IRA-IIJA Funding: Rich Stover



Fortnightly Magazine - June 12 2023

The Inflation Reduction Act's $370 billion in clean energy investments, effective August 2022, are designed to accelerate private investment in clean energy solutions in all sectors of the economy. That includes strengthening supply chains from critical minerals to efficient electric appliances, and ensuring the U.S. leads the way in climate change efforts.Public Utilities Fortnightly's Paul Kjellander examines the federal funds coming into the energy and utilities space and how State Energy Offices are playing a role. Listen in as he talks to the experts who are already dealing with the big funding issues, for there is much to learn.

PUF's Paul Kjellander: What role is your Idaho State office playing related to the increased federal funding targeted for a lot of these energy related projects?

Rich Stover: This office operates under executive order. The current executive order 2020-17 provides that the Office of Energy and Mineral Resources is responsible for coordinating, among other things, energy planning in the State of Idaho.

As a result of the Infrastructure Investment and Jobs Act, the office will receive at least three major funding programs. Those are IIJA Section 40101(d), the SEP BIL, the State Energy Program Bipartisan Infrastructure Law increase, as well as Energy Efficiency and Conservation Block Grant, or EECBG. Those are the three under the Infrastructure Act we are focused on.

Of those, Section 40101(d), the Preventing Outages and Enhancing the Resilience of the Electric Grid Grants Program, is the one we are dedicating the most amount of attention to.

PUF: Why are you focused on that aspect and what is the intent behind that funding?

Rich Stover: The reason we are focused on it is, while the office has been around for a long time, it operates on a small budget. With passage of the Infrastructure Act, the State of Idaho can receive about twenty-five million dollars over the next five years to make investments in grid hardening and modernization.

We've never done that before. The State of Idaho relies on utilities and regulators, specifically the PUC, to decide when and how to shape those investments.

But now, we've got an opportunity to help facilitate investments. We are also the administrative arm of the Idaho Strategic Energy Alliance, which is a group of experts and stakeholders who come together to address energy issues for the betterment of the State of Idaho, its citizens, and economy.

We enlisted the Strategic Energy Alliance to help us formulate a plan for these investments. Through the Alliance, we established working groups. One is specifically related to section 40101(d), and the work group is comprised of utilities, INL, economic development professionals, academia, and other key stakeholders.

They helped us identify priorities and criteria for funding. Through that we solicited projects from the utilities and compiled a list of eighty projects that utilities want to take on with this funding.

We will administer the funds through a competitive process with the help of advisory groups and review committees in a public and transparent way.

PUF: What type of projects have the most interest?

Rich Stover: We got a lot of feedback from the utilities and grid operators that mirrored for the most part the list of eligible projects under the program. What stood out to me, which I saw repeatedly, are transmission capacity, congestion, and wildfire-related investments.

The latter is probably the highest on the list in Idaho, where we see many wildfires and have our infrastructure running through a lot of public lands that are forested and range lands susceptible to fires. There is an overwhelming need for hardening and resiliency investments that will hopefully mitigate the effects of fires.

PUF: You talked about two other pots of money, and how are those shaping up?

Rich Stover: In a similar process, we utilized a working group in the Strategic Energy Alliance to help identify priorities for the SEP-BIL funding. The State Energy Program is the federal grant that State Energy Offices have taken advantage of since the 1970s. Under the Infrastructure Act, the amount of Idaho grant funding has doubled.

We can invest that money in Idaho. Through the working groups, we identified priorities. At the top was energy efficiency investments. Number one is K-12 educational facilities.

Under the program, we would provide audits for educational facilities and identify areas for energy efficiency retrofits. That's for light bulbs, windows, HVAC systems, et cetera. Another identified priority is agricultural energy efficiency, and it would be a similar type of program.

Finally, we identified a need for a program we are calling the Energy Independent Local Communities, where we would help local communities, cities, and counties address energy issues in their planning. These are all programs targeted on specific areas that can be coordinated and compliment other funding sources available through the Infrastructure Act.

PUF: You were fortunate being a small Office of Energy and Mineral Resources. You had the infrastructure to help with planning and to move it along through the Strategic Energy Alliance.

Rich Stover: Yes. I'm not going to take credit for that. I was new last year. I've got a great staff and fortunately the governor and previous governors had the foresight to put together groups like the Strategic Energy Alliance, who are the experts.

