Maryland Gov. Larry Hogan | © RTO Insider LLC

Maryland Gov. Larry Hogan (R) tells a great story about his part in hammering out the compromises needed to get the bipartisan Infrastructure Investment and Jobs Act (IIJA) passed in 2021.

Hogan was then chair of the National Governors Association and had a particular focus on infrastructure, he recalled at a Thursday seminar on the IIJA hosted by the Bipartisan Policy Center in D.C. When negotiations over the bill got bogged down, Hogan said, “I hosted kind of an unprecedented summit in Annapolis, where I brought together Republican and Democratic governors, senators and congressmen. … We locked them in a room, plied them with alcohol and crabcakes for two days and walked out of the front door of the governor’s mansion with a basic deal” and set of recommendations for the $1.2 trillion package.

But, six months on, the challenge for the Biden administration and state governments like Maryland’s is getting the money out the door and ensuring it gets to the projects and communities where it will have optimal impacts, Hogan and other speakers at the event said.

Karen Wayland, GridWise Alliance | © RTO Insider LLC

“Getting access to that money is not easy,” said Karen Wayland, CEO of the GridWise Alliance, a nonprofit focused on grid modernization. “Getting access to federal dollars requires you to have grant writers, requires you to do all sorts of reporting,” which smaller utilities that need the funds may not have the resources for, she said.

“How do we help all utilities everywhere access federal money?” Wayland said. “Because if we don’t, then we’ll be moving toward what I call an expanded view of the digital divide” on grid modernization.

The states have a critical role in implementation of the law, Hogan said. IIJA funds flow through state agencies to individual projects, he said, and state and local officials need both clear guidance and flexibility to ensure the money is spent efficiently and effectively.

According to a recent IIJA progress report from the White House, allocations to Maryland now total about $1.7 billion, with more than 80% earmarked for transportation infrastructure and the remainder going primarily to climate and energy projects.

Still, Hogan cautioned that while the IIJA is “an important step forward, it’s not quite the transformational, immediate thing. Everybody thinks we all of a sudden have trillions of dollars in this big pile in the back of our State House that we are ready to dole out. … It’s basically a 20% increase in infrastructure spending spread over five years, so it’s about a 4% [per year] increase in infrastructure.”

Calvin Butler, Exelon | © RTO Insider LLC

Similarly, in a moderated discussion at the BPC event, Hogan and Calvin Butler, chief operating officer of Exelon (NASDAQ:EXC), spoke of the law, and its billions for transportation, energy, water and broadband infrastructure as a foundation or force multiplier that will stimulate private investment and public-private partnerships.

Following the recent separation of its regulated utilities and nonregulated energy generation and services business, now Constellation Energy, Exelon has committed $29 billion in capital spending to transmission and distribution infrastructure through 2025, Butler said. With its own infrastructure task force, the utility plans to “partner with our local jurisdictions across the country to say, ‘If you’re going to target and go after any of those [IIJA] grants, we’re going to partner with you to leverage our dollars,’” he said.

In Maryland, for example, the utility is working with two counties seeking federal dollars to electrify their bus fleets to ensure a system of chargers is in place, Butler said.

The state has backed up such efforts, Hogan said, with public and private infrastructure spending, reforms aimed at cutting red tape and an infrastructure subcabinet established “to develop, evaluate and coordinate a cohesive infrastructure strategy that leverages” the IIJA funds.

“It’s not like we flipped the switch, and all our problems are over,” Hogan said. “It’s a small investment from the federal government, and we’re going to try to utilize that to spur a whole lot more private sector investment.”

Waiting for Guidelines

Since President Biden signed the IIJA into law in November, the White House and federal agencies have been focused on getting the money out, with some agencies, such as the Energy Department, announcing new funding opportunities almost weekly.

In January, the White House issued the 459-page Bipartisan Infrastructure Law Guidebook, which provides a high-level overview of all the funding in the $1.2 trillion law, plus online links to specific funding opportunities and information on eligibility and how to apply. Additional guidebooks breaking down the law’s funding include one each for rural and tribal communities, as well as a technical assistance guidebook aimed at providing “targeted support” to help communities and organizations access specific funding in the law.

More detailed information has been issued for individual funding streams in the IIJA, such as the law’s $7.5 billion for electric vehicle charging infrastructure. A memorandum on the program, which aims to put 500,000 EV chargers on American highways, was issued in February. (See States to Get $615 Million for EV Charging from IIJA Funds.)

But guidelines for other key infrastructure programs have been slower in coming, Hogan said. State and local officials are still waiting for guidelines for a cybersecurity grant program, and state allocations for the law’s $65 billion in broadband funding have been delayed while the Federal Communications Commission updates its service maps.

At a hearing before the House Energy and Commerce Committee in March, FCC Chairwoman Jessica Rosenworcel pledged to have the new maps completed by this fall. But a “challenge period” mandated by the IIJA, in which the maps may be contested by local communities, could further delay final determination of the allocations.

Consistency of Funding

Even when the process encounters fewer snags, challenges remain for state officials accessing IIJA funds. The EV charging funds provided a prime example for speakers on a panel following Hogan and Butler on Thursday.

Phil Jones, Alliance for Transportation Electrification | © RTO Insider LLC

Phil Jones, executive director of the nonprofit Alliance for Transportation Electrification, said that money will flow through state departments of transportation, which don’t understand the electric power system. “Building out these charging stations, especially for medium- and heavy-duty vehicles, it’s going to put stress on the grid. These are large loads coming in.”

Wayland sees a different but equally significant disconnect “between the speed with which the [automakers] have decided to make investments to transform the fleet and the desire of consumers to transform the way they drive, and the ability of the utility industry to move quickly enough to be there when people want to plug all those vehicles in.”

“We’re not going to break the grid in the long term,” Wayland said. “But in the short term, I think we’re going to see some bumps because the utility industry, even when the capital is available, has to move through a very chunky, cumbersome regulatory process.”

She hopes that grid improvement funds in the IIJA “will help de-risk some of the decisions that the policymakers and the regulators have to make when it comes to the investments that are going to be critical for supporting transportation electrification.”

A second, more detailed set of guidelines for the EV charging money could be released at a two-day stakeholder event on Thursday and Friday, to be hosted by the Joint Office of Energy and Transportation, set up by DOE and the U.S. Department of Transportation to oversee distribution of the funds, Jones said.

David Strickland, GM | © RTO Insider LLC

David Strickland, vice president of global regulatory affairs at General Motors, said his company is committed to ensuring EVs and charging infrastructure are available, and affordable, for all communities as it moves toward an all-electric fleet by 2035.

His main concern on implementation of the IIJA is “consistency of funding. We have a five-year tranche of money, and I think a lot of people are betting to make sure that it is a consistent level. I have seen more than a few times in my life where there have been interruptions of that money at the federal level, especially … for these communities in need,” he said.

For Jones, the IIJA’s $7.5 billion for charging infrastructure is only a down payment. He predicts the U.S. could need up to $250 billion for EV charging to remain competitive with China and Europe.

“We’re going to have to renew this federal infrastructure bill in five years,” he said. “So, we just have a lot more to do.”