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ELIGIBILITY DETERMINATIONS UNDER EECBG, SEP, or WAP

  1. Reporting requirements for in-kind contributions under the Energy Efficiency Appliance Rebate Program
  2. What constitutes an infrastructure project under EECBG?
  3. What can SEP and EEGB funds be used for in relation to solar energy systems?
  4. How can SEP funds be used in relation to biofuels?
  5. What information related services is the Energy Technology Commercialization Services Program allowed to provide? 
    Does this include grants to small and start-up businesses?
  6. How does DOE interpret the 180-day requirement for states to provide subgrants under EECBG?
  7. Is there a signage requirement under SEP or EECBG?
  8. Is the construction of a new renewable energy system permissible under ARRA?
  9. What federal requirements apply to SEP revolving loan programs?
  10. To what extent are construction and repair costs permissible uses of State Energy Program (SEP) funds?
  11. How can a State demonstrate that it has obligated SEP funds for a revolving loan fund?
  12. Does the EECBG Grant provision on decontamination and decommissioning (D&D) costs prohibit funding asbestos or lead paint removal necessary for efficiency or renewable energy projects?
  13. For programs using a combination of utility and ARRA funding sources, how should energy savings be attributed between utilities and ARRA funds for reporting purposes?
  14. Are costs for follow-up or additional repair work considered eligible costs under WAP?
  15. What is the deadline for obligation of ARRA funds for WAP?
  16. How do EECBG reporting entities avoid double counting metrics for projects funded by both ARRA and non-federal funds?
  17. Can non-federal funds be leveraged with federal funds to supplement weatherization measures?
  18. Can a multi-family building be weatherized under the Weatherization Assistance Program (WAP) if the building is currently being rehabilitated and no one is currently living in the dwelling units?
  19. Confirmation that EECBG funds advanced to a local government sub-grantee must be placed into an interest bearing account and what requirements/restrictions apply?
  20. Can SEP-ARRA funds be used as match in a grant project funded by another federal program?
  21. Are there set income levels for use of funds with the Energy Efficiency and Conservation Block Grant (EECBG) Program?
  22. When are funds obligated in a revolving loan fund considered loaned out? What is the deadline for making the loans?
  23. What is the deadline for making loans supported by loan loss reserves? What is the deadline for committing loan loss reserve funds to support “individual loans or portfolios of loans?”
  24. If a grantee manages a revolving loan fund distribution account themselves but retains a third party program administrator, how do they obligate funds?
  25. When can revolving loan funds and loan loss reserves be drawn down? Do funds need to be disbursed within three days of draw down? Do we need to repay interest earned on advances into a revolving loan fund or a loan loss reserve fund to the federal government?
  26. Does the pass-through of SEP funds from one state agency to another state agency constitute a sub-award?
  27. Under SEP, are state funded universities considered state agencies or sub-recipients for 1512/ jobs reporting?
  28. Are ARRA SEP funds subject to the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act?
  29. Are there restrictions on SEP or EECBG funds being used to fund projects to benefit churches or other faith based institutions?
  30. Eligibility of Renewable Fuel Pumps Under EECBG

1.  Can you clarify or confirm that DOE will NOT be asking State Energy Offices to report on or otherwise verify in-kind contributions for the Rebate Program?

There is no statutory requirement for in-kind contributions under the Energy Efficient Appliance Rebate Program. The State does have to provide an assurance that the State will use Federal funds to supplement but not supplant funds made available to carry out the State program (42 USC 15821(b)(3)), but this is not an "in-kind" requirement.

DOE's financial assistance regulations address the record keeping and valuation of in-kind contributions. See, for example, 10 CFR 600.224. Additionally, the Recovery Act includes a heightened degree of accountability and transparency. Your grant should include specific terms and conditions, including ones regarding the Recovery Act that reflect the additional access to records and the reporting and accountability requirements. You need to comply with these terms and conditions.  If you have specific questions about particular in-kind contributions and how they should be accounted for, you should consult with the Contracting Officer identified in the relevant grant agreement.

2.  Does DOE have a definition for what constitutes an infrastructure project under the EECBG Program?

OMB Section 1512 Reporting includes a field for total Federal ARRA infrastructure funding.  As provided in the DOE Supplemental Instructions (page 12), there is no standard Federal or DOE definition of infrastructure for the purpose of this report. Recipients should use their best judgment in determining applicability.  Other information regarding reporting can be found at: http://energy.gov/recovery/.

3.  In connection with the installation of solar energy systems, can some amount of funds be used to strengthen the roof to ensure proper installation of the system or must all funds be directly related to the system itself?

Generally, under the State Energy Program and the Energy Efficiency Conservation Block Grant Program, modifications to a building to support an eligible installation of solar panels would be permissible.  However, the modifications should be limited to only those necessary to support the solar project.

4.  Does the production of Biofuels qualify as a "renewable energy measure" under section 420.18 (e)?  And can SEP funds be used as a grant for the purchase of equipment and materials to produce Biofuels, or to increase the production of Biofuels from an existing Biofuels facility?

