Preparing for the U.S. infrastructure stimulus
May 17, 2022
5 MINUTE READ
It has been six months since the historic $1 trillion bipartisan Infrastructure Investment and Jobs Act (IIJA) was signed into law, and many competitive funding application programs are now opening. The IIJA will inject more than $80 billion into reshaping and strengthening the U.S. energy sector, with climate, equity and community impact at the forefront. As the IIJA comes online over the coming year, success for utilities companies will be achieved by developing a thoughtful investment opportunity strategy, orchestrating partnerships with government organizations and other industries, assembling compelling applications, and executing a disciplined stakeholder engagement plan.
Of the key IIJA funding programs that utilities and their partners will be eligible for this year, the first Notices of Funding Opportunity (NOFO) windows are already open (clean buses, ferries, electric vehicle charging infrastructure). Additional NOFO windows will open through this summer (clean hydrogen, energy storage) and into the fall (grid flexibility, grid resiliency). Similar to the 2009 American Recovery and Investment Act (ARRA), the NOFOs are expected to have a 90-day grant application window.
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Figure 1: Key IIJA utility program timelines
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Identifying the appropriate portfolio of utility IIJA investment opportunities will require engagement across the entire utility—not just the grid engineering teams, but also across field operations, customer operations and external affairs. It is also important for utilities to consider which investment opportunities hold the most value for its stakeholders and enable a positive impact on economic development, resilience and emissions in the communities they serve. Doing so could involve collecting and analyzing data along with any human-centered ethnographic research to truly understand how to uplift communities in a holistic way.
As utilities are shaping their IIJA investment portfolios, there are also some areas to watch. For instance, the U.S. Office of Management and Budget recently issued preliminary guidance to federal agencies on how to implement the new “Buy America” requirements applicable to federally funded infrastructure projects. Utilities need to closely monitor these requirements as they could have significant implications on the equipment and materials needed to implement their programs.
These emergent NOFO timelines mean utilities will need to develop an agile plan on approaching the FOA opportunities, activating a dedicated team and collaborating with internal and external stakeholders to maximize application competitiveness. In other words, this is not simply a “show up and fill out the application” exercise for utilities.
It’s also important to recognize that while utilities are able to access federal funds directly, partnerships with external stakeholders can and will play a key role in extracting maximum value from IIJA funds. Several programs can require months of preparations to develop the appropriate partnerships. Examples include the U.S. Department of Energy’s Hydrogen Hub program, which requires a complex ecosystem of hydrogen producers, transport and storage providers, end users, equipment suppliers, and communities. Similarly, the Broadband programs by the National Telecommunications and Information Administration may necessitate partnerships with internet service providers, apart from complex approval and negotiations process with regulatory commissions.
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Figure 2: Some of the key players in the partner ecosystem for utilities.
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These emergent NOFO timelines mean utilities will need to develop an agile plan on approaching the FOA opportunities, activating a dedicated team and collaborating with internal and external stakeholders to maximize application competitiveness. In other words, this is not simply a “show up and fill out the application” exercise for utilities.
It’s also important to recognize that while utilities are able to access federal funds directly, partnerships with external stakeholders can and will play a key role in extracting maximum value from IIJA funds. Several programs can require months of preparations to develop the appropriate partnerships. Examples include the U.S. Department of Energy’s Hydrogen Hub program, which requires a complex ecosystem of hydrogen producers, transport and storage providers, end users, equipment suppliers, and communities. Similarly, the Broadband programs by the National Telecommunications and Information Administration may necessitate partnerships with internet service providers, apart from complex approval and negotiations process with regulatory commissions.
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