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NOTICE OF INTENT (NOI)
Gap Grant Funding for Energy Efficiency and Clean Energy Projects
At Drinking Water and Wastewater Facilities in Massachusetts
DEP-NOI-CERP-FY2018-05
COMMBUYS#: BD-18-1045-BWR00-BWR01-20572
October 5November 13, 2017
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Note: The deadline for submittal of applications has been extended from Nov. 24, 2017 to Nov. 30, 2017, as specified on pages 5 and 7 of this NOI.
INTRODUCTION
Treating drinking water and wastewater consume a significant portion of the total electric usage by municipalities in Massachusetts.[1] As large consumers of electricity, drinking water and wastewater treatment facilities represent attractive opportunities for clean energy projects, including both energy efficiency and renewable energy projects. The Massachusetts Department of Environmental Protection (MassDEP) has been working since 2007 to identify and implement clean energy projects at these facilities in collaboration with many partners, including the Massachusetts Department of Energy Resources (DOER), the Massachusetts Clean Energy Center (MA CEC), the U.S. Environmental Protection Agency (EPA), University of Massachusetts (Lowell and Amherst), and the electric and gas utilities.
The Massachusetts Clean Energy Results Program (CERP), a government-led energy and environmental partnership between the MassDEP, DOER and MA CEC, developed a streamlined “Gap Grant” program that helped municipalities reduce their operating costs, stimulate the local economy and improve the environment. In 2014 Massachusetts awarded one million seven hundred thousand dollars ($1.7 million) in state “Gap Funding” to jump-start and implement thirty (30) clean energy projects at municipal drinking water and wastewater facilities across the Commonwealth. In 2016, a cost-benefit analysis of the Massachusetts Gap Funding program was done in partnership with American Water Works Association (AWWA) and the Policy Navigation Group in Washington D.C. This analysis showed that the Massachusetts investment of two million five hundred thousand dollars ($2.5 million) in energy efficiency projects (Gap Funding grants plus Mass Save® energy utility incentives) is expected to result in over forty million two hundred thousand dollars ($40.2 million) of public benefits over fifteen (15) years: yielding over thirty-one million dollars ($31 million) of energy savings for municipal water facilities and over nine million dollars ($9 million) of public environmental benefits. The projected benefit-cost ratio is over 15:1, meaning that more than $15 in public benefits will be achieved for every public dollar invested. Additional information on the Clean Energy Results Program and the “Gap I Grants” can be found at: MassDEP Gap Grant Model.
While Massachusetts has seen many of its drinking water and wastewater facilities become energy leaders working towards clean energy goals, barriers remain that continue to make the implementation of clean energy projects challenging. These barriers include operational and managerial needs to limit the number of funding and financing requests proposed to ratepayers. Because each request for funding leads to the impression, and often the actuality, of rate increases, and because these requests must be approved through the annual municipal budget cycle, they are often limited. Often, funding is only requested when an urgent need arises, such as an emergency, a state regulatory compliance requirement, or when large infrastructure improvements are needed. The result is delayed implementation of clean energy projects, both large and small, until the time of a facility upgrade. Small to medium efficiency projects in particular that are not able to be executed with operating funds, but do not warrant seeking stand-alone project financing, are often postponed and overlooked. By delaying action, many drinking water and wastewater utilities have historically missed opportunities to regularly advance energy projects to reduce their energy use, operating costs, and carbon footprint.
In order to address these barriers, MassDEP and DOER have collaboratively created a grant opportunity to provide an additional round of Gap Funding to advance efficiency projects and install clean energy projects. The program is designed to expedite implementation of previously assessed energy efficiency and clean energy generation projects. By providing this “Gap II” funding, the goals of MassDEP and DOER are to:
1) Reduce facility energy and operating costs – thereby enabling drinking water and wastewater utilities to reinvest their annual cost savings back into their infrastructure and assets;
2) Continue the cost-effective and results based efficient Gap Funding grant model to leverage funding from multiple partners for clean energy project implementation;
3) Address the challenge of funding smaller efficiency and clean energy projects that have a cost too large to cover with an operating budget, but too small to warrant financing; and
4) Provide additional financial grant incentives for larger efficiency and clean energy projects that are cost effective.
