On July 6 the U.S. Department of Energy (“DOE”) opened the application window for Tribes and States to apply for $2.3 billion in federal grants for strengthening and modernizing their electric grid infrastructure through the Preventing Outages and Enhancing the Resilience of the Electric Grid program (the “Program”). The Program’s funding—which was appropriated as part of the bipartisan Infrastructure Investment and Jobs Act (“IIJA”) passed in November of 2021—can be used by Tribes on their own or through sub-grants to certain eligible entities for measures that reduce the likelihood and consequences of blackouts due to extreme weather, wildfires, or natural disasters. The Program offers Tribes a unique opportunity to upgrade their electric grid infrastructure in the face of climate change-exacerbated extreme weather events that have made electric service increasingly unreliable.
The Program
For the fiscal years 2022 through 2026 DOE is to award the $2.3 billion ($459 million annually) to States and Tribes based on an allocation formula outlined in IIJA and refined by DOE. The allocation formula takes into account factors such as population, land area, electricity customers per mileage of power lines, probability of extreme weather events for the Tribe or State, and other recent expenditures aimed at reducing blackouts. For fiscal year 2023, Tribes have been allocated in excess of $82 million with each eligible Tribe receiving a certain sub-allocation amount. Tribes must submit a Program application annually for the funds and commit to matching 15% of any funds received. The Tribe may use the funds it receives from the Program to either carry out a project that improves the resiliency of the electric grid for its members on its own or enter into a sub-grant agreement with an eligible entity (e.g., an electric generation, transmission, distribution, storage owner or operator) that will do so. The eligible entity receiving the sub-grant is required—with the exception of certain small utilities—to provide a 100% match for any Program funds it receives.
Eligible Projects
Program funds can be used for any activities, technologies, equipment, or grid hardening measures that reduce either the likelihood or consequences of electric grid disruptions. IIJA provided a number of examples of the projects that would be eligible to receive Program funds, including the undergrounding of electrical equipment, utility pole management, relocation or reconductoring of power lines, vegetation management, grid monitoring or control technologies, and the hardening of power lines, substations, or other grid facilities. Perhaps most significantly, IIJA included in the list of its funding examples the use or construction of distributed energy resources like microgrids or battery-storage sub-components. Use of Program funds for new electric generating facilities or cybersecurity is expressly prohibited by the IIJA.
Application Process
The central component of the application is a narrative description that covers, among other things, (i) the primary objectives and criteria that the Tribe intends to apply for distributing or using Program funds; (ii) how the funds will be used to create quality jobs, generate the greatest community benefit, and support the Biden administration’s equity, environmental, and energy justice commitments; (iii) the process by which a Tribe will solicit public comment and feedback; (iv) a completed environmental questionnaire; and (v) a Tribal council resolution or similar document demonstrating authorization to apply for the Program funding. Although the application should include a description of the proposed distribution for the funding and categories of sub-grant recipients, it should not contain specific information regarding projects the Tribe intends to provide a sub-grant to. Priority will be given to applications which will provide the greatest community benefit (whether rural or urban) in reducing the likelihood and consequences of disruptive events to the electric grid.
Tribes looking to enhance the safety and reliability of the electric service provided to their members through the Program must submit an application and complete other Program registration requirements on or before September 30, 2022.