Public Comments Received for Environmental Financial Advisory Board

December 15, 2022 Virtual Meeting

Written Comments

•	Americans for Financial Reform Education Fund, Emerald Cities Collaborative, The Greenlining
Institute, Just Solutions Collective, Rewiring America, and 72 equity-aligned organizations

COMMENT: (attached)

•	Americans for Financial Reform Education Fund, The Chisholm Legacy Project, The Greenlining
Institute, Public Citizen, and WE ACT for Environmental Justice

COMMENT: (attached)

•	Arlington Partnership for Affordable Housing
Carmen Romero, President and CEO

COMMENT: (attached)

•	Calvert Impact Capital
Beth Bafford
Krystal Langholz

COMMENT: (attached)

•	Calvert Impact Capital, Natural Resources Defense Council, Opportunity Finance Network, New
York Energy Efficiency Corporation

COMMENT: (attached)

•	Chinatown Community Development Center, Brightline Defense Project, Mission Economic
Development Agency, Little Tokyo Service Center, Silicon Valley at Home, East Bay Asian Local
Development Corporation, and the Tenderloin Neighborhood Development Corporation

COMMENT: (attached)

•	Coalition for Green Capital
Kevin S. Minoli, Counsel

COMMENT: (attached)

•	Cook County (IL) 6th District
Donna Miller, Commissioner

COMMENT: (attached)

•	EAH Housing

Laura Hall, President and CEO
COMMENT: (attached)

•	Ecority

COMMENT: (attached)

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Public Comments for 12/1/22 EFAB Meeting

Eden Housing

Linda Mandolini, President

COMMENT: (attached)

Evernorth

Nancy Owens, Co-President

COMMENT: (attached)

Foundation Communities

Water Moreau, Executive Director
COMMENT: (attached)

The Greenlining Institute

COMMENT: (attached)

Groundswell

COMMENT: (attached)

Hannon Armstrong

Jeffrey W. Eckel, Chairman and CEO
COMMENT: (attached)

Illinois Finance Authority/Climate Bank

Christopher B. Meister, Executive Director
COMMENT: (attached)

Just Solutions Collective, Emerald Cities Collaborative, Rewiring America, and 38 others
COMMENT: (attached)

National Housing Trust

Todd Nedwick, Senior Director of Sustainability Policy
COMMENT: (attached)

NDN Collective

COMMENT: (attached)

New York State Energy and Research Development Authority

Doreen Harris, President and CEO
COMMENT: (attached)

Self-Help Enterprises

Thomas J. Collishaw, President and Chief Executive Officer
COMMENT: (attached)

South Carolina Clean Energy & Resiliency Accelerator

Jory Fleming

COMMENT: (attached)

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Public Comments for 12/1/22 EFAB Meeting

Southeast Sustainability Directors Network and Urban Sustainability Directors Network
COMMENT: (attached)

State Energy and/or Environmental Agencies of CT, CO, IL, LA, ME, Ml, NV, NJ, NM, PA, and VT
COMMENT: (attached)

Triple Bottom Line Foundation, ResourceSmart LLC, International Center for Appropriate and
Sustainabile Technology (ICAST)

COMMENT: (attached)

US Composting Council
Frank Franciosi, Executive Director
COMMENT: (attached)

Vermont Municipal Bond Bank, Vermont Economic Development Authority, Vermont Housing
Finance Agency

COMMENT: (attached)

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Americans for
Financial Reform
Education Fund

THE

CHISHOLM

LEGACY

PROJECT

Green lining

PUBLICCITIZEN

FOR ENVIRON MENTAL lUSTICEl

December 5, 2022

Michael Regan, Administrator
US Environmental Protection Agency
Office of the Administrator, Mail Code 1101A
1200 Pennsylvania Avenue, NW
Washington, DC 20460

Re: Docket ID No. EPA-HQ-OA-2022-0859

Dear Administrator Regan, EPA Staff, and Members of the Environmental Financial Advisory
Board,

Americans for Financial Reform Education Fund, The Chisholm Legacy Project, The
Greenlining Institute, Public Citizen, and WE ACT for Environmental Justice appreciate the
opportunity to comment in response to the Environmental Protection Agency's (the "EPA")
Request For Information ("RFI") on the Greenhouse Gas Reduction Fund (the "Fund") program
design and implementation. We write to urge you to prioritize environmental, racial, and
economic justice as you administer the Greenhouse Gas Reduction Fund, as authorized by the
Inflation Reduction Act of 2022.

The EPA should plan the implementation of the Fund to ensure it achieves both the equity and
climate goals of the Inflation Reduction Act and President Biden's Justice40 Initiative.1 Our
letter first summarizes equity principles that we urge the EPA to incorporate in its design and
implementation of the Fund, then provides more detailed recommendations below in direct
response to questions posed in the RFI.

1 "Justice40 A Whole-of-Government Initiative." The White House, https://www.whitehouse.gov/environmentaliustice/iustice40/


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Our equity-centered priorities for the implementation of the Fund include:

•	For the goals of this Fund to be meaningfully achieved, the requirement that 40% of
dollars benefit low-income and disadvantaged communities, aligned with Justice40, must
be a floor not a ceiling. A maximum amount of the dollars must flow to these historically
disinvested communities to catalyze the emissions reductions and market transformation
goals.

•	Investments should be stewarded by trusted community-based financial institutions and
green banks with proven track records of investment in community-driven projects,
offering the best opportunity to leverage private dollars to achieve the Fund's goals.

•	Additionality will be best achieved by maximizing investment in low-income and
disadvantaged communities, with an emphasis on Black communities and additional
communities of color.

•	Opportunities to enhance economic well-being and wealth-building in low-income and
disadvantaged communities should be emphasized.

•	Smaller-dollar, community-oriented projects should make up a considerable portion of
the portfolio of projects financed from the Fund, to promote the use of proven
emissions-reducing technologies that improve the health and livelihoods of communities.

•	Information regarding financed projects should be collected and publicly shared to ensure
accountability and guarantee funds are reaching low-income and disadvantaged
communities.

Section 1: Low-Income and Disadvantaged Communities

Low-income and disadvantaged communities should be thought of as not only passive
beneficiaries of the Fund, but explicit recipients of dollars and active implementers of air
pollution and greenhouse gas reducing projects. In designing and implementing the Fund, the
EPA should precisely indicate the need for these communities to receive tangible financial and
wealth-building benefits, in addition to pollution reduction, health improvements, and decreasing
economic and financial burdens.

The EPA has multiple statutory mandates in implementing the Fund, including ensuring financial
and technical assistance reaches low-income and disadvantaged communities, financing
emissions-reducing projects, and prioritizing investment in qualified projects that would
otherwise lack access to financing. In order to accomplish these goals, the criteria for what
constitutes low-income and disadvantaged must simultaneously be wide ranging enough to
capture economic and environmental burdens faced by communities, and sufficiently targeted to
assure direct benefits flow to those most in need. Benefits to communities should be direct,

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meaningful, and assured, with resources from the Fund addressing a community-identified need.2
Furthermore, an understanding of historical context and the severity of the persistent racial
wealth gap, as well as impaired access to financial services, credit markets, and non-predatory
capital should be a priority for the EPA and all recipients of the Fund in determining what
constitutes low-income and disadvantaged.

Low-Income Communities

In defining "low-income" communities, the EPA should consider using 50% Area Median
Income (AMI). This metric is aligned with the Community Reinvestment Act (CRA), which
designates communities below 50% AMI as "low-income" and those between 50-80% AMI to
be "moderate-income."3 The AMI is a common metric used to determine eligibility for programs
especially in the housing and economic development spaces.4 We recommend that the EPA
utilize the 50% AMI threshold to provide direction and incentives for recipients of dollars to
target their funds for those at lower income thresholds. The 50% AMI metric should be utilized
on a household basis to qualify single consumer loans, and on a census tract level to qualify
loans for businesses or community projects that will serve low-income populations. Where
communities rather than households are the unit of designation, care should be taken that
projects actually serve the low-income residents of those communities, and that they do not lead
to displacement of low-income residents. If a higher threshold such as 80% AMI is implemented,
the EPA should still require that a significant subset of the funds go to individuals and
communities at the 50% AMI threshold.5

Disadvantaged Communities

In defining "disadvantaged communities," the EPA should consider applying the White House
Justice40 Initiative's definition of "disadvantaged communities." This will facilitate critical
alignment with other significant public funding programs, as well as opportunities for leverage to
allow for maximum transformative impact in communities. Disadvantaged communities should
be understood primarily in the context of historical economic harms, toxic exposure, health
outcomes, and current economic instability and inability to access the many opportunities as the
U.S. moves toward a cleaner economy. As part of the implementation of President Biden's
Executive Order establishing the Justice40 Initiative, interim guidance defines "disadvantaged
communities" as a combination of variables that include low-income and/or persistent poverty,

"CCI Quantification, Benefits, and Reporting Materials." California Air Resources Board.

3	"Community Reinvestment Act (CRA)." Board of Governors of the Federal Reserve System.
https://www.federa1reserve.gov/consiimerscommiinities/craresourcesJitni

4	McCabe, Brian, "The Area Median Income (AMI), explained." Greater Greater Washington. September 2016.
https://ggwash.ora/view/42671/the~3rea~mediari~income~ami~exDlained

5	"HUD's Public Housing Program," U.S. Department of Housing and Urban Development.

https://www.hud.gov/topics/renta1_assistance/p1inrog; "Affordable Housing and Community Development," Federal Housing
Finance Agency.

s-Perforiiiance. aspx

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racial and ethnic residential segregation, distressed neighborhoods, high energy cost burden and
low energy access, and disproportionate impacts from climate change.6

Tools

We recommend the EPA utilize the Climate and Economic Justice Screening Tool (CEJST) from
Justice40 to assist recipients of funds in targeting products and clarify what communities will
"count" as disadvantaged communities. The recently finalized version of the tool takes into
account critical indicators that were left out of the draft version, including incorporating Tribal
Nations and data regarding historic redlining practices.7 The tool also displays demographic
information for each census tract. With these latest revisions, we feel the CEJST represents the
best, most straight-forward option for EPA to direct resources from these Funds related to
disadvantaged communities.

Further, the EPA should provide reference to other federal tools that help illuminate
environmental and socioeconomic burden in communities, such as the Department of Energy's
Energy Justice Mapping Tool8 and the Environmental Justice Index which comes from the
Department of Health and Human Services' Office of Environmental Justice, the Centers for
Disease Control and Prevention, and the Agency for Toxic Substances and Disease Registry.9

Limitations and Suggested Additional Factors

While we feel the above definition of "disadvantaged" does the best job of any established
federal definition of capturing the comprehensive nature in which communities experience
burden and harm, it does not include every factor that may render a community at relative
disadvantage from either attracting investment or being vulnerable to climate impacts. For
example, the Justice40 definition does not name race as a factor, which countless studies have
acknowledged to be a primary driver of understanding economic and environmental impact.10
The EPA should also consider utilizing a cumulative impact approach, as does the California
Communities Environmental Health Screening Tool (CalEnviroScreen), which takes into account
the specific sensitivity some communities may face due to experiencing so many different
impacts.11 Low-income and disadvantaged communities experience higher levels of poverty,

6	"Interim Implementation Guidance for the Justice40 Initiative." Office of Management and Budget Executive Office of the
President. July 2021. https://www.whitehouse.gov/wD-content/ixpkxids/2021/07/M-21-28.pdf

7	"Biden-Harris Administration Launches Version 1.0 of Climate and Economic Justice Screening Tool, Key Step in
Implementing President Biden's Justice40 Initiative." The White House. November 2022.

https://www.whitehouse.gOv/ceq/news-updates/2022/11/22/biden-h arris- administration-launches-version-1-Q-of-climate-and-eco

8	"Energy Justice Mapping Tool - Disadvantaged Communities Reporter." Department of Energy.
https://energviustice.egs.an1.gov/

9	"Environmental Justice Index." Agency for Toxic Substances and Disease Registry.

https://www.atsdr.cdc.gov/placefflidhealth/eii/index.html

10	Shrestha, Rajat and Jillian Neuberger, Sujata Rajpurohit, and Devashree Saha. "6 Takeaways from the CEQ Climate and
Economic Justice Screening Tool." World Resources Institute. March 2022.

https://www.wri.org/insights/6-takeawavs-ceci-climate-fflid-ecoiiomic-iustice-screening-tool

11	"About CalEnviroScreen." California Office of Environmental Health Hazard Assessment.

https://oehha.ca.gov/calenviroscreen/about-caleiiviroscreeii

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unemployment, and population loss related to climate migration,12 with these cumulative impacts
rendering them more vulnerable to the effects of climate change.

Further examples of environmental and socioeconomic factors and indicators the EPA should
consider in defining "disadvantaged" include the following, with many of these included in the
above-mentioned CalEnviroScreen tool, as well as in EPA's own Environmental Justice Screen
(EJ Screen),13 and New York State's Draft Disadvantaged Communities Criteria:14

•	Race and ethnicity15

•	Experiencing heat island effect16

•	Exposure to pesticides17

•	Proximity to power generation facilities18

•	Infant mortality rates and low birth weight rates19

•	Maternal mortality rates20

In addition to indicators suggested above, there are additional trends and challenges faced by
low-income and disadvantaged communities that, while they may be challenging to quantify
with existing data at this time, are nonetheless critical factors in understanding wealth erosion
and contributing to persistent poverty, particularly for communities of color. The Federal
Reserve's financial accounts and distributional accounts pages provide some of this data to help
form an understanding of wealth distribution in the U.S.21 We encourage the EPA to take into
consideration issues such as these in its implementation guidance to ensure recipients are clear
that products and services from this Fund should aim to ameliorate some of the trends listed
below.

12	Zonta, Michela and Caius Z. Willingham. "A CRA To Meet the Challenge of Climate Change," Center for American Progress.
December 2020. https://www.3mericmCT0gress.org/article/cra~meet~challenge~climate~change/

13	"EJScreen: Environmental Justice Screening and Mapping Tool." United States Environmental Protection Agency.

14	"New York State's Draft Disadvantaged Communities Criteria." New York State Department of Environmental Conservation
and New York State Energy Research and Development Authority. 2022.

15	"Overview of Socioeconomic Indicators in EJScreen." United States Environmental Protection Agency.
https://www.epa. gov/ei screen/overview~socioeconomic~indicators~ei screen

16	"Learn About Heat Islands." United States Environmental Protection Agency.

https://www.epa.gov/heatislands/lemi~aboiit~lieat~islands

17	"Human Health Issues Related to Pesticides." United States Environmental Protection Agency.

18	"Power Plants and Neighboring Communities." United States Environmental Protection Agency.
https://www.epa.gov/airmarkets/nower-plants-and-neighboring-commiinities

19	"Low Birth Weight Infants." California Office of Environmental Health Hazard Assessment.
https://oehha.ca.gov/calenviroscreen/indicator/low~birth-weight-infcints

20	Boyles, Abee, et al. "Environmental Factors Involved in Maternal Morbidity and Mortality." Journal of Women's Health.

21	"Distribution of Household Wealth in the U.S. since 1989

Governors of the Federal Reserve System.

Board of Governors of the Federal Reserve System.

Financial Accounts of the United States,'
https://www.federalreserve.gov/releases/zl/default.htm

Board of

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•	Underrepresentation in the renewable energy economy, either as owners or as
employees22

•	Rate of downward economic mobility in households, particularly of those who will be in
an income quintile lower than that of their parents23

•	Historic and current lack of access to consumer credit,24 bond markets, and financing for
municipal projects25

•	Communities with high rates of sole proprietorships with limited access to traditional
financial institutions26

•	Lower credit scores and credit trajectories27

•	Coming from groups that experience high failure rates of assets transferred upon death of
a parent or elder28

•	High percentage of median total net wealth held in depreciating assets or durable goods29

•	Rural communities, particularly rural indigenous communities30 and rural communities in
the Deep South31 as well as unincorporated communities32 and Freedmen's Settlements33

•	Areas where a majority of adults carry student debt34

22	"Help Wanted: Diversity in Clean Energy." E2, Alliance to Save Energy, American Association of Blacks in Energy, Energy
Efficiency for All, Black Owners of Solar Services, BW Research Partnership. 2021.

https://e2.orE/wD~content/iiDloads/2021/09/E2~ASE~AABE~EEFA~BOSS~Diversitv~Report~2021.pdf; "Green Jobs Report:
Creating A Green Workforce: Community-Based Solutions for a Diverse Green Jobs Sector," WeAct for Environmental Justice.

23	Smith, Ember, et al. "Stuck on the ladder: Wealth mobility is low and decreases with age." Brookings. June 2022.
https://www.brookings.edu/b1ogAin~front/2022/06/29/stuck~on~the~1adder-wea1th~TTiobi1itv~is-1ow~and~decreases~witli~age/

24	"CFPB Report Finds 26 Million Consumers Are Credit Invisible." Consumer Financial Protection Bureau. May 2015.
https://www.consumerfmance.gov/about~us/newsToom/cfDb~report~fmds~26~million~consumers~are~credit~invisible/

25	Marohn, Charles. "Financial Fragility Is To Blame for Jackson's Water Crisis." Strong Towns. September 2022.

26	Liu, Sifan and Joseph Parilla. "New data shows small businesses in communities of color had unequal access to federal
COVID-19 relief." Brookings. September 2020.

https://www.brookings.edii/reseitrch/iiew~data~sliows~small~businesses~in~commiinities~of-color~liad~uiiequal~access~to~federal~c
ovid-19-relief/

27	Garon, Thea. "Young Adults' Credit Trajectories Vary Widely by Race and Ethnicity." Urban Institute. August 2022.
https://www.urban.org/urban-wire/voung-adults-credit-traiectories-varV'-widely ¦-race-and-ethnicitv

28	True, Sarah. "Debt After Death: The Painful Blow of Medicaid Estate Recovery." US News and World Report. October 2021.

29	Carasso, Adam and Signe-Mary McKernan. "The Balance Sheets of Low-Income Households: What We Know about Their
Assets and Liabilities." Office of the Assistant Secretary for Planning and Evaluation. October 2007.

30	Dewees, Sarah and Benjamin Marks. "Twice Invisible: Understanding Rural Native America." First Nations Development
Institute. April 2017.

https://www.iisert~inc.org/wn-content/iin1oa.ds/hveniiti/WWS/2017/Mav%202017/M3y%20S/Twice%20Invisible%20~%20Rese
h%20Note.pdf

31	Rodd, Scott. "Depths of Poverty in the Deep South." Inequality.org. June 2015.

32 Gomez-Vidal, Cristina and Anu Manchikanti Gomez. "Invisible and unequal: Unincorporated community status as a structural
determinant of health." Social Science and Medicine. September 2021.

795362100694Q

33	Sitton, Thad. "Freedmen's Settlements.: Texas State Historical Association.

https://www.tshaonline.org/handhook/entries/freedmens-settlements: Sanders, Brandee. "History's Lost Black Towns." The Root.
January 2011. https~ //www theroot com/hi story s-lost-hlark-towns-1790868004

34	Canchola, Aissa and Seth Frotman. "The significant impact of student debt on communities of color." Consumer Financial
Protection Bureau. September 2016.

https://www.consumerfmmce.gov/about~us/blog/significmt~immct~student~debt~communities-color/

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• High rate of non-typical intrafamiliar and/or inter vivos transfers or support, such as an
adult child covering monthly expenses for parents or grandparents or grandparents
covering expenses for grandchildren.35

Technical Assistance to Low-Income and Disadvantaged Communities

Technical assistance should allow for a wide provision of support, including for both institutions
disbursing funds and for communities to help develop projects that can eventually seek resources
from the Fund.

For community-oriented technical assistance, support should include education and
capacity-building related to project development and financing that the Fund can facilitate to
help lay appropriate groundwork for projects to emerge. Technical assistance should also include
a spectrum of services that will assist communities in developing a potential pipeline of fundable
projects, including education, pre-project development, and both application and project
implementation support, such that when communities are prepared to seek funds they are
successful in going through the process.

As an example of robust technical assistance provision to support communities in accessing
dollars for emissions-reducing projects, the EPA should consider lessons learned from California
Climate Investments, which, similar to the Fund, directs dollars to greenhouse gas-reducing
projects with an emphasis on low-income and disadvantaged communities.36 Initial
implementation of CCI programs demonstrated that in order to meet statutory requirements to
benefit priority communities, those communities needed robust technical assistance to envision
and successfully apply for funding. After years of piloting various models of technical
assistance, the California Strategic Growth Council has developed a best practices guide for
technical assistance, taking lessons learned from implementing technical assistance for a variety
of programs from affordable housing to climate smart agriculture, that meets community needs
and outlines different approaches.37 The EPA should utilize some of these best practices in its
program design for technical assistance for the Fund, including definitions of technical assistance
and capacity building as well as principles for technical assistance program design that include
trust-building, community engagement, and community relevance.

Another example of a successful, equity-oriented model of technical assistance delivery includes
the Department of Energy's (DOE) National Community Solar Partnership (NCSP), which
provides technical assistance support for: policy, legislation, and regulation research; project

35	Parker, Kim and Eileen Patten. "The Sandwich Generation: Rising Financial Burdens for Middle-Aged Americans." Pew
Research Center. January 2013. littns: //www, newresearch. org /sex: 1 al - trends/2013/01 /30/the- sandwi ch - eenerati on/

36	"California Climate Investments: Cap-and-Trade Dollars at Work." State of California.
https://www.caclimatemvestments.ca.gov/

37	"Technical Assistance Guidelines for State Agencies." California Strategic Growth Council. August 2020.

https://sgc.ca.gov/programs/cace/docs/2020Q826-TA Guidelines.pdf

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financing analysis; outreach and engagement strategies; program design; and, technical issues.38
This model demonstrates the necessity of having collaborative processes and stakeholder
engagement that builds trust within communities as an essential component of technical
assistance delivery.

Further, for the Fund to facilitate support and prioritization of businesses owned or led by
members of low-income or disadvantaged communities, the EPA should refer to the Department
of Treasury's best practices for small business lending, and engage with and request input from
the Treasury's Office of Small and Disadvantaged Business Utilization.39 The EPA should also
engage with and request input from the Department of Treasury regarding how they are
disbursing $10 billion as part of the State Small Business Credit Initiative (SSBCI), and the
Department of Commerce as they are implementing a significant technical assistance component
focused on underserved entrepreneurs.40

In addition to community-centered technical assistance delivered by trusted experts, the EPA
should design and support a technical assistance platform, as well as a data dashboard (see
Section 5 response), to provide lender education, product information, suggested underwriting
standards, as well as metrics for decarbonization, professional certification standards for third
parties, and capacity building.41 This platform would serve as a critical tool to share information
efficiently across the country and help develop some consistency in technical assistance delivery
across varying circumstances and geographies.

Structuring Financial Assistance to Effectively and Efficiently Reach Low-Income and
Disadvantaged Communities

Financial assistance for projects should include, but not necessarily be limited to cash grants,
zero percent interest loans and other low cost loans, recoverable grants, as well as opportunities
to cover soft costs such as fees, operational costs, and costs for accreditation, and credit
enhancements such as loan loss reserves.

While a diversity of financial assistance options will be necessary to ensure successful
deployment of funds to low-income and disadvantaged communities, a few forms of assistance
should not be emphasized. As one example, while balance sheet equity can be important to shore

38	"Technical Assistance Opportunities: Community Solar," U.S. Department of Energy.
https://www.energv.gov/coiTiiTiunitvso1ar/techTiica1-assistance-opportiinities

39	"Technical Assistance and Best Practices." U. S. Department of Treasury.

https://home.trettsurv.gov/policv-issues/small-business-prognims/state-smdl-business-cralit-imtiatiYe-ssbci/technicd-assistmce-
and-best-nr acti ces: "Small and Disadvantaged Business Utilization." U.S. Department of Treasury.

40	"Treasury Announces Plans to Deploy $300 Million in Technical Assistance to Underserved Entrepreneurs and Very Small
Businesses through the State Small Business Credit Initiative." U.S. Department of Commerce Minority Business Development
Agency. April 2022.

https://https://www.mbda.gov/news/news-and-annomcements/2022/04/treasurv-announces-plans-deplov-300-million-technical

41	"Comments related to EPA's Greenhouse Gas Reduction Fund," Natural Resources Defense Council.
https://www.nrdc.org/sites/default/files/comments-epa-greenhouse-gas-rechiction-fund-20221011.pdf

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up institutions' ability to do community-oriented activities, it is important to ensure that Fund
resources are being deployed to actual on-the-ground projects. At times, green banks and other
community-based financial institutions have a tendency to hold on to dollars.42 We recommend
that the EPA suggest a deployment ratio goal of approximately 80% in order to incentivize
recipients to proactively seek projects and keep dollars flowing. A recent survey of Community
Development Financial Institutions (CDFIs) that primarily finance small businesses found that
over 25% of institutions were able to meet or exceed this benchmark.43 Additionally, the EPA
implementation guidance should discourage the use of too many financial intermediaries with
little ties to the communities aimed to be served, beyond those outlined in the statute creating the
Fund, to minimize administrative costs or other mark-ups to the cost of this capital, which would
be antithetical to the purpose of this Fund.

Section 2: Program Design

Overarching Priorities for Program Design

The intended final beneficiaries of these projects - low-income and disadvantaged communities
- should be top of mind for the EPA in designing implementation guidance for the Fund. While
there may be a variety of direct recipients ("eligible recipients") and indirect recipients, guidance
should ensure that Black and other BIPOC communities, and institutions that have historically
been present in and represented by these communities, be provided financial and technical
assistance to engage in this historic green financing opportunity. This will help create investment
in qualified projects that would otherwise lack access to financing.

As a result of this top-line priority, traditional principles of revenue return and private sector
leverage, while instructive, may need to be reconsidered in instances where opportunities to
deliver benefits to truly disinvested communities are available. This can and should include a
strong "but for" test (but for the action, the result would not have happened) when financing
projects to reach low-income and disadvantaged communities to justify alternative criteria and
potentially the allocation of deeper grant subsidies (see criteria for "but for" test below). This
should also include prioritizing small-dollar, community-driven projects for financing. Further,
recipients should strategize how to leverage the entire portfolio utilizing resources from the Fund
in order to recycle sufficient funds to provide flexibility to extend capital for harder-to-finance
projects and entities.

42"Performance still holding steady as CDFIs emerge from the pandemic yet continue to face a challenging economy." Aeris. June
2022.

https://www.aerisinsight.com/2022/10/17/perfoiTnance-sti11-ho1ding-steadv-as-cdfis-emeree-from-the-pandemic-yet-coritinue-to-f
rge-from-the-pandemic-vet-continue-to-face-a-challengmg-economv

43 Sereleas, Lolita, Ruth Barber, and Moira Warnement. "Deployment Strategies for CDFI Small Business Lenders." Opportunity
Finance Network, https://www.cdfifund.gov/sites/cdfi/files/documents/deplovment strategies ta memo.pdf

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With priorities of the Fund including additionality, continued operability, and maximizing
pollution and emissions reductions, the EPA should think about the different kinds of crucial
expertise of different institutions. For example, green banks have perhaps the most experience
with green finance, while community-based financial institutions, such as Community
Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs),
Low-Income Credit Unions (LICUs), and other credit unions have expertise in the needs of the
communities they serve and how to extend credit in those communities. The longevity of the
impact of this Fund depends on the normalization of green finance to more institutions across all
geographies. Financial institutions which have not previously provided much in the way of green
finance need to be included and supported through financial and technical assistance, in order for
this Fund to support a complete and continuing economic transition toward a net zero economy.
Private market uptake and market transformation can only occur if this financing becomes an
understood and everyday practice for all types of institutions.

Private Sector Leverage

Regarding leverage of private funds, especially when it comes to leveraging funds for projects
benefiting low-income and disadvantaged communities, the EPA should consider the
opportunities for deposit-taking community-based financial institutions, such as credit unions
and MDIs, to highly leverage their deposits. Additionally, CDFIs have immense opportunities to
leverage private sector capital via the CDFI Fund at an 8-to-l ratio,44 and green banks have a
track record of leveraging $2 billion in funding to attract an additional $5 billion in private
capital.45 These opportunities further emphasize the importance of having a diverse, ecosystem
approach to possible direct and indirect recipients.

The EPA should also ensure alignment with the incentives that financial institutions have to
invest in similar projects. One powerful incentive to understand is the Community Reinvestment
Act (CRA), a civil rights era law that obligates banks to reinvest in low- and moderate-income
communities, implemented by the Federal Reserve Bank, the Federal Deposit Insurance
Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).46 CDFIs are able
to attract significant portions of their overall capital stack from financial institutions as a direct
result of the CRA. EPA should consult with the three regulators regarding how they intend to
finalize recently proposed regulations to incorporate climate resilience. This will ensure that
recipients of dollars from this Fund will be able to leverage it with CRA dollars.

44	"U.S. Treasury CDFI Fund." Opportunity Finance Network.

https://www.ofn. orgAis-treasurv-cdfi-fund/#:~:text=The%20CDFI%20Fund's%20iiinovative%20modeLeverv%20%241%20in%2

0niiblic%20funding.

45	"Total U.S. Green Bank Investment Reaches $7 Billion per Newly Released 2020 Annual Green Bank Report." Coalition for
Green Capital. May 2021.

https://coa1itionforereencapita1.com/tota1-u-s-green-hank-inveslTnent-reaches-7-bi11ion-per-new1v-re1eased-2020-anmia.1-greeri-ha

46	Ibrahim, Rami. "Reimagining the Community Reinvestment Act." The Greenlining Institute. June 2022.

hat%20aii%20iipdated.coiiiiiiiiiiities%20viiliierable%20to%20cliiiiate%20chaiige.

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Additionality

The first step to this Fund creating additionality, i.e. funding projects that otherwise would not
have been funded, is by prioritizing low-income and disadvantaged community projects. These
funds should reach places that the private market is not yet reaching, and ideally seed funding in
a way that private markets ultimately do gain interest, so that the funds can be recycled.
Additionality can occur in the types of projects that currently do not have significant funding
sources outside of public dollars. Examples include heat pump financing, microgrid
development, brownfield remediation, conservation projects, weatherization projects,
transportation, and water projects. The EPA in its funding criteria should require recipients to
find a balance of offering financing products paired with grant opportunities to ensure the
hardest-to-finance projects and efforts have an opportunity.

To implement this practically, the EPA should institute a strong "but for" test which recipients
must utilize to justify investments. Criteria or questions that should be considered in such a test
could include:

•	Could the recipient receive traditional financing (particularly private sector financing) for
the project?

•	Are there other incentives/programs that would better suit this project?

•	Is there evidence to show that projects of similar type have been underserved by or
excluded from programs or incentives that the project qualifies for (for example, as a
result of historic discrimination or programs shown to have under-served portions of the
eligible populations)?47

Projects that are not likely to pass such a test, and perhaps do not best serve additionality goals,
include utility-scale renewable energy projects or research and development projects for
emerging technologies (see Section 3 response).

Another consideration in additionality for the Fund is to ensure that community-based lenders
that may have less experience in green lending, and conversely green banks with less community
lending experience, are directly engaged with each other. By providing financial and technical
assistance to a wider array of institutions project opportunities could be realized that make the
most of community expertise and green finance.

Continued Operability of the Fund

While we recommend that a sufficient amount of funds be recycled to ensure some length of
continued operability, we do not believe maximum return on investment is a priority for this
Fund. More specifically, we recommend a majority of the capital should be recycled through the

47 "Despite Progress, Low-Income Households Underserved by Utilities' Efficiency Programs." ACEEE. November 2022.
https://www.aceee.ora/OTess~release/2022/ll/reTOrt~cfcsTOte~OTOgress-low~mcome~touseholds-uiiderseTved~utilities

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use of low-cost loans, zero-interest loans, and recoverable grants. Grants should be focused on
projects in low-income and disadvantaged communities that would not be viable without grant
money. Projects should be ineligible for grants if they do not explicitly benefit low-income and
disadvantaged communities. It is critical for capital to be deployed in a manner that is affordable
to low-income and disadvantaged communities in a non-predatory manner such that investment
will not result in potentially dangerous debt burden. These safeguards will help ensure that funds
are recycled and that the Fund can continue to operate.

Projects with an anticipated revenue stream, such as electric vehicle charging infrastructure or
other energy projects, should not necessitate grants unless specifically benefitting low-income
and disadvantaged communities. They instead should consider using Fund capital for the
creation of revolving loan funds, also known as green revolving funds, where cost savings from
energy efficiency or renewable energy projects are realized as economic benefits to individuals
and small businesses in low-income and disadvantaged communities as well as recycled back
into the revolving fund for future projects.48

Projects with less certain cash flows, such as resilience hubs, should be considered for grant
funding. One option to consider are so called "recoverable" grants which are grants in which the
grantors expect to be repaid in order to be able to recycle the capital into future projects.
However, under extraordinary circumstances, the grant can be forgiven.49 Recoverable grant is
not a legally defined term and entities should be careful in constructing them so that they are not
confused with loans. Forgivable loans are also an option. Unlike grants (recoverable or not), they
do require debt to be taken on for a project, but if certain metrics are met, then the debtor is not
required to make repayment.50

Capital from the Fund should allow recipients to finance a mix of projects and consider
continued operability at the portfolio level. This allows for maximum flexibility for the recipient
and does not disincentivize them from funding or financing hard-to-reach projects.

Reducing Burden on Potential Borrowers

The EPA should encourage recipients to use alternative underwriting criteria when considering
low-income and disadvantaged borrowers so that they are not shut out from accessing this
opportunity as they may have been from previous financing programs. For example, payment
history criteria should be considered as an alternative to traditional credit scores in evaluating
loan applications. Payment history is perhaps the most important credit factor, as it accounts for

48	"Revolving Loan Funds in Commercial Real Estate," Better Buildings Alliance with the U.S. Department of Energy.
https://betterbuildingssoliitioncenter.energv.gov/sites/default/files/attacliments/Revolving Loan Funds in CRF-.pdf

49	"Recoverable Grant FAQ." Echoing Green. 2021.

https://echoinggreen.org/wp-contentAiDloads/2021/03/echoing green recoverable grant faa.ndf

50	"Innovative Finance Focus: Doing More With Less Lhrough Recoverable Grants." Lhe National Law Review. January 2021.

https://www.natlawreview.com/article/imiovative-finfflice-focus-doing-more-less-through-recoverable-gMits

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35% of a FICO Score calculation.51 Evaluating 'ability to pay' or 'proof of payment' from bill
history can reduce credit barriers, particularly for low-income and disadvantaged communities.

For minimizing barriers for potential borrowers, the EPA should ensure that recipients provide
simple, streamlined application processes that are not overly onerous, which can have the
unintended consequence of excluding those most in need of these resources. Some key best
practices for ensuring an equitable application process include keeping applications brief,
allowing for revisions, reducing the amount of paperwork or back up documentation required,
and having technical assistance available that can help applicants with the application process.
The EPA could consider implementing a standard application for any potential borrower which
could be utilized by all recipients of funds.52

Recipients should be required to consider the digital divide as well, as internet access and
internet speed are huge barriers for many individuals across the country, particularly in
low-income communities, rural communities, and tribal communities.53 Further, the EPA should
require recipients to consider language access within their geographies of focus, to ensure those
that are Limited English Proficient (LEP) are able to access resources and in order to improve
consumer protection.54 Recipients should be able to demonstrate how best to reach their
communities given these potential limitations, to ensure access to the Fund and to facilitate the
application process.

The EPA should also consider the special circumstances facing renters when it comes to
accessing financing programs to participate and benefit from renewable energy as well as
improve the health and safety of their homes and communities. Renters face additional barriers
to accessing opportunities to invest in their homes, as landlords need to be incentivized to make
these investments on behalf of their residents while tenants need to be protected from potential
financial burden and displacement. For one example of how a building decarbonization program
is handling this challenge, specifically for multifamily properties, the Solar on Multifamily
Affordable Housing (SOMAH) program directly markets incentives to landlords, such as
low-cost solar and lowering building operating costs, while emphasizing benefits and protections
for tenants such as lower energy bills and protection against rent increases.55 Measures like this
should be required for any product involving tenants.

51	Kiah, Treece and Jordan Tarver, "Focus On Payment History—It's The Most Important Credit Factor." Forbes. March 2022.

52	"Capacity Building with Frontline Community Leaders: Best Practices and Recommendations." California Strategic Growth
Council. June 2022. httns://sgc.ca.gov/progra.rns/nace/docs/20221017-PACF,Recommendations Report June 2022.pdf

53	Bauer, Anahid, D.L Feir and Matthew T. Gregg. "The Tribal Digital Divide: Extent and Explanations." Center for Indian
Country Development. Federal Reserve Bank of Minneapolis. June 2022.
https://www.minneapo1isfed.ore/~/media/assets/papers/cicdwp/2021/tied-wp-2021-03.pdf

54	Hofstetter, Jacob, Margie McHugh andAnna O'Toole. "AFramework for Language Access: Key Features ofU.S. State and
Local Language Access Laws and Policies." Migration Policy Institute. October 2021.

"Tenant Benefits." Solar on Multifamily Affordable Housing, https://calsomah.org/teiiaiit-beiiefits

13


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Labor Opportunities

In addition to prevailing wage requirements, job quality and job access measures are critical to
the success of this Fund. Training programs on their own without dedicated pathways to
employment are not sufficient for building the high-skill workforce needed to implement eligible
projects, and especially to ensure low-income and disadvantaged communities have access to the
economic prosperity that could come from being part of a clean energy economy. We emphasize
the role of partnerships in ensuring equity in developing the labor standards and project selection
criteria. We recommend that the EPA require recipients to adhere to these general principles:

•	Prioritize partnerships across programs: Partnerships across programs, agencies and
training providers have proven to improve employment outcomes for populations with
higher barriers to employment than a single pipeline program itself.

•	Utilize Project Labor Agreements ("PLAs ") and Community Workforce Agreements
("CWAs"): The EPA should encourage engaging with PLAs and CWAs that promote
quality jobs and family sustaining wages to ensure equity in implementation.56 The EPA
should also consider incorporating training programs within PLAs to streamline
resources.

•	Orient toward broad occupational training: Orienting toward earn-as-you-learn
apprenticeship training for broad occupational skills provides a range of career
opportunities as opposed to training for specific tasks related to clean energy.

•	Prepare students for Union apprenticeships: Financed projects should promote training
geared toward success in union apprenticeships that put them on a pathway to a career
with family sustaining wages and benefits instead of providing project-by-project jobs
without job security.

•	Establish formal agreements with apprenticeship programs: When agreements are
created between apprenticeship programs and employers, the students benefit from the
removal of certain entry cost barriers.

•	Provide additional support to address multiple challenges: Funding needs to be available
to support additional challenges that workers with high barriers to employment face such
as transportation, homelessness, racism, child care, hunger etc.

Further, the EPA should consider the differences and nuances between commercial labor, which
is often unionized, specialized, highly regulated, and paid a higher wage, and residential labor,
which is often lower-wage and less safe for workers.57 Workforce development opportunities
should take these considerations into account and ensure that low-income and disadvantaged
community participants are not being tracked into riskier work with less upward mobility.

56	"High-Road Workforce Guide for City Climate Action." Inclusive Economics. April 2021.
https://www.usdn.ore/uploads/cms/documents/workforce-guide 4.12.21 fonn.ndf

57	Clark, Steve. "Residential Construction Presents Many Hazards." Laborers' Health and Safety Fund of North America. May
2008. https://www.lhsfna.org/residential~constmction~presents-manv~hazards/

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Title VI of the Civil Rights Act

Given the requirements to invest in and benefit low-income and disadvantaged communities, it
will be absolutely necessary for the EPA to track the flow of capital to understand demographic
and geographic spread of investments. (See also, response below to Section 5).

Collecting this data is common practice for the kinds of financial institutions that will be
deploying capital from the Fund. For example, the Consumer Financial Protection Bureau
(CFPB) explains that CDFIs receiving financial assistance from the CDFI Fund may collect
demographic information on the individuals the CDFI serves despite perceived limitations for
creditors outlined in the Equal Credit Opportunity Act (ECOA).58 Additionally, pursuant to the
Home Mortgage Disclosure Act (HMDA),59 data regarding race and ethnicity on borrowers of
home mortgages continues to be collected.

Alignment with Other Federal and Private-Sector Priorities

Alignment of the Fund with other federal programs should be for the purpose of increasing
opportunities for low-income and disadvantaged communities and difficult to fund projects,
while still encouraging private investment. When these funds are being targeted to the "riskiest,"
least likely to be financed projects, there needs to be a certain degree of alignment with other
federal and private-sector priorities that are currently being incentivized. The EPA should be
meeting regularly with other federal agencies with not only significant resources to invest in
climate-related projects, but also those that maintain critical community partnerships.

Guidance to Tribal and/or Territorial Governments

Guidance specific to Tribal and/or territorial governments is absolutely necessary for equitable
implementation of the Fund. There are specific considerations related to sovereignty and
consultation that need to be thoughtfully taken into account.

As of 2021, there were more than 70 Native CDFIs operating in the United States.60 Native
CDFIs should be recipients of the Fund, as they have a significant presence and value for Native
communities across the country. Native CDFIs and CDFIs that specialize in lending in Indian
Country have essential expertise and models that should be leveraged for the Fund. This is
important for a variety of reasons, including that Native CDFIs improve credit outcomes for
Indian Country residents, while non-Native CDFIS do not improve those outcomes.61

58	"Statement on Collection of Demographic Information by Community Development Financial Institutions." Consumer
Financial Protection Bureau. June 2019.

https://www.consum erfmmce.gov/comDlimce/suDervisorv~guidaiKe/statement~collection~cfcmograDhic~mformation~communitv~
development-financial-institiitions/

59	Richardson, Jason. "NCRC's HMDA2018 Methodology: How To Calculate Race And Ethnicity." National Community
Reinvestment Coalition. September 2019. https://rcrc.org/ncrcs-hmda~2018~methodologv~how~to~calculate~race~aiid~ethmcitv/

60	"Mapping Native American Financial Institutions." Federal Reserve Bank of Minneapolis.

61	Kokodoko, Michou, et al. "Native CDFIs improve credit outcomes for Indian Country residents." Federal Reserve Bank of
Minneapolis. April 2021.

https://www.mmiieaDolisfed.org/itrticle/2021/native~cdfis-imDrove~credit~outcomes~for-mdim~countrv~residents

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Specific legal issues should be addressed in guidance issued by the EPA. The EPA should consult
with the CDFI Fund regarding their Native Initiatives Program62, as well as with Native CDFIs
themselves to understand specific challenges that remain unresolved that could be addressed with
this Fund. Key legal issues include waivers of sovereign immunity,63 tax implications,64 and
recourse in the case of default.

Regarding technical assistance, nuances of working with tribes should also be considered in
program design. In addition to the technical assistance resources highlighted in Section 1, the
California Strategic Growth Council also has guidance related to providing assistance to tribes.65
A practice of cultural humility, an acknowledgement and understanding of historic violence, and
strong consultation and communication policies are key components to successful technical
assistance delivery.

Section 3: Eligible Projects

General Project Requirements

We recommend the EPA allow direct and indirect recipients a certain amount of flexibility with
Fund dollars in order to facilitate the financing of innovative projects that may meet unique
community needs. It may be that certain investments deliver deeper greenhouse gas emissions
reductions while others deliver more co-benefits to low-income and disadvantaged communities.
Direct and indirect recipients should balance their portfolio of projects to advance both Fund
goals as much as possible.

While we support flexibility and the funding of a variety of projects, resources from this Fund
generally should not be deployed for programs or projects that have sufficient other financing
opportunities. As articulated above in Section 2, projects should be required to meet a "but for"
test in order to qualify for financing. Projects likely to fail this "but for" test include mature
technologies that are well-served by current financing such as utility-scale renewables or
transmission. Other areas that are relatively well-funded or already targeted via other federal
provisions in the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act

62	"Native Initiatives," U.S. Department of the Treasury Community Development Financial Institutions Fund.
https://www.cdfifiind.gov/programs-1ra.ining/nrogra.ms/na.tivesinitia.tives#:~:text=Na.tive%20CnFTs%20he1p%20Native%20Com

63	Congdon, Charles. "Tribal Finance: Irrevocable Limited Waiver of Sovereign Immunity." Thomson Reuters Practical Law.

lithis7/content next westlaw coin/iir3ctic3l-l3w/dociiineiit/l'6556h9636ff511e49RdbRb09Mff)43e0/Triba1-Finance-Trrevocah1e-T.in
ited-Waiver-of-Sovereigii-Iiiiiiiiiiiit\'?viewTvpe=FiillText&traiisitioiiTvpe=Defaiilt&coiitextData=fsc.Defaiilt')&firstPage=triie

64	"Redefining Indigenous Wealth with a Bold, New Opportunity: Q&A with Nick Tilsen and Gaby Strong." NDN Collective.
December 2021.

https://ndncoUective.org/redefiiring-indigenous-wealth-with-a-bold-new-oPDortunitv-aa-with-nick-tilsen-and-gabv-strong/

65	"Tribal Appendix to the Technical Assistance Guidelines for State Agencies." California Strategic Growth Council. October
2020. https://sgc.ca.gov/Drograms/cace/docs/20201Q15~TA Guidelines-Apdx A.pdf

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(IRA) include grants to reduce air pollution at ports, methane emissions reduction programs, and
clean heavy-duty vehicles.

However, as allowable by law, resources from this Fund should be stackable and complementary
to other IIJA and IRA programs where beneficiaries are low-income or disadvantaged. This
could include programs like the Energy Infrastructure Reinvestment Program at the Department
of Energy.66 While it is important to ensure additionality with Fund resources and focus on
projects that otherwise would not be funded, where there are opportunities to maximize the
economic and environmental well-being of low-income and disadvantaged individuals and
households, project applicants should not be unnecessarily precluded from leveraging other IIJA
and IRA resources.

Entities such as corporates, investment-grade rated institutions with no demonstrated mission
focus, affluent customers, and commercial real estate developers - which do not have missions
or mandates to benefit low-income or disadvantaged communities - should be deprioritized to
receive resources from this Fund.67

Further, community consultation and relationship building should be critical components of
finalizing and approving projects for financing. The California Air Resources Board,
implementers of California Climate Investments, offers key principles for successful community
engagement, including the need to build trust, advance social equity, and promote mutual
learning. For investments from this Fund to succeed, direct and indirect recipients should work to
both broaden and deepen their relationships with local community-based and/or environmental
and climate justice organizations, as well as community development entities that serve
low-income and disadvantaged communities. In order to ensure proper community engagement
is being conducted,68 recipients should be required to report on their outreach to and
engagements with organizations, including where and how these efforts were made and how the
engagement shaped financed projects.

Financial assistance products should be designed to be as easy as possible for communities to
access. This means the application and deployment process should be relatively simple, easy to
explain, and not burdensome to pursue. It also means the Fund should be used to meet people
and communities where they are, on the projects they are interested in or are already pursuing.

66	NCSL Staff. "Inflation Reduction Act of2022 Provisions." National Conference of State Legislatures. 2022.
https://www.ncsl.org/E'ortals/l/LXKuments/NCSL/NCSL-Summarv~Inflation~Reduction~Act.pdf: "Infrastructure Investment and
Jobs Act." The House Committee on Transportation and Infrastructure.

20Iiivestmeiit%20aiid%20Jobs.create%20good%2Dpaviiig%20iiiiion%20iobs; "Energy Infrastructure Reinvestment." U.S.
Department of Energy Loan Programs Office. https://wwwenergv.gov/lpo/energv~infrastnictiire-reinvestTrient

67	"Comments related to EPA's Greenhouse Gas Reduction Fund," Natural Resources Defense Council.
https://www.nrdc.org/sites/default/files/comments-epa-greeTLhouse-gas-rechiction-fund-20221011.pdf

68	"Community Engagement Brief," WE ACT for Environmental Justice. September 2022.
https://www.weact.org/wp-contentAiploads/2022/10/Communitv-Engagement-Brief-Q92322-FINAL.pdf

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To facilitate this type of arrangement, recipients should have the flexibility to structure project
financing in a way that allows for a variety of mechanisms to meet the stated goals of the statute,
especially to facilitate investment in projects that are directly owned and operated by low-income
and disadvantaged community members. Practically, this could include structuring parts of deals
as grants or forgivable loans, being able to fund loan loss reserve funds, and credit
enhancements. (See response to Section 1 for more on financial assistance).

The EPA should require that all projects supported by the Fund ensure consumers are protected
against unsafe and unfair business practices and are designed to minimize risk to participants, by
including consumer protections such as those of the Illinois Solar for All program.69 We further
urge the EPA to require that the eligible loan products for the Fund are structured in ways that
build wealth and financial sustainability for low-income and disadvantaged communities, and do
not result in or rely on predatory lending practices. For example, there has been significant and
justified criticism of the residential Property Assessed Clean Energy (PACE) program in which
bad actors preyed upon low-income consumers, older adults, and homeowners of color, including
through deceptive contractor practices and targeting communities of color, which has resulted in
problematic lien structures and foreclosure risks.70 These problems resulted from a lack of
consumer protections incorporated into the program, and the EPA should learn lessons from
PACE on the need for careful assessment of what financing models to permit and promote.

Priority Projects

While we recommend a certain degree of flexibility for recipients to be able to design products to
meet community needs, we recommend that the EPA also provide an illustrative, non-exhaustive
list of possible projects in order to assist recipients in beginning community engagement to seek
projects and ensure key solutions that meet community-identified needs are well promoted.

One solution to highlight is inclusive utility investment (IUI), also known as tariffed on-bill
financing. This mechanism allows utilities to make site-specific energy efficiency improvements
to buildings, pay for the costs, and recoup the cost via a tariff on the customer's bill, typically at
a rate that allows the customer to still enjoy lower bills.71 For the purposes of this Fund, entities
would provide resources directly to utilities to finance these upgrades, which would make for an
efficient structure for financing upgrades to low-income and disadvantaged community
households. To-date, conventional debt products to fund energy efficiency upgrades for
residential customers have seen little scale.72 IUI offers a promising opportunity for low-income
and disadvantaged customers to benefit from a more energy efficient home and lower energy
bills without taking on debt. Important consumer protections to include in IUI implementation

69	"Consumer Protections." Illinois Solar For All. https://www.illmoissfa.com/consumer-trotections/

70	"PACE Energy Efficiency Loans: Good Intentions, Big Risks for Consumers." National Consumer Law Center. September

71	"Inclusive Utility Investment." Energy Star, https://www.energvstar.gov/wcxhicts/inclusive utility investment

72	"Long-Term Performance of Energy Efficiency Loan Portfolios." State and Local Energy Efficiency Action Network. March
2022. https://eta-publications.lbl.gov/sites/default/files/see action loan performance full study final.pdf

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such that customers are not harmed and can best benefit from this model include guaranteed bill
savings, provisions to not disconnect service over non-payment, and ensuring customers that
may be eligible for direct support programs are referred to those first. We recommend the EPA
highlight this IUI product as one that can meet multiple goals of the Fund and encourage direct
and indirect recipients to pursue financing of these investments.

As long as other criteria as outlined in this letter are met - such as passing a "but for" test, being
non-predatory, and benefiting low-income and disadvantaged communities - examples of
projects we believe are especially in need of support from this Fund include the following:

•	Community solar and microgrids73

•	Rooftop solar74

•	Equitable energy storage75

•	Community Resilience Centers (also known as Resilience Hubs) which utilize energy
efficiency measures and/or solar plus storage76

•	Energy efficiency and weatherization, including home repair needs, such as health and
safety improvements, and energy audits, in preparation for these projects77 (consider
California's San Joaquin Valley Affordable Energy Pilots which allows for home repair
up to $5,00078)

•	Building electrification for single-family homes, multi-family homes, and small
businesses, including for heat pumps79

•	Transportation electrification, including publicly-accessible electric vehicle charging
stations80 as well as financing for the purchase or lease of new or used electric vehicles81

73 "Community Solar Basics." U.S. Department of Energy Office of Energy Efficiency and Renewable Energy.

https://www.energv.gov/eere/so tar/communitv-sotar-basics: "Community solar in D.C." Solar United Neighbors.
https://wwwsolaTTinitedneighbors.org/dc/leaTTi-the-issues-in~dc/commiinitv~solar-in-dc/: "Solar for All." New York State Energy
Research and Development Authority. https://www.nYserda.nY.gov/solar-for-all: "Community Solar and Microgrids.: Fireflower
Alternative Energy.

