You're saving cashflow, but adding a year to the mortgage. I'm making the assumption you want the 15 year loan to pay it off as quickly as possible.
Since you are a year in, I would recalculate each of the refi options as 14 year loans and compare to the current payment amount.
Based on the info you provided, I guesstimate your payment now is $3431/month, option 1 for 14 years means a $3298 payment, and option 2 for 14 years is a $3018 payment. So, you can add about $413/month in cash flow by paying down the $32K, and you'd replenish your emergency fund in about 6.5 years. You'd then be able to redirect the extra $413 towards the mortgage, allowing you to pay it off in 156 total months, or in 13 years.
If you're comfortable with allocating your EF for this opportunity, do it. Since you have $25K of the $32K available in the taxable account and you would make up the $7K difference in about 17 months, I would probably roll the dice. YMMV.