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What is “Tier 3?”

Vermont’s Renewable Energy Standard encourages electric utilities to implement projects that reduce fossil fuel use in Vermont. This allows utilities to sell more electricity if it reduces fossil fuel use. Utilities must achieve a percentage of their annual retail electric sales through these “Energy Transformation” projects. This percentage increases over time, starting at 2% in 2017 and rising to 12% by 2032. This is why Vermont utilities offer incentives for electric heating equipment and battery electric cars. The increased sales of electricity is intended to avoid a death spiral, which is when higher costs for electricity coupled with reduced consumption make it more expensive to deliver electrons.