IIJA Funding for Electricity Sector

Infrastructure and Jobs Act (IIJA) — Funding for the Electricity Transmission and Distribution Sector

March 14, 2023

The $1.2 trillion spending package in the Infrastructure Investment and Jobs Act (IIJA or BIL) includes development funding for transportation, broadband access, clean water, and energy. There are several electric grid renewal programs, applicable to the electric utility sector, and the Department of Energy (DOE) is now clarifying how the grants will be administered, and which state agencies will be responsible at the state level.

The Building a Better Grid Initiative coordinates IIJA grid renewal funding with previously enacted DOE funding. The initiative is administered by the DOE’s new Grid Deployment Office (GDO), and aims to improve and expand the nation’s electric grid.

The Building a Better Grid Initiative will support resilience, reliability, and decarbonization, with a focus on long-term national planning; research, studies, and analysis; investment and financing models; coordination; and improved permitting processes. The individual grants are relevant to both transmission and distribution utilities. (Visit the Building a Better Grid Initiative program website here, as well as the GDO Funding Opportunities and Program Conductor websites.)

1. GRIP

Within the Building a Better Grid Initiative, three programs are grouped together to form the Grid Resilience and Innovation Partnerships, GRIP, with combined resources of $10.5 billion over five years. The grouped programs are aligned to be administered and funded together, although they still retain their separate objectives and identities.

GRIP’s aim is to quickly improve the reliability of our power transmission and distribution infrastructure so that all American communities have access to affordable, reliable, clean electricity anytime, anywhere. Visit the GRIP website here, and find a GRIP Fact Sheet and an informative Webinar video at these links.

The following three programs make up GRIP

1.1 Grid Resilience Utility & Industry Grants

The Preventing Outages and Enhancing the Resilience of the Electric Grid Program (also called the Hazard Hardening or Grid Hardening Program) has two subparts, (c) and (d). An entity may not apply to both subparts in one year. Only (c) is part of GRIP.

Program Name: Grid Resilience Utility and Industry Grants, also known as the Grid Resilience Competitive Grants Program, or Grants to Eligible Entities, or Competitive Utility/Industry Grid Resilience Grants
Program Number: 40101(c)
Funding: $2.5 billion over five years.
Eligible entities: Electric grid operators, electricity storage operators, electricity generators, transmission owners or operators, distribution providers, fuel suppliers, and others, including entity team collaborations
Description: For supplemental hardening activities to reduce the risk of power lines causing wildfires, and to reduce the threat to the electric grid of extreme weather, wildfires, and natural disasters. Projects must address at least three of the project types, which are listed in the Grid Resilience Utility and Industry Grants fact sheet. This program is specifically focused on distribution

GRIP Status Update

GRIP is gathering momentum. After the recent issue of the RFI, the FOAs for the f irst round of funding were released on 18 November, 2022. The first step in the application process is the submission of concept papers. The DOE will respond to the concept papers in January and February 2023, and selected projects will be invited to submit full proposals, due between March and May 2023. Awards will be made in 2023, for the Concept papers are due on: combined 2022 and 2023 financial years.

December 16, 2022 for the Grid Resilience Utility and Industry Grants (More info here.) and Smart Grid Grants. (More info here.)
January 13, 2023 for the Grid Innovation Program. (More info here.)

1.2 Grid Innovation Program

Program Name: Grid Innovation Program, also known as the Innovation Resilience Grants Program, or the Program Upgrading Our Electric Grid and Ensuring Reliability and Resiliency.
Program Number: 40103(b)
Funding: $5 billion over five years in competitive financial assistance
Eligible entities: States, local governments, tribes, and public utility commissions, including teams formed with electric utilities and other entities
Description: To support electric sector owners and operators with projects that demonstrate innovative approaches to hardening and enhancing the resilience and reliability of transmission, storage, and distribution infrastructure. This program is specifically aimed at both transmission and distribution systems. Grid Innovation Program fact sheet

