State Energy Program Competitive Financial Assistance Program

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The U.S. Department of Energy's State Energy Program (SEP) provides funding and technical assistance to states, territories, and the District of Columbia to enhance energy security, advance state-led energy initiatives, and maximize the benefits of decreasing energy waste.

SEP dedicates a portion of its funding each year to provide competitively awarded financial assistance that helps states meet their energy goals and explore opportunities for regional collaboration and partnerships. In a typical year, states may apply for funding under specific Areas of Interest with the flexibility to choose topics or approaches to achieving their energy goals within the Areas of Interest.

Find information on 2012–2016 SEP Competitive Award Selections (2012–2016)
State Energy Program Fiscal Year 2017 Competitive Funding Opportunity Announcement

During Fiscal Years 2014-2016, SEP Competitive Awards up to $5 million were awarded to applicants seeking to maximize the impact of formula grant work related to energy efficiency and/or renew­able energy adoption under three Areas of Interest:

State Energy Planning

Since 2014, SEP has provided $4.5 million to 11 states to bolster state/regional energy planning by funding efforts to facilitate stakeholder and interagency discussions and related activities concerning the future direction of the energy sector in the state; help states enhance economic development opportunities associated with energy efficiency and renewable energy; and help states undertake relevant analytics efforts and plan strategically for current and future environmental factors that will impact the energy sector.

Under this area, states

  1. Development of a roadmap for implementing a preferred set of solutions related to the electric power sector and natural gas supply and transport, with milestones set for 2020 and 2025.
Opportunities for Innovative Energy Efficiency and Renewable Energy Programs

Since 2014, SEP has provided $10.2 million to 20 states to assist in the development of new programs that advance energy efficiency and renewable energy adoption within several topics of emphasis:

  1. Advancing state energy reduction and/or renewable energy generation goals through utility partnerships;
  2. Financing mechanisms for public or private sector energy efficiency and renewable energy investment;
  3. Statewide energy efficiency and renewable energy targets/goals (including Renewable Portfolio Standards, Energy Efficiency Resource Standards, energy efficiency targets as part of an integrated resource plan, part of an RPS, or portfolio of programs that will provide defined savings).
  4. Policies and programs for distributed resources.
  5. Frameworks for evaluation, measurement and verification of energy and emission reductions.
  6. Financing retrofits for public facilities.
  7. Utility or third-party administered energy efficiency programs.
  8. Supporting partnerships with local governments to incentivize and/or remove barriers to energy efficiency and renewable energy investments.
  9. Building energy performance information for decision-making, including benchmarking and disclosure, aggregation of whole building usage data and data access.
Technical Assistance to Advance SEP Formula Grant Clean Energy Activities

In 2016, SEP provided $225,000 to three states for technical assistance activities that maximize the impact of their formula-funded grant work related to energy efficiency and/or renewable energy adoptions.  This Area of Interest is only open to states that have not received a competitive award in the last four years (2013-2016).

Read more about SEP competitive funding assistance in the areas of Stimulating Energy Efficiency Action in States; Public Facility Retrofits; and Supporting Leadership by Example in States.

Working with States to Replicate Solutions

SEP provides states with technical assistance and guidance to assist with implementation of efficient and effective programs. States share information with the Energy Department and each other in a peer-to-peer facilitated dialogue about the challenges they encounter, how they overcome those challenges, and barriers to implementing effective programs. This collaborative process allows both federal and state-level decision makers to learn and improve the efficacy and impact of energy efficiency and renewable energy programs.

Recipients of SEP Competitive Awards under Area of Interest 2, “Opportunities for Innovative Energy Efficiency and Renewable Energy,” develop best practice guidelines in the format of an Implementation Model or State Outcomes in Focus as a replicable solution for the deployment of energy efficiency and renewable energy in other states.  These guides identify solutions that address key barriers to energy efficiency within the state and detail the approach the state took to create a sustainable solution.  State Energy Program Notice 14-2 provides guidance to SEP Competitive Awardees on Implementation Model development.

Below are the most recent Implementation Models and State Outcomes in Focus completed by states:

Implementation Model: Advancing Energy Efficiency Through Iowa's Benchmarking Tool for Public Buildings

Graphic of the state of Iowa.
GOAL: Achieve a 20% decrease in energy consumption in public buildings by 2020, based on a 2009 baseline.