PROGRAM OUTLINE
To achieve the goals of this Program, MassDEP, with funding assistance from DOER, is making three million dollars ($3,000,000) in grant funds available for drinking water and wastewater facilities (public municipal, district, or authority) to assist with the implementation and completion of both energy efficiency and clean energy generation projects statewide. This Program is designed to accomplish the following objectives:
1. Through a simple and streamlined online application process provide funding to expedite the installation of clean energy and energy efficiency projects at drinking water and wastewater facilities;
2. Incentivize the direct investment in clean energy by municipal, district or authorities operating drinking water or wastewater facilities by awarding grant funding to lower operating costs and reduce their carbon footprint.
3. Communicate project results through a public education and outreach component for each project to highlight the immediate and long-term benefits of energy management and sustainable water infrastructure.
Facility Eligibility Requirements
· Publicly-owned and contract-operated municipal facilities, districts or authorities - which are treating or pumping drinking water or wastewater - are eligible for Gap II funding.
· The facility types listed above must submit a complete application “online” including all requested supporting documentation in the required file formats.
· Districts or municipalities that wish to fund work at more than one facility should submit a single application that includes all projects. For example, a district operating two independent drinking water treatment facilities with separate distribution systems should submit one application that includes all projects at both treatment facilities and distribution systems.
· Private or commercial facilities are not eligible for this funding opportunity.
Project Eligibility Requirements
· Energy efficiency projects are eligible.
· Renewable energy generation projects, including wind, solar photovoltaic (PV), in-conduit hydropower are eligible.
Note: Up to 200 kW maximum of solar photovoltaic (PV), at a facility-owned installation, is eligible. Additional information on the Solar Massachusetts Renewable Target (SMART) Program MA Upcoming SMART Solar Incentive Program, and the current net metering cap allocations and remaining capacity for the electric utilities can be found at: MA System of Assurance of Net Metering Eligibility.
· Renewable thermal energy projects, such as solar thermal, air or water-source heat pumps, are eligible.
· Anaerobic Digestion and/or Combined Heat and Power owned by the municipal facilities, districts or authorities are eligible.
An eligible drinking water or wastewater facility must submit an application for identified energy efficiency and or clean energy measures. The estimated energy and cost savings for all eligible projects must be quantified and documented by a previously completed energy assessment, energy audit, or technical evaluation. This document must be submitted online with all other required application materials. Examples of acceptable documentation include, but are not limited to, an energy assessment for efficiency measures, a technical study examining energy savings from adding variable frequency drives (VFDs) to pumps, or a feasibility study indicating potential for renewable energy generation. This documentation must include the estimated total project costs and an estimate for potential energy savings or generation (expressed in kilowatt hours (kWh), therms, gallons, and monetary cost savings, etc.). Before awarding Gap II grant funding, MassDEP must have a confirmation of the energy utility project’s financial incentives/contributions secured for the project (i.e., from Mass Save®, or a Municipal Light Plant).
No awards will be made for energy assessments, technical evaluations or feasibility studies. Engineering costs required to implement eligible projects can be included in the total project cost. In-kind labor costs cannot be included, and cannot be counted as the required 10% minimum cost share contribution. Grant awards will be distributed on a reimbursement basis, based on actual costs, and terms contained in the Standard Contract Form.
SELECTION OF AWARDEES
Applications will be considered as follows:
1. Complete applications. Only complete applications will be considered. Any application not completed in its entirety, including all requested attachments in the specified file formats, will be rejected. Applicants will be notified if their application is rejected. There is no guarantee that notification will occur in time for a re-submission to be considered.
2. The maximum total Gap II Grant available is $200,000. Please note that grant applications will be reviewed and awards made based on total project costs – with one funding track for smaller projects less than $100,000; and a second funding track for larger projects greater than $100,000. Funding request amounts should be determined after taking all other potential grants and incentives into account. For anticipated funding sources such as other grants or loans, whether or not they have been secured, please note the application or decision date and include a copy of the application(s) decisions/awards for those grants and loans. All clean renewable energy generation projects must be municipally-owned by the drinking water or wastewater facility; and all associated energy cost savings or revenues generated must directly benefit the facility’s ratepayers.