Under limited circumstances, the State Energy Program (SEP) funds may be used for the purchase of equipment and materials to produce biofuels, and to increase the production of Biofuels from an existing biofuels facility.

The SEP regulations prohibit the use of SEP funds for "construction, such as construction of mass transit systems and exclusive bus lanes, or for the construction or repair  of buildings or structures."  10 CFR 420.18(a)(1). 

The regulations provide an exception to the prohibition on funding construction for demonstrations of commercially available renewable energy techniques and technologies.  10 CFR 420.18(c).  "Commercially available" is defined as "available for purchase by the general public or a target audience in the State."  Further, DOE has applied the commercially available test to the renewable energy process as well as the relevant equipment.  If a project were determined to be a demonstration of a commercially available renewable energy technique and technology, it may be eligible under SEP. 

Also, as you pointed out, the SEP regulations permit a State to use funds for the purchase and installation of equipment and materials for renewable energy measures.  10 CFR 420.18(e).  The term "renewable energy measure" is defined as "any capital investment that reduces energy costs in an amount sufficient to recover the total cost of purchasing and installing such measure over an appropriate period of time and that results in the use of renewable energy to replace non-renewable energy.  10 CFR 420.2.  Whether 10 CR 420.18(e) is applicable will depend on whether the project at issue meets the definition of "renewable energy measure."

5.  Under the definition of an "Energy Technology Commercialization Services Program," in section 420.17(b) is it allowable to make grants to small and start-up businesses to help them solve product development and manufacturing problems?

Under the SEP regulations, an Energy Technology Commercialization Services Program is to provide information related services as opposed to grants.  As you noted, the regulations governing an Energy Technology Commercialization Services Program are located at 10 CFR 420.17(b).  Subparagraphs 420.17(b)(1)(i)-(vi) indicate the types of services that are to be provided by an Energy Technology Commercialization Services Program.  These services include: aiding small businesses and start-up businesses in discovering useful and practical information related to the manufacture and production of new energy technologies, encouraging the application of such information, coordinate engineers and manufacturers to aid small businesses and start-up businesses, solving technical problems, assisting in the preparation of financial assistance applications, and facilitating research between universities and small and start-up businesses. 

The regulations do not include grants as part of the services that an Energy Technology Commercialization Services Program is to provide, and in fact paragraph 420.17(b)(3) requires that fees be charged for the provided services.

6.  How does DOE interpret the 180-day requirement for states to provide subgrants under EECBG?The Required Period for States to Provide Subgrants under the EECBG Program

A State that receives a grant under the Energy Efficiency and Conservation Block Grant (EECBG) Program must use not less than 60% of the amount received to provide subgrants to units of local government in the State that are not eligible units of local government (“ineligible units of local governments”).  The subgrants for ineligible units of local government must be provided within 180 days after the date DOE approves the State’s energy efficiency and conservation strategy, i.e., 180 days after the Contracting Officer signs the award. 

What subgrants are subject to the 180-day period?

The 180-day period applies to all subgrants made to ineligible units of local government.  For example, if a State uses 80% of its EECBG grant to provide subgrants to ineligible units of local government, the State must provide all of those subgrants within 180 days.

When is a subgrant “provided” to an ineligible unit of local government?

A subgrant is considered to be provided to an ineligible unit of local government grant at the time the State has obligated, or otherwise similarly committed, the funds to the ineligible unit of local government.  Refer below to how the 180-day period is interpreted. 

How is the 180-day period interpreted?

The 180-day period begins when DOE has approved a State’s energy efficiency and conservation strategy, i.e., the date on which the Contracting Officer signed the award.  However, DOE interprets this period to exclude any period of time in which DOE is reviewing substantially complete information necessary to remove a DOE condition that applies to the funding for the subgrants.   For example, if a State is providing the required subgrants through a request for proposals (RFP) and the Federal funding for the projects under the RFP is subject to a NEPA condition, the period of time during which DOE is reviewing the information provided by the State that is necessary to remove the NEPA condition does not count towards the 180-day period.

What happens if a State cannot provide the required subgrants within 180 days of the approval of the State’s energy efficiency and conservation strategy?

If a State is unable to meet the 180-day deadline for providing subgrants to ineligible units of local government, the State must submit to the Project Officer for approval by DOE an action plan that identifies specific activities and responsible parties to allow for providing the sub-grants as expeditiously as possible. 

DOE may approve the action plan and provide additional time for the State to provide the required subgrants.  Additional time provided, if any, will be dependent on the circumstances of the State.  In most instances DOE will seek to limit extensions to between 15 and 60 days.

7.   Is there a requirement in ARRA SEP or EECBG for a permanent or temporary sign or plaque to be placed at ARRA funded project sites?  A member of our staff is under the impression that such a requirement exists and is concerned that we do not have the resources budgeted to meet it.

There is no requirement under either EECBG Program or SEP for any sign or plaque to be placed at ARRA funded project sites.

