IRA-IIJA Funding: Whitney Muse



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: Share a high-level overview of some of the energy funding programs related to the IIJA and other federal funding mechanisms that will impact utilities and regulators?

Whitney Muse: It's an exciting time to be at the U.S. Department of Energy. Through President Biden's Bipartisan Infrastructure Law, or BIL, the Department of Energy got sixty-two billion dollars of funding, and the Inflation Reduction Act, or IRA, added another thirty-five billion dollars across the portfolio, principally for demonstration and deployment activities.

In the DOE's Grid Deployment Office, or GDO, we're focused on grid resilience investments, keeping clean generation assets online, and all aspects of transmission deployment. Across those three areas, GDO received twenty-two billion dollars from BIL and another three billion through the Inflation Reduction Act.

However, DOE is not the only agency to receive high-level energy funding through BIL and IRA. There are additional federal dollars and potential programs that could be of interest to public utilities.

There are over ten billion dollars available through the U.S. Department of Agriculture through the Rural Utilities Service and the Rural Development portfolio of IRA-funded programs to help the rural co-ops transition to cleaner sources of energy and make upgrades to their generation and transmission assets.

The Environmental Protection Agency has a number of programs, including the Greenhouse Gas Reduction Fund, a twenty-seven-billion-dollar program to accelerate deployment of clean energy financing. For those of you in states with Tribes, there's additional funding for Tribal electrification at the Department of Interior.

This is just a snapshot of programs across the federal government that address energy funding. Now back to what I know best, the GDO. To start, we have programs for grid resilience, including competitive grants through the Grid Resilience and Innovation Partnership Program or GRIP, a ten and a half billion-dollar program running over five years to enhance grid flexibility and improve the resilience of the power system against the growing threats of extreme weather and climate change.

GRIP is a combination of three different BIL-funded programs that work toward those same grid resilience and innovation goals. For states, we also have the State and Tribal Grid Resilience Formula Grants, and that's 2.3 billion dollars over five years to strengthen and modernize the power grid against wildfires, extreme weather, and other natural disasters that are exacerbated by the climate crisis.

These programs accelerate the deployment of transformative projects that will help to ensure the reliability of the power sector's infrastructure, so that all American communities have access to affordable, reliable, clean electricity.

The formula grants were open for the first two years of funding for States and Territories through May 31, with an August 31, 2023, deadline for Tribes.

PUF: It's a lot to organize, so how are these programs progressing? Is it becoming a little more manageable now?

Whitney Muse: Staffing up and increasing the resources available to help execute these programs is helpful. We also are at the point where all our BIL-funded programs are either currently open for applications or applications received are being reviewed.

Now, we also are better able to understand what States, Territories, Tribes, utilities, and industry are interested in with this funding. The ability to get our arms around the interest helps to inform how the programs are evolving.

We're seeing keen interest from States and utilities for these programs. For example, GRIP received more than seven hundred concept papers for the first round of funding. That's an extraordinary level of interest and signals that the direction we're going in standing up the Grid Deployment Office and implementing these programs, is resonating with the broader public.

I talked about grid resilience programs, but the other big swath of activities that will be of interest to utilities and to regulators are our transmission programs.

Right now, we're reviewing applications for our $2.5 billion revolving fund, the Transmission Facilitation Program. Support from this program will help to overcome some of the financial hurdles facing large-scale, new transmission development or upgrades to existing projects. We also have programs that can help address some of the siting and permitting challenges that go along with transmission.

That's often something that is a hindrance to the evolution of these projects. For example, earlier this year we issued a Request for Information for our Transmission Siting and Economic Development Grant Program, another tool to help address the broader grid and transmission challenges. We're currently reviewing responses and standing up the program.

PUF: What is it you're learning so as you start to take those next steps, you can make midterm corrections or take advantage of what you're learning?

Whitney Muse: We've had an opportunity to get lots of feedback from the public through a variety of ways. All these programs started with a request for information where we received written feedback. We've done a number of webinars or listening sessions about the programs to get input from the public as well.

As we are standing up these programs, we are bringing forth the Department's knowledge, while also recognizing that program success requires public stakeholder input and industry and community collaboration.

We're seeing that through the life cycle of these various programs. We're also learning that as we go through the first round of funding, that process allows us to learn where there are areas we may want to target a bit more narrowly and with more definition.

We supplemented written responses with webinars and listening sessions to get more public feedback. We've also engaged at the national and regional meetings for NARUC, and other national groups such as NASEO, NGA, EEI, and utility related organizations at a number of events around the country.

