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Weekly UpdatesTHE AMERICAN RECOVERY & Reinvestment Act of 2009 is a complex beast. The act, better known as the federal stimulus package, seeks to rejuvenate an economy in the middle of what has been dubbed the Great Recession.
The stimulus bill also has another, smaller goal: to push the United States toward a "greener" economy. The $787 billion package promises that more than $80 billion--about 10 percent of the total--in spending and tax cuts will go toward increasing energy efficiency and developing energy sources that are alternatives to fossil fuels.
In Arkansas, no one knows exactly how much of the state's projected $2.9 billion share of the stimulus money will result in "green" endeavors, but the total reaches at least $165 million.
A number of state agencies are overseeing stimulus-related programs that claim both to create jobs and follow President Barack Obama's goal of transitioning the nation to a green economy. Federal agencies administer several other programs, meaning Arkansas will receive funding only if individual proposals gain approval.
Programs range from a $1.7 million Diesel Emission Reduction program to several programs to modernize old buildings and, in the process, increase the state's energy efficiency. Officials hope that updating aging buildings--both government and privately owned--will reduce the state's energy consumption and bills.
The state's fledgling wind power industry also likely will gain indirectly from the stimulus package. If the nation continues diversifying its sources of energy generation, windmill manufacturers could see production continue during a tough economy for manufacturers, an industry spokesman said.
Reduce Consumption
Weatherizing existing buildings is a major facet of programs three Arkansas agencies will oversee.
Helping low-income residents make their homes more energy efficient will bring in about $50 million in stimulus money for the Arkansas Department of Human Services.
The Arkansas Economic Development Commission is overseeing about $49 million, with a large chunk devoted to making government buildings more energy efficient.
And though the Arkansas Department of Highway & Transportation is allowing local public transit entities to apply for money to upgrade buses, most of the state's mass transit authorities are using stimulus money to upgrade facilities built in the early 1980s, Mickey Newcomb, the ADHT's public transportation administrator, said. Currently, local transit authorities have received approval for 65 grants worth about $15 million through the U.S. Department of Transportation.
Renovations and weatherizing might not be the sexiest of green initiatives, but they can make a big difference.
"The buildings in our state and around the country use a significant amount of our energy, so they are the place we'd like to look at to be able to reduce our energy use," Chris Benson, head of the AEDC's Arkansas Energy Office, said. "The overall objective of these funds is to be more efficient and reduce fossil fuel emissions."
The AEDC will receive the bulk of funding through the State Energy Plan--$39.4 million to be exact, Benson said. The remaining $9.6 million will go toward Energy Efficiency & Conservation Block Grants.
The Arkansas Energy Office's $39.4 million will go to programs it deems necessary. The office so far has selected 13 programs to fund, Benson said, but the U.S. Department of Energy has not yet approved any of them.
The approval process for stimulus money varies depending on the program. Some programs gain approval directly from federal agencies; some first go through a state agency for approval before gaining ultimate approval from the feds; and some allow state agencies to appropriate the money, but only after the state agency's selection criteria are approved by the federal agency doling out the money to the individual states.
About 60 percent of the $9.6 million block grant money will fund competitive grants for small cities and counties. The communities will apply for the programs, and the AEDC will select winners based on criteria that the U.S. Department of Energy approved. The remainder of the grant money will benefit city and counties throughout the state, Benson said.
Weatherization
The weatherization trend goes beyond government buildings. The Arkansas Department of Human Services will receive $50 million from the stimulus package. The money will benefit the weatherization of low-income houses throughout the state.
"That is a program that has been ongoing," Julie Munsell, a DHS spokesperson, said. "But it has gotten a lot of new funding."
The program has operated on an average yearly budget of $4 million in recent years, Munsell said. The money allowed the program to weatherize about 1,200 homes per year.
Lowering energy bills can be a boon to the families who benefit.
"It certainly will, in the process of assisting low-income families, help them get better efficiencies out of their home," she said.
Simple steps like replacing weather stripping, sealing around pipes and replacing windows that cause drafts can cause a healthy reduction in the cost of monthly utilities, she said. And the less money low-income households spend on utilities, the more money they have to spend, possibly reducing the amount of government aid required, Munsell said.
The transportation department and local transit authorities also hope funding will help update aged buildings.
A couple of local transit authorities are planning to use funds for improved lighting systems and geothermal heating and air systems. Without stimulus funding, the local transit authorities would not be able to afford the upgrades, Newcomb said.
LED Lighting
The AEDC also will use the funding to begin a few interesting programs. The AEDC and state Transportation Department are working together on a program to transition streetlights and lamps from incandescent to light-emitting diodes. The AEDC is also using the block grant money to fund a Home Energy Audit program, which will help residents identify how to make their homes more energy efficient. The commission is currently working out the details of the program and must turn in the proposals by June 25 to the U.S. Department of Energy.
"I wouldn't expect the programs to be out there until probably Oct. 1," Benson said. "We've been moving pretty quickly; the DOE is a large federal agency so they are moving sort of slow."
The AEDC also plans to use its funding to support trials in the business world. The commission is using $1.6 million in stimulus money to work with the University of Arkansas' Department of Poultry Science. The university and commission will partner with select poultry plants to test the effectiveness of LED rather than incandescent lighting in poultry operations, Benson said. Because poultry operations remain lit 24 hours a day, the commission and university expect the trial to prove LED lighting will reduce energy consumption at the plants substantially, Benson said.
"The more you have to keep lighting on, the more you want to get energy-efficient lighting," he said.
The upfront cost of installing an untested lighting system has kept poultry companies from testing the technology and is why the commission and university are funding the study.
"One of the things you have to overcome is the initial risk of buying the technology," Benson said.
The project's participants expect the program to expand after the trial. The cost of installing LED lighting should be recouped within two years because of the new lighting's efficiency, Benson said.
And while stimulus money for environmentally friendly initiatives is spread across many state agencies, one agency is receiving surprisingly little funding. The Arkansas Department of Environmental Quality is set to receive only $1.7 million to administer the Diesel Emissions Reduction program, department spokesman Aaron Sadler said.
The program will provide grants--to public and private entities--to retrofit diesel engines, which will lower emissions, he said.
Sadler said the ADEQ itself might not have received much funding, but other programs the department has an interest in did receive funding. The Arkansas Natural Resources Commission is overseeing about $50 million in stimulus money for improvements to public wastewater and drinking water improvements. The NRC did not return calls seeking comment.
Blowing in the Wind
The stimulus package will likely continue to aid wind energy as the energy source becomes more prominent in the United States.
The wind industry doesn't know how much funding it might receive, said Julie Clendenin, a representative with the American Wind Energy Association of Washington D.C., a wind power advocacy group.
"Through the economic recovery act these next few years, there is the opportunity for a wind farm developer" to receive tax credits for investing, Clendenin said.
The tax credit, which can be earned based on either the amount of energy produced or based on the investment, will remain in place until 2012, Clendenin said. Previously, an investor could earn a tax credit for energy production only, Clendenin said. The existing wind farm credit was set to expire at the end of the year.
"I think the stimulus is important because in the short term it allows the sector to remain productive," Clendenin said.
If the nation expands its wind energy production, Arkansas will likely benefit, she said. "Arkansas is in a very good position to become a hub for wind power manufacturing," she said.
A study by the U.S. Department of Energy found that the country could produce 20 percent of its power needs through wind energy by 2030, Clendenin said. "You can see that supply chain is happening," she said.
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