BARRIER: Decisions on energy efficiency improvements are difficult to prioritize across a large statewide public buildings portfolio when there is incomplete data on public buildings.

SOLUTION: Engage public facility owners and utilities to expand the Iowa Public Building Benchmarking Project (Project), and use the Project’s web-based benchmarking tool as the basis for energy efficiency project decisions in public buildings.

OUTCOMES: 900+ buildings added to benchmarking database; 1 million BTU in potential energy savings identified, representing $14.1 million of annual energy cost savings; and energy use reduction of 4.8% for seven organizations participating in the program for at least one year.

Implementation Model: Advancing Energy Efficiency in Mississippi's Institutes of Higher Learning

Graphic of the state of Mississippi.
GOAL: Achieve a 20% reduction in energy consumption by a large subcategory of state buildings – Institutes of Higher Learning (IHL) – by 2020, using 2011 as a baseline year.

BARRIER: IHL facility managers lack energy consumption data, which is critical for planning energy efficiency retrofits.

SOLUTION: Benchmark IHL facilities’ energy use in Mississippi’s central database for state facility energy consumption data. The database allows all state agencies, including IHLs, to assess their energy use and make decisions on how to target energy initiatives based on that information.

OUTCOMES: Complete and accurate information on IHL campus buildings allowed smart meter configuration and implementation plans to address sub-metering opportunities. Mississippi benchmarked IHL facilities’ energy use and used results to execute energy efficiency upgrade projects, resulting in significant energy and energy cost savings.

Implementation Model: Enhancing Energy Efficiency in the Illinois Public Sector Through Holistic Retrofit Strategies and Targeted Educational Efforts

Graphic of the state of Illinois.
GOAL: Achieve a 20% reduction of building electricity consumption in the Illinois public sector by 2020, from 2006 baseline.

BARRIER: Limited public sector participation in energy efficiency projects.

SOLUTION: Implemented the Illinois Energy Now Trade Ally Program, an initiative that utilizes recognition to foster competition among energy efficiency providers. The Program advances public sector participation in energy efficiency projects by empowering Trade Allies through enhanced networking, training, and technical assistance.

OUTCOMES: In less than one year, Trade Allies completed more than 300 new energy efficiency projects in the public sector, a 40% increase over projects completed in 2012. These projects encompassed a wide variety of upgrades that helped Illinois achieve energy savings of over 5.9 million British thermal units (MBtu) and thus meet its annual public sector energy efficiency milestones in 2015.

State Outcomes in Focus: Stimulating Energy Efficiency Action in Kentucky Through Collaborative Stakeholder Engagement

Graphic of the state of Kentucky.
PROCESS: Through Kentucky’s ‘Stimulating Energy Efficiency Action’ program,  the state sought participation of more than 80 stakeholders to partner on a number of critical steps to success, like forming a project team with subject matter experts; identifying best practices for neighboring states; and tracking progress through energy efficiency program performance reporting. 

RESULTS: As a result of these efforts, the partners developed the following:  an Action Plan that lays out Kentucky’s energy efficiency goals; a consistent, practical methodology for measuring progress toward the state’s one percent annual electric savings goal; a forum for diverse attendees to interact with one another and engage in forthright discussions on the opportunities and barriers to energy efficiency in Kentucky; and the team engaged legislators as a means to raise awareness of energy efficiency issues within the General Assembly.

Public Energy Partnership: State of Rhode Island Implementation Model - 2012

GOAL: 20% energy savings in 100 public facilities

BARRIER: Public-sector data

SOLUTION: The state established the RIPEP, an unprecendented collaboration of key state agencies, municipal governments, utilities, and state university parners, whose mission was to create a comprehensive inventory of energy performance data for state and local public sector buildings that would be used to identify and prioritize energy efficiency upgrade projects. RIPEP was also charge with implementing energy efficiency measure and helping to identify and mitigate barriers to further public sector efficiency improvements

OUTCOME: Rhode Island officials were able to use the new inventory to rank the energy use of facilities in order to prioritize and implemnet energy efficiency projects. The RIPEP team's goal was to implement 100 energy efficiency projects with average energy savings of 20%. The team exceeded the goal by implementing 123 energy efficiency projects in three years, which resulted in average savings of 28.6% per project or 4,748 MMBTU.

