Alicia Brown steered a city-owned electric Nissan Leaf through communities hemmed in by chemical plants, paper mills, and the constant rail and truck traffic that feeds one of the nation’s busiest seaports, in Savannah, Georgia.
The city’s clean-energy program manager said she sees opportunity for Savannah neighborhoods like Hudson Hill, made up of former sharecropper housing, thanks to unprecedented federal money newly available to pay for home energy efficiency updates, rooftop solar installations, electric buses, and EV charging stations.
In fact, a significant percentage of the billions of dollars being unleashed through President Joe Biden’s climate and environmental initiatives is earmarked for poor and underserved areas like Hudson Hill. But Brown’s hopes are mixed with a growing frustration.
“Right now, the only people who consistently win funding are the organizations that are big enough to hire outside grant writers who know the magic formula,” she said.
The sentiment is being heard across the country, where local officials without experience applying for federal money are finding the byzantine process a significant barrier.
“Navigating the federal funding maze, it’s a landscape that’s new territory for everyone,” said Katie McKain, director of sustainability in Charleston, South Carolina, about two hours north of Savannah.
“I shouldn’t have to pay someone to increase my chances of succeeding with a grant application,” said Brown. “It should stand on the merits.”
Brown’s frustration in Savannah “echoes concerns that we have been hearing from state and local officials across the country and others who work on the nationwide transformation to clean energy,” Amanda Finney, an Energy Department spokesperson, said in a statement.
“DOE’s goal is to ensure that federal dollars are used to achieve the greatest impact possible, and is required by law to prevent waste, fraud, and abuse of resources,” Finney said. “This requires resources and expertise.”
This tension highlights the vexing challenge facing federal agencies implementing the Inflation Reduction Act, the Democrats’ landmark tax-and-climate bill passed last summer, as well as the 2021 bipartisan infrastructure law.
The laws promise to funnel money into energy projects that wean the country off fossil fuels and provide benefits to communities that have long been ignored by federal funding. They expanded and overhauled the Energy Department, which created about six dozen new programs and offices, and ramped up hiring following the laws.
But the laws now cast a spotlight on the gulf between federal agencies and local officials, who say they have little extra time to compete in a notoriously opaque federal grant process. Last year, several communities in water-stressed New Mexico told Bloomberg Law they would likely not even apply for federal funds to pay for badly needed new wells for fear that the grants could someday revert to loans they couldn’t pay back.
Communities that are considered economically dependent on fossil fuels have more than $538 billion in energy funding opportunities — a 13-fold increase in funding opportunities from just two years ago, according to federal officials. On top of that, a 10% additional tax credit for these “energy communities” covers roughly half the country.
But local officials who stand to benefit told a federal task force they face administrative barriers.
“Rural and distressed communities often lack the resources and capacity to compete with communities that do not have these same challenges,” one West Virginia official said, according to a report issued in April.
“There’s still the nagging fear for me that those communities that are the worst off are going to be further left behind,” said Brian Anderson, executive director of the Interagency Working Group on Coal and Power Plant Communities, which published the report.
The group has dispatched “rapid response teams” to communities and published an online database of funding opportunities to help lower barriers to access, Anderson said. Separately, the Energy Department is working directly with two dozen fossil fuel and environmental justice communities nationwide to advance clean energy plans.
In response to feedback from local officials, the agency has added an option to apply for energy efficiency vouchers, which can be a lower burden than creating and managing a program, and offers blueprints for success with limited funds and technical assistance from its national laboratory staff.
Equity Learning Curve
Officials in the US Southeast have long connected climate and equity issues, said Michael Dexter, director of federal programs for the Southeast Sustainability Directors Network, a group of 110 local governments across 10 Southeast states.
Sea-level rise, intensifying hurricanes and flooding, higher-than-average energy cost burden as a percentage of income, and entrenched racial and economic injustice render the region a test bed for clean energy dollars. The administration has promised, under a program called Justice40, at least 40% of the benefits of federal funding will flow to communities bearing the brunt of industrial pollution.
But federal agencies, trying to tailor equity to their specific programs, have issued different maps and tools to identify disadvantaged communities, which can confuse local officials seeking funding, Dexter said. The Energy Department uses 36 different indicators collected at the census tract level to map disadvantaged communities, for example, while the Transportation Department uses 22 indicators.
