American Recovery and Reinvestment Act - Energy Efficiency and Conservation Block Grant (EECBG)
 
Program Description
New Jersey as whole will receive $75,468,200 in formula-based American Recovery and Reinvestment Act (ARRA) grants from the Department of Energy (U.S. DOE) under the Energy Efficiency and Conservation Block Grant (EECBG) Program.  Under the formula, 60% or $61,067,500 will go directly from U.S. DOE to 75 eligible units of local government.  The U.S. DOE defined an eligible unit of local government as cities and municipalities with a population of at least 35,000 and counties with a net population of at least 200,000.

The remaining 40% or $14,400,700 will go to the State through the State Energy Program (SEP) administered by the Board of Public Utilities.  Of the 40% set aside for the state to administer, at least 60% or $8,640,420 must be allocated to municipalities and counties that were ineligible for the direct federal grants.

The purpose of the EECBG program is to assist eligible entities in creating and implementing strategies to:

  • Reduce fossil fuel emissions in a manner that is environmentally sustainable and, to the maximum extent practicable, maximizes benefits for local and regional communities;
  • Reduce the total energy use of the eligible entities; and
  • Improve energy efficiency in the building sector, the transportation sector, and other appropriate sectors.

These stated purposes describe the overall intent of the EECBG program. Each eligible entity is required to use its allocated funds in a cost-effective manner that is of maximum benefit to the population of that entity and in a manner that will yield continuous energy efficiency and environmental benefits over time.  In keeping with the purpose of the ARRA to quickly invest in the economy, the U.S. DOE is requiring that entities obligate all funds within eighteen (18) months from the effective date of the award.

On March 26, 2009, U.S. DOE issued a funding opportunity announcement for the EECBG Program setting a filing deadline of June 25, 2009 for all eligible entities to submit their applications. As part of the announcement, U.S. DOE also issued a list of core principles to guide entities during the program and project planning process. The core principles include:

  • Prioritize energy efficiency and conservation first as that represents the  cheapest, cleanest, and fastest way to lower energy demand;
  • Maximize benefits over the longest time period possible;
  • Invest funds in programs and projects that create and/or retain jobs and stimulate the economy while meeting long term energy goals;
  • Target programs and projects that will provide substantial, sustainable and measurable energy savings, job creation and economic stimulus effects;
  • Give priority to programs and projects that leverage federal funds with other public and private resources;
  • To the extent possible, develop programs and 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.

In order to receive their allocated share of funds, states must submit an Energy Efficiency and Conservation Strategy (EECS) as part of their application to DOE.  The EECS shall:  1) address the process for providing sub-grants to units of local government that are not eligible for population formula-based grants; and 2) include a strategy for the state’s portion of funds received under the program. 

New Jeresey’s EECS for the funds is to allocate 71% or $10,240,000 of its $14,400,700 EECBG to local government entities that are not eligible for direct formula grants, and 29% or $4,160,700 to State government buildings and facilities.  By allocating 71% of the funds to local governments, each locality will be eligible for up to $20,000 in funding.

Energy Efficiency and Conservation Strategy (EECS)

Local Government Sub-grants - $10,240,000
Under the local government allocation, local governments will be able to participate in a sub-grant rebate program whereby local governments in New Jersey that do not qualify for direct grants from DOE can be eligible for a second-tier grant through the state.  In order to qualify, each applicant must first obtain an energy audit of at least one public building through the BPU’s Office of Clean Energy’s Local Government Energy Audit Program (LGEA Program).

This program, which was created in 2008, targets municipal and local government-owned facilities including offices, courtrooms, town halls, police and fire stations, sanitation buildings, transportation structures, schools and community centers. Funding for the LGEA program for municipalities and other local governments located within the service territory of at least one of NJ's public utilities is through the NJ Clean Energy Program.

Municipalities that are serviced by electric cooperatives or municipal electric utilities are currently not eligible for the LGEA Program. These non-investor owned utility ratepayers do not pay the Societal Benefit Charge (SBC) that funds the LGEA program. To remedy this,  the Board of Public Utilities is setting aside funds for energy audits for local governments served by electric cooperatives and municipal electric utilities in a separate application for SEP ARRA funding.

Thus, either by way of Clean Energy funds or by way of Recovery Act funds, every local government in the State will be eligible for the LGEA Program and the EECBG.  Paying for energy audits with monies outside of the Recovery Act will permit all Recovery dollars to be spent on actual energy efficiency upgrades.

Once local governments have fulfilled the eligibility requirement of the LGEA program, municipalities can apply to the BPU for the energy upgrades recommended in the audit up to $20,000.  Rebates will be issued to the participating municipalities upon the completion of the approved energy efficiency upgrades.

This initial funding period would be for one year from the date the State receives its first EECGB staged disbursement.  If all 501 municipalities and 11 counties eligible for EECBG funds from the state apply, New Jersey would disburse $10,240,000. In the event that after one year, all municipalities and counties have not applied, then the program would be open for repeat participation. The remaining funds would be available to all local and county governments including those that either failed to take advantage of the initial one-year eligibility period, or used the full amount of their initial  $20,000 rebate but require additional funding per the LGEA Program recommendations.

State Government Buildings and Facilities - $4,160,700
The remaining 29% of the EECBG funds would be used for energy efficiency, conservation measures, and building retrofit improvements to state government buildings and facilities consistent with the eligible activities set forth in the EECBG program guidance document. The funds would be allocated to the Office of Energy Savings within the New Jersey Department of Treasury. 

The Office of Energy Savings is charged with reducing state government’s energy consumption and lowering its energy costs.  It performs energy audits on state-operated buildings in order to identify opportunities for energy efficiencies.  It prioritizes the buildings that consume the greatest amount of energy first, and makes capital investments to those facilities.  Its current annual budget is $10 million dollars.

Candidates include any building owned by the Treasury Department; for example, state-run medical facilities, prisons, and office buildings.

Based on their energy audits, the Office of Energy Savings will prioritize projects that maximize the following:

  • The number of jobs created;
  • Project readiness;
  • Expected savings in energy costs; 
  • Expected annual energy reductions;
  • The amount of greenhouse gas emission reductions; and
  • The public benefit of the improvements.

Successful implementation of the proposed strategy (both the sub-grants to local governments and direct funding to State facilities and buildings) will not only help achieve the goals and objectives of the EECBG program, but will also help implement the Energy Master Plan (EMP) strategy for energy savings under a whole building approach.  The EMP’s whole building approach is designed not only to maximize energy conservation and efficiency, but also reduce peak electricity demand and reduce GHG emissions.  The Office of Energy Savings will make publicly available the list of projects funded through this program.

BPU Assistance to EECBG Direct Recipients
The BPU team has prepared a guidance document intended to assist the 75 local government direct recipients. Given the June 25 application deadline as well as feedback from local governments that BPU staff has received, this document is an important tool. It is being offered only in an advisory context, since the U.S. DOE reviews and approves the direct-grant applications, not the State. The guidance document contains deadlines, useful websites, and important steps in the application process. It also contains a suggested Energy Efficiency and Conservation Strategy focused on improving the energy efficiency of local government buildings.  Applicants can include this in their application if they so choose.  This will help simplify the process for applicants not accustomed to the application process.  While the EECBG guidelines allow 14 different types of energy efficiency and renewable energy activities, the BPU wishes to encourage direct-grant local governments to focus on energy efficiency  in buildings because this is the most effective means to quickly reduce energy consumption and create jobs.

BPU staff will be conducting a series of application assistance sessions in Trenton, Newark, and New Brunswick during the month of June for those municipalities preparing applications.