By Conference Staff
January 14, 2008

When President Bush signed the “Energy Independence and Security Act of 2007” into law (PL 110-140), a new $10 billion federal partnership with the nation’s cities, counties and states was established. This is one that strengthens and further empowers the efforts of mayors and other local elected officials as they take local actions to reduce the nation’s energy dependency, promote increased energy efficiency, develop greener energy supplies and further climate protection goals.

Enactment of this new initiative, called the Energy Efficiency and Conservation Block Grant Program (EECBG), is the product of a nearly yearlong effort by The U.S. Conference of Mayors and its member mayors, as first unveiled one year ago during the 75th Winter Meeting in the Conference’s 10-Point Plan.

The new law authorizes $2 billion annually over five fiscal years (FYs 2008-2012) for block grant assistance to cities, counties and states. A graphic depiction of how these resources are to be allocated to support city- and county-based activities is provided in the chart below. With the EECBG program and funding authorization in place, the Conference and its member mayors are now working to secure actual funding (i.e., appropriations) for the program, which is among the top priorities before mayors who will be participating in the 76th Winter Meeting, to be held January 23-25, 2008 in Washington, DC.

Specifically, this program emphasizes bottom-up, community-based strategies to help the nation meet its energy and climate protection challenges, an approach that Conference leaders identified early on as a critical element of any successful national energy strategy.

Funding for the EECBG program takes on even greater immediacy, as the nation’s already weakening economy absorbs additional ill effects from high energy costs, largely driven by record oil prices. Already, Congressional and Administration leaders are calling for action on an economic stimulus package and there is renewed attention to the need for more immediate and more dramatic efforts to curb the nation’s energy use, especially petroleum.

In addition, when the mayors’ campaign to enact this block grant program was first initiated, slightly more than 350 mayors had signed The U.S. Conference of Mayors Climate Protection Agreement. Currently, 773 mayors have joined on as signatories. Importantly, the five-year authorization period for the EECBG program is nearly concurrent with the five-year period, ending December 31, 2012, which is the Agreement’s target date for achieving emission reduction goals set forth in the Kyoto Protocol.

Mayors participating in the Conference’s upcoming Winter Meeting, which will feature a special session on the program, will be working to make sure that Congressional leaders and other policymakers make a strong commitment to prompt EECBG funding as a response to these conditions.

While the following provides a brief overview of the key features of the EECBG program, the actual legislative language can be found in Title V (Sections 541-548) of Public Law 110-140.

The new EECBG program is largely modeled after the highly-successful Community Development Block Grant (CDBG) program, which was first enacted in 1974.

Like CDBG, the largest share of total funding (i.e., 68 percent) is allocated directly by formula to eligible cities and counties. Similarly, each state receives a funding share (i.e., 28 percent) to serve cities and counties not directly eligible for formula funds. Also, funds provided under the EECBG program require no matching share.

Unlike CDBG, the Secretary of the U.S. Department of Energy is the program administrator, not the Housing and Urban Development Secretary, and the factors used to allocate funds among formula recipients are different as well, with the new law requiring the Energy Secretary to develop a formula based largely on population factors.

As depicted in the accompanying chart, two percent of program funding is reserved to Indian tribes, and another two percent is retained by the Secretary of Energy to support a competitive grant program. In addition to local funds provided by formula or through the state, any local government can also apply to the Secretary for funds under this program. However, the Secretary is directed to give priority to localities applying for funds from less populated states (i.e., two million or less) or to local projects that result in “significant energy efficiency improvements or reductions in fossil fuel use.”

With enactment of the new law, the U.S. Department of Energy is now beginning its preparations for issuing various rules, policies and guidance to support the startup of the program.

A key trigger in the law is a directive that the Energy Secretary must publish in the Federal Register, not later 90 days from the beginning of each fiscal year for which grants are to be made available, the formula to distribute funds under this program. In effect, if Congress provides appropriations, either in a supplemental measure and/or in a FY 2009 appropriations bill, the Secretary would have to move immediately to issue the formula for the program.

Once a formula city or county receives its first year funding, it must develop an Energy Efficiency and Conservation Strategy pursuant to the requirements of the law and submit it within one year of receipt of these funds. In subsequent years, additional funding is limited to implementation of an approved strategy.

Within two years of receipt of an initial grant, each formula recipient must report to the Secretary on the status of its implementation of the strategy, including an assessment of the energy efficiency gains. Annual reporting is required each year thereafter.

The new law generally identifies three key goals for recipients of these block grant funds: 1) reduce fossil fuel emissions, 2) reduce total energy use; and 3) improve energy efficiency in the transportation, building, and any other appropriate sectors. It supports the achievement of these goals by authorizing a broad range of local programs, projects and other activities that can be funded with available block grant resources (see Sec. 544 of PL 110-140).