%20solar%20proiectsjs%20grid%2Dcomiected%20or%20not

74	"Rooftop Solar." Solar Energy Industries Association, https://www.seia.org/iiiitiatives/roofton-solar

75	Richardson, Jeremy. "How to Ensure Energy Storage Policies Are Equitable." Union of Concerned Scientists. November 2019.

https://www.iicsusa.Org/sites/defaiilt/files/2021-ll/L,egislative Language for Equitable Energy Storage.pdf

76	Bryn Grunwald, Mia Reback, and Ryan Warsing, "Weathering Climate Disasters with Resilience Hubs," Rocky Mountain
Institute. October 26, 2022. https://Tmi.org/weatheTing-climate-diSfisteTS-with-resilience-hubs/: "What Are Resilience Hubs?"
Urban Sustainability Directors Network, http://resilience-hub.org/what-are-hubs/: "Community Resilience Centers." California
Strategic Growth Council, https://sgc.ca.gov/programs/communitv-resilience-centers/

77	Miller, Maria R. "Sealing the Cracks in Weatherization and Home Repair." Shelterforce. August 2022.
https://shelterforce.org/2022/08/05/in-pa-bill-aims-to-lielp-homeowiiers-pav-for-costlv-home-repairs/

78	"Decision Approving San Joaquin Valley Disadvantaged Communities Pilot Projects." December 2018.

79	Rosenberg, Joel. "Electrify Everything in Your Home: A Guide to Comfy, Healthy, Carbon-Free Living." Rewiring America.
December 2021. https://content.rewiringamerica.org/repoTts/electrifv-home-giiide.pdf

80	Aguayo, Leslie. "Achieving Electrification Equitably: Principles for Building EV Charging Infrastructure for Everyone." The
Greenlining Institute, https://greenlining.org/blog-categorv/2022/achieving-electrification-eciuitablv/

81	"Clean Vehicle Financing." Beneficial State Bank.

https://www.beneficialstatebfflik.eom/personal/auto-loans#clean-vehicle-finaiicing

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(for those ineligible for the IRA tax credit such as those who are low-income and pay
little to no taxes or nonprofit institutions)

•	Local permanent conservation projects, community gardens, or creation of local parks
that avoid or reduce greenhouse gas emissions and create ecosystem, economic, and
social justice benefits to communities without facilitating gentrification82

To further maximize benefits to these communities, the EPA should require projects to
demonstrate deep community engagement and consultation, as mentioned above, to inform both
the development and implementation of a project. This could include evidence of an established
partnership or documentation of how feedback directly impacts decision-making.

Ineligible Projects

While we recommend flexibility to facilitate project financing, we also believe certain projects
should be categorically ineligible for support from the Fund. Some projects that claim to reduce
emissions and provide community benefits may actually cause other unintended consequences in
the communities the Fund is meant to primarily benefit, thus rendering them ineffective in the
broader fight against climate change or the effort to benefit low-income and disadvantaged
communities.83 Projects that should not receive capital or investments from the Fund include:

•	Carbon capture and sequestration (CCS) or carbon capture, utilization, and storage
(CCUS) projects, as these technologies are likely to continue oil and gas extraction
processes that disproportionately burden disadvantaged communities.84 While point
source carbon capture is hypothetically able to remove 85-90% of carbon dioxide, the
filtering process does not remove simultaneously-emitted air toxics that contribute to
overall public health burden, and levels allowed by environmental regulators still harm
public health.85 In addition, the carbon-reduction benefits are overstated. These projects
are overly expensive, have not achieved the capture rates that were anticipated, and most
of the captured C02 is used to produce additional oil, which means supporting further
fossil fuel supply, not reducing carbon pollution.86

82	Rigolon, Alessandro and Jon Christensen. "Greening without Gentrification: Learning from Parks-Related Anti-Displacement
Strategies Nationwide." University of California Los Angeles Institute of the Environment and Sustainability.
https://www.ioes.ucla.echi/Droiect/Drads/

83	Field, Sandy. "False Solutions to the Climate Crisis." Sierra Club Pennsylvania. December 2021.
https://www.sierrachib.ora/permsvlv3nia/blog/2021/12/false-soliitions~climate-crisis

84	"Carbon Capture: The Fossil Fuel Industry's False Climate Solution." Earthjustice. September 2022.

IiflBsi^aiMuslifi>^argZli2fflJi£diga^^

85	Liu, Cong, et al. "Ambient Particulate Air Pollution and Daily Mortality in 652 Cities," The New England Journal of Medicine.
August 2019. https://www.neim.0rg/doi/f11ll/l 0 1056/nrimoal 817364- Hanigan, Ivan, et al. "All-cause mortality and long-term
exposure to low level air pollution in the '45 and up study' cohort, Sydney, Australia, 2006-2015." National Library of Medicine.
March 2019. https://puhmed.ncbi.n1m.nih.gov/30R7RR71/: Jacobson, Mark Z. "The health and climate impacts of carbon capture
and direct air capture." Energy and Environmental Science. October 2019.
https://web.stmford.edii/grouD/efmh/iacobson/Articles/Others/19~CCS-DAC.pdf

86	Robertson, Bruce and Milad Mousavian. "The carbon capture crux: Lessons Learned." Institute for Energy Economics and
Financial Analysis. September 2022. https://ieefa.ora/resources/carbon-caDture-crux-lessons-learned

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•	Biomass, specifically (but not exclusively) wood pellet production, because neither the
production nor later burning of biomass is clean or carbon neutral and it
disproportionately harms low-income communities and communities of color.87

•	Anerobic digestion or "Dairy Digestors," as the technology may actually be leading to an
increase in methane emissions because of dairy expansion.88

The EPA should also exclude emerging technologies from eligibility in the distribution of these
funds.89 Examples include small modular (nuclear) reactors and hydrogen.90 The focus of Fund
support should be on established (i.e., mature, proven, and deployable at scale) technologies that
can deliver guaranteed benefits to communities, consumers, and households in short order.91
Emerging clean energy or other climate mitigation technologies can and will continue to be
developed and funded through other public or private investment.92 A technology that is still
emerging at present might become established during the lifetime of the Fund. The EPA could
provide updated guidance on eligible technologies for the Fund every couple of years in
coordination with the Department of Energy and the Fund's oversight commission (see Section

5).

Section 4: Eligible Recipients

Competitive Selection Process for Multiple Eligible Recipients

To ensure that a diverse set of entities are able to access the Fund, we urge the EPA to set forth a
competitive, transparent process for selecting direct recipients ("eligible recipients") to receive
Fund dollars. We recommend issuing a Request for Proposals (REP) to generate a diverse
applicant pool and prioritize entities with proven grantmaking or financing relationships to
Black, Indigenous, People of Color (BlPOC)-led organizations. These entities should have
experience with, and demonstrate via the RFP that they will partner with, community-based
financial institutions to deliver maximum investment to the low-income, low-wealth, and
disadvantaged communities whom the Fund is intended to reach. We also urge you to ensure

87	"SELC, 95 other groups warn Biden about dangers of biomass." Southern Environmental Law Center. September 2021.
https://www.southemenvironment.ora/news/selc~95~other-orgs-w3m~OTesident~biden~about~dangers-of~biomass-energv/

88	Spector, Rebecca and Dashel Murawski. "The Dairy Digester Dilemma: A False Climate Solution." Center for Food Safety.

89	"What is Emerging Technologies," IGI Global, https://www.igi-global.com/dictionarv/emerging-technologies/37736: "What is
the Definition of Emerging Technology?," Winston and Strawn LLP.

90 "DOE Establishes New Office of Clean Energy Demonstrations Under the Bipartisan Infrastructure Law," U.S. Department of
Energy. December 2021.

91

Zappa, Michell. "17 Emerging Energy Technologies That Will Change The World." Business Insider. April 2014.

92 "About NREL." National Renewable Energy Laboratory U.S. Department of Energy, httns: //www.nrel. gov/about/: "DOE
Applied Energy Budget: FY22 Outcomes and FY23 Request," American Institute of Physics. June 2022.

https://www.aip.org/fvi/2022/doe~applied-energv~biidget~fv22~oiitcomes~aiid~fv23~reqiiest

21


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good coverage of benefits across all geographies and within different networks and types of
financial institutions.

Eligible recipients should have experience with and have explicit plans to work within the
nation's capillary banking system. This includes, as a priority, the networks of community-based
financial institutions, including CDFIs, MDIs, and LICUs, that are well positioned to lend to the
targeted communities with speed and efficiency. Furthermore, channeling lending in this manner
further serves those communities by strengthening local businesses and institutions. Additionally,
partnering with green banks that possess deep community partnerships and a demonstrated track
record of supporting projects for low-income and disadvantaged communities should also be
encouraged.

We are pleased that the IRA requires 40% of Fund dollars to benefit low-income and
disadvantaged communities, in alignment with the Biden Administration's Executive Order on
Justice40.93 However, this threshold must be a floor, not a ceiling. For the goals of this Fund to
be meaningfully achieved, a maximum amount of the dollars must flow to these historically
disinvested communities to catalyze emissions and air pollution reductions and market
transformation. These funds must be equitably administered to help low-income and
disadvantaged communities from across the country participate in the energy transition, build
wealth and resilience, and have greater opportunities for self determination and empowerment.

It is critical that more than 40% of the Fund benefit low-income and disadvantaged communities
for the sake of equity and parity. Some tools that have been used in states define a larger
proportion of their population as "disadvantaged" than the funding required for investment (such
as California defining 28.4% of its population as disadvantaged while only requiring 25% of
climate dollars to benefit these communities).94 The CEJST 1.0 identifies 33% of the US
population as disadvantaged, which is close to the 40% requirement in the Fund's enabling
legislation.95 Adding in the percentage of the U.S. population that is likely to be considered
low-income but outside the definition of disadvantaged, it is very likely that more than 40% of
the U.S. population would qualify under either definition. Therefore, in order to be truly
equitable, the Fund needs to deliver far more than 40% in benefits to low-income and
disadvantaged communities. As part of an RFP process, the EPA should assess whether
applicants can maximize these goals based on their past track records and what they propose to
do with resources from the Fund.

93	"Justice40 A Whole-Of-Government Initiative." The White House.
https://www.whitehouse.inw/eriviroriTnerita1iustice/iustice40/

94	Sotolongo, Marisa. "Justice40 and Community Definition: How Much of the U.S. Population Is Living in a 'Disadvantaged
Community?" Initiative for Energy Justice, https://ieiusti.org/iustice-40-tind-communitv-defmition-blog/

95	"White House Releases version 1.0 of the Climate and Economic Justice Screening Tool (CEJST)." The White House.

https://www.voutiibe.com/watch?v=XwilQp3EXRO&ab chaimel=TheWhiteHouse

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The EPA may want to consider a combination of structures for direct recipients of the Fund, in
order to better leverage different expertise, and maximize the amount of green banks, community
lenders, and other such mission-oriented organizations involved in the Fund's implementation.
Efforts such as the Strong, Prosperous, And Resilient Communities Challenge96 (SPARCC), the
Partnership for the Bay's Future,97 the Rural Community Assistance Partnership98 (RCAP), and
Partners for Rural Transformation99 offer models of how CDFIs have partnered with other
nonprofits to strategically deploy capital and build local capacity to meet local resilience and
community development needs. By encouraging consortiums of entities to apply jointly, the EPA
can better assure the full range of expertise is at-hand to achieve the goals set out in the statute
and provide additional checks and balances on recipients.

The RFP should be done on a rolling basis, so that not all eligible recipients must apply, receive
grants, and deploy funds right away. This would provide opportunity for those that have more
capacity to begin disbursing dollars soon to hit the ground running and allow others to plan
strategically and seek funds at a later date. Recognizing the need to disburse funds quickly, it is
also important to recognize that immense speed in allocation processes often does a disservice to
low-income and disadvantaged communities. EPA should structure this process to facilitate both
expediency and equity-oriented needs.

Criteria for Eligible Recipients in Their Applications

All direct recipients should meet the following criteria in their grant applications for the RFP to
ensure that they will be responsible stewards of this historic green financing opportunity through
the Fund:

•	Demonstrate engagement with existing mission-based financing entities that leverage
public and private capital, including CDFIs, MDIs, LICUs, established state and local
green banks, credit unions, housing finance agencies, public housing authorities, and
others.

•	Demonstrate an understanding of proven and emerging financing solutions for climate
mitigation and resilience

•	Demonstrate a commitment to distribute funds to projects that will benefit low-income
and disadvantaged communities

•	Submit a strategic plan, which includes how they will:

o meet greenhouse gas and air pollution reduction goals;
o create additionality, private leverage, and continued operability of the funds;

96	"Our Team." SPARCC.

97	"Who We Are." Partnership for the Bay's Future, https://bavsfiitiire.org/about-iis/

98	"About Us." Rural Community Assistance Partnership, https://www.rcan.org/about

99	"About." Partners for Rural Transformation, https://www.niraltraiisformation.org/

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o meet, track, and report on the metrics and indicators for program outcomes
(outlined in Section 5 below), and require their recipients (indirect recipients) to
provide the data necessary to do so;
o balance financial and technical assistance needs;

o incorporate opportunities for community ownership and wealth-building

strategies in deployment of clean energy technologies;100 and
o address deployment hurdles in each product vertical in which the direct recipient
intends to deploy support.

Section 5: Oversight and Reporting

Given the diversity of entities that could ultimately be implementers of projects, the clear
mandate to benefit low-income and disadvantaged communities, as well as the broad opportunity
the Fund provides to finance emissions-reducing projects, it is important to put in place
governance structures to effectively monitor all of these moving pieces.

Community Accountability

The EPA should require each direct recipient to establish a Community Accountability Board
(CAB) to oversee the disbursement of its funds and ensure capital is flowing in a manner that
meets local community needs. This CAB should be representative of the communities the
recipient is aiming to serve, both in geography and demographically with an emphasis on
low-income and disadvantaged community representation. The CDFI Fund requires something
similar per its implementing statutes, framed as an advisory board, to provide "accountability to
residents of its investment area or targeted population."101 However, we recommend that EPA
require CABs to have more decision-making authority and direct oversight over the investments
that are made utilizing dollars from the Fund. By moving beyond simply having an advisory
board that provides feedback that may or may not influence the ultimate decision-makers, if this
Fund is truly to be successful in meeting the needs of disinvested communities, those very
communities need to be more centrally involved and power must be shared. For reference, there
are many frameworks that demonstrate a spectrum of community engagement that moves from
informing and consultation to more transformative partnerships that include collaboration and
ownership. The Movement Strategy Center's framework outlines activities that can help
implement these steps as well as a sense of resource allocation needed to accomplish the
engagement goal.102

100	Kent, Adam. "An Opportunity for Equitable Climate Finance." Natural Resources Defense Council. October 2022.
https://www.nrck.ore/experts/adam~kent/oprortimitv~transform~climate~fmarice

101	"Community Development Financial Institution Certification Application: Overview of FINAL Revisions and Modifications."
CDFI Fund. October 2022.

littps://www.cdfifiind.gov/sites/cdfi/files/2022~10/CI)FICertification Application Overview Oct 2022.pdf

102	"The Spectrum of Community Engagement to Ownership." Facilitating Power.

https://movementstrategv.org/wp-content/uploads/2021/08/The-Spec tram~of~Commiiiiitv-Engageiiient-to-Owiiership.pdf

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Oversight Commission

In addition to EPA staff oversight, to provide further accountability and also to foster a spirit of
mutual learning and sharing of best practices, the EPA should create an oversight commission
consisting of representation of senior leadership from each direct recipient of the $20 billion
portion of the Fund, the EPA Office of Environmental Justice and External Civil Rights, the
White House Environmental Justice Advisory Council, the White House Council on
Environmental Quality, and the Department of Treasury's CDFI Fund.

The oversight commission should also be required to coordinate with regional EPA
administrators to receive additional input on whether the Fund is adequately reaching
low-income and disadvantaged communities in their respective regions, and especially how the
$7 billion portion dedicated to states, municipalities, and tribal governments is being deployed.
The oversight commission should be granted the power to implement standard remedies, such as
withholding of subsequent rounds of funding or clawing back funds already distributed, if
recipients are found to have failed to live up to low-income and disadvantaged community
benefit commitments.

Metrics and Indicators

It will be important for the EPA to track program outcomes for accountability, and as proof of
concept for how these funds are facilitating market transformation and benefits to historically
disinvested communities. Given the multi-pronged set of goals outlined in the RFI (emissions
reductions, benefits to communities, leveraged funds, etc.), indicators should be developed for
each goal such that direct recipients can help indirect recipients effectively track outcomes.

Examples of indicators for a selection of the stated goals listed in the RFI could include:

•	Reductions in greenhouse gas emissions and air pollution:

o Annual and lifetime avoided emissions from a project, aggregated in carbon

dioxide equivalent and disaggregated by greenhouse gas;
o Reductions in toxic air pollutants, including particulate matter.

•	Allocation of benefits to low-income and disadvantaged communities (some suggested
indicators below are referenced from California Air Resources Board for Assessment
Methodologies for co-benefits):103

o Recipient of Fund dollars is a resident of a low-income or disadvantaged
community;

o Beneficiaries of Fund dollars are residents of low-income or disadvantaged
communities;

103 "California Climate Investments Co-benefit Assessment Methodologies." California Air Resources Board.
https://ww2.arb.ca.gov/resoiffces/documents/cci~methodologies

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o Number of "clean" or "green" jobs supported, including direct jobs and indirect or
induced jobs;104

o Qualitative description of the jobs and companies engaged in those jobs, including

whether those businesses are minority or women owned;
o Additional job tracking, including new job training and apprenticeship programs,

job placement outcomes, and retention statistics;
o Utility (energy and water) cost savings to consumers;

o Improvements to climate resiliency (including extreme heat, drought, sea level

rise, and inland flooding);
o Community ownership and wealth-building opportunities, including increased net
worth or net profits of individuals, cooperatives, or firms in low-income and
disadvantaged communities;
o Opportunities provided by the project applicant for community members to
provide input or have decision-making authority over components of the project,
for example via community meetings or community needs assessments.

•	Private sector leverage, additionality, and recyclability of funds:

o Percent of project budget supplied by Fund dollars;

o Dollar amount of additional public and private capital utilized to finance a project;
o Leverage ratio of public to private funds;

o Product structure (grant, loan, etc.), including interest rates and terms;
o Repayment rates and additional loan performance information.

•	Distribution of projects at the national, regional, state, and local levels:

o Project geographic location by zip code and census tract.

Through the data collection and reporting process, if it is found that recipients are lending more
than 40% to low-income and disadvantaged communities (see response in Section 4), then the
oversight commission should encourage recipients to drive up the percentage going to those
communities even further.

EPA Web Portal and Dashboard

The EPA should create a publicly-facing web portal and dashboard, in addition to a technical
assistance platform (see Section 1 response), that hosts the data on the Fund's financial, climate
and community benefit outcomes. The eligible recipients should be required to, at minimum,
annually report to the EPA on where and how the funds are being distributed. Data collection
should include which institutions are receiving the funds, the types of projects being funded,
when loans are repaid, and the mix of funding (or capital stack) for each project that is receiving

104 "Employment Direct Indirect And Induced." Sustainable Energy Jobs Platform.

littns://seiplatform.ore/ECey-concents/Emnlovrnent-Direct-Indirect-and-Induced: "What are direct, indirect, and induced jobs?"
EB5 Affiliate Network.

https://eb5afriliatenetwork.com/proiect-developer-faa-topics/direct-vs-regional-centeT-proiects/direct-indirect-inchiced-iobs/

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grants or financing as a result of the Fund. The EPA should disclose this data on the
publicly-facing dashboard.

Indirect recipients should be required to track and report through the direct recipients the metrics
and indicators listed above for every project that receives capital or financing through the Fund.
Annual data should be required for the calendar year, even if an institution has not had the funds
for an entire year. Further, the raw data informing the dashboard should also be available for the
public to download, as an Excel spreadsheet or similar format, such that individuals, researchers,
public interest organizations and others can conduct their own analyses regarding outcomes from
the Fund. Benefits to open data include transparency, public service improvement, social and
economic innovation, and efficiency.105

The EPA should facilitate the submission of data in a standardized format by recipients for all of
their projects, and the portal or dashboard should be a user- and public-friendly source of visual
data reporting. The dashboard should include an interactive map, such as the one used already by
the EPA for the Clean School Bus Program.106

There is precedent for this type of data collection and reporting, such as the Connecticut Green
Bank's Post Bond Issuance Verification Report.107 Also, the California Air Resources Board, the
implementer of California Climate Investments, has on its website all reporting templates it
requires administering agencies to complete regarding critical data on projects funded.108 The
agency also publishes a project map that allows the public to see what projects have been funded
in each community and to download data for further analysis.109

Additional examples of portals or dashboards the EPA should consider modeling after include:

•	The National Development Council (NDC)'s Impact Map, which provides topline
numbers for homes built, jobs created, and development professionals trained. In addition
to an interactive map of projects by type including technical assistance, small-business
lending, and training.110

•	The New York State Energy Research and Development Authority's Green Jobs Green
New York loan portfolio interactive dashboard, which includes number of loans, loan

"Starting an Open Data Initiative," The World Bank. littn://oneiidatatoolkit.worldbaiik.org/eii/starting.litml
"Awarded Clean School Bus Program Rebates." United States Environmental Protection Agency.

107	"2021 Post Bond Issuance Verification Report." Connecticut Green Bank. 2021.

https://www.ctjn~eenbank.com/wn-contentAip1oads/2022/02/2021-Post-Bond-Tssiiarice-Verificatiori-Report.pdf

108	"CCI Quantification, Benefits, and Reporting Materials." California Air Resources Board.

Iittns://ww2.arb.ca.gov/resoiirces/dociiments/cci-ciiifflitification-beiiefits-and-renorting-materials

109	"California Climate Investments Project Map." California Air Resources Board. littns://webiiians.arb.ca.gov/ccirrian/
no Impact Map: NDC's Impact Across America." National Development Council, httos: //ndconline. org/ndc-map/

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purposes, loan types, interest rates, principal amounts, and debt-to-income ratios for the
last 12 years.111

• The Treasury Emergency Rental Assistance (ERA) Dashboard has a spending tracker of
funds approved or paid to households from the ERA, a list of entities and programs
engaged, and summary statistics of the programs.112

Evaluation

In addition to the metrics tracking and reporting recommendations outlined above, we further
recommend the EPA conduct a robust, third-party evaluation on the implementation of the Fund
approximately every 3-5 years.113 There are many important lessons to be learned via the
deployment of these dollars, including how impactful the resources are in low-income and
disadvantaged communities in reducing emissions and providing critical co-benefits. We
recommend EPA seek an objective third-party, such as a university entity, to conduct this holistic
assessment and ensure results are shared publicly.114

Fraud Prevention

Also, similar to the EPA's Clean School Bus Program, every direct and indirect recipient for the
Fund should be required to register with the System for Award Management (SAM.gov), to help
prevent fraud.115 The direct recipients should be required to attend fraud awareness training to be
able to flag applications for the Fund, and Inspector General offices should also continue to be
staffed up, like for the clean school bus program.

Given the EPA's limited capacity and the relatively small sum of $30 million available until
September 30, 2031, for the EPA to administer the Fund, the agency should consider regulating
the Fund in a manner that facilitates continued data collection and display with minimal EPA
administration. Alternatively, if there are concerns about the EPA hosting the portal and
dashboard, the commission proposed in this comment to be formed from the nonprofit direct
recipients should host the portal as a stand-alone website, rather than being directly affiliated
with any of the individual direct recipient organizations.

111	"Data and Trends." The New York State Energy Research and Development Authority. October 2022.
https://www.nvserda.nv.gov/Researchers-and-Po1icvmakers/Oreen-Johs-Oreen-New-York/Data-and-Trends

112	"Treasury Emergency Rental Assistance (ERA) Dashboard." National Low Income Housing Coalition.
httos: //nlihc. ore/era-dashboard

113	"Introduction to Program Evaluation for Public Health Programs: A Self-Study Guide." Program Performance and Evaluation
Office. Centers for Disease Control and Prevention, https://www.cdc.gov/eva1imtion/giiide/intrcxhiction/index.htm

114	Transformative Climate Communities Evaluation Plan: A Road Map for Assessing Progress and Results of the Round 1
Place-based Initiatives." UCLA Luskin Center for Innovation and UC Berkeley Center for Resource Efficient Communities.

Assistance Guidelines: Evaluation." California Strategic Growth Council.

''System for Award Management (Sam.gov)." General Services Administration. https://sam. gov/content/home

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Section 6: General Comments

Timing for Fund Distribution

We ask that the EPA be mindful of when funds are distributed between the February 2023 and
the September 2024 deadlines. There is value in distributing funds quickly to recipients and
projects that are ready in February 2023. But this should be balanced with the need for careful
program design and guidance by the EPA that allows other recipients enough time to gather
themselves and develop projects that will benefit communities, as well as for the Fund to create a
representative network of financing opportunities across all communities for the purposes of
reducing or avoiding greenhouse gas emissions and assisting communities in their efforts to do
so. There are social equity tradeoffs in distributing funds too quickly, where speed of deployment
could hinder the goals of this Fund in actually reaching low-income and disadvantaged
communities.

Recognizing that the EPA is required by statute to begin disbursing some funds in February of
2023, the EPA should disburse capacity-building technical assistance and workforce
development funding to low-income and disadvantaged communities in the initial tranche of
funding. There is a significant need to help communities meaningfully participate in the Fund
and to boost the workforce needed to install zero-emissions technologies and deploy other
qualified projects. This would help community-based organizations and environmental justice
communities boost their capacity to apply for and advance zero-emissions projects.

Direct recipients should receive all grants from the Fund by the September 2024 deadline, as
indicated by law. Guidance from the EPA to direct recipients should be clear that they should
only deploy funds to indirect recipients that have demonstrated financing pipelines for
greenhouse gas emissions reducing- and low-income and disadvantaged communities benefiting-
projects. Direct recipients should also disburse technical assistance funds for the purposes of
capacity-building for entities without such a pipeline in place to prepare them to eventually
receive and deploy funds. This should allow some flexibility for all recipients and provide time
for them to assess their portfolios and engage with communities on projects that should be
funded.

We thank the EPA for issuing this request for information, and urge you to heed our input to
design and implement the Greenhouse Gas Reduction Fund in a manner that maximizes benefits
for low-income and disadvantaged communities in addition to the other stated goals of the Fund.
For further discussion, please contact Jessica Garcia at jessica@ourfinancialsecurity.org and
Monica Palmeira at monica.Dalmeira@greenlining.org.

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Sincerely,

Americans for Financial Reform Education Fund
The Chisholm Legacy Project
The Greenlining Institute
Public Citizen

WE ACT for Environmental Justice

30


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AFR

Americans for a\u'a _ . , «...
Financial Reform	Emerald Cities

Education Fund

v"v

COLLABORATIVE

Greenlining

JUST SOLUTIONS

CoLLective





December 5, 2022

Michael Regan, Administrator
US Environmental Protection Agency
Office of the Administrator, Mail Code 1101A
1200 Pennsylvania Avenue, NW
Washington, DC 20460

Re: Docket ID No. EPA-HQ-OA-2022-0859

Dear Administrator Regan, EPA Staff, and Members of the Environmental Finance Advisory Board,

On behalf of Americans for Financial Reform Education Fund, Emerald Cities Collaborative, The
Greenlining Institute, Just Solutions Collective, Rewiring America, and the 72 undersigned
organizations, we welcome the opportunity to comment in response to the Environmental Protection
Agency's (the "EPA") Request For Information ("RFI") on the Greenhouse Gas Reduction Fund (the
"Fund") program design and implementation. We write to urge you to prioritize environmental, racial,
and economic justice as you administer the Greenhouse Gas Reduction Fund, as authorized by the
Inflation Reduction Act of 2022.

The EPA should plan the implementation of the Fund to ensure it achieves both the equity and climate
goals of the Inflation Reduction Act, President Biden's Justice40 Initiative,1 and the EPA's Equity Action
Plan.2 Below are key principles the EPA should prioritize in order to equitably deploy capital to
maximize benefits to low-income and disadvantaged communities.

The EPA should disburse capacity-building technical assistance and workforce development
funding to low-income and disadvantaged communities in the initial tranche of funding.

Recognizing that the EPA is required by statute to begin disbursing funding in February of 2023 and that
there is a significant need to help communities meaningfully participate in the Fund and to boost the
workforce needed to install zero-emissions technologies and deploy other qualified projects, this would

1	"Justice40 A Whole-Of-Government Initiative." The White House. https://wwwwhitehouse.gov/environmenta1iustice/iustice40/

2	"Equity Action Plan." Environmental Protection Agency, https://www.epa.gov/environmentaliustice/eauitv-action-plan


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help community-based organizations and environmental justice communities boost their capacity to
apply for and advance zero-emissions projects.

The Fund should prioritize capacity-building investments in low-income and disadvantaged
communities. Qualified projects include any activity that "assists communities in the efforts of those
communities to reduce or avoid greenhouse gas emissions and other forms of air pollution." Activities in
low-income and disadvantaged communities that build the community's capacity, like community
planning and workforce development, should be prioritized for direct investment. Making these
investments early will enable communities to better take advantage of subsequent opportunities for
investment and assistance. Likewise, prioritizing technical assistance grants to low-income and
disadvantaged communities will result in communities that are better equipped to meaningfully
participate in the Fund. This includes indirect investments to establish new or support existing public
financing entities like green or public banks. Additionally, on the community level, a spectrum of
services should be made available that will facilitate the development of a potential pipeline of fundable
projects, including education, pre-project development, and both application and project implementation
support, such that when communities are prepared to seek funds they are successful in going through the
process.

Investments should be stewarded by trusted community-based financial institutions and green
banks with proven track records of investment in community-driven projects, offering the best
opportunity to leverage private dollars to achieve the Fund's goals. We urge the EPA to set forth a
competitive, transparent process for selecting possible entities to receive dollars from the Fund to ensure
a diverse set of entities are included in the pipeline to access the Fund. We recommend issuing a Request
for Proposals (RFP) to generate a diverse applicant pool, and to prioritize entities with proven
grantmaking or financing relationships to Black, Brown, Indigenous, People of Color (BlPOC)-led
organizations, including a history of co-governance relationships with these organizations, in order to
deliver maximum investment to the low-income, low-wealth, and disadvantaged communities whom the
Fund is intended to reach. We further recommend the EPA ensure strong coverage of benefits across all
geographies and within different networks and types of financial institutions.

Projects receiving direct or indirect investment from the Fund must be consistent with the
fundamental environmental justice principle of self-determination. The Fund must include
mechanisms to ensure that low-income and disadvantaged communities are meaningfully involved in
making decisions about projects that may affect them, especially with respect to pollution, health, and
energy burden. Investment standards should be in place that require projects to be community-driven,
build community capacity, and deliver intentional benefits.3 We recommend that the EPA require
recipients to proactively engage with residents of low-income and disadvantaged communities to
develop and apply such standards for projects assisted by the Fund to ensure that meaningful benefits are
realized and communities are not harmed.

3 "Greenlined Economy Guidebook." The Greenlining Institute. September 2020.
https://green1ining.ore/publications/2020/green1ined-economv/


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Additionality will be best achieved by maximizing investment in low-income and disadvantaged
communities, with an emphasis on Black communities, communities of color, and Tribes and
Indegenious communities. The first step to this Fund creating additionality, i.e. funding projects that
would not have been otherwise funded, is by prioritizing low-income and disadvantaged community
projects. These funds should reach places that the private market is not yet reaching or that the market
has neglected. To implement this practically, the EPA should institute a strong "but for" test which direct
recipients must utilize to justify investments. Criteria or questions that should be considered in such a
test could include:

•	Could the recipient receive traditional financing (particularly private sector financing) for the
project?

•	Are there other incentives/programs that would better suit this project?

•	Is there evidence to show that projects of similar type have been underserved by or excluded
from programs or incentives that the project qualifies for (for example, as a result of historic
discrimination or programs shown to have under-served portions of the eligible populations)?4

Projects that are likely not to pass such a test, and perhaps do not best serve additionality goals for this
Fund, include utility-scale renewable energy projects and research and development projects for
emerging technologies.

Opportunities to enhance economic well-being and wealth-building in low-income and
disadvantaged communities should be emphasized. An important component in the implementation
of the Fund is to facilitate a number of co-benefits to low-income and disadvantaged communities.

These investments have an important role to play in closing legacy gaps in investment, especially in
Black and other communities of color, that have hindered the accumulation of wealth in these
communities and led to immense disparities. The EPA should encourage eligible recipients to
incorporate opportunities for community ownership and wealth-building strategies in the deployment of
clean energy technologies5 as a means of delivering this critical co-benefit.

Smaller-dollar, community-oriented projects should make up a considerable portion of the
portfolio of projects financed from the Fund, to promote the use of proven emissions-reducing
technologies that improve the health and livelihoods of communities. Traditional finance has long
evaded small, community-scale projects as financial institutions prefer to finance larger-scale projects in
order to meet underwriting criteria. In some cases, some financing institutions, like the New York Green
Bank, are statutorily required to support projects at the wholesale level. The Fund offers a unique
opportunity to extend capital to those very projects that would otherwise go unfunded either for legal
reasons or because of the market's preference for larger projects. The EPA should urge or incentivize
recipients to dedicate funds to small-dollar projects such that the intention of the statute to benefit
low-income and disadvantaged communities is met. These projects should incorporate proven strategies,

4	"Despite Progress, Low-Income Households Underserved by Utilities' Efficiency Programs." ACEEE. November 2022.

littns://www.aceee.org/nress-release/2022/ll/renort-desnite-nrogress-low-income-hoiiseholds-iiiiderserved-iitilities

5	Kent, Adam. "An Opportunity for Equitable Climate Finance." Natural Resources Defense Council. October 2022.
https://www.nrdc.ora/experts/adam~kent/oprortimitv~transform~climate~fmarice


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which can include electrification retrofits, community-based mobility projects, district geothermal,
rooftop and community solar, and battery storage, that reduce emissions and provide tangible benefits to
residents of low-income and disadvantaged communities.

Require that information regarding financed projects is collected and publicly shared to ensure
accountability of these projects and guarantee funds are reaching low-income and disadvantaged
communities. It will be important for the EPA to track program outcomes for accountability, and as
proof of concept for how these funds are facilitating market transformation and benefits to historically
disinvested communities. The EPA should create a publicly-available web portal and dashboard, in
addition to a technical assistance platform, that hosts the data for the Fund's climate and community
benefits outcomes. The eligible recipients should be required to, at minimum, annually report to the
EPA's portal on where and how the funds are being distributed.

Ensure that a mix of grants, loans, and low-cost financing options are supported by the Fund.

While the Fund is intended to deploy capital in a way where the payback can help support the
sustainability of the Fund, it is important that a portion of the fund is used to provide grants to projects
that are unable to qualify for loans or financing. Well-positioned and targeted grants can help build
market confidence in clean energy technologies as well as advance the infrastructure needed to
sustainably deploy zero-emissions technologies. For example, grants to cover the upfront cost of starting
a contractor firm could help individuals from underrepresented groups build sustainable businesses in
communities. Even while deploying some grants, other financing support from the Fund could continue
to ensure the Fund's continued operability.

The EPA should expressly confirm that the Fund is a "covered program" for Justice40 purposes.

As part of implementation of Justice40, the Office of Management and Budget released Interim
Implementation Guidance which specified that a "covered program" is a Federal Government program
that makes covered investment benefits in one or more of seven areas, including climate change and
clean energy and energy efficiency6. The guidance further requires agencies to report benefits to OMB.
We recommend that the EPA confirm with OMB that the implementation of this Fund is a covered
program and plan to report on program benefits accordingly.

We thank the EPA for issuing this RFI, and urge you to heed our input to design and implement the
Greenhouse Gas Reduction Fund in a manner that maximizes benefits for low-income and
disadvantaged communities.

6 "Interim Implementation Guidance for the Justice40 Initiative." Office of Management and Budget.
https://www.whitehouse.gov/wp--contentAiDloads/2021/07/M~21~28.pdf


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Sincerely,

Americans for Financial Reform Education Fund

Emerald Cities Collaborative

The Greenlining Institute

Just Solutions Collective

Rewiring America

ACCE (Alliance of Californians for Community Empowerment)
Action Center on Race & the Economy
Adasina Social Capital

African American Alliance of CDF I CEOs Inc.

Building Decarbonization Coalition
California Reinvestment Coalition
Center for Neighborhood Technology (CNT)

Ceres

City of Fort Collins

CleanAirNow

Climate Action California

Climate Crisis Policy

Coalition of Community Organizations

Communities Unlimited, Inc.

Connecticut Citizen Action Group (CCAG)

Cool Planet Working Group of First Presbyterian Church of Palo Alto
Croatan Institute

E2 (Environmental Entrepreneurs)

Earth Action, Inc.

Ecology Center (of Michigan)

Ecumenical Ministries of Oregon
Elders Climate Action
Energy Alabama
Energy Solutions
Evergreen Action

Extinction Rebellion San Francisco Bay Area

First Alliance Consulting LLC

Forth

Friends of the Earth US
Future Nexus

Grassroots Global Justice Alliance
Greater Grand Rapids NAACP
Growth Opps
Health Care Without Harm
Hip Hop Caucus


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Inclusiv

Institute for Market Transformation

Keystone Energy Efficiency Alliance

Kinetic Communities Consulting

League of Conservation Voters

Mid-Missouri Peaceworks

Mormon Environmental Stewardship Alliance

National Energy Improvement Fund

Natural Resources Defense Council

NDN Collective

New Mexico Climate Justice

New Urban Mobility Alliance

North Carolina Climate Justice Collective

North Carolina Justice Center

Peninsula Interiaith Climate Action (PICA)

People's Action Institute

PODER (People Organizing to Demand Environmental and Economic Rights)

Positive Money US

Private Equity Stakeholder Project

Public Citizen

Renewal of Life Trust

Respiratory Health Association

Revolving Door Project

Rural Community Assistance Corporation

Sierra Club

The Chisholm Legacy Project

The Climate, Energy and Environment Team of the Consolidated Oregon Indivisible Network (COIN)
The Semilla Project
The Sunrise Project
Third Act

Transformative Wealth Management, LLC

Transportation Riders United

Virginia Organizing

WE ACT for Environmental Justice

350 Conejo / San Fernando Valley

350.org

350Hawaii


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apah

December 2, 2022

Michael S. Regan
Administrator

U.S. Environmental Protection Agency
Electronically submitted via www.reaulations.aov

RE: Request for Information - Greenhouse Gas Reduction Fund;

Docket ID No. EPA-HQ-OA-2022-0859

Dear Administrator Regan,

The Arlington Partnership for Affordable Housing (APAH) appreciates the
opportunity to provide comments on the Greenhouse Gas Reduction Fund (GGRF)
program design and implementation. APAH is a nonprofit affordable housing owner,
operator, and developer with over 30-years of experience based in Arlington, VA.
Today, we own and operate over 2,000 homes and serve over 4,000 residents in
the Washington, DC metro area. We primarily serve residents making between
30%-60% of the area median income. Our mission includes both providing
affordable housing to essential workers and fostering positive health and economic
outcomes for all our residents. Outside of housing, energy costs comprise one of
the most significant cost burdens for our families. Moreover, much of our portfolio
consists of garden-style buildings that are over 30 years old with substantial room
for energy efficiency improvements. With that in mind, we urge you to consider
affordable housing with an emphasis on low-income and disadvantaged
communities as a top priority for the Greenhouse Gas Reduction Fund (GGRF)
program. With respect to the design and implementation of the GGRF, we align
ourselves with the following priorities from the Housing Partnership Network (HPN):

Eligible Recipients:

We would ask that the EPA prioritize Community Development Financial
Institutions (CDFIs) as the primary capital deployment vehicle for the GGRF. We
believe that CDFIs would be ideal stewards of GGRF funding because of their long-
standing track record of mission lending. There are more than 1,300 Treasury-
certified CDFIs investing in all 50 states. Having developed the trust, deep
familiarity and connection with low-income and disadvantaged communities, CDFIs


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Letter to Administrator Regan
December 2, 2022
Page 2

already have the infrastructure in place to rapidly deploy funding that will
accelerate decarbonization and effectuate the EPAs greenhouse gas reduction goals.

Eligible Projects

We encourage the EPA to include funding that is targeted to affordable housing in
the set of eligible activities.

Decarbonizing housing stock is a critical piece of reducing greenhouse gas.
Decarbonization is not just about decreasing carbon emissions. It is also about
energy and resource efficiency, improved health through better indoor air quality,
addressing inequities through reducing energy burdens and building climate
resiliency. Residential energy use produces roughly 20% of greenhouse gas
emissions in the United States. If U.S. residential buildings were a country, they
would be the sixth-highest emitter of greenhouse gases in the world. Historically,
low-income and disadvantaged communities have been disproportionately
impacted. The GGRF provides a unique opportunity to center these communities by
lowering housing cost burdens, positioning them to take advantage of the
innovations in the energy sector, and creating safe and healthy indoor
environments.

Definition of Low-Income and Disadvantaged Communities

There exist several definitions for low-income and disadvantaged communities
within current Federal programs. For example, the CDFI Fund established definition
of an eligible "Target Market" as well as the New Markets Tax Credit program and
existing HUD housing programs provide guidance that meaningfully captures low-
income and underserved communities. These definitions include consideration of
individual borrower characteristics as well as the communities where borrowers and
projects are located. Adopting these definitions would create standardization and
lower costs of compliance, as government program awardees already track and
report their activity based upon these definitions.

Structure of Funding

It is critical that the GGRF funds be as flexible as possible to meet the needs of low-
income individuals living in disadvantaged communities and the front-line
practitioners who serve them. Providing a mix of grants, forgivable grants and
equity-like investments will help ensure affordability for the end users. Specifically,
low- and moderate-income homebuyers cannot absorb any additional debt to cover
the increased costs related to green and sustainable materials and features.

Further, existing multifamily residential portfolios have already leveraged debt and


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Letter to Administrator Regan
December 2, 2022
Page 3

cannot afford to pile on additional debt and remain financially viable for owners and
affordable to residents as the properties undergo green retrofits. This challenge
also extends to community facilities and community-serving retail uses that are
already leveraging as much hard debt as possible. All these projects need
concessionary financing and by allowing a flexible structure, these investments will
ultimately determine how deeply projects can go in terms of greenhouse gas
reduction improvements while ensuring the equitable deployment of GGRF funds.

Thank you for the opportunity to provide comments and highlight our priorities in
executing the GGRF. We look forward to working with you to ensure the
Greenhouse Gas Reduction Fund is a success.

Carmen Romero
President and CEO

Arlington Partnership for Affordable Housing

Cc: Environmental Financial Advisory Board (EFAB) via email to: efab@epa.gov

Sincerely,


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Response to the Environmental
Finance Advisory Board Charge
Questions

DATE: December 5, 2022

FROM: Beth Bafford

Calvert Impact, Inc.

BBafFord@calvertimpact.org

Krystal Langholz
Calvert Impact, Inc.

kianqholz@caivertimpact.org

TO: The Environmental Finance Advisory Board of the Environmental Protection Agency

(efab@epa.gov)

This written statement is offered in response to the Environmental Finance Advisory Board
(EFAB) Charge Questions.

Calvert Impact was formed in 1995 to mobilize capital to create a more equitable and
sustainable world. Calvert Impact raises capital from individuals and institutions to invest in
intermediaries and funds that support communities that are underserved by traditional credit
markets, including low-income and
disadvantaged communities. Calvert
Impact has mobilized over $4 billion dollars
for these communities since inception,
much of this financing for Greenhouse Gas
Reduction Activities. Calvert Impact's
financing activities, in 2021 alone, have
generated 3.3 million MWh of clean energy
by solar, wind and other renewables,
reduced C02 emissions by 18.6 million
metric tons, and conserved 562.3 million
kwh of energy.

In addition to our Greenhouse Gas
Reduction financing, in 2021, Calvert
Impact's portfolio of investments served
144 million individuals, created 764,000
jobs, financed 4.1 million small businesses,

Impact on Climate



3.3 mil

18.6 mil

MWh of clean energy
generated by solar, wind,
and other renewables

metric tons
C02 reduced

562.3 mil

7.8 mil

kWh Energy Conserved

solar products
financed

^1 p%mil acres of land
I««iP 11 ill managed sustainably

1 | Page


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created or preserved 33,000 affordable homes, arid increased access to clean energy for 28
million people around the world.

Calvert Impact builds the financial products that enable money to move from individuals and
institutions into local, high-impact organizations financing solutions to global inequality and
climate change. Its role is to translate between the needs of the private capital markets and the
needs in communities. Its flagship product, the Community Investment Note, has raised more
than $2.5 billion from more than 20,000 individual and institutional investors and Calvert Impact
is currently creating new products and services that have already mobilized another $1.5 billion
in private and public sector capital. Every dollar lent or invested from its core portfolio is
leveraged at least 30 times, catalyzing nearly $7 billion annually into communities.

The Multiplier Effect of Our Work

we disbursed	B |« jS KB W 5? — ®

to borrowers in 2021

bil

our borrowers
disbursed to end
ciients in 2021

Based on this extensive experience blending public, private, and philanthropic funds for the
benefit of low-income and disadvantaged communities, Calvert Impact recommends that the
EPA focus on the following core tenets as it designs and implements the Greenhouse Gas
Reduction Fund.

•	Drive demand and behavior change in target communities. The enormous task at
hand is to get individual families, business owners, developers, and building and
landowners to implement new technologies or practices that reduce greenhouse gas
emissions faster and more efficiently than they would otherwise. This requires extensive
outreach, education, distribution, and financial product innovation tailored to the target
consumer or local context. All aspects of the program should be designed with this in
mind.

•	Leverage existing, trusted relationships. The fastest way to change the behavior of a
broadly distributed population is to leverage existing relationships with target consumers.
This strategy was tested during the pandemic through the Paycheck Protection Program
(PPP) where Congress relied on large banks to reach their existing customers. We
learned the importance of leveraging an existing distribution system for fast deployment
- Congress just picked the wrong system. For the GHGRF, the EPA should leverage the

2 | Page


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community finance industry1 and ecosystem to immediately reach millions of individuals,
businesses and buildings in the program's target communities.

•	Balance flexibility with accountability. For local organizations and lenders to
appropriately tailor products and services to meet local needs and prioritize efficient
deployment, there needs to be flexibility in the use of proceeds. Funds should be
awarded as grants to well-vetted intermediaries and deployment partners with a proven
track record of managing public and private capital against a specific set of objectives -
reducing greenhouse gas emissions through the deployment of Qualified Projects in
target communities. Further restrictions on use of funds would inhibit the speed,
creativity, and locally-informed approach that organizations could otherwise take to
generate demand and change behavior. For the EPA to feel comfortable with this
approach, it can implement robust reporting mechanisms, audits, and/or oversight to
ensure program objectives are being met on an ongoing basis.

•	Use intermediaries as non-governmental partners. To operationalize this approach,
the EPA should rely on existing intermediary2 organizations that can act as long-term
partners to the EPA in executing its program goals while adhering to the deployment
timeframe for the GHGRF in the Inflation Reduction Act. These non-governmental,
nonprofit partners can act as national "hubs" of an effective hub-and-spoke model for
deployment and can actively manage GHGRF awards over time to be responsive to a
quickly changing and dynamic market. These organizations can allocate and reallocate
funds, shift deployment strategies, invest in capacity where there are gaps, and ensure
the program objectives are being met on an ongoing basis. This will be particularly
important given how quickly the private market is shifting towards supporting and
financing clean energy solutions. For example, if in five years, the private market for
rooftop solar gains greater comfort in financing low-income households or consumers
with lower credit scores, GHGRF intermediaries should not continue to use precious
taxpayer funds to support that activity and funds should be shifted into products,
projects, or communities that the private markets are not serving. This ongoing active
management will be best provided by a set of selected non-governmental intermediaries.

I. Objectives

a. Environmental Justice / Definition of "low-income and disadvantaged communities"

1	The Community Finance industry includes certified Community Development Financial Institutions,
Community Development Credit Unions, Minority Depository Institutions, Affordable Housing developers,
and other local, mission-driven specialty community and green finance organizations with a track record
of providing clean energy and financial solutions for low-income and disadvantaged communities.

2	Intermediary organizations are Eligible Recipients that can make direct and indirect investments, per the
Greenhouse Gas Reduction Fund statute. These organizations can and should support a broad set of
indirect investees with grants and/or loans, support market development, aggregate assets and activities,
aggregate information and reporting, conduct impact analysis, and generally act as a partner to the EPA.

3	|


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i. What considerations should EPA take into account in defining "low-income"
and/or "disadvantaged" communities in order to ensure fair access/that the
funding benefits disadvantaged communities?

We recommend that the EPA define "low-income and disadvantage communities" using either
the US Treasury's established definition of CDFI eligible "Target Market" and/or Justice40
Disadvantaged census tract. Adoption of these robust existing definitions would decrease the
administrative burden on participating awardees and lenders. In either case, we request that the
EPA publish an easily accessible list of census tracts on a periodic basis with their current
designations or labels for ease of tracking, targeting, and reporting. We also recommend that
low-income and disadvantaged be considerate of both the individuals served and the location of
any activities. For example, a business owner may have a retail business location in a high-
income census tract, but the business owner and their employees qualify as low-income. If the
designations or tests are only location-based, these people would not be prioritized or served.

The definition of "Socially and Economically Disadvantaged Individuals" in the State Small
Business Credit Initiative guidance from the US Treasury Department does a good job of
including both the people and the geographies in their definition.

ii.	How can EPA ensure that communities and organizations who have received
little or no funds in the past receive priority consideration for funding? How could
EPA identify the low-income and disadvantaged communities it should prioritize for
greenhouse gas and other air pollution reduction investments?

EPA can ensure that communities who have been systematically excluded from the capital
markets are included through (1) creating a Tribal set-aside of fund and separate guidance for
these funds, (2) making sure that organizations deploying capital in persistent poverty counties,
or those where 20% or more of the country population has lived below the poverty line for the
past three decades, receive priority points on their application3. Direct intermediary recipients,
or hubs, who can demonstrate a meaningful plan to include these communities through their
network, or spokes, should likewise receive these priority points.

The EPA should also waive any enacted match or leverage requirements for persistent poverty
counties, tribal communities, and other low-income and disadvantaged communities so that
there are no barriers to participation. Extensive outreach should be made to these communities,
as well as technical assistance on the application itself, so that organizations know that the EPA
is serious about working in partnership with these communities. Lastly, it can provide
deployment timelines that allow for extensive capacity building and prioritizing large scale,
"shovel ready" projects in favor of smaller community projects.

iii.	What kinds of technical and/or financial assistance should GHGRF funding
recipients provide to ensure that low-income and disadvantaged communities are

3	Persistent Poverty - Partners for Rural Transformation

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able to be direct or indirect beneficiaries of GHGRF funding? Please identify
supports that could help communities with project implementation.

Technical assistance is critical to the success of the GHGRF and a hallmark of the Community
Development Finance industry. Effective technical assistance is flexible and uniquely adapted to
the community being served by the mission-based lender or organization. It also plays a dual
role in low-income and disadvantaged communities of preparing a borrower or beneficiary to be
credit or investment ready and building a strong connection for ongoing support. This hands-on
and tailored approach has resulted in exceptionally low industry write-off rates for loans that are
otherwise deemed to be un-bankable.

The GHGRF should, in its grant programs, broadly define technical assistance to ensure
maximum adaptation to cultural and community needs. It is crucial that the GHGRF facilitates
technical assistance on multiple levels. In addition to providing financial resources for
community-based technical assistance, the GHGRF should also allow for technical assistance to
the lenders and developers who will be implementing these activities.

We recommend that the definition of technical assistance includes funding for:

•	curriculum development and training

•	cultural and language translation

•	community outreach materials

•	community outreach coordinators (akin to "Navigators" used to help people understand
and access the coverage benefits of the Affordable Care Act)

•	creation of best practice networks

•	support for intermediaries to create resource banks (for product design, industry data
aggregation, enabling technologies, etc.)

•	the development of technology systems and data that will support asset class maturation
and market development (e.g., data systems that aggregate and track loan performance
for household loans to consumers with limited credit history or poor credit scores so that
the market can effectively analyze and price risk)

•	technical assistance surrounding GHG mitigations in the form of clear guidance on
responsible reduction

•	program administration of technical assistance programs

•	travel funds to both deliver technical assistance and to participate in capacity building to
strengthen technical assistance and lending programs

•	accelerator or one-stop-shop models that combine energy expertise and building
science with the necessary hand holding surrounding financing (including incentives or
grants) and process components such as bidding and evaluation

Support from outreach materials and community outreach coordinators is necessary for
customer acquisition. Although members of low-income and disadvantaged communities spend
proportionately more of their income on energy than wealthy households,7 they rarely have the
luxury of spending time to research methods to increase their overall energy efficiency. In
addition, general consumer awareness of GHG reduction financing products is low, especially in
the low-income and disadvantaged communities that have historically been systematically
excluded from both traditional capital markets and the green movement.

