The bipartisan Infrastructure Investment and Jobs Act will create major opportunities across the economy for investment in a wide range of energy, sustainability, and climate projects. I recently interviewed Abby Finis, senior program manager for GPI’s Communities Program, about lessons learned from how federal energy and climate funding was spent at the local level during the 2009 stimulus bill. Finis discusses what is different a decade later in terms of local government expertise and leadership on energy and climate solutions, and how that could be leveraged in the new infrastructure funding.
From 2009–2013, Finis was a program administrator for the Minnesota Department of Commerce Division of Energy Resources. In her role, she primarily focused on assisting local governments with grant funding from the 2009 stimulus bill, the American Recovery and Reinvestment Act (ARRA).
Here are two key takeaways from our conversation:
- Cities and local governments have emerged as leaders on energy and climate solutions in the years since ARRA.
- Flexibility in federal infrastructure funding will enable local entities to drive innovation and implementation on energy and climate.
When you worked at the Minnesota Department of Commerce during the ARRA rollout, what was your role?
I started working at the Minnesota Department of Commerce in what is now called the Division of Energy Resources in 2009. The state had just received federal funding through ARRA to stimulate the economy and pull us out of the recession. My role was to administer grants to local governments for clean energy and energy efficiency projects. Those were aimed at improving the efficiency in public buildings through lighting upgrades, envelope improvements, HVAC replacements, installing building controls, etc.
How was the ARRA funding allocated to local governments?
ARRA funding was allocated either through formula grants where counties and cities of a certain size received direct funding from the federal government or through competitive grants. States also received funding that was dedicated to different programs, like the Energy Efficiency and Conservation Block Grants (EECBG) and the State Energy Program (SEP), weatherization, and others. In Minnesota and other states, the legislature determined the final allocation of how the funding would be spent. Of course, this funding was within the parameters set by the federal government, and recipients had to follow all federal requirements.
The Minnesota Department of Commerce administered most of the energy funds. I worked to administer the EECBG and SEP dollars. That meant developing and issuing requests for proposals. Eligible entities would respond with applications to fund projects that fit within the scope. Then, I would work with the entities to issue, process, and monitor the use of grant funding.
What types of projects were funded at the local level?
There were a couple of grant rounds that had similar eligible projects. This included efficiency improvements that I mentioned, as well as some feasibility studies for district heating systems, county energy plans, and appliance upgrades.
A couple projects that still stand out to me include one in Franklin, Minnesota, where the city installed a mini district heating system fueled by wood pellets. It met the heating needs of the city hall, fire station, and municipal liquor store. Another was in Clearbrook, way up in northwestern Minnesota, where the city clerk led the application effort and oversaw the project that added insulation to the walls and roof of a municipal building. She used the state benchmarking tool to show the dramatic decrease in costs and energy use resulting from that improvement. It really underscores the massive opportunity that exists for deeper energy efficiency and that even the smallest communities can make a difference.
One area that was quite new was the switch to LED bulbs and fixtures. At that time, the payback was usually under two years to switch to LEDs, but there was some concern about performance, especially for streetlights and traffic signals. The Minnesota Department of Transportation hadn’t issued guidance on the illumination levels for particular road types and was reluctant to approve streetlight applications. There were other concerns that traffic signals with LEDs wouldn’t get warm enough to melt the snow and could cause visibility issues. Of course, LED streetlights are ubiquitous now. If you haven’t updated your streetlights or any other lights to high-efficiency lighting for that matter, you’re wasting money.
Were states and local governments prepared to take advantage of the ARRA funding in a way that made the biggest impact?
The toughest aspect for public entities and contractors was probably navigating the federal requirements that came with the funding. This was a massive amount of funding at the time and the largest investment in energy efficiency and clean energy. Minnesota has, of course, had long-standing efficiency programs, so we were prepared to know what to implement. We were maybe less prepared for the amount of funding and how to treat emerging technologies, like solar.
