APPA Comments on DOE Implementation Strategy for Grid Resilience Program

The American Public Power Association (APPA) recently submitted comments in response to a Department of Energy (DOE) Request for Information (RFI) on its implementation strategy for the Grid Resilience and Innovation Partnerships (GRIP) program.

GRIP is part of the Infrastructure Investment and Jobs Act (IIJA). It is aimed at enhancing grid flexibility and improving the resilience of the power system. Under GRIP, $10.5 billion in grants are available through three programs: Grid Resilience Grants ($2.5 billion), Smart Grid Grants ($3 billion), and Grid Innovation Program ($5 billion).

Among other things, DOE asked for feedback on what actions it can take to best achieve the benefits of coordinating applications to all three Grid Resilience and Innovation Partnerships topic areas at the same time.

In response, APPA said it supports DOE’s initiative to stage the application process so that applicants are able to submit a white paper before being asked to complete a full application.

“DOE could further reduce the barrier that exists for smaller entities by establishing teaming lists, as it has done for other opportunities, so that utilities may find technology partners who wish to demonstrate innovative approaches at scale, and by staggering the initial application windows by topic area,” APPA said.

A single application window for all three programs in GRIP could cause smaller entities wishing to apply to more than one topic to choose just one area, while larger utilities with more resources to direct to the application process would be able to mount multiple applications, APPA said.

“Further, DOE could provide more than 30 days between receipt of an Encourage notification to mount a completed application.”

APPA also addressed the question of how can funding from the GRIP program can best overcome challenges impeding the development of transmission, grid solutions, and interconnecting new generation and storage to improve grid resilience and reliability.

APPA believes that “these challenges may be overcome by encouraging joint action between smaller public power utilities to collectively deploy grid-edge solutions for grid resilience.”

It noted that many smaller public power utilities do not have the resources or volume of meters necessary to deploy advanced metering infrastructure (AMI) and distributed energy resource management systems (DERMS) at an affordable scale, nor the capacity to analyze the data and manage distributed energy resources (DERs) to maximize benefits and reduce impacts to the grid.

“By funding joint action agencies to deploy and manage these systems on communities’ behalf, it will enable a more resilient, modern grid within rural public power communities. Access to acreage for renewable energy deployment behind the community’s meter is not readily available in many communities.”

Instead, communities can utilize behind-the-retail meter assets, such as rooftop solar photovoltaic generation and energy storage, to help stabilize the grid and dispatch loads to meet local and regional intermittent carbon-free generation resource availability, thus mitigating the need for increased transmission infrastructure, the trade group said.

Additionally, GRIP should take into consideration the ongoing costs of maintaining the additional capabilities dedicated to resilience. Most of these capabilities are not cost advantageous nor cost recoverable from customers, and are not viewed as a valued investment by shareholders, APPA added.

DOE also asked for feedback on whether existing or expected supply chain concerns are anticipated to delay or impact development of potential applications or project implementation, if awarded.

“APPA and other industry groups have done extensive surveying of utility supply chain concerns. Lead times for transformers prior to the COVID-19 pandemic were typically three to four months, but now most utilities are experiencing lead times of over a year, and many are seeing lead times of as much as 18-24 months.”

APPA said there are also significant backlogs in other essential components, including meters. “Additionally, supply constraints are impacting goods associated with advances in grid infrastructure. The microchip shortage, as well as increased constraints related to lithium-ion batteries, mean that projects involving these components may experience significant delays.”

Labor issues are also a concern, “as almost all parties – utilities, suppliers, manufacturers – are having trouble in hiring and retaining employees. This is only exacerbating the supply chain issues almost all utilities face and may create further backlogs. An increased flow of money into this sector will also increase demand for components, furthering potential delays.“

DOE will need to factor project delays into its timetable and be flexible regarding project timetables, APPA said. “Flexibility can be defined as tolerance for a marked-up product price within a grant budget and a no-cost extension of the project work plan for up to one-year, when requested by the awardee, to accommodate the longer window of time for performance due to the delayed delivery of a product.”

APPA also addressed the timing related to the first application cycle for the GRIP program, saying it is concerned with the relatively brief turnaround time.

Having the application cycle open in November may be too soon for DOE to thoughtfully incorporate public comments from the RFI process (due October 14) into the final funding opportunity announcement (FOA), it said.

“Utilities may struggle to identify projects that are good candidates for grant funding, particularly under section 40101(c).  Most utilities have an existing backlog of dozens, if not hundreds of projects, that fit the descriptions in the program, but this backlog of necessary projects is in some tension with the requirement of additionality.”

 Applicants are not accustomed to prioritizing projects based on grant program guidelines and may benefit from reviewing a revised draft FOA for several weeks, after DOE has incorporated comments from stakeholders and before the application window opens, APPA said. “Releasing the FOA in December, with concept papers due at the end of January and full applications due at the end of April would minimize conflicts due to the holidays and allow applicants more time to convene partnerships and obtain letters of support.”

APPA also said that smaller public power utilities often lack dedicated staff to work through the application process. “DOE could consider covering the cost of grant writers and compliance managers as this would be helpful to public power utilities who lack the requisite staff resources. A shorter application could also be helpful to smaller public power utilities. Any sort of assistance from DOE could also be coordinated through JAAs.” 

APPA and its members are also concerned about the $100 million cap on the federal share of grant allocations. “While DOE has expressed that this is not intended to be the target amount awarded for each project, many potential applicants may interpret by this cap to mean that only the largest and most ambitious efforts will be awarded. Since the federal share is no more than half of the project cost, smaller utilities will perceive the effective project costs to be $200 million or greater, and very few, if any, small utilities could reach this amount.” 

Lowering the federal share cap would provide additional room to make a greater number of awards, including awards to smaller utilities and smaller projects. This would allow DOE to have a larger impact by supporting a greater number of utilities, and with a wider geographic distribution (and for other factors) as opposed to a consolidation of funding in only a few companies in a few regions. A lower cap may also assuage the concerns of potential applicants who do not think their own efforts will receive serious consideration, the trade group said.