Recovery Act State Energy Program Funding Opportunity Announcement
The American Recovery and Reinvestment Act of 2009 (ARRA) appropriated $3.1 billion for the Department of Energy’s State Energy Program (SEP), which provides funding to state energy offices (SEOs) for energy efficiency and renewable energy programs.
The grants will be distributed to states following an allocation formula and used for a range of statewide energy projects, contingent on the governor’s commitment to enact several complementary measures. See the Alliance Recovery Act summary for more SEP program details.
Program Overview
- Funding: $3.1 billion
- Eligible Entities: Energy Offices of States & Territories (See Appendix 1 for State Allocations)
- Program Goals: The goals of the ARRA funding of the DOE State Energy Program are to create and retain jobs, save energy, increase energy generation from renewable sources, and reduce the environmental impacts of energy production. The overall goal of the ARRA is to preserve and create jobs and promote economic recovery, and preference is given to activities that can do so expeditiously.
- Program Precedents: Many states already operate strong SEOs that are supported by local, federal and utility funds totaling $3.5 to $5 billion per year.1 While the ARRA represents a 30 fold increase in federal funding (up from $45 million in FY 2008)2, it only doubles state energy office budgets, with some seeing a greater increase than others. The State Energy Program is authorized under Part D of Title III of the Energy Policy and Conservation Act.
Activities and Priorities
General SEP Guidelines and Goals – In the SEP guidance document, DOE outlines the following general guidelines for State Energy Offices:
- States should plan to reduce 2012 per capita energy consumption by 25% of 1990 levels in accordance with EPAct2005. A description of how the State will achieve this goal must be provided in the comprehensive application form.
- States should prioritize activities that meet program goals and lead to long-term market transformation.
- When funding existing programs, states must use SEP ARRA money to expand current activities, not to supplant existing state or ratepayer funding.
- States must follow the monitoring and reporting schedule set by the DOE in the Funding Opportunity Announcement.
Eligible SEP Activities – DOE lists six mandatory and 16 optional program activities to be included in each state plan. The mandatory activities are as follows (See Appendix 2 for optional activities):
- Establish lighting efficiency standards for public buildings
- Promote carpools and public transportation
- Incorporate energy efficiency criteria into procurement procedures
- Implement thermal efficiency standards for new and renovated buildings
- Permit right-on-red policies at traffic lights
- Coordinate activities of all local, state, and Federal energy efficiency programs, including Energy Efficiency and Conservation Block Grant (EECBG) funds provided under ARRA
Prioritized Activities – Of the twenty-two program activities listed in Appendix 2, the Department of Energy encourages states to consider developing the following programs, which have demonstrated the greatest potential to expediently and cost-effectively reduce energy use while creating jobs. The DOE places no limit on capital expenditures associated with these projects.
- Establishment and enforcement of energy efficient building codes and standards, and implementation of voluntary programs that impact new design.
- Loans, grants and incentives for energy efficiency and renewable energy measures.
- Building retrofits.
- Traffic signal synchronization and replacement with LEDs.
- Industrial retrofits.
The SEP guidance also encourages States to promote funding mechanisms which lead to long-term market transformation. Suggested programs include revolving loans, on-bill financing, property tax assessments, and performance contracting (Note: All ARRA funds must be obligated by September 30th 2010, and expended by March 2012. When a state proposes to use funds to establish a revolving loan fund, they are treated as obligated funds. For more on revolving loan financing, see section 9.10 of the Funding Opportunity Announcement)
Additional Requirements
Matching Funds – The states are not required to provide a funding match for ARRA SEP funding. Note: This is a revision of previous SEP statues.
Governor’s Assurances – In order to receive ARRA SEP funding, the Governor of a given state must provide assurances to DOE that she or he will:
- “Seek to implement” rate-making policies that “ensure that utility financial incentives are aligned with helping their customers use energy more efficiently.”
- Adopt the most recent residential and commercial building codes within the next eight years; and
- Prioritize the expansion of existing state programs when distributing SEP funding.
