May 16, 2023 | SWEEP Federal Funding Implementation Coordinators
Money from the Bipartisan Infrastructure Law (BIL) is starting to roll out to local governments. We’re very excited that the law renewed funding for the Energy Efficiency and Conservation Block Grant (EECBG) program, first launched in the aftermath of the 2008 financial crisis. From 2009 to 2015, this program:
- Saved more than 400 million MMBtu worth of energy;
- Created more than 60,000 jobs;
- Prevented more than 25 million metric tons of carbon dioxide pollution, providing a climate protection value exceeding $1.7 billion; and
- Saved consumers more than $5 billion on their energy bills.
The first round of money from the new era of this program will be allocated by formula to local governments with a population of at least 35,000. To access the money, these governments need to submit a pre-award information sheet to the Department of Energy by July 31, 2023.
The Southwest Energy Efficiency Project (SWEEP) teamed up with Rocky Mountain Institute (RMI) to draft and send a letter to these local governments to encourage them to participate in the program, and to urge them to use these dollars in a way that will help maximize the efficiency, consumer savings and climate benefits of the much larger pools of money available through the Inflation Reduction Act (IRA).
See a generic version of this letter below. (Note that this version of the letter does not necessarily take into account state laws that may limit the applicability of the ideas we suggest.)
Thanks to the Bipartisan Infrastructure Law (BIL), local governments are eligible to receive federal funds from the U.S. Department of Energy (DOE) as part of the Energy Efficiency and Conservation Block Grant (EECBG) Program.
This funding is an excellent opportunity to help residents and businesses save money on energy bills and transportation costs, while also reducing pollution. Additionally, this funding can be used to plan for and unlock greater benefits from much larger pools of money available through other parts of the BIL and the Inflation Reduction Act (IRA).
We are writing to urge you to apply for this funding and to suggest a few ideas below for how you might use the money to maximize the benefits available for government operations, taxpayers, and your community at large. When planning how to use EECBG funds, please:
- Lead by example by choosing projects that will reduce energy use, save money, cut pollution via vehicle and building electrification, and align well with the larger programs in the IRA.
- Showcase the energy efficiency work you are doing to help the public understand the benefits of improving building performance and electrifying vehicles;
- Educate local residents and businesses about available opportunities to pursue their own energy efficiency projects and access federal support; and
- Consider adopting additional policies that will help drive efficiency upgrades and pull in state and federal support, such as strengthening building energy codes.
If you have any questions about this funding or about these project ideas, please contact us.
Applications for EECBG funding are open and available now. All eligible applicants must submit a Pre-Award Information Sheet by
April 28, 2023 July 31, 2023 (new deadline), with full applications due by January 31, 2024. The DOE has put together templates and instructions for applications, and the agency is offering streamlined reporting and management for smaller governments eligible for less than $250,000 by allowing those entities to apply for vouchers.
As part of the full application, each recipient must submit an Energy Efficiency and Conservation Strategy (EECS). The strategy needs to describe goals for increasing energy efficiency and conservation and outline a plan for achieving those goals. As an option, local governments may use a streamlined EECS Template provided by DOE. Alternatively, if your office has not developed such a strategy yet, EECBG funding can be used to fund that work.
The EECBG program allows eligible entities to team up with peers to carry out larger projects across a wider area. Teams of local governments can submit a single joint application to DOE to reduce the administrative burden. You can find a list of other local governments in your area eligible for EECBG funding on the DOE Application Hub.
EECBG funds are relatively limited compared to other programs in the BIL and IRA that are also targeted at improving energy efficiency and reducing pollution. Formula awards range between $75,000 and $1.3 million per local government. Eligible uses of the money include a wide variety of potential projects, including energy efficiency planning; improving the efficiency performance of government buildings, vehicle fleets, or transportation systems; and/or driving efficiency improvements in the wider community.
We encourage you to think about this award not as a one-off pot of money to spend on a discrete project but instead as an opportunity to maximize the impact of the much, much larger energy efficiency programs that the IRA made available, including:
- The 25C and 45L Tax Credits for home energy efficiency and electrification improvements or highly efficient new home construction, which are available now in unlimited quantity;
- The 179D Energy Efficient Commercial Buildings tax deduction also available now in uncapped quantity;
- Tax credits for personal and commercial electric vehicles and charging infrastructure, available now, subject to eligibility requirements but in uncapped quantity; and
- Almost $9 billion for Home Efficiency Rebates and Home Electrification and Appliance Rebates, which will likely roll out in each state toward the end of this year or in early 2024.