Schools and Public Housing Integrating Renewables and Efficiency (SAPHIRE) Program: State of Massachusetts Implementation Model

GOAL: Achieve a greenhouse gas (GHG) emission reduction of 25% by 2020, from a 1990 baseline, as well as an 80% reduction by 2050.

BARRIER: Public housing developments and public schools lack access to capital and low-interest financing for energy efficiency and thermal renewable energy upgrade projects.

SOLUTION: Massachusetts Department of Energy Resources (DOER) created the Schools and Public Housing Integrating Renewables and Efficiency (SAPHIRE) Program to provide technical assistance and funding to public housing developments and public schools to perform energy efficiency and renewable thermal projects.

OUTCOME: The SAPHIRE Program resulted in energy efficiency and renewable thermal projects in seven public schools and 14 multifamily public housing sites. These projects are expected to yield nearly $600,000 in energy cost savings annually. SAPHIRE projects were expected to yield GHG reductions of up to 85%.

Developing an Energy Savings Performance Contracting Framework for Public Facilities in Nevada - Nevada Implementation Model

GOAL: To achieve significant energy savings in state agencies and local governments in Nevada by signing $100 million in ESPC.

BARRIER: Lack of a statewide framework for facilitating the adoption of ESPC.

SOLUTION: The Nevada Governor’s Office of Energy (NGOE) created the Public Facilities Retrofit Program in 2012, which promoted ESPC as a vehicle for energy efficiency and created an infrastructure to accelerate the adoption of ESPC by state agencies and local governments.

OUTCOME: Since 2012, Nevada has seen a marked increase in the use of ESPC in state agencies and local governments. Prior to the creation of the Public Facilities Retrofit Program in 2012, only a few local governments had pursued ESPC, and only two state agencies had undergone an ESPC project in 10 years. From 2012 to 2015, local governments in Nevada initiated two ESPC projects for a total value of approximately $32.6 million. In 2016 and 2017, incentives were awarded for five additional projects to local governments and school districts, valued at approximately $32.7 million. One project with a local school district is currently in development, with a value of $12 million, and the state is anticipating that three more major projects will be initiated in 2018 and 2019 with a value of approximately $26.3 million. Together these projects exceed the state’s goal of $100 million in ESPC.

Industrial Energy Efficiency and Combined Heat and Power: State of Texas Implementation Model

GOAL: Clarify ERCOT’s existing DG interconnection process so developers could better navigate it. With roughly 300 CHP projects in the pipeline, improving the transparency of the interconnection process has the potential to significantly increase the deployment of these systems.

BARRIER: The process to connect large CHP systems to the transmission grid was complex and time-consuming, often leading to project delays and potentially contributing to project cancellations.

SOLUTION: SECO and HARC developed the DG Interconnection Tool for Texas, an interactive step-by-step guide to interconnection designed to ensure CHP project developers experience a successful and timely interconnection development process.

OUTCOME: The DG Interconnection Tool for Texas (the Tool), rolled out in 2016, can help developers and their partners realize up to a 70% reduction in the time needed to approve a CHP interconnection application. For developers using the Tool to manage a CHP interconnection application, the Tool has the potential to reduce the average time to complete the application from over 1000 days to an estimated 270 days. When aggregated across some 300 CHP systems currently in the ERCOT interconnection pipeline, project developers can be expected to save years in terms of staff time and costs. One facility in Texas has already used the Tool to move through the early stages of interconnection to advance a 40 MW CHP system.

Combined Heat and Power: Kentucky Implementation Model

GOAL: Drive demand for CHP systems to improve industrial energy efficiency in public sector, industrial, and commercial facilities in Kentucky.

BARRIER: Facility owners lack information on CHP technology the benefits it can provide, and the regional market opportunities in Kentucky.

SOLUTION: DEDI undertook a targeted stakeholder engagement process to highlight prime locations for the deployment of CHP.

OUTCOME: Through the stakeholder engagement process, DEDI developed an Action Plan that provides specific recommendation for future activities and actions to promote CHP in Kentucky. DEDI's stakeholder engagement efforts ultimately helped four industrial and public candidates take a crucial step in the complex CHP installation process The four candidates pursued prequalification screening, which future CHP deployment could not occur.

View more details on the State and Local Solution Center, a one-stop shop of impactful, public sector resources.