To meet this requirement the states must submit with their initial application: a) a signed Governor’s Assurance Certification (Appendix 2) or b) a written assurance covering the same requirements. With their comprehensive application (due 5/12/09), each governor must provide a discussion of how his or her state is progressing towards these assurances.
Prevailing Wages – All laborers and mechanics working for contractors and subcontractors on stimulus-funded projects must be paid at local prevailing wage rates in accordance with the Davis-Bacon Act.
- Jeff Genzer, National Association of State Energy Officials, Alliance to Save Energy Webinar on Energy Efficiency in Stimulus: March 16, 2009
- Ibid
Timeline for State Application Process
Based on DOE Funding Opportunity Announcement for State Energy Program Formula Grants, Issued 3/12/2009
| Due Date | Components | DOE Obligation of Funds | |
| Initial Application | 3/23/2009 (8pm EST) | Standard form for federal assistance • Governor’s Assurance (See discussio n above) • Preliminary list of planned project activities | 10% of total allocation upon DOE approval |
| Comprehensive Application | 5/12/2009 (8pm EST) |
|
40% of total allocation upon DOE approval |
| Progress Reports | Quarterly through grant period | DOE will closely monitor grantee performance through continual communication and monitoring. States need to include plans for monitoring and evaluation of SEO and subgrantee programs | The rest of funding requires DOE approval of state fund obligation, reporting compliance and job creation. Probably doled out in stages (20%, 20%, 10%) |
| Funds Obligated | All funds to be obligated by September 30th, 2010 | ||
| Funds Expended | All funds must be spent by March 2012 |
Appendix 1: State Energy Program: Stimulus Grantee Allocations: $3.1 Billion Total
Based on DOE Funding Opportunity Announcement for State Energy Program Formula Grants, Issued 3/12/2009
| State/Territory | SEP Funds | State/Territory | SEP Funds |
| Alabama | $55,570,000 | Nevada | $34,714,000 |
| Alaska | $28,232,000 | New Hampshire | $25,827,000 |
| Arizona | $55,447,000 | New Jersey | $73,643,000 |
| Arkansas | $39,416,000 | New Mexico | $31,821,000 |
| California | $226,093,000 | New York | $123,110,000 |
| Colorado | $49,222,000 | North Carolina | $75,989,000 |
| Connecticut | $38,542,000 | North Dakota | $24,585,000 |
| Delaware | $24,231,000 | Ohio | $96,083,000 |
| District of Columbia | $22,022,000 | Oklahoma | $46,704,000 |
| Florida | $126,089,000 | Oregon | $42,182,000 |
| Georgia | $82,495,000 | Pennsylvania | $99,684,000 |
| Hawaii | $25,930,000 | Rhode Island | $23,960,000 |
| Idaho | $28,572,000 | South Carolina | $50,550,000 |
| Illinois | $101,321,000 | South Dakota | 23,709,000 |
| Indiana | $68,621,000 | Tennessee | $62,482,000 |
| Iowa | $40,546,000 | Texas | $218,782,000 |
| Kansas | $38,284,000 | Utah | $35,362,000 |
| Kentucky | $52,533,000 | Vermont | $21,999,000 |
| Louisiana | $71,694,000 | Virginia | $70,001,000 |
| Maine | $27,305,000 | Washington | $60,944,000 |
| Maryland | $51,772,000 | West Virginia | $32,746,000 |
| Massachusetts | $54,911,000 | Wisconsin | $55,488,000 |
| Michigan | $82,035,000 | Wyoming | $24,941,000 |
| Minnesota | $54,172,000 | American Samoa | $18,550,000 |
| Mississippi | $40,418,000 | Guam | $19,098,000 |
| Missouri | $57,393,000 | Northern Marianas | $18,651,000 |
| Montana | $25,855,000 | Puerto Rico | $37,086,000 |
| Nebraska | $30,910,000 | Virgin Islands | $20,678,000 |
| Total | $3,069,000,000 |
*Allocation of funding is based on a formula that takes into consideration a state’s population and its energy consumption
Appendix 2: Eligible Program Activities under ARRA SEP Funding
Based on DOE Funding Opportunity Announcement for State Energy Program Formula Grants, Section 9.3 and 9.4, Issued 3/12/2009
| Type | Activity |
| Mandatory | Establish mandatory lighting efficiency standards for public buildings |
| Promote carpools, vanpools, and public transportation | |
| Incorporate energy efficiency criteria into procurement procedures | |
| Implement mandatory thermal efficiency standards for new and renovated buildings, or in states that have delegated such matters to political subdivisions, adopt model codes for local governments to mandate such measures | |