“We’re seeing that there’s still a learning process at the federal agency level — as well as the local level — as to what that actually means, and what that entails, and how you demonstrate it,” Dexter said.
And city officials often want to move faster than the federal spigot can turn on.
Charleston is hiring a second grant writer to hunt opportunities. But the city still lacks enough program managers to handle all the grants and meet stringent federal compliance requirements. This summer, the city wants to draft a fleet transition plan, but the DOE hasn’t released an application to apply for a voucher to get the program running.
“Everything just keeps changing, and the final details are yet to be released, so that makes it really hard to plan,” McKain said. “Game-changing money is on the line here.”
Untested Processes
Local officials said they understand the Biden administration is facing political scrutiny of taxpayer dollars — and a dramatically expanded clean-energy funding mission.
The infrastructure and climate bills created 71 new programs at the Energy Department that push funding through “untested processes and newly designed and untested internal controls,” Teri Donaldson, the inspector general, told Congress in March.
Last August, Donaldson’s office found the department needs to hire more people, and build internal controls and independent oversight systems, to guard against fraud and abuse of taxpayer money. A Government Accountability Office report last year found gaps in the department’s oversight of funds supporting nuclear reactor demonstration projects.
Energy Department officials say they are setting up processes to prevent misuse of funds while meeting Justice40 goals. The agency, for the first time, is requiring all applicants to file a community benefits plan — weighted at 20% of an application — that emphasizes workforce training and community outreach.
“This has never been done before at DOE, so we’re building it as we go,” Shalanda Baker, director of the Office of Economic Impact and Diversity, told a gathering of renewable energy developers in March.
The biggest challenge the agency sees so far is “making sure all stakeholder voices are represented in a community benefits plan,” Baker told Bloomberg Law in May.
And while her office is working to quantify some direct benefits, the government will likely need a third-party vendor to capture all long-term improvements in disadvantaged communities.
“It’s easier to measure more immediate benefits like job creation, like allocation to communities of certain resources,” she said. “But the Justice40 Initiative is ambitious. It is supposed to be about transformation.”
‘See Your Work’
In Savannah, Brown is committed to that transformation. A 25-year-old Mississippian with a chemical engineering degree, she moved to Savannah about two years ago seeking to make a difference.
By many measures, she has seen progress toward the city’s ambitious mandate to source electricity from renewable power by 2035.
The city approved a contract to install solar panels that feed 19 city-owned buildings. Brown wrote into the contract that the private solar installer must train at least three local workers and use trainees on many of those projects. The metro area has six new electric buses that arrived in April, about 10% of its total fleet, with four more on order.
Harambee House, an environmental justice organization that teaches skills like home efficiency upgrades, added rooftop solar to its class offerings last year.
In October 2021, weeks before the infrastructure law passed, Energy Secretary Jennifer Granholm praised Savannah’s commitments. Granholm strode through Hudson Hill, an environmental justice community bounded by about 17 industrial sites and an interstate highway, and she prayed with the executive director of the Harambee House.
‘Secret Sauce’ Grants
But Brown has been frustrated by bureaucratic delays, rejections, and nitpicks since Granholm’s visit.
She ticks off recent frustrations: A 10-page pre-award application for an Energy Department block grant that has already been set at $199,050. An 18-page project narrative for a $1 million Environmental Protection Agency grant that has required nearly 60 hours of her time, and for which she recently hired a grant specialist to insert “secret sauce” words and formatting, she said.
There’s constant tailoring of her plans to fit rigid requirements, there’s community outreach, and there are long webinars that often tell her things she already knows. And, at the end of it all, there’s no guarantee the money will arrive — leaving empty promises after years of delicate trust-building in those communities.
“I feel like I’m contorting myself like a pretzel,” Brown vented as she walked on Savannah’s public-facing side — antebellum mansions and second homes, manicured parks and art galleries, brick streets dripping with Spanish moss and teeming with tourists and horse-drawn carriages.
The new electric buses are great, but Brown also wants an electric vehicle sharing program and charging stations for lower-income communities.
The common demand from federal officials that programs eventually become self-sufficient ignores the scale of the problem in communities like Hudson Hill, Brown said.
“The federal government talks this huge game about Justice40 and doesn’t really take steps to make sure they’re really supporting that goal,” Brown said. “They don’t make the application process easier.”
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