3. Applicant Cost Share. The required applicant cost share contribution is a minimum of 10% of the total adjusted project costs (total project costs – incentives = adjusted project costs x 10% minimum municipal cost share). The cost share contributed by the facility may include cash and borrowed funds but may not include other grants or Mass Save® incentives.
4. Evaluation Criteria.
· Applications for total Gap II grant funding of less than $100,000 will be evaluated based on the following criteria:
· Cost-effectiveness of MassDEP’s Gap II grant ($ grant invested/projected energy savings);
· Total projected amount of energy savings (kWh, therms, gallons, etc.);
· Energy utility incentives/contributions secured for the project (i.e. Mass Save® and Municipal Light Plant (MLP) funding);
· Estimated project completion date; and
· Applicant’s cost share contribution above the required minimum.
· Applications for total Gap II grant funding for more than $100,000 will be evaluated on the following criteria:
· Cost-effectiveness of MassDEP’s Gap II grant ($ grant invested/projected energy savings);
· Total projected amount of energy savings (kWh, therms, gallons, etc.);
· Energy utility incentives/contributions secured for the project (i.e. Mass Save® and Municipal Light Plant (MLP) funding);
· Estimated project completion date; and
· Applicant’s cost share contribution above the required minimum.
5. Timely Submission of Application. MassDEP will begin accepting all Applications (electronically), starting on November 6, 2017 continuing through November 24, 2017 November 30, 2017. Applications received after November 24 November 30, 2017 will not be eligible for consideration.
6. Grant Awards. All grant awards will be between MassDEP and the publicly-owned municipal facility, district or authority. The scope and terms of the grant award agreement will be incorporated into a MassDEP Standard Contract Form and attachments. Grant awards will be distributed on a reimbursement basis, based on actual costs and terms contained in the Standard Contract Form.
7. Program Goals. In the event that the total amount of funding requested exceeds the allocated three million dollars ($3,000,000) available, MassDEP reserves the right to allocate funding according to the relative number and size of all the applications received as well as the application of the project evaluation criteria noted above. This is to ensure that the following goals of this program are achieved.
1) Expedite installation of clean energy and energy efficiency projects at drinking water and wastewater facilities.
2) Incentivize direct investment in clean energy by municipal, district or authorities operating drinking water or wastewater facilities by awarding grant funding to lower operating costs and reduce their carbon footprint.
3) Complete public education and outreach components in each project to highlight the connection and importance between energy and water infrastructure, and raise awareness of the project’s benefits.
8. Adjusting Awards. MassDEP reserves the right to reduce or increase the awards based on total funding available, and applications received.
REQUIRED APPLICATION MATERIALS TO BE SUBMITTED ONLINE
Each of the following items must be included in order for your application to be considered complete. If any required materials are missing, your application will not be considered complete and will not be considered for Gap II grant funding.
Applicant Information and Funding Overview (Appendix A)
Signed Certification of Application and Financing Certification (Appendix B)
Grant Application Data Table (Appendix C)
Complete energy assessments or studies describing the proposed efficiency and clean energy generation projects, including estimated energy savings or generation and estimated costs.
Supporting documentation from other grant or incentive partners (such as notice of receipt of application or a communication) indicating that the proposed clean energy project(s) are funded or are likely to be eligible for a grant or incentive.
PRE-APPLICATION CONSULTATIONS
This funding opportunity is for specific, documented clean energy projects (energy efficiency and on-site renewable energy generation). To facilitate the application process, MassDEP is providing assistance in completing the Grant Application Data Table (Appendix C) to interested drinking water and wastewater facilities through its Clean Energy Results Program (CERP). A pre-application meeting with your MassDEP CERP Contact is available upon request and is strongly recommended (see below).
In addition to the required applicant cost share through direct contribution or cost share, additional project funding sources must be described included in the Grant Application Data Table as applicable:
· Direct contributions by the drinking water or wastewater facility (municipal, district, authority)
· Financing secured for the project
· Mass Save® energy efficiency incentives (e.g., National Grid, Eversource, Cape Light Compact, Unitil, Columbia Gas, Liberty Utilities, Berkshire Gas, and Blackstone Gas Company)
· Municipal Light Plant (MLP) energy efficiency incentives
MA Department of Energy Resources (DOER) grants (Green Communities etc.)