| Permit right turns at red traffic lights and left turns from a one-way street onto a one-way street at a red light after stopping | |
| Ensure effective coordination among various local, state, and Federal energy efficiency, renewable energy and alternative transportation fuel programs within the state. This requirement is especially important in light of the substantial ARRA funding that will be provided to local governments under the Energy Efficiency and Conservation Block Grant (EECBG). State Plans should detail how SEP and EECBG funding will be coordinated. | |
| Optional | Programs of public education to promote energy conservation. |
| Programs to increase transportation energy efficiency, including programs to accelerate the use of alternative transportation fuels and hybrid vehicles for state government fleets, taxis, mass transit, and privately owned vehicles. | |
| Programs that encourage the introduction of energy saving technologies in the industry, buildings, transportation and utility sectors and encourage state and industry partnerships that develop and demonstrate advances in energy efficiency and clean technologies. | |
| Programs for financing energy efficiency and renewable energy capital investments, and programs, which may include loan programs and performance contracting programs for leveraging additional public and private sector funds, and programs that allow rebates, grants, or other incentives for the purchase and installation of eligible energy efficiency and renewable energy measures in public or nonprofit buildings owned and operated by a state, a political subdivision of a state or an agency or instrumentality of a state, or an organization exempt from taxation under section 501(c)(3) of the Internal Revenue Code of 1986, including public and private non-profit schools and hospitals, and local government buildings. | |
| Programs for encouraging and for carrying out energy audits with respect to buildings and industrial facilities (including industrial processes) within the state. | |
| Programs to promote the adoption of integrated energy plans which provide for periodic evaluation of a state's energy needs, available energy resources (including greater energy efficiency) and energy costs and utilization of adequate and reliable energy supplies, including greater energy efficiency, that meet applicable safety, environmental, and policy requirements at the lowest cost. | |
| Programs to promote energy efficiency in residential housing, such as programs for development and promotion of energy efficiency rating systems for newly constructed housing and existing housing so that consumers can compare the energy efficiency of different housing; and programs for the adoption of incentives for builders, utilities, and mortgage lenders to build, service, or finance energy efficient housing. | |
| Programs to identify unfair or deceptive acts or practices which relate to the implementation of energy efficient and renewable resource energy measures and to educate consumers concerning such acts or practices. | |
| Programs to modify patterns of energy consumption so as to reduce peak demands for energy and improve the efficiency of energy supply systems, including electricity supply systems. | |
| Programs to promote energy efficiency as an integral part of economic development and environmental planning conducted by state, local, or other governmental entities or by energy utilities. | |
| Programs to provide training and education to building designers and contractors to promote building energy efficiency. | |
| Programs for the development of building retrofit standards and regulations. | |
| Programs to provide support for feasibility studies for the utilization of renewable energy and energy efficiency resource technologies. | |
| Programs to encourage the use of renewable energy technologies. | |
| Programs that partner with other state agencies to leverage additional funds, such as public benefits funds and state and local investments in Clear Air Act compliance. | |
| Collaborative programs for energy efficiency and renewable energy technologies that link a state’s energy and environmental objectives. In order to meet the state air quality priorities, these programs could leverage air quality funding to invest in air quality measures such as energy efficiency and renewable energy technologies. |