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We know efforts to change behavior, especially for things in people's lives that aren't necessarily
"broken" like their gas-fueled cars, existing HVAC systems, or current practices, take very
intentional, economically attractive, and relationship-driven approaches to be successful. We
therefore recommend outreach efforts that package local financing opportunities, benefits of
energy efficiency, and incentives into a "no brainer" package of support through local, trusted
partners. With 84 percent of CDFI portfolios currently deployed in low-income areas to low-
income people or people of color, the community finance industry is well positioned to serve as
these local partners.4

Working hand in hand with quality technical assistance, it is important that GHGRF provide
financial assistance that is thoughtfully designed to make sure that it reaches low-income and
disadvantaged communities. The types of financial assistance offered must be those that
ultimately encourage lenders to make loans to entities and individuals that are underserved by
traditional capital providers due to perceived higher risk profiles. Representative products
include:

•	grants for capacity building

•	cash incentive payments to drive adoption or behavior change

•	credit enhancements, such as low-cost guarantees, first-loss capital, and/or loan loss
reserves

•	equity investments or grants-in-lieu of equity, similar to the role that tax credit equity
plays in a project

•	subordinate loans at better rates or terms than currently available in the market

•	senior loans at better rates or terms than currently available in the market

•	working capital

•	bridge loans until incentives are paid out

Financial Assistance

Flexible GHGRF financing along the entirety of the traditional capital stack
will ultimately increase opportunities for leverage and allow communities
to design products to meet their needs.

SENIOR LOANS

GHGRF recipients can provide better rates and
terms than currently available in the market

SUBORDINATE LOANS

GHGRF recipients can likewise provide better rates and terms '
than currently available in the market, galvanizing leverage in
the form of senior loans from private capital



^ EQUITY

Through equity investments or grants-in-lieu of equity, GHGRF recipients can
finance projects that otherwise wouldn't cash flow and provide "cushion" to



attract private capital

4 https://www.cdfifund.gov/sites/cdfi/files/2021-10/ACR_Public_Report_Final_10062021_508Compliant_v2.pdf

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Equally important to the types of financial assistance offered are the channels that the EPA uses
to reach low-income communities and any additional requirements it puts on these funds. EPA
must prioritize the distribution of this financial assistance to community finance organizations
who demonstrate experience in serving, existing relationships within, and accountability to low-
income communities. While an experienced community finance organization can easily design
and deploy a new loan product, it can take years to develop trust and cultural competency in
low income and disadvantaged communities.

Although we believe it is prudent for the EPA to prioritize working with organizations that have a
strong history of creating leverage on financial transactions, it is important to note that low-
income communities often have less access to private capital and philanthropic resources. The
EPA should avoid imposing match or leverage requirements that would make it difficult for low-
income communities to access financial assistance.

b. Program Efficiency

i. How can the GHGRF grant competition be designed so that funding is highly
leveraged (i.e., each dollar of federal funding mobilizes multiple dollars of private
funding)? How can the funding be used to maximize "additionality" (i.e., the extent
to which funding catalyzes new projects that would not otherwise occur)? How can
EPA balance the need for grants for capacity building and short-term results with
financial structures that will allow capital to be recycled over time? Where (if at all)
is it appropriate to impose sustainability requirements on direct or indirect
beneficiaries of GHGRF funding?

Community finance organizations are adept at facilitating high private-sector leverage, with
CDFIs typically generating an 8:1 leverage ratio on investment.5 GHGRF should ultimately
partner with Eligible Recipients and their network of Indirect Investees with a history and track
record of raising private capital to leverage public funds. Those with experience leveraging
private capital have already built the necessary relationships and trust with private capital
sources, meaning that they can quickly leverage new federal funding. These relationships with
private capital sources such as banks, corporations, insurance companies, philanthropy, and
other asset owners take time to develop, and—in general—all private capital sources will require
that the lenders with whom they are working have a strong lending track record, experience
managing federal funds, and long-standing relationships in the communities they serve. Most, if
not all, institutional investment platforms will not work with de novo managers or organizations
that have not previously raised, managed, and returned institutional capital.

Additionally, GHGRF funds need to be able to be subordinate (in the form of grants, equity, loan
loss reserves, guarantees, etc.) to leverage private capital, meaning that—in any transaction
financed from multiple sources—the funds would be the first to take a loss if a loan was not
going to be fully repaid. Private capital is risk averse, particularly with respect to low-income and
historically disinvested communities. Perceptions of risk, often inaccurate and driven by limited

5 (2021). Remarks by Secretary of the Treasury Janet L Yellen on $1.25 Billion Award to CDFIs to Support Economic
Relief in Underserved Communities Affected by COVID-19. Treasury.gov. https://home.treasury.aov/news/press-

releases/jy0229.

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data available, mean that projects in low-income communities do not get financed. Accordingly,
private capital will require that subordinate, or first-loss capital be present in a transaction to
serve as a loss "cushion." The more cushion in any transaction, the faster and easier the federal
investment will leverage private funds. Therefore, it is critical that GHGRF can be used as
subordinated capital to facilitate high, reasonably priced private-sector leverage.

As discussed, the EPA must be thoughtful in developing private capital and leverage
requirements. Private capital can be very difficult to attract in low-income communities,
especially Tribal, rural, or persistent poverty counties, where physical distance from banking
institutions and perceptions of risk work in tandem to greatly limit capital access. GHGRF should
provide clear guidance on what portion of the funds should be granted to organizations and
what should be leveraged and used for financing, and private capital leverage requirements
should not exist on all funds. Many investments in low-income and disadvantaged communities
cannot absorb the additional debt required to take on decarbonization projects. Grants should
be deployed in small and very low-income projects, and leverage should be defined by other
sources used to support the project, such as tax credits or rental assistance.

To ensure that leverage still occurs in low-income and disadvantaged communities, the EPA can
prioritize funding organizations with experience leveraging capital, such as community finance
organizations. In general, experienced community finance organizations know the correct mix of
capital (grant, debt) they need to design financial products uniquely adapted to their community.
To maximize the positive impact on low-income communities, the highest level of flexibility
possible should be given to grantees to design meaningful capital products for their
communities.

Calvert Impact, like the Center for Impact Finance at the Carsey School of Public Policy, also
holds that the "best way to ensure additionality is to direct substantially all of the $27 billion
toward low-income and disadvantaged communities", as stated in their RFI response. The EPA
should focus their efforts on smaller projects and consumers in low-income and disadvantaged
communities to ensure that the GHGRF directs capital to projects that would not have otherwise
been financed.

The EPA should also engage in a multifaceted understanding of additionality to make sure that
these federal funds ultimately support projects that would not have been able to access
affordable financing otherwise. The EPA should not only consider whether a project would have
received financing, but also whether that investment would otherwise have been carbon free or
reduced. This is especially important in very low-income areas where it is difficult for projects to
absorb the additional debt necessary for the increased costs related to decarbonization. This
has been a large driver behind the lack of penetration of GHG-reducing technologies (solar, heat
pumps, electric water heaters, etc.) to date because the lack of access to affordable credit
means that households and businesses cannot afford the upfront costs of installation that bring
the long-term economic benefits.

To achieve this additionality, EPA funds should be used to buy down financing costs which are
too high for Low-to-Moderate Income (LMI) consumers and households. An interest rate buy-
down tool can be tailored to a variety of different types of products and markets, making it an
adaptable tool for environmental justice and market transformation. In using first mortgage
capital as an example, grant dollars from the EPA can be used to buy down the first mortgage

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rate to a level that allows the property owner to access the additional funds required to build or
retrofit to net zero or net zero ready. In this example, the GHGRF funds would be in a
subordinate position providing the private capital with protection which will drive their part of the
rate lower than if private capital had financed the entire first mortgage. A significant rate
reduction can be achieved with this credit enhancement, typically 200 basis points or more,
which presents significant interest savings that can offset the increased costs. This buy-down
can often also allow a family to borrow money above standard Loan-to-Value ratios, allowing
borrower money to go further. The long-term cost savings of living in an energy efficient home,
coupled with owning an appreciable asset, make this a powerful wealth creation tool for low-
income families.

As discussed, EPA funds also need to be set to take risk that private funds cannot or do not
make to generate additionality, including serving as subordinate capital in a transaction.

Likewise, as the GHGRF makes grants of capital to mission-based lenders, these lenders can
blend this equity into their GHGRF funds, where it can serve as first loss capital, supporting
product innovation. Additionality also requires lending in areas that are underserved by
traditional capital markets and using EPA funds for financial products that are not otherwise
available to low-income consumers.

EPA funds should also be used to support capacity and/or technical assistance for organizations
engaged in GHG reduction activities across the entire value chain. Improved organizational
capacity creates significant additionality, as organizations will strengthen their existing GHG
reduction activities and/or add new product lines. As capacity is built and organizations become
more efficient in their activities, these organizations can expand, serving additional communities
that were previously unserved by the market and creating financing opportunities where there
were previously none.

In summary, awardees should be required to report the additionality of their investments across
a range of categories:

•	EPA funds should be used to buy down financing costs when they are too high for LMI
consumers / households

•	EPA funds should be used to take risk that private funds cannot / do not take

•	EPA funds should be used for financial products that are not otherwise available to LMI
consumers or communities

•	EPA funds should be used to support capacity building and/or technical assistance for an
organization engaged in GHG reduction activities (defined across the value chain)

While the EPA should endeavor to capture these additionalities, it is critical that the EPA avoid
any slow external testing processes to verify that these transactions would not have occurred
without GHGRF financing, such as the "alternative availability" test under the CDFI Fund's New
Market Tax Credit program. Given the broad, household-level activities encompassed under the
GHGRF, an external verification process would take too long and serve as major barrier to
speed in deployment. Self-reporting provided by experienced federal grant administrators would
address the GHGRF's desire to create additionality without slowing deployment of this critical
financial assistance.

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For programmatic sustainability, EPA funds should also be distributed to experienced non-profit
community finance organizations with deep community connections. Entrusting these mission-
based lenders is a guaranteed recipe to ensure the continued charitability and operability of the
funds. Community finance organizations have some of the lowest write-off rates on their loans in
the country, in many cases much lower than traditional lenders. For example, in FY2020, the
Opportunity Finance Network (OFN) member CDFIs reported a write-off rate of .48% across all
lending sectors.6 This means that over 99% of all capital lent by these community lenders is
ultimately repaid back to their institutions and ready to be recirculated back to their community.
Calvert Impact likewise has had a less than 1.0% net charge off rate since inception (nearly 30
years), and it has never defaulted on the repayment of investor capital. All of its earnings are
reinvested to grow its investments to further its mission.

Mission-based lenders attribute low write-off rates to their deep relationships in their
communities and responsive risk management practices. The community finance sector works
with its borrowers to provide hands-on, individualized support for borrowers who are struggling
with repayment, often providing technical assistance and flexible repayment options. The EPA
must rely on experienced lenders such as these not only to ensure deployment, but also to
ensure that these funds are effectively recycled to achieve continued sustainability.

However, EPA should avoid sustainability requirements that require all funds to exclusively build
balance sheets through being strictly allocated to revolving loan funds. It is critical that funds
also be used to build the market, As discussed by the Center for Impact Finance at the Carsey
School of Public Policy in their RFI, Calvert Impact likewise believes that grants for these market
building activities improve the sustainability of the recipients over time - and that these
investments in market infrastructure (data, impact evaluation, secondary market activity,
community-level capacity building, etc.) create a high tide that lifts all boats. Calvert Impact
subsequently also recommends avoiding making grant awards as "permanently restricted"
capital.

ii. Are there programs/structures at the federal or state level that could effectively
complement the GHGRF? How can EPA best leverage the GHGRF to support
lasting, long-term (beyond 2024) transformation of the clean energy and climate
finance ecosystem, especially for disadvantaged communities, and greenhouse
gas and other air pollution reductions?

The Inflation Reduction Act has many potent energy incentives that stand to make the financing
delivered by mission driven lenders with GHGRF funds more accessible to LMI consumers.
Financial products should be developed around these other incentives, such as:

• Electrical Vehicles (EVs): Many credit unions and CDFIs provide vehicle financing.
When EV credits are coupled with long-term cost savings for borrowers, it becomes
financially plausible for LMI families to purchase an EV. For example, a discount on an
electric vehicle from $50,000 to $42,500 still makes that vehicle completely out of reach
for most American families. But if a community development credit union, with the help
of credit enhancement from the GHGRF in the form of a loan loss reserve or guarantee
provided by an intermediary, could offer $0 down, 0% long-term financing to a family to

6 https://cdn.ofn.org/uploads/2022/05/03154422/OFN-Side-by-Side_FY2020.pdf
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purchase the $42,500 EV, monthly payments could reach a level that is more palatable
for a much broader set of families. This is especially true if this offer is provided by a
credit union that the family already knows and trusts from prior experience.

•	Home Energy Efficiency Improvements: Many credit unions and CDFIs finance
weatherization, the purchase of appliances such as dryers and stoves, and water
heaters. Mission-based lenders are well situated to combine financing with Whole Home
Energy Reduction Rebates to ensure that the low-income families that most need access
to home energy efficiency improvements can access them. These rebates can provide
up to $8,000 in rebates for households that are under 80 percent of Area Median
Income, but this requires significant work of the renter or homeowner to identify a
contractor, conduct an assessment of the home's energy savings potential, pay out of
pocket for the contractor's services, and then submit the paperwork required to qualify
for the rebate. Instead, a local community lender could partner with a network of
qualified contractors to go door-to-door in neighborhoods to offer these services at no
upfront or ongoing cost to the family. This could be provided by a mix of grants and low-
cost loans to the lender so they can offer a financing package that reflects the value of
the rebate and the value of ongoing energy savings along with a guarantee not to
increase (or perhaps more likely, to decrease) the family's monthly payments. Some of
the funds could also provide added incentive for the contractor to ensure they focus on
providing services in LMI communities.

•	Clean Energy Credits: Many organizations in the community finance sector finance
solar products, such as the Solar and Energy Loan Fund. These credits, offered for
businesses and residential homeowners, can work in conjunction with community
finance products to ensure that solar is accessible to LMI small businesses and families.

Past efforts to use tax credits or rebates to incentivize consumer behavior have failed to reach
low-income communities because, among other things, 1) these communities and individuals do
not tend to have a high tax burden, 2) they are not often the target of market education or
outreach, and outreach that is done is not presented in a culturally competent way, and 3) it is
not often a top priority of a family or individual when other challenges abound. If the new tax
credits, rebates, and other incentives in the Inflation Reduction Act are to meet the Biden
Administration's environmental and energy justice goals, these incentives need to be paired with
extremely attractive financial packages and hands-on technical support provided through
trusted local institutions. The EPA should thus work to develop and support financial products
that ultimately complement these incentives, as they will mutually work together to increase
access to these products for LMI families and businesses.

The American Rescue Plan Act of 2021 reauthorized and expanded the SSBCI program.
Providing a combined $10 billion to states, territories, and Tribes, this initiative is designed to
expand capital access to small businesses in the wake of the pandemic, create jobs, and build
entrepreneurship and opportunity ecosystems.7 Each state, territory, and Tribe has developed
its own plans with its allocated funding, such as creating venture capital funds and various other
credit support programs (e.g., loan participation and collateral support programs). Helping
states, territories, and tribes transition to net zero economies was always an explicitly named

7 https://home.treasury.gov/system/files/256/State-Small-Business-Credit-lnitiative-SSBCI-Fact-Sheet.pdf
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potential economic benefit in the SSBCI program policy guidelines, leading some states to
develop programs explicitly designed to help their industries with high-carbon output transition
to the green economy.

Whether or not net zero transition is explicitly targeted by their programs, all states, Tribes, and
territories will have SSBCI funding to support small businesses within their jurisdictions through
various mechanisms. For small businesses and contractors that need financing for a mix of both
GHG reduction activities and non-GHG reduction activities (such as building renovation), SSBCI
funds can be leveraged with financial assistance from the GHGRF to ultimately help both critical
federal programs accomplish their legislative purposes. The EPA should thus consider how to
maximize SSBCI as a complement to the funding available through the GHGRF.

II. Program Structure

a. Eligible Recipients

i. Who could be eligible entities and/or indirect recipients under the GHGRF? What
should the thresholds for deployment be - both amount and timing - for GHGRF
funding by these entities? Please provide references regarding the total capital
deployed by these entities into clean energy and climate projects.

There is a strong existing community development finance sector in the United States. This
existing infrastructure includes:

•	Credit Unions: There are more than 5,000 credit unions across the country, of which
approximately 500 are designated as Community Development Credit Unions, Minority
Depository Institutions, and/or CDFIs (together, CDCUs).

•	Community Development Financial Institutions: There are 1,378 organizations
designated as CDFIs across the US, of which 573 are structured as loan funds ("CDFI
Loan Funds"), and the majority of which are non-profit organizations. There are also
more than 60 certified Native CDFIs located in 23 states.

•	Non-profit real estate and solar developers: There are thousands of non-profit
developers of affordable housing and/or solar projects across the country who have
current portfolios that can and should be decarbonized quickly.

•	Specialty Finance Organizations: In addition of the organizations above, there are
specialty finance and/or development organizations that are purpose-built to bring
access to clean energy and clean energy technologies to low income and
disadvantaged communities, such as PosiGen, Sunwealth, and Urban Ingenuity.

All of these organizations will need to be mobilized to ensure fast and effective deployment of
eligible technologies in low-income and disadvantaged communities.

While the data collection and methodology surrounding the volume of green lending is as
diverse as the organizations providing this financing, the Center for Impact Finance at the
Carsey School of Public Policy estimates this combined lending at over $1 billion per year8.

8 The Center for Impact Finance at the Carsey School of Public Policy RFI
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To maximize the ability of eligible recipients to leverage and recycle Greenhouse Gas Reduction
Fund grants, as discussed in our introductory remarks, the EPA should use intermediaries as
non-governmental partners, relying on a hub and spoke model. The Small Business
Administration Community Navigators program provides an effective example of a national hub
and spoke model. The success of this program, however, relies on the diversity of the spokes
chosen. Under this program, there were 8 Tier 1 hub grantees, as well as a host of Tier 2 and
Tier 3 hubs. Each of those Tier 1 hubs was selected because they had specialized experience
reaching and serving different market segments or provided a specific product.

We like many of our partners believe that the GHGRF funding should be awarded to multiple
recipients for several reasons:

•	As money flows through additional and unnecessary intermediaries, it ultimately
increases the final cost of capital for the ultimate recipients. It also decreases
administrative efficiency, ultimately providing less money for programming.

•	It creates long-term market inefficiencies. Like water, capital continues to flow through
familiar channels. While relying on one entity might feel expedient, it ultimately will limit
innovation in the field over time by serving as a dam to the capital flow to low-income
and disadvantaged communities.

•	For GHGRF funding to effectively reach low-income and disadvantaged communities,
this funding must also be accountable to these communities through its governance
structures and must have the flexibility to make programmatic adaptions to serve these
communities.

•	It is too risky. If that one entity fails in its mandate or struggles to build the administrative
capacity to oversee the fund, the entire GHGRF runs the risk of becoming a political
failure. In the hub and spoke model, if one hub should encounter difficulty, the integrity of
the broader program remains intact.

The EPA should subsequently target its funding to 3-10 direct eligible recipients, or hubs,
allowing these hubs to direct resources to other lending institutions.

ii. What eligible entities and/or indirect recipients would best enable funds to reach
disadvantaged communities? What are their challenges and opportunities and how
can EPA maximize the use of these channels?

To effectively deploy this capital in low-income and disadvantages communities, the EPA should
rely on the community development finance infrastructure, as 84% of CDFI portfolios are
currently deployed in low-income areas, to low-income people, or people of color9.

This is critical for the success of the GHGRF because the community development finance
sector is unique in that it already has deep relationships with the low-income and disadvantaged
communities it serves. Ultimately, the EPA must rely on this industry to ensure that GRGRF
resources reach the disadvantaged communities and communities of color that will bear the
highest burden of climate change.

9 https://www.cdfifund.gov/sites/cdfi/files/2021-10/ACR_Public_Report_Final_10062021_508Compliant_v2.pdf
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As shown through the COVID-19 pandemic with (PPP) lending, the community development
finance industry is responsive and capable of massive scale deployment when given effective
resources to do so. While the PPP program was not originally set up for active participation from
community finance organizations, the U.S. Small Business Administration and the Federal
Reserve changed their policies to accommodate more non-bank lenders once enormous
income disparities in PPP access came to light. Following those policy revisions, certified CDFIs
quickly led the charge, doing more than $34 billion of PPP loans throughout the program with
much higher deployment rates in low-income communities than the general program
averages10.

The existing community development finance sector has extensive experience in green lending
and carbon-reduction financing activities. In fact, 55% of OFN members report existing lending
products in green energy sectors11. However, while there are many experienced green lenders
throughout this sector, there also many mission-driven lenders that have never had access to
the capital and resources necessary to create or scale their GHG lending products. The scale,
depth and breadth of the community finance sector speaks for itself; in 2020, 807 CDFIs
reported a total of $111 billion in assets deployed across 6.2 million transactions.12 Like with
PPP, once given access to the GHGRF, the existing community development finance
infrastructure will be poised to move quickly to develop locally-tailored solutions.

In 2020, The University of New Hampshire and Inclusiv, a network of community development
credit unions, launched a free virtual Solar Lending Professional Training and Certificate
program. This program was designed to increase solar financing in low-income and
communities by harnessing the power of the existing community development infrastructure. In
2021 alone, 96 program graduates lent $2.25 billion in green products. The success of this
program demonstrates that once organizations newer to the GHG reduction lending space
receive this type of targeted training and technical assistance, they can quickly develop and
strengthen programs to rapidly deploy capital to build a stronger green economy.

Both the Solar Lending Professional Training and Certificate program and the rapid mobilization
of PPP lending demonstrate the potential latent capacity in the existing community development
finance infrastructure. For this reason, the EPA should focus its attention on mobilizing,
supporting, and expanding the highly experienced existing community finance infrastructure in
our country.

b. Eligible Projects

i.	What types of projects/sectors/market segments could EPA prioritize for funding

through the eligible recipients?

ii.	Considering each major project type/sector/market segment, discuss:

1. What are the barriers to private sector capital?

10	CDFIs Continue to Outperform Other PPP Lenders, https://www.ofn.org/cdfis-continue-outperform-other-ppp-
lenders/

11	Opportunity Finance Network

12	https://www.cdfifund.gov/sites/cdfi/files/2021-10/ACR_Public_Report_Final_10062021_508Compliant_v2.pdf
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2.	Please provide any citations to relevant case studies in low-income
and disadvantaged communities, in terms of emissions reductions and other
benefits, including cost effectiveness, wealth creation, economic
empowerment, workforce development, etc.

3.	What project-level gaps could the GHGRF fill for each type of
project? What form could capital take to fill these gaps? Please provide
references that analyze the deal-level economics for the various types of
projects, including whether and how these may vary by geography.

4.	Beyond assembling the capital stack for a deal, what other barriers
and constraints exist that could constrict the pipeline of successful
projects? What program strategies are needed to respond to these barriers
and constraints?

iii. What types of contracting vehicles and structures will best support rapid
deployment of clean technology solutions and direct involvement of the private
sector, including in supporting disadvantaged communities?

Qualified Projects should include the deployment of the following technologies:

•	Renewable energy generation (solar, wind, etc.)

•	Vehicle electrification (cars, trucks, fleets, etc.)

•	Vehicle charging infrastructure

•	Clean fuels

•	Building efficiency

•	Building electrification


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• Sustainable or regenerative agriculture

Calvert Portfolio Partner, Sunwealth, helps install community solar installation
on municipal buildings, including this fire station

To effectively reach low-income and disadvantaged communities and provide direct economic
and health benefits to families, deployment of these technologies should be prioritized in multi-
family housing, single-family housing, community real estate (e.g., houses of worship,
community centers, health clinics, schools), community solar accessible to low-income
subscribers, small businesses, and vehicles owned or driven by low-income individuals.

c. Structure of Funding

i. Are there any potential program design requirements that would impact the
ability of recipients to use the GHGRF program funds? How could EPA address
these issues through program design? How could recipients comply with relevant
federal requirements? How can EPA streamline the distribution of funds so that
applicable federal and state review can be accomplished in a coordinated and
efficient manner?

To reduce burdens on applicants, grantees, and/or subrecipients, EPA must find a way to
receive substantive quantitative outcomes data and reduce reporting burdens to create an
inclusive, functional program. To accomplish both goals, EPA should only collect output metrics
that are truly necessary and provide capacity building tools surrounding data collection. In
addition, we recommend the development and standardization of meaningful proxy estimations
related to the reduction of GHG emissions and tools to assist in this estimation process. These
proxy estimates should be based on reasoned averages, and there should be a systematic
process for developing and disseminating this proxy data. This is because in many cases there

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are not always cost effective, consumer-friendly ways of getting direct data. In these cases, the
desire to have precise outcome data must be balanced by the desire to create an inclusive,
functional program where funding can be quickly deployed to confront the challenges of climate
change. We recommend that the EPA develop and publish these proxies for use across all
eligible projects and programs.

Also regarding reporting requirements, we recommend that the EPA allow recipients to self-
certify their reporting, providing their annual audit as confirmation that they are accurately
representing themselves. Audits can be done on both financial performance and impact
management, as we do at Calvert Impact. Lastly, we recommend that the EPA provide grantees
with clear guidance and flexibility surrounding budget modifications over the course of their
grant administration. With new programs, this ultimately supports successful grant
administration, allowing grantees to adapt their program based on what is working well.

Additionally, the EPA can mimic some positive features of the CDFI Fund's Financial Assistance
(FA) Awards. FA awards do not restrict funds solely for end deployment or specific programs,
but instead allow for flexible usage between lending capital, loan loss reserves, and the delivery
of technical assistance. This flexibility allows the CDFI to create the credit enhancement
necessary to attract additional investment and to develop the correct mix of financial products
and technical assistance services for their community. The EPA, however, is encouraged to
mimic a more streamlined application process such as the CDFI Fund's Rapid Response
Program (RRP), in order to allow for quicker funding deployment.

Neither the CDFI Fund's RRP or FA program require line-item budgeting, but they did have very
specific rules on how funds can be used and allocated. Recipients are responsible for reporting
that their funds were spent in a compliant manner, which is regularly tested in program-testing
during a Single Audit. This allows maximum flexibility for those administering funds, while still
providing strong oversight over the programs.

Additionally, the CDFI Fund FA awards allow up to 15% of the funds to be used for
administration. This has been critical for the success of the program, allowing lenders the
overhead they need to properly administer funds and supporting broader capacity building
across the sector. Federal programs, such as the SSBCI program, which have not provided
adequate administrative funding (e.g. 3-5%), have struggled with broad scale adoption.

Lastly, it is critical that the EPA does not re-underwrite individual loans under the GHGRF, as
done by some federal guarantee and RLF programs (e.g. the USDA or EDA). This process
greatly slows down the deployment of the funds with very little gain. Experienced lenders are
well prepared to gauge and mitigate their own risk to preserve capital. Answering to their
funders and communities, community finance organizations have extensive experience with risk
management that the federal government does not have. Compliance can be ensured by
making initial grants to lenders and other organizations with robust organizational capacity and
through standardized reporting.

III. Execution, Reporting, & Accountability

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b. hat types of requirements could EPA establish to ensure the responsible
implementation and oversight of the funding?

In addition to the benefits of the on-the-ground capacity of the existing community finance
industry, the community finance sector has experience taking, leveraging, and reporting on
government funds for the benefit of LMI communities. It is paramount for GHGRF capital to
provide maximum flexibility. If funds come with too many strings attached it will greatly hinder
deployment, and particularly fast deployment. The EPA should hold firm to its primary goal of
reducing GHG and allow the lenders in the program to determine how to use the fund's capital
to create and enhance products to reach it.

For the EPA to get comfortable with deploying funds flexibly, it must ensure that the
organizations involved in implementation have a track record of appropriately managing,
deploying, and reporting on the use of government funds. The majority of the organizations in
the community finance industry have decades of experience deploying federal, state, and local
government funds with extremely minimal waste, fraud, or abuse. For example, the amount of
fraud in large and fast-moving government programs like PPP is staggering when flexibility is not
paired with appropriate accountability. But the PPP funds deployed by CDFI lenders have been
shown to have greater reach into LMI communities, ultimately ensuring that more resources
reached the intended recipients13. Similarly, defaults by first time homebuyers working with local
non-profit lenders occur at a significantly lower rate than with other mortgage lenders.

As reported by 2020 OFN membership survey, CDFIs on average receive 19 percent of their
funding from the federal government, 6 percent from state and local governments, and the rest
from a diverse mixture of individuals, religious institutions, foundation, corporations, and
banks.14The 25 percent of their funding that comes from government sources demonstrates
their experience in managing government resources, which often result from long-term
partnerships with the CDFI Fund, HUD, SBA, USDA, and a host of many other federal agencies.
However, it is also important to note that 75 percent of their funding ultimately does not come
from governmental sources, also displaying the community finance sector's capacity to leverage
diverse capital sources.

In addition, all eligible entities seeking to serve as intermediaries or direct award recipients
should meet the following criteria, informed by NRDC's RFI response:

a.	Have at least a five-year track recording of lending, especially in low-income and
disadvantaged communities

b.	Experience administering federal grants and serving as an intermediary

c.	Demonstrate long-standing relationships with the industry that they are representing

d.	Have an existing revenue model and subsequently not plan to use GHGRF funding as
their sole source of operations

e.	Have an effective model for how they will distribute funds in a cost-effective manner

f.	Demonstrate good, long-standing governance and staffing capacity

13	CDFIs Outperform Other Paycheck Protection Program (PPP) Lenders - Partners for Rural
Transformation

14	https://cdn.ofn.org/uploads/2022/05/03154422/OFN-Side-by-Side_FY2020.pdf
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g.	Display a viable pipeline of transactions and seek funding appropriate to the size of
that pipeline

h.	Showcase strong support from the sub-recipients of the GHGRF funding

c. What mechanisms could eligible recipients adopt, including governance as well as
other mechanisms, to ensure that their applications and subsequent
implementation efforts ensure: (1) accountability to low-income and disadvantaged
communities; (2) greenhouse gas emission reductions; and (3) the leveraging and
recycling of the grants?

There are a variety of structures and mechanisms that could be implemented to ensure
accountability to disadvantaged communities, spanning governance, operations, and the
investment process. Below are options to consider:

•	Require a certain percentage of community and/or small business representatives on the
governing body and/or on the investment or decision committee, similar to CDFI or
NMTC requirements, provided that the representative must reside in the communities
being served.

•	Form a separate Advisory Committee that requires all members reside in a
disadvantaged community, and require reporting to that Advisory Committee. Several
regional committees may be appropriate. It will be important to compensate committee
members for their time and efforts.

•	Require a certain percentage of projects funded to include a community ownership
mechanism.

•	Require evidence of community needs assessments and/or community engagement
events pre-investment, as well as community surveys post-investment.

•	Establish a national grievance mechanism whereby community members can submit
issues directly to the intermediaries or to the EPA.

•	Prioritize investing through community-based intermediaries who employ the above
mechanisms.

While we understand that rapid deployment is a primary concern for not only the EPA, but our
entire planet, we encourage the EPA to take the time necessary in implementation to ensure that
there is community participation and accountability in the deployment of these funds. Smaller,
community-based projects will ultimately lead to a greater reduction of carbon emissions over
the long-run, as it builds markets and changes consumer behavior.

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December 8, 2022

Kerry E. O'Neill, Chairperson
Environmental Protection Agency (EPA)

Environmental Financial Advisory Board (EFAB)

efab@epa.gov

Re: Comments related to EPA's Greenhouse Gas Reduction Fund

Dear EPA Environmental Financial Advisory Board:

We are writing to provide comments to EFAB on EPA's Greenhouse Gas Reduction Fund
(GHGRF). Our response is informed by our deep experience in developing and advising on the
green bank model, designing and implementing national and local financing programs, and
building and operating financial institutions, programs, and initiatives that invest in GHG-
reducing projects that drive benefits to low-income communities and households. Collectively,
we have over eight decades of experience in this work, and we believe that there are excellent
models and lessons learned to look toward (and others to avoid) as EPA structures this
important program.

Our letter seeks to address two questions of paramount importance to EPA. First, how should
EPA design a program that balances and maximizes: (1) GHG emissions and other air pollution
reduction; (2) creates tangible benefits to low-income and disadvantaged communities and
households; and (3) appropriately structures key financial considerations of additionality,
leverage of additional capital, recycling, and accelerating market development? Second, what
considerations should EPA take in its award process and ongoing oversight to ensure GHGRF
capital flows to entities that will be good stewards of taxpayer dollars?

We appreciate your consideration of our comments and welcome any additional questions
should they arise. We look forward to working with the EPA to design and implement a program
that expands access to clean energy while producing measurable benefits for low-income and
disadvantaged communities.

Sincerely,

Beth Bafford

Vice President of Strategy, Calvert Impact Capital
Adam Kent

Senior Advisor, Green Finance Center, Natural Resources Defense Council
Amber Kuchar-Bell

Chief Strategy and Operations Officer, Opportunity Finance Network
Susan Leeds

Founder and CEO Emeritus, New York City Energy Efficiency Corporation (NYCEEC)

Doug Sims

Senior Director, Resilient Communities, Natural Resources Defense Council

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SECTION 1: MAXIMIZING THE IMPACT OF THE GHGRF

Introduction	

Our letter focuses on the $19.97 billion of general assistance and assistance to LI/DAC provided
via competitive grants to Eligible Recipients.

The question standing before EPA is: how can GHGRF be allocated through direct investment
and indirect investment to provide both financial assistance and technical assistance (TA) and
ensure the goals of the legislation are met? An allocation approach should be designed with the
end goals in mind. Key goals identified in the GHGRF legislation are: (1) GHG emissions and air
pollution reduction; (2) delivering tangible benefits to LI/DACs; and (3) additionality, leverage of
additional capital, recycling, and accelerating market development.

We believe these goals are best met by distributed GHG reduction technologies (e.g.
building decarbonization, distributed solar including community solar plus storage,
electric vehicles and personal mobility and related infrastructure for low-income and
disadvantaged communities, and other small-scale distributed technologies addressing
agriculture, small industry, etc.). This is based on the fact that these projects combine the
"public good" benefit of GHG reductions with long-term household cost savings, asset
appreciation (at the family and community level), increased resilience, and improved mobility,
health, safety and comfort. These are proven GHG-reducing technologies, but have low or
constrained market penetration, with limited demand signal for financing. Many of these
distributed technologies lack adequate federal resources through other policies and programs,
and are in need of financial assistance to scale in markets targeted by GHGRF. This approach
ensures robust delivery of benefits to low-income and disadvantaged communities, strongly
supports the legislative goal of assisting projects that otherwise lack access to financing, and
offers excellent opportunities for leveraging and recycling GHGRF capital.

One significant implication of this recommendation is deployment - the extent to which
financing products need to reach qualified projects, likely numbering in the tens of thousands, or
even higher. Some examples will help to illustrate:

A 6kW solar panel installation for the average home costs from $10,626 to $13,230, and
the national average cost for a heat pump is about $5,500. A multi-measure net-zero
decarbonization project for an existing 50-unit apartment building may cost roughly $2
million, or $40,000 per unit. With this range of costs in mind, we can posit that an
average GHG-funded loan size (financing 50% of project costs) might be in the range of
$200,000 to $250,000. Assuming a $225,000 average loan size, and further assuming
that 10% of the $19.97 billion fund is allocated to TA, this implies that initially about
80,000 loans must be originated to deploy the GHGRF one time. With the goal of
recycling funds and in support of the opportunity to develop more sophisticated
approaches using GHGRF to de-risk loan portfolios and facilitate secondary market
investment, this initial number can be multiplied many times. Over time, GHGRF funds
can potentially support financing for a million or more qualified projects. Against
this backdrop, community development financial institutions (CDFIs) (including banks,
credit unions and loans funds) generally originate, on average, about 2,500 loans each
year across all business lines, in addition to the (fewer but increasing) loans green banks
originate. We can clearly see both a real deployment challenge and a significant

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opportunity to positively impact large numbers of households and businesses across the
country.

To solve this deployment challenge, hundreds of retail lending institutions across
several established industries1 must participate in the GHGRF. Below, we outline a
diversified, networked hub-and-spoke strategy that envisions the mobilization of GHGRF funds
delivering economic, health, and quality-of-life benefits to communities, households, and small
businesses across the country, with a particular emphasis on low-income and disadvantaged
communities. A significant secondary benefit is that several key lending industries and large
numbers of lenders can be engaged in a process that leads to market transformation - green
banks can grow and proliferate, and more traditional financial institutions that serve the day-to-
day needs of Americans can become "green" lenders. Ultimately, "green" investments can
become "mainstream" investments that do not rely as much on public subsidy.

Finally, to ensure the effective flow of funds that we envision and recommend in this
letter, EPA should clarify the roles and responsibilities of various participants in the
GHGRF ecosystem, in relation to both federal grant rules and the language of the statute.

By issuing such guidance to potential applicants, EPA can clarify different entities' potential
roles in this multi-layered, sophisticated grantmaking program and, in turn, enhance the quality
of applications that the agency receives.

For instance, we envision a large number of "downstream" retail lending entities as essential
players in this ecosystem. These retail lenders will be funded by Eligible Recipients and will use
GHGRF funds to make large numbers of relatively small-sized individual loans to qualifying
projects and technologies. This retail lending role can be labor-intensive; as such, it is critical
that retail lenders be able to deploy GHGRF funding efficiently and pragmatically, within clear
rules, and without excessive administrative and regulatory requirements.

The flexible nature of the GHGRF presents a unique opportunity for EPA to address these
practical considerations in program design and through clear guidance to applicants. For
example, EPA may wish to consider the process of funding each retail lender as an "activity"
that constitutes a Qualified Project. This interpretation of the statue may alleviate the
administrative burden on retail lenders, allowing them to focus on the all-important tasks of
building pipelines of projects, engaging their customers, collaborating with project and
community-level technical assistance providers, and originating and closing loans that fund
GHG reducing technologies and projects for households, businesses, and communities.
Although this model is not explored in this letter, we believe it warrants further consideration by
EPA.

Allocation and Structure of Funds	

We recommend that EPA anticipate funding multiple Eligible Recipients. An illustrative range of
3 to 10 awards would reduce concentration risk for EPA, increase innovation, and ensure that
the right products and solutions are being developed for a variety of the highest emitting sectors
with broad geographic coverage and locally proficient translation. This approach would also

1 Established industries could include consumer finance, auto finance, small business finance, housing finance,
commercial real estate finance, agricultural finance, among others.

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ensure that Eligible Recipients are funded adequately to benefit from economies of scale, and
that EPA can conduct appropriate oversight on a manageable number of direct grantees.

We think the risks outweigh the potential rewards of awarding all GHGRF capital to one single
entity for a number of reasons - it is too risky2; like monopolies, a single entity also risks
creating long-term market inefficiencies in low-income and disadvantaged communities3. A sole
awardee would be much less accountable to the many diverse communities across the country
that GHGRF should serve4; it would be highly unlikely to have the expertise, capacity,
relationships, products, and strategies to effectively deploy general assistance capital and serve
LI/DAC, and it will be the LI/DAC segments that would likely suffer5. Also, it is unlikely to have a
complete national presence and so risks wasting time and resources developing untested and
duplicative franchisees or subsidiaries.

Unless GHGRF deployment is diversified via a hub-and-spoke model that invests through
multiple lending industries with multiple product and deployment strategies, there is real
risk of under-deployment. The relevant industries/lending channels include green banks,
CDFI6 loan funds, credit unions, community banks (MDI and CDFI), speciality non-bank
community and green lenders, affordable housing mortgage lenders (including moderate
income and low- income borrowers), and housing finance agencies (HFAs). There may be other
emerging strategies like use of state revolving loan funds, but that is unknown at present.

Once awarded grant funds, Eligible Recipients should have flexibility to allocate and
reallocate funds as needed based on actual deployment success in GHG- and other air
pollution-reducing projects. For example, if an Eligible Recipient has $1 billion in funds to
allocate across 50 small business lenders for the purpose of financing the decarbonization of
small business real estate and operations in their markets, instead of allocating $20 million to
each lender on day one, the Eligible Recipient can allocate $5 million to each lender and then
track progress on deployment to ensure the remaining funds get allocated to the lenders with
clear success deploying funds quickly against the program's objectives. This will create a

2	If that one entity fails in its mandate or struggles to build the administrative capacity to oversee the fund, the entire
GHGRF runs the risk of failure. In the hub and spoke model, if one hub should encounter difficulty, the integrity of
the broader program remains intact.

3	Like water, capital continues to flow through familiar channels. While relying on one entity might feel expedient, it
ultimately carries the risk of limiting innovation in the field over time and can potentially serve as a dam to the
capital flow to low-income and disadvantaged communities.

4	For GHGRF funding to effectively benefit low-income and disadvantaged communities, this funding must also be
accountable to these communities through familiar and trusted governance structures and must have the flexibility
to make programmatic adaptations to serve these communities.

5	GHGRF must serve LI/DAC and can also provide "general" assistance that is not restricted to LI/DAC. One single
entity is highly unlikely to have the expertise and relationships necessary to both deploy general assistance capital
and simultaneously address the specific needs of LI/DAC market segments. Serving LI/DAC requires expertise,
experience, and established relationships of trust. It also requires different strategies, financial products,
prioritization of technical assistance, and strategic use of subsidy. Relying on one entity to effectively execute two
fundamentally different strategies for two very different market segments creates significant risk of ineffective
deployment and under-deployment to LI/DAC.

6	To be certified as a CDFI by the Treasury Department, an entity must: have a primary mission of promoting
community development; provide both financial and technical assistance to borrowers; target at least 60% of its
financing activities in eligible "target markets", which may include low-income or distressed census tracts, low-
income borrowers, borrowers with low-income end-users, and other underserved communities; maintain
accountability to the communities it serves, generally through representation on their board and/or special
advisory boards; and be a non-governmental entity, except for Tribal government entities. (Source: CDFI Fund,
U.S. Department of Treasury)

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beneficial, race-to-the-top dynamic among participating lenders. At the end of the period, some
lenders may have received and deployed $50 million and some may have only received and
deployed the initial $5 million. This can happen over time, including after the September 2024
deadline for EPA to disburse the GHGRF in grants. These downstream retail-facing lenders can
have flexibility to use funds for various activities - loans, concessionary loans, soft debt, grants,
technical assistance, and capacity building. Through this process, Eligible Recipients will learn
which approaches are the most effective and share that information with its network, increasing
program effectiveness.

The diagram on the following page illustrates our recommended structure for the GHGRF,
including key actors, their responsibilities, and the proposed flow of funds.

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Summary of structure

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The Role of Eligible Recipients

Eligible Recipients, under grant awards from EPA, will have significant power over the impact,
reach and success of the GHGRF. This is because Eligible Recipients have the responsibility of
setting the terms, conditions, and costs under which funds will flow to other entities within the
ecosystem of lenders and TA providers. Eligible Recipients will be responsible for attracting
other entities to participate in the GHGRF. These downstream lenders and TA providers have
the most labor-intensive roles in the ecosystem, since getting projects and technologies "over
the finish line" - providing the financial and technical assistance needed at the borrower and
community level - is the hard work of this program.

The more that Eligible Recipients acting as intermediaries seek to earn revenue by flowing
funding to downstream program participants in the form of interest-bearing debt products and
financing arrangements, the more financial burden will be placed on those participants. We
recommend that EPA incentivize Eligible Recipients - through both scoring and sizing of
awards - to flow funds to other program participants in the form of grants and very low-
cost financing arrangements akin to philanthropic Program Related Investments.

In the proposed deployment strategy, Eligible Recipients play multiple, important roles including:
(1) investing in indirect recipients; (2) providing lender technical assistance and shared
platforms; (3) providing compliance and accountability services for EPA; (4) helping to create
the GHGRF ecosystem; and (5) investing directly into qualified projects.

Indirect Financial Investment Role

Eligible Recipients should be able to clearly demonstrate their ability and strategy to
"downstream" funds. Eligible Recipients should develop a model for "downstreaming" funds and
resources to retail lenders (Indirect Recipients). This may include providing sub-grants,
technical resources and financing products to Indirect Recipients. As an indirect investor, an
Eligible Recipient should have a burden of care to ensure that all projects financed by
downstream lenders meet GHGRF and EPA requirements for Qualified Projects.

Eligible recipients should be able to demonstrate that they can:

•	Solicit and engage retail lenders as Indirect Recipients.

•	Allocate funds to Indirect Recipients; make sub-allocation decisions based on
transparent, fair, and effective criteria.

•	Disburse funds to Indirect Recipients on a controlled basis, preferably against objective
milestones (loans originated and closed in LMI/DAC and other communities) or project
financings (e.g., a monthly draw asset-based facility, or staggered drawdowns on
recourse debt).

•	Hold the technical expertise and accountability to determine appropriate terms and/or
products for Indirect Recipients that will facilitate GHGRF projects that benefit LI/DAC
communities and households

•	Make reallocation determinations and shift funding as needed based on activity of the
Indirect Recipients.

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There must be transparency and fairness regarding all costs associated with funds provided to
Indirect Recipients. Excessive rates, fees, management fees, overhead allocations, or other
revenues and cost recovery earned by Eligible Recipients on the provision of funding to Indirect
Recipients can create substantive barriers to lenders participating in GHGRF and to deploying
funds into Qualified Projects, and can diminish the level of benefits delivered to end-use
borrowers, particularly LI/DAC households and communities. Indirect Recipients need both
adequate operating funds and revenue opportunities to be motivated to participate in GHGRF,
to do the hard work of developing project pipelines and to originate large numbers of relatively
small loans. Excessive application and reporting requirements for Indirect Recipients can create
burden as well, and Eligible Recipients should be prepared to provide Indirect Recipients with
tools, systems and support to ease these burdens. It is essential to make this program attractive
to downstream lenders, and this responsibility will rest with Eligible Recipients serving as
intermediaries.

Given that each Eligible Recipient must be a nonprofit organization, best practices with respect
to nonprofit financial management should apply:

•	Earned revenues in excess of (1) allowable operating costs related to GHGRF direct
investment or indirect investment activities, up to an administrative cost cap established
by EPA; (2) the cost of servicing any debt directly supporting GHGRF direct investment
or indirect investment activities; and (3) the establishment and maintenance of reserves
for losses must be reinvested in program activities. Such reinvestment of revenue
earned should prioritize and, as needed, subsidize LI/DAC activity, unless and until any
disbursements or projections regarding beneficial LI/DAC investment are achieved or on
track.

•	Unrestricted net assets or accumulated funds (the equivalent of retained earnings)
should be maintained at an appropriate level as a cushion against fluctuations in
operating revenues and unanticipated risks. Excessive retention of retained earnings
should be avoided and EPA should establish strong guardrails against private
enrichment.

Lender Technical Assistance and Platform Role

Eligible Recipients should also be expected to provide lender technical assistance to their
network of Indirect Recipients, including via the creation or strengthening of shared platforms
that Indirect Recipients can use to drive GHG reduction and community co-benefits. These
include:

•	Technical assistance designed to assist lenders to acquire customers; adjust or develop
appropriate underwriting guidelines and loan processes that facilitate investment in
GHG-reducing technologies; and address learning needs, for example around GHG
reduction technologies.

•	Provide product templates, lending process tools, and data on performance for lenders
to modify existing products and/or adopt new products that effectively finance GHG-
reduction technologies.

o Assist lenders to identify familiar, market-accepted financing products that can be
modified or enhanced to finance GHG reduction technologies.

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o Seek to develop new products and solutions where established products don't
work.

•	Establish matchmaking platforms to connect lenders with project- and community-level
TA providers.

•	Promote recognition and learning opportunities related to successful case studies,
products, processes and lending strategies amongst Indirect Recipients.

•	Develop other forms of TA responsive to lender needs.

Compliance Role

Eligible Recipients should be expected to monitor Indirect Recipient performance and ensure
that those entities comply with GHGRF requirements. EPA cannot be expected to monitor the
performance and compliance of hundreds, if not thousands of lenders. Instead, EPA should
focus its oversight on Eligible Recipients, who in turn will be relied on to ensure Indirect
Recipient performance and compliance. The details of grant agreements between Eligible
Recipients and Indirect Recipients will be critical in ensuring Indirect Recipient performance and
compliance.

Eligible Recipients' responsibilities in this role include:

•	Execute and oversee grant agreements with Indirect Recipients that codify the Eligible
Recipient's role in ensuring GHGRF-related performance and compliance, with
appropriate remedies.

•	Ensure that grant milestones are achieved, and pursue reallocation remedies as
needed.

•	Roll up financial and impact reporting for Indirect Recipients reporting; focusing on loan
level outputs should be required by Indirect Recipients, and Eligible Recipients should
have systems in place to report on retail lending of Indirect Recipients in the aggregate,
including key metrics such as GHG emissions reduction, LI/DAC benefits delivered,
project- and portfolio-level leverage, and loan-level performance.

•	Ensure consistency in reporting data amongst Indirect Recipients.

•	Report out on capital deployment volume in terms of investments in Qualified Projects,
not capital commitments. Note that some green banks present many metrics in terms of
capital commitments whether such commitments are utilized or not. This practice tends
to inflate capital deployment impact metrics and obscure the economic value of actual
GHG-reducing project investments.

Role in Helping to Create the GHGRF Ecosystem

Beyond providing financial assistance to Indirect Recipients and ensuring performance and
compliance, Eligible Recipients should also make investments in the broader ecosystem of
project delivery, helping to build the pipeline of investible projects and addressing barriers at a
larger scale than any one Indirect Recipient could accomplish. This goes beyond the lender

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technical assistance role discussed above, and will ultimately help GHGRF investment capital
flow through Eligible Recipients and Indirect Recipients to qualified projects on the ground. In
this role, Eligible Recipients should:

•	Include existing or prospective partnerships with TA providers and/or the development
of TA platforms as part of their grant applications.

•	Develop effective partnering arrangements with project-level, community-scale and
workforce development technical assistance providers.

•	Engage with GHGRF-funded TA providers and report on joint activities.

•	Develop and facilitate the creation of secondary markets to increase efficiency and
lower costs of private capital through direct asset purchases, warehousing, asset-
backed issuances, aggregation of data, and education of key market actors (ratings
agencies, investment banks, etc.).

Direct Investment Role

Finally, Eligible Recipients can also make direct investments in projects, activities, and
technologies that reduce or avoid GHG emissions and other forms of air pollution. As such,
Eligible Recipients should modify existing or develop new products that clearly address
financing gaps in GHGRF qualified projects, particularly those benefitting LI/DAC communities
and households. It is possible that some Eligible Recipients will have the capacity to invest in
much larger projects than Indirect Recipients. Those investments should still follow the
prioritization GHGRF legislation has placed on delivering benefits to LI/DAC communities and
households.

Qualified projects by definition also include investments that "assist communities in the efforts"
of reducing GHG emissions and other forms of air pollution. We read that language as a specific
nod to the weight GHGRF places on technical assistance and capacity building. For a deeper
discussion on that, please see the Technical Assistance Section below.

Structuring the Flow of GHGRF Funding	

At $30 million for a 10-year grant administration period, EPA has limited administrative
resources to manage a complex and multifaceted program. EPA should target a relatively small
number (e.g., 3 to 10, but will depend on the quality of applications) Eligible Recipients and
empower these recipients to downstream GHGRF resources to other lending institutions.

• Use of intermediaries as Eligible Recipients: By awarding program funds to

intermediaries (defined by those entities that can perform the five roles covered in the
section above), EPA can both successfully obligate the funds within the required
timeframe and execute a strategy that allows funding to flow through a large number of
lenders. An intermediary strategy can also maximize flexibility of federal funds.
Intermediaries should be allowed to reallocate funds amongst retail-facing Indirect
Recipients and downstream participating lenders beyond September 2024. This will
provide time to engage a wider range of Indirect Recipients. Because as grantees,
intermediaries have more flexibility over a longer timeframe to allocate and reallocate

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funds than does EPA as Program Administrator, this provides some protection against
slow or ineffective deployment by individual lenders who are Indirect Recipients.

• Large-scale direct lenders: We recommend emphasizing an intermediary strategy,
but not to the exclusion of applicants who are large-scale direct lenders. There may be
institutions with adequate loan volumes and geographic reach, who also have track
records lending to GHG-reducing technologies and LI/DAC communities, who are
strong candidates for deploying funding directly to Qualified Projects through their
current and prospective customers. As all Eligible Recipients must be non-profits, such
large-scale direct lenders will most likely be large CDFIs or credit unions with a national
or multi-regional footprint. Joint applications from a collaborative of direct lenders such
as regional green banks could also be entertained.

