American Recovery and Reinvestment Coordinating Council Report 

ARRA Energy funding opportunities for Oklahoma include (1) formula funding, (2) grant opportunities and (3) financial and tax incentives. The Office of the Secretary of Energy will not receive or administer any funds associated with ARRA.

As a member of the ARRA Coordinating Council, the Secretary of Energy is collaborating with working groups to determine the proposed best use of available funds (discretionary formula), and to identify available grant opportunities and financial incentives. Collaborative partners to date include Department of Commerce, Office of the Secretary of Environment, Secretary of State, Department of Agriculture, Department of Environmental Quality and ACOG Clean Cities Program. Additionally, the Secretary of Energy is reaching out to educational and industrial constituents to explore opportunities of stimulating Oklahoma’s energy economy through ARRA investment.

Due to immediate deadline requirements, the primary focus to date has been the evaluation of the opportunities, requirements and duties associated with energy-related formula funding. The bulk of energy-related formula funding will support (1) local government energy efficiency block grants (approximately $35 million), (2) low-income residential weatherization (approximately $64 million) and (3) discretionary funding to be administered through Oklahoma’s State Energy Program (approximately $46 million). Administration of these funds, as well as monitoring and reporting requirements, will be managed by the Oklahoma Department of Commerce.

ARRA goals established for State Energy Program Funding include: increase energy efficiency to reduce energy costs and consumption for consumers, businesses and government; reduce reliance on imported energy; improve the reliability of electricity and fuel supply and the delivery of energy services; reduce the impacts of energy production and use on the environment.

The Department of Commerce, in cooperation with its collaborative partners, will develop appropriate processes for administration and management of State Energy Program funds. A sampling of potential Oklahoma projects include those that support increased statewide adoption of alternative fuels, enhancing building efficiencies, electric power and renewable energy (including solar, wind and demand response programs) and energy education/curriculum development.

Relevant timelines related to State Energy Program funding include: March 23, 2009 - initial application due to the U.S. Department of Energy, including Governor’s assurances as required by section 410 of ARRA (submitted); May 12, 2009 – comprehensive application due to the U.S. Department of Energy; September 30, 2010 – Congressional and Department goals for all ARRA funds

Significant competitive grant opportunities are developing for Oklahoma energy projects. Many of the details, including the actual federal solicitations, are yet to be released. Areas of immediate competitive grant opportunity include, but are not limited to:

• $11 billion for transmission infrastructure, specifically $4.5 billion to implement smart grid programs.
• $3.4 billion for Fossil Energy Research and Development, including $1.5 billion for a competitive grant program for industrial carbon capture and energy efficiency projects.
• $800 million for biomass programs.
• $400 million for geothermal projects.
• $400 million for the Advanced Research Projects Agency to fund research that will reduce energy imports form foreign countries and energy-related GHG emissions and improve energy efficiency across all economic sectors.
• $300 million for investment in alternative vehicle purchase and infrastructure.

Requirements include:

• Partnership with Clean Cities
• 50-50 state and federal cost share
• Project awards range $5 million to $15 million
• Initial applications due May 29, 2009

A brief sampling of financial and tax incentives that will have a direct impact in Oklahoma include:

• Wind Production Tax Credit (PTC) extended for three years, though December 31, 2012.
• Temporary election to claim investment tax credit in lieu of PTC – eligible facilities in Oklahoma could include wind, biomass, geothermal and hydropower.
• Energy Grants in lieu of Tax Credits – equal to thirty percent (30%) of the cost of the renewable energy facility.
• Qualified Energy Conservation Bonds – $2.4 billion to finance state, municipal and tribal government programs designed to reduce greenhouse gas emissions.
• Clean Renewable Energy Bonds (“CREBS”) - $1.6 billion to finance facilities that generate electricity from wind, biomass, geothermal and hydropower.