Vermont has 14 municipal electric departments, most with fewer than 3,000 customers. Several have recently filed significant rate increases or faced operational challenges.

by Compass Vermont

Customers of Hyde Park Electric learned this week that their electric rates will increase by more than 20% beginning January 1. The decision follows a state investigation that found the village-run utility insolvent, burdened by $4.5 million in debt, and unable to meet its short-term financial obligations.

The Department of Public Service (DPS) and the Public Utility Commission (PUC) have stepped in, ordering the rate increase and working with the Vermont Public Power Supply Authority (VPPSA) to stabilize the utility.

Hyde Park’s situation is unusually severe, but it underscores a larger question facing Vermont:

How many other communities could face similar rate increases?

Compass Vermont reviewed official filings, municipal reports, and recent rate cases to identify patterns across Vermont’s small municipal electric departments.

What Went Wrong in Hyde Park

According to state records, Hyde Park Electric entered 2025 with declining liquidity, rising debt, and limited cash reserves. By October, the utility notified state regulators that it could not meet its financial obligations — including payments to regional grid operators — and that it was effectively out of cash.

Key findings from the state investigation include:

• The utility had accumulated approximately $4.5 million in debt, including unpaid power costs, operational liabilities, and village-backed loans.
• The Village of Hyde Park borrowed about $1 million to cover the utility’s shortfall. DPS has warned the loan must be restructured to avoid jeopardizing the village’s broader finances.
• The utility has an aging substation transformer with no replacement fund and no contingency plan if the equipment fails.
• The manager of the utility — who also served as Village Manager — resigned in late October.
• VPPSA is now assisting the village in managing finances and stabilizing operations.
• Regulators warned that additional rate increases may be required in 2026.

Hyde Park’s customer base is small — roughly 1,400 customers — which magnifies every financial shock. A transformer replacement or major storm repair, which might be manageable for a larger utility, becomes an outsized burden when spread across such a small population.

Is This an Isolated Case?

Hyde Park is the most extreme case currently visible in Vermont. But it is not the only small utility facing financial pressure.

Vermont has 14 municipal electric departments, most with fewer than 3,000 customers. Several have recently filed significant rate increases or faced operational challenges that echo some of the conditions that led to Hyde Park’s insolvency.

A review of recent filings shows:

• Barton Electric Department implemented an 18.27% rate increase in 2023 after years of financial stress and eventually transferred much of its operations to VPPSA.
• Enosburg Falls Electric Light Department has filed for an 8.55% increase effective November 2025.
• Jacksonville Electric sought its first increase in more than a decade; its formal filing now proposes 12.5%.
• Johnson Water & Light approved a 9.33% increase in 2023.

These increases are lower than Hyde Park’s 20% shock but reflect the same underlying pressures: rising costs, small ratepayer bases, and long periods without incremental rate adjustments.

Why Vermont’s Smallest Utilities Are Vulnerable

A range of structural factors make Vermont’s smallest utilities financially fragile.

1. Tiny customer bases

Utilities such as Orleans (~669 customers), Jacksonville (~653), and Johnson (~958) have extremely small populations over which to spread fixed costs.

2. Rising transmission and wholesale power costs

Regional transmission charges and wholesale energy costs have risen steadily. These are fixed expenses that small utilities cannot avoid or negotiate.

3. Frequent and costly storms

Storm-related restoration is a major cost driver. Vermont Electric Cooperative, for example, spent nearly $2.8 million responding to two storms in 2024, absorbing roughly $1.2 million in unreimbursed expenses. A fraction of that cost can destabilize a very small utility.

4. Aging infrastructure

Many municipal utilities operate infrastructure installed decades ago, often without dedicated capital reserves for replacements.

5. Limited staff capacity

Several towns — including Hyde Park — relied on one or two staff members to manage electric operations, regulatory compliance, and other municipal duties simultaneously.

6. Long gaps between rate increases

Some utilities went more than a decade without adjusting rates. While this keeps customer bills stable in the short term, it creates financial instability when operational costs rise.

Which Communities Appear Most at Risk?

Based on customer counts, rate histories, and regulatory filings, a small group of Vermont communities appear structurally vulnerable:

Highest-Risk Category (under 1,000 customers)

These utilities would likely face severe financial strain from a major equipment failure or storm cost:

• Orleans Electric
• Jacksonville Electric
• Johnson Water & Light

Moderate-Risk Category (1,200–2,200 customers)

These utilities are somewhat larger but still exposed to the same cost pressures:

• Northfield Electric
• Enosburg Falls Electric
• Barton Electric (recently stabilized through VPPSA support)

Lower-Risk Category (larger systems)

These utilities generally have better staffing, stronger reserves, or more stable rate histories:

• Morrisville
• Hardwick
• Stowe
• Swanton
• Ludlow

It is important to note that none of these towns are currently in crisis. Several have proactively filed modest rate increases to stay ahead of inflation and infrastructure costs.

What Regulators and Towns Are Considering

Vermont officials and utility leaders are discussing possible ways to prevent sudden rate shocks:

• More frequent, incremental rate reviews to avoid long gaps and sudden adjustments.
• Shared services for engineering, financial planning, and compliance among small towns.
• State-level capital support for major equipment purchases.
• Expanded VPPSA involvement in financial management and planning.
• Early-warning monitoring of utility finances to catch problems sooner.

These ideas have supporters and opponents. Some municipal leaders value local control; others acknowledge that small towns lack the staffing and scale to manage complex electric systems alone.

The Bottom Line for Customers

For most Vermonters served by Green Mountain Power, Burlington Electric, Washington Electric Co-op, or VEC, Hyde Park’s insolvency will have no direct effect.

But for Vermonters in one of the 14 municipal service areas, Hyde Park serves as a warning of what can happen when a small utility faces rising costs without sufficient reserves.

The lesson is not that Vermont’s local utilities are failing — most are doing their best with limited resources — but that scale matters, and the financial pressures on the smallest systems are increasing.

Hyde Park may be the most dramatic example yet. It is unlikely to be the last.

Sources

1. Vermont Public — “Hyde Park Electric customers will see 20% rate increase to cover utility’s financial crisis,” Nov. 18, 2025.
2. Vermont Public Utility Commission — Case No. 25-2569-INV, Investigation into the financial status of Hyde Park Electric Department.
3. Vermont Department of Public Service — Investigation materials and public statements, Oct–Nov 2025.
4. Village of Hyde Park — “Notice of Electric Rate Change,” 2025.
5. VPPSA — Member utility profiles and operational support documentation.
6. Barton Village Electric Department — 2023 rate case filing and trustee statements.
7. Enosburg Falls Electric Light Department — 2025 rate case filing (8.55%).
8. Jacksonville Electric Company — 2025 tariff filing (12.5%).
9. Johnson Water & Light Department — 2023 rate adjustment filing (9.33%).
10. Vermont Electric Cooperative — 2024 financial and storm cost reports.
11. Renewable Energy Vermont — 2025 analysis of statewide electric rate trends.
12. American Public Power Association — reporting on VPPSA assistance and small-utility challenges.

Compass Vermont is an independent, native publication focused on a collaborative resource model. This ensures thorough research and reporting that serves every resident, not just specific interest groups.