We recommend a minimum award size of $500 million for two reasons: to encourage
applications with scaled impact, and to assist EPA in accomplishing the goals of the statute
within the confines of its administrative budget.

Technical Assistance	

The statutory language recognizes the critical role of TA in unlocking the potential of green
finance. The need for technical assistance is acute at the project level, especially for building
decarbonization projects focused on multifamily housing, affordable housing, and solar
deployment in low-income and disadvantaged households and communities. EPA must
accordingly ensure that TA is built into every layer of the GHGRF ecosystem. In particular, we
recommend that EPA awards create a structure for providing TA at two levels, as described
below.

First, as previously discussed, Eligible Recipients should be expected to provide lender TA
and shared platforms to their respective networks of Indirect Recipients.

In addition, Eligible Recipients should be required to present and execute a detailed
demand generation and TA strategy that will support community-, portfolio-, and project-
level TA and capacity building to build a pipeline of initiatives or products that will
ultimately be financed by either the Eligible or Indirect Recipients. Community- and
project-level TA, capacity building, and awareness building are key to creating markets for
GHGRF financing across asset types (households, buildings, community solar, etc.). Capacity-
building assistance should be tailored to individual communities' needs, supporting activities
such as workforce development, small business development, culturally competent marketing
and outreach strategies, and community-ownership of projects. In addition, by forming
partnerships with TA providers, Indirect Recipients should look across their portfolio of
investments for opportunities to decarbonize the work they have already financed.

The relationships between lenders and TA providers should go both ways. Lenders can train TA
providers on the information required for a financing application, ensuring that the TA process
will facilitate the ability for a customer to seamlessly apply for financing, and possibly helping
them do that. And, a reciprocal referral system could be established so TA providers can refer
projects to lenders, and lenders can refer potential projects for TA.

Eligible and Indirect Recipients should be encouraged to forge partnerships with experienced,
successful TA partners, and not re-create the wheel. EPA should use proposal scoring criteria

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that incentivizes applicants to advance meaningful partnerships prior to submitting an
application, not just include language saying what they plan to do on TA.

SECTION 2: DEVELOPING THE GHGRF ECOSYSTEM

The allocation strategy discussed above places a significant amount of responsibility on the
Eligible Recipients to deploy capital in a networked fashion to achieve GHGRF goals. Below we
discuss (1) key criteria EPA should require from Eligible Recipients; (2) how to structure an
application and award process that will facilitate a networked, diversified implementation; and
(3) how EPA can build in compliance and accountability to ensure fidelity to the program goals.

In this section, we refer to the GHGRF's $8 billion in funding for projects exclusively in LI/DAC
as the "LI/DAC Fund" and the remaining $11.97 billion for general assistance as the "GA Fund."

All Eligible Recipients	

Eligible Recipients will assume primary responsibility for maximizing the GHGRF's reach and
will have contractual relationships with EPA. Criteria for grantee eligibility, evaluation and
selection, contractual commitments, disbursement procedures, grant monitoring, and
supervision are thus all critically important to the success of the GHGRF.

Given the critical role of Eligible Recipients in developing the GHGRF ecosystem, EPA must
ensure that all prospective Eligible Recipients meet certain key criteria:

Purpose - Any Eligible Recipient must be able to demonstrate how its use of funds will:

•	Accelerate deployment of distributed GHG reduction technologies and anti-pollution
projects in LI/DAC;

•	Deliver clear, measurable equity-based outcomes, in addition to pollution-related ones;
and

•	Deploy public and private capital to drive new market creation and/or market
transformation.

Experience - Any Eligible Recipient must have a proven track record of:

•	Successfully raising, deploying, and managing public and private capital, including large
sums of capital, either directly or through their networks.

•	Successfully deploying capital, either directly or through their networks, into GHG
reducing and anti-pollution projects, companies, or activities; and

•	Administering government grants. In the absence of such experience, an applicant must
demonstrate partnering, sub-contracting or staffing strategies that will address this need
to EPA's satisfaction.

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Financial Expertise - Any Eligible Recipient must be able to clearly and credibly demonstrate:

•	Existing finance products that can be used for qualified projects, or a clear and credible
commitment to modify existing or create new products that can be used for qualified
projects',

•	Established lending and grantmaking standards, systems, and infrastructure, including
proven accounting systems, robust policies and procedures, sound information
technology and data storage capabilities, and reporting frameworks that can be used to
track grant, loan, and impact performance;

•	A strategy that seeks funding that is "right-sized" for the deployment capacity within the
industry the applicant intends to serve, including quantitative analysis providing details
on anticipated loan volumes in relation to historical loan volumes and anticipated asset
and origination growth rates within this industry;

•	A seasoned CEO or Executive Director and senior management team with deep
expertise in the clean energy lending and technology markets which the Eligible
Recipient intends to serve; and

•	A governance structure and record that reflects:

o Best practices for nonprofit and financial management and oversight;

o Responsiveness and accountability to the communities in which they operate; and

o A board of directors and/or advisory boards that include subject matter experts and
are representative of the communities in which they operate.

Relationships - Any Eligible Recipient must have:

•	Trusted client/borrower networks and relationships in the states, regions, and/or
communities in which they intend to operate;

•	Long-standing and extensive relationships within the lending industry the applicant is
proposing to serve as intermediary;

•	Relationships with other capital providers and a history of raising and blending
concessionary (public or private) capital with commercial capital and accessing the
capital markets (including experience with institutional operational and financial
diligence); and

•	Institutions in the industry, ideally including technical assistance providers, as supporters
to an applicant's application who are committed to participate as indirect recipients via
that applicant.

It will ultimately be incumbent upon Eligible Recipients to select and monitor their network of
Indirect Recipients. However, EPA should require that all Eligible Recipient applicants include
as part of their application an initial network of committed Indirect Recipients with which they
intend to work. EPA should stress that, to the greatest extent possible and as applicable, these
Indirect Recipients should meet most of the criteria laid out above.

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Over time, Eligible Recipients are likely - and should be encouraged - to provide financial and
technical assistance to additional Indirect Recipients not included in their original application,
including new lending institutions that may not exist yet. EPA should thus require that in their
applications, potential Eligible Recipient specify (1) the criteria they will use to evaluate, select,
and monitor future Indirect Recipients, whether existing or newly established; (2) in the case of
newly established Indirect Recipients, how the Eligible Recipient will ensure that these new
lenders receive funding from other public and/or private sources and can demonstrate strong
governance standards; and (3) the maximum amount that the Eligible Recipient plans to spend
capitalizing new Indirect Recipients.

Eligible Recipients Serving LI/DAC	

In addition to meeting the criteria described in the previous section, an Eligible Recipient that
intends to work in LI/DACs should be reguired to meet certain additional standards. EPA

can maximize policy outcomes by granting funds to multiple Eligible Recipients in the LI/DAC
pool (within the confines of 3 to 10 total awardees overall, as discussed above). Capitalizing
multiple entities in the LI/DAC pool will allow lenders to develop customized solutions that truly
meet individual community needs. These entities and their identified Indirect Recipients must be
able to demonstrate that they have the following:

•	A demonstrated track record of successfully investing in low-income and disadvantaged
communities;

•	Trusted relationships in the LI/DACs in which they intend to operate;

•	An understanding of the challenges that LI/DACs and low-income households face in
accessing green finance and deploying low- and zero-emission products, technologies,
and services;

•	An ability to promote and facilitate community ownership of projects; and

•	A governance structure and record that reflects:
o A commitment to equity;

o Accountability to the communities in which they operate; and

o A board of directors and/or advisory boards that are representative of the
communities in which they operate.

One of the lessons learned from other programs intended to be directed toward low-income and
disadvantaged communities, such as the Paycheck Protection Program (PPP) included in
COVID relief legislation, is that serving low-income and disadvantaged communities requires
specialized market expertise. This need for specialized market expertise has also been a lesson
learned by green banks who seek to serve low-income and disadvantaged communities. For
this reason, the LI/DAC Fund (and, at minimum, 40% of the GA Fund) should be targeted
towards recipients who can demonstrate this knowledge. The established lending infrastructure
in LI/DACs is expansive, with existing institutions - including CDFI loan funds, community
development credit unions, community development banks, state Housing Finance Agencies
and Public Housing Agencies, Minority Depository Institutions, and Low-Income Credit Unions -

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collectively holding over $1.5 trillion in assets.7 CDFIs and other community-based lenders have
the unique ability to leverage their extensive network and ensure rapid, equitable investment in
rural and urban communities across the country.

There are some existing institutions that EPA should consider eligible for the LI/DAC Fund,
given the criteria described above. Certain types of CDFIs, for instance, should qualify based on
these criteria. These entities have already been through an intensive U.S. Treasury Department
certification process that ensures they are good stewards of taxpayer dollars, are accountable to
their community (in terms of both the financing they provide and their board representation), and
have a history of successfully deploying capital in target communities. In addition, there is an
existing network of nonprofit investment funds, green banks, and similar mission-oriented
entities that meet the statutory requirements of an Eligible Recipient. Any of these entities that
can demonstrate a successful track record of working in LI/DAC communities, with at least 50%
of their lending and/or investment activities dedicated to serving such communities, should be
considered eligible applicants for the LI/DAC Fund.

Requirements for GHGRF Applications and Awards	

As noted above, statute creates two funding streams for Eligible Recipients: the GA Fund and
the LI/DAC Fund. All Eligible Recipients - regardless of which funding stream they apply to -
should be funded in relation to their scale, customer reach, and experience with GHG emissions
reduction technologies, or that of the industries they represent. These entities should also be
evaluated based on the strength of their industry relationships and down-streaming strategies.
All applicants should demonstrate experience with government grant management; strength of
governance, oversight and transparency; operational infrastructure to raise and manage private
capital; plans to fund both financial assistance and technical assistance; overhead allocation;
and systems available to track and report.

Beyond these cross-cutting requirements, EPA should take certain factors into consideration
when structuring the application and awards process for both the GA Fund and the LI/DAC
Fund.

First, EPA should establish a separate application process for each funding stream. The

anticipated flow of funds would be largely similar with some key distinctions:

•	Additional eligibility criteria for applicants to the LI/DAC Fund (see above section), or for
those receiving the portion of the GA Fund that has been devoted to LI/DAC
households, businesses, and communities.

•	Monitoring and reporting protocols for LI/DAC Fund to ensure that funds actually benefit
LI/DAC households and communities.

•	Funding applications for both resources should provide for applicants who apply as
intermediaries, applicants who apply as direct lenders, applicants who apply as both
intermediaries and direct lenders.

7 Based on research conducted by the Center for Impact Finance at the University of New Hampshire's Carsey
School of Public Policy.

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o Applicants should apply separately for GA Fund and LI/DAC Fund but can apply
for both.

o If awards are granted to a single applicant under both GA Fund and LI/DAC
Fund, reporting should be segregated.

Second, the GA Fund should be subject to Justice40 principles and EPA should ensure
that 40% of the benefits of the GA Fund resources benefit LI/DAC households and
communities. This requirement supports the overall ability for GHGRF to achieve and
demonstrate additionality. Additionality is tenuous in some key technology sectors for borrowers
who are not LI/DAC community members (e.g., solar PV or electric vehicles).

Finally, EPA should recognize that there is a greater need for technical assistance and
financial assistance in the form of grants in the LI/DAC segment. This reality means that
lending business models that can successfully serve LI/DAC market segments likely need to
allocate more GHGRF resources to project-level technical assistance and grants. This may
result in lower leverage and slower recycling in the lending business model, although both
leverage and recycling are achievable in LI/DAC market segments.

•	For applicants that apply under the GA Fund, GHGRF revenues that are not required to
support ongoing GHGRF operations and fund necessary reserves against losses
should be utilized to subsidize LI/DAC activity, unless and until Justice40 goals are fully
met. Unrestricted net assets, or accumulated funds (the equivalent of retained earnings)
should be maintained at an appropriate level as a cushion against fluctuations in
operating revenues and unanticipated risks. Excessive retention of retained earnings
should be avoided. To the greatest extent feasible, earnings should be reinvested in
eligible GHGRF activities.

•	For LI/DAC Fund and the deployment of Justice40 funds, it is essential to ensure that
CDFIs, credit unions with low-income designations, minority-owned institutions, and
community banks serving these communities are represented and engaged. These
lenders have expertise and deep experience necessary to serve LI/DAC customers.
Another excellent strategy for reaching these communities is through housing finance
agencies (HFAs) with whom CDFIs and other LI/DAC-serving lenders often partner.

Applicant Evaluation Criteria	

Below we outline key considerations for EPA as it designs the GHGRF funding application. It is
critical that EPA's application assessment and program accountability goals focus on clearly
defined and intentional outcomes (e.g. LI/DAC benefits targeted, additionality, leverage, etc.)
and provide flexibility to allow for the market and recipient to figure out the best way to achieve
the outcomes and leverage.

As a threshold matter, EPA should evaluate for each applicant applying as an Eligible Recipient
based on the key considerations described below:

• Applicant's proposed business model for serving as intermediary, especially the
revenue model.

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o If intermediaries lend money to downstream lenders - charging interest and fees
earned on debt products - rather than sub-granting funds, this may slow and
depress the development of the primary markets, particularly LI/DAC markets.

o It is essential that downstream lenders who are expected to develop project and
transaction pipelines and make large numbers of small-scale loans have ample
cost recovery and revenue opportunities to support this labor-intensive activity.

•	Applicant's strategy for attracting and engaging Indirect Recipients: How does the
applicant propose to engage downstream lenders as Indirect Recipients? How many
lenders are projected to participate and how many of these lenders are already firmly
committed to participate in GHGRF? What are the key terms of engagement with
downstream lenders? What are the planned application requirements for indirect
investments?

•	Applicant's plan, capacity and experience to provide Indirect Recipients with access to
lender-focused technical assistance and the additional supports and systems necessary
for them to succeed.

•	Applicant's approach to ensuring availability of robust and effective project-level and
community-level technical assistance: Does the applicant have engaged and committed
technical assistance partners? Does the applicant have adequate staff with background
and experience to work with both technical assistance partners and Indirect Recipients
to provide a fully integrated suite of technical and financial assistance to potential
borrowers, project developers, and community-based organizations?

In addition, EPA should evaluate proposals based on the applicant's proposed cost efficiency of
providing services to lender networks - in other words, how would an applicant applying as an
intermediary pay for its various activities, as described below:

•	Projected use of capital funds: portion of grant funds to be used for market-rate
financing, concessionary financing, grants (to Indirect Recipients and Qualified
Projects), technical assistance.

•	Illustrative terms and requirements of both sub-grants and loan products; level of mark-
up of sub-grants.

•	Recognition of the interest earned on grant awards (prior to deployment).

•	Amount of management or administrative fees.

•	Proposed percentage of operating budget allocation in grant award.

•	Securitization revenues anticipated and how these revenues will be reinvested to
advance GHGRF objectives.

•	Level of pricing, monies recycled versus spent outright, operating expenses, timeframe
for recycling.

•	Leverage projections: Applications may have a wide range of projections about the
leverage an Eligible Recipient proposes to achieve. Leverage projections can be
difficult to evaluate a priori especially for entities without a track record. As stated
earlier, leverage is easier to achieve in some sectors than in others. EPA should

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therefore focus on more concrete elements of applicants' proposals (lending program
design, efficiency in flowing funds to borrowers/beneficiaries, approach to reinvesting
earnings, ability to source and deliver pipeline, track record, etc.). Finally, leverage
calculation methods can vary, so any historical leverage metrics provided need to be
scrutinized to ensure an apples-to-apples comparison based on EPA's leverage
reporting requirements for GHGRF.

•	Intent for long-term sustainability of the enterprise.

Finally, EPA should also evaluate:

•	Pro-forma financial model for proposed GHGRF award (for a minimum of five years of
operations).

o Demonstrate illustrative mix of grants, technical assistance, loan products and
any other anticipated activities.

o Project revenues from various activities; project expenses disaggregating
personnel expenses and other program-related expenses.

o Demonstrate recycling and reinvestment expectations.

o Demonstrate "continued operability".

•	Competent and skilled management team; proposals should also address the staffing
needs to accomplish the activities and whether staffing is presently in place or needs to
be hired.

•	Risk management - in other words, proposals should:

o Articulate key risks in successfully executing the proposed direct and indirect
investment activities, and identify mitigating factors.

o Explain key organizational policies and procedures that will promote the success
of the Eligible Recipient in carrying out the proposed activities, and that will serve
to mitigate key risks.

o Describe the applicant's investment management policies: Who makes key
investment decisions? What is the depth and experience of credit risk
management staff? Describe composition of investment committees and
approval levels.

•	Explanation of governance structure.

o Legal status of organization; non-profit status of organization; summary of key
elements of by-laws and articles of incorporation.

o Board structure and design; Board committee structure; current Board members
and background information.

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Grant Management and Disbursement Recommendations

Awards should be sized to winning applicants taking into consideration their individual or
industry scale (evidenced by annual loan origination volumes, total assets under management
and, as applicable, numbers of network institutions), breadth of customer access, ability to serve
and deliver benefits to LI/DAC (for both LI/DAC Fund and GA Fund given Justice40 principles),
and lending experience with eligible GHG emissions reduction technologies.

In addition, EPA should use a matrix/formula approach based on track record and scale to take
into account the breadth, geographic reach, volume, asset base and capacity of existing
industries. EPA should make the comparison based on green lending (not generic lending),
and/or applicants should be required to show how their existing products will be adapted to
green lending and what resulting volume of capital would be expected. Special consideration
may be given to a green bank or similar organization due to its sophistication and experience
with the underlying technologies.

Finally, EPA should negotiate and set clear deployment timelines with Eligible Recipients, based
on milestones that tie future disbursements to a determination of whether an Eligible Recipient
has sufficiently obligated their initial GHGRF funds. Similarly, Eligible Recipients should be
required to include performance-based disbursement milestones for their Indirect Recipients, as
well as a provision that requires Indirect Recipients who fail to deploy funds based on an agreed
upon timeframe to return funds to the Eligible Recipient. These disbursement milestones should
be tied to hard, quantitative results like loan amount closed (not loan amount in underwriting).

Measuring Outcomes	

EPA should define clear impact standards and metrics for awardees to drive significant GHG
and air pollution reductions, as well as meaningful energy and environmental justice impacts for
low-income and disadvantaged communities. Overall, the agency should seek to understand the
outputs generated by GHGRF funds and the outcomes the funds had on people and the planet.
To balance reporting burden with speed of deployment, all reporting at the Qualified Project
level should be quantifiable outputs (and when applicable, outcomes) reported by the Indirect
Recipient to their Eligible Recipient.

Metrics

We recommend that EPA consider a short list of clear, overarching, quantifiable program
outputs and outcomes that all Recipients will be responsible for reporting in a database
system. Key metrics should include size of loan, term, project cost, technology financed,
and LI/DAC benefits, as well as a more tailored set of metrics specific to each project
vertical (e.g., building electrification, EVs, and so on). EPA should identify when national,
standardized approaches to measuring outcomes could best be applied; when a regional
approach makes sense; and when local, recipient-level reporting is needed. Currently, many
green lending entities communicate impact differently. The GHGRF presents an opportunity for
EPA to establish clear standards on impact reporting and measurement for all recipients to
follow.

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While all recipients should be expected to report a number of project outputs and
outcomes, EPA should rely heavily on Eligible Recipients to do more detailed tracking
and measurement, particularly on GHG emissions and transaction level data. Eligible
Recipients should be expected to aggregate, study, and sample Qualified Projects across their
network to gain a deeper understanding of outcomes. This includes the translation of loans,
grants, or activities into GHG reduction estimates as well as understanding the role that access
to Qualified Projects had on the beneficiaries (e.g., homeowner who electrified their home, small
business who electrified their fleet, etc.). This can be done through various impact evaluation
approaches and helps build evidence useful for the entire network of activities without placing
this cost burden on every Indirect Recipient. They should also organize and aggregate
transaction level data, which could enable the creation of active secondary markets.

In addition to consistency, EPA should promote learning among Eligible and Indirect
Recipients to improve the use of metrics year over year. EPA should collate and publish
core metrics, tailored sector-specific metrics, and qualitative reporting among practitioners to
advance learning as well as share validated indicators recipients can use for the coming
reporting cycle. The complexity and nascency of this undertaking warrants EPA's use of
dedicated agency staff for metrics development, application in project implementation, and
ongoing learnings.

Finally, EPA should ensure that GHGRF awardees can rely on independent, third-party
professionals to provide assessments, validate project scopes, validate GHG savings
estimates, and provide reliable cost estimates. To the greatest extent possible, EPA should
seek to streamline these services to maximize efficiency and reliability, although local/state
policy or code may require more tailored approaches in some instances.

Infrastructure for Reporting Reductions in Greenhouse Gas Emissions and Air Pollution

EPA should design a program that provides clear guidance to recipients on what
projects/technologies are deemed high-priority for funding under GHGRF and the
emissions-reduction factors of those technologies. By providing clear guidance, EPA can
ensure that funds go toward projects that reduce GHG emissions and other air pollution while
lessening administrative burdens on recipients. This would also reduce confusion among
Eligible Recipients on how to account for the emissions reductions of a Qualified Project. Many
lenders may lack the expertise to measure and track GHG emission reductions, nor should they
be the ones deciding what is/isn't eligible to receive GHGRF financing. Once lenders report
back on what technologies were financed, EPA can work with Eligible Recipients and third-party
organizations to estimate total GHG and other air pollution reductions, as well as associated
health benefits.

EPA guidance on emissions factors will help ensure that emissions reductions are being
calculated in a comparable manner by all Eligible Recipients. Further, this guidance will help
avoid the unwarranted exclusion of certain projects, whether building retrofits or transportation
electrification, from consideration as a way to reduce emissions.

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Ensuring Compliance and Accountability

EPA should ensure ongoing compliance and accountability for the fund by using existing
reporting structures where possible.

Because of the size of this fund and its deviation from EPA's historical role, we
recommend that EPA does not attempt to make individual loan level determinations of
eligibility for this fund. Rather, a robust reporting and accountability structure could ensure
that the funds are: a) spent in low-income and disadvantaged communities in ways that improve
people's lives, and b) reduce or avoid greenhouse gas emissions and other forms of air
pollution. CDFIs have experience with this type of reporting already and currently gathering and
report significant financial and place-based data. For example, the CDFI fund already tracks the
geocodes of each of the investments made by CDFIs and reports in a Transaction Level Report
(TLR) and Use of Award Report (UAR). A similar reporting structure, with carbon reduction
information layered on, would be a simple way to ensure these funds are spent in accordance
with the law, maximize flexibility within the program, and ensure accountability. In addition, to
ensure the financing is as flexible as possible and balanced with accountability the EPA should
consider other federal financing programs like the CDFI Fund's Rapid Response Program
(RRP), which defined allowable grant funding across a range of flexible categories.

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Appendix: About the Authors

Beth Bafford is Vice President of Strategy at Calvert Impact Capital, a nonprofit financial
institution that has raised more than $4 billion from 20,000+ investors in pursuit of measurable
social and/or environmental impact. Beth leads Calvert Impact Capital's strategy and new
business development efforts to build financial products and services that accelerate private
capital for the benefit of communities in the US and around the world, with a focus on how to
unlock the traditional capital markets for good. She also leads the organization's loan
syndications and structuring practice and oversees corporate strategy, communications and
impact management and measurement.

Prior to Calvert, Beth was a consultant in McKinsey & Company's D.C. office where she focused
on U.S. Health Reform strategy. She has also worked as a Special Assistant at the White
House Office of Management and Budget during the drafting and passage of the Affordable
Care Act, as a Regional Field Director and Community Organizer on the 2008 Obama for
America campaign, and as a Senior Associate at UBS Financial Services. Beth received both
her BA in Public Policy and MBA in Social Entrepreneurship at Duke University.

Beth serves on the Advisory Board for the CASE Initiative on Impact Investing (CASEi3) at
Duke's Fuqua School of Business, the Investment Committee for the Aaron and Lillie Straus
Foundation, the Impact Investment Committee for the Baltimore Community Foundation, the
Advisory Board of Higher Ground Labs, and the Board of Directors of Founders First Capital
Partners, a revenue-based financing firm focused on funding diverse founders. She lives in
Washington, DC with her husband and four young children.

Adam Kent is the Senior Advisor in NRDC's Green Finance Center, working at the intersection
of finance and climate, with a particular focus on the role housing and community development
finance play in creating a more equitable and environmentally sustainable economy. Prior to
NRDC, Kent was the deputy director in the Washington, D.C. office of the Local Initiatives
Support Corporation (LISC). During his time there, he financed over 1,500 affordable homes for
lower-income families and helped to grow LISC's solar financing. In addition, he developed and
led LISC's Elevating Equity Initiative, a $100 million effort devoted to fostering equitable and
inclusive development in the neighborhoods surrounding the 11th Street Bridge Park. Prior to
LISC, Kent worked as a high school math teacher in the D.C. Public Schools system and as a
researcher at the Urban Institute. He serves on the board of Project Create, a D.C.-based arts
nonprofit that delivers accessible multidisciplinary arts education and programming to youth and
families. Kent holds a bachelor's degree in economics from Macalester College, a master's
degree in teaching from American University, and a master's degree in public affairs from
Princeton University.

Amber Kuchar-Bell is the Opportunity Finance Network's (OFN) Chief Strategy and Operations
Officer and is responsible for strategic initiatives, corporate budgeting, and facilitating
partnerships with major financial institutions, philanthropy, and new corporate partners. Prior to
joining OFN, Amber was the CDFI Program/NACA Program Manager at the CDFI Fund. She
was responsible for the design and implementation of the $1.25B CDFI Rapid Response

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Program and managed over $200MM annually in grants and loans to over 300 organizations.
Amber was also an investment officer for Calvert Impact, where she managed a $68MM
investment portfolio of CDFIs. Amber also worked at Momentus Capital as a commercial loan
underwriter and Bay Federal Credit Union as a Sr. Consumer Loan Officer. Amber has a Master
of Public Policy from Duke University located in Durham, North Carolina, and a Bachelor of
Science in International Development from the University of California Los Angeles.

Susan Leeds is the founder of the New York City Energy Efficiency Corporation (NYCEEC), the
country's first local green bank. Susan served as President and CEO of NYCEEC from 2011 to
2019 and currently serves as Director and Secretary of the corporation. NYCEEC is a non-profit
that finances energy efficiency, electrification, and clean energy projects primarily in buildings.
Leveraging an initial federal grant of $37.5 million, NYCEEC has mobilized over $400 million of
public, private, and philanthropic capital to date for building-scale decarbonization investments.

Susan is a recognized leader in clean energy finance - as an entrepreneur, lender, advocate
and consultant to the public and private sectors. Susan's recent consulting assignments include
Association for Energy Affordability, Boston Green Ribbon Commission, Citibank, Energy
Foundation, Kansas City, Massachusetts Clean Energy Center, New York Green Bank, NRDC,
NYSERDA, St. Louis, The Clean Fight, and various early- and growth-stage clean tech
companies. Prior to founding NYCEEC, Susan worked as an advocate for NRDC and led
fundraising for Equilibrium Capital. Susan spent over seventeen years working in capital
markets in various positions in the U.S. and abroad. Susan holds an MBA in finance from the
Wharton School and a BA from the University of Pennsylvania.

Doug Sims is Senior Director of the Resilient Communities Division at Natural Resources
Defense Council (NRDC), where he manages a team of over 40 advocates working on climate
finance and place-based, and people-centered strategies to improve lives while combatting and
preparing for climate change. Doug founded and led NRDC's Green Finance Center, was
instrumental in the design and launch of the New York Green Bank is a co-founder of global
Green Bank Network, a membership organization whose members include the Clean Energy
Finance Corporation (Australia), Connecticut Green Bank, GreenTech Malaysia, NY Green
Bank, New Zealand Green Investment Finance, Development Bank of Minas Gerais (Brazil),
Rhode Island Infrastructure Bank, DC Green Bank and Tata CleanTech (India). He authors
papers, presents at conferences and advises jurisdictions around the world on green finance
and sustainable infrastructure. He is a member of the Standards Board of the Climate Bonds
Initiative, the board of directors of the Center for Sustainable Energy and a founding board
member of Inclusive Prosperity Capital, a spin out of Connecticut Green Bank. An infrastructure
finance lawyer by training, Douglass worked for a decade at Allen & Overy LLP, focusing on
energy and infrastructure projects. Douglass holds a law degree from Harvard Law School and
bachelor's degree from Stanford University.

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1

©Little Tokyo
Service Center |^J

Chinatown Community
Development Center

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Center

DEFENSE

EAST BAY ASIAN LOCAL
DEVELOPMENT CORPORATION

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HOMES. HEALTH. VOICE.

BUILDING HEALTHY, VIBRANT AND SAFE NEIGHBORHOODS

December 5, 2022

Michael S. Regan
Administrator

U.S. Environmental Protection Agency
Electronically submitted via www.regulations.gov

Re: Request for Information - Greenhouse Gas Reduction Fund; Docket ID No.
EPA-HQ-OA-2022-0859

Dear Administrator Regan,

Chinatown Community Development Center (CCDC,) Brightline Defense Project (Brightline),
Mission Economic Development Agency (MEDA), Little Tokyo Service Center (LTSC), Silicon Valley
at Home (SV@Home), East Bay Asian Local Development Corporation (EBALDC), and the
Tenderloin Neighborhood Development Corporation (TNDC) appreciate the opportunity to
provide comments on the Greenhouse Gas Reduction Fund (GGRF) program design and
implementation.

The Mission of the Chinatown Community Development Center is to build community and
enhance the quality of life for San Francisco residents. We are a place-based community
development organization serving primarily the Chinatown neighborhood, and also serve
other areas including North Beach and the Tenderloin. We are a community development
organization with many roles - as neighborhood advocates, organizers and planners, and as
developers and managers of affordable housing.

CCDC believes in a comprehensive vision of community, a quality environment, a healthy
neighborhood economy, and active voluntary associations. We are committed to the
empowerment of low-income residents, diversity and coalition building, and social and
economic justice.

Brightline is an environmental justice nonprofit working to empower communities and build
sustainable environments. Brightline works with San Francisco Chinatown community
organizations on air quality, food insecurity, parks and green space, SRO resident needs,
language access, and workforce development.

CCDC, Brightline, MEDA, LTSC, SV@Home, EBALDC, and TNDC welcome the GGRF as an
historic opportunity to further accelerate clean energy investments across the United States,
and particularly welcomes the Fund's emphasis on low-income and disadvantaged


-------
communities. This directly aligns with our organizations' commitment to supporting these
communities.

With respect to the design and implementation of the GGRF, we encourage the
Environmental Protection Agency (EPA) to consider the following priorities:

Eligible Recipients:

We would ask that the EPA prioritize Community Development Financial Institutions (CDFIs) as

the primary capital deployment vehicle for the GGRF. We believe that CDFIs would be ideal
stewards of GGRF funding because of their long-standing track record of mission lending. There
are more than 1,300 Treasury-certified CDFIs investing in all 50 states. Having developed the
trust, deep familiarity and connection with low-income and disadvantaged communities, CDFIs
already have the infrastructure in place to rapidly deploy funding that will accelerate
decarbonization and effectuate the EPAs greenhouse gas reduction goals.

In particular, we would urge the EPA to prioritize CDFI's that are also Minority Depository
Institutions.

Eligible Projects:

We encourage the EPA to include funding that is targeted to affordable housing in the set of
eligible activities.

Decarbonizing housing stock is a critical piece of reducing greenhouse gas. Decarbonization is
not just about decreasing carbon emissions. It is also about energy and resource efficiency,
improved health through better indoor air quality, addressing inequities through reducing
energy burdens and building climate resiliency. Residential energy use produces roughly 20% of
greenhouse gas emissions in the United States. If U.S. residential buildings were a country, they
would be the sixth-highest emitter of greenhouse gases in the world. Historically, low-income
and disadvantaged communities have been disproportionately impacted. The GGRF provides a
unique opportunity to center these communities by lowering housing cost burdens, positioning
them to take advantage of the innovations in the energy sector, and creating safe and healthy
indoor environments.

In particular, we encourage the EPA to prioritize sustainable rehabilitation of existing housing
stock that is already affordable or will be converted into affordable as part of the overall
rehabilitation transaction.

Definition of Low-Income and Disadvantaged Communities:

There exist several definitions for low-income and disadvantaged communities within
current Federal programs. For example, the CDFI Fund established definition of an eligible
"Target Market" as well as the New Markets Tax Credit program and existing HUD housing
programs provide guidance that meaningfully captures low-income and underserved
communities. These definitions include consideration of individual borrower characteristics
as well as the communities where borrowers and projects are located. Adopting these
definitions would create standardization and lower costs of compliance, as government
program awardees already track and report their activity based upon these definitions.


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With that said, Asian Pacific Islander American (API) communities are NOT considered a
Target Market for the purpose of the CDFI fund. We STRONGLY urge the EPA to include
AAPI's within any definition of Low-Income and Disadvantaged Communities. Similarly, it is
imperative that the Latino community be included.

Additionally, affordable housing developers in urban areas should not be excluded based
solely on mapping processes like the Climate and Environmental Justice Screening Tool and
the California Communities Environmental Environmental Health Screening Tool
(CalEnviroScreen). Mapping tools, like CalEnviroScreen, are imprecise as they combine many
factors in a census tract and may inappropriately exclude disadvantaged and low-income
communities. For example, in some neighborhoods in San Francisco's high density and aging
housing stock communities are not defined as "disadvantaged" in most state definitions due
to extraneous environmental health factors. The use of mapping based definitions may
unduly exclude communities that would significantly benefit from the GGRF.

Structure of Funding:

It is critical that the GGRF funds be as flexible as possible to meet the needs of low-income
individuals living in disadvantaged communities and the front-line practitioners who serve them.
Providing a mix of grants, forgivable grants and equity-like investments will help ensure
affordability for the end users. Specifically, low- and moderate-income homebuyers cannot
absorb any additional debt to cover the increased costs related to green and sustainable
materials and features. Further, existing multifamily residential portfolios have already leveraged
debt and cannot afford to pile on additional debt and remain financially viable for owners and
affordable to residents as the properties undergo green retrofits. This challenge also extends to
community facilities and community-serving retail uses that are already leveraging as much hard
debt as possible. All these projects need concessionary financing and by allowing a flexible
structure, these investments will ultimately determine how deeply projects can go in terms of
greenhouse gas reduction improvements while ensuring the equitable deployment of GGRF
funds.

Thank you for the opportunity to provide comments and highlight our priorities in executing the
GGRF. We look forward to working with you to ensure the Greenhouse Gas Reduction Fund is a
success.

Sincerely,

Malcolm Yeung, Executive Director
Chinatown Community Development Center

Eddie Ahn, Executive Director
Brightline Defense Project

Luis Granados, CEO

Mission Economic Development Agency (MEDA)


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Erich Nakano

Executive Director, Little Tokyo Service Center

Regina Celestin Williams, Executive Director
Silicon Valley at Home (SV@Home)

Maurillo Leon, CEO

Tenderloin Neighborhood Development Corporation
Andy Madeira, CEO

East Bay Asian Local Development Corporation

Cc: Environmental Financial Advisory Board (EFAB) email to: efabgepa.gov


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Coalition for
Green Capital

Hon. Edward H. Chu,

Designated Federal Officer
Environmental Financial Advisory Board
U.S. Environmental Protection Agency

Hon. Kerry O'Neill,

Chair

Environmental Financial Advisory Board
U.S. Environmental Protection Agency
RE: Greenhouse Gas Reduction Fund

Dear Mr. Chu, Ms. O'Neill, and Members of the U.S. Environmental Protection Agency's Environmental
Financial Advisory Board-

On behalf of the Coalition for Green Capital, I want to commend the Environmental Financial Advisory
Board for the considerable amount of work that has been done since the Board accepted the
Greenhouse Gas Reduction Fund ("GHGRF") charges from EPA in October. The slides for the December
1, 2022, public meeting are evidence of that work, as well as the expertise of the members of the Board.
The Coalition for Green Capital submits the following information for the Board's consideration as you
finalize your analysis.

The Role of Clean Air Act § 134

When submitting the charge to the EFAB, EPA encouraged the Board to construe its assignment broadly,
and the slides outlining the workgroups' analysis to date is consistent with that request. When EPA
receives the EFAB's report and makes decisions regarding how to structure the GHGRF, however, the
agency will be bound by the language in Section 134 of the Clean Air Act. The statutory text defines key
terms such as "eligible recipient" and creates obligations that every eligible recipient that receives a
grant must be able to fulfill. For example, an "eligible recipient" of a grant under the $8B Low-income
and Disadvantaged Communities Fund ("LIDC Fund") and the $11.97B General Assistance Fund ("GA
Fund") must be a national non-profit "designed to provide capital, leverage private capital, and provide
other forms of financial assistance for the rapid deployment of low- and zero-emission products,
technologies, and services." CAA § 134(c)(1)(A). Entities that were designed for another purpose, such as
to provide credit or housing to underserved communities, cannot become eligible recipients simply
because of their interest in expanding their mission to include green financing.

The statute creates obligations that every "eligible recipient" that receives funding must be able to fulfill
- such as direct investment in qualified projects at the national level and indirect investment through
funding and technical assistance provided to other institutions that invest in qualified projects at the
regional, state, and community levels. By mandating that any eligible recipient both invest in qualified


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projects at the national level and to provide funding and technical support for other entities at all other
levels reflects Congress's intent to have the money awarded under the LIDC and GA Funds be used to
establish a national, nonprofit finance institution. Entities that are limited to operating within a limited
geographic area or that intend to use the grant solely to benefit its members would not be capable of
fulfilling those obligations would not be eligible recipient. They would remain eligible to be the
beneficiary of indirect investment of GHGRF money by the national nonprofit green bank.

The direct investing must be prioritized to provide financing the private sector would not otherwise
provide. EPA describes this concept as that of "additionally," and has stated a clear preference for
proposals that maximize the amount of funds that will provide additional, necessary financing. While it
may be difficult to identify a precise way to confirm the additionality of a use of funds, by definition uses
of funds that are designed to compete with available commercial financing by providing a more
attractive interest rate or lower costs of financing fall outside of what could be considered additional.

The statute also requires an eligible recipient to manage its direct investments at the national level to
ensure continued operability of the GHGRF. As a result, an eligible recipient must have a viable business
plan that ensures continued operations for many years to come. To achieve the primary goals of §134,
the business plan also must show how it will help EPA fulfill both the goals of greenhouse gas emissions
and other air pollution reduction and advancing environmental justice, with the majority of the
investment under the two funds in "low-income and disadvantaged communities." EPA should define
such communities in a unique, precise way to give guidance to all "eligible recipients," or alternatively
should require applicants to provide precise definitions that will allow EPA to evaluate the communities
in which the money will be spent.

The statute also contains a definition of "qualified projects" that will impact which entities could be
considered eligible recipients and which projects can be funded. "Qualified projects" include "any
project, activity, or technology" that falls within two carefully defined categories:

"(A) reduces or avoids greenhouse gas emissions and other forms of air pollution in partnership with,
and by leveraging investment from, the private sector, or

(B) assists communities in the efforts of those communities to reduce or avoid greenhouse gas emissions
and other forms of air pollution."

The statutory definition of qualified projects cannot be read to allow GHGRF grants to be used to fund
general economic development or affordable housing projects. Including technologies that directly
reduce or avoid greenhouse gas emissions or other forms of air pollution in a larger development or
housing project would not make the entire project eligible for funding. If the grantee can demonstrate
that commercial financing was not available for those technologies, however, it may be possible for an
eligible recipient or an indirect recipient to provide funding for the cost of adding them to a project.

When viewed together, these provisions undoubtedly constrain the universe of entities that are
potential eligible recipients, and do so in ways that would impact the options EPA has regarding the
structure of the program. The EFAB should be clear that its final report provides EPA with information
on a range of finance entities that could - as a technical matter - be used to provide green financing
based on the Board's experience and expertise, but is not an attempt by the Board to define the scope
of EPA's authority or discretion under Section 134. Despite the fact that such an interpretation would go


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beyond the specific GHGRF charge questions before the Board and fall outside the role of the EFAB as
specified in its charter, the potential for the EFAB's report to be misunderstood as EFAB's interpretation
of Section 134 is significant and clear statements to the contrary are warranted.

The attachment to this letter contains additional information prepared by the Coalition for Green Capital
regarding the reasons why Congress intended the GHGRF to be used to capitalize a national green bank,
how all other interested entities would then be able to receive funding as indirect recipients, and other
issues relevant to your final evaluation.

Thank you for your consideration of this information.

Sincerely,

Kevin S. Minoli

Counsel for the Coalition for Green Capital

Enclosure


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Attachment

Why did Congress write the statute written to require a national green bank?

Congress directed EPA to create a national green bank as the most effective use of public dollars to
impact greenhouse gas emissions and address environmental injustice. In particular, a national green
bank will:

1.	Set national priorities for investing in "qualified projects" in partnership with EPA, recognizing
that both direct and indirect investing goals will change over time.

2.	Manage risk over a broad portfolio of indirect and direct investments, maximizing the total
amount of investment but guaranteeing total positive return as required by statute.

3.	Partner efficiently with EPA in order to manage risk to the very low levels historically achieved
by American Green Bank Consortium members. In effect the national entity is an extension of EPA,
enabling financial functions the agency cannot conduct but giving effect to agency goals in a fiscally
efficient manner.

4.	Create open network of indirect recipients, not limited only to those prepared to make
investments in "qualified projects" at the present time. Successful deployment of capital would unlock
additional capital for high performing intermediaries.

5.	Standardize. While local green banks and financing institutions have local advantages, a national
green bank, working in partnership with local green banks and financing institutions can help
standardize a range of documents and procedures (credit, for example), as well as provide asset
management and back-office services. These activities would significantly reduce the "soft costs" of
financing. In smaller projects, sometimes the legal costs alone can overwhelm the economics of the
project.

6.	Provide product support (a product for financing heat pumps, for example) and capacity building
that will enable these lenders to expand their offering to clean energy and energy efficiency projects. A
national green bank would have the scale to provide capacity building at local green banks, the ability to
develop and disseminate new financial products, and the buying power to negotiate the best pricing
from vendors.

7.	Accelerate the recycling of funds. Most clean energy project loans have long maturities (since
the projects have long asset lives). Through standardization of contracts and underwriting standards,
these loans can be aggregated and sold to bond investors. In so doing, the proceeds can be re-lent to
new projects. This recycling increases the amount of money that can be lent. In addition to establishing
these standards, a national green bank can act as warehouse and agent in acquiring loans from local
green banks and selling them.


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8.	Lead effort for collection of data which provides for an ability to better analyze risk and hence
permit private sector participants to feel more comfortable with these clean energy-related investment
opportunities. In addition to credit and energy-related data, a national green bank can work with health
care partners to better establish the benefits of clean energy and health. Scale matters in data
collection.

9.	Negotiate directly with national suppliers. Supporting bulk negotiation with critical clean energy
equipment manufacturers creating consistent availability for local projects and more favorable terms for
participating contractors.

10.	The larger the capitalization of the national green bank, the larger its debt capacity relative to
the debt capacity created if the EPA were to split the capital among many recipients. The NCB would
therefore be able to more appropriately leverage its own balance sheet than available in the case of
multiple recipients.

11.	Simplify oversight and reduce administrative expenses. A national green bank would limit the
amount of oversight and administrative expenses required, as the bank would manage reporting and
oversight for all of the intermediary participants, simplifying the oversight burden for EPA and reducing
the overall admin expense required to support federal contracting requirements.

What are the risks of dilution?

As EFAB considers the most effective models for the Greenhouse Gas Reduction Fund, several of the
proposed alternatives would significantly dilute the pool of capital available for capitalization. In
particular, the proposed alternatives, such as regional or sectoral recipients, in addition to not
complying with the statute, also pose the following risks:

1.	Reduce debt capacity, thus lowering total investment

2.	As the number of "eligible recipients" increases, the difficulty for EPA to manage risk among all
of them increases, and the difficulty for them in creating a broad net positive portfolio
increases, given that each must invest both directly and indirectly

3.	Competition among indirect recipients for support from multiple national green banks will lead
to reduced standards at both levels

4.	Failure to establish common standardization, efficient securitization, thereby reducing leverage

5.	Inability to negotiate favorable transactions with OEMs and distributors of critical products

6.	Limits ability to reduce "backoffice" costs to indirect recipients since scale advantages are
reduced

7.	Cannot allocate capital where most needed to achieve "additional" public-private investment
and to focus on "low-income and disadvantaged communities" as circumstances and needs
change overtime; instead locked into initial allocation

8.	Cannot move capital from one sector to another over time as sectoral needs change due to lock-
in of initial funding


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9.	Unable to balance risk over broad portfolio; the smaller are discrete portfolios, the greater the
risk, or alternatively the more the EPA has to manage risk itself as to all investing, which is not a
desirable role for the agency

10.	Increase administration and transaction costs for EPA

11.	Create confusion and redundancy among indirect recipients seeking to participate in on-lending
by multiply direct recipients.

National Green Bank / Fund Strengths and Weaknesses

The Consortium offers the following comments on slide 24:

1.	The competition is not only "inter-state" but inter-sectoral, inter-product, and between
recipients to encourage higher performance over time

2.	The country wants to drive more public private investment into the sectors that maximize the
reduction and avoidance of greenhouse gas emissions and other forms of air pollution in low
income and disadvantaged communities per public dollar. This objective will cause sectoral
allocation to change over time.

3.	The specific physical and financial products that implement a strategic decision will change over
time and therefore capital allocation also should change over time. This observation is not
theoretical but based upon the experience of existing green banks. The key role for the eligible
and indirect recipients is to fill in market gaps where traditional finance institutions do not lend.
By "incubating" financial structures and building a portfolio of credit-worthy loans, green banks
demonstrate the attractiveness of new areas for traditional lenders so that green banks can step
out of the way, letting the market take over. Because there is an evolution of combinations of
technologies, credit counterparties, and business models, there is an ever-evolving frontier of
market gaps. The very reason the law required an independent entity is to give it the flexibility
to respond to these changing market gaps.

4.	The sectoral requirements of DOE's Loan Program Office gives a clear example of the perils of
establishing industry "silos." Because of these sectoral requirements, authority could not be
transferred from one area where there was inadequate demand for loans (nuclear, as one
example) to renewable energy projects where there was strong demand. Markets and
technologies change.

5.	It is likely that most nonprofits that could become indirect recipients are not yet formed or not
yet ready to invest heavily in the physical and financial products that are "qualified projects."
The national green bank should support the development of new participants, particularly in low
income and disadvantaged communities that are not currently served by a sustainable finance
institution, welcome all future participants and not be locked exclusively into supporting only
those presently seeking funds.


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6.	In addition to reducing the burden to EPA, the efficiencies of reduced administration, national
monitoring, partnership with EPA, are tremendous cost savings and efficiency benefits of
capitalizing a national green bank.

7.	The scale of capitalization directly correlates to more leverage with private sector investing and
greater recycling, producing substantially more total investment over a reasonable relevant
time.

8.	The asserted weaknesses/challenges are not likely to be realized

•	The management challenge of creating a single fully capitalized green bank is far easier than
creating many different management teams doing the same or similar jobs or redirecting
multiple existing organizations from their current purpose

•	The "ramp-up time to operationalize" is much faster when capitalizing an existing
consortium with billions of dollars of backlog in qualified projects, existing know-how, and
go-to-market plans ready to roll out right now

•	The costs of capitalizing many "eligible recipients" directly from EPA will be much higher
than the costs of capitalizing one

•	One entity distributing to many indirect recipients is by far the most efficient model for on-
lending

•	The "concentration of funds in one entity" does not "elevate financial management and
political risks." To the contrary, the funds are not concentrated but largely distributed
through indirect investing to many regional and local investors, while at the national level
the agency and national green bank manage the portfolio via contract to reduce risk and
achieve net positive return. It would seem beyond the scope of the EFAB to evaluate
political risk.

•	A "broad scope" does not "create challenges in planning." To the contrary, if we want a
national strategy, with local implementation, then it follows we should want a national
green bank. And a national strategy for the reduction and avoidance of emissions of
greenhouse gases and other pollutants in low income and disadvantaged communities is
what the president and innumerable others have called for. The real challenge is lack of
coordination of strategies when they are delegated to regions, states, or localities with no
means to coordinate across state lines, across affected sectors, and for all low income and
disadvantaged communities.

•	Capitalizing a national green bank is said to require "new capacity/entity to address the
broad remit and requirements, which could delay timely distribution of funds." It is true that
being ready to go is an important aspect of the merits of any application for funding.

What is the best administrative structure to get funds to communities?

Every green bank is a community organization, but every community organization is not a green bank. A
national strategy must be developed to ensure disadvantaged communities across the United States
have access to funds to lower greenhouse gas emissions and address climate injustices through the
GHGRF.


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A National Climate Strategy was intended to be published with the passage of the Build Back Better Act.
This national roadmap of reducing GHG emissions across the supply chain is vital to accomplishing the
administration's goals. As that national strategy is being developed and published, EPA must move
forward and require the recipient to develop a comprehensive plan rooted in local, state, and national
community engagement.

The national green bank will design a multi-tiered engagement process to ensure the national strategy is
inclusive, funds are reaching the local level, and there's a mechanism of accountability. In our RFI
comments, we discussed that a national green bank would develop a thorough mapping process to
identify priority communities nationwide for initial investment. Following that process, we engage in a
participatory planning process with partners on the ground and execute community benefits
agreements. For example, partners on the ground can be environmental groups, elected officials, and
municipal staff from towns, cities, and states that have developed extensive planning processes to
address climate change (i.e., climate action plans, green new deals, and resiliency plans). These plans are
naturally aligned with the mission and objectives of the national green banks. We want to build upon
the work of these existing planning processes to align financing with the greatest needs across the
country. This participatory planning process will bring together the various planning initiatives and
identify capital needs and opportunities to develop markets for clean energy deployment.

To continue using this example, the result of the participatory planning process will be a community
benefits agreement (CBA). The CBA will define the needs and solutions identified during the planning
process. This document will also specify the partners and determine the roles of the involved parties. It
will document the process providing transparency and accountability. Our priority with the CBA is to
align the benefits from the GHGRF with the statute and work with EPA to determine what other benefits
could be attributed to the funds. The signatories of the community benefit agreements will be the
involved parties, and it will be legally binding.

There is no national strategy to address the climate crisis. And there is no precedent for conducting a
national engagement strategy to address the climate crisis. It is in the best interest of the National
Green Bank and EPA to commit to developing a national strategy to deploy the GHGRF. There needs to
be a mechanism to monitor and track progress at both a local and national level.

EPA EFAB Charge Questions

In addition, we submit the following comments in response to the EFAB Charge Questions:

Objectives

• Charge Question l.a.i: What considerations should EPA take into account in defining "low-
income" and/or "disadvantaged" communities in order to ensure fair access/that the funding
benefits disadvantaged communities?

To aid eligible recipients and give itself a more manageable task in awarding funds, EPA should provide a
clear, consistent, and transparent definition of "low-income and disadvantaged communities." We
recognize that several agencies and other entities within the federal government have already published
definitions or standards for designating a community as "low-income" or "disadvantaged" under


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programs they administer and that many of those entities have built robust screening tools designed to
help identify which communities are considered low-income or disadvantaged under the office's
particular definitions. Definitions of "low-income" or "disadvantaged" that are generated for use in
other federal programs or for different purposes are unlikely to be equally effective at identifying the
communities that should be prioritized by an eligible recipient that receives funding under the GHGRF
for investments, funding, and technical assistance. As a result, we do not recommend EPA wholly adopt
any "off-the-shelf" definitions for these key terms. In particular, EPA should not use definitions—or the
resulting classifications—used in the context of determining the geographic boundary in which a
community-based financial institution may operate, as those definitions do not include any
consideration of environmental burdens. There is no basis in Section 134 for eliminating consideration
of environmental impacts when identifying those communities that should be prioritized for investment
under the GHGRF.

At the same time, EPA need not launch a time-consuming effort to "recreate the wheel." Rather, EPA
should define the subject geographic and demographic markets by combining those components or
aspects of existing definitions that are particularly relevant to the GHGRF's purpose. For example, EPA
should not adopt the entire definition of "disadvantaged community" relied on by the CEQ because it
covers at least some communities that are not burdened by emissions of greenhouse gases, other forms
of air pollution, or the production or combustion of fossil fuels. However, some aspects of the CEQ
definition focus on identifying communities that are burdened by emissions of greenhouse gases, other
forms of air pollution, or the production or combustion of fossil fuels. EPA can also incorporate relevant
aspects of the agency's EJ Screen tool, and the Department of Energy's ("DOE") Priority Energy
Communities methods.4 These existing efforts to define environmental damage, low income, and
historic underinvestment can serve EPA in deciding the direction of grant funds.

