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EECBG Program: Conference-led Energy Block Grant Program Launched

By Debra DeHaney'Howard
April 6, 2009


Key Administration officials unveiled program rules and funding allocations on March 26 to distribute $2.8 billion in economic recovery funding to cities, counties and states under the Energy Efficiency and Conservation Block Grant (EECBG) program.

This new initiative to support local efforts to reduce energy use, develop renewable energy resources and strengthen the efforts of mayors throughout the U.S. on climate protection was a key priority of The U.S. Conference of Mayors and its member mayors. This effort was first advanced in early 2007 as part of the Mayors’ 10'Point Plan and later in the MainStreet Recovery Plan.

“The nation’s mayors commend the Obama Administration for their decision to distribute $2.8 billion in Energy Efficiency and Conservation Block Grants in the Recovery Package, which will benefit hundreds of cities throughout the U.S. Today’s announcement by the Department of Energy of the funding guidelines for this program is a milestone in the nation’s effort to achieve greater energy independence, climate protection, and sustainability,” said Conference President Miami Mayor Manny Diaz.

Diaz applauded President Obama, Congressional leaders, and individual Senators and Representatives, including Senators Bob Menendez (NJ), Frank Lautenberg (NJ), and Bernie Sanders (VT), and Representative Chaka Fattah (PA), who were instrumental in getting the EECBG program authorized under the Energy Independence and Security Act of 2007 (EISA) and funded in ARRA.

“The nation’s mayors thank President Obama and Congressional leaders for their commitment to making this investment in energy efficiency and conservation at the community level. These new resources will allow cities, counties and smaller communities to accelerate initiatives that reduce energy use and greenhouse gas emissions and promote sustainable communities,” said Diaz. In his statement, the ever'expanding commitments of mayors to reducing greenhouse gas emissions was cited, noting that 935 mayors have now signed the Mayors Climate Protection Agreement.

The U. S. Department of Energy (DOE), which under the 2007 Energy Act is charged with administering the EECBG program, developed the EECBG guidance documents that cities and counties receiving formula funding as well as states serving smaller jurisdictions will have to follow in expending these resources. The guidance documents and related information is available online at www.usmayors.org.

EECBG Funded in ARRA

The American Recovery and Reinvestment Act of 2009 (ARRA), signed in February, appropriated $2.8 billion for the energy block grant program and provided an additional $400 million for a DOE'administered competitive grants program to further support the efforts of EECBG recipients for projects that improve energy efficiency and reduce greenhouse gas emissions. Specifically, cities and counties will receive nearly $1.9 billion under the block grant program, while states and territories will receive nearly $770 million.

At a March 26 press conference, Vice President Biden said, “These investments will save taxpayer dollars and create jobs in communities around the country,” adding, “Local leaders will have the flexibility in how they put these resources to work – but we will hold them accountable for making the investments quickly and wisely to spur the local economy and cut energy use.”

DOE Secretary Steven Chu joined Vice President Biden at the press conference. Chu said, “The Block Grants are a major investment in energy solutions that will strengthen America’s economy and create jobs at the local level.” He also explained that “the funding will be used for the cheapest, cleanest and most reliable energy technologies we have – energy efficiency and conservation – which can be deployed immediately. The grants also empower local communities to make strategic investments to meet the nation’s long term clean energy and climate goals.”

Diaz praised Chu and other officials at DOE for their work on devising the program rules and funding allocations. “We thank Energy Secretary Chu and his team at the Department of Energy for devising a formula that reflects the goals of the Mayors Climate Protection Center, and look forward to working with them,” said Diaz. “This program will allow flexibility for cities to utilize their block grants in creative ways to meet their energy efficiency and conservation goals, and will aid in creating much'needed green jobs.”

Key Features of Block Grant Program

The newly created EECBG program provides $2.8 billion in formula grants to cities, counties and states to spur economic growth, decrease total energy consumption, create and/or retain jobs, and improve energy efficiency in the transportation, building, and other energy'consuming sectors. Applications are due to DOE by June 25.