8.  We are ready to issue an RFP for our revolving loan program and our legislature has defined only renewable energy systems as being eligible to receive funding under the program. Eligible systems must either be for the expansion of an existing renewable energy system to increase its generating capacity or the construction of a new renewable energy system. A question came up today regarding whether "construction" projects can be funded under ARRA. Is the construction of a new renewable energy system permissible under ARRA? Or, are there certain minimums or maximums in terms of kWh's that the system must be limited to?

Generally the use of SEP funds for construction is prohibited. 10 CFR 420.18(a)(1). However, SEP funds can be used to purchase and install equipment and materials for renewable energy measures, including for reasonable design costs, subject to the specified limitations. See 10 CFR 420.18(e). Renewable energy measures are defined as capital investments that reduce energy costs in an amount sufficient to recover the total cost of purchasing and installing such a measure over an appropriate period of time and that results in the use of renewable energy to replace the use of non-renewable energy. 10 CFR 420.2.

9.  Are there any prohibitions on transferring appropriated SEP funds for a revolving loan program into an interest bearing loan account prior to writing loans or do loans need to be written before money is transferred? Once funds are committed to a loan program, is that the same as spent? Once a loan program is set up and funds are dedicated to the loan program are there any other federal requirements that relate to when loans must be dispersed? Are SEP loan programs required to disperse funds by April 2012?

Generally, SEP program monies being used for a loan fund are considered obligated by the recipient once they have been used to capitalize an established loan fund. SEP recipients may not draw down funds to capitalize a loan fund until they have received a loan application from potential borrowers, unless state or local requirements (regulatory, statutory, or constitutional) dictate otherwise. If an SEP recipient requires an earlier draw down under such requirements, they should document the relevant requirement and provide that documentation to its Project Officer. In instances in which an SEP recipient will have the loan fund operated by a third party, the SEP recipient may draw down the total loan funds in order to provide the funds to that third party. Again, the SEP recipient should provide documentation to its Project Officer.

Under the American Recovery and Reinvestment Act of 2009 (Recovery Act) funds must be drawn down by or reimbursed to recipients no later than September 30, 2015. However, in light of the urgent economic situation facing the country, the Department of Energy shortened the time that SEP funds were available for drawn down or reimbursement in order to encourage recipients to put the funds to use quickly. Accordingly, under the SEP grant agreements funds must be drawn down or reimbursed prior to April 30, 2012.

For revolving loan funds, it is the initial drawn down or reimbursement of funds for loans which must occur by April 30, 2012. Once this has occurred any repayments received or interest earned on the funds are available to the recipient to be used for further loans under the SEP grant and will not expire so long as they continue to be used for SEP loans. If the recipient is considering closing down their revolving loan fund, they should contact their DOE program officer for further guidance.

10.  Under the State Energy Program (SEP), to what extent are construction and repair costs permissible uses of SEP funds?

The SEP regulations prohibit the use of SEP funds for "construction, such as construction of mass transit systems and exclusive bus lanes, or for the construction or repair of buildings or structures." 10 CFR 420.18(a)(1).

However, the purchase and installation of equipment and materials for energy efficiency measures and renewable energy measures, including reasonable design costs, are permissible uses of SEP funds (subject to certain conditions.) 10 CFR 420.18(e). In some instances, the installation of an energy efficiency measure or a renewable energy measure may require construction or repair work to be performed. For example, installation of solar panels on a building roof may require minor repairs to or reinforcement of the roof structure. Additionally, energy retrofit efforts may require inoperative building systems to be repaired.

To the extent that SEP funds are used for construction or repair that is directly related to and required by the installation of an energy efficiency measure or renewable energy measure, then such use is permissible. 
 

The SEP regulations prohibit the use of SEP funds for "construction, such as construction of mass transit systems and exclusive bus lanes, or for the construction or repair of buildings or structures." 10 CFR 420.18(a)(1). However, the purchase and installation of equipment and materials for energy efficiency measures and renewable energy measures, including reasonable design costs, are permissible uses of SEP funds (subject to certain conditions.) 10 CFR 420.18(e). In some instances, the installation of an energy efficiency measure or a renewable energy measure may require construction or repair work to be performed. For example, installation of solar panels on a building roof may require minor repairs to or reinforcement of the roof structure. Additionally, energy retrofit efforts may require inoperative building systems to be repaired. To the extent that SEP funds are used for construction or repair that is directly related to and required by the installation of an energy efficiency measure or renewable energy measure, then such use is permissible. 

The SEP regulations prohibit the use of SEP funds for "construction, such as construction of mass transit systems and exclusive bus lanes, or for the construction or repair of buildings or structures." 10 CFR 420.18(a)(1). However, the purchase and installation of equipment and materials for energy efficiency measures and renewable energy measures, including reasonable design costs, are permissible uses of SEP funds (subject to certain conditions.) 10 CFR 420.18(e). In some instances, the installation of an energy efficiency measure or a renewable energy measure may require construction or repair work to be performed. For example, installation of solar panels on a building roof may require minor repairs to or reinforcement of the roof structure. Additionally, energy retrofit efforts may require inoperative building systems to be repaired. To the extent that SEP funds are used for construction or repair that is directly related to and required by the installation of an energy efficiency measure or renewable energy measure, then such use is permissible. 