• Charge Question l.a.ii: How can EPA ensure that communities and organizations who have
received little or no funds in the past receive priority consideration for funding? How could
EPA identify the low-income and disadvantaged communities it should prioritize for
greenhouse gas and other air pollution reduction investments?

How EPA defines "low-income and disadvantaged communities" is critical to shaping the business plans
of eligible recipients for grants and for achieving the statutory purposes. As discussed in more detail
below, that definition must include considerations of the pollution burden historically imposed on
communities and the disproportionate energy burden low-income communities have borne and will
continue to face. We urge EPA to require eligible recipients to show in detail how they will cause both
direct and indirect investment in such communities for the majority of the GHGRF awards.

For direct investment as defined in Section 134(b)(1), Congress required that the eligible recipient
"prioritize investment in qualified projects that would otherwise lack access to financing." Historically,
the financial sector has not provided fair and equal access to financing for racial minorities and low-
income communities. Therefore, EPA should direct applicants to identify how they will determine what
"qualified projects" should be prioritized on the grounds that financing is lacking. In that explanation, an
applicant should specify the obstacles to conventional financing that must be overcome, such as


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ownership by or location in a low-income or disadvantaged community, and how to overcome those
challenges.

The Biden Administration has repeatedly established a strong commitment to ensuring the prioritization
of historically disadvantaged communities as a key factor in transitioning to a clean economy. In Section
219 of Executive Order 14008: Tackling the Climate Crisis at Home and Abroad, the Administration
acknowledges: "To secure an equitable economic future, the United States must ensure that
environmental and economic justice are key considerations in how we govern. That means investing and
building a clean energy economy that creates well-paying union jobs, turning disadvantaged
communities—historically marginalized and overburdened— into healthy, thriving communities, and
undertaking robust actions to mitigate climate change while preparing for the impacts of climate change
across rural, urban, and Tribal areas."

Additionally, in the Interim Implementation Guidance for the Justice40 Initiative Memo, the
Administration outlines direction by the President for the Director of the Office of Management and
Budget ("OMB"), the Chair of the Council on Environmental Quality ("CEQ"), and the National Climate
Advisor in consultation with the White House Environmental Justice Advisory Council ("WHEJAC") to
jointly publish guidance on how certain federal investments might be made toward a goal that 40% of
the overall benefits of such investments flow to disadvantaged communities—the Justice40 Initiative.
The Justice40 Initiative is acknowledged as a critical part of the Administration's whole-of-government
approach to advancing environmental justice.

Finally, in September 2021, the Environmental Protection Agency released the report Climate Change
and Social Vulnerability in the United States , which provided critical data-based context towards the
urgency of ensuring that climate investments are prioritized for disadvantaged.

Definitions or tools that are not based on environmental considerations—and more precisely not based
on consideration of impacts from greenhouse gases; other forms of air pollution; or the production,
delivery, and use of energy from fossil fuels—will generate results that are not tailored to addressing the
GHGRF's purpose. For example, Census tracts can misdirect investments pursuant to Section 134
because this measurement divides larger communities into multiple Census tracts and combines smaller
communities with neighboring communities. Both these features can obscure the location of "low-
income and disadvantaged communities." Nor should EPA define the boundaries of communities solely
using constructs such as an investment area or targeted population as the criteria used by the
Department of Treasury's Community Development Financial Institutions Fund ("CDFI Fund") to
determine if a CDFI will serve a "Target Market." As noted above, income and financial metrics alone
also will miss the mark, because they do not consider the energy and environmental burdens faced by
communities.

If EPA decides not to identify precisely the geographic and demographic markets meeting the definition
of "low-income and disadvantaged communities," then the agency must require eligible recipients to
identify with specificity the "communities" where they propose to provide directly "financial assistance"
and indirectly "funding and technical assistance" consistent with Section 134(b) of the CAA (Use of
Funds) or the precise measures and metrics that the eligible recipient will use to identify those
communities when implementing the grant. Great specificity will permit EPA to discern the differences
among competing applications. It then can give greater value to applications that serve the statutory


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purposes to the maximum degree. Specifically, in the event EPA depends on eligible recipients for the
definitions, then it should require them to address the following:

•	Definitions of disadvantaged communities they will target and the reasoning behind their
definitions

EPA should require each applicant to identify the variables it will use to define and prioritize
disadvantaged communities. In making these definitions, eligible recipients must simultaneously
consider environmental, economic, and social factors and how these factors relate to one another and
the purpose of the GHGRF. Definitions that prioritize only one type of variable (economic, social, or
environmental) without addressing the needs created by the others should be rejected.

•	Specific priority geographies and reasoning behind those priorities

In many environmental justice hotspots and frontline areas, communities have been and are
disproportionately impacted by local factors such as particulate air pollution from industrial processes,
vehicles, or fossil fuel production and combustion. Eligible recipients should identify the characteristics
of hotspots they plan to address through their investment strategy. They should explain how their
strategy will both remedy the specific environmental problems and support the economic development
of surrounding communities.

•	Anticipated environmental, health, and energy impacts in target communities

Eligible recipients should identify the specific environmental and energy benefits they plan to deliver in
discrete geographic and demographic markets. For example, when addressing energy burdens, eligible
recipients should assess the specific sources of energy burden in the communities and explain how their
business plan will benefit members of the community. Eligible recipients should identify specific health
issues arising from greenhouse gas emissions and air pollution and then show how they mitigate
adverse experiences currently suffered in the relevant communities.

•	Intended GHG and air pollution reductions

Eligible recipients should explain the specific sources of greenhouse gas emissions and other forms of air
pollution in the selected communities they intend to address and how they intend to abate them by
means of "rapid deployment of low- and zero-emission products, technologies, and services." EPA
should reject applications that fail to articulate a well-thought-through strategy identifying the specific
"products, technologies, and services"—a requirement that specifically means all three measures must
be utilized for the purpose of Section 134 to be realized.

•	Second-order GHG emissions impacts

EPA will be aware that investment may reduce GHG emissions in one location but redistribute them
elsewhere. For example, a building electrification project might reduce GHG emissions onsite but cause
a new electrical load at a nearby fossil fuel-fired electric generating unit that emits GHGs and other
forms of air pollution for the surrounding community. Eligible recipients should explain to EPA where
their activities might create new electrical loads, the impacts of such loads on greenhouse gas emissions
and air pollution, and how they plan to address both potential increases in emissions and air pollution in
those areas. They should also explain how they plan to protect communities that could suffer harm from
increased electricity production expected to result from their investment strategies.


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• Justice40

EPA should apply Justice40 goals to its assessment of the merits of applications under the GA Fund. To
this end, the same definition of "community" used for the LIDC Fund should be applied to the GA Fund.

•	Charge Question l.a.iii: What kinds of technical and/or financial assistance should GHGRF
funding recipients provide to ensure that low-income and disadvantaged communities are
able to be direct or indirect beneficiaries of GHGRF funding? Please identify supports that
could help communities with project implementation.

First, any grant made under either the General Assistance (GA) Fund or the Low-Income and
Disadvantaged Communities (LIDC) Fund must facilitate both direct and indirect investment into
qualified projects, as Congress used mandatory language in both Sections 134(b)(1) and (b)(2). In
addition, grants made under the LIDC Fund must facilitate both the direct and the indirect investment
into qualified projects in low income and disadvantaged communities only.

Second, both direct "financial assistance" and indirect "funding and technical assistance" must be made
in the context of a "qualified project." Section 134(b)(1)(A) requires an eligible recipient to provide
financial assistance to "qualified projects" at the national, regional, State, and local levels," while Section
134(b)(2) requires an eligible recipient to provide funding and technical assistance to "entities that
provide financial assistance to qualified projects at the State, local, territorial, or Tribal level or in the
District of Columbia."

As a threshold matter, all "qualified projects" must be a "project, activity, or technology." While those
terms are broad, they are not limitless. Paying off an entity's pre-existing operational debts, for
example, is unlikely to be a qualified project because it does not appear to be a "project, activity, or
technology."

From the broad range of types of assistance that could constitute "any project, activity or technology,"
Congress authorized the use of grants made under the GHGRF for just two types. Section 134(c)(3)
specifies that a qualified project must be a "project, activity, or technology" that:

•	"(A) reduces or avoids greenhouse gas emissions and other forms of air pollution in partnership
with, and by leveraging investment from, the private sector; or

•	(B) assists communities in the efforts of those communities to reduce or avoid greenhouse gas
emissions and other forms of air pollution."

Ideally, an "eligible recipient" would demonstrate to EPA that its business plan integrates both types of
"qualified projects." Considering the requirement that an "eligible recipient" invest both directly and
indirectly, support new and existing intermediaries, recycle funds, "ensure continued operability," and
otherwise meet all the statutory mandates, it is difficult to imagine an applicant presenting a coherent
business plan that does not integrate and aim at both types of "qualified project."

In any event, the community assistance category requires an applicant to show exactly how it proposes
to aid communities "in the efforts of those communities to reduce or avoid greenhouse gas emissions
and other forms of air pollution" Section 134(c)(3)(B) (emphasis added). As drafted by Congress, this


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provision empowers communities to be the ones to decide what efforts they want to take to reduce
emissions, and it requires an eligible recipient to support the efforts chosen by the community. By
drafting it this way, Congress was clear that the obligation on eligible recipients is not simply to spend
money in low-income and disadvantaged communities but to use grant funds to invest in the
communities themselves.

To ensure that low-income and disadvantaged communities are able to fully participate in and benefit
from the GHGRF, EPA should rely on Section 134(c)(3)(B) to distinguish between applications that
propose to use grant funds to increase the amount of business the applicant or members of its network
will do within low-income and disadvantaged communities that they already serve and applications that
propose to increase the amount of funding available for low-income and disadvantaged communities to
expand their businesses. EPA should require applicants to demonstrate how their proposal will ensure
that the long-term value of the investment of GHGRF Funds will remain in and belong to the community
and not the eligible recipient or its members. Other laudable assistance or worthwhile community
efforts—such as general economic development projects—do not fulfill the requirements of Section
134.

In connection with all financial assistance, the applicant should be obliged to show how it will:

•	"prioritize investment in qualified projects that would otherwise lack access to financing"
(Section 134(b)(1)(B));

•	"recycle and monetize" the "fees, interest, repaid loans" and other revenue generated from
qualified projects (Section 134 (b)(1)(C)); and

•	"ensure continued operability" (Section 134(b)(1)(C)).

In short, the LIDC recipient cannot primarily or even mostly engage in non-remunerative "financial
assistance and technical assistance" without violating the conditions of Section 134(b)(1). To comply
with this law, EPA must require eligible recipients for awards from the GA Fund and the LIDC Fund to
show how their business model serves the relevant communities, leverages the private sector, promotes
only "qualified projects" (and not some other product or service, however laudable), and will be self-
sustaining economically over time.

• Charge Question l.b.i: How can the GHGRF grant competition be designed so that funding is
highly leveraged (i.e., each dollar of federal funding mobilizes multiple dollars of private
funding)? How can the funding be used to maximize "additionality" (i.e., the extent to which
funding catalyzes new projects that would not otherwise occur)? How can EPA balance the
need for grants for capacity building and short-term results with financial structures that will
allow capital to be recycled over time? Where (if at all) is it appropriate to impose
sustainability requirements on direct or indirect beneficiaries of GHGRF funding?

EPA correctly identifies the importance of using the GHGRF grant funds to increase total investment. We
estimate that to meet President Biden's emissions goal at least $1 trillion must be invested in the next
decade in addition to what the private sector otherwise will cause. We estimate further that "low-
income and disadvantaged communities" need at least $200 billion of this additional investment. EPA


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should call for eligible recipients to explain in detail how they will fill these investment gaps. That is why
the objective of "high private-sector leverage" is absolutely required in the design of the program and
the requirements imposed by EPA on eligible recipients.

In championing the GHGRF, the sponsors of the legislation have explained publicly that they envision the
capitalization of a national green bank as the purpose of the legislation. Therefore, EPA should require
eligible recipients to show how either through a national green bank or in some other way they will
utilize efficiently conventional, prudent banking tools. These must include at least the following across a
portfolio of investments:

•	"Mobilize" private sector investors to partner in financing specific qualified projects,

•	Cause the private sector to purchase debt and other assets aggregated by the "eligible
recipient,"

•	Obtain loans from the private sector at favorable rates, and

•	Attract new private sector financing into the relevant product and geographic markets.

Eligible recipients that do not propose to capitalize, organize, manage, and execute with such tools
through a national green bank should explain in detail how they will operate otherwise to 'facilitate high
private-sector leverage."

Here follows a summary of questions relating to "leverage" that we suggest EPA require eligible
recipients to answer in detail:

•	Explain financing competence and plans: Eligible recipients should specify how they will safely
and effectively leverage funds and obtain lines of credit to comply with Section 134(b)(1)(C). In
this regard, eligible recipients should show in detail how they have and how they will in the
future recycle funds, and how they will partner with the private sector in investing in low and
zero emission projects and products.

•	Show how "leverage" will be limited to statutory purpose. GHGRF funds can be used only for
"qualified projects." To this end, eligible recipients with organizational or institutional
objectives that lie outside the scope of "qualified projects" should show how they would
separately track the GHGRF Funds through recycling, partnering, and other financing to the
statutory purpose. EPA should require eligible recipients that have balance sheets derived from
other investment activity to demonstrate that they will not commingle or otherwise use GHGRF
capital directly or indirectly to support investing in anything other than "qualified projects." For
example, an applicant may not deposit GHGRF capital on its balance sheet, borrow against that
capital, and then use anything less than all that capital to invest in "qualified projects." This
restriction applies to investing by indirect recipients as well. Section 134 is aimed exclusively at
increasing (and then monitoring) investing to "qualified projects."


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• Demonstrate a plan for positive returns overall. Positive returns on an entire portfolio are
essential for an "eligible recipient" to maintain continued operability over time as required by
Section 134. Therefore, EPA should ask eligible recipients to explain how they will obtain net
positive returns, whether they intend to grow capital, and how they will maximize "leverage"
generally and in "low-income and disadvantaged communities" over at least a lOyear period. In
this explanation, they should address in detail how they intend to balance any nonremunerative
provision of services and grants to indirect recipients and communities with the imperative to
be operationally sustainable and to grow capital to achieve the greenhouse gas and pollution
reduction generally and specifically in low-income and disadvantaged communities. This is
particularly important to enable entities that are not yet ready to receive before September 30,
2024 (when all funds must be obligated) to become indirect recipients in the future. Section
134(b)(2) requires the "eligible recipient" to "provide funding and technical assistance to
establish new or existing" members of an indirect investing network. Eligible recipients will be
unable to expand that network to "new" members or continue to support "existing" members in
future years if they do not "ensure continued operability."

•	Provide details on public-private investing: EPA should require that eligible recipients explain in
detail existing and proposed future plans to partner with private sector investors. In doing so,
they should identify, to the extent possible, the specific physical products and projects that they
believe will involve partners, based on their capabilities and future business plans.

•	Show competence in recycling and partnering: EPA should ask eligible recipients to show how
their board and management team have recycled funds for investments that fall within the
scope of "qualified projects" and how they partnered with private sector investors for such
specific projects. EPA should not rely on recycling and partnering for other types of projects as
satisfactory evidence of track record or future plans suitable for receiving funds as an "eligible
recipient." Investing in "qualified projects" is the relevant expertise. In this connection, to the
extent available, eligible recipients should report on historical default rate, average interest
rates, and rates of adoption of "qualified projects" ("any project, activity, or technology that (A)
reduces or avoids greenhouse gas emissions and other forms of air pollution in partnership with,
and by leveraging investment from, the private sector"). Eligible recipients with scant
experience in driving the adoption of "qualified projects" should explain how they propose to
gain the skills necessary to invest at optimal speed and volume in the projects and products
composing the clean power platform. Eligible recipients that wish to focus only on assisting
"communities in the efforts of those communities to reduce or avoid greenhouse gas emissions
and other forms of air pollution" will fail to show that they can meet the other requirements of
the definition of "eligible recipient" such as the three direct investing activities under Use of
Funds (b)(1) or the imperative of supporting an indirect network.

•	Speed Matters: EPA should require eligible recipients to show how they intend to expedite
private sector "leveraging." All else being equal, it is better to reduce emissions and pollution
sooner rather than later from a global warming, pollution, and socio-economic point of view.


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Therefore, eligible recipients should explain their Day 1 and Year 1 plans for "mobilizing private
funding."

•	Charge Question l.b.ii: Are there programs/structures at the federal or state level that could
effectively complement the GHGRF? How can EPA best leverage the GHGRF to support lasting,
long-term (beyond 2024) transformation of the clean energy and climate finance ecosystem,
especially for disadvantaged communities, and greenhouse gas and other air pollution
reductions?

We suggest EPA require details on how the applicant will ensure its operability for at least one decade.
The one-time capitalization of one or more "eligible recipients]" is meant to launch a prudently
investing, long-term successful, national non-profit investing entity that can address the dual mission of
avoiding climate crisis and causing a beneficial clean energy transition in "low-income and
disadvantaged communities."

Pursuant to Section 134, an "eligible recipient" also must invest directly on "national, regional, State and
local levels." It cannot, therefore, focus only on the "State and local levels." This requirement comports
with the need to reduce greenhouse gas emissions and other pollutants everywhere in the country and
with the need to focus on "low-income and disadvantaged communities" that are found in all states and
regions.

In presenting a strategic plan for such mandatory national and regional direct investing, the "eligible
recipient" should discuss a sectoral approach to investing. It must achieve a positive return on its entire
portfolio, partner with private sector investors, recycle funds, and seek to avoid doing what the private
sector would do on its own. Given these constraints, the applicant should explain on a national and
regional level the sectors—including both product and geographic markets—in which it initially intends
to invest.

EPA should require that eligible recipients show how they will align investments with at least the
following programs and projects:

Inflation Reduction Act Additional Related Programs

•	The ZET Fund, $7 billion, to make grants to states, municipalities, and Tribal governments to
deploy or benefit from zero-emission technologies.

•	Clean Energy Incentives for Individuals, Section 13302, extends tax credits for capital costs of
qualified residential clean energy property expenditures, including a variety of zero emission
technologies.

•	Energy Community Reinvestment, Section 50144, $5billion: To "retool, repower, repurpose, or
replace energy infrastructure" or "enable operating energy infrastructure to avoid, reduce,
utilize, or sequester air pollutants or anthropogenic emissions of greenhouse gases."

•	Clean Heavy-Duty Vehicles, Section 60101, $lbillion: Granting mechanism "to help replace dirty
medium and heavy-duty vehicles with zero-emitting vehicles."


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Funding to Address Air Pollution at Schools, Section 60106, $50million: Granting mechanism "to
monitor and reduce air pollution and greenhouse gas emissions at schools."

•	Low Emissions Electricity Program, Section 60107, $87 million: Technical assistance and
education programs for consumer-related groups, low-income, and disadvantaged communities,
and others to reduce greenhouse gas emissions from electricity generation.

•	Climate Pollution Reduction Grants, Section 60114, $5 billion: For a competitive grant program
for state planning and implementation of greenhouse gas reduction programs.

•	Environmental and Climate Justice Block Grants, Section 60201, $3 billion: To award grants "for
environmentally-related activities that benefit disadvantaged communities."

•	Energy Infrastructure Reinvestment Program, Section 50144, $5 billion and $250 billion in loan
guarantees to "(1) retool, repower, repurpose, or replace energy infrastructure that has ceased
operations; or (2) enable operating energy infrastructure to avoid, reduce, utilize, or sequester
air pollutants or anthropogenic emissions of greenhouse gases."

Bipartisan Infrastructure Law

•	Electric and Reduced Carbon Buses: $5 billion. State and local government entities and nonprofit
entities that can arrange financing for sales eligible under this program are eligible receiving
entities.

•	Pollution Prevention: $100 million for the Pollution Prevention Program.

•	Charge Question II.a.i: Who could be eligible entities and/or indirect recipients under the
GHGRF? What should the thresholds for deployment be - both amount and timing - for
GHGRF funding by these entities? Please provide references regarding the total capital
deployed by these entities into clean energy and climate projects

The requirements for meeting the definition of "eligible recipient" each can be satisfied only by
appropriate "governance structures, reporting requirements and audit requirements." These
requirements are ongoing. An applicant cannot merely be in compliance at the time of the application
but instead must remain continuously in compliance during the entire term of the grant it seeks. Here
are the four requirements that require governance, reporting, and auditing:

•	To be "eligible," the nonprofit must be "designed" to "provide capital, leverage private capital,
and provide other forms of financial assistance for the rapid deployment of low- and zero-
emission products, technologies, and services." To comply with this provision, an applicant must
show the EPA that it is "designed" by charter, history, organization structure, management
expertise, and board composition to fulfill these mandatory functions. A nonprofit "designed"
for some other purpose, however laudable and consistent with other statutory authorities, does
not meet this requirement. For example, a nonprofit with the primary purpose of investing in
general economic development is not an "eligible recipient" under Section 134, although it can
be an indirect recipient of "funding and technical support." Governance structures must be
disclosed to assess whether an applicant complies with this provision.


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• Nonprofits that take deposits are excluded from the definition of "eligible recipient." This
provision bars credit unions, or organizations that derive their funds from credit unions, from
applying directly. EPA should not permit as an "eligible recipient" the creation of a mere
paperwork construct that is in effect a front for an entity that cannot qualify as an "eligible
recipient." An "eligible recipient" must have a board, charter, by-laws, proposed management
team, business plan, financial plan and capability to fulfill all the requirements of Section 134.
No mere paper shell of a nonprofit founded and controlled by entities ineligible to apply or
unqualified to deserve a grant can be advanced as an appropriate "eligible recipient."

• To be "eligible," the nonprofit can be funded only by "public or charitable contributions." It
cannot be funded, therefore, by the private sector to any degree. Section 134 clearly calls for
the "eligible recipient" to partner with the private sector as opposed to being a subsidiary,
affiliate, or entity in any way supported by the private sector. To comply with this provision,
eligible recipients should explain to EPA how they are currently funded. If they claim to rely on
"charitable contributions," then they must also prove their status as 501(c)(3) certified
charitable organizations. Governance and reporting must comply with the regulations
concerning such status.

• A nonprofit seeking to be deemed "eligible" must explain to EPA how its governance, reporting
and auditing practices and processes will enable it to "invest[s] in or finance[s] projects alone or
in conjunction with other investors." EPA should interpret the word "projects" to mean
"qualified projects." Governance, reporting, and auditing suitable, for example, to small
business lending in general will not necessarily serve the carefully defined purposes of Section
134.

• Charge Question ll.a.ii: What eligible entities and/or indirect recipients would best enable
funds to reach disadvantaged communities? What are their challenges and opportunities and
how can EPA maximize the use of these channels?

A viable national green bank can not only sustain but actually multiply the initial one-time capitalization
under GA and LIDC Fund grants many times over during the years and decades required to avoid or
reduce GHG emissions and other forms of air pollution at scale.

Given the magnitude of the challenge, it is essential that to ensure scale, scope, and cost-reducing
efficiency, it is best to fully capitalize a national green bank. By contrast, making multiple grants to
smaller entities will inevitably reduce the total amount of investment needed to redress environmental
injustice and emissions and air pollution reduction.


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A purpose-built national green bank is ideal for full capitalization because its board, management, and
skill sets will be focused on the mission of Section 134 as opposed to some other objective. Changing the
direction and capability of an existing institution is one of the most difficult of all organizational
challenges. Instead of hoping for such a transformation by an applicant seeking to be an "eligible
recipient/' EPA would be far more likely to achieve the goals of Section 134 by requiring a fully
capitalized national green bank to support additional green investing by existing nonprofits that can add
to their other objectives a component of investing in "qualified projects." To that end, eligible recipients
should be required to show how grants, technical support, and other assistance can enable existing
nonprofits to enter into green investing.

Execution, Reporting, and Accountability

• Charge Question III.a - Given the tight timeline for implementation of the funds, what are key
steps that EPA could take in the short- (next 180 days), medium- (next two years before funds
expire in 2024), and long-term (beyond 2024)?

EPA has correctly identified the need to "reduce burdens on applicants, grantees, and/or subrecipients."
Eligible recipients should be required to identify such burdens and show how they will reduce them.
They include at least the following measures that any applicant should be required to address. First, it
should show how it will bear to the maximum degree feasible the costs to comply with necessary data-
gathering, audits, and other monitoring of performance. Second, to support indirect investing, it should
engage in efforts on national, regional, and local levels to increase efficiencies and lower costs for supply
chains of "qualified projects." Third, it should address the myriad impediments to financing and
deployment in energy markets, such as the soft costs of permitting and financing. EPA should require
eligible recipients to explain in detail their plans for reducing all these "burdens."

A national green bank should be able to satisfy the most stringent of EPA monitoring and reporting
requirements, not only as to its own direct investment but also on behalf of all members of the network
of indirect lenders to which it has extended funding and technical support. Imposing that burden on
each of the members of this network directly would multiply overhead costs. It would open the door to
divergent methods of accounting, measuring, and reporting, which in turn would cause a lack of clarity
and the inability to respond quickly to market changes. Any applicant that proposes to decentralize such
systems should be required to explain how it can avoid multiplying the costs of such activities.

Second, EPA should request that any eligible recipients explain how they would negotiate with original
equipment manufacturers and distributors for the lowest unit cost supply contracts, timely delivery, and
other supply chain efficiencies.

Third, product adoption and project formation have in the past occurred too slowly given the urgency of
addressing both climate change and the greenhouse gas and pollution reduction in low-income and
disadvantaged communities, namely, emissions and pollution reduction and investment in low-income
and disadvantaged "low-income and disadvantaged communities." Project implementation delay is a
burden that reduces leverage in all its dimensions and contributes to increased social and environmental
damage. Eligible recipients therefore should be asked how they would expedite product marketing and


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adoption and project formation without incurring inappropriate risks or engendering possible waste,
fraud, and abuse of funds.

In connection with all three activities, EPA should require eligible recipients to show how "technical
assistance" for indirect investors will reduce burdens. It is critical that an "eligible recipient" not foster a
network of indirect investors that are burdened by redundant, proliferating expenses among all
members.

In addition, EPA should adopt a term and condition for any grant award made under the GHGRF that
provides grant recipients with the same flexibilities regarding use of Program Income that are provided
to recipients of EPA funding for revolving loan fund programs contained in 2 C.F.R. § 1500.8(d).

•	Charge Question lll.b - What types of requirements could EPA establish to ensure the
responsible implementation and oversight of the funding?

-AND-

•	Charge Question lll.c - What mechanisms could eligible recipients adopt, including
governance as well as other mechanisms, to ensure that their applications and subsequent
implementation efforts ensure: (1) accountability to low-income and disadvantaged
communities; (2) greenhouse gas emission reductions; and (3) the leveraging and recycling of
the grants?

The EPA has rightly identified governance as critical to determining whether an applicant is an "eligible
recipient" and, if it is, whether its application is meritorious. Governance must be substantively
established as opposed to being merely a matter of form.

Section 134 excludes any for-profit, deposit-taking, or not-for-profit entities from the scope of "eligible
recipient." In order to give full meaning to the Congressional intent, EPA should also bar such excluded
entities from creating mere paperwork fronts of nonprofits that are created to pass funds through to the
excluded entities.

The "Use of Funds" strictures of Section 134 require a unique set of skills and experiences for the board,
advisory boards, and management teams. The EPA should require eligible recipients to explain in detail
how the use of the funds, national scope, the mandate of directly and indirectly investing, the
imperative of addressing "low-income and disadvantaged communities," and the narrow focus of
"qualified projects" all will be reflected in its detailed operating plan. An applicant that has historically
pursued investing for other purposes, no matter how worthy, should be obliged to explain how it
proposes to meet the obligations that the GHGRF imposes on any "eligible recipient."

EPA should require any applicant to demonstrate in its "governance structures" and its "reporting"
compliance with diversity goals in the dimensions of race, ethnicity, national origin, gender, regional
location, partisan affiliation, and skill set, at a minimum.

Congress wanted to guarantee, and the EPA should confirm, that the applicant for direct receipt of a
GHGRF grant is truly independent of government. The applicant's "governance structures" must
manifest such independence. For this reason, eligible recipients are not "eligible" if their regulation or


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governance indicates support by any other government funding program or implies a guarantee that
government would fulfill its obligations in the event of default. Independence from the federal
government assures that the national direct recipient is not backed by the full faith and credit of the
United States either explicitly or by an implication perceived in the market.

EPA should state the reporting and audit requirements that will be required of direct and indirect
recipients and call for eligible recipients to provide adequate detail demonstrating how they will comply
with the requirements. Eligible recipients should explain their safety and soundness policies for asset
management - including at least credit underwriting, portfolio diversification, loss reserve
requirements, internal controls, cybersecurity and other necessary functions suitable to managing
substantial capital.

EPA can incorporate reporting and auditing requirements established by some other federal agency or
department, but it should not delegate responsibility for implementing and overseeing operation of the
GHGRF to some other agency. No other agency has the experience or the continuing role of assuring
that the eligible recipients for funds are committed to combatting climate change and redressing
environmental injustice.

We urge that EPA either dictate its requirements or ask eligible recipients to propose how they would
address the following issues through reporting and auditing:

•	Showing how direct and indirect investing is confined to "qualified projects"

•	Providing for contractual relationships between the direct recipient and indirect recipients of
"funding and technical assistance"

•	Reporting the status of creating "new" indirect recipients

•	Reporting on standardization, securitization, and recycling

•	Reporting on partnerships with private sector investors

•	Demonstrating "operability" on an ongoing basis

•	Tracking "funding and technical assistance" to indirect recipients

•	Accounting for community assistance

•	Managing risk

•	Monitoring and reporting on reductions and avoidance of "greenhouse gas emissions and other
forms of air pollution" through both direct and indirect investing

•	Reporting on overhead, including compensation and benefits for employees

•	Assessing performance against objectives for "rapid deployment of low- and zero-emission
products, technologies and services"

•	Reporting on job creation, health benefits, training results, and other benefits for "low-income
and disadvantaged communities"

•	Producing beneficial impact on wages


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• Allowing for changes in strategy and tactics as circumstances change • Ensuring mitigation of
conflicts of interest


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County Building	Chairman

118 N. Clark Street	jdHRSSSflrak	Forest Preserve District

Room 567	Contract Compliance Committee

dorina^mUkr@cookcountyil.gov	XjlB8k&	Contract Compliance Committee

Vice-Chairman

District Office	Veterans Committee

Oak Forest, IL 60452	Donna Miller	Vice-Chairman

Tel: 312-603-3789	PrwiviTCSTnMPi? - A™ Dtctdtpt	Workforce, Housing, and Community

COMMISSIONER - D UISTRICT	Development Committee

Cook County Board of Commissioners

December 2, 2022

Dear Members of the Environmental Financial Advisor} Board,

As a Commissioner of the second largest county in the United States, and a strong advocate for
environmental justice initiatives, I encourage you to ensure that funding from the Infrastructure and
Investment Jobs Act (IIJA) and the Inflation Reduction Act (IRA), the most significant legislation in U.S.
history to tackle the climate crisis and strengthen American energy security, including but not limited to
the Greenhouse Gas Reduction Fund be earmarked to disadvantaged communities predicated on place based
need rather than formula funding to make certain these communities are prioritized. Additionally, it is
important to prioritize grant dollars for pre-development projects such as storm water management, solar
power projects and other climate resilient infrastructure investments that develop projects in an integrated
way.

This November (2022), the Cook County Board of Commissioners unanimously approved a resolution I
introduced (see addendum) to create a Cook County Justice40 Infrastructure Fund Initiative, which affirms
the County's commitment to furthering the principles of the federal Justice40 Initiative and seeking all
available resources to do so by directing Cook County to advance health equity and climate justice in
alignment with Justice40 by applying for federal grants made available by the aforementioned legislation
to deliver at least 40 percent of the overall benefits from such investments m climate and clean energy to
disadvantaged communities. Also, the legislation directs the County to adhere to procurement policies that
regulate equitable participation of minority and women business enterprises in the execution of grant-
related projects and requires a quarterly report from the Budget Director on grants received.

This legislation is in line with the County's Policy Roadmap, which seeks to support healthy, resilient
communities that thrive economically, socially, and environmentally and helps inform funding proposals
by working and investing in environmental justice and sustainability by supporting projects spanning from
community solar to comprehensive transit planning to water infrastructure, in addition to increasing access
to electric vehicle charging stations throughout Cook County.

Thank you for your attention to this matter. Please do not hesitate to contact me if you have any questions.
Sincerely,



Donna Miller

Cook County Commissioner, 6th District

PRINTED ON RECYCLED PAPER


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Board of Commissioners of Cook
County

Legislation Details (With Text)

118 North Clark Street
Chicago, IL

File #:

22-3910

Version: 2 Name:

JUSTICE40 INFRASTRUCTURE FUND

Type:

Resolution

Status:

Committee Reports
Finance Committee

File created: 6/9/2022
On agenda: 6/16/2022

File created:

In control:

Final action: 11/17/2022

Title:

PROPOSED SUBSTITUTE RESOLUTION to FILE #22-3910

COOK COUNTY JUSTICE40 INFRASTRUCTURE FUND INITIATIVE

WHEREAS, infrastructure systems in the United States are in a period of significant disrepair and are
increasingly vulnerable due to climate change; and aging infrastructure, new technologies, increasing
complexity, and increasing incidents of severe weather due to climate change pose new challenges to
the resilience of those infrastructure systems; and

WHEREAS, the climate resilience challenge is most severe in disadvantaged communities which are
hurt "worst and first" by flooding, extreme heat, extreme cold, and other results of climate change, and
these disparities are the result of governmental policies that deliberately institutionalized racial
disparities in financing, funding, and delivery of services; and

WHEREAS, to build an equitable climate-resilient future for Cook County, reparative climate resilient
infrastructure investments are necessary to close the infrastructure gap that has resulted from past
policies, and to enable communities that have been subject to disinvestment, underinvestment, and
marginalization to fully participate in and benefit from such development; and

WHEREAS, failing to make such reparative investments would perpetuate racial disparities by putting
new money into old systems that were designed to maintain inequitable outcomes; and

WHEREAS, reparative climate resilient infrastructure increases the capacity of communities to
respond to and recover from the impacts of climate change, and may include renewable energy,
energy storage, residential and commercial building energy efficiency, green infrastructure to mitigate
and manage stormwater and heat islands, EV charging infrastructure, and other built infrastructure;
and

WHEREAS, experts have determined that predevelopment funding at the local and project levels is
the critical gap in accelerating efforts of the Federal Government to support climate-resilient
infrastructure systems and regional economies, and to create a steady stream of "shovel worthy" and
well-maintained community projects; and

WHEREAS, Cook County has been a leader in addressing historic and continued disinvestment and
inequities that have negatively impacted Black, Latinx and other marginalized residents by advancing
equity for all residents in Cook County through policies and investments; and

WHEREAS, the foundation for this approach was laid in the Cook County Policy Roadmap, which has
guided policy and investment priorities for the county budget, the Equity Fund, CARES Act funding,
and American Rescue Plan Funding (ARPA); and

WHEREAS, the Cook County Equity Fund Taskforce supports Cook County's work to intentionally re-
align government policies, practices, and resource allocation to advance racial equity and ensure all
Cook County residents can live healthy, prosperous lives; and

WHEREAS, the County's Policy Roadmap, Sustainable Communities Pillar, seeks to support healthy,
resilient communities that thrive economically, socially, and environmentally and helps inform funding

Board of Commissioners of Cook County

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File#: 22-3910, Version: 2

proposals for the Equity Fund and ARPA including by working and investing in environmental justice
and sustainability by supporting projects spanning from community solar to comprehensive transit
planning; and

WHEREAS, the Smart Communities Pillar seeks to provide an innovative infrastructure that will
change how we live, work, and connect through investments in transportation and water
infrastructure, in addition to increasing access to electric vehicle charging stations throughout Cook
County, focusing on where there are currently large gaps in service areas, primarily in the south and
west suburbs, and investing in digital equity; and

WHEREAS, President Biden made historic commitments to advance environmental justice and spur
economic opportunity for disadvantaged communities by establishing the Justice40 Initiative within his
first weeks in office; and

WHEREAS, the Justice40 Initiative is a whole-of-government effort to ensure that Federal agencies
work with states and local communities to make good on President Biden's promise to deliver at least
40 percent of the overall benefits from Federal investments in climate and clean energy to
disadvantaged communities; and

WHEREAS, the Infrastructure and Investment Jobs Act (IIJA) created a funding source to advance
environmental justice, and spur economic opportunity by investing in reparative climate resilient
infrastructure; and

WHEREAS, the Inflation Reduction Act (IRA), the most significant legislation in U.S. history to tackle
the climate crisis and strengthen American energy security, created an additional funding source that
counties can apply for directly including but not limited to a $27 billion Greenhouse Gas Reduction
Fund at EPA, which establishes two different types of grant programs. The first is a $7 billion
competitive grant program for state and local governments and other eligible entities, to provide
financial and technical assistance to enable low-income and disadvantaged communities to deploy or
benefit from zero-emission technologies. The second is a $19.97 billion competitive grant program for
state and local governments, among other eligible entities, to either: Provide financial assistance to
qualified projects and recycle repayments from fees, interest and repaid loans to maintain the financial
assistance program; OR provide financial and technical assistance to create or support public or
nonprofit entities which would then provide financial assistance to qualified projects; and

WHEREAS, qualified projects under this second grant program include those that reduce greenhouse
gas emissions in partnership with the private sector or through community-led efforts. Additionally, $8
billion of the $19.97 billion is reserved for projects in low-income and disadvantaged communities; and

WHEREAS, the Environmental Protection Agency (EPA) must begin awarding grants within six
months of the IRA's enactment; and

WHEREAS, counties can submit funding requests directly to the EPA for both programs;
NOW THEREFORE, BE IT RESOLVED, by the Cook County Board of Commissioners, that Cook
County is committed to advancing health equity and climate justice for disadvantaged communities
through the Justice40 Initiative; and

BE IT FURTHER RESOLVED, that Cook County is committed to applying for grants from the IIJA and
IRA for the purpose of advancing the principles of the Justice40 Initiative within Cook County; and

BE IT FURTHER RESOLVED, that upon the award of any IIJA or IRA grants that incorporate the
Justice40 principles, the County shall adhere to the provisions in the Cook County Procurement Code
(Chapter 34, Article IV) related to the equitable participation of M/WBEs; and

BE IT FURTHER RESOLVED, that the Budget Director shall report on IIJA or IRA grants received by
the County and on ARPA programs that incorporate the Justice40 principles on a quarterly basis.

Sponsors:	DONNA MILLER. BRIDGET DEGNEN, BRANDON JOHNSON, LARRY SUFFREDIN, FRANK J.

AGUILAR, ALMA E. ANAYA, LUIS ARROYO JR, SCOTT R. BRITTON, JOHN P. DALEY, DENNIS

Board of Commissioners of Cook County

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File#: 22-3910, Version: 2

DEER, BRIDGET GAINER, BILL LOWRY, KEVIN B. MORRISON, PETER N. SILVESTRI, DEBORAH
SIMS

Indexes:

Code sections:
Attachments:

Date

Ver.

Action By

Action

Result

11/17/2022

2

Board of Commissioners

approve as substituted

Pass

11/16/2022

2

Finance Committee

recommend for approval as substituted

Pass

10/20/2022

2

Board of Commissioners

defer

Pass

10/19/2022

2

Finance Committee

recommend for approval as substituted

Pass

10/19/2022

1

Finance Committee

accept as substituted

Pass

6/16/2022

1

Board of Commissioners

refer

Pass

PROPOSED SUBSTITUTE RESOLUTION to FILE #22-3910

COOK COUNTY JUSTICE40 INFRASTRUCTURE FUND INITIATIVE

WHEREAS, infrastructure systems in the United States are in a period of significant disrepair and are increasingly
vulnerable due to climate change; and aging infrastructure, new technologies, increasing complexity, and increasing
incidents of severe weather due to climate change pose new challenges to the resilience of those infrastructure
systems; and

WHEREAS, the climate resilience challenge is most severe in disadvantaged communities which are hurt "worst
and first" by flooding, extreme heat, extreme cold, and other results of climate change, and these disparities are the
result of governmental policies that deliberately institutionalized racial disparities in financing, funding, and
delivery of services; and

WHEREAS, to build an equitable climate-resilient future for Cook County, reparative climate resilient
infrastructure investments are necessary to close the infrastructure gap that has resulted from past policies, and to
enable communities that have been subject to disinvestment, underinvestment, and marginalization to fully
participate in and benefit from such development; and

WHEREAS, failing to make such reparative investments would perpetuate racial disparities by putting new money
into old systems that were designed to maintain inequitable outcomes; and

WHEREAS, reparative climate resilient infrastructure increases the capacity of communities to respond to and
recover from the impacts of climate change, and may include renewable energy, energy storage, residential and
commercial building energy efficiency, green infrastructure to mitigate and manage stormwater and heat islands, EV
charging infrastructure, and other built infrastructure; and

WHEREAS, experts have determined that predevelopment funding at the local and project levels is the critical gap
in accelerating efforts of the Federal Government to support climate-resilient infrastructure systems and regional
economies, and to create a steady stream of "shovel worthy" and well-maintained community projects; and

WHEREAS, Cook County has been a leader in addressing historic and continued disinvestment and inequities that
have negatively impacted Black, Latinx and other marginalized residents by advancing equity for all residents in
Cook County through policies and investments; and

Board of Commissioners of Cook County

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File#: 22-3910, Version: 2

WHEREAS, the foundation for this approach was laid in the Cook County Policy Roadmap, which has guided
policy and investment priorities for the county budget, the Equity Fund, CARES Act funding, and American Rescue
Plan Funding (ARPA); and

WHEREAS, the Cook County Equity Fund Taskforce supports Cook County's work to intentionally re-align
government policies, practices, and resource allocation to advance racial equity and ensure all Cook County
residents can live healthy, prosperous lives; and

WHEREAS, the County's Policy Roadmap, Sustainable Communities Pillar, seeks to support healthy, resilient
communities that thrive economically, socially, and environmentally and helps inform funding proposals for the
Equity Fund and ARPA including by working and investing in environmental justice and sustainability by
supporting projects spanning from community solar to comprehensive transit planning; and

WHEREAS, the Smart Communities Pillar seeks to provide an innovative infrastructure that will change how we
live, work, and connect through investments in transportation and water infrastructure, in addition to increasing
access to electric vehicle charging stations throughout Cook County, focusing on where there are currently large
gaps in service areas, primarily in the south and west suburbs, and investing in digital equity; and

WHEREAS, President Biden made historic commitments to advance environmental justice and spur economic
opportunity for disadvantaged communities by establishing the Justice40 Initiative within his first weeks in office;
and

WHEREAS, the Justice40 Initiative is a whole-of-government effort to ensure that Federal agencies work with
states and local communities to make good on President Biden's promise to deliver at least 40 percent of the overall
benefits from Federal investments in climate and clean energy to disadvantaged communities; and

WHEREAS, the Infrastructure and Investment Jobs Act (IIJA) created a funding source to advance environmental
justice, and spur economic opportunity by investing in reparative climate resilient infrastructure; and

WHEREAS, the Inflation Reduction Act (IRA), the most significant legislation in U.S. history to tackle the climate
crisis and strengthen American energy security, created an additional funding source that counties can apply for
directly including but not limited to a $27 billion Greenhouse Gas Reduction Fund at EPA, which establishes two
different types of grant programs. The first is a $7 billion competitive grant program for state and local governments
and other eligible entities, to provide financial and technical assistance to enable low-income and disadvantaged
communities to deploy or benefit from zero-emission technologies. The second is a $19.97 billion competitive grant
program for state and local governments, among other eligible entities, to either: Provide financial assistance to
qualified projects and recycle repayments from fees, interest and repaid loans to maintain the financial assistance
program; OR provide financial and technical assistance to create or support public or nonprofit entities which would
then provide financial assistance to qualified projects; and

WHEREAS, qualified projects under this second grant program include those that reduce greenhouse gas emissions
in partnership with the private sector or through community-led efforts. Additionally, $8 billion of the $19.97 billion
is reserved for projects in low-income and disadvantaged communities; and

WHEREAS, the Environmental Protection Agency (EPA) must begin awarding grants within six months of the
IRA's enactment; and

WHEREAS, counties can submit funding requests directly to the EPA for both programs;

NOW THEREFORE, BE IT RESOLVED, by the Cook County Board of Commissioners, that Cook County is
committed to advancing health equity and climate justice for disadvantaged communities through the Justice40

Board of Commissioners of Cook County

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File#: 22-3910, Version: 2

Initiative; and

BE IT FURTHER RESOLVED, that Cook County is committed to applying for grants from the IIJA and IRA for
the purpose of advancing the principles of the Justice40 Initiative within Cook County; and

BE IT FURTHER RESOLVED, that upon the award of any IIJA or IRA grants that incorporate the Justice40
principles, the County shall adhere to the provisions in the Cook County Procurement Code (Chapter 34, Article IV)
related to the equitable participation of M/WBEs; and

BE IT FURTHER RESOLVED, that the Budget Director shall report on IIJA or IRA grants received by the
County and on ARPA programs that incorporate the Justice40 principles on a quarterly basis.

Board of Commissioners of Cook County

Page 5 of 5

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Expanding the range of opportunities for all by
developing, managing and promoting quality
affordable housing and diverse communities.

¦ 11 ¦ ¦

EAH HOUSING

A roof is just the beginning

December 5th, 20222

Michael S. Regan
Administrator

U.S. Environmental Protection Agency
Electronically submitted via www.regulations.gov

Re: Request for Information - Greenhouse Gas Reduction Fund; Docket ID No. EPA-HQ-OA-2022-0859
Dear Administrator Regan,

EAH Housing appreciates the opportunity to provide comments on the Greenhouse Gas Reduction Fund
(GGRF) program design and implementation.

At EAH Housing our commitment to affordable housing has allowed us to grow into one of the largest
and most respected nonprofit housing development and management organizations in the western
United States. As part of the Building Sustainable Communities Initiative, our staff in the Real Estate
Management and Operations is implementing our Green Operations and Maintenance Best Practices
Manual. This manual is a comprehensive approach to green management that can be shared and
modeled with other nonprofits, property owners and building managers.

We know that environmentally responsible practices are wise investments that bring value to our
properties and to our communities—creating good places to live, work, play, study and raise families-
Green community workshop with Hawai'i Energy today and for the future.

EAH Housing welcomes the GGRF as an historic opportunity to further accelerate clean energy
investments across the United States, and particularly welcomes the Fund's emphasis on low-income
and disadvantaged communities. This directly aligns with EAH Housing commitment to supporting these
communities.

With respect to the design and implementation of the GGRF, we encourage the Environmental
Protection Agency (EPA) to consider the following priorities:

Eligible Recipients:

We would ask that the EPA prioritize Community Development Financial Institutions (CDFIs) as the

primary capital deployment vehicle for the GGRF. We believe that CDFIs would be ideal stewards of
GGRF funding because of their long-standing track record of mission lending. There are more than 1,300
Treasury-certified CDFIs investing in all 50 states. Having developed the trust, deep familiarity and
connection with low-income and disadvantaged communities, CDFIs already have the infrastructure in
place to rapidly deploy funding that will accelerate decarbonization and effectuate the EPAs greenhouse
gas reduction goals.

CALIFORNIA 22 Pelican Way, San Rafael, CA 94901 | (415)258-1800 | CA Lie. 853495
HAWAII 1001 Bishop Street, #2880, Honolulu, HI 96813 | (808) 523-8826 | HI Lie. RB-16985

www.EAHHousing.org


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Eligible Projects:

We encourage the EPA to include funding that is targeted to affordable housing in the set of eligible
activities.

Decarbonizing housing stock is a critical piece of reducing greenhouse gas. Decarbonization is not just
about decreasing carbon emissions. It is also about energy and resource efficiency, improved health
through better indoor air quality, addressing inequities through reducing energy burdens and building
climate resiliency. Residential energy use produces roughly 20% of greenhouse gas emissions in the
United States. If U.S. residential buildings were a country, they would be the sixth-highest emitter of
greenhouse gases in the world. Historically, low-income and disadvantaged communities have been
disproportionately impacted. The GGRF provides a unique opportunity to center these communities by
lowering housing cost burdens, positioning them to take advantage of the innovations in the energy
sector, and creating safe and healthy indoor environments.

Definition of Low-Income and Disadvantaged Communities:

There exist several definitions for low-income and disadvantaged communities within current
Federal programs. For example, the CDFI Fund established definition of an eligible "Target Market"
as well as the New Markets Tax Credit program and existing HUD housing programs provide
guidance that meaningfully captures low-income and underserved communities. These definitions
include consideration of individual borrower characteristics as well as the communities where
borrowers and projects are located. Adopting these definitions would create standardization and
lower costs of compliance, as government program awardees already track and report their activity
based upon these definitions.

Structure of Funding:

It is critical that the GGRF funds be as flexible as possible to meet the needs of low-income individuals
living in disadvantaged communities and the front-line practitioners who serve them. Providing a mix of
grants, forgivable grants and equity-like investments will help ensure affordability for the end users.
Specifically, low- and moderate-income homebuyers cannot absorb any additional debt to cover the
increased costs related to green and sustainable materials and features. Further, existing multifamily
residential portfolios have already leveraged debt and cannot afford to pile on additional debt and
remain financially viable for owners and affordable to residents as the properties undergo green
retrofits. This challenge also extends to community facilities and community-serving retail uses that are
already leveraging as much hard debt as possible. All these projects need concessionary financing and
by allowing a flexible structure, these investments will ultimately determine how deeply projects can go
in terms of greenhouse gas reduction improvements while ensuring the equitable deployment of GGRF
funds.

CALIFORNIA 22 Pelican Way. San Rafael. CA 94901 | (415)258-1800 | CA Lie. 853495
HAWAII 1001 Bishop Street. #2880. Honolulu. HI 96813 | (808) 523-8826 | HI Lie. RB-16985

www.EAHHousing.org


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Thank you for the opportunity to provide comments and highlight our priorities in executing the GGRF.
We look forward to working with you to ensure the Greenhouse Gas Reduction Fund is a success.

Laura Hall, President and CEO
EAH Housing

Cc: Environmental Financial Advisory Board (EFAB) email to: efabgepa.gov

CALIFORNIA 22 Pelican Way. San Rafael. CA 94901 | (415)258-1800 | CA Lie. 853495
HAWAII 1001 Bishop Street. #2880. Honolulu. HI 96813 | (808) 523-8826 | HI Lie. RB-16985

www.EAHHousing.org

Sincerely,


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December 6, 2022

U.S. Environmental Protection Agency
Environmental Financial Advisory Board
1200 Pennsylvania Avenue, NW
Washington, DC 20460

RE: Greenhouse Gas Reduction Fund, Supplemental Recommendations on EFAB Charge
Questions

To the Environmental Financial Advisory Board,

We were pleased to provide input ahead of the December 15th EFAB meeting based on our
experience as a consortium of credit unions and CDFIs working together to design and
successfully implement financing solutions in different consumer product markets. As we have
had the opportunity to refine the mechanisms we believe could benefit low-income and
disadvantaged communities, we are providing additional information to EFAB for consideration.

To refresh, our consortium consists of independent operating credit unions from across the nation
with over one hundred billion dollars of assets. We have a history of collectively developing
products and implementing operations at a scale that achieves public trust, exceptional regulatory
performance, and accountability to provide credit and investment in local communities that
produce positive social impact.

The law charges EPA with creating a program that enables low and disadvantaged communities
to deploy or benefit from zero-emission technologies, specifically calling out distributed
technologies on residential rooftops. While many of the investments empowered by the GHGRF
will be targeted to industrial and commercial investments, to achieve the goals of the Fund, it
will be necessary to do retail-level financing of GHG-reducing projects within low-income and
disadvantaged communities. Our particular concern deals with balancing the need to incent
demand while avoiding layering additional debt on those who can least afford it.

Notwithstanding the many additional federal support programs authorized in the Inflation
Reduction Act and other federal laws, it is reasonable to anticipate many circumstances
(especially among low- or middle-income households) where there are little or no direct cost
savings for implementing clean energy technologies over the life of the loan. This may be the
case even when accounting for the very low costs of capital that the EPA can unleash using a
loan guarantee or interest rate subsidy model. In these circumstances, it may be necessary for
EPA to include in the loan package additional ways to lower the cost of the loan through other
types of loan subsidies to incentivize these borrowers to make investments in the clean energy
projects covered under the loan program.

1703 Broadway / San Antonio, TX 78215 / 210.488.4068 / ecority.org


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2

Ecority is providing as an Addendum (attached hereto) a white paper describing one approach
that we encourage EFAB to include among the options available to EPA to address cost concerns
for low-income and disadvantaged communities. Under this model, EPA backstops the cost of
improvements to protect low-income participants from incurring negative financial benefits,
especially the pernicious effects of increasing unproductive debt burdens. By providing an
assurance of cost reductions relative to the status quo, EPA can more likely stimulate demand.

EPA will also need to address the amount of subsidy to distribute under the GHGR Fund
program for temporal Fund deployment objectives. Two important juxtaposed tradeoff factors
for EPA's consideration should include the following: (1) the targeted time frame for
infrastructure purchases and loan production to consumers in low-income and disadvantaged
communities, and (2) the pace by which EPA deems it appropriate to deplete the GHGR Funds
to incent the implementation of these green projects in low-income and disadvantage
communities.

This backstop funding may be the critical determinant of whether GHG technologies are widely
adopted at a rapid pace in low-income and disadvantaged communities. If project advocates can
provide guarantees to households (borrowers) that actual savings will exceed their costs of
financing such an investment, participants will be more willing to engage in the program.

Thank you in advance for the opportunity to submit this supplemental information. If you have
any questions, please feel free to contact Rob Talley at rob@talleyandassociatesinc.com or (202)
460-9114

1703 Broadway / San Antonio, TX 78215 / 210.488.4068 / ecority.org


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3

ADDENDUM

Overview of a Proposed Structure to Create a
Savings Subsidy Backstop Using Grant Allocations from the GHGR Fund

While an abundant supply of credit can be created by providing financial support to install green
technologies and products through the Greenhouse Gas Reduction (GHGR) Fund, adding more
debt to a financially struggling household must be considered carefully. As such, we believe one
critically important objective in designing an effective loan program for households in low-
income and disadvantaged communities is to create the appropriate structure to incentivize those
households to implement projects in a financially responsible manner.

To a household, such an incentivization structure can be achieved with a guarantee that the cost
savings from installing green technologies and products will be greater than its all-in cost,
including financing. Absent such certainty, adding more debt to a financially struggling
household is not only irresponsible but also risks running afoul of the myriad of consumer
protection laws.

One effective approach for achieving these important objectives is to design a loan program that
is based on the following attributes:

1.	Financing for any such system is available at the lowest possible rates, with payment
obligations in all periods remaining below what the low-income or disadvantaged
household will realize in actual savings from the project.

2.	Institutions marketing such solutions (system plus financing) are doing so in full
compliance with the myriad of consumer protections.

3.	Cash flow shortfall protections must exist for the entire duration that any loan amount is
due and outstanding.

4.	Solutions providers should refrain from artificially extending the maturity dates of
financing terms to promote low monthly payments that keep households perpetually
indebted. In addition, financing durations should not be materially mismatched from the
life of the systems being installed.

Project-Specific Economic Considerations

Based on this design approach, we propose allocating a portion of the GHGR Fund to create a
Savings Subsidy Backstop. To illustrate how such a mechanism would work, assume the
following project attributes.

1703 Broadway / San Antonio, TX 78215 / 210.488.4068 / ecority.org


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4

Project Investment
(Amount is assumed to be net of all
rebates, tax incentives, etc.)

$10,000

Interest Rate of Loan

5%

Term / Payment Frequency

10 years / Monthly

Monthly Payment / Annual Cost

$106/$1,273

Total Payments Over Life of Loan

$12,728

At its most basic level, such a project plays out in three scenarios:

Scenario 1: The monthly cost savings resulting from the project exceeds the monthly loan
payment. In this scenario, no subsidy is required, and savings from the project are available to
the homeowner.

Scenario 2: Loan payment obligations exceed cost savings. A subsidy structure would cover
the amount of any shortfall in payments. Since this scenario could occur for numerous reasons
over the life of a loan, a portion of the GHGR Fund would need to be placed in reserve to
accommodate such a shortfall to support the monthly payment obligations on the debt (Savings
Subsidy Backstop). In the alternative, EPA could elect to authorize an incentive payment to
subsidize a portion of the cost to deploy green technologies and products, thereby lowering the
total cost of the loan.

Scenario 3: Loan payments exceed savings at inception, while cost savings exceed loan
payments over the entire term of the loan. In this scenario, the amounts set aside for the
Savings Subsidy Backstop could eventually be released and recycled.

Project sponsors and accompanying lenders must consider several other factors in designing any
such program. These include:

•	Homeowners may change their behavior of systems usage if their costs are fixed/capped
and additional usage is deemed to be "free."

•	Cost savings assume sustained availability of the system. Equipment failures and other
drivers of non-availability will need to be considered in the life of loan warranty
programs.

•	Changes in homeownership during the life of a project loan introduce a myriad of issues
on property transfer.

1703 Broadway / San Antonio, TX 78215 / 210.488.4068 / ecority.org


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5

Taken altogether, addressing such considerations will require localized knowledge, financial
counseling, and administrative capability in loan origination and servicing to achieve positive
outcomes for all constituent parties.

Scaling Deployment

To understand the implications of the Savings Subsidy Backstop at scale, the following chart
depicts a scenario for each $100 million of GHGR Fund allocated to create such a backstop
reserve:

$100MM Allocation of GHGR Fund for Subsidy /

$10,000 Project

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20,000
40,000
60,000
80,000
100,000

10%

% of Project Cost Subsidized
20%	30%	40%

50%

#	of Subsidized Projects {10 year,5%)

#	of Subsidized Projects {10 year, 10%)

Project Subsidy (10 year maturity, 5% Interest}

¦Project Subsidy {10 year, 10% interest)

$10,000
$8,000
$6,000
$4,000

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6

Over time, any excess funds held in reserve would be released and recycled toward supporting
additional green projects. A portfolio-based approach to managing reserves from the Savings
Subsidy Backstop is also the best method to mitigate risk from individual households, specific
regions, or types of projects.

Also depicted are the number of projects that each $100 million would support under various
subsidy levels. For instance, if the subsidy requirement were 10 percent, approximately 78,500
projects could be supported through the Savings Subsidy Backstop. If the subsidy requirement
were 50 percent, the number of supportable projects covered under the Savings Subsidy
Backstop would correspondingly be reduced to 15,700 projects or an 80 percent reduction in
program size. Under these assumptions, the Savings Subsidy Backstop requirement is linear.
Said differently, if the subsidy requirement were 50 percent, then the support of the same 78,500
projects would require an allocation of $500 million of the GHGR Fund, or a 500 percent
increase in the capital requirement.

Another relevant factor for evaluating the effectiveness of the Savings Subsidy Backstop is the
interest rates applicable to these green projects. As illustrated in the above example, in the case
of a $100 million allocation at a 10 percent subsidy requirement combined with a 10percent
interest rate (as compared to a 5 percent interest rate) would reduce the number of actionable
projects by 15,000, or 19 percent reduction due to higher interest rates.

If $5 billion from the $7 billion tranche (for competitive grants to enable low-income and
disadvantaged communities) were allocated under this methodology, a 10 percent subsidy level
would support a little over 3.9 million households. By contrast, if the initial subsidy reserve
requirement were 50 percent, only 785,000 household projects could be launched.

Summary

Low-income households have little to no means to make investments to reduce greenhouse gas
emissions unless the investments are fully financed. Furthermore, to avoid putting households in
a worse financial condition, the financial savings from the project must exceed the debt service
payments and generate a material reduction in household expenses.

Situations that potentially worsen households' financial condition risk running afoul of a myriad
of consumer protection laws. Equally important, the reputational consequences of such
outcomes to providers, financial institutions, and, ultimately, the EPA should give pause to such
undertakings.

Done correctly, however, the Savings Subsidy Backstop maximizes GHGR Fund leverage by
lowering default risk, enabling capital to be sourced at the lowest possible rates. Tangible
economic benefits will be realized by households while accomplishing the primary objective of
reducing GHG emissions.

Finally, it should be noted that the Clean Air Act provides EPA with broad discretion to
determine the amount and pace of the financial subsidies provided to low-income and
disadvantaged communities. This discretion would apply to funding provided under sections
134(a)(1) and (a)(3) for a total of $15 billion of the $27 billion authorized in the GHGR Fund.

1703 Broadway / San Antonio, TX 78215 / 210.488.4068 / Gcority.org


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7

Based on this authority, EPA has the authority to allow eligible entities to make an incentive
payment that would subsidize a portion of the cost to deploy the green technologies and products
and thereby lower the cost of the loan. Furthermore, EPA could elect (as an alternative to the
Savings Subsidy Backstop) to provide incentive payments for those low-income and
disadvantaged households in greatest need of the subsidy to incentivize further the rapid
deployment of green technologies and products in these communities.

1703 Broadway / San Antonio, TX 78215 / 210.488.4068 / ecority.org


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EDEN

HOUSING

December 5, 2022

Michael S. Regan
Administrator

U.S. Environmental Protection Agency
Electronically submitted via wvwv.regulations.gov

Re: Request for Information - Greenhouse Gas Reduction Fund; Docket ID No.
E PA- H Q-OA-2022-0859

Dear Administrator Regan,

On behalf of Eden Housing, I appreciate the opportunity to provide
comments on the design and implementation of the Greenhouse Gas
Reduction Fund (GGRF) program. With new resources approved by Congress,
this program provides the U.S. Environmental Protection Agency (EPA) with a
unique opportunity to support zero-emission technologies and projects that
reduce or avoid greenhouse gas emissions impacting low-income and
disadvantaged communities.

To support this program's effectiveness, I urge you to ensure that affordable
housing, where millions of the nation's most disadvantaged households live,
remains a priority use for these funds. With this goal in mind, I also encourage
you to make Community Development Finance Institutions (CDFIs) eligible
to serve as the primary capital deployment vehicle for the GGRF.

Eden Housing is one of California's oldest non-profit housing developers, and
since our inception in 1968, Eden has partnered with communities across the
state to develop, acquire, and preserve more than 10,000 affordable
apartments — providing homes to 22,000 low-income Californians.

Eden recently signed on to the U.S. Department of Energy's Better Climate
Challenge, a national leadership initiative calling for reduced greenhouse gas
emissions, job creation and partners in promoting healthy, safe and thriving
communities. Better Climate Challenge Partners commit to a 50% or more
reduction in greenhouse gas emissions across their building portfolio over the
next 10 years, and Eden is already identifying how to make this a reality in our
properties.

22645 Grand Street | Hayward, CA 94541 | Tel: 510-582-1460 | edenhousing.org

fat /L. Broker License No. 872400 'NeigMoiV&b'

SSJSSS	CHARTERED MEMBER


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Eden welcomes the GGRF as an historic opportunity to further accelerate
clean energy investments across the United States, and particularly
welcomes the Fund's emphasis on low-income and disadvantaged
communities.

With respect to the design and implementation of the GGRF, we encourage
the Environmental Protection Agency (EPA) to consider the following
priorities:

Eligible Recipients;

We would ask that the EPA prioritize Community Development Financial
Institutions (CDFIs) as the primary capital deployment vehicle for the
GGRF. We believe that CDFIs would be ideal stewards of GGRF funding
because of their long-standing track record of mission lending. There are
more than 1,300 Treasury-certified CDFIs investing in all 50 states. Having
developed the trust, deep familiarity and connection with low-income and
disadvantaged communities, CDFIs already have the infrastructure in place
to rapidly deploy funding that will accelerate decarbonization and effectuate
the EPAs greenhouse gas reduction goals.

Eligible Projects;

We encourage the EPA to include funding that is targeted to affordable
housing in the set of eligible activities.

Decarbonizing housing stock is a critical piece of reducing greenhouse gas.
Decarbonization is not just about decreasing carbon emissions. It is also
about energy and resource efficiency, improved health through better indoor
air quality, addressing inequities through reducing energy burdens and
building climate resiliency. The GGRF provides a unique opportunity to center
low-income and disadvantaged communities in these efforts, by lowering
housing cost burdens, positioning them to take advantage of the innovations
in the energy sector, and creating safe and healthy indoor environments.

Definition of Low-Income and Disadvantaged Communities;

There exist several definitions for low-income and disadvantaged
communities within current Federal programs. For example, the CDFI Fund
established definition of an eligible "Target Market" as well as the New

Markets Tax Credit program and existing HUD housing programs provide


-------
guidance that meaningfully captures low-income and underserved
communities. These definitions include consideration of individual borrower
characteristics as well as the communities where borrowers and projects are
located. Adopting these definitions would create standardization and lower
costs of compliance, as government program awardees already track and
report their activity based upon these definitions.

Structure of Funding;

It is critical that the CCRF funds be as flexible as possible to meet the
needs of low-income individuals living in disadvantaged communities and

the front-line practitioners who serve them. Providing a mix of grants,
forgivable grants and equity-like investments will help ensure affordability for
the end users. Specifically, low- and moderate-income homebuyers cannot
absorb any additional debt to cover the increased costs related to green and
sustainable materials and features. Further, existing multifamily residential
portfolios have already leveraged debt and cannot afford to pile on additional
debt and remain financially viable for owners and affordable to residents as
the properties undergo green retrofits. This challenge also extends to
community facilities and community-serving retail uses that are already
leveraging as much hard debt as possible. All these projects need
concessionary financing and by allowing a flexible structure, these
investments will ultimately determine how deeply projects can go in terms of
greenhouse gas reduction improvements while ensuring the equitable
deployment of GGRF funds.

Thankyou for the opportunity to provide comments and highlight our
priorities in executing the GGRF. We look forward to working with you to
ensure the Greenhouse Gas Reduction Fund is a success. Please let us know if
Eden can be of any assistance. You can contact me at:

I mandolini@eden housing.org.

Sincerely,

Linda Mandolini
President
Eden Housing

Cc: Environmental Financial Advisory Board (EFAB)


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even i Ui

Investing In communities. Building possibilities.

December 5, 2022

Michael S. Regan
Administrator

U.S. Environmental Protection Agency
Electronically submitted via www.regulations.gov

Re: Request for Information - Greenhouse Gas Reduction Fund; Docket ID No. EPA-HQ-OA-2022-0859

Dear Administrator Regan,

Evernorth appreciates the opportunity to provide comments on the Greenhouse Gas Reduction Fund
(GGRF) program design and implementation.

Evernorth (EN) is a nonprofit organization that provides affordable housing and community investments
in Maine, New Hampshire, and Vermont. EN is deeply knowledgeable of local markets, has close
connections with local and regional organizations, and understands the policy and regulatory framework
guiding affordable housing and community development across northern New England.

With offices in Portland, ME and Burlington, VT, EN raises capital to invest and lend for affordable
housing, to strengthen our economy, and to improve our environment through energy efficiency. EN has
raised and deployed over $1B in equity capital for affordable housing and built more than 12,550 energy
efficient affordable homes and apartments for low- and moderate-income people across our region.

Evernorth operates EN Energy Services which seeks to maximize energy efficiency and optimize building
systems. Over the past 5 years, the work of EN Energy Services has saved $1.7M in lower energy costs
across 30 affordable housing properties.

Evernorth welcomes the GGRF as an historic opportunity to further accelerate clean energy investments
across the United States, and particularly welcomes the Fund's emphasis on low-income and
disadvantaged communities. This directly aligns with our commitment to supporting these
communities.

With respect to the design and implementation of the GGRF, we encourage the Environmental
Protection Agency (EPA) to consider the following priorities:

Eligible Recipients:

We would ask that the EPA prioritize Community Development Financial Institutions (CDFIs) as the

primary capital deployment vehicle for the GGRF. We believe that CDFIs or similar existing state

100 Bank Street, Suite 400, Burlington, VT 05401
Phone: 802.863,8424 Fax: 802,680.9034

120 Exchange Street, Suite 600, Portland, ME 04101
Phone: 207,772,8255 Fax: 207,772.8241

evemorthus.org


-------
evernorth

Investing in communities. Building possibilities.

community development financing entities would be ideal stewards of GGRF funding because of their
long-standing track record of mission lending.

Eligible Projects:

We encourage the EPA to include funding that is targeted to affordable housing in the set of eligible
activities.

Decarbonizing housing stock is a critical piece of reducing greenhouse gas. Decarbonization is not just
about decreasing carbon emissions. It is also about energy and resource efficiency, improved health
through better indoor air quality, addressing inequities through reducing energy burdens and building
climate resiliency. Residential energy use produces roughly 20% of greenhouse gas emissions in the
United States. If U.S. residential buildings were a country, they would be the sixth-highest emitter of
greenhouse gases in the world. Historically, low-income and disadvantaged communities have been
disproportionately impacted. The GGRF provides a unique opportunity to center these communities by
lowering housing cost burdens, positioning them to take advantage of the innovations in the energy
sector, and creating safe and healthy indoor environments.

Definition of Low-Income and Disadvantaged Communities:

Consider using a simple definition such as: Low-income means income, adjusted for family size, or not
more than:

(1)	For Metropolitan Areas, 80 percent of the area median family income; and

(2)	For non-Metropolitan Areas, the greater of:

(i)	80 percent of the area median family income; or

(ii)	80 percent of the statewide non-Metropolitan Area median family income

Other standard definitions for low-income and disadvantaged communities utilized in current Federal
programs like NMTC often don't translate well to rural areas. Each state has unique and specific
challenges related to historically disadvantaged groups and environmental impacts of climate change. In
rural communities costs related to heating, especially in areas utilizing unregulated fuels for heat,
transportation and high housing cost stress rural populations. While adopting standard definitions
would create lower costs of compliance and oversight, including flexibility for rural states to define these
areas will increase program impact and drive real results for low-income people.

Structure of Funding:

It is critical that the GGRF funds be as flexible as possible to meet the needs of low-income individuals
living in disadvantaged communities and the front-line practitioners who serve them. Providing a mix of
grants, forgivable grants and equity-like investments will help ensure affordability for the end users.
Specifically, low- and moderate-income homebuyers cannot absorb any additional debt to cover the
increased costs related to green and sustainable materials and features. Further, existing multifamily
residential portfolios have already leveraged debt and cannot afford to pile on additional debt and

100 Bank Street, Suite 400, Burlington, VT 05401
Phone: 802.863.8424 Fax: 802.660.9034

120 Exchange Street, Suite 600, Portland, ME 04101
Phone: 207.772.8255 Fax: 207.772.8241

evernorthus.org


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even i Ui

Investing In communities. Building possibilities.

remain financially viable for owners and affordable to residents as the properties undergo green
retrofits. This challenge also extends to community facilities and community-serving retail uses that are
already leveraging as much hard debt as possible. All these projects need concessionary financing and
by allowing a flexible structure, these investments will ultimately determine how deeply projects can go
in terms of greenhouse gas reduction improvements while ensuring the equitable deployment of GGRF
funds.

Thank you for the opportunity to provide comments and highlight our priorities in executing the GGRF.
We look forward to working with you to ensure the Greenhouse Gas Reduction Fund is a success.

Sincerely,

Nancv Owens

Cc: Environmental Financial Advisory Board (EFAB) - email to: efab@epa.gov

100 Bank Street, Suite 400, Burlington, VT 05401 120 Exchange Street, Suite 600, Portland, ME 04101

Phone: 802.863,8424 Fax: 802,660.9034 Phone: 207,772.8255 Fax: 207,772.8241

evemorthus.org


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FOUNDATION

COMMUNITIES

creating housing where
families succeed

3000 S IH 35, Ste 300
Austin, TX 78704

tel: 512-447-2026
fax: 512-447-0288

foundcom.org

Michael S. Regan
Administrator

U.S. Environmental Protection Agency
Electronically submitted via www.regulations.gov

December 1, 2022

Re: Request for Information - Greenhouse Gas Reduction Fund;

Docket ID No. EPA-HQ-OA-2022-0859

Dear Administrator Regan,

Foundation Communities (FC) appreciates the opportunity to provide comments on the
Greenhouse Gas Reduction Fund (GGRF) program design and implementation.

FC welcomes the GGRF as a historic opportunity to further accelerate clean energy
investments across the United States, and particularly welcomes the Fund's emphasis
on low-income and disadvantaged communities. This directly aligns with FC's
commitment to supporting these communities. FC is a nationally recognized nonprofit
organization that empowers low-income and disadvantaged families and individuals
through quality affordable housing and tools to increase their educational and economic
standing. FC's responsibilities include assisting residents to be good stewards of the
environment, understanding finances and promoting well-being. FC is a DOE Better
Climate and Better Buildings Challenge partner, with climate change goals that directly
align with the goals of the GGRF.

With respect to the design and implementation of the GGRF, we encourage the
Environmental Protection Agency (EPA) to consider the following priorities:

Eligible Recipients:

We ask the EPA to prioritize Community Development Financial Institutions (CDFIs) as

the primary capital deployment vehicle for the GGRF. We know CDFIs would be ideal
stewards of GGRF funding because of their long-standing record of accomplishment of
mission lending. There are more than 1,300 Treasury-certified CDFIs investing in all 50
states. Having developed the trust, deep familiarity and connection with low-income and
disadvantaged communities, CDFIs already have the infrastructure in place to rapidly
deploy funding that will accelerate the roll out of this funding.

^ighborWoHa®

CHARTERED MEMBER

A partner agency of

Eligible Projects:

We encourage the EPA to include funding that targets affordable housing in the set
eligible activities. Decarbonizing housing is a critical step to fight climate change with

United



Way



1£l

United Way for Greater Austin opportunity


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FOUNDATION

COMMUNITIES

creating housing where
families succeed

3000 S IH 35, Ste 300
Austin, TX 78704

tel: 512-447-2026
fax: 512-447-0288

foundcom.org

n#

impacts greater than efficiency. These include positive health outcomes due to improved
indoor and outdoor air quality, improved financial stability due to utility bill savings, and
improved building conditions that increase climate resilience. Additionally, we address
inequities in energy-burdened communities. Residential energy use produces roughly
20% of greenhouse gas emissions in the United States. If U.S. residential buildings were a
country, they would be the sixth-highest emitter of greenhouse gases in the world. The
GGRF provides a unique opportunity to center these communities by lowering housing
cost burdens, positioning them to take advantage of the innovations in the energy sector,
and create safe and healthy indoor environments.

Definition of Low-Income and Disadvantaged Communities:

There are several definitions of low-income and disadvantaged communities within
current Federal programs. We believe the following definitions are most accurate: the
CDFI Fund established definition of an eligible "Target Market", the New Markets Tax
Credit program and existing HUD housing programs. All three provide guidance that
meaningfully captures low-income and underserved communities. Additionally, the
definitions include consideration of individual borrower characteristics as well as the
communities where borrowers and projects are located. Adopting these definitions will
create standardization and lower costs of compliance, as government program awardees
already track and report their activity based upon these definitions.

Structure of Funding:

The GGRF funds must be as flexible as possible to meet the needs of low-income
individuals living in disadvantaged communities and the front-line staff who serve them.
Providing a mix of grants, forgivable grants and equity-like investments will help ensure
affordability for the end users. Specifically, low- and moderate-income multifamily
building owners cannot absorb additional debt to cover the up-front costs needed to
make major sustainable improvements. Existing multifamily properties already leverage
large amounts of debt ($20 million +) over 15 years and must balance financial viability
for the owners with affordable rents. This challenge also extends to community facilities
and community serving retail uses that already leverage as much hard debt as possible.
All these projects need concessionary financing. By allowing a flexible structure, these
investments will ultimately determine how deeply projects can go to reduce greenhouse
gas emissions.

Thank you for the opportunity to provide comments and highlight our priorities in
executing the GGRF. We look forward to working with you to ensure the Greenhouse Gas
Reduction Fund is a success.

^ighborWoHa®

CHARTERED MEMBER

A partner agency of

United



Way



Sincerely,

IN —-

Walter Moreau, Executive Director

Cc: Environmental Financial Advisory Board (EFAB) email to: efab@epa.gov

1£l

United Way for Greater Austin opportunity


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Green lining

Resources for the Greenhouse Gas Reduction Fund:

Case Studies and Frameworks to Advance Equitable Climate Projects

Case Studies of Equitable Climate Projects

Green Housing Upgrades and Integrated Building Decarbonization

Housing upgrades and decarbonization projects should be targeted towards low-income and
disadvantaged communities through a process that does not increase rent or energy burden.

•	Affordable Residential Program by Philadelphia Energy Authority

•	The Plan to Turn Blighted Houses into a New Source of Green Power for the Grid

•	Healthy Homes Program by Energy Outreach Colorado and City of Denver, Colorado

•	Home Electrification Equity Project by Habitat for Humanity East Bay/Silicon Valley and
The Cities of Berkeley, Fremont, Hayward, and Oakland, California

•	Multifamilv Soft Storv Retrofit Program

Technology and Assessment

Technology and data collection are needed to help identify communities most vulnerable to the
effects of climate change, accelerate the transition to sustainable infrastructure, and ensure
projects are reaching low-income and disadvantaged communities.

•	Resilient Cities Catalyst by Resilient Cities Catalyst and city of Pittsburgh, Pennsylvania

•	Vehicle Grid Integration by The Alan Turing Institute

Transportation

Sustainable transportation projects should be targeted towards underserved communities both
to fill mobility gaps as well to reduce the harmful effects of air pollution in vulnerable areas.

•	Unlocking Capital to Electrify Truck and Bus Fleets

•	Clean Mobility Options by CALSTART, Shared Use Mobility Center, and CivicWell

•	Mobility Hubs by Metropolitan Transportation Commission

•	Clean Mobility in Schools Project by California Climate Investments

•	Our Community Car Share Sacramento by Sacramento Metropolitan Air Quality
Management District

•	CalVans

•	Ecosystem of Shared Mobility by San Joaquin Valley Air Pollution Control District

•	Green Raiteros by Shared Use Mobility Center and Hewlett Foundation

•	Clean Transportation Program by Energy Commission's Fuels and Transportation
Division

•	Bus Replacement Program by the California Energy Commission

•	Clean Vehicle Assistance Program by Beneficial State Foundation and California Air
Resources Board

•	Clean Cars 4 All by California Air Resources Board


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• Access Clean California

Resilience Hubs/Centers

Resilience hubs enable vulnerable communities to direct resources and initiatives towards their
localized needs before, during, and after natural disasters to build resilience in the face of
climate change.

• Resilience Hubs Can Help Communities Thrive -- and Better Weather Disasters by Pew
Charitable Trusts

Frameworks for Advancing Equity

Making Equity Real Framework

The Making Eouitv Real Framework is a tool that we at Greenlining use to ensure that equity is
at the core of an entire program in every step including the goals, process, implementation, and
evaluation. This framework was developed as part of Greenlining's efforts advising and shaping
climate change funding programs in California. California offers a variety of climate change
funding programs that aim to both fight climate change and also create community co-benefits.
These funding programs can improve air quality and community health, reduce consumers'
energy bills, and create clean economy jobs. But far too often these programs fail to adequately
reach the communities with the greatest needs, especially low-income communities of color. For
that reason, we believe officials designing these programs must make a conscious, thoughtful
effort to embed social equity into all aspects of each program's process. We believe that these
same considerations apply to federal financing and incentive programs. Here is a brief overview
of the framework:

1.	The program's Goals, Vision, and Values should explicitly state the social equity goals
of the funding program to help ensure these goals get prioritized.

2.	The program's Process should include working with partners who have social equity
expertise and incorporate strategies for inclusive outreach and technical assistance.

3.	The Implementation of climate change funding programs is critical. Staff must make
sure that awardees have the resources and tools they need to get the greatest possible
environmental and economic benefits and minimize unintended negative consequences.
Programs should target community-identified needs.

4.	Finally, programs should Evaluate their impact, based on clearly defined social equity
goals and criteria track success. This requires proactive planning to collect the data
needed, so that administrators and officials can use the analysis to improve the program
going forward and inform the design of future emissions reductions programs.


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Our theory is that by intentionally building equity into all aspects of a program, we can achieve
the strongest equity outcomes in frontline communities.

Equitable Community Investment Standards

The Greenlined Economy Guidebook offers a roadmap to build a new economic system that
radically meets the needs of the people who have suffered the most under our current
paradigm, particularly people of color.

In order to achieve "greenlined" community investment, we have developed a set of rules to
govern funds and programs intended to address poverty and inequity. Without standards, we
end up reinforcing the structures that caused these problems in the first place. These standards
are meant to address failures of equity in our current community investment model. We use the
phrase "community investment" broadly to refer to community-oriented projects in disinvested
communities across many different sectors, including housing, real estate, infrastructure,
transportation, parks, food and nutrition, health and small business, to name a few. In this
guidebook, we focus on large-scale community investments, particularly those that have the
potential to accelerate or catalyze significant change in a neighborhood.

1.	Emphasize race-conscious solutions. Race-conscious policies like redlining and
urban renewal got us to this point, and race-neutral approaches can't fix the underlying
inequities. Investment needs to target and prioritize the most impacted communities.

2.	Prioritize multi-sector approaches. Programs may be siloed, but problems are not. We
need to prioritize approaches that address multiple issues and sectors at once.

3.	Deliver intentional benefits. Benefits cannot trickle down to communities; they need to
go directly to the people in the most impactful ways, while avoiding increasing or creating
new burdens.

4.	Build community capacity. Long-term disinvestment and discriminatory policies can
erode a community's capacity for leadership, organizing or political capital.
Acknowledging the ways that structural racism has impacted the capacity of
communities of color to undertake community development projects is a key part of
improving investments.

5.	Be community-driven at every stage. Lifting up community-led ideas and sharing
decision-making power is an important element of truly community-centered investment.
Community members and organizations should be part of every phase of the project or
policy, from goal-setting to analysis.

6.	Establish paths toward wealth-building. We need community ownership of assets and
opportunities to continue building wealth. In a Greenlined Economy, as many people as
possible should be able to participate in wealth building, which will include a broader set
of pathways beyond homeownership with lower barriers to entry.

We imagine that these standards could be applied to community investments by diverse actors,
including public agencies, philanthropic organizations, private investors or community-based
organizations advising or developing their own investment strategies.


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About The Greenlining Institute

The Greenlining Institute ("Greenlining"), works toward a future where communities of color can
build wealth, live in healthy places filled with economic opportunity, and are ready to meet the
challenges posed by climate change. Our multifaceted advocacy efforts address the root causes
of racial, economic, and environmental inequities in order to meaningfully transform the material
conditions of communities of color in California and across the country.


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WW

Groundswell r)

rr

December 9, 2022

Response: Request for Public Comments. EPA GHGRF

Environmental Finance Advisory Board
Environmental Protection Agency

Submitted Electronically via efab^eoa.aov

RE: Request for Comments on the Greenhouse Gas Reduction Fund

Dear Distinguished Members of the Environmental Finance Advisory Board:

On behalf of Groundswell, we appreciate this opportunity to provide public comments on the
implementation of the newly created Greenhouse Gas Reduction Fund (GHGRF). We are grateful to be
able to share our experiences and perspectives.

So that you have a sense of where we come from, we would first like to introduce ourselves and our
work. Groundswell (groundswell.org) is a 501c3 nonprofit organization, our mission is building
community power, and we serve low- and moderate-income (LMI) households and communities that
have been historically under-resourced and marginalized. In pursuit of our mission, we develop, build,
and operate community solar projects, community resilience hubs that incorporate solar and energy
storage, energy efficiency programs that reduce household energy burdens, and subscriber
management software and support solutions that distribute energy savings to our LMI customers. In
addition, we lead multiple research and data science initiatives that put our experience and knowledge
to work towards broader market transformation. Groundswell currently serves more than 6,000 income-
qualified households with more than $3 million per year in energy savings; delivers clean energy
programs in DC, GA, IL, MD, and NY; and leads multiple national research and data science projects with
a particular focus on studying project finance strategies that expand LMI access to the benefits of clean
energy.

As such, the following comments are offered from the perspective of experienced clean energy project
developers, practitioners, and researchers who exclusively serve LMI households and under-resourced
communities in diverse locations across multiple states. Where applicable, we have included references
and links to data sets and multi-year research studies for additional background and reference.

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Comments and Recommendations

Reparative investments to close infrastructure gaps are necessary to deploy clean energy infrastructure
in historically under-resourced and disadvantaged communities, therefore the GHGRF should prioritize
grant funding to fund the gaps including project predevelopment costs. Without this support, many
projects in disadvantaged communities will never make it to the financing stage.

In our role as a nonprofit developer of LMI-serving community solar and resilience hub projects,
Groundswell has completed construction on multiple projects in DC, GA, IL, and MD, with additional
projects underway in each of these markets as well as in upstate NY. The majority of the projects we
have completed are located in communities that were previously subjected to racist policies and
practices such as redlining, the physical legacies of which are still very present and impacting local
communities today. As a result, it's typically more expensive to build projects in under-resourced
neighborhoods because you have to fix and/or upgrade so many aspects of the infrastructure (e.g.,
electrical service and transformers in addition to facility-level issues such as roof and other structural
repairs) before you can install anything new.

Specifically, in our experience, the lack of investment in real estate and other built infrastructure in
these communities has also resulted in under-investment in electrical and grid infrastructure. As a
result, interconnection costs in under-resourced communities are often much higher than in
neighborhoods that have had consistent investment and development.

For example, Groundswell completed a community solar project at Dupont Park SDA Church in 2019,
which is located an under-resourced community East of the Anacostia River in the District of Columbia,
as a part of the DC Solar for All program. Project interconnection costs exceeded $40,000 - more than
lOx the typical interconnection cost for community solar projects in DC - because of the extensive
utility-side upgrades that the project had to pay for in order to connect the solar project to the grid. We
have had this same experience of much higher-than-average interconnection costs for projects in
historically under-resourced communities on multiple projects.

While we are not aware of any national studies documenting the prevalence of this experience, a 2021
article in Wired reported on how our nation's economic divide is reflected in the electric grid:

https://www.wired.com/storv/an-outdated-grid-has-created-a-solar-power-economic-divide/

Additional costs related to histories of disinvestment, underinvestment, marginalization, and racist
policies are not limited to physical aspects of the build environment. We often have to provide legal and
administrative support to the community partners for whom we develop solar and resilience projects in
order to clear titles and/or remove liens. For example, a church we partnered with in DC had changed its
name in the early 1900's but had never updated its property titles. We worked with the church to

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research documentation to prove the name change so that the church could reclaim clear title to their
land and property. In the Chicago area, we worked with a community-based nonprofit to clear multiple
tax liens and reclaim three land parcels that had been taken by the county and land banked so that they
could proceed with a solar project.

While the Inflation Reduction Act's addition of tax credit "adders" to the ITC for renewable energy
projects located in under-resourced communities will help to cover additional costs such as these (which
will undoubtedly help increase equitable deployment of solar projects in under-resourced communities),
the tax provisions will not be sufficient to close the gaps. Past policies such as redlining not only starved
communities of investment, but they also left the people who live there stuck with higher energy bills
due to old and inefficient housing, more vulnerable to the impacts of climate change, and facing higher
costs to install solar because so many repairs and upgrades are often necessary as a part of the process.
The context, and the history, into which these policies will be implemented is material to how they will
be deployed.

Ensure that GHGRF funds are used to fund/finance projects and programs that would not be
economically competitive on their own - such as smaller projects and projects with high social and
environmental benefits but low economic returns.

Unlike ten years ago, there is a robust market for various forms of green finance including green bonds,
energy performance contracts, and other tools that serve economically competitive commercial
projects. GHGRF funds should not be available for projects that are able to be financed on the private
market and should instead be directed toward areas of market failure - where projects with high social
and environmental benefits lack sufficient scale and/or economic return to be financed without a source
of financing that views ROI through a more comprehensive lens. This may also include incremental
additional investment in project features or technologies with strong additionality but low economic
returns (e.g., deep decarbonization of buildings, incorporation of energy storage).

To that end, existing leaders in green finance may be important partners in GHGRF deployment and
should be consulted to ensure that the GHGRF doesn't duplicate work the private market is already
doing well.

Along similar lines, EPA should view CDFI's as important partners implementation partners because they
are focused on serving disadvantaged communities with financing solutions that are tailored to their
needs.

CDFI's already serve disadvantaged communities as financing partners and have increasing experience
financing clean energy and climate resilient infrastructure. For example, Rochdale Capital, a Black-
founded and led financial institute that is currently applying for recognition by US Treasury as a CDFI,

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recently provided construction financing to City of Refuge in Baltimore for a community resilience hub
project developed by Groundswell. Rochdale's financing will enable community ownership both the
solar and energy storage elements of the project.

Implementing the GHGRF shouldn't duplicate or compete with strong, existing financing infrastructure.

EPA should consult with US Treasury and the US DOE's National Community Solar Partnership to inform
the implementation plan for the GHGRF so that it complements other major IRA programs, such as the
ITC's new direct pay option, to optimize benefits to LMI and disadvantaged communities including the
potential for community ownership.

The "direct pay" option for the ITC created by the Inflation Reduction Act holds the potential of enabling
community ownership of ITC-eligible clean energy and energy storage assets. Community ownership of
clean energy assets will enable LMI communities to receive greater economic benefits from clean energy
- which may include greater savings, the wealth-creating benefits of ownership, and the intangible
economic benefits of being able to exercise agency over the sources of energy production serving one's
community. This policy change is well-aligned with the statutory purposes of the GHGRF and with the
Justice40 policy, and consultation across EPA and US Treasury together with DOE's National Community
Solar Partnership will optimize community benefits.

While tax credits, including the ITC, have proven to be an effective incentive for increasing the
generation of clean energy both in absolute terms and as a percentage of total US clean energy
production, tax credits as an incentive mechanism reward wealth with ownership and force those
without wealth to pay rent. The unintended result of tax credits having long been the only national
incentive for clean energy is that low-wealth residents and communities, as well as the nonprofits that
serve them, have had to pay more for clean energy that big companies and wealthy households that
could benefit directly from the tax credit.

The direct pay option included in the Inflation Reduction Act is an enormous step forward towards
enabling everyone to benefit equally from the savings and other benefits associated with clean energy.
While the direct pay option applies to nontaxable entitles including nonprofits, and does not extend to
individual LMI households, LMI households will still be able to benefit from the resulting greater energy
savings through nonprofit-owned community solar. That's because nonprofit owners will no longer be
required to pay a premium to tax equity investors, who up until now had to own every project for
nonprofits to see any benefit from the ITC. For example, even if a solar project was located on a church
that was using all the electricity from the project, the solar project still had to be owned by a tax equity
investor who could monetize the ITC. Any savings that trickled down to the church had to accommodate
the tax equity investor's rate of return requirements over and above the value of the ITC. Thanks to the
new direct pay option, that's no longer true. Now, nonprofit owners will not only be able to benefit fully

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and directly, they'll also be able to share the full economic benefit of the ITC with LMI households
through community solar,

Community solar, or shared solar, enables multiple households to receive clean energy from a single
centrally located solar array. For example, solar panels installed on a church or community center
rooftop can provide power to surrounding homes, or solar panels installed on the roof of a multifamily
apartment building can provide power to the many individually metered residences in the building. As
further background, the illustration on the following page depicts how community solar works.

o

You subscribe to
community solar.

©

Your local utility
company then distrib-
utes the electricity to
surrounding neighbor-
hoods and business.

O

You receive a credit on
your utility bill for the
electricity your
subscription generates,
save money, and help
support clean energy.

0

The solar panels in
your community
produce electricity,
metered by the local
utility company.

For the $7 billion committed to state, local, and Tribal governments, GHG intensity of electricity and
average LMI energy burden as measured at the county level should be included in funding allocation
decisions.

Utilizing GHG intensity of electricity to prioritize funding will ensure that projects and programs
supported by the GHGRF are maximizing the impact of funding towards the goal of decarbonizing the
grid.

Incorporating average LMI energy burden as a metric for prioritizing funding will link decarbonization
with clean energy savings for LMI communities. It is imperative that LMI energy burdens be measured at

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Groundswell k

	r

the county level. As Dr. Elvis Moleka of Groundswell demonstrated in a recent research publication
entitled "Energy Impoverished" (https://groundswell-web-assets.s3.amazonaws.com/lift"
solar/Energv+lmpoverishment+and+Climate+Change+(li.pdf). examining energy burdens only in metro
areas significant understates the issue. In subsequent research, Dr. Moleka examined energy burdens at
the county level in GA (https://groundswell~web~

assets.sB.amazonaws.com/GA+rural+ENERGY+burdens.pdf) and in NC (https://groundswell~web~
assets.s3.amazonaws.com/report/The+Report+NC+rural+burden+-+FINAL.pdf) and found that the
average LMI energy burden in dozens of rural counties exceed 20 percent and even approached 40
percent.

Successful GHGRF funding deployment should drive project funding/financing into communities with the
highest GHG intensive electricity and the highest energy burdens so that clean energy can reduce
pollution, reduce the energy bills, and improve overall quality of life.

Include building the capacity of existing regional and state-based organizations among the objectives of
implementing the $8 billion in financial and technical assistance.

Regional and state-based organizations such as Groundswell and our colleagues at Sustainable Capital
Advisors, Urban Ingenuity, Elevate, and Southface have deep expertise developing and financing a wide
range of clean energy and climate resilience projects. Our expertise can be deployed in states and
regions that do not yet have clean energy project finance and development capacity so long as the $8
billion for financial and technical assistance can be used for local start-up costs for program expansion
into new geographic markets.

Additional Resources:

Groundswell recently published a set of comprehensive data sets, research reports and ancillary
analysis, and a decision-support application that is designed to optimize LMI access to and participation
in solar savings. The "LIFT Toolkit" was funded by a 3-year DOE research grant. The toolkit includes a
GIS-enabled mapping of every community solar project serving LMI households in the US with
associated project profiles. EFAB and the EPA may find this GHGRF deployment:

The full LIFT Toolkit can be found here: https://lift.groundswell.org

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From:

To:

Subject:

Date:

Attachments:

Gil Jenkins
EFAB

Hannon Armstrong Comment Letter Re: Greenhouse Gas Reduction Fund RFI
Friday, December 2, 2022 2:16:50 PM

Hannon Armstrong GGRF RFI Response to EPA 120222 final.odf

Dear Members of the Environmental Finance Advisory Board,

We are pleased to submit to you the attached comment letter in response to EPA'S RFI related to the
implementation of the Greenhouse Gas Reduction Fund.

Based in Annapolis, Maryland, Hannon Armstrong ("HASI"), is the first U.S. public company solely dedicated to
investments in climate solutions. We have invested in renewable energy and energy efficiency projects since the
1980s. HASI presently invests approximately $2 billion annually in a wide variety of renewable and energy
efficiency projects including utility-scale wind and solar power, residential and commercial rooftop solar,
multifamily and commercial energy efficiency, battery storage, electric vehicles, renewable natural gas, and
various nature-based projects, among other climate solutions. HASI has utilized both public and private capital as
well as various forms of debt, including asset-backed securitization and PACE financing. In addition, the Hannon
Armstrong Foundation funds energy efficiency, renewable energy, and resiliency projects for nonprofits and
disadvantaged communities.

As one of the longest-standing and largest investors focused on greenhouse gas reductions, HASI has provided
four overall recommendations as well as a detailed response to the RFI. Please note that our recommendations
are focused on the $11.97 billion of general assistance but also apply to the $7 billion state and local government
and the $8 billion low-income and disadvantaged communities programs.

Our overall recommendations are:

1. Focus on technical assistance (education and project development) and funding for residential, small
business, and local government energy efficiency which currently lack access to financing

Green banks were initially conceived around 2009 in part because wind and solar projects were charged
higher interest rates since they were considered higher-risk emerging technologies at the time. Thankfully,
renewable energy and energy efficiency investing has become mainstream with banks, pensions, and
insurance companies, thus significantly lowering the cost of financing. Over $40 trillion was invested in
ESG-focused assets in 2020, triple the amount from eight years ago. Companies compete vigorously to
finance solar plants, wind farms, utility-scale storage, residential and community solar, municipal water
replacements, and large building energy efficiency upgrades and these types of projects are unlikely to
benefit from GGRF or meet the criteria of "projects that would otherwise lack access to financing."

Instead, where the market has still not developed is in providing the education, workforce training,
technical assistance, and low-cost financing to encourage homeowners, small businesses, nonprofits, and
local governments to make energy efficiency upgrades, adopt electric vehicles, or implement other
greenhouse gas reducing activities such as nature-based solutions. Many of these constituents lack the
knowledge and financial capability to make upgrades, especially as these improvements are often made
because of an existing equipment failure such as air conditioning units breaking in a heat wave. Similarly,
many local governments and nonprofits are focused on their core mission, lack trusted resources, and are
constrained in their capital spending - all of which limits their ability to invest in greenhouse gas reducing
technologies.

Focusing on the development and financing of these types of projects will not only reduce greenhouse
gases but also serve to improve the quality of life of the recipients (such as better heating and cooling


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systems in low-income housing) and can increase resiliency to climate change. An example of a
comprehensive approach to solve this problem is Southface, a nonprofit the Hannon Armstrong
Foundation has partnered with, which provides the energy audit, project design, vendor selection, project
management, and grants for nonprofits such as food banks and Salvation Army to upgrade their facilities
across the country.

An example of a successful program for state and local governments that leveraged private financing was
the Clean Renewable Energy Bonds which the EPA could duplicate by making grants to state and local
governments to repay them for the interest on borrowings. This program allowed state and local
governments to use energy as a service or other contract structures which didn't impact their bond
capacity. As a general rule of thumb, however, if a project is developed, uses existing technologies, and
has a credit worthy off-taker or other source of repayment, there are multiple providers of private capital
who will efficiently provide the debt, subordinated debt, mezzanine debt, preferred equity, and equity and
thus the GGRF funds should be focused elsewhere.

2.	Widely distribute the funds across all 50 states

We believe the program funds should be widely distributed across all 50 states to provide the maximum
benefit while limiting the risk of the funding being concentrated in the hands of a few entities. One major
risk of a concentrated grant is that there are very few, if any, qualified entities who have the established
infrastructure and track record to securely safeguard and invest $500 million or $1 billion, thus greatly
increasing the risk to EPA. Equally distributing the entire funded amount would equate to approximately
$500 million per state while also encouraging broad political support.

In looking at similar programs, the Treasury recently highlighted that its $5 billion new market tax credit
program was distributed to 107 community development entities across 35 states with 20% to rural
communities' Similarly, Treasury's $1.4 billion in bond funding for low-income communities through CDFIs
has gone to 32 states.

Along with many of the other public comments made to date, we are strongly opposed to a single
organization receiving a substantial portion of the available grants for any category of the GGRF. It is clear
from the use of plural in both "grants" and "recipients" in the legislative language that Congress intended
these funds to be distributed to multiple entities. This is, in part, because the GGRF would never have
complied with the Byrd Rule and been approved by the Senate Parliamentarian for inclusion in a Budget
Reconciliation bill had it been intended for one single entity.

3.	Set standards for entities and projects including for reporting of use of the funds including measuring
the impact of greenhouse gas reductions

Given the large amount being allocated, it is important that recipients be held accountable for the
allocations and that basic standards and limitations be put in place such as requiring audited financial
statements prior to grants over $10 million, requiring a segregation of the funds from other uses and
limitations on the amount of overhead that can be funded with the grants. It would appear that the
legislative language would require Direct recipients to be existing organizations while acknowledging
indirect organizations can be newly established organizations.^ There are few organizations that have an
established track record with grants of over $100 to $200 million and thus we would suggest such a limit
on funding to any one organization to limit the exposure to any one organization and a limit on allocations
to any one project of $25 to $50 million with larger projects subject to Davis Bacon and Build America
requirements.

In addition, there should be a reported measure of the carbon saved. One effective tool available for
appropriate data collection is CarbonCount. Developed by HASI in 2013, CarbonCount is a scoring tool for


-------
evaluating investments in U.S.-based renewable energy, energy efficiency, and climate resilience projects
to determine the efficiency by which each dollar of invested capital reduces annual carbon dioxide
equivalent emissions. This methodology promotes transparency in project finance by creating a simple and
comparable metric for infrastructure projects to be evaluated in terms of how much the capital
investment is mitigating climate change. By incorporating current emissions and power generation data
validated by third parties, CarbonCount gives climate finance managers a critical avoided carbon emissions
metric for the downstream impacts of their investments, which drives much-needed disclosure around
financed emissions that exacerbate climate change.

4. Provide the funds in multiple stages to organizations that successfully prioritize projects that lack access
to funding and reduce greenhouse gas emissions

Given that the GGRF offers EPA historic funding amounts, and that the amounts will likely be the largest
amount ever received by many of the organizations, we recommend that EPA provide the grants in two or
more stages. This will allow EPA to limit the exposure to any one organization, be able to measure the
impact of the grants before disbursing the second phase and be able to focus the second round of grants
on the most successful organizations. It will also allow EPA to be able to adjust to fund new or emerging
areas in the second phase. Phased grants also seem to align with the legislative language which provides
that grants shall begin no later than 180 days but would be available to be granted until September 30,
2024. It should be noted that phased contributions for investments are standard practice in private
infrastructure funds with investors only contributing their money when a project is identified and needs
the capital.

We appreciate the Environmental Finance Advisory Board's robust stakeholder engagement process to with
respect to the implementation of the Greenhouse Gas Reduction Fund, and we hope you will consider our
recommendations as you finalize the Board's recommendations to the Administrator in the coming weeks.

Respectfully,

Gil Jenkins

Gil Jenkins	Hannon Armstrong

Vice President - Corporate Communications & Public Affairs
Hannon Armstrong (NYSE: HASI)

gjenkins@hannonarmstrong.com

Phone: 443-321-5753 | Mobile: 415-971-7044

Web I Twitter I L jnkedln | ppdcast

Please note that effective June 1, 2022 our office address is: One Park Place, Suite 200, Annapolis, MD 21401. Kindly update your records
and direct all future business correspondence to reflect this new address.

This message, and any files attached with it, is intended only for the individual(s) to whom it is addressed and may contain confidential or
privileged information. Please be aware that the use of such information may be restricted by state and federal privacy laws. If you are not the
intended recipient, do not read, copy, use, or disclose this communication to others. Please return the message to its sender and delete iit from
your files. Thank you.

Securities are offered by Hannon Armstrong Securities, LLC, a registered broker-dealer, member FINRA and SIPC and subsidiary of Hannon
Armstrong Sustainable Infrastructure Capital, Inc.


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J HANNON
ARMSTRONG

December 2, 2022

Via Electronic Submission

The Honorable Michael Regan, Administrator
U.S. Environmental Protection Agency (EPA)

Office of the Administrator, Mail Code 1101A
1 200 Pennsylvania Avenue, NW
Washington, DC 20460

Re: Request for Information (RFI) - Greenhouse Gas Reduction Fund - Docket ID No. EPA-HQ-OA-2022-0859

Dear Administrator Regan and EPA Staff, and Members of the Environmental Finance Advisory Board:

On behalf of Hannon Armstrong (NYSE: HASI), thank you for the opportunity to provide comments on the Request for
Information (RFI) in Docket ID NO. EPA-HQ-OA-2022-0859, related to implementation of the Greenhouse Gas Reduction
Fund ("GGRF") included in the Inflation Reduction Act of 2022 ("IRA").

Based in Annapolis, Maryland, Hannon Armstrong ("HASI"), is the first U.S. public company solely dedicated to investments
in climate solutions. We have invested in renewable energy and energy efficiency projects since the 1980s. HASI presently
invests approximately $2 billion annually in a wide variety of renewable and energy efficiency projects including utility-
scale wind and solar power, residential and commercial rooftop solar, multifamily and commercial energy efficiency,
battery storage, electric vehicles, renewable natural gas, and various nature-based projects, among other climate solutions.
HASI has utilized both public and private capital as well as various forms of debt, including asset-backed securitization and
PACE financing. In addition, the Hannon Armstrong Foundation funds energy efficiency, renewable energy, and resiliency
projects for nonprofits gnd disgdvgntgged communities.

As one of the longest-stgnding gnd Igrgest investors focused on greenhouse ggs reductions, HASI hgs provided four overgll
recommendgtions gs well gs g detgiled response to the RFI. Plegse note thgt our recommendgtions gre focused on the
$1 1.97 billion of general gssistgnce but glso gpply to the $7 billion stgte gnd locgl government gnd the $8 billion low-
income gnd disgdvgntgged communities programs.

Our overgll recommendgtions gre:

1. Focus on technical assistance (education and project development) and funding for residential, small
business, and local government energy efficiency which currently lack access to financing

Green bgnks were initigIly conceived ground 2009 in pgrt becguse wind gnd solgr projects were chgrged higher
interest rates since they were considered higher-risk emerging technologies gt the time. Thgnkfully, renewgble
energy gnd energy efficiency investing hgs become mginstregm with bgnks, pensions, gnd insurance compgnies,
thus significgntly lowering the cost of fingncing. Over $40 trillion wgs invested in ESG-focused gssets in 2020, triple
the gmount from eight yegrs ggo. Compgnies compete vigorously to fingnce solgr plgnts, wind fgrms, utility-scgle
storage, residentigl gnd community solgr, municipgl wgter replgcements, gnd Igrge building energy efficiency
upgrades gnd these types of projects gre unlikely to benefit from GGRF or meet the criterig of "projects thgt
would otherwise Igck gccess to fingncing."1

Instegd, where the mgrket hgs still not developed is in providing the educgtion, workforce training, technicgl
gssistgnce, gnd low-cost fingncing to encourage homeowners, smgll businesses, nonprofits, gnd locgl governments to
mgke energy efficiency upgrades, gdopt electric vehicles, or implement other greenhouse ggs reducing gctivities
such gs ngture-bgsed solutions. Mgny of these constituents Igck the knowledge gnd fingncigl cgpgbility to mgke
upgrades, especiglly gs these improvements gre often mgde becguse of gn existing equipment fgilure such gs gir
conditioning units bregking in g hegt wgve. Similgrly, mgny locgl governments gnd nonprofits gre focused on their

1 Inflation Reduction Act Sec. 60103 (b)(1)(B)

One Park Place, Suite 200 • Annapolis, MD 21401 • (410)571-9860 • www.hannonarmstrona.com


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JHANNON
ARMSTRONG

core mission, lack trusted resources, and are constrained in their capital spending — all of which limits their ability to
invest in greenhouse gas reducing technologies.

Focusing on the development and financing of these types of projects will not only reduce greenhouse gases but
also serve to improve the quality of life of the recipients (such as better heating and cooling systems in low-income
housing) and can increase resiliency to climate change. An example of a comprehensive approach to solve this
problem is Southface, a nonprofit the Hannon Armstrong Foundation has partnered with, which provides the energy
audit, project design, vendor selection, project management, and grants for nonprofits such as food banks and
Salvation Army to upgrade their facilities across the country.2

An example of a successful program for state and local governments that leveraged private financing was the
Clean Renewable Energy Bonds which the EPA could duplicate by making grants to state and local governments to
repay them for the interest on borrowings. This program allowed state and local governments to use energy as a
service or other contract structures which didn't impact their bond capacity.3 As a general rule of thumb, however, if
a project is developed, uses existing technologies, and has a credit worthy off-taker or other source of repayment,
there are multiple providers of private capital who will efficiently provide the debt, subordinated debt, mezzanine
debt, preferred equity, and equity and thus the GGRF funds should be focused elsewhere.

2.	Widely distribute the funds across all 50 states

We believe the program funds should be widely distributed across all 50 states to provide the maximum benefit
while limiting the risk of the funding being concentrated in the hands of a few entities. One major risk of a
concentrated grant is that there are very few, if any, qualified entities who have the established infrastructure and
track record to securely safeguard and invest $500 million or $1 billion, thus greatly increasing the risk to EPA.
Equally distributing the entire funded amount would equate to approximately $500 million per state while also
encouraging broad political support.

In looking at similar programs, the Treasury recently highlighted that its $5 billion new market tax credit program
was distributed to 107 community development entities across 35 states with 20% to rural communities.4 Similarly,
Treasury's $1.4 billion in bond funding for low-income communities through CDFIs has gone to 32 states.5

Along with many of the other public comments made to date, we are strongly opposed to a single organization
receiving a substantial portion of the available grants for any category of the GGRF. It is clear from the use of
plural in both "grants" and "recipients" in the legislative language6 that Congress intended these funds to be
distributed to multiple entities. This is, in part, because the GGRF would never have complied with the Byrd Rule
and been approved by the Senate Parliamentarian for inclusion in a Budget Reconciliation bill had it been
intended for one single entity.

3.	Set standards for entities and projects including for reporting of use of the funds including measuring the
impact of greenhouse gas reductions

Given the large amount being allocated, it is important that recipients be held accountable for the allocations and
that basic standards and limitations be put in place such as requiring audited financial statements prior to grants
over $10 million, requiring a segregation of the funds from other uses and limitations on the amount of overhead
that can be funded with the grants. It would appear that the legislative language would require Direct recipients to
be existing organizations while acknowledging indirect organizations can be newly established organizations.7
There are few organizations that have an established track record with grants of over $100 to $200 million and
thus we would suggest such a limit on funding to any one organization to limit the exposure to any one

2	https: //www.southf ace.org / our-work /proa rams /aooduse /

3	See https: //proarams.dsireusa.ora /system /program /detail /251 0 for further information

4	https://www.cdfifund.gov/news/490

5	https: //www.cdfifund.gov/news/486

6	Inflotion Reduction Act Sec. 60103 (g)(1), (g)(2) gnd (g)(3). The legislgtive history olso shows thot the Sengte Pgrligmentgrign would not hove
gllowed the progrom in the reconciliotion get if it wgs intended for one entity.

7	Inflotion Reduction Act Sec. 601 03 (b)(l) - reflecting "sholl" gnd gbsence of the "new" longugge in (b)(2).

One Pgrk Plgce, Suite 200 • Anngpolis, MD 21401 • (410)571-9860 • www.honnonormstrono.com


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HANNON
ARMSTRONG

organization and a limit on allocations to any one project of $25 to $50 million with larger projects subject to
Davis Bacon and Build America requirements.

In addition, there should be a reported measure of the carbon saved. One effective tool available for appropriate
data collection is CarbonCount. Developed by HASI in 201 3, CarbonCount is a scoring tool for evaluating
investments in U.S.-based renewable energy, energy efficiency, and climate resilience projects to determine the
efficiency by which each dollar of invested capital reduces annual carbon dioxide equivalent emissions. This
methodology promotes transparency in project finance by creating a simple and comparable metric for
infrastructure projects to be evaluated in terms of how much the capital investment is mitigating climate change. By
incorporating current emissions and power generation data validated by third parties, CarbonCount gives climate
finance managers a critical avoided carbon emissions metric for the downstream impacts of their investments, which
drives much-needed disclosure around financed emissions that exacerbate climate change.

4. Provide the funds in multiple stages to organizations that successfully prioritize projects that lack access to
funding and reduce greenhouse gas emissions

Given that the GGRF offers EPA historic funding amounts, and that the amounts will likely be the largest amount
ever received by many of the organizations, we recommend that EPA provide the grants in two or more stages.

This will allow EPA to limit the exposure to any one organization, be able to measure the impact of the grants
before disbursing the second phase, and be able to focus the second round of grants on the most successful
organizations. It will also allow EPA to be able to adjust to fund new or emerging areas in the second phase.
Phased grants also seem to align with the legislative language which provides that grants shall begin no later than
1 80 days but would be available to be granted until September 30, 2024. It should be noted that phased
contributions for investments are standard practice in private infrastructure funds with investors only contributing
their money when a project is identified and needs the capital.

The enclosed appendix addresses some of the specific questions in the RFI. Thank you very much for your consideration of
our comments. Please do not hesitate to contact me at jeckel@hannonarmstrong.com or Gil Jenkins at 443-321 -5753 or
ajenkins@hannonarmstrong.com with any additional questions you may have.

Respectfully,

Jeffrey "Jeff" W. Eckel
Chairman and CEO
Hannon Armstrong

Appendix - Specific Responses to RFI Questions

One Park Place, Suite 200 • Annapolis, MD 21401 • (41 0) 571-9860 • www.ha nnoriarmstrong .com


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JHANNON
ARMSTRONG

Section 1: Low-Income and Disadvantaged Communities

1.	What should EPA consider when defining "low income" and "disadvantaged" communities for purposes of
this program? What elements from existing definitions, criteria, screening tools, etc., - in federal programs or
otherwise - should EPA consider when prioritizing low-income and disadvantaged communities for
greenhouse gas and other air pollution reducing projects?

We think that low income and disadvantaged communities should be awarded funding from the Greenhouse Gas
Reduction Fund widely distributed and allocated to nonprofits servicing these communities.

One helpful resource for defining low income and disadvantaged communities would be to utilize version 1.0 of the
Climate and Economic Justice Screening Tool released by the White House Council on Environmental Quality
(CEQ).8 This tool identifies communities that are marginalized, underserved, and overburdened by pollution. The
tool uses census tracts that represent about 4,000 people, which is the smallest unit of geography for which
consistent data can be displayed on the map.

2.	What kinds of technical and/or financial assistance should the Greenhouse Gas Reduction Fund grants
facilitate to ensure that low-income and disadvantaged communities can participate in and benefit from the
program?

The low-income and disadvantaged community market needs investment in providing education, workforce training,
technical assistance, and low-cost financing or grants to encourage homeowners, small businesses, nonprofits, and
local governments to make energy efficiency upgrades, adopt electric vehicles, or implement other greenhouse gas
reducing activities such as nature-based solutions. Many of these constituents lack the knowledge and financial
capability to make upgrades, especially as these improvements are often made because of an existing equipment
failure like an air conditioning unit breaking in a heat wave. There is an opportunity to focus on projects that will
not only reduce greenhouse gases but also serve to improve the quality of life of the recipients (like better heating
and cooling systems or LED lighting in low-income housing). Similarly, nature-based projects (like tree planting and
shoreline protection) can reduce greenhouse gases while increasing the resiliency to climate change.

An example of a comprehensive approach to solve this problem is Southface, a nonprofit we have partnered with,
which provides the energy audit, project design, vendor selection, project management, and grants for nonprofits
like food banks and Salvation Army to upgrade their facilities across the country.9

3.	What kinds of technical and/or financial assistance should the Greenhouse Gas Reduction Fund grants
facilitate to support and/or prioritize businesses owned or led by members of low-income or disadvantaged
communities?

See answer to Question 2 above.

Section 2: Program Design

1. What should EPA consider in the design of the program to ensure Greenhouse Gas Reduction Fund grants
facilitate high private-sector leverage (i.e., each dollar of federal funding mobilizes additional private
funding)?

Given the large amounts of funding being allocated by EPA, it is important that recipients be held accountable for
the allocations. The funding should be directed to areas of need where the market has still not developed such as
providing education, workforce training, technical assistance, and low-cost financing to encourage homeowners,
small businesses, nonprofits, and local governments to make energy efficiency upgrades, adopt electric vehicles, or
implement other greenhouse gas reducing activities such as nature-based solutions. Many of these constituents lack

8	"Biden-Harris Administration Launches Version 1.0 of Climate and Economic Justice Screening Tool, Key Step in Implementing President Biden's
Justice40 Initiative." https://www.whitehouse.aov/cea/news-updates/2022 /I 1 /22 /biden-harris-administration-launches-version-1 -O-of-climate-and-
economic-iustice-screenina-tool-kev-step-in-implementina-president-bidens-iustice40-initiative /.

9	https: //www.southface.ora / our-work/proa rams /aooduse /

One Park Place, Suite 200 • Annapolis, MD 21401 • (410)571-9860 • www.hannonarmstrona.com


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JHANNON
ARMSTRONG

the knowledge and financial capability to make upgrades, especially as these improvements are often made
because of an existing equipment failure like an air conditioning unit breaking in a heat wave.

The funding should not be allowed to be directed to areas where investors compete vigorously to finance including
utility-scale solar plants and wind farms, utility-scale storage, residential and community solar, municipal water
replacements, and large building energy efficiency upgrades ("Well Financed Projects") as these types of projects
are unlikely to benefit from GGRF or meet the criteria of "projects that would otherwise lack access to financing."10
To the extent it is proposed that any of the funds are intended to be utilized for Well Financed Projects, the
recipient should be required to solicit market-based financing and justify why it was uniquely qualified to finance
the project.

In addition, basic standards and limitations should be put in place such as requiring audited financial statements
prior to grants over $10 million, requiring a segregation of the funds from other uses and limitations on the amount
of overhead that can be funded with the grants. It would appear that the legislative language would require
Direct recipients to be existing organizations while acknowledging indirect organizations can be newly established
organizations.11 There are few organizations that have an established track record with grants of over $1 00 to
$200 million and thus we would suggest such a limit on funding to any one organization to limit EPA's exposure to
any one organization and a limit on allocations to any one project of $25 to $50 million with larger projects
subject to Davis Bacon and Build America requirements.

In addition, there should be a reported measure of the carbon saved. One effective tool available for appropriate
data collection is CarbonCount. Developed by HASI in 201 3, CarbonCount is a scoring tool for evaluating
investments in U.S.-based renewable energy, energy efficiency, and climate resilience projects to determine the
efficiency by which each dollar of invested capital reduces annual carbon dioxide equivalent emissions. This
methodology promotes transparency in project finance by creating a simple and comparable metric for
infrastructure projects to be evaluated in terms of how much the capital investment is mitigating climate change. By
incorporating current emissions and power generation data validated by third parties, CarbonCount gives climate
finance managers a critical avoided carbon emissions metric for the downstream impacts of their investments, which
drives much-needed disclosure around financed emissions that exacerbate climate change.

An example of a successful program for state and local governments that leveraged private financing was the
IRS's Clean Renewable Energy Bonds (CREBs), which the EPA could duplicate by making grants to state and local
governments to repay them for the interest on borrowings. This program allowed state and local governments to
use energy as a service or other contract structures which didn't impact their bond capacity.12

2. What should EPA consider in the design of the program to ensure Greenhouse Gas Reduction Fund grants
facilitate additionality (i.e., federal funding invests in projects that would have otherwise lacked access to
financing)?

See answer to Question 1 above.

The funding should not be allowed to be directed to areas where investors compete vigorously to finance including
utility scale-solar plants and wind farms, utility-scale storage, residential and community solar, municipal water
replacements, and large building energy efficiency upgrades as these types of projects are unlikely to benefit
from GGRF or meet the criteria of "projects that would otherwise lack access to financing."13

We believe the program funds should be widely distributed across all 50 states to provide the maximum benefit
while limiting the risk of the funding being concentrated in the hands of a few entities. One major risk of a
concentrated grant is that there are very few, if any, qualified entities who have the established infrastructure and
track record to securely safeguard and invest $500 million or $1 billion, thus greatly increasing the risk to EPA.

10	Inflation Reduction Act Sec. 60103 (b)(1)(B)

11	Inflation Reduction Act Sec. 60103 (b)(1) - reflecting "shall" and absence of the "new" language in (b)(2).

12	See https: //proara ms.dsireusa.org /system/proaram/detail/251 0 for further information. Similar programs include qualified school construction
bonds (QSCBs) and qualified energy conservation bonds (QECBs) from ARRA

13	Inflation Reduction Act Sec. 60103 (b)(1)(B)

One Park Place, Suite 200 • Annapolis, MD 21401 • (410)571-9860 • www.hannonarmstrona.com


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JHANNON
ARMSTRONG

Equally distributing the entire funded amount would equate to approximately $500 million per state while also
encouraging broad political support.

In looking at similar programs, the Treasury recently highlighted that its $5 billion new market tax credit program
was distributed to 107 community development entities across 35 states with 20% to rural communities.14 Similarly,
its $1.4 billion in bond funding for low-income communities through CDFIs has gone to 32 states.15 It is also clear
from the use of plural in both "grants" and "recipients" in the legislative language16 that Congress intended these
funds to be distributed to multiple entities.

Finally, we believe there is an opportunity to focus on the development and financing of projects that will not only
reduce greenhouse gases but also serve to improve the quality of life of the recipients (like better heating and
cooling systems or LED lighting in low-income housing or new windows that also allow lead to be remediated) or in
nature-based solutions that reduce carbon like tree planting and shoreline protection that also increase the
resiliency to climate change. Another area of opportunity is working with organizations like Groundswell,17 which
works to build resiliency hubs in low-income communities that both reduce greenhouse gas emissions and increase
climate resiliency.

3.	What should EPA consider in the design of the program, in addition to prevailing wage requirements in
section 314 of the Clean Air Act, to encourage grantees and subrecipients to fund projects that create high
quality jobs and adhere to best practices for labor standards, consistent with guidance such as Executive
Order 14063 on the Use of Project Labor Agreements and the Department of Labor's Good Jobs Principles?

We strongly believe that any project over $25,000,000 should utilize a project-labor agreement. That threshold is
necessary to encourage all grantees and subrecipients to fund projects that create high quality jobs and adhere to
the best practices and labor standards. This language from the National Climate Bank Act as introduced can serve
as guidance to EPA on prevailing wage (below).

"(c) Wage Rate Requirements.—

"(1) IN GENERAL.—Notwithstanding any other provision of law, all laborers and mechanics employed by
contractors and subcontractors on projects financed directly by the Bank shall be paid wages at rates not less than
those prevailing on projects of a similar character in the locality, as determined by the Secretary of Labor in
accordance with subchapter IV of chapter 31 of part A of subtitle II of title 40, United States Code (commonly
referred to as the 'Davis-Bacon Act').

"(2) AUTHORITY.—With respect to the labor standards specified in paragraph (1), the Secretary of Labor shall
have the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (64 Stat. 1 267; 5 U.S.C.
App.) and section 3145 of title 40, United States Code.

4.	What should EPA consider when developing program guidance and policies, such as the appropriate
collection of data, to ensure that greenhouse gas and air pollution reduction projects funded by grantees and
subrecipients comply with the requirements of Title VI of the Civil Rights Act, which prohibits discrimination
on the basis of race, color, and national origin in programs and activities receiving federal financial
assistance?

One effective tool available for appropriate data collection is CarbonCount. Developed by HASI in 201 3,
CarbonCount is a scoring tool for evaluating investments in U.S.-based renewable energy, energy efficiency, and
climate resilience projects to determine the efficiency by which each dollar of invested capital reduces annual
carbon dioxide equivalent emissions. This methodology promotes transparency in project finance by creating a
simple and comparable metric for infrastructure projects to be evaluated in terms of how much the capital
investment is mitigating climate change. By incorporating current emissions and power generation data validated

14	httos://www.cdfifund.aov/news/490

15	https: //www.cdfifund.aov/news/486

16	Inflation Reduction Act Sec. 60103 (a)(1), (a)(2) and (a)(3). The legislative history also shows that the Senate Parliamentarian would not have
allowed the program in the reconciliation act if it was intended for one entity.

17	https: //aroundswell .org /proarams/#resilience-hubs

One Park Place, Suite 200 • Annapolis, MD 21401 • (410)571-9860 • www.hannonarmstrona.com


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J HAN NON
ARMSTRONG

by third parties, CarbonCount gives climate finance managers a critical avoided carbon emissions metric for the
downstream impacts of their investments, which drives much-needed disclosure around financed emissions that
exacerbate climate change. Once CarbonCount data is collected along with other project details, it can be used to
evaluate Title VI requirements.

5.	What should EPA consider when developing program policies and guidance to ensure that greenhouse gas
and air pollution reduction projects funded by grantees and subrecipients comply with the requirements of the
Build America, Buy America Act that requires domestic procurement of iron, steel, manufactured products, and
construction material?

We believe that the requirements of the Build America, Buy America Act should apply to any projects funded out
of the Greenhouse Gas Reduction Fund that exceed a total cost of $25,000,000.

6.	What federal, state and/or local programs, including other programs included in the Inflation Reduction Act
and the Infrastructure Investment and Jobs Act or "Bipartisan Infrastructure Law," could EPA consider when
designing the Greenhouse Gas Reduction Fund? How could such programs complement the funding available
through the Greenhouse Gas Reduction Fund?

EPA should consider if projects that would benefit from the tax credits or DOE loan programs should also be
eligible for GGRF funding. One way to take advantage of both funding is for the EPA money to be focused on the
areas that are not eligible for the credits such as providing the education, workforce training, technical assistance,
and project development to encourage homeowners, small businesses, nonprofits and local governments to make
energy efficiency upgrades, adopt electric vehicles, or implement other greenhouse gas reducing activities such as
nature-based solutions.

Section 3: Eligible Projects

1. What types of projects should EPA prioritize under sections 134(a)(l )-(3), consistent with the statutory

definition of "qualified projects" and "zero emissions technology" as well as the statute's direct and indirect
investment provisions? Please describe how prioritizing such projects would:

•	maximize greenhouse gas emission and air pollution reductions;

•	deliver benefits to low-income and disadvantaged communities.

•	enable investment in projects that would otherwise lack access to capital or financing;

•	recycle repayments and other revenue received from financial assistance provided using the
grant funds to ensure continued operability; and

•	facilitate increased private sector investment.

Given the large amount being allocated, it is important that recipients be held accountable for the allocations. The
funding should be directed to areas of need where the market is still not developed such as providing the
education, workforce training, technical assistance, and low-cost financing to encourage homeowners, small
businesses, nonprofits, and local governments to make energy efficiency upgrades, adopt electric vehicles, or
implement other greenhouse gas reducing activities such as nature-based solutions. Many of these constituents lack
the knowledge and financial capability to make upgrades, especially as these improvements are often made
because of an existing equipment failure like an air conditioning unit breaking in a heat wave.

Through our many years of investment, we have found energy efficiency improvements to have the quickest return
on investment or payback period (as well as typically the largest carbon benefit per dollar spent) and this should
be prioritized. In addition, energy efficiency improvements have the added benefit of improving the recipients
lives by making the living area more comfortable (such as improved heating and cooling systems, LED lighting,
controls, etc.). While having longer paybacks, improving the building shell with better roofs and windows can
reduce leaks that can lead to the formation of mold and thus create a healthier indoor environment while also
providing energy efficiency benefits.

Similarly, many local governments and nonprofits are focused on their core mission, lack trusted resources, and are
constrained in their capital spending which limits their ability to invest in greenhouse gas reducing technologies.

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Thus, projects which provide for development and technical assistance will be beneficial. Similarly, such
governments often have limited experience with developing nature-based projects (like tree planting and shoreline
protection) that can reduce greenhouse gases while increasing the resiliency to climate change. So again,
development financing and technical assistance will be beneficial as could be bonding capacity which is often a
large expense.

It is important to note that while there is a large amount of private financing available for state and local
government projects, these governments often face limitations on their capital spending because of a desire to
maintain their bond rating, and thus projects that make sense are not done because of such limitations. Providing
funding for technical assistance, development, and project management will allow such projects that can leverage
private capital to be advanced. As previously mentioned, an example of a successful program for state and local
governments that leveraged private financing was the IRS's Clean Renewable Energy Bonds (CREBs), which allowed
state and local governments to use energy as a service or other contract structures which didn't impact their bond
capacity.18

Projects modeled after the Federal Energy Performance Contracts ("ESPC") where the ultimate project is privately
financed and paid for out of energy savings would be another good model, since they don't count against bond
ratings. These projects reduce energy and greenhouse gases while also improving the quality of life of the users of
the buildings. Again, the lack here is for the development capital to identify and develop the projects.

GGRF funding should not be allowed to be directed to areas where investors compete vigorously to finance—
including utility-scale solar plants and wind farms, utility-scale storage, residential and community solar, municipal
water replacements, and large building energy efficiency upgrades—since these types of projects are unlikely to
benefit from GGRF or meet the criteria of "projects that would otherwise lack access to financing."19

There may be a potential need in some emerging markets such as hydrogen or even in the development of
transmission. As a general rule of thumb, however, if a project is developed, uses existing technologies, and has a
credit worthy off-taker or other source of repayment, there are multiple providers of private capital who will
efficiently provide the debt, subordinated debt, mezzanine debt, preferred equity and equity and the GGRF
funds should be used elsewhere.

Section 4: Eligible Recipients

1. Who could be eligible entities and/or indirect recipients under the Greenhouse Gas Reduction Fund consistent
with statutory requirements specified in section 134 of the Clean Air Act? Please provide a description of
these types of entities and references regarding the total capital deployed by such entities into greenhouse
gas and air pollution reducing projects.

We believe the program funds should be widely distributed across all 50 states to provide the maximum benefit
while limiting the risk of the funding being concentrated in the hands of a few entities. One major risk of a
concentrated grant is that there are very few, if any, qualified entities who have the established infrastructure and
track record to securely safeguard and invest $500 million or $1 billion, thus greatly increasing the risk to EPA.
Equally distributing the entire funded amount would equate to approximately $500 million per state while also
encouraging broader political support.

In looking at similar programs, the Treasury recently highlighted that its $5 billion new market tax credit program
was distributed to 107 community development entities across 35 states with 20% to rural communities.20 Similarly,
its $1.4 billion in bond funding for low-income communities through CDFIs has gone to 32 states.21 It is also clear
from the use of plural in both "grants" and "recipients" in the legislative language22 that Congress intended these
funds to be distributed to multiple entities.

18	See https: //proara ms.dsireusa.org /system/proaram/detail/251 0 for further information.

19	Inflation Reduction Act Sec. 60103 (b)(1)(B)

20	https: //www.cdfifund.aov/news/490

21	https:/ /www.cdf if und.gov/news/486

22	Inflgtion Reduction Act Sec. 601 03 (o)(l), (a)(2) and (a)(3). The legislative history also shows that the Senate Parliamentarian would not have
allowed the program in the reconciliation act if it was intended for one entity.

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We believe the money will be best used in local communities and should not be granted to organizations whose
only goal is to "regrant" the money. It is unlikely that money sent to "regrant" organizations will be able to address
the great need for development and technical assistance at a local level. A recent Wall Street Journal article also
highlighted the risk of using a "regrant" organization in regard to the PayCheck Protection Program. In this
program, misaligned incentives encouraged the "regranting" organization to focus mostly on dollar volume of
transactions and resulted in alleged billions of dollars of fraudulent transactions.23 Requiring the money be sent to
the states and local communities will reduce this risk as well as the overhead associated with "regrant"
organizations. Less overhead and risk will help assure that more money is available to go directly to the
beneficiaries of the projects.

It would also appear that the legislative language would require Direct recipients to be existing organizations
while acknowledging indirect organizations can be newly established organizations.24 There are few organizations
that have an established track record of working with greenhouse gas reductions projects with grants of over $100
to $200 million. Therefore, we would suggest such a limit on funding to any one organization to limit the exposure
to any one organization and a limit on allocations to any one project of $25 to $50 million with larger projects
subject to Davis Bacon and Build America requirements.

An example of an eligible recipient who makes direct investments is Southface, a national nonprofit we have
partnered with. Southface provides a comprehensive approach including an energy audit, project design, vendor
selection, project management, and financing through matching grants to help nonprofits across the country like
food banks and Salvation Army to upgrade their facilities to save energy and reduce emissions.25 Another eligible
recipient would be Groundswell,26 which works to build resiliency hubs in low-income communities that both reduce
greenhouse gas emissions and increase climate resiliency. Finally, a third suggestion is Grid Alternative,27 a
national nonprofit that develops and installs solar and other projects while also providing hands on job training
and technical assistance. As previously stated, the closer the recipient is to the ultimate user, the more effective the
program will be, and the less money will be spent on overhead.

Another example of an eligible recipient is the Maryland Clean Energy Center.28 Grants to state organizations
could be structured to leveraged private financing by modeling previously successful programs such as the Clean
Renewable Energy Bonds (which the EPA could duplicate by making grants to state and local governments to
repay them for the interest on borrowings. This program allowed state and local governments to use energy as a
service or other contract structures which didn't impact their bond capacity.29

Similarly, projects modeled after the Federal Energy Performance Contracts ("ESPC") where the ultimate project is
paid for out of energy savings would be another good model as they don't count against bond ratings. These
projects reduce energy and greenhouse gases while also improving the quality of life of the users of the buildings.
Again, the lack here is for the development capital to identify and develop the projects.

2. What types of entities (as eligible recipients and/or indirect recipients) could enable Greenhouse Gas

Reduction Fund grants to support investment and deployment of greenhouse gas and air pollution reducing
projects in low-income and disadvantaged communities?

As described above, one entity that we think would make an effective eligible recipient is the Southface Institute.
Southface Institute is a sustainable nonprofit building nonprofit that strengthens equity and the environment by
transforming residential and commercial structures at every stage of the building life cycle. Since 1978, Southface
has collaborated with other nonprofits, businesses, builders, developers, universities, government agencies, and
communities to deliver practical solutions with tangible results in energy and greenhouse gas savings. For example,
Southface and Feeding America have an initiative to provide sustainable energy and water efficiency upgrades to
Feeding America foodbanks. This initiative helps foodbanks reduce annual utility costs so that those saved dollars

23	https://www.wsi.com/articles/fintech-firms-oversaw-billions-in-fraudulent-covid-aid-loans-reoort-savs-1 1 669930784

24	Inflation Reduction Act Sec. 601 03 (b)(l) - reflecting "shall" and absence of the "new" language in (b)(2).

25	https://www.southface.ora /our-work/proarams/aooduse/

26	https://groundswell.Org/progrgms/#resilience-hubs

27	https: //aridalternatives.org /what-we-do

28	https: //www.mdcleg nenergy.org/gbout-mcec/

29	See https: //progrgms.dsireusg.org /system/progrgm/detgi 1/251 0 for further informotion

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may be redirected to their mission to serve more families facing hunger in low income and disadvantaged
communities. Also, see above about Groundswell and Grid Alternatives.

3.	What types of entities (as eligible recipients and/or indirect recipients) could be created to enable Greenhouse
Gas Reduction Fund grants to support investment in and deployment of greenhouse gas and air pollution
reducing projects in communities where capacity to finance and deploy such projects does not currently exist?

As described above, there are many successful potential eligible recipients with a history of successfully
implementing energy efficiency, renewable energy, and other types of projects. To the maximum extent possible,
funds should be directed to organizations like these that have proven models and a desire to expand into
underserved areas. The remaining funds should be directed to local community-based organizations that can
provide development and technical assistance. It will be difficult to scale new businesses and creating new
"regranting" entities like green banks will duplicate existing entities and potentially increase the program risk as
highlighted in the recent Wall Street Journal article on the PPP program.30

4.	How could EPA ensure the responsible implementation of the Greenhouse Gas Reduction Fund grants by new
entities without a track record?

It is important to understand that energy efficiency and renewable energy projects are complicated construction
projects that require expertise and local knowledge including permitting and building codes. HASI has financed
energy efficiency improvements on tens of thousands of housing units and hundreds of thousands of rooftop solar
projects. This work is complicated and requires design and development processes, local contracting crews, and a
knowledge of the local building market as well as a keen attention to detail, excellent communications, and
working as a point of contact with the customer to coordinate. It is not suitable for organizations that have never
worked on these projects before.

It may be possible to set aside a certain amount of funds that may go to small businesses (SBA, for example) —
organizations are relatively small today, but need to scale up with a portion of this that should go towards
mentorship.

Given that the GGRF offers EPA historic funding amounts, and that the amounts will likely be the largest amount
ever received by many of the organizations, we recommend that EPA provide the grants in two or more stages.

This will allow EPA to limit the exposure to any one organization, be able to measure the impact of the grants
before disbursing the second phase, and be able to focus the second round of grants on the most successful
organizations. It will also allow EPA to be able to adjust to fund new or emerging areas in the second phase.
Phased grants also seem to align with the legislative language which provides that grants shall begin no later than
1 80 days but would be available to be granted until September 30, 2024. It should be noted that phased
contributions for investments are standard practice in private infrastructure funds with investors only contributing
their money when a project is identified and needs the capital.

Section 5: Oversight and Reporting

1. What types of governance structures, reporting requirements and audit requirements (consistent with

applicable federal regulations) should EPA consider requiring of direct and indirect recipients of Greenhouse
Gas Reduction Fund grants to ensure the responsible implementation and oversight of grantee/subrecipient
operations and financial assistance activities?

Given the large amount being allocated, it is important that recipients be held accountable for the allocations and
that basic standards and limitations be put in place such as requiring audited financial statements prior to grants
over $10 million, requiring a segregation of the funds from other uses and limitations on the amount of overhead
that can be funded with the grants. Larger grants should require the organization to have an independent board
of directors who oversees the grantee with appropriate controls over related party transactions.

30 https: //www.wsi.com/articles/fintech-firms-oversaw-billions-in-fraudulent-covid-aid-loans-report-says-1 1 669930784

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Grants should also have requirements for submitting quarterly and annual reports to the Administration including
the financial activities and outcomes achieved with the funds received under this section, including quantification of
reductions in greenhouse gas emissions and other forms of air pollution.

Given that the GGRF offers EPA historic funding amounts, and that the amounts will likely be the largest amount
ever received by many of the organizations, we recommend that EPA provide the grants in two or more stages.

This will allow EPA to limit the exposure to any one organization, be able to measure the impact of the grants
before disbursing the second phase, and be able to focus the second round of grants on the most successful
organizations. It will also allow EPA to be able to adjust to fund new or emerging areas in the second phase.
Phased grants also seem to align with the legislative language which provides that grants shall begin no later than
1 80 days but would be available to be granted until September 30, 2024. It should be noted that phased
contributions for investments are standard practice in private infrastructure funds with investors only contributing
their money when a project is identified and needs the capital.

As mentioned above, there should be a reported measure of the carbon saved. One effective tool available for
appropriate data collection is CarbonCount. Developed by HASI in 201 3, CarbonCount is a scoring tool for
evaluating investments in U.S.-based renewable energy, energy efficiency, and climate resilience projects to
determine the efficiency by which each dollar of invested capital reduces annual carbon dioxide equivalent
emissions. This methodology promotes transparency in project finance by creating a simple and comparable metric
for infrastructure projects to be evaluated in terms of how much the capital investment is mitigating climate change.
By incorporating current emissions and power generation data validated by third parties, CarbonCount gives
climate finance managers a critical avoided carbon emissions metric for the downstream impacts of their
investments, which drives much-needed disclosure around financed emissions that exacerbate climate change.

2.	What metrics and indicators should EPA use to track relevant program outcomes including, but not limited to,
(a) reductions in greenhouse gas emissions or air pollution, (b) allocation of benefits to low-income and
disadvantaged communities, (c) private sector leverage and project additionality, (d) number of greenhouse
gas and air pollution reduction projects funded and (f) distribution of projects at the national, regional, state
and local levels?

See answer to question 1 above.

3.	What should EPA consider in the design of the program to ensure community accountability for projects
funded directly or indirectly by the Greenhouse Gas Reduction Fund? What if any existing governance
structures, assessment criteria (e.g., the Community Development Financial Institutions Fund's Target Market
Accountability criteria), rules, etc., should EPA consider?

As noted, we believe the program funds should be widely distributed across all 50 states to provide the maximum
benefit while limiting the risk of the funding being concentrated in the hands of a few entities. One major risk of a
concentrated grant is that there are very few, if any, qualified entities who have the established infrastructure and
track record to securely safeguard and invest $500 million or $1 billion, thus greatly increasing the risk to EPA.
Equally distributing the entire funded amount would equate to approximately $500 million per state while also
encouraging broad political support.

In looking at similar programs, the Treasury recently highlighted that its $5 billion new market tax credit program
was distributed to 107 community development entities across 35 states with 20% to rural communities.31 Similarly,
its $1.4 billion in bond funding for low-income communities through CDFIs has gone to 32 states.32 It is also clear
from the use of plural in both "grants" and "recipients" in the legislative language33 that Congress intended these
funds to be distributed to multiple entities.

31	httos://www.cdfifund.aov/news/490

32	https: //www.cdfifund.aov/news/486

33	Inflation Reduction Act Sec. 601 03 (a)(l), (a)(2) and (a)(3). The legislative history also shows that the Senate Parliamentarian would not have
allowed the program in the reconciliation act if it was intended for one entity.

One Park Place, Suite 200 • Annapolis, MD 21401 • (410)571-9860 • www.hannonarmstrona.com


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Section 6: General Comments

1. Do you have any other comments on the implementation of the Greenhouse Gas Reduction Fund?

See the opening comments that highlighted these four points:

1.	Focus on technical assistance (education and project development) and funding for residential, small business,
and local government energy efficiency which currently lack access to financing

2.	Widely distribute the funds across all 50 states

3.	Set standards for entities and projects including for reporting of use of the funds including measuring the
impact of greenhouse gas reductions

4.	Provide the funds in multiple stages to organizations that successfully prioritize projects that lack access to
funding and reduce greenhouse gas emissions

One Park Place, Suite 200 • Annapolis, MD 21401 • (41 0) 571-9860 • www.ha nnoriarmstrong .com


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f IFA

W ILLINOIS Fl

ILLINOIS FINANCE AUTHORITY

Suite S-1000

160 North LaSalle Street

Chicago, IL 60601

To:

Michael Regan, Administrator, U.S. Environmental Protection Agency
Environmental Financial Advisory Board

312-651-1300

Re:

From:

Date:

Christopher B. Meister, Executive Director, Illinois Finance Authority
December 5, 2022

Greenhouse Gas Reduction Fund Stakeholder Comments

Docket ID EPA-HO-OA-2022-0859 (Submission 2 of 2)

The Illinois Finance Authority/Climate Bank ("iFA/CB") embraced the call from U.S. EPA to help shape the
future of the Greenhouse Gas Reduction Fund ("GHGRF") through stakeholder engagement. To that end, the
Authority held two listening sessions for Illinois" stakeholders to provide oral comments and invited the
submission of written comments.

Summary of comments received:

Participants in the listening sessions held by the IFA/CB on November 10 and 17, 2022 discussed opportunities
for the State of Illinois and the Authority to advance the initiatives of Illinois" Climate and Equitable Jobs Act to
reach the State's clean energy goals and to ensure prioritization of the State's Equity Investment Eligible
Communities. An overall theme of the public input received by the IFA/CB was a desire for a coordinated
approach to the challenges of expanding the use of clean energy and facilitating the transition to a sustainable
clean economy in Illinois.

Participant speakers highlighted the opportunity to use resources made available by the GHGRF to address
financing gaps related to electric vehicle fleets, community-scale generation, and building decarbonization, and to
work with Illinois' workforce hubs and contractor incubator programs to equitably expand the clean energy
economy. Participants further cautioned against developing finance mechanisms for Carbon Capture and Storage
projects or other non-zero-emission technology approaches.

Representatives from financial institutions discussed the success of the previous efforts of the IFA/CB to leverage
private capital for the social good, such as through the IFA/CB's Clean Water Initiative Revolving Fund, and the
opportunity created by the GHGRF to build on that success.

Attached please find:

1.	The notice for the listening session held on November 10, 2022

2.	The minutes for the listening session held on November 10, 2022

3.	The notice for the listening session held on November 17, 2022

4.	The minutes for the listening session held on November 17, 2022

5.	The written comments received by the Authority

6.	Agency listening session stakeholder's materials

Respectfully,

Christopher B. Meister
Executive Director


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ILLINOIS FIKrt H(t. AUTHORITY

I FA

Friday, November 4, 2022

REVISED NOTICE OF FEDERAL GREENHOUSE GAS REDUCTION FUND AGENCY LISTENING

SESSION

Staff of the Illinois Finance Authority (the "Authority"), consistent with the Authority's designation as the
Climate Bank of the State of Illinois under Illinois law, will hold an agency listening session regarding the
Inflation Reduction Act which amended the Clean Air Act to create a new program through the United States
Environmental Protection Agency: the Greenhouse Gas Reduction Fund. This first-of-its-kind federal program
will provide competitive grants to mobilize financing and leverage private capital for clean energy and climate
projects that reduce greenhouse gas emissions - with an emphasis on projects that benefit low-income and
disadvantaged communities - and further the Biden-Harris Administration's commitment to environmental
justice. The agency listening session will be held in the Authority's Chicago Office, 160 North LaSalle Street,
Suite S-1000, Chicago, Illinois 60601 on Thursday, November 10, 2022, at 11:00 a.m.

Due to ongoing health concerns related to the novel COVID-19 virus, members of the public are encouraged to
attend the agency listening session via audio or video conference. The Audio Conference Number is (312) 626-
6799 and the Meeting ID is 890 2505 1102 followed by pound (#). When prompted for a Participant ID, please
press pound (#) and wait for the Password prompt. Upon being prompted for a Password, please enter 666181
followed by pound (#). To join the Video Conference, use this link:
https://us06web.zoom.us/i/89025051102?pwd=Q3JHZmYvSzI2STdLMDNBbC9CN01Mdz09 and enter
passcode 666181. Guests participating via audio conference who find that they cannot hear the proceedings
clearly can call (312) 651-1300 or write info@il-fa.com for assistance. Note: Authority will not allow verbal or
written comments that contain obscene, indecent, profane language, or hate speech; contain threats or defamatory
statements; or promote or endorse services or products.

Feedback about the Greenhouse Gas Reduction Fund may be submitted in writing to webmaster@il-fa.com until
5:00 p.m. on November 18, 2022.

I.	Call to Order

II.	Chair's Remarks

III.	Executive Director Overview Regarding Greenhouse Gas Reduction Fund

IV.	Public Comment and Opportunity for Guests to Ask Follow-Up Questions

V.	Adjournment

The agency listening session will be accessible to handicapped individuals in compliance with Executive Order #5 (1979) as well as
pertinent State and Federal laws upon notification of anticipated attendance. Handicapped persons planning to attend the agency
listening session and needing special accommodations should contact Mari Money at the Illinois Finance Authority by calling

(312)651-1319, TTY (800)526-0844."

ILLINOIS FINANCE AUTHORITY
GREENHOUSE GAS REDUCTION FUND AGENCY LISTENING SESSION

Thursday, November 10, 2022
11:00 AM

AGENDA:


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ILLINOIS FINANCE AUTHORITY
FEDERAL FUNDING LISTENING SESSION

REPORT OF PROCEEDINGS of the Federal
Funding Listening Session of the Illinois Finance
Authority HELD IN PERSON and VIA AUDIO- and
VIDEOCONFERENCE on Thursday, November 10th, 2022, at
11:00 a.m., pursuant to notice.

PRESENT VIA AUDIO- AND VIDEOCONFERENCE AND/OR IN
PERSON:

GUEST CHAIR WILL HOBERT
GUEST MEMBER ARLENE JURACEK
GUEST MEMBER AMEYA PAWAR
GUEST MEMBER ROGER POOLE

CHRISTOPHER MEISTER, Executive Director

MARK MEYER, Associate General Counsel

ROB LITCHFIELD, IFA IT Expert
* * * * *

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Funding Listening Session - 11/10/2022

EXECUTIVE DIRECTOR MEISTER: Good morning,
everyone. This is Chris Meister. I am Executive
Director of the Illinois Finance Authority. I would
like to call this agency listening session to order.

Assistant General Counsel Mark Meyer?

ASSOCIATE GC MARK MEYER: Good morning.
This is Mark Meyer, Associate General Counsel of the
Authority. Today's date is Thursday, November 10th,
2022. This agency listening session has been called
to order by Executive Director Meister at the time
of 11:01 a.m. and will remain open until 12:01 p.m.;
60 minutes from now.

This is a listening session only and
is being conducted via video and audioconference.

Staff of the Authority, consistent
with the Authority's designation as the Climate Bank
of the State of Illinois under Illinois law, are
holding this agency listening session regarding the
Inflation Reduction Act (or "IRA"), which amended
the Clean Air Act to create a new program for the
United States Environmental Protection Agency ("US
EPA"): The Greenhouse Gas Reduction Fund (the
"GGRF"). This first-of-its-kind federal program
will provide competitive grants to mobilize

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Funding Listening Session - 11/10/2022

financing and leverage private capital for clean
energy and climate projects that reduces greenhouse
gas emissions -- with an emphasis on projects that
benefit low-income and disadvantaged communities --
and further the Biden-Harris Administration's
commitment for environmental justice.

Executive Director Chris Meister is
currently with me in the Authority's Chicago office
at the physical location of this listening session
and participating via video- and audioconference;
some guests and staff are similarly at the location
of the meeting and participating via video- and
audioconference, while some other guests and staff
will attend this meeting solely via video- and
audioconference.

As we take the roll, the response of
the guests and staff will be taken as an indication
that this they can hear all discussion and
testimony.

Since this is an agency listening
session, I will recognize the guest members and
staff who are present. Please respond with a
"present" when I call your name.

Guest Member Juracek?

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Funding Listening Session - 11/10/2022

GUEST MEMBER JURACEK: Here. Present.
ASSOCIATE GC MARK MEYER: Guest Member

Pawar?

GUEST MEMBER PAWAR: Present.

ASSOCIATE GC MARK MEYER: Guest Member

Poole?

GUEST MEMBER POOLE: Present.

ASSOCIATE GC MARK MEYER: Executive
Director Chris Meister?

EXECUTIVE DIRECTOR MEISTER: Present.
ASSOCIATE GC MARK MEYER: IFA IT Expert
Rob Litchfield?

IFA IT ROB LITCHFIELD: Present.

ASSOCIATE GC MARK MEYER: Guest Chair and
Member Hobert?

GUEST CHAIR HOBERT: Present.

ASSOCIATE GC MARK MEYER: Before we begin
making our way through today's session, I would like
to request that each speaker mute their audio, when
possible, to eliminate any background noise unless
you are speaking, answering a question, or otherwise
providing any comments for the record. If you are
participating via video, please use your mute button
found on your task bar at the bottom of your screen.

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You will be able to see the control bar by moving
your mouse or touching the screen of your tablet.

For any Guest Member, staff, or
anyone from the public participating via phone, to
mute and unmute your line, you may press *6 on your
keypad if you do not have that feature on your
phone.

As a reminder, we are being recorded,
and a court reporter is transcribing today's
listening session. For the consideration of the
court reporter, I would also like to ask that each
speaker state their name before speaking or
otherwise providing any comments for the record.

Finally, I would like to confirm that
all members of the public attending in person or via
audio conference can hear this meeting clearly.

Chris, can you confirm that this
video- and audioconference is clearly heard at the
physical location of this meeting?

EXECUTIVE DIRECTOR MEISTER: Thanks, Mark.
This is Chris Meister. I am physically present in
the conference room on the 10th floor of 160 North
LaSalle. With me are Guest Chair Will Hobert and
Guest Member Ameya Pawar. I can confirm that I can

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hear all discussions at the physical location of the
listening session. We've advised the security
guards on the first floor that we have this public
session today. The agenda for this listening
session was posted on this floor and on the first
floor, as well as on the Authority's website as of
last Friday, November 4th, 2022. The building
security has been advised that any members of the
public who choose to do so and choose to comply with
the building's public health and safety requirements
may come to this room and speak in the posted manner
and listen to those proceedings.

Back to you, Mark.

ASSOCIATE GC MARK MEYER: This is Mark
Meyer. Thank you, Chris.

If any members of the public
participating via video- or audioconference find
that they cannot hear these proceedings clearly,
please call (312) 651-1300 or write info@il-fa.com
immediately to let us know, and we will endeavor to
solve the audio issue.

Over to you, Chair Hobert.

GUEST CHAIR HOBERT: This is Will Hobert.
Welcome. This is the first time that we have

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conducted an agency listening session. As you have
heard, this morning's topic is the Greenhouse Gas
Reduction Fund. The GGRF is an important
opportunity for the Authority in our state statutory
role as the Climate Bank and for Illinois as a
whole.

The GGRF is a new program, and the
federal government is in the process of shaping it.
The amount of the GGRF money that the federal
government will be distributing nationally is
estimated to be as large as $27 billion, and the
timeline of such funding is aggressive. In our
view, the GGRF's purposes are consistent with the
purposes of the Illinois Climate and Equitable Jobs
Act, or CEJA, specifically the goals of: Putting
1 million electric vehicles on Illinois roads by
2030, reaching 100 percent of clean energy in
Illinois by 2050, and while prioritizing job
creation/training/placement reflecting the diversity
of Illinois.

Importantly, US EPA is conducting its
own public engagement efforts. So our work today
merely complements US EPA's public engagement
efforts. However, as the Authority shapes its

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approach to compete for limited GGRF funds, the
Authority wants to hear as many voices as possible.
We will limit each guest's statement to
three minutes, and an email address has been
provided for written comments. We thank you,
everyone, for your interest in this listening
session and for taking time out of your day.

Before I ask Chris to provide a brief
overview of the GGRF opportunity, I turn to my
colleagues, Members Juracek, Pawar, and Poole.

GUEST MEMBER JURACEK: Yes. This is
Member Arlene Juracek. And I want to say, first of
all, this is, as has been stated several times
already this morning, an unprecedented opportunity
in both potential funding size and the
aggressiveness of the implementation schedule. And
it's going to be important that all of us -- grant
applicants and grant recipients -- do this right
because I think the whole world is going to be
looking at us.

So this morning's opportunity to have
public input is really going to be critical to
shaping the quality of our response. I see that we
have more than 71 folks who have chosen to join us

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this morning, and I'm looking forward to all of your
comments. I see a varied group of you who are
joining us from all segments of the interested
public. And I encourage you to be candid, to be
succinct, and to be constructive. We're very much
looking forward to hearing from all of you.

GUEST MEMBER PAWAR: Good morning. This
is Member Ameya Pawar. This is an exciting day
because Section 134 of the Inflation Reduction Act
is an opportunity to inject much needed private
capital into low-income and disadvantaged
communities across Illinois, improve the health of
these communities by reducing greenhouse gas
emissions, and do so consistent with the governor's
goals outlined in CEJA and in a manner that reflects
the true diversity of Illinois. Thank you.

GUEST CHAIR HOBERT: Roger?

GUEST MEMBER POOLE: Yes. Thank you,
Mr. Chairman.

Very interesting program, obviously.
Something that we could widely use in the state of
Illinois. That's obvious. So I'm glad to be here
this morning to listen in on the program.

I've been a union machinist for

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50-plus years, and I've had -- I've been active at
all levels of the American labor movement; and also
belong to the -- was vice president of AFL-CIO, the
people who brought you the middle class and the
weekend.

I'm excited for the opportunity --
the opportunities of Section 134 of the IRA offer to
the trained and affected women and men of organized
labor. I am the longer serving labor representative
on the Illinois Finance Authority, and I am grateful
to Governor Pritzker for the opportunity to serve
and that we have this listening session this
morning.

Thank you, Mr. Chairman.

GUEST CHAIR HOBERT: Chris, over to you.

EXECUTIVE DIRECTOR MEISTER: Great. Thank
you. For all the stakeholders, there's a memo that
is posted on our website labeled, appropriately, "to
stakeholders." Much of it has been summarized in
the comments up to this moment.

I do want to make sure that everybody
is aware, because the links for the US EPA's
Environmental Finance Advisory Board and the
relevant dates -- and those are open to the

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public -- are there on the bottom of page 1. The
US EPA has provided a GGRF website, which has a
wealth of information on it. But, specifically, I
want to turn to the actual statute, which,
fortunately, is about two-plus pages and is very
brief.

So I just really want to outline the
zero-emissions technologies, which the IFA, as a
public entity, can compete for, along with nonprofit
eligible entities. EPA is authorized to make these
grants on a competitive basis. It's up to
$2 billion, but, specifically, the goal is to
provide financial assistance, including technical
assistance, to enable and benefit low-income and
disadvantaged communities, to deploy or benefit
zero-interest technologies, including rooftop
distributed technologies, and to carry out other
activities. That's $7 billion.

There's close to $12 billion, again,
competitive to nonprofit eligible recipients.

Three, there is up to $8 billion to
low-income and disadvantaged communities, again, to
eligible recipients. There is a group that helps
with this legislation of the coalition for green

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capital. They're seeking to create a national green
bank. There is some legislative -- federal
legislative intent on that.

But, again, really the focus of
today's discussion is for us to listen on those
sorts of financial assistance, those sorts of loans,
grants, guarantees, technical assistance, needs in
Illinois that, should the Illinois Finance
Authority, as the Climate Bank, to be fortunate
enough to receive these moneys, that we could
maximize these utilities and sustainability of these
funds over the long term.

So should we begin? Oh, I'm sorry.
This is a listening session. The instructions for
the attendees are here. If any attendee is
participating by video, please indicate by raising
your hand. I believe we already have one. Click
the "raise hand" option at the bottom of your
screen. And you should be able to see that on the
task bar. If you are participating by phone, please
indicate your desire to raise your hand by pressing
*9 .

Each attendee will be speaking for
three minutes or less. We will have a timer. We

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have a large number of attendees, so we would
encourage you, if you have less than three minutes,
use less than three minutes.

We also have the opportunity to
submit comments in writing. The website is
noticed -- it is on the website on the notice. It's
open until 5:00 p.m. Central time on November 18,
2022 .

This session is being recorded, and
we have a court reporter here transcribing the
discussion. When you are called upon, please be --
slowly state and spell your name so that the court
reporter can accurately record it.

Rob Litchfield, our colleague, will
help us manage the queue.

Back to you, Will.

GUEST CHAIR HOBERT: Thank you, Chris.

This is Will Hobert.

Rob, if you could -- if I could ask
you and Chris to work together to queue and call
upon the attendee speakers, we will work to have as
many attendee speakers as possible. This session
will only run for 60 minutes total.

And, Rob, do you have the speakers

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ready?