Many of these larger programs require residents and local businesses to proactively decide to make energy-efficiency upgrades at their homes, offices, facilities or in their vehicle fleets. Therefore, there is an essential role for local governments to drive participation and thereby pull larger amounts of federal funding — and larger benefits — into your community. Ideally, EECBG funds can help you implement a comprehensive plan to drive building and transportation electrification and efficiency improvements in your community, looking out across the entire decade that most IRA programs will be available.
POTENTIAL PROJECT IDEAS
With that higher purpose in mind, here are a few suggested projects that EECBG awards could fund. The DOE plans to offer project blueprints with expedited application reviews for each of these topics, which offer meaningful potential benefits.
- Fund building energy assessments, audits, and energy efficiency or electrification upgrades in local government buildings, schools, or public housing. This type of program can significantly reduce operating costs for government buildings (and in turn, taxpayers). Investing in efficient heating and cooling, improved air filtration, and on-site renewable energy plus battery storage can also improve air quality, health, and resilience in schools, community centers, and other buildings that can act as community hubs during emergencies.
- Procure an energy performance contractor to improve the energy efficiency of local government buildings or schools. Energy performance contracting is an innovative financing technique that uses the savings from lower energy use to repay the cost of installing the upgrades. Normally offered by private Energy Service Companies, this innovative financing technique allows building users to achieve energy savings without upfront capital expenses. Energy performance contracting would allow the federal money to go further, by creating a lasting program to reduce energy usage in municipal buildings. EECBG funding can help with the administrative and legal costs of procuring a contractor.
- Provide funding to existing entities providing energy efficiency or electrification to income-qualified households in your community. Through utility-run and federally-funded programs there are likely already programs in your community aimed at improving the energy efficiency of housing for income-qualified households. However, these funds are often limited in their use by strict federal requirements (for example, many only focus on heating and not cooling, and many don’t prioritize electrification). EECBG funds could be used to augment these existing programs to support electrification or improvements in energy efficiency. By partnering with utilities, state energy offices, or other community groups already in this space, local governments can put EECBG funds to use quickly with limited need for additional planning. By working with entities that provide job training, this approach could also provide workforce development co-benefits. (See the resources section at the end of this letter if you need help identifying potential partners.)
- Adopt updated building energy codes or ordinances to drive higher levels of building energy efficiency in new construction and significant retrofits across the community. EECBG funds can be used to help develop and implement building energy codes, including funding public input processes, task forces, cost analyses, and options exploration. These funds can also be used to explore and develop additional codes that can be layered on top of more standard building energy codes, like solar-ready, electric-vehicle (EV)-ready, electrification, or an existing buildings policy. Adopting more robust policies could greatly magnify the impact of federal funding by ensuring new construction is automatically built to a higher standard, leaving more money available for building energy retrofits in alignment with the Home Efficiency Rebates, Home Electrification and Appliance Rebates, and building efficiency tax credits in the IRA. For example, Crested Butte, Colorado set a new building energy code requiring new homes and buildings to be fossil-fuel-free. Other local governments like Denver and Louisville included energy code amendments requiring electrification of just space and water heating in new buildings. Or, for example, the cities of Tucson and Scottsdale adopted EV-ready building codes to ensure that buildings have proper wiring to support EV adoption. Your state may receive funding through the Bipartisan Infrastructure Law and DOE to support building code implementation.
- Develop and implement a Benchmarking and/or Building Performance Standard program. These policies, aimed at improving the efficiency of existing commercial and multifamily buildings, first require these larger buildings to measure how much energy their buildings are using in comparison to similar buildings (“benchmarking”), then set reduction goals based on building type, starting points, end goals, etc. These programs use the free and widely-used Energy Star Portfolio Manager as the base software. EECBG funding can be used to design and stand up benchmarking and building performance standards programs or to provide technical assistance to building owners and operators for benchmarking and/or building performance standard compliance, with an emphasis on assistance for affordable housing and other buildings that serve low-income and overburdened communities.