11.  What action is necessary for a State to demonstrate that it has obligated SEP funds for a revolving loan fund?

As stated in section 9.10 of the program guidance that accompanied the SEP funding opportunity announcement, when a state proposes to use funds for an established revolving loan fund, they are treated as obligated or encumbered. DOE further addressed the obligation issue in GUIDANCE FOR STATE ENERGY PROGRAM RECIPIENTS ON FINANCING PROGRAMS (SEP Program Notice 10-8). In addition, if the State is establishing an RLF that is to be operated by the State, funds would be considered obligated by the State submitting a letter to the program officer as discussed below.

SEP Program Notice 10-8 states that program monies being used for a loan fund are considered obligated by the recipient once they have been used to capitalize a loan fund. A loan fund may be capitalized in any of the following circumstances:

  • Receipt of a loan application from potential borrowers
  • State or local requirements (regulatory, statutory, or constitutional) dictate
  • The distribution account is operated by a third party

In addition to obligating funds through capitalization of a loan fund, if the State is establishing an RLF that is to be operated by the State, funds would be considered obligated by the State submitting a letter to the DOE project officer. The letter must provide the strategy for the RLF, and identify the scope and size of the loan program.

12.  Does the EECBG Grant provision prohibiting use of government funds to pay for decontamination and decommissioning (D&D) costs extend to asbestos and/or lead paint removal and similar items even if such activities are necessary for an energy efficiency or renewable energy project?

The decontamination and decommissioning (D&D) provision does not prohibit using EECBG funds for asbestos removal, lead paint removal and similar activities that are incidental to carrying out the EECBG activity. If the recipient determines that an EECBG activity requires additional measures for compliance with asbestos and lead paint removal requirements, DOE funds could be applied towards the cost of the energy efficiency improvement and up to 25% towards compliance efforts. Any additional costs must be borne by the recipient. 

13.  Is there any guidance as to the attribution, for reporting purposes, of energy savings between utilities and ARRA funding sources for programs using a combination of utility funds and ARRA funds?

Generally speaking, if the utility funds were used along with Recovery Act funds in execution of a Recovery Act project, energy savings would be determined from the entire project value (not just the Recovery Act supported portion).

As stated on page 7 Section 6.2.2 Reported Metrics of DOE RECOVERY ACT REPORTING REQUIREMENTS FOR THE STATE ENERGY PROGRAM (SEP)(SEP Program Notice 10-06) and page 7 Section 6.2.3 Reported Metrics of DOE RECOVERY ACT REPORTING REQUIREMENTS FOR THE ENERGY EFFICIENCY AND CONSERVATION BLOCK GRANT (EECBG) PROGRAM (EECBG Program Notice 10-07A):

"In determining [the metrics required for reporting], recipients should consider the impact of funds for the entire project, including non-Federal ("leveraged") funds in addition to [EECBG] or SEP funds. In this manner, DOE will be able to accurately measure the full impact of Recovery Act funding."

Also covered under PAGE (www.page.energy.gov) FAQs (Metrics (EECBG): General Guidelines):

"Question: Make clearer what is meant by "total project value." I assume this should be where leveraged funds are used, not in cases where a $50 million building is constructed with a $500,000 roof upgrade.

"Response: All metrics (except where specific distinctions are made) should report performance/impact based on total project value, not just that portion supported by Recovery Act funds. The project value is defined as the total cost of the project undertaken with support of Recovery Act funds. If a building retrofit priced out at $500K is supported by $250K of Recovery Act funds, the performance metrics (i.e. number of buildings retrofitted, sqft retrofitted, GHG reductions, energy savings, etc.) should be based on the entire $500K project value, not just the $250K in Recovery Act funds."

14.  If a Community Action Agency (CAA) completes a job under the Weatherization Assistance Program (WAP), and within a few months the CAA is required to do a follow-up to do some additional repair work, are these costs considered eligible costs under WAP? Furthermore, if the repair is deemed necessary due to work that the CAA subcontracted out (HVAC, roofing, etc), are these costs considered eligible under WAP?

Follow up repair work or repair work deemed necessary due to work that is subcontracted out is not considered eligible for federal funds under the Weatherization Assistance Program (WAP). Once weatherization work under WAP has been completed on a home and a final inspection has been reported to DOE as a completed unit no repair work qualifies as eligible under WAP except in the following circumstances: (1) if such dwelling unit has been damaged by fire, flood, or act of God and repair of the damage to weatherization materials is not paid for by insurance. 10 CFR 440.18(f)(2)(ii); or (2) "the dwelling units partially weatherized under [WAP] or under other Federal programs during the period September 30, 1975, through September 30, 1993, may receive further financial assistance for weatherization. . ." 10 CFR 440.18(f)(2)(iii). The above requirements are applicable to all grantees and subgrantees of WAP funds.

