WASHINGTON INSIGHT

Energy Independence & Security Act of 2007 provides opportunities for public works projects

Julia Anastasio, Esq.
Senior Manager of Government Affairs
American Public Works Association
Washington, D.C.

In the waning days of 2007, Congress enacted a new comprehensive energy policy, the Energy Independence & Security Act of 2007, marking a major step towards increasing fuel economy standards, increasing production of biofuels, and increasing energy efficiency. According to President Bush, "[the Act] represents a major step forward in expanding the production of renewable fuels, reducing our dependence on oil and confronting global climate change. It will increase our energy security, expand the production of renewable fuels and make America safe, stronger and cleaner for future generations."(1) The nation has not taken such a big step towards creating a sustainable national energy policy since the 1970s and the oil crisis. The new law provides several new funding and program opportunities to assist local governments and public works departments in improving energy efficiency and conservation and reducing greenhouse gas emissions.

The new law establishes a comprehensive energy policy that builds upon the energy security, conservation and efficiency provisions included in the 2005 Energy Policy Act and marks a major step forward toward reducing the nation's dependence on fossil fuels, increasing energy efficiency and reducing carbon dioxide emissions. Specifically, the new law contains provisions for increasing fuel economy standards and production of renewable fuels, and provides financial incentives for research and development of renewable energy technologies: biofuels, waste energy recovery and carbon capture technology. The new law also requires stronger energy efficiency standards for buildings, appliances and lighting systems and creates several programs that should benefit public works departments and local government policy makers in increasing the energy efficiency of their departments.

Increased Fuel Economy
One of the most significant aspects of the new law is an increase in the national fuel economy standards for cars and light trucks, the first such increase in more than 30 years. The new law establishes a single Cooperate Average Fuel Economy (CAFE) standard of 35 miles per gallon by 2020 for cars and light trucks, a 40% increase in current fuel economy standards. Additionally, the new law requires the development of standards for "work trucks" and commercial medium and heavy duty on highway vehicles. The new law also includes a renewable fuel standard that requires fuel refiners to use 36 billion gallons of biofuels annually by 2020. Finally, the new law also includes loan guarantee and grant programs for advanced battery development, plug-in hybrid vehicles, incentives for purchasing heavy-duty vehicles for fleets and credits for electric vehicles.

Congress created a new "Advanced Transportation Technology Program" in the new energy law to provide grants for demonstrations of plug-in electric drive vehicles. Under the new grant program, battery manufacturers may partner with local governments, metropolitan transportation authorities, air pollution control districts and others, to provide advanced transportation technology. The demonstration grants are designed to provide data on vehicle performance, life-cycle costs and emissions reductions, and grant recipients will be required to submit annual reports to the Department of Energy (DOE). Priority will be given to proposals that are likely to contribute to the commercialization and production of plug-in electric drive vehicles domestically. The Secretary of DOE is to ensure that grants awarded under this program are given to a variety of applications, manufacturers and end-users. Congress authorized $60,000,000 per year until 2012. The Secretary is tasked with administering these new grants.

Increased Production of Biofuels
The new law also includes a "Recoverable Waste Energy Inventory Program" for projects that successfully produce electricity or incremental useful thermal energy from waste energy recovery. Waste energy includes exhaust heat or flared gas from any industrial process and waste gas or industrial tail gas that would otherwise be flared, incinerated or vented. Net excess waste energy recovery-produced power may be sold under the program. The Act provides $200 million per year for the program and the Secretary of DOE is responsible for establishing criteria and guidelines for the submission, evaluation and funding of proposed projects.

Increased Energy Efficiency
The new law also creates the "Environmental Protection Agency (EPA) Demonstration Grant Program for Local Governments." The demonstration grant program is designed to assist local governments in retrofitting for energy efficiency government buildings and facilities. Under this program, EPA is directed to establish, within one year from enactment, guidelines for monitoring and verification of operational cost savings; standards for grantees regarding training programs; and standards regarding technical assistance and requirements ensuring that each entity receiving a grant to retrofit existing local government buildings and facilities achieves a facility-wide cost savings of at least 40% as compared to the baseline operational costs of the building before renovation. Eligible activities include installation of cost-effective lighting technologies, geothermal heat pumps and the planting of vegetation that provides shade and reduces the heating, cooling or light needs of the building or facility. Congress authorized $20,000,000 per year until 2012 for the program. The program will expire on September 30, 2012.

Additionally, the new law creates a new "Energy Efficiency and Conservation Block Grant Program" to help reduce energy use and emissions at the local and regional levels. The new program provides $2 billion per year until 2012, in formula grants to cities, counties and states to develop energy efficiency strategies to help reduce greenhouse gas emissions. These block grants may be used for a variety of activities including: developing and implementing an energy efficiency and conservation strategy; conducting energy audits; providing grants to nonprofit organizations to perform energy efficiency retrofits; developing and implementing energy efficiency programs for buildings and transportation; promoting of zoning guidelines; developing new building codes; public education campaigns; methane capture technologies; LEDs installation and retrofit; and onsite renewable energy technology that generates electricity from renewable sources such as solar, wind and biomass. Successful grant recipients are required to submit an energy efficiency and conservation strategy which includes goals and a plan for implementing this strategy within one year after receipt of a grant. Additionally, grant recipients are required to report to the Secretary of DOE on the status and implementation of the strategy and any assessments of energy efficiency gains every two years. Recipients not meeting the goals outlined in its energy efficiency and conservation strategy may have their funding revoked by the Secretary. Any funding provided under these block grants will supplement, not replace, funding provided by DOE under the Weatherization and State Energy Programs.

Furthermore, the law increases the federal share for congestion mitigation and air quality (CMAQ) projects funded by the "Congestion Mitigation and Air Quality Improvement Program." Cities out of compliance with federal air quality standards may now seek up to 100% federal funding for projects funded by the CMAQ. As a result of the new law, state departments of transportation should have at least $4 billion in CMAQ funding to direct to local projects in non-attainment areas.(2) CMAQ funds may be used for a variety of projects that reduce energy consumption and greenhouse gas emissions including: vanpool or carpool programs; alternative fuel technologies and systems; traffic signalization improvements; transit capital programs such as purchasing of alternative fuel buses or fleet vehicles; transit operating costs when offering new or expanded transit services; and a broad range of other travel demand management (TDM) techniques.

Finally, the new law includes a Sense of Congress statement that, in constructing new roadways or rehabilitating existing facilities, state and local governments should employ policies designed to accommodate all users, including motorists, pedestrians, cyclists, transit riders, and people of all ages and abilities.

Conclusion
The Energy Independence and Security Act of 2007 is significant legislation that builds upon the energy security, conservation and efficiency provisions established by the 2005 Energy Policy Act and takes significant steps towards increasing fuel economy standards, increasing production of renewable biofuels and reducing greenhouse gas emissions. In the coming months, DOE will be working to implement the new requirements and programs contained in the new law and any information on these programs can be found by contacting the DOE directly (www.doe.gov). Check the APWA Advocacy Webpage at www.apwa.net/advocacy for any updates on the programs outlined in this article or contact Julia Anastasio at janastasio@apwa.net.

(1) Office of the Press Secretary. Fact Sheet: Energy Independence & Security Act of 2007 (12/19/2007). Http://www.whitehouse.gov/news/releases/2007/12/print/20071219-1.html.

(2) The US Conference of Mayors, "Mayors Energy Block Grant Clears House," Senate Floor. US Mayor V. 74, Issue 19 (12/17/2007).