Geothermal power is emerging as a way for gas utilities to make the shift toward cleaner energy without abandoning their entire business model — especially in states that have passed laws mandating decarbonization.
Vermont Gas is making the leap, today announcing its first investment in geothermal ground loops. The utility, which serves about 56,000 customers in the northwestern part of the state, is covering the upfront cost of the new infrastructure that will provide heating and cooling for a new affordable housing project. Dandelion Energy is handling the system design and drilling.
President and CEO Neale Lunderville told Latitude Media that geothermal networks are good business for Vermont Gas because it allows the utility to continue expanding its customer base even as the state shifts away from fossil fuels. In Vermont, most homes still rely on fuel oil and propane for heating, even as the vast majority of the grid is powered by renewables, such as hydropower imported from Canada. The state in 2020 enacted a legally binding target to cut greenhouse gas emissions 80% by 2050 compared to 1990 levels.
“This is an important part of our long-term strategy to diversify our revenue and keep the service we provide affordable for customers,” Lunderville said.
He added that Vermont Gas is also investing in energy efficiency, including installing heat pumps in homes, while diversifying the fuels in its pipelines. That includes capturing methane from dairy farms, landfills, and wastewater treatment plants and piping it to homes to replace dirtier, more expensive fuel oil. One such project was completed earlier this year.
Vermont Gas is among about two dozen utilities participating in a “gas-to-geo” initiative launched by the climate nonprofit HEET, which researches and advocates for the transition.
In 2024, Eversource Energy in Massachusetts completed its first residential geothermal project and is expanding it in part with funding from a Department of Energy grant, Canary Media reported. National Grid in New York is also piloting community-scale geothermal loops.
More than a dozen states since 2021 have passed laws either mandating or encouraging gas utilities to test geothermal networks, including Colorado, Massachusetts, Minnesota, New York, and Washington.
Lowering utility bills
The total cost of the geothermal project with Dandelion is estimated at $2 million to serve 44 townhomes and apartments. Vermont Gas is investing nearly $400,000, while nonprofit affordable housing partners are covering the more expensive installation of ground-source heat pumps inside buildings, regulatory filings show.
The overall price tag is about $1 million less than originally proposed. Vermont Gas planned to use a grant from tDOEto cover most of the costs. However, those funds didn’t come through after the Trump administration froze, canceled, or clawed back tens of billions of dollars for climate and clean energy initiatives shortly after taking office. Vermont’s is just one of the thousands of DOE projects that remain in limbo.
Vermont Gas in its regulatory filing said that its grant hasn’t been canceled, but the DOE hasn’t committed to a timeline for fund availability. As a result, the utility and Dandelion redesigned the project to lower costs and potentially make it easier to replicate across other housing developments in the state.
Both Lunderville and Dan Yates, CEO of Dandelion, said geothermal power will save customers money on their bills. Residents of the new housing project in Vermont will still pay a monthly utility bill to cover the cost of their power, in addition to a $25 to $35 monthly fee over 20 years to access geothermal. Combined, that is still expected to be less than using fuel oil or propane — especially given the fuels’ volatile price fluctuations.
Geothermal also comes with the perk of supplying cooling as well as heating — which Lunderville said is increasingly in demand as Northeast summers get hotter.
“When you compare it against an oil or propane system, plus a window unit or heat pump for air conditioning, the math favors geothermal,” he added. “That’s what we’re working to demonstrate in these early projects, so Vermonters see this as a good option for new homes.”
Lunderville said the economics are best in new homes, which Vermont aims to build 30,000 of by 2030. Retrofits are a lot more expensive. In some parts of the U.S. with older gas pipelines, it may make sense to replace them with geothermal lines. But Vermont’s gas infrastructure was mostly built within the last three decades.
Dandelion, for its part, is deploying geothermal loops in some 1,000 homes per year, with a goal to scale up to 10,000. Yates said the project with Vermont Gas is a major milestone for the company. “It’s time to mainstream geothermal,” he said.