We are broadly looking to get feedback as we fine tune and refine the approach to these longer-term investments. We have an opportunity with the BIL and IRA funding to have an influx of capital, and long-term commitments to transmission deployment and grid resilience to support ongoing growth. Evolving and learning as part of these processes is a key piece of success here.

PUF: People need to recognize this isn't a one-time competitive grant program. This is going to roll out over a couple of years.

Whitney Muse: That's the key message we have been putting forth. While all of GDO's programs are open mostly for the first round of funding right now, the first round of funding will have multiple funding cycles.

The key difference between the American Recovery and Reinvestment Act of 2009 versus these efforts, is that the Bipartisan Infrastructure Law programs generally have five-year lead times, and the Inflation Reduction Act programs have eight to ten years. DOE has a significant amount of time to implement these programs.

We're also not faced with the immediate push to get funding out the door quickly. We want these programs to make a real impact on the grid across the country.

PUF: What guidance seems to be working best as you start to look at the resources you're able to provide to applicants?

Whitney Muse: One of the key tools that GDO set up was our Grid and Transmission Program Conductor. It acts as a clearinghouse for all of GDO's transmission and grid resilience financing programs, as well as bringing in some of the other existing DOE programs that can also finance transmission and grid efforts.

We created this tool to be a one-stop shop to streamline questions with an interactive format to help guide you to the program that best fits your circumstance. It helps cut through a bit of the noise with there being so many programs available.

We also have a news and events forum both for breaking news and events, and a monthly newsletter that summarizes the work we've done previously, and what is to come to give the public an opportunity to get their arms around the work that we're doing here in GDO.

Those two resources have been well received by States, Tribes, stakeholders, and utilities and are helping them better understand what GDO is putting forth and the opportunities available to them.

PUF: What's your vision of how this would be determined as successful as far as participation from stakeholders and potential applicants?

Whitney Muse: This is not something that the DOE can do alone. We alone can't build out the transmission systems to meet the 2035 and 2050 goals of the Biden administration.

Nor can we ensure that we have a resilient and reliable grid if we're doing this work by ourselves. We need partnership. We need collaboration with States, industry, and utilities to do so, and a successful path will only emerge with significant collaboration.

It is incredibly important for us to collaborate around transmission and distribution planning. Our National Transmission Planning Study looks at interregional transmission planning and is a longer-term transmission planning analysis.

The nearer term National Transmission Needs Study is more of a state-of-the-grid report to identify high-priority national transmission needs. We're working to collaborate on offshore wind transmission planning before we start standing up those infrastructure investments.

We're setting up processes to facilitate interstate and interregional transmission efforts. One example is our work on the National Interest Electric Transmission Corridor designation process.

On May 9, we issued a request for feedback to improve the designation process to more accurately pinpoint areas experiencing the greatest transmission need and with the greatest potential for immediate transmission deployment. Feedback to this RFI will be critical in setting up this program for long-term success.

PUF: There's a lot of federal funding from DOE going directly to states. A lot of State Energy Offices will be the beneficiaries. What are you seeing on that front?

Whitney Muse: We're seeing that States are getting a significant amount of funding through the BIL, the IRA, other DOE programs, and many other agencies.

We are sending a lot of money from the federal government down to the states for execution, implementation, and deployment to ensure that this broader vision is met.

We are committed to providing extensive technical assistance to States, Territories, and Tribes, particularly as a part of the Grid Resilience State and Tribal Formula Grants. We also have technical assistance efforts through a number of the national groups, including NARUC, NASEO, NCSL, and NGA.

We're partnering with several of the DOE's National Labs to help provide technical assistance. With them, we're developing activities that focus on in-person grid resilience trainings and virtual meetings, technical guidance and analysis, baselining efforts, and better tracking of grid resilience policies, as well as fomenting peer sharing and case studies around equity planning, utility planning for wildfire risk, and other key challenges states are facing.

 We work closely with other offices at DOE, such as the Office of State and Community Energy Programs that works closely with the State Energy Offices, the Artic Energy Office, and the Indian Energy Office to leverage outreach opportunities across DOE.

PUF: Are there any words of caution or support that you can offer to State Energy Offices as they navigate through the increased funding levels?

Whitney Muse: There are a lot of great opportunities for State Energy Offices right now. As they're moving through the processes, thinking about the breadth of funding and opportunities through GDO, we are happy to be a partner and a resource.

GDO wants to connect early and often for technical assistance, guidance, and collaboration. As I said earlier, only by working together can this opportunity be successful.

We look forward to being a partner to States as they move through the many funding opportunities and help them achieve the broad goals that these new pieces of funding and legislation offer.


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