In this Emerging Issues Analysis, Svend Brandt-Erichsen of Marten Law Group explains the process that will be used to award funds appropriated in the federal stimulus bill for various projects relating to renewable energy and energy efficiency, electricity transmission, transportation infrastructure, and water and wastewater infrastructure. He also discusses who decides how the funds will be allocated and the timeliness for these decisions.

“As has been widely reported, there is over $110 billion for energy and transportation infrastructure projects in the federal stimulus bill signed by President Obama on Feb. 17, 2009, including various and varied energy generation and efficiency projects, transportation projects and monies for environmental cleanup and restoration,” he writes.  “For those who are looking for a piece of the pie -- and there are many -- the key is understanding the process that will be used to award the funds, who decides, and the timelines for these decisions.

“Most importantly, the stimulus monies are mainly being channeled into existing programs. For example, in the energy sector, the Department of Energy already administers federal loan guarantees, and is expected to apply its existing procedures in making decisions on projects funded with stimulus monies, including renewable energy transmission projects. States will control new stimulus funds for roads, transit, clean water and drinking water projects.

“There is no national process for prioritizing projects, and no lottery or any other new formula. Infrastructure funds are being distributed to the states through existing formulas -- although highway funds and some of the other funds will be redistributed among the states if not committed within a few months. There is additional funding for existing federal infrastructure projects, such as harbors and flood control projects funded by the Corps of Engineers, and dams and water projects funded by the Bureau of Reclamation. There are, however, few truly new construction projects funded by the stimulus bill.

“Federal tax credits have long supported the financing of wind, solar, and other renewable energy projects. But at a time when many potential financial backers have suffered significant losses, investors and lenders do not have enough profit to make use of them. Tight credit markets also have taken their toll on financing of renewable energy projects. The stimulus bill offers relief for both problems.”

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