Case Study: Electrical System Ice and Wind Storm Mitigation Projects in Kansas and Nebraska (FEMA HMGP and BRIC)
In 2007, the Federal Emergency Management Agency (FEMA) funded two projects in Kansas and Nebraska that aimed to increase the resiliency of the local electric grid to ice and wind storms. FEMA partnered with the City of Kiowa, Kansas, and the Southwest Public Power District (SWPPD) to fund three projects: the replacement of electric poles and installation of stronger conductors on two different sets of transmission lines in Nebraska; and the replacement of distribution conductors, poles, and transformers in Kiowa itself. FEMA’s Hazard Mitigation Grant Program (HMGP) provided $1.15 million for the two projects. In the winter of 2006-2007, Kansas and Nebraska experienced a severe ice storm that damaged many parts of the state. A FEMA study examining how the resilience improvements fared found that total losses avoided amounted to $1.33 million, providing a return of investment of 115 percent for the projects.
FEMA’s Hazard Mitigation Grant Program (HMGP) funds projects in areas under a Presidential Major Disaster Declaration that is determined by the state’s Governor. The formula for HMGP provides funding for disaster areas depending on the amount of disaster assistance required for the designated area. State governments apply for the funding and then award funding to subapplicants, who administer the grants and comply with program requirements. Qualifying uses of this funding include infrastructure retrofits that mitigate risk to existing utility systems. Resilience projects that prove they fit this category may be awarded funding for development. In 2021, for example, FEMA awarded the Utility Board of the City of Key West over $5.5 million for the protection of utility poles form future storms. The HMGP funding will “help pay for protection from corrosion due to water and salt air for 119 water crossing transmission poles near the north end of the Seven Mile Bridge in Marathon Key, resulting in a more resilient electrical grid for southern Monroe County.”
FEMA also provides assistance through the Building Resilient Infrastructure and Communities (BRIC) Program (formerly the Pre-Disaster Mitigation Grant program), which is designed to assist state and local governments with mitigation planning and projects while reducing reliance on federal money in a future disaster. These grants are awarded , based on an annual state and territory allocation, a tribal set-aside, and a national competitive selection process, with the latter making up the bulk of BRIC funding. State, territorial, tribal, and local governments need to adopt hazard mitigation plans before applying for funds for Pre-Disaster Mitigation projects. Once the governing body has developed and adopted a hazard mitigation plan that is approved by FEMA, it can apply for project funding consistent with the plans. Localities may be eligible for funding for microgrid projects if those projects meet the mitigation goals. FEMA announced the availability of $1 billion in funding under the program for FY 2020. Governors can play an important role here in prioritizing energy investments across state agencies (including the State Energy Office and Office of Emergency Management, which is typically the lead on these applications), bring project partners to the table, and facilitate effective applications.
Case Study: New Jersey Energy Resilience Bank (HUD CDBG)
In 2014, New Jersey used $200 million in U.S. Department of Housing and Urban Development’s Community Development Block Grant – Disaster Recovery program (HUD CDBG) funds to capitalize an Energy Resilience Bank. The Resilience Bank’s mission is to finance the installation of distributed energy resources to improve the resiliency of critical facilities throughout the state. Technologies eligible for the Resilience Bank to finance include (but are not limited to) combined heat and power systems, fuel cells, and solar panels. Eligible facilities include water/wastewater treatment plants, hospitals, transportation networks, emergency response facilities, and schools that function as shelters. Since its establishment, the Resilience Bank has made several low-interest grants and loans to increase critical facility resiliency. For example, in 2017 the Resilience Bank financed the installation of CHP systems at three New Jersey hospitals to ensure their operation during future black sky conditions. The bank also provided funding to improve the resiliency of a wastewater treatment plant’s existing CHP system, to raise the substations serving the plant to above flood levels, and to install a biogas storage tank to ensure availability of gas for the plant’s CHP systems in the event of a disruption. The Resilience Bank is no longer accepting new applications for funding at this time as it has no further funding to distribute.
HUD CDBG offers funding for resilience projects in areas affected by recent natural disasters. The program aims to assist communities in developing projects to mitigate the risk from future disasters. Potential grantees must develop action plans that include Mitigation Needs Assessments, which analyze current and potential disaster risks to develop a baseline for potential resilience improvements. As of 2018, HUD had nearly $16 billion available to award for resiliency mitigation projects.
Case Study: Transmission and Smart Grid Upgrades in Minnesota (USDA Electric Loan Program)
In 2021, the U.S. Department of Agriculture’s Electric Loan Program provided $22.8 million in low-interest loans to Minnesota Valley Cooperative Light & Power to build transmission and smart grid improvements in its service territory. The improvements will connect 132 customers to the utility grid and improve over 137 miles of electric lines. The utility plans to install over $1.3 million in smart grid technologies to improve grid operations and resilience.
The U.S. Department of Agriculture’s Rural Utilities Service (RUS) operates an Electric Infrastructure Loan & Loan Guarantee Program which loans capital at low interest and long repayment terms to rural utilities in order to assist those utilities with upgrading their infrastructure. Eligible improvements covered by this program include maintenance, upgrades, and replacement of transmission and distribution facilities; energy efficiency; and renewable energy upgrades. The program recently invested $598 million in eleven states to improve rural electric infrastructure and install smart grid technologies in rural communities and Tribal lands.