More Funding Opportunity Announcements for Smart Grid
Apr 21, 2009 - Stoel Rives, LLP
The American Recovery and Reinvestment Act ("ARRA") provides $4.5 billion to the Department of Energy's ("DOE") Office of Electricity Delivery and Energy Reliability ("OED") to be used in upgrading and modernizing the nation's electricity grid. The funds are intended to be used in, among other things, research and development of technologies that improve the delivery of electricity, including distributed energy (small-scale and modular devices designed to provide electricity to locations close to consumers), energy storage to help balance electricity output with demand (important to the integration of inconsistent energy sources such as wind and solar) and other smart grid technologies.
Recently, the DOE released a Notice of Intent for the DOE Smart Grid Investment Grant Program (the "SGIG Program") as well as a highly anticipated draft Funding Opportunity Announcement ("FOA") from the Department for a smart grid regional demonstration initiative (AS NOTED IN OUR March 6, 2009 Client Alert). The SGIG Program will receive $3.375 billion of the total $4.5 billion available to the OED to provide grants for smart grid technology deployments and grid monitoring devices.
The SGIG Program
The SGIG Program was created by the Energy Independence and Security Act of 2007 and modified by ARRA. The purpose of the SGIG Program is to stimulate the rapid deployment and integration of the technology required to upgrade the nation's electricity delivery systems.
The SGIG Program will divide the funds between smart grid deployment grants and projects that deploy "Phasor Measurement Unit" ("PMU") technology. PMU technology is a monitoring system within the transmission system infrastructure that provides measurements and data in real-time, allowing operators to create a more reliable supply. Between $500,000 and $20 million will be provided to cover up to 50% of electric utilities' and other entities' investments in smart grid deployment projects and between $100,000 and $5 million will be allocated to fund 50% of the cost of projects that promote the development of PMU technology.
A competitive, merit-based process will be used to select qualified projects. The DOE will separate out applications into the smart grid or PMU category. Applications should indicate into which category the project fits, and describe how the project supports or advances smart grid functions. A "smart grid function" is one that can develop, measure, store, send, receive, analyze and react to digital information concerning the usage, pricing, storage, and availability of electricity through a number of devices and technologies, including PMU technology. Applications should include a description of how the information from the funded technology will be utilized and by whom, the estimated costs (broken down according to whether funds for those costs will come from the grant or from non-government sources), an estimate of the cost savings (including calculations), the jobs (temporary and permanent) created by the project, and a description of the project's effect on cyber-security issues. The DOE will identify and describe other application requirements in the formal FOA depending on whether the project fits into the smart grid or PMU category.
Eligible applicants include electric utilities (investor-owned and municipal), rural electric cooperatives, load serving entities or entities providing distribution services, distributors of electricity directly to the public, system operators, installers, and manufacturers of equipment enabling smart grid technology. If the applicant is a government entity (state or local), local government officials will be required to certify the project description, cost and other issues.
The DOE's review criteria include the feasibility of the project, its anticipated impact on the local grid, job creation and retention and the extent of the cost-share — applicants must provide at least 50% of the project cost. The DOE reserves the right to apply additional review criteria. The DOE anticipates issuing the FOA on June 17, 2009, which will contain application instructions and detailed information about the funding requirements. The final program structure will depend on feedback submitted to the DOE during the 20-day public comment period on the Notice of Intent. All of the funds will likely be allocated by September 30, 2010. Applications may be made on or before the following dates: July 29, 2009, December 2, 2009 and March 31, 2010, but the DOE cautions that that the funds may be used up on the first tranche of applications.
Successful applicants will be required to comply with quarterly reporting requirements. By accepting the grant, the project's records are open to governmental scrutiny.
Smart Grid Demonstration Initiative
The purpose of the Smart Grid Demonstration Initiative is to demonstrate the efficacy of the project technology in meeting electricity demand, improving energy efficiency and increasing grid reliability. The DOE recently announced a draft FOA for three types of smart grid demonstration projects:
Each demonstration project must be carried out in collaboration with the electric utility that owns the grid facilities. Successful applicants will include on their applications products and services suppliers, end users, and state and municipal governments. The projects require a cost share of at least 50% non-federal funds.
Interested applicants should submit questions regarding the draft FOA via FedConnect at https://www.fedconnect.net/FedConnect/ by May 6, 2009. The DOE will subsequently issue a FINAL version of this FOA that will identify the due date for formal applications.
If you have questions on any of these programs or other ARRA issues, or would like to discuss submitting an application for DOE funds, please contact: