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Stimulus Funding PNW Chapter Meeting: Association of Energy Engineers Seattle WA., July 16, 2009 Mark L. Anderson July 2009 American Recovery & Reinvestment Act of 2009 On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act (ARRA) “to preserve and create jobs and promote economic recovery; to assist those most impacted by the recession; to provide investments needed to increase economic efficiency by spurring technological advances in science and health; to invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits; and, to stabilize State and local government budgets in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases.” ARRA Energy Grant Information • • • • • http://www.energy.gov/recovery/funding.htm http://www.grants.gov http://www.fedconnect.net CTED Opportunity Tracking Spreadsheet http://www.commerce.wa.gov/site/1164/default. aspx • http://www.energy.gov/recovery/taxbreaks.htm ARRA Energy Overview http://www.energy.gov/recovery/index.htm • • • • • • • • • $38.7 Billion - Total $16.8 B – Energy Efficiency & Renewable Energy $5.97 B – Environmental Management $4.5 B – Office of Energy $3.4 B – Fossil Energy $1.6 B – Science $400 M – ARPA-E (Advanced Research) $42 M – DA $10 M – WAPA (Western Area Power Administration) Washington Legislature’s Guidance for the State Energy Program On May 7, 2009 Governor Gregoire signed ESSB5649 & on May 11th signed ESHB2289, which together allocated the SEP Funds to the following four programs: 1. Community-Wide Urban Residential & Commercial Energy Efficiency Program – $14.5 million This program will be used for the development & deployment of at least three large neighborhood based building energy efficiency projects. This program will be managed by the Washington State University Energy Program. They anticipate issuing a draft request for proposals on or around July 7, 2009. 2. Farm Energy Assessments Program - $500,000 This program will develop energy tools & training assistance to increase energy efficiency in the state’s agricultural sector. This program will also be managed by the Washington State University Energy Program. 3. Energy Efficiency Credit Enhancement Program - $5 million This program will provide credit enhancement mechanisms to state financial institutions. The program is intended to provide credit support for loans for energy efficiency in order to exp& the lending available to increase energy efficiency opportunities in Washington. Commerce is in the process of developing program guidelines & plans on announcing the program approach by September 2009. 4. Energy Efficiency & Renewable Energy Loan & Grant Program (EERE) - $38.5 million This program will create a loan & grant fund to provide interim financing to support cost-effective energy efficiency projects, renewable energy projects, and to assist innovative companies that have commercial or near commercial energy technologies and programs move to the next level of commercialization. SEP EERE Loan & Grant Program Issue Date: July 1, 2009 Information Workshops: Jul 13, 14, 15, & 16 Information Webinar: July 23, 2009 Notice of Intent Due Date: July 27, 2009 5PM The Notice of Intent is required if you want to apply. Loan & Grant Program Description Commerce will make loans and grants of up to $20 million under this solicitation. Approximately one third of the money ($6.7 million) will be distributed as grants, and two-thirds ($13.3 million) will be distributed as loans. The amount of the individual loans and grants will be between $500,000 & $2 million, which means that Commerce will fund between ten & forty projects in this round. The loan and grant funds will be allocated to the following three categories with a minimum of $4 million going to each: – Energy efficiency projects (loans only) –Renewable energy projects (grants & loans) –Clean energy innovation projects (grants & loans) Eligibility Applicants for SEP funding must meet six eligibility criteria to have their proposal evaluated & scored. • • • • Eligible Applicant Eligible Project Sufficient Matching Funds SEP Funding Request Between $500,000 & $2,000,0000 • Timely Expenditure of Funds • Statement of Need for Funding Application Evaluation • Threshold Evaluation – must pass to score • Scoring Evaluation – top scores calculated – Match & Leverage – Jobs created & retained – Energy Saved / Generated – Project Plan – Project Team – Total 30 points 10 pts 10 pts 40 pts 10 pts 100 pts • Overlay Evaluation – adjust for targets, goals Loan Terms and Set-up Fee Loan Terms CTED will distribute up to $13.7 million in low-interest loans through this program. Repayment can be deferred up to four years from the date the loan is made. Loans will include the following terms: Loan Set-up Fee 1% loan set-up fee will be charged to each loan agreement. Loan fee is added to the loan amount & is recaptured with the first reimbursement request. The loan fee will be amortized over the life of the loan. Interest Rates •Simple interest, i.e., interest does not compound •3% interest charged annually on the balance of the loan •2% interest is available to projects in distressed communities (on the list published by Employment Security Department at the time of application.) Terms of Repayment • Private entities – maximum of 5 years plus 1 year for every 12 months of deferral • Governmental entities – maximum of 15 years • Equal annual principal payment plus interest charged on the balance due. • Payments are due annually by September 30th starting September 30, 2011. • Interest & principal repayment may be deferred for 24 months on a caseby-case basis for projects that require additional development for commercialization • No pre-payment penalty • Subordination of debt owed to CTED may be allowed by CTED on a case by case basis should subordination be required to obtain additional funds from another lender who requires priority to the CTED debt. • The CTED debt shall not be subordinated if it is a general obligation debt. Interim Financing/Bridge Loans will be considered with the following conditions: • Loans for the construction or development phase which will result in product commercialization. • Requires documentation that take-out financing is guaranteed upon completion of construction or is secured by letter of credit as a condition of contract execution • Loan fee is charged at time of loan repayment. • Fixed interest rate of 3% due at time of loan repayment or 2% if in a distressed community. • Interim Financing/Bridge Loans must be repaid with interest by January 31, 2013. Contract Requirements • Staff training on contract requirements • Buy American – Use of American Iron, Steel, and Manufactured Goods • Davis-Bacon Act Wage Rate or State Prevailing Wage, whichever is higher • Quarterly reporting • Environmental and cultural review • Listing Recovery Act jobs with Employment Security Department Buy