15.  What is the deadline for obligation of American Reinvestment and Recovery Act of 2009 (Recovery Act) funds for the Weatherization Assistance Program (WAP)?

Pursuant to the Recovery Act all funds appropriated in the Recovery Act must be obligated by the Department of Energy (Department) by September 30, 2010. In keeping with the intent of the Recovery Act, the Department indicated in guidance to the Funding Opportunity Announcement for the WAP that all funds are to be obligated by September 30, 2010. To the extent that the September 30, 2010 date refers to obligation of funds by a grant recipient under the WAP, this language is merely guidance.

16.  How do reporting entities of the EECBG program avoid double counting of metrics such energy savings, building retrofits, and energy audits, where a project is funded by more than one recipient of American Recovery and Reinvestment Act of 2009 funding and by non-federal sources of leveraged funding?

In program performance reporting, DOE intends to measure not only the impact of Recovery Act funds, but the impact of non-federal funds attracted in by Recovery Act funds (i.e. would not have been applied in the absence of Recovery Act funds). The determination of whether or not non-federal funds are "attracted in" by Recovery Act funds is left to the discretion of the recipient. A useful rule of thumb for recipients to determine whether or not the impact of non-federal funds should be counted is this: "Would the non-federal funds have been applied in the absence of Recovery Act funds?" If the answer is no, the impact of the non-federal funds should be included.

Thus, where EECBG projects are also supported by leveraged funds that have been attracted in by Recovery Act funds, metrics should report performance and impact based on total project value, not just that portion supported directly by Recovery Act funds. The project value is defined as the total cost of the project undertaken with support of Recovery Act funds. If a building retrofit valued at $500K is supported by $250K of Recovery Act funds and $250K in non-federal funds that would not have been used without the Recovery Act funds, the performance metrics (i.e. number of buildings retrofitted, square feet retrofitted, GHG reductions, energy savings, etc.) should be based on the entire $500K project value, not just the $250K in Recovery Act funds.

Conversely, if the $250K in non-federal funds would have been used to retrofit the building regardless of whether or not Recovery Act funds were used, then only the impact of the Recovery Act funds applied to the project should be counted. If in this instance the recipient is unable to readily identify which specific measures were undertaken with Recovery Act funds (e.g. whether or not Recovery Funds alone were used to purchase an HVAC unit or more efficient lighting ballast), then the recipient should estimate the benefits accruing from Recovery Act funds as a direct proportion of the Recovery Act fund applied. Therefore, if the $250K in non-federal funds noted in the example above was not attracted in by Recovery Act funds, the recipient would only report 50% ($250K Recovery Act funds/$500K Total Project Value) of the benefits accruing from the total project.

All other federal funds should not be considered when reporting the impact of EECBG funds, regardless of whether these funds were provided through the Recovery Act or not. If applied to an EECBG project, these funds should be treated similarly to non-federal funds not attracted in by the Recovery Act and should not be included the determination of benefits accruing from the implementation of the EECBG project.

17.  Can non-federal (i.e. utility low-income program) funds be leveraged with the federal American Recovery and Reinvestment Act of 2009 Weatherization Assistance Program (WAP) and standard federal WAP funds to supplement weatherization measures?

Pursuant to the Weatherization Assistance Program (WAP) regulations funds used for leveraging activities in accordance with 10 CFR 440.14(c)(6)(xiv) are allowable expenditures. 10 CFR 440.14(c)(6)(xiv) states that the State plan must include implementation of "[t]he amount of Federal funds and how they will be used to increase the amount of weatherization assistance that the State obtains from non-Federal sources, including private sources, and the expected leveraging effect to be accomplished."

Therefore, according to the WAP regulations non-federal funds may be used to leverage federal American Recovery and Reinvestment Act (Recovery Act) funds and standard federal WAP funds for the WAP. However, note if non-federal funds are used to leverage (and mix) federal Recovery Act funds then the projects supported by those funds may be subject to Recovery Act requirements (i.e. NEPA, Buy American and Davis-Bacon requirements).

18.   Can a multi-family building be weatherized under the Weatherization Assistance Program (WAP) if the building is currently being rehabilitated and no one is currently living in the dwelling units?

Can a multi-family building be weatherized under the Weatherization Assistance Program (WAP) if the building is currently being rehabilitated and no one is currently living in the dwelling units?

ANSWER: Generally, a dwelling unit is eligible for weatherization, in part, if it is occupied by a family unit that meets the necessary income qualifications. 10 CFR 440.22, emphasis added. The regulations do not define "occupied" and a State may determine that it is something less than current physical occupation (for example a lease is signed by a family unit that meets the income qualifications, but the family has not yet moved into the dwelling unit.) However, for purpose of WAP, the mere potential of renting a unit to an income-qualified family unit would not meet the "occupied by a family unit" requirement.

