State Strives to Increase Its Share of Fed Stimulus Pie

Lawmakers and their consultants bedecked in apparel of various shades of green on Saint Patrick’s Day quizzed state energy agency, utility, and city representatives about their plans for reaping and spending billions of federal stimulus greenbacks to advance green jobs, green power, and energy efficiency in California. The Obama Administration approved giving the state $412 million at the end of last week. Of that, $226 million is to go to the California Energy Commission for energy efficiency and renewables. The rest of the money is to be spent on making low-income homes more efficient via weatherization programs. The agency and other entities hope to access hundreds of million more dollars allocated by the American Recovery and Reinvestment Act to create jobs and a cleaner and stronger economy. Tapping into the federal stimulus money “is nothing short of a chance in a lifetime,” said Senator Alex Padilla (D-Pacoima), chair of the Senate Energy, Utilities & Communications Committee. The large pots of federal money allocated for clean energy and green jobs must be committed before September 2010. State legislation to grow the renewable mandate from 20 percent to 33 percent, passed by the Senate energy committee last month and the Senate Appropriations Committee March 16, “is not the only pressing issue before us,” Padilla sporting a dark green tie said March 17. It is imperative, he added, not only to create jobs but quality jobs, given that 1.8 million Californians are without work. Legislators sought assurances from the energy agencies receiving federal money that they would be kept in the loop about how it is spent, and assurances there would be checks and balances to avoid wasteful spending. California Energy Commission chair Karen Douglas said her agency’s top priority for federally-funded projects was job creation, followed by promoting energy efficiency and renewable projects that “achieve lasting, measurable benefits.” The commission also hopes to use federal funds to support efficiency programs targeting struggling Californians who are in the bottom half of the middle-income bracket. In addition to $226 million, the CEC hopes to be a contender for funding from other federal funds (see story below). However, federal program regulations and guidelines are being formulated for other funding. The $185.8 million in weatherization funding for low-income residences, which includes weather stripping, caulking, insulation, and other upgrades, is expected to boost agency staffing needs and outside jobs. The funds will go to the state Department of Community Services and Development, which partners with 44 entities. The federal award represents a 30-fold increase in weatherization funding. It is expected to create about 100,000 jobs, said Lloyd Throne, department director. Weatherization reduces the typical home energy bill by $418 a year, he added. Assemblymember Felipe Fuentes (D-Sylmar), chair of the Assembly Utilities & Commerce Committee who wore a light green tie, applauded the boost in weatherization projects. The federal stimulus package also allocates $4.5 billion for regional and utility scale “smart grid” projects. Like the Department of Energy’s stimulus funding efficiency projects, program definitions and eligibility are under development. “It is a bit of a black hole,” said CPUC member Rachelle Chong, referring to the absence of federal funding guidelines. State regulators plan to hold a March 27 workshop to strategize on how to maximize funding for grid modernization projects. What a “smart grid” means remains unknown. Chong noted the term generally refers to communication devices that allow one- and two-way communication between the high voltage lines, the utility, and businesses or homeowners. Struggling renewable developers hope federal money will get their financially-challenged projects off the ground. A key program is the one allowing the renewable federal tax credit to be converted into a rebate covering 30 percent of a project’s costs because tax equity is worth little in the economic downturn. According to the CPUC, nearly 4,000 MW of wind, solar and other renewable deals between developers and investor-owned utilities have insufficient or no financing. Entities must apply for federal funds, which will be disbursed in partial payments for qualified projects as they progress through permitting and construction. Thus, expedited project permitting for large solar installations is critical to tapping into funding, Joshua Bar Lev, vice president of BrightSource Energy and the Large Scale Solar Association, told the committee Investor-owned utilities also hope to reap some of the federal largesse to advance their smart grid, renewable energy, electric vehicle, and alternative fuel projects. Padilla insisted that federal funds the investor-owned utilities receive reduce the cost of the renewable energy. In another funding development of interest to the state’s utilities, President Barack Obama while visiting Southern California Edison’s Electric Vehicle Center March 19 announced $2.4 billion in funding for producing next generation plug-in hybrid electric vehicles and advancing battery components for the vehicles. Under the funding program, the Department of Energy is offering up to $1.5 billion in grants to U.S.-based manufacturers to produce these highly efficient batteries and their components. It is offering another $500 million in grants to U.S.-based manufacturers to produce other components needed for electric vehicles, such as electric motors and other components. The department is offering up to $400 million to demonstrate and evaluate Plug-In Hybrids and other electric infrastructure concepts--like truck stop charging stations, electric rail, and training for technicians to build and repair electric vehicles.

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State Strives to Increase Its Share of Fed Stimulus Pie

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