American – Use of American Iron, Steel, & Manufactured Goods None of the funds appropriated or otherwise made available by the Recovery Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, & manufactured goods used in the project are produced in the United States American Recovery & Reinvestment Act of 2009, Section 1605. The Recovery Act does provide for some limited exemptions to this requirement. Davis-Bacon Act Wage Rate Requirements All laborers & mechanics employed by contractors & subcontractors on projects funded directly by or assisted in whole or in part by & through the Federal Government pursuant to the Recovery Act, shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code (Davis-Bacon Act). The work performed under contract may also be subject to the State’s prevailing wage laws, Chapter 39.12 RCW. Applicants are advised to consult with the Washington State Department of Labor & Industries to determine the prevailing wages that must be paid. Reporting : Accountability & Transparency Not later than 10 days after the end of each calendar quarter, each recipient that received recovery funds from Commerce shall submit a report to Commerce that contains, but is not limited to, a detailed list of all projects or activities for which recovery funds were expended or obligated, including: Accountability & Transparency (cont.) 1. 2. 3. 4. The name of the project or activity; A description of the project or activity; An evaluation of the completion status of the project or activity; An estimate of the number of jobs created & the number of jobs retained by engaging in the activity; 5. The amount of energy saved; 6. The amount of renewable energy generated; 7. The amount of greenhouse gases reduced; 8. The amount of funds leveraged; and 9. Key metrics that will vary by project type per U.S. DOE guidance. Prior to contracting, successful applicants must demonstrate that they have the necessary data, accounting, & management systems in place to meet these requirements. Environmental & Cultural Review Because ARRA funds are federal, all funding recipients must complete an environmental review under the National Environmental Policy Act (NEPA), a cultural review under Section 106 of the National Historic Preservation Act, & an environmental review under the State Environmental Policy Act. Training & additional information will be provided to successful applicants. Listing Recovery Act Jobs with the Employment Security Department All job openings created by the funding recipients for this program must be listed with the WorkSource system (an affiliate of the Employment Security Department) before hiring; all hiring decisions also must be reported to WorkSource. In addition, all sub-contractors hired by funding recipients also must be required to list jobs & report hiring results to WorkSource. Existing or sub-contractor employees who are retained using funds from this project also must be reported to WorkSource. WorkSource will pre-screen and refer qualified job candidates for the funding recipient’s or sub-contractor’s consideration. The funding recipients and sub-contractors also have the discretion to use other, additional recruitment systems, and retain the right to make all hiring decisions. Prohibited Uses The Federal Recovery Act prohibits the use of funds for swimming pools, gambling establishments, aquariums, zoos, & golf courses. No funds can be used for any activity whatsoever at a prohibited establishment. Any activities at facilities that are adjacent to any of the prohibited establishments & benefit any of the prohibited establishments are also prohibited. Note: Projects funded under Energy Efficiency & Conservation Block Grants are eligible projects & may also apply for funding through this program. State and Local Energy Efficiency and Conservation Block Grants • New program created in 2007 energy act but not funded until ARRA • Funding to local governments and tribes for energy efficiency activities (only cities, counties and tribes) • Formula grants direct from DOE o Twenty-six cities > 35,000 - $22.6 million o Ten large counties > 200,000 - $22.7 million o Twenty-nine tribes - $2.7 million • State funds for State Energy Program and for cities < 35,000/counties < 200,000 - $10.6 million • Competitive grants from DOE - $400 million all cities and counties, states and tribes; $55 million just smaller cities/counties (no guidance yet from DOE) State and Local Block Grants Formula – Resources for Smaller Jurisdictions • At least 60% of the $10.6 million ($6.4 million) to smaller cities and counties as competitive grants • June 22 – State’s application for smaller cities/counties submitted to USDOE • August 10 - Large cities’/counties’ applications now due to USDOE Eligible Applicants • Cities < 35,000 – 255 • Counties < 200,000 in population – 29 Ineligible Applicants • Direct recipients of formula funds – cities > 35,000 population, counties > 200,000 in population, and tribes • Other local and state agencies • Private entities Funding Amounts and Applications • Cap of $135,000 per application • One application may include more than one eligible activity • Cities and counties are encouraged to partner with other cities and counties, and other private and public entities to leverage funds • Eligible cities and counties may jointly apply for up to $135,000 per joint applicant • Only one application per applicant Threshold Eligibility Review • Application is complete. • Applicant is eligible. • Activity or activities are eligible (proposed projects or programs). • Activities can be completed and funds expended by April 30, 2012. Note: Applicants need to consider whether activities subject to NEPA can be completed on time. Grant Scoring • Other activity funds – 10 points • Jobs created or retained – 15 points • Energy Savings/Renewable Generation – 30 points • Activity Work Plan – 30 points • Persistence of benefits beyond 2012 – 15 points Formula Block Grant Timelines • State application submitted to U.S DOE on June 22, 2009 • 120-days for U.S. DOE to review • Issuance of competitive application to all eligible cities and counties upon DOE approval – September 1 or four weeks after DOE approval, whichever is later • All funds obligated within 18 months of award, expended within 36 months Statewide Energy Planning Program (the other 40%) • Statewide program to provide financial and technical assistance for all cities and counties, regardless of size • Includes technical assistance and funding to do energy planning • Includes technical assistance, infrastructure and funding for resource conservation managers through WSU Extension Energy For More Information • www.cted.wa.gov/recovery • State Energy Program: Cory Plantenberg – (360) 725-3111 [email protected] • Energy Efficiency and Conservation Block Grant: Heather Ballash - (360) 725-3044 [email protected] • Commerce email list – send an email to [email protected]