By Joseph Phelan, Grants Development Consultant (State and Local Government)
The Infrastructure Investment and Jobs Act and Inflation Reduction Act include many opportunities for energy-related grant initiatives. In fact, it is overwhelming to consider the sheer volume of programs made available over the past couple of years and will continue to be created as more information is known. The U.S. Department of Energy (DOE) is the federal grantmaker tasked with administering a number of these research and development, demonstration, and deployment programs. The U.S. Department of Agriculture (USDA) is another popular grantmaker for energy-specific programs. These funds are available to nonprofits, all forms of government agencies, private businesses, and even individuals.
As for the near future, there are three specific programs worth diving a little deeper into, as they either have firm deadlines or are expected to open in the coming weeks. The first comes from the Inflation Reduction Act and more specifically through the USDA.
The Empowering Rural America (New ERA) program is intended to help rural electric cooperatives transition to clean, affordable, and reliable energy. Rural, as defined by USDA, means a service territory where at least 50 percent of its consumers are rural. As far as eligible purchases are concerned, this program will fund generation and transmission systems improvements, any renewable energy, zero-emission, and carbon capture storage systems. The USDA has emphasized that New ERA is designed to be flexible, by providing an example that cooperatives can seek funding for renewable and zero-emission systems that eliminate aging, obsolete, or expensive infrastructure, or they can change their purchased-power mixes to support cleaner portfolios, manage stranded assets, and transfer to clean energy.
The USDA requires a letter of interest by August 31, 2023, before sending applications to the highest-ranking rural electric cooperatives.
The New ERA program will have three categories to make sure cooperatives only compete against similar-sized cooperatives.
- Category 1: Total utility plant value equal to or more than $500 million
- Category 2: Total utility plant value of more than $200 million and less than $500 million
- Category 3: Total utility plant value equal to or less than $200 million
There will be two funding streams. Loans will be set either at the U.S. Treasury rate or a fixed rate as low as two percent, while grants will cover 25 percent of the total project costs. There is also an opportunity for a cooperative to take advantage of a combination of the two. In that scenario, applicants can propose to refinance debt related to a stranded asset if the applicant utilizes the refinancing savings to fund an eligible project.
The Rural and Municipal Utility Advances Cybersecurity Grant and Technical Assistance Program from the DOE is expected to open this summer. This program will provide grants and technical assistance to rural electric cooperatives, municipally owned electric utilities, small investor-owned utilities, and state-owned utilities to protect against, detect, respond to, and recover from cybersecurity threats. At the end of last year, the DOE released a request for information posting, allowing interested parties to provide detailed information as to what a notice of funding opportunity will look like. This program is still in wait-and-see mode, but it certainly will draw plenty of enthusiasm when it officially opens.
The final program is called the Energy Efficiency and Conservation Block Grant Program, which required a pre-award information sheet to be submitted by July 31, 2023. This program will essentially provide direct funding to states, units of local governments, and tribes to implement strategies to reduce fossil fuel emissions, reduce the total energy use of the eligible entity, improve overall energy efficiency in the transportation and building sectors, and build a clean energy economy with a heightened focus on disadvantaged communities by promoting equity and inclusion in workforce opportunities. Local and tribal governments will have until January 31, 2024, to take advantage of these funds, while states were required to submit their paperwork by July 31. To learn more about this program, including specific allocations to states, cities, counties, towns, and tribes, visit here: https://www.energy.gov/scep/eecbg-program-formula-grant-application-hub
These three funding options are just a sample of the opportunities out there for all kinds of potential applicants. The list continues to grow as more knowledge about deadlines and specific application instructions are announced on grants.gov or DOE and USDA websites, so be sure to monitor both on a regular basis.