KEMA’s Experience with Applications to the Smart Grid Investment Grant Program
On August 6, numerous KEMA clients submitted applications for the first major round of smart grid funding provided by the American Recovery and Reinvestment Act (ARRA) of 2009. The stimulus bill provided approximately $3.4 billion to support the Smart Grid Investment Grant (SGIG) Program, operated by the Department of Energy (DOE), with the goal of promoting accelerated deployment of smart grid systems and technologies across the country. KEMA was intimately involved in conceiving, designing, and assembling multiple SGIG grant proposals. With additional ARRA smart grid applications due in coming weeks and months, it is helpful to take stock of experiences up to now and distill lessons learned for future use.
Application Processes
Multiple processes were required to facilitate SGIG grant submissions. Within KEMA, the Federal Services Team served as the backbone of organizational efforts to assist clients in making submittals. Team members brought a variety of perspectives to the task of application support, including technical, administrative, and project management expertise. The group aided KEMA project managers by providing general guidance, answering questions, creating and distributing standard application materials, and maintaining a dedicated internal SharePoint site. The stimulus research team ensured that applications were consistent, uniform, and based on informed reasoning and analysis, while also making sure that submittals met formal merit review criteria (see below). Many application support teams relied on the assistance and coordination provided by the Federal Services Team. However, universal engagement by KEMA support teams would have maximized the benefits of this company-wide resource.
This internal KEMA process was tightly coupled with client interactions. In the end, clients were the official applicants to the SGIG Program, and thus were ultimately responsible for submitting high-quality, compliant applications. KEMA’s role was one of support and facilitation for prospective applicants. KEMA support teams worked closely with client firms to prepare compelling applications, but as with any client relationship much depended on the contributions made by partner organizations.
Finally, KEMA and clients worked together to navigate DOE’s feedback and submission procedures. Significant effort was required to clarify the meaning and intent of the formal Funding Opportunity Announcement (FOA) document released by the Department. One particular problem concerned confusion regarding application instructions. In their original form, these instructions were often vague, imprecise, and even contradictory. KEMA’s solution was to create an authoritative set of directions for completing SGIG applications, which was distributed both internally and to clients. Although DOE’s responsiveness to applicant requests declined noticeably in the final weeks before the deadline, Department personnel performed well in managing the overall application process. This performance was especially impressive given the massive increase in funds and revised organizational goals that have begun to transform DOE in the wake of the Recovery Act.
Projects Submitted
KEMA assisted with the submission of a wide variety of SGIG applications. Most applicants were submitted under two “topic areas,” Electric Distribution Systems, and Integrated and/or Crosscutting Systems. Many proposed projects centered on AMI, meter data management systems (MDMS), and meter data communication networks. For these clients, KEMA emphasized the importance of supplementing conventional AMI deployments with more innovative initiatives. A similar number of projects focused on distribution automation (DA) and distribution management systems (DMS). Several applicants sought funding for synchrophasor deployments and expansions. A small number of applicants requested grants for end-use technologies, such as home energy management systems, and dynamic pricing programs.
The majority of applicants supported by KEMA were either IOUs or municipal utilities seeking to launch or expand smart grid systems. Proposed projects encompassed established smart grid technologies as well as new technologies with evidence of commercial viability, but did not include those systems in early stages of development targeted by DOE’s companion funding opportunity for Smart Grid Demonstrations. Applicants requested funding for a range of project sizes, both “smaller” and “larger” as defined by the FOA. Most applications proposed grants of less than $75 million, but a few requested amounts up to and including the $200 million maximum allowed under the FOA.
Keys to Success
In crafting applications and interacting with clients, KEMA’s primary concern was maximizing each submittal’s chance of success. To this end, consultants operated with two objectives in mind. First, it was important to verify that formal directions had been followed and that applications complied with DOE guidance. Given the size and complexity of submissions, ensuring that grant applications adhered to official instructions took considerable effort.
The second objective of those supporting client applications was to make sure submissions satisfied the official merit review criteria to the highest degree possible. DOE identified four such criteria in the SGIG opportunity announcement, and indicated the relative weight that would be assigned to each:
Adequacy of the technical approach for enabling smart grid functions (40%)
Adequacy of the plan for project tasks, schedule, management, qualifications, and risks (25%)
Adequacy of the technical approach for addressing interoperability and cybersecurity (20%)
Adequacy of the plan for data collection and analysis of project costs and benefits (15%)
In order to meet these criteria, a peer review group known as 58ACT (FOA 58 Application Check Team) was assembled to examine each SGIG application. The 58ACT team focused mainly on shaping project narratives to take full account of the merit review criteria so that applications would earn high technical merit ratings. High scores on technical merit were viewed as critically important to DOE evaluators, and hence essential to securing awards under SGIG.
Submission and Awards
The submission process itself was relatively straightforward. Few problems were encountered, and any issues that arose were resolved quickly. DOE has repeatedly emphasized the urgency with which it intends to disburse ARRA funds, and KEMA expects the Department to announce awards by no later than early November. Given the number of applications KEMA supported, it is almost certain that some submissions will not be awarded federal funding. As a consequence, some clients may hold KEMA responsible for rejection by DOE and seek reparation. While this is a potential risk, it is one that KEMA was cognizant of throughout the application process and has taken steps to mitigate.
The next round of funding under the SGIG Program is already underway, with Phase 2 applications due November 4. In the near future, applications for Smart Grid Demonstrations are due August 26. KEMA intends to use the knowledge and experience gained in supporting SGIG submittals to assist clients in applying for Demonstrations grants. KEMA anticipates that the institutional knowledge accumulated over the course of these grant processes will be leveraged in future applications to DOE and other federal agencies, in the context of the Recovery Act and more broadly. This will serve to increase the success rate of client applications and improve long-term prospects for KEMA.
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