State audit finds gaps in tracking and $1.6 billion overstatement in reported energy savings

Tim Ash, deputy state auditor, presented an audit of the Buildings & General Services (BGS) energy management program and told the House Energy and Digital Infrastructure Committee that the audit identified measurement, coverage and validation problems that limit the state's ability to know whether it is meeting energy-reduction goals.

Ash said auditors examined whether the state is measuring progress against the six-year state agency energy plan, whether BGS is selecting cost-effective projects and whether project savings are validated after completion. He reported three primary shortcomings: the state lacks clear baselines needed to measure percentage reductions; BGS has limited its tracking primarily to properties it owns and operates (about 60% of state-owned square footage), excluding leased and other-agency space; and the office has not consistently required Efficiency Vermont to validate post-project savings.

The audit found that when lifetime savings projections were recalculated using validated numbers the amount of savings reported to the legislature and public was overstated by about $1.6 billion for the period reviewed. Ash said that while many projects were cost-effective overall, auditors identified examples where non-cost-effective work was bundled with cost-effective measures at other sites, masking poor returns.

Ash also described capacity constraints: several project-manager positions that supported delivery of efficiency projects are funded by Efficiency Vermont and have been hard to fill, contributing to a drop in completed projects in recent years. He said BGS has agreed to all 14 audit recommendations, which include establishing baselines, including leased properties in totals, implementing drafted procedures for engagement with leased buildings, and improving post-project validation.

Committee members asked detailed follow-up questions about fuel-data conversions, whether the space book includes corrections and how agencies would automate data reporting. Ash said some agencies are not inputting kilowatt-hour or gallon metrics in ways BGS can aggregate and that better automated reporting would help produce accurate performance measurement.

Ash told the committee that BGS's responses accept the recommendations and that the committee will likely need to discuss where baselines should be set and how targets should be revised for realism and accountability.