Note that the regulations provide an alternative to the "occupied by a family unit" requirement if the building at issue contains rental dwelling units (i.e., multifamily housing). WAP funding may be used for multifamily housing where, in part, not less than 66 percent (50 percent for duplexes and four-unit buildings) of the dwelling units in the building
* Are eligible dwelling units, or
* Will become eligible dwelling units within 180 days under a Federal, State or local government program for rehabilitating the building or making similar improvements.
10 CFR 440.22(b)(2).

As such, if the building at issue is being rehabilitated under a Federal, State, or local government program that provides for such rehabilitation subject to the units being rented to income-eligible family units, WAP funds may be used (assuming that all other relevant requirements are met). However, if WAP funds are used and the building fails to meet the qualifications of occupancy by a family unit it will result in a repayment of WAP funds to WAP. 

19.  Requesting confirmation that EECBG funds advanced to a local government sub-grantee must be placed into an interest bearing account and also inquiring about requirements/restrictions that apply to that interest bearing account.

According to the GUIDANCE FOR STATE ENERGY PROGRAM AND ENERGY EFFICIENCY AND CONSERVATION BLOCK GRANT RECIPIENTS ON PAYMENT PROCEDURES, STATE ENERGY PROGRAM NOTICE 10-011 EECBG PROGRAM NOTICE 10-013, effective June 23, 2010, advance payments to sub-grantees are appropriate in certain circumstances. See http://www1.eere.energy.gov/wip/pdfs/eecbg_sep_asap_draw_down_guidance.pdf 

It states:

Advances to Sub-grantees: Grantees can pay sub-grantees in advance using ASAP to draw down funds for actual and immediate cash needs, provided the latter demonstrate the willingness and ability to maintain procedures minimizing the time elapsing between the fund transfer and the disbursement of funds by the sub-grantee. To that end, Grantees should be able to confidently make a determination that any sub-grantee has adequate financial management procedures that enable it to conform to this basic standard of payment. Grantees must monitor the use of funds that are drawn down for any advances to sub-grantees.

The guidance quoted above is consistent with the regulation at 10 CFR § 600.221(c). It states:

Grantees and subgrantees shall be paid in advance, provided they maintain or demonstrate the willingness and ability to maintain procedures to minimize the time elapsing between the transfer of the funds and their disbursement by the grantee or subgrantee.

Also, subpart (i) of section 600.221 of Title 10 CFR states that any interest earned on advanced funds should be returned to the Federal government "promptly, but at least quarterly." That regulation further provides that the subgrantee may keep interest amounts up to $100 per year for administrative expenses.

Other than those provisions, there are no additional requirements in 10 CFR that govern advance payments, and no requirement in 10 CFR that the grant funds be deposited into an interest bearing account.

However, we point out that according to 10 CFR § 600.220, State laws and procedures for expending and accounting of its own funds governs grant funds going to the State. Therefore, State laws and procedures may require that federal grant funds be held in an interest bearing account.

20.  Can SEP-ARRA funds be used as match in a grant project funded by another federal program?

American Recovery and Reinvestment Act of 2009 (ARRA) funds obtained through the U.S. Department of Energy's State Energy Program (SEP) must be used for an eligible purpose as set forth in the SEP statute (42 U.S.C. 6321 et seq.) and regulations (10 CFR Part 420). Whether the SEP-ARRA funds may be treated as matching for purposes of another federal program that determination must be made by the other federal program.

21.  Are there set income levels for use of funds with the Energy Efficiency and Conservation Block Grant (EECBG) Program?

The Energy Efficiency and Conservation Block Grant (EECBG) Program is authorized in Title V, Subtitle E of the Energy Independence and Security Act (EISA). Pursuant to Section 544 of EISA (42 USC 17154) a grantee may use EECBG funds to carry out thirteen types of activities listed in 42 USC 17154(1) through (13). The EECBG statute does not impose any income limitation for any of the eligible activities. As long as the activity is within one of the categories listed in 42 USC 17154(1) through (13) then the activity is considered eligible.

The Weatherization and Intergovernmental Program (WIP) which oversees the EECBG program has developed a Solution Center for technical assistance resources. The goal of the Solution Center is to help eligible grantees and sub-grantees develop and implement successful energy efficiency and conservation projects and programs that meet the conditions and guidelines of the EECBG program. The Solution Center can be found at the following link:
http://www1.eere.energy.gov/wip/solutioncenter/

22.  When are funds obligated in a revolving loan fund considered loaned out? What is the deadline for making the loans? 

Loans are loaned out at the time the fund disburses cash to the borrower. SEP Program Notice 10-008C and EECBG Program Notice 09-002C specifies that “Self-administered: Funds are considered fully expended (outlaid) for grantees operating an RLF when the RLF has loaned to specific borrowers for an amount equal to or greater than the EECBG funds that initially capitalized the fund. The value of loans issued in any reporting quarter is to be reported as expenditures (outlays) for that quarter.

