1. Sustainability Elements of the ARRA, and Getting the Most out of Stimulus Funding Jeannie Renne-Malone, LEED AP National Director – Climate Change & GHG Management The American Recovery and Reinvestment Act: Dispatches from the Front Lines Congress for the New Urbanism

2. Overview Sustainable Elements of the ARRA The Energy Efficiency and Conservation Block (EECBG) Program Getting the Most of Your EECBG Funds Using Sustainable Return on Investment (SROI) to Make a Green Business Case for Competitive Funds

3. 3 ARRA: Stimulus Investments With Sustainability Goals Aid to States and Local Governments –Health care –Energy –Infrastructure –Education –Public safety Emphasis on Sustainability –Clean Energy Projects –EECBG Funding –Sustainable Transportation Solutions –Environmental Protection –Support for Climate & Sustainability Initiatives –Green Job Creation 3

4. 4 $3.2 Billion from DOE to Cities, Counties, States and Tribes throughout US $400 Million Competitive Grants – to be released soon Energy Efficiency and Conservation Block Grant (EECBG) Program Overview 4

5. 5 Reduce fossil fuel emissions Decrease overall energy consumption Improve energy efficiency in the transportation, building, and other energy consuming sectors EECBG Program Purpose 5

6. 6 EECBG Evaluation Criteria Jobs created and/or retained Energy savings on a per dollar invested basis Renewable energy capacity installed Greenhouse gas emissions reduced Funds leveraged Web-based reporting system Individual output metrics based on activity type *Framed through Sustainable Return on Investment

7. Keys to Getting the Most Out of EECBG 1.Don’t Use All the Money Doing Easy Things (Make Wise Choices) 2.Be Sure to Establish Energy and GHG Baselines 3.Anticipate More Competitive Funding Initiatives 4.Make a “Green” Business Case 5.Measure Your Sustainable Return on Investment (SROI) 7

8. Don’t Use All the Money Doing Easy Things Be Mindful of DOE’s Priorities –Leverage –Legacy –Jobs –Energy Efficiency and GHG Reduction –Resilience –Return on Investment Strategic Planning and Detailed Analysis P3 Development verses Capital Investments Think of EECBG Funds as Venture Capital 8

9. Be Sure to Establish Energy and GHG Baselines Reporting Expectations Track Record for Future Energy Funding Emerging GHG Regulations Avoid the Need for General Fund Expenditures 9

10. Anticipate More Competitive Funding Programs Supply (of Federal Funds) verses Demand Funding Directed Toward Federal Priorities Anticipate Transparency Measures Aim for the “Hot” Buttons Make the Most Convincing Case 10

11. Make a “Green” Business Case Your Funding Proposals Should Include: A Baseline Forecast for Achieving Outcomes Facts Supporting a Case for Incremental Benefits Detailed Jobs Projections Energy Efficiency and Sustainability Summary (with backup) Projections for Enhancements to Energy Resiliency and Business Continuity Present a Detailed Cost Benefit Summary (including NPV/ROI/SROI) 11

12. Measure Your Sustainable Return on Investment (SROI) Assess the Financial Return on Investment Assign Monetary Values to the Non-Cash Risks, Benefits, and Externalities including: –Changes in GHG and Air Contaminant Emissions –Health and Safety –Water Saved –Productivity –Mobility/Congestion –Waste Avoided –Other Factors 12

13. SROI Flow Diagram 13 Operating Cost Increases ($) Capital Costs ($) Associated Maintenance Costs ($) Disposal Costs ($) Costs Cash Reduced Electricity Costs Reduced Heating/Cooling Costs Reduced Water Costs Reduced Sewage Costs Reduced Waste Disposal Costs Other Reduced Operational Costs Non-Cash Reduced Green House Gas Emissions Reduced Air Contaminant Emissions Fresh Water Conserved Improved Health Improved Productivity Improved Resiliency Improved Safety Example of Benefits Discounting (%) Total Benefits ($) Total Costs ($) Reveals a project’s Full Value Output Metrics ($)

14. SROI – Considers All Benefits 14

15. Build Your Business Case Around the Sustainability “S” Curve 15

16. SROI can Lead to Wiser Use of EECBG Resources Optimized Choices among Broad Categories and Competing Initiatives –City Departments (e.g., Fleet vs. Public Works) –Non-profit and Private Sector (building retrofits vs. new generation) –Balancing Direct Investments (City-owned vs. non- governmental facilities) Identify Preferred Options within Specific Areas –Recycling and Waste Management –Signals and Street Lighting –Waste-to-Energy –Wastewater Treatment 16

17. Targeted Applications of SROI for Maximum Sustainable Outcomes Screen and Prioritize Your Capital Improvement Program –Saves Money and Maximizes Important Benefits –Forces Lower Rank Projects to be Reevaluated to Improve SROI Can Help Find Best Solutions in Individual Sectors –Buildings and Operations –Transportation Improvement Programs –Stormwater –Waste Management –Water Supply and Treatment –Wastewater Treatment –Greenhouse Gas Management 17

18. Summary Measuring “Green” Will Help You Make the Most of Your EECBG Funds Leverage Your EECBG Funds Like Venture Capital Avoid the Need for a General Fund Expenditure Make the Most Convincing Case Your Funding Proposals Should Present Cost Benefit Details in NPV/ROI/SROI Use the Sustainability “S” Curve to Explain the Benefits to Your Stakeholders Apply SROI to Make Wiser Use of EECBG Resources For more information: www.HDRGreen.com | SROI@hdrinc.com 18

19. Sustainability Elements of the ARRA, and Getting the Most out of Stimulus Funding Jeannie Renne-Malone, LEED AP National Director – Climate Change & GHG Management The American Recovery and Reinvestment Act: Dispatches from the Front Lines Congress for the New Urbanism