The American Recovery and Reinvestment Act (ARRA) dramatically reenergized local governments' ability to help address their energy and infrastructure issues, primarily through billions of dollars in the Energy Efficiency and Conservation and Smart Grid Investment Grant (SGIG) programs. Those stimulus funds have been used to upgrade facilities and public spaces, reduce energy consumption and create opportunities for "green" jobs and businesses. The resulting improvements can deliver long-lasting environmental benefits that can help cities and counties meet their energy and emissions reduction goals.

With about 45 percent of the funds already disbursed by May 2010, much of the work is beginning to take shape. And, cities and counties continue to explore ways to use the funding to improve their communities, including energy retrofits offset by guaranteed energy savings and smart grid initiatives, such as automated meter networks and demand response programs.

Maximizing grants

Buildings account for nearly 40 percent of energy use and 70 percent of electrical use in the United States. So, many cities have identified energy efficiency and infrastructure improvements as primary uses for their energy block grant funds. A recent study from the U.S. Conference of Mayors (USCM) indicates 83 percent of cities have earmarked their EECBG funds to retrofit government facilities, with other uses including solar installations, LED traffic and street lighting, and energy awareness campaigns.

To accomplish energy retrofit projects, more than half of the USCM survey respondents plan to use their EECBG funds as part of an energy savings performance contract, a financing tool that allows organizations to pay for facility improvements and upgrades through the guaranteed energy savings they generate. By incorporating energy block grants with guaranteed energy savings, cities and counties can stretch their funding without affecting operating budgets or requiring additional taxpayer dollars. Using energy savings also counters concerns about excess spending because projects that pay for themselves in a definitive time period will not burden governments with excessive debt obligations after stimulus funds are gone.

Read the entire magazine feature from American City and County, our sister publication.

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