For the most part, local governments were familiar with projects like boiler replacements, envelope improvements, etc. — they just didn’t have the capital budgets to make those kinds of improvements. This was an opportunity to catch up on deferred maintenance and get the additional benefits of saving energy and money, as well as supporting local job creation.
Overall, I think it was a good use of funding, yet there might have been ways to spend it to have a bigger impact. For instance, a lot of these projects were one-off efficiency improvements. There were not a lot of projects, or perhaps not any, that took a whole building or whole campus approach. That was due to a combination of the nature of spending the money as quickly as possible and cities and schools not yet being in a place where they were thinking bigger about energy use and greenhouse gas emissions.
What are your reflections on the impact of ARRA?
The primary purpose of ARRA was to stimulate the economy, and it did that successfully, but not necessarily sustainably. It served as a quick boost to local governments and wasn’t intended for continued support and advancement of energy issues in these communities. That said, I do think that it served as an awakening for local governments in terms of their role in energy and climate action.
In part, because of ARRA, we started to see more local government staff and officials interested in driving climate action at the local level. And states have launched sustainability programs. In Minnesota, we have GreenStep Cities, which has seen tremendous growth in participation over the past ten years. The program is a part of a larger network (the Sustainable States Network) of similar programs.
Cities, counties, and tribal governments are increasingly looking to integrate climate and energy solutions into services to residents to improve their quality of life. With all these pieces in place, there is level of sophistication that wasn’t there previously. Now there are staff at various city, county, and tribal levels who really understand how to transform their communities to be more climate-friendly. They also recognize the economic, environmental, and health benefits that result from those actions.
What’s changed since the ARRA era?
We are looking at another round of federal funding that will support climate and energy efforts coming out of the infrastructure bill that was just passed. Additional funding for climate and energy is stalled in the Build Back Better bill, which has yet to be passed by the US Senate (it passed the House of Representatives in November). Because of the uncertainty around Build Back Better, there is greater importance and urgency to view the infrastructure funding through a climate lens. For example, we can’t build out roads the same way—instead of expanding and widening roads, many should be narrowed, reducing traffic volume and increasing safety, while also integrating green infrastructure and multiple modes.
One major change that has occurred is the focus on equity. There is much more intentionality among local governments about who benefits and who loses as a result of policy and program decisions. This was not a focus of ARRA. The Biden Administration has an initiative called Justice40 where they want 40 percent of the benefits of federal investments in clean energy and climate to go to under-resourced and historically marginalized communities. I think this is a critical element and one that many local governments are going to be receptive to. There is real opportunity to close the gap on some of the disparities that exist by ensuring resources go to where they are most needed.
Another thing that is different from ARRA is the economic response. The primary purpose of ARRA was to create jobs to stimulate the economy and pull the country out of an economic recession. There was a ton of opportunity to create jobs in clean energy and energy efficiency. Now, we are in the throes of a global pandemic where we are seeing people leave the labor market for a variety of reasons and we have a massive problem in climate change to solve.
There will be all sorts of jobs for building out renewable energy projects, constructing green infrastructure, and decarbonizing buildings. So, the question now is how do we ensure we create a workforce where we are bringing people to jobs they will want, that pay well, and will last?
What do you hope to see with the infrastructure funding and the potential Build Back Better Act funding?
I think it’s important to recognize that so many cities have come a long way in the last decade or so and know what needs to be done. Many of these cities have emerged as national and international leaders on climate and energy. They have goals and plans in place. They’ve been driving participation in renewable energy and finding ways to adapt to climate change. They just haven’t had the necessary capital to really make a dent in the way we need to meet our climate goals.
So, what I hope to see is a recognition from the US Department of Energy and Department of Transportation that not all cities and tribal governments are in the same place, and many are out ahead. It’s important that these funds are not overprescribed, and there is flexibility built in so that these local entities can continue to drive innovation and implementation. Flexibility will enable cities and tribal governments to have the impact needed to meet emissions reduction goals while building more resilient and equitable communities.
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