sandra Lucia at 951-0336 or visit our website at: https://vermontgas.com/residential/switch-tonatural-gas/ and request a Free Estimate. Sincerely, Brian Gray Sales & Marketing Manager 27