Preventing Outages and Enhancing the Resilience of the Electric Grid

The Bipartisan Infrastructure Law (BIL) includes historic levels of federal funding to advance the energy transition and improve our nation’s infrastructure. With hundreds of grants, each with its own unique requirements, eligible entities, and various funding mechanisms, navigating the BIL and its inherent complexities can be a challenge. To support our clients as they work to pursue these grants, we’re launching a series of blog posts, the “BIL Blog,” that provides a digestible overview of grants we see our clients prioritizing and, more importantly, how our clients should be thinking about differentiating their grant applications to improve their chances of success. 

In this inaugural blog post, we cover Section 40101(c): Preventing outages and enhancing the resilience of the electric grid. There is an additional $2.5 billion of formula funding provided directly to the states under 40101(d) that shares similar objectives.

Guidehouse believes there are certain elements that utilities may consider incorporating into their proposal to differentiate from other applications:

• Resilience risk assessment: A key phrase in the grant is “supplemental to existing hardening efforts.” Mitigation of traditional reliability risk won’t cut it here. Utilities should evaluate their resilience risk in dollars from extreme weather events (e.g., wind, flood, extreme heat). Conducting a vulnerability study will help utilities target investments explicitly designed to mitigate their most exposed areas. Further, total dollars cannot be more than the previous three years combined expenditures for a receiving entity.
• Benefit-cost analysis: Historically, utilities have planned to a level of risk that feels sufficiently conservative and then picked the least-cost alternative to achieve that risk. Grantors need to see benefits in dollars to measure realized benefits, largely from avoided outages and reduced restoration time. By quantifying the avoided resilience risk, utilities can perform a formal benefit cost analysis for all investments proposed under the grant, highlighting in dollars the value to customers.
• Environmental justice: There is immense focus from the Department of Energy on investments that create value for disadvantaged communities (DACs) under the Justice40 initiative. Explicit incorporation of DACs into prioritization of investments proposed under this grant will be critical to application approval.

If you have interest in exploring how to strategically position your BIL applications to maximize their chances of success, please reach out to Michael Levy (mlevy@guidehouse.com).