- Train local businesses to drive increased participation in key IRA programs. For example, a team of local governments in a region could collaborate to create a training program for heating and cooling businesses, setting them up to market and install IRA rebate-eligible appliances, including heat pumps and heat-pump water heaters. Training programs could specifically support the development of businesses owned by women, veterans, and people of color to increase diversity and inclusion in the clean technology workforce. (For example, see ICAST projects in Denver, CO and Santa Fe, NM.)
- Accelerate switching municipal fleets to EVs. EECBG funds can be used to develop a fleet replacement plan, conduct cost assessments, or to purchase and install EVs and charging equipment. All of these activities can help you accelerate the transition to EVs for municipal operations. (For example, see this case study of Austin, TX.)
Incorporate the work you choose into a broader communication campaign designed to inspire local residents and businesses to pursue their own energy efficiency projects. Whatever projects you choose, use the work in a communications effort designed to help local residents and businesses understand the available benefits, and how they could execute similar projects supported by federal funds. (For example, see the Love Electric campaign put together by a coalition of local governments and utilities in Colorado, at loveelectric.org, which includes case studies of residential and local government building electrification projects.) EECBG funds can be used for public education about energy efficiency opportunities, in alignment with your broader efficiency and conservation strategy.
PROJECTS TO AVOID
EECBG program funds can be used for various activities that offer efficiency or conservation benefits, but do not necessarily align with the larger incentives of the IRA or with the need to reduce fossil fuel consumption and associated climate-changing pollution. For example, synchronization of traffic signals is an eligible use of funds, but this measure — and similar measures that primarily benefit the flow of vehicular traffic without increasing vehicle occupancy, could actually induce more traffic and increase pollution. For another example, EECBG funds could be used to purchase natural gas-fueled vehicles or fueling infrastructure. However, even if gas eventually comes from non-fossil sources like hydrogen, full decarbonization of the transportation sector will require vehicle electrification. EECBG funds would be better used to open the door to more widespread deployment of electric vehicles across the community. Likewise, we recommend avoiding using EECBG funds to subsidize continued fossil fuel consumption in buildings. As new appliances typically last decades, using EECBG funds to accelerate the deployment of electric equipment can maximize pollution reduction benefits. We recommend that you focus EECBG funds on projects with the highest potential to scale and deliver long-term value.
ENSURING EQUITABLE BENEFITS
The EECBG program is subject to the Biden Administration’s Justice40 executive order, which directs federal agencies to ensure that 40 percent of the benefits of federal spending flow to historically disadvantaged populations. We encourage you to consciously design programs aimed at reducing costs, cutting pollution, and creating jobs for and within low-income and underserved communities in your jurisdiction. Additionally, we encourage you to engage community-based organizations in project design and implementation, as applicable. If needed, the federal government provides mapping tools to identify disadvantaged communities. Further guidance on Justice40 implementation from DOE is available at this link.
Make sure to submit your pre-award information sheet to DOE by July 31, 2023. to reserve your formula allocation from the EECBG program if you have not already done so. We encourage you to have conversations about the possibility of teaming up with other EECBG recipients in your region to coordinate your efforts to prepare to maximize the value of the many additional grants and incentives in the BIL and IRA. EECBG funds are an excellent opportunity to advance efficiency and electrification within government operations while planning to scale these efforts across your community.
Elise Jones, Executive Director
Laila Atalla, Senior Associate
- The EECBG hub page offers resources for learning about and applying for the program.
- Full application instructions, including a list of projects DOE intends to provide blueprints for, are at this link.
- DOE provides webinars and recordings that are open to the public.
- DOE has dedicated email inbox for questions which they aim to respond to within a week’s time: firstname.lastname@example.org.
- DOE offers bi-weekly office hours, Fridays at 1 PM Eastern.
- Outside organizations, including the Urban Sustainability Directors Network, Climate Mayors, Local Governments for Sustainability, or the Infrastructure Hub, offer technical assistance for local governments.
- Environmental Protection Network provides pro bono technical assistance to disadvantaged communities, NGOs, and under-resourced state/local/tribal government agencies.
- To find state agencies and non-governmental partners providing energy efficiency or electrification to income-qualified households in your community, use the following links for Arizona, Colorado, Nevada, and New Mexico.
- Building code resources/toolkit materials