Third party-administered: For revolving loan funds administered by a third party, grantee funds are considered expended (outlaid) when the funds are transferred to the third party for operation of the RLF. Funds transferred to a third party administrator in any reporting quarter are to be reported as expenditures (outlays) for that quarter.

If an RLF is administered by the grantee, all funds must be loaned out (initial round of funding) within timeframe specified in the terms and conditions of the award agreement; converted for use of approved program activities after submitting and finalizing an amendment through a DOE Project Officer; or returned to DOE.

If an RLF is administered by a third party (subgrantee or vendor), all funds should be loaned to specific borrowers (initial round of funding) within timeframe specified in the terms and conditions of the award agreement; converted for use of approved program activities after submitting and finalizing an amendment through a DOE Project Officer; or returned to DOE.

Regardless of whether an RLF is administered by a grantee or subgrantee, if the RLF does not loan out funds for eligible activities under the program then DOE may take an enforcement action against the grantee and/or subgrantee, as applicable, for noncompliance of the terms of the award agreement and disallow all or part of the cost of the activity or action not in compliance or other allowable remedies against the grantee and/or subgrantee, as applicable. 10 CFR 600.243

23.  What is the deadline for making loans supported by loan loss reserves? What is the deadline for committing loan loss reserve funds to support “individual loans or portfolios of loans?” 

Loans supported by a loan loss reserve must be disbursed to borrowers by the expiration date specified in the terms and conditions of the grant. Moreover, loan loss reserve funds must be committed to support individual loans or portfolios of loans by the expiration date specified in the terms and conditions of the grant.

 

24.  If a grantee manages a revolving loan fund distribution account themselves but retains a third party program administrator, how do they obligate funds? 

Managing the distribution account constitutes operation of the revolving loan fund. Consequently, “funds would be considered obligated by the grantee upon submitting a letter to the Project Officer and receiving a confirmation response from the Project Officer. The letter must: (1) provide the strategy for the RLF and (2) identify the scope and size of the loan program.” This can be found on page 3 of SEP Program Notice 10-008B and EECBG Program Notice 09-002B.

 

25.  When can revolving loan funds and loan loss reserves be drawn down? Do funds need to be disbursed within three days of draw down? Do we need to repay interest earned on advances into a revolving loan fund or a loan loss reserve fund to the federal government?

Revolving loan funds and loan loss reserves may be drawn down in advance to capitalize the RLF at the time the fund is obligated and are not subject to the requirement that they must be disbursed within three days See 31 CFR 205.15 and 205.25; 10 CFR 420.18(d)

Interest earned from the time that revolving loan funds are advanced to the time loans are made or from the time that loan loss reserve funds are advanced to the time they are contractually committed sto support specific loans or portfolios of loans must be treated as program income and rolled back into the fund or another approved, eligible activity. However, if a grantee chooses not to roll interest earned back into the revolving loan fund or use it for another approved, eligible activity, then they must return it to the federal government. See 31 CFR 205.15 and 205.25; 10 CFR 420.18(d).

26.   Does the pass-through of SEP funds from one State agency ("State Agency 1") to another State agency ("State Agency 2") constitute a "sub-award" such that State Agency 2 is a sub-recipient? If State Agency 2 is a sub-recipient, then does the subsequent pass-through of SEP funds to another entity ("Entity A") to manage/disburse loans to individual homeowners mean that Entity A is a contractor/vendor?

The question of whether a pass-through of SEP funds from State Agency 1 to State Agency 2 constitutes a "sub-award" depends on how the two agencies relationships are defined under State law. If the two State agencies were defined by State law as two distinct entities then the pass-through of SEP funds would be considered a sub-award to State Agency 2 and a subsequent pass-through to Entity A would be a contractor/vendor award.

27.   Under the State Energy Program are State funded universities or institutions of higher education considered a State agency or sub-recipient for 1512/ jobs reporting purposes? 

The State Energy Program follows OMB jobs reporting guidance that State funded universities or institutions of higher education are considered a sub-recipient for 1512/ jobs reporting purposes when receiving American Reinvestment and Recovery Act of 2009 funds from a State agency.

28.  Are American Reinvestment and Recovery Act of 2009 (ARRA) State Energy Program (SEP) funds subject to the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act (or URA, 49 CFR Part 24)? And if so, is there any DOE guidance regarding the requirements?

Yes, ARRA SEP funds are subject to the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601, et seq.) (URA). All grantees must comply with applicable provisions of 49 CFR Part 24 which implements the URA and provides for fair and equitable treatment of persons displaced by federally assisted programs or persons whose property is acquired as a result of such programs. However, the SEP regulations at 10 CFR 420.18 prohibit the use of SEP funds to purchase land, a building or structure or any interest therein. 10 CFR 420.18(a)(2) Therefore, it is unlikely the provisions of 40 CFR Part 24 would be at issue for any activities funded by SEP funds. DOE has not released any guidance regarding the requirements. 