1.3 Smart Grid Grants

Program Name: Smart Grid Grants, also known as Deployment of Technologies to Increase Capacity and Enhance Flexibility of the Existing Grid.
Program Number: 40107
Funding: $3 billion over five years in matching grants. Part of the Smart Grid Investment Matching Grant Program.
Eligible entities: Higher education institutions, for-profit and non-profit entities, state and local governmental entities, tribal nations, and entity team collaborations.
Description: Focuses on advanced grid technologies which increase transmission system capacity, prevent faults that lead to wildfires, integrate renewable energy transmission and distribution, and integrate electrified vehicles. It is hoped that smart grid technologies funded in this program will then be adopted by the wider market. This program is for both transmission and distribution. Smart Grid Grant fact sheet

2. Stand-Alone Programs — Not Part of GRIP

2.1 Smart Grid Grants

This is the second part of the Preventing Outages and Enhancing the Resilience of the Electric Grid Program, also known as Hazard Hardening or Grid Hardening Program, mentioned above.

Program Name: Grid Resilience Formula Grants Program, also known as Grants to States and Indian Tribes.
Program Number: 40101(d)
Funding: $2.5 billion over five years, distributed to states, tribal nations, and territories based on a formula. The grants will then be sub-granted to business entities in the energy sector, towards specific projects. View the full funding distribution per entity per year here.
Eligible entities: Electric grid operators, electricity storage operators, electricity generators, transmission owners or operators, distribution providers, fuel suppliers, and others.
Description: For supplemental hardening activities to reduce the risk of power lines causing wildfires, and to reduce the threat to the electric grid of extreme weather, wildfires, and natural disasters. Visit the Formula Grant website here.

Formula Grants Status Update

This program is now open for states to submit their application documentation. The deadline for submissions was extended from 30 September 2022 to the new date of 31 March 2023. When the extension was announced, many states had already planned — or already held — their information sessions and were well advanced with their program narratives. The DOE has clarified that, if a state is ready, applications may be submitted at any time prior to the new deadline. Applications will be processed when they are received, and grants may be awarded before the deadline date. This means that states may keep to their previously announced schedules and will not automatically extend their own deadlines.

Stakeholders in the industry should find out how their state’s program narrative works, including the criteria and methods for awarding sub-grants, and the dates of public hearings. It is advisable for stakeholders in the energy sector to attend these hearings, which are often held virtually.

SGS has been gathering information for each state, including which department or entity is responsible for the state’s application, contact emails, and useful resources. We would be happy to share this with our sector partners; Please contact us. info@smartgridsolutions.com

2.2 Energy Improvement in Rural and Remote Areas (ERA)

Program Name: Energy Improvement in Rural and Remote Areas
Program Number: 40103(c)
Funding: $1 billion over five years — grant, cooperative agreement, or other.
Eligible entities: Local governments, utilities, private sector project developers, and others.
Description: Competitive grants to improve resilience, safety, reliability, availability, and environmental performance of rural and remote energy systems in small cities, towns, and unincorporated areas with fewer than 10,000 people.
Eligible uses: Include improving the cost- effectiveness of energy generation, transmission, or distribution systems; siting or upgrading transmission and distribution lines; reducing greenhouse gas emissions; providing or modernizing electric generation facilities; developing microgrids; and increasing energy efficiency.

2.3 Transmission Facilitation Program

Program Name: Transmission Facilitation Program
Program Number: 40106
Funding: $2.5 billion revolving fund.
Eligible entities: Transmission developers.
Description: To facilitate the construction of high-capacity new, replacement, or upgraded transmission lines, including high-level assistance with the required permits.
Status Update: The first request for proposals was released 18 Nov 2022, and aims to offer capacity contracts to late-stage projects, to increase investor confidence and reduce the risk of under-sizing future transmission projects. The submission deadline for the first phase is February 1, 2023. Find more information on the Transmission Facilitation Program web page.

2.4 Existing DOE Loan Programs

Existing DOE loan programs for large-scale energy infrastructure projects are also included in the Building a Better Grid Initiative program. These are programs offering flexible financing and expertise in energy infrastructure project development for investments in long-distance transmission projects.