4. IRA presentation — original pdf

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The Inflation Reduction Act City of Austin Opportunities Rohan Lilauwala, Office of Sustainability Sep 2022 About ● Largest investment in climate in US history ○ $391 billion ● Projected 40% reduction in GHGs by 2030 (from 2005 levels) ○ Further federal action + local/state action is needed to meet US goals (50-52% GHG reduction) as part of Paris Agreement ● Funding opportunities for City of Austin departments as well as community partners to work on climate action Breakdown of Funding in IRA Source: RMI GHG Reductions / Environmental Justice $5 b $2.8 b Climate Pollution Reduction Grants for local and state plans and implementation projects to reduce GHGs Environmental and Climate Justice Block Grants for community- led climate, resilience, pollution mitigation, capacity building projects Direct funding opportunity for City Projects Opportunity for City to support community-based organizations, help find resources and build capacity Direct Pay Tax Credits Tax-exempt entities like cities or municipally-owned utilities can claim a tax credit despite having no tax liability. ● Renewable Electricity Production ● Renewable Energy Investment ● Carbon Oxide Sequestration ● Zero-Emission Nuclear Power Production (new in Opportunities for AE to directly invest in renewable assets, EDD advanced manufacturing incentives, fleet savings, clean ARR trucks, PARD/WPD/AW/DSD carbon sequestration projects, etc. ● Clean Hydrogen Production Credit (new in IRA) ● Advanced Manufacturing Production (new in IRA) IRA/CHIPS) ● Clean Electricity Production (new in IRA) ● Clean Fuel Production (new in IRA) ● Clean Energy Investment (new in IRA) ● Qualifying Advanced Energy Project (new in IRA) ● Clean Electricity Investment (new in IRA) ● Alternative Fuel Refueling Property ● Qualified Commercial Clean Vehicles (new in IRA) Direct Pay Tax Credits Many tax credits have ‘adders’ or bonus credits awarded for many different purposes, which can be stacked to maximize benefits: ● If prevailing wage/apprenticeship requirements are met ● If projects are located in disadvantaged communities (additional bonus if benefits primarily flow to residents) ● For meeting domestic content requirements ● For projects in an ‘energy community’ Transportation $290 m Alternative Fuel and Low-Emission Aviation Technology Program $3.2 b Neighborhood Access and Equity Grant Program for highway removal, remediation, capping + complete streets, active transportation + access to essential destinations $600 m Clean Heavy-Duty Vehicles Grants and Rebates, to cover incremental costs of vehicles, fueling/charging infrastructure, workforce development, technical assistance Potential funding for clean ARR trucks, CapMetro buses, AISD buses Aviation department opportunity - cleaner jet fuel development and use Lots of potential projects - I-35 Caps, ASMP projects, Corridor projects, sidewalk + bike lanes etc. Carbon Sequestration $1.5 b $5 b State and Private Forestry Conservation Programs - multiyear, programmatic, competitive grants for tree planting and related activities Energy Infrastructure Reinvestment Financing - loan guarantee program to support projects that rework, repurpose, or replace energy infrastructure no longer in operation or support the operation of energy infrastructure that reduces, sequesters, or uses GHGs or pollutants Local governments are eligible, could be an opportunity for DSD, PARD, WPD, AW etc to fund forestry projects New uses for retiring AE assets, loan guarantees for direct air capture Buildings $1 b $1 billion To provide local and state governments with assistance for Latest and Zero Building Energy Code Adoption. Includes active training, enforcement programs, and measurement of compliance. For loans and grants that improve the Energy Efficiency, Water Efficiency, or Resilience of Affordable Housing. Includes funding for data analysis, benchmarking, IT. Local governments are eligible, opportunity to improve building codes and advance ACEP Sustainable Buildings Goals Flows from HUD to housing providers. HACA/HATC could access, or HPD could spread the word or provide technical assistance to non-profit providers Greenhouse Gas Reduction Fund (‘The Green Bank’) $7 billion for grants, loans, technical assistance for low-income communities to deploy/benefit from zero emission technologies $20 billion ($8 billion for low-income) for grants to provide investment to leverage private sector investment or assist communities to reduce GHGs ● Municipalities + non-profits eligible for this funding ● Potential to build and capitalize a local green bank to invest in local projects ● Leverage private sector investments (every $1 could unlock $5-9, per NRDC) ● Potential to partner with local green financing nonprofits Residents and Businesses $9 b Tax Credits Rebates (designed/administered by States): ● Home Energy Performance-Based, (25C) ● Energy Efficient Home Improvement Credit Whole-House Rebate (HOMES) Program ● Energy Efficient Commercial Buildings ● High-Efficiency Electric Home Rebate Deduction (179D) Program (HEERA) ● Residential Clean Energy Tax Credit (25D) ● EV Tax Credit (30D) Opportunities for Austin Energy to: ● Spread the word about these programs ● Provide assistance to customers (esp. low-income/communities of color) to help apply ● Build knowledge, skills, and experience in the contractor community through training programs, so they are ready to install/maintain clean technologies Justice40 Initiative ● Whole of government plan that 40 percent of the overall benefits of certain Federal investments flow to disadvantaged communities ● Communities will be screened based on the Climate and Economic Justice Screening Tool ● How does this relate to IRA? ○ Some programs dedicated to serving disadvantaged communities (i.e. Environmental and Climate Justice Block Grants) ○ Some programs have 40% set aside (Neighborhood Access and ○ Equity Grant Program, GHG Reduction Fund, Rebates) ○ Many tax credits have adders that increase the value of the credit when disadvantaged communities are served) The Problem - Limited City Grant Infrastructure Grants Decision Process ● Long, with many veto points ● Requires many people to sign off ● Needs early buy-in from leadership Our Approach - Connect the Dots Our Approach - Connect the Dots ● Meetings with 15+ departments to identify gaps ● Everyone looking to us to lead on this ● Development of a plan to hire AECOM off the environmental rotation list ○ ○ Initial funding from Management Services budget Leadership, finance, and intergovernmental relations supportive of approach ● Regular check ins to make sure departments are aligned Climate Pollution Reduction Planning Grants ● $1 million in non-competitive funding for regional climate planning ● Unlocks the possibility of applying for CPRG implementation grants - $4.6 billion in total (coming early 2024) ● City of Austin (Sustainability) leading process ● AECOM supporting grant application ● Deadline to apply 5/31 ● Outputs ○ ○ Priority and Comprehensive Climate Action Plans Four years of regional climate planning Partners City of Kyle City of Buda City of San Marcos City of Lakeway City of Round Rock City of Pflugerville City of Austin Travis County Hays County Bastrop County Clean Air Force CAPCOG CAMPO SPEER Movability Sierra Club Lone Star Clean Fuels Alliance Urban and Community Forestry Grants ● Competitive funding from USDA - $1.5 billion in funding ● City staff convening a group of 20+ CBOs on an application ● Application for $20 million+ over 5 years ● Application led by American Youth Works, with support from AECOM Urban and Community Forestry Grants Urban and Community Forestry Grants Projects exclusively in disadvantaged communities ● ● Tree Planting and Maintenance ● Workforce Development ● Community Leadership/ Empowerment and Education Research/ Data Analysis/ Monitoring Urban and Community Forestry Grants ● Addresses many goals/strategies in climate equity plan ○ Green jobs and workforce development ○ Achieving 50% local tree canopy cover ○ Prioritize local community initiatives ○ Regional collaboration ○ Protect and manage natural lands ● New model of city-supported application, with CBO as lead ● Deadline - June 1 Austin Energy Pursuits ● Energy Efficiency Conservation Block Grant $855k in formula funding ○ ○ AE exploring how to best use funds to meet objectives ● Charging and Fueling Infrastructure Grant ○ Competitive grant program with $700 million for electric vehicle (EV) charging infrastructure and other alternative fueling infrastructure projects in urban and rural communities in publicly accessible locations, including downtown areas and local neighborhoods, particularly in underserved and disadvantaged communities ○ AE putting together an application Interdepartmental Workshop - June 7 ● It’s difficult to go from idea to application from announcement to grant deadline ● We need to do homework to hit the ground running ● AECOM to facilitate a workshop with city staff to look at funding, identify projects, and linkages between them ● Output: preliminary project list and recommendations of project bundles to support compelling grant proposals What’s Next ● Submit applications for CPRG and UCFG ● Get departments together for workshop, develop list ● Go after other opportunities as they arise