As knowledgeable as my staff is, we can't make these types of decisions with taxpayer money without the input of people who work on the ground. I think that approach leads to the best results, and that's the approach I take.

I'm trying to build upon existing relationships with utilities, regulators, and the Department of Commerce, so we can get a full picture of where to invest the money and what the impact would be. I'm hopeful the impact will be noticeably beneficial to the citizens of Idaho.

PUF: You're trying to avoid squandering an opportunity.

Rich Stover: Absolutely. It's not often an opportunity comes to invest this amount of money in the grid and with energy-related issues.

PUF: You mentioned having competitive grant programs in which utilities and stakeholders will apply for funds through your office. You've already done a pilot project?

Rich Stover: That is correct. When we set up the working groups, there was a timeline established for an application and receipt of the Infrastructure Act funding, and that was originally for September. We worked with our national organization, the Strategic Energy Alliance, and working group to identify priorities and got the application ready with the vision for how funds would be sub-granted out.

The U.S. Department of Energy extended the deadline for that application. All the states looked at each other and said, "What should we do? Do we need to take another look through our application? Make sure we dotted our Is and crossed our Ts?"

We decided to utilize the funding the legislature appropriated for this office for a State Energy Resiliency Program. Instead of waiting for the federal program, we decided to run a pilot program, see how it works, and learn lessons. We advertised that to all recipients who would be eligible under Section 40101(d).

Essentially, it was a state version of Section 40101(d). We received thirty-seven applications from utilities across the state, public utilities, co-ops, and IOUs. We funded sixteen projects totaling approximately $4.4 million.

Projects included mesh wrapping on power poles, artificial intelligence, satellite-based vegetation management, undergrounding distribution and transmission lines, and capacity upgrades. They all generally fit within parameters of transmission congestion, capacity, and wildfire resilience.

PUF: When the federal money shows up, your office is ready to move.

Rich Stover: We are ready. The contract terms will be a little different because we've got to make sure we're complying with federal requirements.

We're going to make a couple of tweaks in terms of how we do the application process. We will include more people in the review component of it, ensure transparency, and have a thorough review. But, generally, as soon as those funds hit the account here, we're ready to launch.

PUF: We've talked about competitive projects through your State Energy Office, but for federal money for energy projects under large federal competitive programs, should potential applicants, vendors, and others be looking to you?

Rich Stover: I would encourage them to do so. We have made it known to the utilities and others who would be eligible for those funds, that we would like to coordinate with them.

It makes the most sense if we have priorities for how we can shape the investments of the Section 40101(d) funds. Utilities should see that as an opportunity and go after the other competitive opportunities for different projects.

Simply put, we want to coordinate and make the most of these funding opportunities. So, yes, we've asked them to work with us and we've received quite a bit of feedback.

We worked with utilities that were going after specific funding, so we were aware, and they've been quite open with us about what they're going after, and what would still be available for utilities under our programs.

PUF: One of the benefits of working with you as they go after nationally competitive funding programs, is it might help get some letters of support that represent the State of Idaho.

Rich Stover: Yes, that's exactly what's occurred. For those whom we've talked to and have worked with us, when they've come back around, gotten through the concept paper portion, and got the encouragement to proceed, we've held ourselves out as partners in terms of technical support and letters of support. We're looking at those opportunities and helping support those folks.

PUF: As you get a chance to spend millions of dollars, what's surprising you the most as you work through the planning and opportunities this funding represents?

Rich Stover: The biggest surprise is how much need there is for funding and then how complicated the issues are related to the grid and the energy transformation issues that are currently pending. It's easy to say, "We need to upgrade this conductor."

At the same time, you've got to take into account that certain baseload power facilities might be slated for retirement and the utilities are replacing that resource with renewables.

Does it make sense to invest in a conductor that is tied to, for example, a coal plant where they know that the plan is going to be to hook up to wind turbines or solar panels in different locations? The complications involved in planning continue to surprise me.

I'm pleasantly surprised with the level of cooperation we're achieving with the utilities. They have their business plans as you're probably aware, and we're not heavy-handed.

The utilities lead the way with their business plans. We're trying to assist them. I've been pleasantly surprised with the level of cooperation of all the stakeholders in general that we brought together.

People have different priorities in terms of how quickly or what kind of energy transition we're dealing with here. Overall, it's been robust and productive conversations, and I've been happy about that.


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