Since the passage of the Infrastructure Investment and Jobs Act (IIJA) in 2021, funding has started flowing for EV charging infrastructure, communication networks, hydrogen hubs and more.
But when grant funding is smaller than they would like, some utilities balk at the paperwork, reporting and compliance that comes with taking a check from the federal government.
Sometimes the solution is just a pushy regulator to nudge the utility to take the funds, says Itron’s Dan Pfeiffer.
At the recent Itron Inspire event in San Antonio, Texas, Pfeiffer, Itron’s Vice President of Government and Regulatory Affairs sat down with Clarion Events Vice President of Transmission and Distribution Stephanie Kolodziej to discuss how the IIJA is helping utilities meet their grid infrastructure goals – and how the act differs from the American Recovery and Reinvestment Act (ARRA) of 2009.
How state utility regulators view the IIJA and IRA subsidies
“Blue state, red state, forget their politics,” Pfeiffer said. “If you can reduce the rate shock of a new deployment, you go get whatever you can.”
A good regulator will push utilities to get subsidies on their project, Pfeiffer said, even if the grant is not as much as the utility ultimately wants.
“Now, of course, you’re just spreading the cost. The person that’s a taxpayer is also a ratepayer,” Pfeiffer said. “But I would say most states have open dockets looking at federal subsidies, whether IRA or IIJA. And they have been encouraging their utilities to go through the red tape and get whatever.”
How the IIJA differs from the ARRA
Given that he worked on both bills, Pfeiffer is familiar with how the IIJA and IRA took different approaches to achieve similar goals. Perhaps the most obvious difference is the cost: the IIJA’s $1.2 trillion, versus the ARRA’s $831 billion.
“But last time, there was much larger grants,” Pfeiffer said. “(There is) a lot more money, but they’re spreading the peanut butter further.”
The ARRA gave up to $200 million grants, Pfeiffer said, compared to the maximum of $50 million now as part of the Grid Resilience and Innovation Partnerships (GRIP) Program, managed by the Department of Energy’s Grid Deployment Office.
The ARRA focused on carbon reduction and jobs. The IIJA also focuses on these things, Pfeiffer said, but with the inclusion of environmental justice, equity, and union jobs. While the ARRA tried to spread its investments across all states, the focus now is on underserved or disadvantaged communities – urban or rural.
The ARRA’s “Buy American” rules ignored the origin of subcomponents, as long as manufacturers created something “substantial” with the components domestically, such as a smart meter assembled in America made from non-domestic circuit boards, resistors, or other parts. Now, the standard is 55% domestic-made content – just for the bill of materials.
“It will be very hard for anybody- not just Itron, anybody that makes an electronic product – to qualify,” Pfeiffer said.
This has prompted Pfeiffer and Itron to work with the Biden administration to get some flexibility, primarily through the use of project waivers. If a grant is issued and certain sub-components don’t qualify, waivers could be issued. This is similar to the Department of Transportation’s EV charger waivers for non-domestic construction materials, although the waiver was recently rejected by the Senate.
