Vermont Gas invests in geothermal for the first time

Vermont Gas, which serves about 56,000 customers in the northwestern part of the state, is paying for its first geothermal heating and cooling system. The system uses underground pipes (a "ground loop") connected to ground-source heat pumps to heat and cool buildings without burning fossil fuels. The utility is covering nearly $400,000 of the roughly $2 million project, which will serve 44 units of affordable housing, with Dandelion Energy handling design and drilling.

The project got cheaper to build after a Department of Energy grant Vermont Gas was counting on got stuck in limbo under funding freezes from the Trump administration. Rather than cancel, the utility and Dandelion redesigned the system to cost about $1 million less, hoping the new design can be copied at other housing developments around the state.

Residents in the new homes will pay a regular utility bill plus a separate fee of $25 to $35 a month for 20 years to access the geothermal system. Combined, that's still expected to cost less than heating with fuel oil or propane, which is what most Vermont homes currently use and which can swing sharply in price. Geothermal also provides air conditioning, a growing draw as Northeast summers get hotter.

The utility says the savings math works best in new construction, not in retrofitting existing homes, since Vermont's gas pipelines are relatively young. Vermont Gas is one of roughly two dozen utilities nationwide testing this kind of "gas-to-geo" shift, alongside similar projects from Eversource in Massachusetts and National Grid in New York.