29.  Are there any restrictions on American Recovery and Reinvestment Act of 20009 (Recovery Act) State Energy Program (SEP) or Energy Efficiency and Conservation Block Grant (EECBG) funds (grants or loans) being used to fund projects to benefit churches/faith based institutions? 

The Recovery Act has no prohibitions on the use of Recovery Act funds being used to benefit churches/faith based institutions. In addition, the EECBG statute and SEP statute and regulations have no prohibitions on federal funds being used to benefit churches/faith based institutions. As long as the activity to benefit churches/faith based institutions is an approved, eligible activity pursuant to the EECBG statute at 42 USC 17154 and/or SEP statute (42 USC 6321 et seq.) and regulations (10 CFR 420) it may be funded by either program.

30.   The Renewable Fuels Infrastructure Investment Program Overview says that, "grantees should require that awardees continue to sell renewable fuels for a specified period of time, and have a grant recapture clause for failure". Can a Grantee of SEP or EECBG funds make the sale of renewable fuels (ethanol blends, biodiesel blends) contingent on the market demand for the fuels? 

The program overview consists of recommendations to ensure that these infrastructure investments result in renewable fuel consumption. Grantees have the flexibility to design programs that will be most effective in meeting local constituent demand. 

Is there a limit on how much a Grantee can contribute to the cost of each blender pump? Can a Grantee pay the full cost?

Under ARRA funded EECBG and SEP, generally there is no cost share requirement. Therefore, programs could pay for the full cost of equipment. Prior experience in deploying such programs suggest that a substantial subsidy is needed to attract convenient store owners/retail fueling stations, however, one of the goal's of ARRA is to leverage as much outside funding (private or other public) as possible.

Can funds be solely used for marketing and outreach efforts as opposed to installations?

Yes, given that one of the purposes of EECBG is to reduce fossil fuel emissions we are interpreting “energy used in transportation” as fossil fuel based energy used in transportation. Under this interpretation the replacement of gasoline by biofuels would be eligible under Category 7 (42 USC 17154(7)). The marketing and outreach efforts for E85 pumps would be eligible under Category 6 (42 USC 17154(6)) which allows for the “development and implementation of energy efficiency and conservation programs for buildings and facilities within the jurisdiction of the eligible entity including - . . .(C) public education.” (Marketing and outreach would be included in public education.)

Can a Grantee offer coupons/discounts to encourage the use of renewable blends instead of pump installations?

Yes - Rebate programs for energy efficiency, retrofit and conservation projects have been determined eligible. Coupons/discounts for the purchase of renewable fuels is a similar activity which supports energy efficiency improvements. Therefore, incentivizing the use of renewable fuels from E85 pumps would be eligible as a financial incentive program for energy efficiency improvements under Category 4 (17154(4))

If a State Grantee uses EECBG funds, does a State Grantee need to maintain the proportion of fund designated for entitlement entities? For example, if an entitlement entity's project is completed under budget, could a State Grantee use the remaining but now unobligated fund to install a blender pump in non-entitlement cities where a blender pump may increase the sales of renewable fuels?

As long as the State Grantee has distributed 60% of EECBG allocation to non-eligible jurisdictions, then the State Grantee could potentially take some of the funds that revert back to the Grantee as projects are completed under budget and re-allocate those funds to other non-entitlement cities where infrastructures investments are needed. 

Would installation of renewable fueling pumps receive expedited NEPA review?

It is likely that renewable fuel pumps installed at existing facilities could qualify for a prospective categorical exclusion that would cover all such installations. If Grantee intends to limit its program to these kinds of installations, it should submit that limitation to DOE in its program or environmental documents.

Installations of renewable fuel pumps at new facilities may be able to qualify for a CX on an individual basis. A Grantee would need to submit a completed environmental questionnaire for each new facility.

If a Grantee is only paying for the installation of the blender pump, can other aspects of the project such as storage tank or underground hardware replacement be exempt from Davis-Bacon wage requirements?

The Recovery Act provides that "all laborers and mechanics on projects funded directly by or assisted in whole or in part" with Recovery Act funding are subject to the Davis-Bacon Act (DBA). Therefore, if the EECBG-funded project is part of a larger project, the entire project is subject to DBA. This is especially true where the EECBG-funded work is done in conjunction with the non-EECBG-funded work, so that all the work is ongoing at the same time. If, however, the work can logically be segregated into two separate and distinct projects the entire project will not be subject to the DBA. In this case, the work such as purchase and installation of a storage tank or underground hardware could be one project and the purchase and installation of the blender pump (EECBG grant funding) could be a second and totally separate project. If the two projects are such that the work is not performed together (i.e., the work using non-Recovery Act funds is completed prior to or after the Recovery Act-funded work and the work crews are not working together) and separate contracts are used for the two separate projects, the non-Recovery Act funded work would not be subject to the DBA. If the two projects are performed together or are all part of the same contract, then DBA would be applicable to the entire project. 

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