Sustainability Elements of the ARRA, and Getting the Most out of Stimulus Funding
Jeannie Renne-Malone, LEED APNational Director – Climate Change & GHG Management
The American Recovery and Reinvestment Act: Dispatches from the Front Lines
Congress for the New Urbanism
Overview
• Sustainable Elements of the ARRA• The Energy Efficiency and
Conservation Block (EECBG) Program• Getting the Most of Your EECBG
Funds• Using Sustainable Return on Investment
(SROI) to Make a Green Business Case for Competitive Funds
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ARRA: Stimulus InvestmentsWith Sustainability Goals
• Aid to States and Local Governments– Health care– Energy– Infrastructure– Education– Public safety
• Emphasis on Sustainability – Clean Energy Projects – EECBG Funding– Sustainable Transportation Solutions– Environmental Protection– Support for Climate & Sustainability
Initiatives– Green Job Creation 3
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• $3.2 Billion from DOE to Cities, Counties, States and Tribes throughout US
• $400 Million Competitive Grants – to be released soon
Energy Efficiency and Conservation Block Grant (EECBG) ProgramOverview
4
5
• Reduce fossil fuel emissions
• Decrease overall energy consumption
• Improve energy efficiency in the transportation, building, and other energy consuming sectors
EECBG ProgramPurpose
5
6
EECBG Evaluation Criteria
• Jobs created and/or retained • Energy savings on a per dollar invested basis • Renewable energy capacity installed • Greenhouse gas emissions reduced • Funds leveraged
• Web-based reporting system• Individual output metrics based on activity type
*Framed through Sustainable Return on Investment
Keys to Getting the Most Out of EECBG
1. Don’t Use All the Money Doing Easy Things (Make Wise Choices)
2. Be Sure to Establish Energy and GHG Baselines
3. Anticipate More Competitive Funding Initiatives
4. Make a “Green” Business Case
5. Measure Your Sustainable Return on Investment (SROI)
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Don’t Use All the Money Doing Easy Things
• Be Mindful of DOE’s Priorities– Leverage– Legacy– Jobs– Energy Efficiency and GHG Reduction– Resilience – Return on Investment
• Strategic Planning and Detailed Analysis• P3 Development verses Capital Investments
Think of EECBG Funds as Venture Capital8
Be Sure to Establish Energy and GHG Baselines
• Reporting Expectations• Track Record for Future
Energy Funding
• Emerging GHG Regulations
Avoid the Need for General Fund Expenditures9
Anticipate More Competitive Funding Programs
• Supply (of Federal Funds) verses Demand
• Funding Directed Toward Federal Priorities
• Anticipate Transparency Measures
• Aim for the “Hot” Buttons
Make the Most Convincing Case10
Make a “Green” Business Case
Your Funding Proposals Should Include: • A Baseline Forecast for Achieving Outcomes• Facts Supporting a Case for Incremental Benefits• Detailed Jobs Projections• Energy Efficiency and Sustainability Summary (with
backup)• Projections for Enhancements to Energy Resiliency
and Business Continuity
Present a Detailed Cost Benefit Summary(including NPV/ROI/SROI) 11
Measure Your Sustainable Return on Investment (SROI)
• Assess the Financial Return on Investment• Assign Monetary Values to the Non-Cash Risks,
Benefits, and Externalities including:– Changes in GHG and
Air Contaminant Emissions– Health and Safety– Water Saved– Productivity– Mobility/Congestion– Waste Avoided– Other Factors
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SROI Flow Diagram
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Operating Cost
Increases ($)
Capital Costs ($) Associated Maintenance
Costs ($)
Disposal Costs ($)
Costs
Cash• Reduced Electricity Costs• Reduced Heating/Cooling Costs• Reduced Water Costs• Reduced Sewage Costs• Reduced Waste Disposal Costs• Other Reduced Operational
Costs
Non-Cash• Reduced Green House Gas
Emissions• Reduced Air Contaminant
Emissions• Fresh Water Conserved• Improved Health• Improved Productivity• Improved Resiliency• Improved Safety
Example of Benefits
Discounting (%)
Total Benefits ($)
Total Costs ($)
Reveals a project’s Full Value
Output Metrics
($)
SROI – Considers All Benefits
Project’sCash
Impacts
CapitalOperations
& Maintenance
LCCA or FROI
FROI + Internal
SROI
InternalNon-CashBenefits
ProductivityHealth & Safety
Mobility
External Costs & Benefits
Green House Gases
Criteria Air Contaminant
Water & Solid Waste
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Build Your Business CaseAround the Sustainability “S” Curve
RISK ANALYSIS OF SUSTAINABLE INITIATIVES - JHU NET PRESENT VALUE
$16.4$27.0
$30.4$31.6
$32.5$33.5
$34.3$35.1
$35.8
$37.5$38.2
$39.1$39.9
$40.9$41.9
$43.2
$47.0$59.5
$0.6
$2.6
$3.3$3.9
$4.4$4.9
$5.4$5.9
$6.9
$7.4$7.9
$8.4$9.0
$9.6
$10.4
$12.5
$19.8
$36.6
$29.0
$44.7MEAN: $36.7
$30.5
$1.8
$11.3
$6.4
MEAN: $6.5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
$0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0
Total NPV ($Millions)
Pro
bab
ility
of
Not
Exc
eed
ing
SROI FROI
Health & Productivity
Externalities
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SROI can Lead to Wiser Use of EECBG Resources
• Optimized Choices among Broad Categories and Competing Initiatives– City Departments (e.g., Fleet vs. Public Works)– Non-profit and Private Sector (building retrofits vs. new
generation)– Balancing Direct Investments (City-owned vs. non-
governmental facilities)
• Identify Preferred Options within Specific Areas– Recycling and Waste Management– Signals and Street Lighting– Waste-to-Energy– Wastewater Treatment
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Targeted Applications of SROI for Maximum Sustainable Outcomes
• Screen and Prioritize Your Capital Improvement Program – Saves Money and Maximizes Important Benefits– Forces Lower Rank Projects to be Reevaluated to Improve
SROI
• Can Help Find Best Solutions in Individual Sectors– Buildings and Operations– Transportation Improvement Programs– Stormwater– Waste Management– Water Supply and Treatment– Wastewater Treatment– Greenhouse Gas Management
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SummaryMeasuring “Green” Will Help You Make the Most of Your EECBG Funds
• Leverage Your EECBG Funds Like Venture Capital• Avoid the Need for a General Fund Expenditure• Make the Most Convincing Case• Your Funding Proposals Should Present Cost Benefit
Details in NPV/ROI/SROI• Use the Sustainability “S” Curve to Explain the
Benefits to Your Stakeholders• Apply SROI to Make Wiser Use of EECBG
Resources
For more information: www.HDRGreen.com | [email protected] 18
Sustainability Elements of the ARRA, and Getting the Most out of Stimulus Funding
Jeannie Renne-Malone, LEED APNational Director – Climate Change & GHG Management
The American Recovery and Reinvestment Act: Dispatches from the Front Lines
Congress for the New Urbanism