Cities, counties and states will receive block grant assistance under various elements of this new block grant program. All cities with a population of 35,000 or more will receive direct formula funding. In some states, there are cities below this threshold that will be eligible for formula grants, subject to a special provision in the legislation. All counties above 200,000 in population are eligible for direct formula funding.

All energy block grant funds must be obligated/committed within 18 months of the effective date of the award and expended within 36 months of the effective date of the award. If funds are not obligated/committed within 18 months, DOE reserves the right to de'obligate the funds and cancel the award.

Cities and counties not receiving funds by formula can access resources from their state’s block grant share, with the legislation directing each state to pass'through a minimum of 60 percent of these funds.

DOE will reserve two percent of all program funds (i.e., $2.8 billion) for a competitive grant program serving non'formula cities and counties throughout the nation, giving priority to communities in states below two million in population.

Energy Block Grant Eligible Activities

The block grant funds may be used for a variety of activities, including developing/implementing an energy efficiency and conservation strategy; conducting energy audits; providing grants to nonprofit organizations to perform energy efficiency retrofits; developing/implementing energy efficiency programs for buildings and transportation (flex time by employees and satellite work centers); promoting of zoning guidelines; developing alternative infrastructure (bike lanes, pathways, pedestrian walkways, and traffic signals); developing building codes; public education programs; methane capture technologies; light emitting diodes (LEDS); onsite renewable energy technology that generates electricity from renewable resources (solar and wind energy, fuel cells, and biomass); and any other activity as determined by the Secretary of Energy in consultation with the Secretaries of Transportation and Housing and Urban Development and the Administrator of the Environmental Protection Agency.

Energy Efficiency, Conservation Strategy (EECS)

Formula grant recipients are required to submit to the Secretary of Energy a proposed Energy Efficiency and Conservation Strategy (EECS), which should include the goals and proposed plan for the grant. The EECS can be submitted either with the grant application or 120 days after the effective date of the grant award. The Secretary of Energy has a maximum of 120 days after receiving a proposed EECS to approve or disapprove. If disapproved, a grantee may resubmit revised proposed strategy as many times as necessary.

In addition, there will be reporting requirements starting two years after funds are provided and annually after that on the status and implementation of the strategy and any assessments of the energy efficiency gains.

Disbursement of Funds

According to the program guidance, DOE will stage disbursements of EECBG funds, based on the size of a recipient’s award. With formula grants of up to $250,000, 100 percent of the allocation can be available at time of the award. No EECS is required prior to award, but the EECS must be submitted within 120 days. For awards above $250,000 but less than $2 million, applicants may receive up to $250,000 for development of the EECS and approved activities. If not submitted with the application, the EECS is required within 120 days of the effective date of the award. The balance of the allocation will be obligated upon DOE approval of the recipient’s EECS. For awards above $2 million, applicants may receive up to $250,000 at award for development of an EECS and approved activities, or 50 percent of the total allocation if an acceptable EECS has been submitted with the application and has been approved by DOE. The balance of funding will be obligated after one or more progress reviews in which the recipient must demonstrate that it has obligated funds appropriately, complied with reporting requirements and created jobs.

Program Principles

Finally, included in the program guidance document, is a list of nine core principles to guide grant recipients during the program and project planning process. They are: prioritize energy efficiency and conservations programs, link energy efficiency efforts to long'term priorities, invest funds in programs/projects that create and/or retain jobs and stimulate the economy, target programs/projects that will provide sustainable and measurable energy savings, give priority to programs/projects that leverage federal funds with other public and private resources, develop programs/strategies that will continue beyond the funding period, ensure oversight, transparency, and accountability for all program activities, enact policies that transform markets, increase investments, and support program goals, and develop comprehensive plans that benchmark current performance and set aggressive goals.

Competitive Grants Program

Up to $456 million of this funding is planned to be made available under a separate competitive solicitation for energy efficiency projects. That solicitation will be released at a later date. Further details of the energy block grant program are available on usmayors.org.