IFA IT ROB LITCHFIELD: I have -- the
first one is Stephen Nickels. I'm going to allow
him to speak. Stephen?

MR. NICKELS: Good morning. Good morning.
From the Illinois Finance Authority "Agency
Listening Session Materials related to the
Greenhouse Gas Reduction Fund" guidelines, Number 3,
qualified project: "The term 'qualified project'
includes any project, activity, or technology that
reduces or avoids greenhouse gas emissions and other
forms of air pollution in partnership with, and by
leveraging investments from, the private sector," or
the Illinois Finance Authority must exclude any
carbon capture projects from consideration of
funding due to the fact that carbon dioxide capture
and transportation, whether for sequestration or
enhanced oil recovery is a net emitter of greenhouse
gases. Therefore, has failed Section 3(A) as quoted
above, carbon dioxide capture and transportation for
sequestration or enhanced oil recovery does not
reduce greenhouse gas emissions.

The Illinois Finance Authority must
further include debt reduction as a path for

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greenhouse gas reduction by municipal electric
aggregators and rural electric co-op to their
generation facility. This is one of the only paths
to a cleaner mix of future power generation for
those of us in beautiful rural Illinois.

Until the coal plants retire, we
rural Illinoisans inevitably contribute to the
destruction of that which so many generations have
taken for granted: A liveable planet.

Oh, and my name is Stephen Nickels,
N-i-c-k-e-l-s, and I'm with Illinois People's
Action. And I thank you for allowing me to address
you.

GUEST CHAIR HOBERT: Thank you, Stephen.

Rob?

IFA IT ROB LITCHFIELD: Sorry. So our
next up on our list is Jonah.

MR. RUBIN: Hi. My name is Jonah Rubin;
that's J-o-n-a-h; last name, R-u-b-i-n. I'm sitting
here with my 10-week-old son Raphael, R-a-p-h-a-e-1.

And we are from Galesburg, Illinois.

We're a small city in Western
Illinois of 30,000 people. And, historically, we
were the type of town where you could get a

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good-paying union job and be in the middle class.
That changed 18 years ago now, when Maytag left
town. And since then, it's hit us hard. The scars
of Maytag leaving here, really is still felt here.

We have a nearly 2 0 percent poverty
rate here in Galesburg. You know, one of the things
that is amazing about CEJA is the presence of these
workforce hubs where people can get really strong
training for founding a green business, get strong
training for getting those good-paying middle-class
jobs. We don't have one in Galesburg. It's a lot
to ask people from my community to travel 45 minutes
or an hour to get to Peoria to go attend class so
that they can get a job three months, six months
from now.

We're getting a lot of federal money.
It would be amazing if we could just direct those to
found more of these CEJA workforce hubs in
communities like mine, the gap communities, that
don't have these opportunities for training, that
don't have the opportunities to get that pathway to
the middle class that, historically, this town has
had.

So I would urge the Climate Bank to

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really explore the possibility of expanding the CEJA
workforce training cites towards communities like
mine, gap communities, that could really use them.

I will just echo the previous speaker
as well in saying that one thing we don't want in
our community are these carbon capture pipelines.
They're not producing long-term paying jobs. I
don't see why we should help islands pollute more.
And I definitely don't want to be driving and have
one of them explode in my community, as they have in
several other communities.

So we want real solutions like the
CEJA workforce hubs in my community, and we don't
want false solutions that don't help communities;
that make more communities more dangerous and that
give a license to pollute elsewhere. Thank you.

GUEST CHAIR HOBERT: Thank you, Jonah.

Rob, next up?

IFA IT ROB LITCHFIELD: So next up we have
Joyce -- is it Harant? Joyce?

MS. HARANT: Okay. Can you hear me?

IFA IT ROB LITCHFIELD: Yes.

MS. HARANT: Great. Thank you very much.
My name is Joyce Harant, and I'm in Peoria. And my

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background is interest and training in public health
and also serve as a Peoria Park District Trustee.
And I'm here representing the Central Illinois
Healthy Community Alliance.

I noted with interest Mr. Meister's
statement when he used a reference to zero
emissions, and I would like to encourage you to
begin using real -- the term "real zero emissions"
because some are now starting to use this term "net
zero." And that refers to, in my view, the use of
carbon capture and sequestration or has oil recovery
techniques that give us the false hope that we will
be able to continue burning fossil fuels forever,
and just put it in the ground. And that is a false
hope.

We know that there are other health
impacts from other pollution sources when we burn
fossil fuels. I believe it's inconsistent with CEJA
where we want to close the coal plants. So I'm
encouraging you, as Illinois Finance Authority, to
not fund and encourage, through your funding
sources, any carbon sequestration projects or
pipeline projects. Others have pointed out the
dangers -- it's risky, untested, and there's really

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no assurance that every carbon dioxide molecule that
is put in the ground will stay in the ground. And
once it starts coming out, we have no control over
it.

So we can better spend our funds
funding renewable energy, energy efficiency, making
sure electric vehicles are built out and they are
charged by renewable energy. And so I -- and,
again, that we use our funds to ensure that equity
contractors can get the jobs, that the hubs are
supported so that we can ensure that our
environmental justice communities get the benefits
from the Climate Fund that we all intended when we
passed CEJA. So thank you very much.

GUEST CHAIR HOBERT: Thank you, Joyce.

Rob?

IFA IT ROB LITCHFIELD: Excuse me. Next
up we have Peter Schwartzman.

MR. SCHWARTZMAN: Yes. Hello. Thank you
so much for giving me the opportunity to speak to
you today. I'm the mayor of Galesburg, Illinois.
It's a city of 30,000 residents in West Central
Illinois. I'm also an environmental studies
professor at Knox College and have been there since

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1998. I'm also a member of the IPA, Illinois
People's of Action.

Over my 3 0 years as an environment
scholar, I've published several peer-reviewed
articles on climate change and energy. I've also
coauthored a book in 2019, "Under the Future of
Energy and Food."

As a scientist and politician, I see
amazing opportunities for Illinois to become a
primary provider of clean energy in the future for
the Midwest and beyond. And when I say future, I'm
talking near future. We have an ample wind and
solar energy in our state, not only for Illinois,
but for all surrounding states. As an elected
leader of my community for the past 12 years, I have
focused a lot of attention on energy savings and
real energy development.

We have seen amazing progress. We
first aggregated our power eight years ago, and
we've saved our residents millions of dollars over
this time. We had a solar array put at our water
pumping station, which is located outside of
Galesburg. That was started up in 2 020, and we are
saving residents in the city $50,000 a year on that.

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We have -- also, we currently have an
RP valve to put solar in our city's water plant
storage plant, and we see that as a very lucrative
and environmentally safe and responsible path.

Two large projects are planned in
renewable energy for our county. Both are over
$50 million. One is a wind project that's held up
in court currently but should be released soon. And
a very large, 400-acre array -- solar array just
south of town. That's going to bring incredible
amounts of tax revenue to our community, provide
revenue for farmers and other landowners. I hope
you guys know about the aggregate FAIT programs that
are being taught now in -- at the University of
Illinois so we can grow food and extract energy from
plots at the same time.

Closing thoughts; very important.
These are very important developments in rural
communities. These are really good jobs and
good-paying ones. The tax revenue I alluded to is
very important to sustain these communities. But we
need to train and hire local people and with
emphasis on low-income --

IFA IT ROB LITCHFIELD: Peter, you have

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less than 30 seconds left.

MR. SCHWARTZMAN: Thank you. I want to
emphasize, too, the incredible potential for energy
storage. For us to become a net energy provider of
energy for other communities outside of Illinois,
which I think we have the capacity to do, we need to
invest in energy storage.

We're ready to move forward, and I'm
looking forward to -- and eager to apply for green
financing through the Climate Bank so we can be
aggressive with our continued efforts in our
community. Thank you, again.

GUEST CHAIR HOBERT: Thank you, Peter. I
appreciate those thoughts. If we cut you off
because of the three-minute time limit, please feel
free to submit more thoughts by email. We would
appreciate that.

Rob, next?

IFA IT ROB LITCHFIELD: So our next caller
is Dawn Dennenbring.

Dawn, you're muted.

MS. DENNENBRING: Thank you. My name is
Dawn Dennenbring. I'm an environmental justice
organizer for Illinois People's Action. You heard

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from some of our members already. We have members
throughout Illinois, outside of Chicago. And our
members were heavily involved in passing the Climate
and Equitable Jobs Act and are now working on
implementing the bill.

I serve on the leadership team of the
downstate caucus and the Jobs and Economic Justice
Committee of the Illinois Clean Jobs Coalition, but
I am speaking on behalf of Illinois People's Action
today.

CEJA is groundbreaking in both
addressing the climate prices and our need to build
a new green economy, leading with racial equity, and
it would be our recommendation that you use the
Greenhouse Gas Reduction Fund money to amplify CEJA
because money is not unlimited. We ask that you
apply a litmus test as you decide how to prioritize
your spending. And if this sounds like I'm
amplifying some of what you've already heard, it's
probably because it's so important.

So, specifically, we would ask that
you ask yourselves two questions to either move a
proposal forward or to stop it in its tracks. The
first is: Will this project support the build-out

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of truly renewable energy, prioritizing solar and
wind, and doing it in a racially equitable way. It
needs to be a "yes" to this answer to move forward.

And the second question needs to be a
no. And that is: Would any portion of this project
prolong fossil fuel use, invest in fossil fuel
infrastructure; would it promote new uses for fossil
fuels or allow for a disproportionate life cycle
impact on the health, safety, or environmental
justice communities. If any portion of that is a
"yes," the proposal needs to be stopped in its
tracks.

I thank you for the opportunity to
provide this oral testimony and will follow up with
written comments that further explain this. Thank
you.

GUEST CHAIR HOBERT: Thank you very much,

Dawn.

Rob?

IFA IT ROB LITCHFIELD: Our next speaker
is Don from Illinois People's Action.

MR. CARLSON: Thank you, Mr. Chair and
Executive Director and members of the board. My
name is Don Carlson, C-a-r-l-s-o-n. I'm the

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executive director of Illinois People's Action, and
we're geographically, I think, probably the most
diverse community-based organization in Illinois,
with membership from Rockford and Galena in the
north to Johnson County in the south, with a focus
of organizing in the cities of Peoria, Decatur,
Danville, Galesburg, and Rockford, and in rural
communities as well.

What I really want to do is amplify
some of the presentations that you've heard already,
I believe all of whom have been IPA members.

There's really three pillars, but there are, you
know, multiple items under those. The first is
making sure that you lead with racial equity. CEJA
is very explicit, about 40 percent of the benefits
going to R3 and PJ environmental justice
communities. I would just add that the president's
own justice for the initiative refers to BIPOC
communities, 13 different times in the executive
order. So you can be explicit in talking about
BIPOC and disadvantaged communities.

Secondly, as you've heard from our
leaders in Galesburg -- and there will be others
from Danville and elsewhere -- make sure that the

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projects are geographically diverse. You know and I
know that Chicago's going to get theirs. And the
challenge is going to be is to make sure that clean
energy, equitable jobs projects, equitable clean
energy projects, are across the breadth of the
state, including far-South Illinois.

And third, as you just heard from
Dawn and others, do not spend this on false
solutions. You know, all you have to do is kind of
do a little Google search about FutureGen 1.0 and
the fact that that was going to be a $1.6 billion
boondoggle. Then you look at FutureGen 2.0s, that
this own Authority went to the Washington, D.C., to
try to promote to the federal government. And that
was taking -- I think, at least on the carbon
sequestration piece -- $86 million they put in the
parking lot and burned it.

We don't need FutureGen 3.0s. That
would be a disaster. The only thing that's changed
in that picture is that the sequestration has become
much more expensive, if you can believe it, and
there is now an organized grassroots movement in
opposition.

IFA IT ROB LITCHFIELD: You have

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3 0 seconds.

MR. CARLSON: In closing, don't shut this
down at 12:00 o'clock. I realize that this is one
of the first times you've had citizen participation.
Don't leave a whole bunch of people on this
presentation and tell them to write something in an
email. Reschedule something so you can hear from
everyday people in this process. Thank you very
much.

GUEST CHAIR HOBERT: Thank you, Don. I
appreciate those thoughts. And to that point, if we
run out of time -- we have a hard stop at noon -- if
we run out of time, we will be rescheduling for
Thursday, November 17, at 7:00 p.m. for another
round of listening if we run out of time.

Rob?

IFA IT ROB LITCHFIELD: Our next caller is
Phoebe Downey.

MS. DOWNEY: Hi. This is Phoebe Downey
with the FCOs that represent Chicago, Cook County,
and in the six surrounding collar counties.

Looking -- we kind of looked at the
electrification of the resource network daily here,
working to kind of -- with our legal partners, the

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CEJA process, modes of transit, freight, personal
EVs. One of the things we regularly heard from our
four agencies, as well as our other partners in the
areas, that there's a lot of funding available for
purchasing EVs and EV charging infrastructure and
that they really are starting to see, like, the
benefits of switching the fleet to EV to benefit
these disadvantaged communities, reducing their
greenhouse gas emissions. The challenge is some of
the initial upfront people that they're fighting is
especially regarding facilities updates in
electrifying fleets in many pieces.

I do see, kind of the IFA and this
funding as a potential to offer some kind of
revolving loan fund program, just like they do in
other municipal agencies that would help to overcome
the initial upfront costs and barriers. And then
these agencies, with the savings they're making
electrifying the fleet, they're coming down
significantly. Those states could be used to kind
of pay off those loans in the long term. It just
seems like a great opportunity for someone like IFA
who has the experience in this day already to
provide some kind of program like that. Thanks.

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Thank you.

GUEST CHAIR HOBERT: Thank you, Phoebe. I
appreciate your thoughts.

Rob, next speaker?

IFA IT ROB LITCHFIELD: Our next speaker
is Jeff Crabbal.

MR. CRABBAL: Hi. Can you hear me?

IFA IT ROB LITCHFIELD: Yes, we can.

MR. CRABBAL: Thank you so much for
allowing me the opportunity to speak. And also, I
appreciate you holding another session in the
evening, so I think more people would be able to
attend.

I am a member of Illinois People's
Action. But I am speaking as a member of the city
council for the city of Bloomington, individually.
And I can see where the city of Bloomington could
benefit greatly from funds from the source. You
know, we, for instance, have millions of dollars
worth of fleet vehicles in our city. You know, we
have tried to do what we can with it -- you know,
idle reduction technology. But we just don't simply
have the funds to make all of those vehicles
electric.

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Also, we do have disadvantaged areas
of our community, many of which would support solar
panels, wind farms, you know, that type of thing.
Many of our government buildings also could be used
for solar and help reduce the city's energy bill.
All of this work would provide good-paying jobs for
people in those disadvantaged, you know, community.
And so, you know, I would strongly encourage the use
of these funds for local communities to do more than
what we otherwise could with our limited budgets.
Thank you so much.

GUEST CHAIR HOBERT: Thank you, Jeff. We
appreciate your thoughts.

Rob, next?

IFA IT ROB LITCHFIELD: Our next speaker
is Stratford Shields.

Stratford, you need to unmute

yourself.

MR. SHIELDS: My name is Stratford
Shields. I appreciate the opportunity to address
the Authority in this open meeting. I'm with Blue
Capital, which is based in Chicago. I am a managing
director, and we have a specialized finance group
there.

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Blue Capital is the largest
minority-owned security company in the United
States. It is also harbored in Chicago. We have a
long history at Blue Capital of working with the
Authority, which is a trusted participant in the
capital markets. The IFA has been a leader in ESG
financings in the capital markets. It's one of the
first issuers to have issued green bonds for the
state's water and waste -- water and state revolving
fund programs.

We have also been a partner with the
IFA on financings for the PACE program, which is the
Property Assessment Clean Energy financing program,
which is for energy efficiency and renewable energy
projects for commercial facilities, which we have
financed, you know, through the IFA, mostly in
Chicago. We would hope to work with the IFA in
greenhouse gas financing opportunities with clean
energy and climate projects, based on its history of
using innovative financing to maximize the leverage
or the impact of, you know, these new federal
programs, as the IFA has done in the past for the
governments, and as I've mentioned for the Illinois
EPA's waste and waste water programs.

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You know, again, I appreciate the
opportunity to address the Authority and would like
to express our interest in continuing to be the
Authority's partner as it looks to maximize the
impact, you know, of these new financing programs.
Thank you very much.

GUEST CHAIR HOBERT: Thank you, Stratford.
We appreciate your time.

Rob, next?

IFA IT ROB LITCHFIELD: Our next caller,
speaker is Deborah Whitaker.

Deborah, you need to unmute yourself.

MS. WHITAKER: Hello. Can you hear me?

IFA IT ROB LITCHFIELD: We can.

MS. WHITAKER: Hello. Deborah Whitaker,
director of business development and diverse supply
chain with HIRE360. One of our main focuses, we
have work with 120 diverse businesses that
are -- have been invested in and have not really had
a tremendous amount of opportunities. And now we
have those opportunities that are presenting
themselves as one of the biggest obstacles for any
of these businesses in order for them to participate
in these opportunities is capital, you know,

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equipment purchases, and things that are needed that
some of the small businesses do not have the
capabilities of being able to take advantage of.

So whereas these programs are coming
to actually move us forward and help us to actually,
like I said, you know, eliminate the greenhouse
gases, we have to take into consideration these
opportunities for generation wealth creation for a
lot of businesses that have not had those types of
opportunities.

So I would like for the consideration
to be made towards making sure that, you know, the
technical system that is going to come out of this,
you know, would actually have some allowance for
companies to be able to rescale them up, get that
access to capital, get that access to the training
and the capabilities for them to actually
participate and take advantage of this and not just
be something where some of the larger companies
that, you know, traditionally get those
opportunities. You just kind of throw out the
crumbs to those smaller businesses. So I just want
to make sure there's a lot of emphasis on inclusion
for those minority businesses.

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GUEST CHAIR HOBERT: Thank you, Deborah.
We appreciate your thoughts.

Rob, it looks -- next up is Ben?

IFA IT ROB LITCHFIELD: Sorry. Ben
Jackson is next.

Ben?

MR. JACKSON: Hello. I'm here. Thank
you. My name is Ben Jackson. I am the executive
vice president with the Illinois Bankers
Association. I appreciate this opportunity to weigh
in on this important matter. I appreciate the IFA
having this public listening session, and it
provides us an opportunity to talk about our
industry's perspective as the perspective of banks,
community banks, and money center banks operating
throughout Illinois and every community throughout
our state to talk about our strong, decades-long
relationship with the Illinois Finance Authority.

The Illinois Finance Authority has
been a critical partner throughout the decades on a
number of initiatives, from farm lending for
Illinois farmers and ranchers and aggregate
businesses, partnering with private banks, as well
as on larger-scale projects such as what is being

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undertaken with C-PACE, for example, or in securing
and appropriately implementing funds from the
Inflation Reduction Act.

We strongly support, and we have
written letters to support, for the agency receiving
funds under this program that would help Illinoisans
across the state. And it would also continue to
strengthen that partnership between a private
finance in Illinois, helping the Illinois economy,
while also ensuring there's a public partner that is
critical to this process of moving Illinois towards
a clean energy future.

We strongly support funds coming into
Illinois from the federal stimulus bill to support
development of green energy throughout the state of
Illinois. IFA, we have worked with them in
Springfield, in Chicago, all over, to come up with
ways to strengthen that partnership between private
finance and government for many years to come, and
that includes working together on the PACE program,
getting that right in Springfield, as well as the
Climate Bank, which the Authority established a
short time ago.

We believe these funds couldn't be

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better placed than they would be with the IFA. They
have a long --

IFA IT ROB LITCHFIELD: Thirty seconds

left.

MR. JACKSON: -- track record of
appropriately using these funds. They have an
independent board that oversees the administration
of that, with many finance experts placed on that
board. We have the utmost confidence in the IFA
appropriately using those funds going forward.

Thank you for the time. I appreciate
the opportunity to testify on behalf of the industry
here.

GUEST CHAIR HOBERT: Thank you, Ben. We
appreciate your thoughts.

Rob, next up?

IFA IT ROB LITCHFIELD: Next up, we have
DeMario Greene.

MR. GREENE: Hello. This is DeMario
Greene. I am the policy and government relations
director for the Chicago Community Loan Fund. We're
minority, midsized senior advisers with Chicago
since 1991. In that time we have provided more than
545 loans that have leveraged more than 1.6 billion

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for 501 financing for for-profit and nonprofit
developers, both gaining accesses to affordable
housing and commercial retail community facilities
and social enterprises to communities across
Chicagoland.

We've also been able to preserve or
create nearly 11,600 units of housing, more than
6,500 jobs, and 12.2 million square feet of
commercial real estate space and nonprofit
facilities there, affordable to do in sustainability
and decarbonization. And we're firmly committed to
working with borrowers who understand the importance
of proactively reversing the extent of environmental
racism that has been placed on Black and Brown
communities that we primarily serve.

To that end, we have been able to
leverage more than $332 million to support green
initiatives in the various types of investment
community that the GGRF is intended to uplift. We
definitely want to highlight that GGRF, like ours,
are some of the most uniquely tailored to serve
minorities -- a majority of minority neighborhoods
in my communities, because that's where we're most
deeply embedded.

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And it's important that the
diverse -- that the awarding process be diverse.
You cannot concentrate GGRF funds in the hands of
two organizations. A diverse applicant is to ensure
equitable and environmentalized outcome, and we
stress that to the IFA. And we also want you all to
know that it's important to strengthen the fund's
impact in low-income and disadvantaged communities
by specifically empowering emerging and
minority-lived and nondepository community financial
service providers who are deeply entrenched in these
communities.

It's also vital that the award be for
at least 40 percent of all program funds to
qualified applicants and reflective of and have a
genuine history in the low-income and disadvantaged
communities that they serve.

We also have to lead with energy
efficiency as a strategy to maximize greenhouse gas
reductions in low-income and disadvantaged
communities. We have to do the nonthreatening
stuff, the regular everyday stuff, and we have to do
it better. In addition to making sure that whatever
programs --

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IFA IT ROB LITCHFIELD: DeMario, you have
20 seconds.

MR. GREENE: -- because it takes both
sides. We have been able to partner with some great
folks to do some amazing things in the group. They
want to continue that work, and we know that we can
do that with the help of IFA and the GGRF. Thank
you so much for your time.

GUEST CHAIR HOBERT: Thank you, DeMario.
We appreciate your thoughts.

Rob, next up looks like Tim?

IFA IT ROB LITCHFIELD: Yes. Our next
speaker is Tim Williams.

MR. WILLIAMS: Good afternoon. Tim
Williams here with RBC Capital Markets. And I
wanted to just offer some insight/input here with
regard to these grants, these new funds from the
federal government, and how they would be received
by the capital markets through the Illinois Finance
Authority.

We've got a really well-regarded
best-in-class entity in the Authority that has used
capital grants, capitalization grants, and federal
funding for over two decades to leverage that into

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multiples of one, two, or three times, you know, of
the amount that would have otherwise been funded
through a leveraging; and that's the Drinking Water
Act and Clean Water Act fund.

And this is a perfect opportunity as
it relates to the programs under IRA, greenhouse gas
reduction, etc., to continue to use that expertise.

And just want to note for the record
that these concepts, this structures -- or these
structures for ledgering are very well-received by
the capital markets. And, of course, IFA has a long
history of expertise in this area, well regarded by
the market, and would be an opportunity for you to,
you know, fund two, three, or four times as much as
would otherwise be funded, you know, with grants
alone.

That's it. And good luck with this,
and look forward to the opportunity to assist with
wherever we can.

GUEST CHAIR HOBERT: Thank you, Tim.

Rob, next?

IFA IT ROB LITCHFIELD: Next we have, it
looks like, MeLena Hessel?

MS. HESSEL: Hi. Can you hear me?

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IFA IT ROB LITCHFIELD: We can.

GUEST CHAIR HOBERT: Yes.

MS. HESSEL: Great. Thank you for the
opportunity to comment today. I'm MeLena Hessel.
I'm associate director of policy at Elevate.

Elevate is an Illinois-based
nonprofit with extensive programs in historically
disinvested communities in state, regionally, and
nationwide. We design and implement energy
efficiency, solar, building decarbonization, clean
water, and workforce development programs at lower
costs to protect the environment and ensure that
program benefits reach those who need them most.

The Greenhouse Gas Reduction Fund
creates an opportunity to reduce carbon emissions
and improve quality of life in historically
disinvested communities. It builds on the clean
energy winds that the state has already locked in
through the passage of CEJA. And if the program is
to live up to federal and state clean energy and
equity goals, then it must be used to fill gaps and
financing for projects brought forward by
environmental justice and are supporting 40
communities and that benefit those communities and

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the households in them.

There are many attractive
large-scaled projects and companies in the clean
energy space. But these projects and businesses are
often able to access other sources of support
including tax credits, other IRA programs, and
private capital. Smaller projects and smaller
companies, and particularly disadvantaged and
equity-eligible communities, simply do not have the
same access to capital. With that in mind, I want
to speak to two different types of projects I see as
key opportunities for this money to fund.

First, energy-efficient buildings,
community scaling of installation, and building
decarbonization in residential buildings and
buildings owned by community-based organizations are
very difficult to move forward in the current
financing environment. I would urge the IFA to
focus its efforts and any comments it submits on
these types of projects, which need additional
support and have few places to go for it.

Second, it is critical that the money
from this fund is used to advance projects led by
marginalized businesses, including equity-eligible

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contractors. Funds should be used to help
marginalized disadvantaged businesses and the
communities across the state from which they
originate, flourish.

We would like to see loan, grant,

and/or other --

IFA IT ROB LITCHFIELD: Thirty seconds

left.

MS. HESSEL: -- thank you -- that support
marginalized businesses; pursue energy efficiency;
solar, wind, and EV development across the state.
And I'm confident that the IFA has the experience
and track record to meaningfully support this goal,
but I also urge you to explore what other entities
may be important to truly reach a broad range of
diverse businesses and communities because we need
to reach them all.

Thank you for listening today. I'd
urge the IFA to keep these remarks in mind. I have
drafted comments to the EPA, worked with other
funding partners, and developed its own program.
That's it.

GUEST CHAIR HOBERT: Thank you, MeLena.
Rob, next up?

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IFA IT ROB LITCHFIELD: We have Scott

Robertson.

MR. ROBERTSON: How are you? Hello. Can
you hear me?

IFA IT ROB LITCHFIELD: We can.

MR. ROBERTSON: Okay. Hello. My name is
Scott Robinson, and I'm the vice president with C&H
Security. I wanted to share our observations with
the Authority on the State Revolving Fund financial
program.

We have observed that the Authority
operates an effective and transparent financing
program on behalf of the state. Furthermore, the
Authority has used the capital market to the
advantage of the State Revolving Fund program to
achieve public benefits for this Environmental
Financing Program. Issuers like the Authority,
which fund State Revolving Fund programs, are
well-suited to lead programs like the ones being
discussed today. Thank you for your time.

GUEST CHAIR HOBERT: Thank you, Scott.

Rob, next up?

IFA IT ROB LITCHFIELD: Next up is
Brian -- I'm sorry if I mispronounce this -- is it

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Liechti?

MR. LIECHTI: Yes. Liechti; that's
L-i-e-c-h-t-i, and I am the senior manager of
marketing at Inclusive Prosperity Capital.

IPC is a clean energy 501(c) (3)
financing platform. It's run out of the Connecticut
Green Bank and focuses on aligning investment
capital and financing programs with organizations,
projects, and community initiatives that benefit
traditionally underserved markets.

IPC partners with state and local
governments, green banks, CDFIs, and other lenders,
nonprofits, and developers to create programs,
derisk other lenders, trade new structures, own
assets on their behalf to collaborate on products,
program, or process design.

And in order to solve the problems
that we're facing, we need to green our existing
infrastructure and lending institutions; to take
capital, including new green capital, and leverage
it; create new programs; scale programs; invest in
job training and new lending and alternatively
secured lending to scale real, meaningful programs
for communities.

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This is about helping capital find
its way to communities, and that's exactly what I
have faith, as this is new capital. And the key is
to create -- not create new programs in some cases,
but to leverage existing programs and work across
state agencies.

I would like to agree with the point
that Tim made earlier on IFA's historical use of
leveraging federal funds, and I want to emphasize
that we partner with organizations nationally,
effectively operating as a virtual green bank.

I want to thank the IFA for their --
opportunity to speak this afternoon, and best of
luck as the process unfolds.

GUEST CHAIR HOBERT: Thank you, Brian. I
appreciate your thoughts.

Rob, next up?

IFA IT ROB LITCHFIELD: Next up is
John -- is it Delurey?

MR. DELUREY: Yeah. Delurey.

Thank you all for making this time,
and just wanted to point out how robust the
participation has been. And we may not hit the top
of the hour, depending how long I and whoever

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follows me goes, but would definitely recommend an
evening session, if at all possible, logistically.
It just turns out different types of people who
might be working now or might be otherwise engaged.

So my name is John Delurey. I'm with
Vote Solar. Vote Solar is a national solar and
justice advocacy organization. We focus on making
solar more equitable and inclusive. I'm also on the
steering committee of the Clean Jobs Coalition, on
the board for the Illinois Environmental Council and
the Midwest Renewable Energy Association, but I'm
speaking today just on behalf of Vote Solar.

I would hazard that our shared goal
is to get the money to the ground and to pull as
much of it as possible to support the people of
Illinois; in particular, low wealth and
disadvantaged Illinois families. We need money to
deploy large scale climate and clean energy
solutions. Don't get me wrong. I just don't worry
as much about those projects that are easier to
finance and have, traditionally, been easier to
capitalize.

I worry about the projects that are
harder to finance, as some other speakers have

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referenced; those that are in disadvantaged
communities, those that are built by disadvantaged
contractors, or those contractors that have been
blocked or overlooked by a long history of racist
lending. We need to put solar on every roof and a
heat pump in every home, with low-wealth Illinoisans
at the very front of the line. Many of these
financing products will require aggregating small
projects, many of which that are done by small,
often nonunion, mom-and-pop contractors.

The Illinois Finance Authority's
Climate Bank will be critically important, but not
sufficient, in achieving this goal. This is why my
colleagues at the Illinois Clean Jobs Coalition and
I worked with members of the Illinois Legislature to
create a new inclusive financing entity. We spent
months listening to disadvantaged communities and
Black and Brown contractors and consulted
extensively with the coalition for green capital
when crafting the structure and role of this new
entity. And that's the same bill that created the
Climate Bank Authority, has created a new Green Bank
as well, the Clean Energy Jobs and Justice Fund.

That fund is laser-focused on

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equitable outcomes and was specifically designed as
a nonprofit entity, to both cover gaps in the
financing landscape and to go places that other
entities might not.

IFA IT ROB LITCHFIELD: Thirty seconds,

John.

MR. DELUREY: Thank you. The timing works
out well, especially considering that 20 of the
27 billion in the Greenhouse Gas Reduction Fund is
reserved for nonprofits and other similar eligible
entities. When the moment comes, this is why we
should have a coordinated approach to apply for
funding to the State of Illinois.

Thanks to CEJA, thanks to Governor
Pritzker, thanks to many in-state leaderships, I
believe Illinois is in position to claim over a
billion dollars of the 27 billion, but only if we
work together and focus on real, not false, climate
and clean energy solutions.

My direct ask, in closing, is that
the comments submitted to the Greenhouse Gas
Reduction Fund or about the Greenhouse Gas Reduction
Fund express the need for multiple recipients at
multiple scales, including the job-adjusted funds,

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to fully achieve climate and economic justice.

Thank you.

GUEST CHAIR HOBERT: Thank you, John. We
have time for one to two more callers, and we will
also be scheduling a November 17th at 7:00 p.m.
listening session.

So with that, Rob, can you ask our
next speaker to unmute.

IFA IT ROB LITCHFIELD: Our next caller is
Deonte Moore.

MR. MOORE: How's it going? Thank you,
all, for allowing me this opportunity. I am Deonte
Moore. I am the Green Jobs Workforce program
director for the Illinois Environmental Council.
And I just want to highlight -- I think, three
things.

I think that all of the funding
that's coming down the pipe from the federal
government as a result of the creation of the Green
Bank and the funding for disadvantaged communities,
as well, I think it's important to utilize those
funds to bolster the support of the -- in the
operations of 13 workforce hubs in the state. That
may also include expanding satellite facilities that

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provide training as well, similar to what's provided
in the workforce hubs.

Likewise, I think that it's
imperative that the IFA considers supporting the
IPA's Energy Workforce Equity Database. Given the
history of an inequitable job placement, I think we
need to ensure that there's a mechanism in place to
track people's -- not only entrance into the
workforce hub; their progress throughout the
workforce hubs and their integration into the jobs.
Without a mechanism like that in place or system,
which would be a robust database in place, I think
we would fail to be able to ensure that the job
placements and the job training is reaching the
disadvantaged communities. And not only that, I
think we would also fail our transition communities
who are transitioning from coal communities
throughout the state.

So I appreciate the opportunity to
speak on behalf of the Illinois Environment Council
for that. And that's all. Thank you.

GUEST CHAIR HOBERT: Thank you, Deonte.
We appreciate your thoughts.

With that, we have more speakers left

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than we have time for. It's been 60 minutes.

Chris, will you please post for the
November -- Thursday, November 17th, 7:00 p.m.
listening session to continue?

EXECUTIVE DIRECTOR MEISTER: Yes. We hope
to have that posting today. We hope to capture
everybody who was on this list, the phone numbers
and the other emails. Joe Duffy, Eric Heineman,
Karen Youngblood, and Samantha Costanzo, I think we
can reach out to you. You had your hands raised,
and we will do that this afternoon. Thank you.

GUEST CHAIR HOBERT: And we are thrilled
that everybody joined this call. We greatly
appreciate the feedback that everybody has given us.
Truly, truly amazing. Everything will be taken into
consideration.

We look forward to many more comments
on Thursday, November 17th, starting at 7:00 p.m.
Please be on the lookout for the details of that, as
Chris will post it. And, again, I thank you all for
your time, your very thoughtful comments, and I look
forward to hearing more from all of you and more
Thursday evening, November 17th.

With that, Mark?

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ASSOCIATE GC MARK MEYER: Again, this is
Mark Meyer. Chair Hobert, Executive Director
Meister, the time is 12:02 p.m. This agency
listening session is adjourned.

GUEST CHAIR HOBERT: Thank you, everybody.
EXECUTIVE DIRECTOR MEISTER: Thank you.

(Whereupon, the above-entitled
matter concluded at 12:02 p.m.)

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Funding Listening Session - 11/10/2022

STATE OF ILLINOIS )

COUNTY OF COOK )

I, Holly A. Koch, CSR, RPR, do certify
that I am a licensed Certified Shorthand Reporter,
duly qualified and certified by the State of
Illinois;

That the above-entitled matter was by me
recorded stenographically at the time and place
herein mentioned, and the foregoing pages constitute
a full, true, complete, and correct record of the
testimony given.

Dated: November 10, 2022

fj fOxK

'Holly Koch
Illinois CSR No. 084004925

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f IFA

W ILLINOIS f I

Thursday, November 10, 2022

NOTICE OF FEDERAL GREENHOUSE GAS REDUCTION FUND AGENCY LISTENING SESSION

Staff of the Illinois Finance Authority (the "Authority"), consistent with the Authority's designation as the
Climate Bank of the State of Illinois under Illinois law, will hold an agency listening session regarding the
Inflation Reduction Act which amended the Clean Air Act to create a new program through the United States
Environmental Protection Agency: the Greenhouse Gas Reduction Fund. This first-of-its-kind federal program
will provide competitive grants to mobilize financing and leverage private capital for clean energy and climate
projects that reduce greenhouse gas emissions - with an emphasis on projects that benefit low-income and
disadvantaged communities - and further the Biden-Harris Administration's commitment to environmental
justice. This REMOTE ONLY agency listening session will be held from the Authority's Chicago Office, 160
North LaSalle Street, Suite S-1000, Chicago, Illinois 60601 on Thursday, November 17, 2022, at 7:00 p.m.
NOTE: 160 North LaSalle Street, Chicago, Illinois 60601 will not be physically open.

Members of the public may only attend the agency listening session via audio or video conference. The Audio
Conference Number is (312) 626-6799 and the Meeting ID is 965 6600 7486 followed by pound (#). When
prompted for a Participant ID, please press pound (#) and wait for the Password prompt. Upon being prompted
for a Password, please enter 528030 followed by pound (#). To join the Video Conference, use this link:
https://us06web.zoom.us/i/82427169619?pwd=WlJNbmk5UWlGTmlaelUvT2JReFpXZz09 and enter paSSCOde 528030. Guests
participating via audio conference who find that they cannot hear the proceedings clearly can call (312) 651-1300
or write info@il-fa.com for assistance. Note: Authority will not allow verbal or written comments that contain
obscene, indecent, profane language, or hate speech; contain threats or defamatory statements; or promote or
endorse services or products.

Feedback about the Greenhouse Gas Reduction Fund may be submitted in writing to webmaster@il-fa.com until
5:00 p.m. on November 18, 2022.

ILLINOIS FINANCE AUTHORITY
GREENHOUSE GAS REDUCTION FUND AGENCY LISTENING SESSION

Thursday, November 17, 2022
7:00 PM

AGENDA:

I.	Call to Order

II.	Chair's Remarks

III.	Executive Director Overview Regarding Greenhouse Gas Reduction Fund

IV.	Public Comment and Opportunity for Guests to Ask Follow-Up Questions

V.	Adjournment

The agency listening session will be accessible to handicapped individuals in compliance with Executive Order #5 (1979) as well as
pertinent State and Federal laws upon notification of anticipated attendance. Handicapped persons planning to attend the agency
listening session and needing special accommodations should contact Mari Money at the Illinois Finance Authority by calling

(312)651 -1319, TTY (800)526-0844."


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Gas Reduction Fund Agency Listening Session - 11/17/2022	Greenhouse Gas Reduction Fund Agency Listening Session

ILLINOIS FINANCE AUTHORITY
GREENHOUSE GAS REDUCTION FUND AGENCY
LISTENING SESSION

REPORT OF PROCEEDINGS of the Illinois
Finance Authority HELD IN PERSON and VIA AUDIO and
VIDEO CONFERENCE, on Thursday, November 17, 2 022, at
7:00 p.m., pursuant to notice.

PRESENT VIA AUDIO AND VIDEO CONFERENCE:

CHAIRMAN WILLIAM HOBERT
VICE CHAIR ROXANNE NAVA

MEMBER ROGER POOLE
MEMBER AMEYA PAWAR

ILLINOIS FINANCE AUTHORITY STAFF:

MARK MEYER, Assistant Secretary
CHRISTOPHER MEISTER, Executive Director

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Gas Reduction Fund Agency Listening Session - 11/17/2022

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EXECUTIVE DIRECTOR MEISTER: Good evening.
This is Chris Meister. I'm the Executive Director
of the Illinois Finance Authority. I would like to
call this agency listening session to order.

ASSISTANT SECRETARY MEYER: Good evening.

This is Mark Meyer, Associate General Counsel of
the Authority. Today's date is Thursday,

November 17, 2022, and this agency listening
session has been called to order by Executive
Director Meister at the time of 7:00 p.m. We'll
remain open up to 12 0 minutes from now or until
everyone has had an opportunity to speak.

This is a listening session only and
is being conducted via video and audio conference.

Staff of the Authority, consistent
with the Authority's designation as the Climate
Bank of the State of Illinois under Illinois law,
are holding this agency listening session regarding
the Inflation Reduction Act, or IRA, which amended
the Clean Air Act to create a new program through
the United States Environmental Protection Agency,
US EPA; the Greenhouse Gas Reduction Fund, or GGRF.
This is a first-of-its-kind federal program -- this
first-of-its-kind federal program will provide

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competitive grants to mobilize financing and
leverage project capital for clean energy and
climate projects that reduce greenhouse gas
emissions -- with an emphasis on projects that
benefit low-income and disadvantaged communities --
and further the Biden-Harris Administration's
commitment to environmental justice.

Executive Director Chris Meister is
currently with me in the Authority's Chicago office
at the physical location of this listening session
and participating via video and audio conference.
Some guests and staff are similarly at the location
of the meeting and participating via video and
audio conference while some guests and staff will
attend this meeting solely via video or audio
conference.

As we take the roll calls, the
response of the guests and staff will be taken as
an indication that they can hear all discussion and
testimony.

Since this is an agency listening
session, I will recognize the guest members and
staff who are present. Please respond with
"present" when I call your name.

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Guest Vice Chair and Member Nava.

VICE CHAIR NAVA: Present.

ASSISTANT SECRETARY MEYER: Guest Member

Pawar.

MEMBER PAWAR: Present. You're going to hear
my dogs. So sorry.

ASSISTANT SECRETARY MEYER: Guest Member

Poole.

MEMBER POOLE: Present.

ASSISTANT SECRETARY MEYER: And Illinois
Finance Authority Executive Director Chris Meister.
EXECUTIVE DIRECTOR MEISTER: Present.

ASSISTANT SECRETARY MEYER: Illinois Finance
Authority IT manager Rob Litchfield.

MR. LITCHFIELD: Present.

ASSISTANT SECRETARY MEYER: Renee, please
state your -- our intern Renee is also present
today. Renee, can you spell your last name for the
court reporter.

MS. GIRARD: Girard, G-i-r-a-r-d.

ASSISTANT SECRETARY MEYER: Thank you. Before
we begin making our way through -- oh, and guest
Chair and Member of the Authority Will Hobert.

CHAIR HOBERT: Present.

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ASSISTANT SECRETARY MEYER: I am also present.

Before we begin making our way
through today's session, I would like to request
that each speaker mute their audio when possible to
eliminate any background noise unless you are
speaking, answering a question, or otherwise
providing any comments for the record. If you are
participating via video, please use the mute button
found on your task bar on the bottom of your
screen. You will be able to see the control bar by
moving your mouse or touching the screen of your
tablet.

For any Guest Member, staff, or
anyone from the public participating via phone, to
mute and unmute your line, you may press *6 on your
keypad if you do not have that feature on your
phone.

As a reminder, we are being recorded
and a court reporter is transcribing today's
listening session. For the consideration of the
court reporter, I would also like to ask that each
speaker state their name before speaking or
otherwise providing any comments for the record.

Finally, I would like to confirm that

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all members of the public attending via video or
audio conference can hear this meeting clearly.
Guest Vice Chair Nava, can you confirm that this
video and audio conference is clearly heard at your
remote location?

VICE CHAIR NAVA: Yes, I can confirm that I
can hear everything just fine from my remote
location. Thank you.

ASSISTANT SECRETARY MEYER: Great. I am
physically present in the conference room on the
10th floor of 160 North LaSalle Street in Chicago,
Illinois, and I can confirm that I can hear all
discussions at the physical location of this
listening session and the remote participants that
have spoken thus far. The agenda for this
listening session was posted on this floor and on
the first floor and on the Authority's website as
of last Thursday, November 10, 2022.

If any member of the public
participating via video or audio conference finds
that they cannot hear these proceedings clearly,
please call (312) 651-1300 or write info@il-fa.com
immediately to let us know, and we will endeavor to
solve the audio issue.

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CHAIR HOBERT: This is Will Hobert. Thank
you, Mark.

Welcome to this second time that
we've conducted an agency listening session. As
you have heard, this evening's topic is the
Greenhouse Gas Reduction Fund. The GGRF is an
important opportunity for the Authority in our
State statutory role as the Climate Bank and for
Illinois as a whole.

The GGRF is a new program, and the
federal government is in the process of shaping it.
The amount of the GGRF money that the federal
government will be distributing nationally is
estimated to be as large as $27 billion, and the
timeline of such funding is aggressive. In our
view, the GGRF purposes are consistent with the
purposes of the Illinois Climate and Equitable Jobs
Act, or CEJA, specifically the goals of putting a
million electric vehicles on Illinois roads by
2030, reaching 100 percent clean energy in Illinois
by 2050, and while prioritizing job creation,
training, placement reflecting the diversity of
Illinois.

Importantly, US EPA is conducting its

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own public engagement efforts. So our work today
merely complements US EPA's public engagement
efforts. However, as the Authority shapes its
approach to compete for limited GGRF funds, the
Authority wants to hear as many voices as possible.
For that reason, we will limit each guest's
statement to three minutes, and an e-mail address
has been provided for written comments. We
encourage everybody to participate both by showing
up today and by e-mail. We thank everyone for your
interest in this listening session and for taking
time out of your day.

Before I ask Chris to provide a brief
overview of the GGRF opportunity, I turn to my
colleagues for a brief statement: Members Nava,
Pawar, and Poole.

Member Nava?

EXECUTIVE DIRECTOR MEISTER: Vice Chair Nava,
would you like to share any thoughts?

VICE CHAIR NAVA: I'm sorry. What?

CHAIR HOBERT: Would you like to share any
thoughts before we get started?

VICE CHAIR NAVA: No. This is Vice Chair
Roxanne Nava, and I'm good. Thank you so much.

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CHAIR HOBERT: Thank you.

Member Pawar or Member Poole?

MEMBER POOLE: Go ahead.

MEMBER PAWAR: Thank you, Member Hobert.

Thank you everyone for joining us tonight. I just
wanted to quickly say that Section 134 of the
Inflation Reduction Act is an opportunity to inject
much needed private capital into low-income and
disadvantaged communities around the state of
Illinois; improve the health of those communities
by reducing greenhouse gas emissions; and do so
that is consistent with the governor's goals and
the Clean Energy Jobs Act and in a manner that
reflects the diversity of Illinois. So thank you
all for being here tonight, and I'm excited to hear
what everyone has to say. Thank you. Back to you,
Chair Hobert.

CHAIR HOBERT: Thank you, Member Pawar.

Member Poole?

MEMBER POOLE: Yes, Mr. Chairman. I'm very
excited to be part of this -- the opportunity to do
this as a member of the IFA, being a member of
organized labor for a long -- longer than I want to
really admit. But the opportunity of this

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Section 134 is as exciting for the fact that how it
will prevail in the state, move jobs,
progressiveness, move jobs and opportunities for
organized labor and their members, men/women of the
labor movement. This is as dynamite a program that
I just can't say much more about it other than the
fact that it's exciting to be a part of it and the
IFA has an opportunity to participate in it at the
level they are. Thank you.

CHAIR HOBERT: Thank you very much.

Chris, over to you.

EXECUTIVE DIRECTOR MEISTER: Thank you very
much, Chair Hobert. For the stakeholders, we
posted on our website a stakeholder memo, which
importantly contains links to various US EPA
websites, including the Environmental Financial
Advisory Board, which met earlier today, and so
they have even more information posted on their
website.

We also have a complete copy of the
statute, which, fortunately, for federal law is
fairly short. It's about two-plus pages. And I'm
just going to -- I'm just going to cover it very,
very briefly because there is a lot of information

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that EPA is continually updating. And in the
stakeholder memo there are various dates. There
was an addition. And as Will said, our work
complements the work of the EPA in gathering public
input. It's our intent to submit this information
to the EPA to help them shape the 134 GGRF program.

So, importantly, there are three
buckets of money under 134. There's what's known
as zero-emission technologies. It's up to
$7 billion. It is open to states, municipalities,
tribal governments, and eligible recipients, a
defined term of art in 134 that is a nonprofit
organization that has the ability to make
investments -- direct investments and indirect
investments -- in qualified projects at the state,
regional, and local levels.

But the zero-emission technology
$7 billion is designed to enable and benefit low
and -- low-income and disadvantaged communities
take advantage of zero-emission technologies,
including those on residential rooftops. So that's
Category 1.

There is a remaining $20 billion that
is open to, again, the eligible entities that I

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just described and that's identified in the
statute. There's up to $12 billion in financial
and technical assistance. And then there is a
billion dollars specifically for low-income and
disadvantaged communities.

Again, we look forward to hearing
what folks have to say. And this is a listening
session. And the instructions for the attendees
who wish to speak on the record, as has been
mentioned, anybody participating via video, please
indicate your desire to speak by using the "Raise
Your Hand" function. Click on the "Raise Hand"
option at the center of your control bar at the
bottom of your screen. You will be able to see the
task bar by moving your mouse or touching the
screen on your tablet.

If any attendee is participating by
phone, please indicate your desire to speak by
using the "Raise Hand" function by pressing *9.

For each attendee, again, as Will
mentioned, please limit your speaking to three
minutes or less. We will use a timer so that we
get as many speakers as possible. You will not be
called upon a second time. However, the member

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guests may wish to ask questions of any attendee
speaker. We will stop the timer for any
question-and-answer exchanges.

If any attendee is inappropriate or
unprofessional, you will be removed from the
meeting. Should you wish to submit comments in
writing, the e-mail is webmaster@il-fa.com. And
we'll keep that open until 5 p.m. on Friday,

November the 18th, 2022.

The session is being recorded. We
have a court reporter who is transcribing this
evening's discussion. So when you are called upon,
please slowly state and spell your name so that the
court reporter can accurately record it.

For the record, Rob Litchfield is
running our technical resources, and he is
available to help manage the queue along with Mark.
So thank you very much. The court-reported
transcription and recording of last Thursday's
listening session has already been posted on the
Authority's website.

Back to you, Will.

CHAIR HOBERT: Thank you, Chris. This is Will
Hobert. Rob, if I could ask you and Chris to work

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together to queue and call upon the attendee
speakers. We will work to have as many attendee
speakers as possible, and this session will run a
full 12 0 minutes if needed. Rob, do you have any
attendee speakers ready?

MR. LITCHFIELD: Yes. There's three queued to
speak. So our first one is Joe Duffy.

MR. DUFFY: Hi. Can you hear me?

CHAIR HOBERT: Yes.

MR. DUFFY: Hi. Good evening, everyone. My
name is Joe Duffy. That's D-u-f-f-y. Thank you so
much for the opportunity to speak today. I am the
executive director of Climate Jobs Illinois. We
are a coalition that is governed by the Illinois
AFL-CIO, the Chicago Federation of Labor, as well
as the Cook County construction and building
trades.

In addition to that, we have 12
different labor affiliates across the state. And
we were created back in 2020 in advance of the
negotiations around the Climate Equitable Jobs Act.
And our organization was successful in terms of
securing the strongest labor standards in the
country on the Climate and Equitable Jobs Act that

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requires project labor agreements in all utility
scale wind and solar, as well as prevailing wage on
projects that receive renewable energy credits
outside of residential solar and some houses of
worship.

And we are very excited. I want to
echo what Member Poole said regarding the Inflation
Reduction Act and why we think certain funds can be
allocated and really benefit the state of Illinois
as well as workers across the state of Illinois and
decarbonize our state's economy due to the work
that we were able to do in CEJA and what the
Inflation Reduction Act does to complement that
work that we all worked on over the last couple
years.

And I also want to echo -- I was on
the previous recording last week -- what a friend
and colleague of ours that we work very closely
with at Hire360, Deborah Whitaker. She made some
comments last week related to funds going to Black
contractors as well as the work that they're doing
at Hire360's diversified construction and building
trades. Very much is important to our coalition,
Climate Jobs Illinois, and our affiliates in labor

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across the state of Illinois.

And then there's two other pieces
that I think are really important where money
secured through this Green Bank can really benefit
Illinois and really benefit and hit the goals that
the Green Bank is seeking to accomplish. One of
which is putting this money towards workforce
development in the Climate and Equitable Jobs Act.
There's three workforce development hubs in
Northern, Central, and Southern Illinois: The
ClimateWorks preapprenticeship program that is in
the process of being implemented by the Department
of Commerce and Economic Opportunity, that would
set up preapprenticeship programs to get people
prepared to take the test to get into an
apprenticeship program for the various construction
and building trades in clean energy. We think that
that money would be very well spent to prop up
those organizations and build upon the work that
Hire360 has done in Chicago.

MR. LITCHFIELD: Joe, you have 3 0 seconds or

less .

MR. DUFFY: Sounds good.

And then in addition to that, it's

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towards carbon-free healthy schools. In the CEJA
there is 15 percent of their mobile energy credits
toward going to solar on schools as well as energy
efficiency audits focused on Tier 1 and Tier 2
environmental justice schools.

So we think it would be very
beneficial to have that money towards amplifying
solar on schools, decarbonizing schools, and
electric school buses as well.

Thank you so much for your time.

CHAIR HOBERT: Thank you, Joe. We appreciate
your time and your thoughts.

Rob, it looks like next up -- who is
next in the queue?

MR. LITCHFIELD: Mike Genin or Genin.

CHAIR HOBERT: Hi, Mike.

MR. GENIN: Hello. Can you hear me?

CHAIR HOBERT: Yes.

MR. GENIN: Thank you, Chair Hobert, Members
of the Illinois Finance Authority, the staff for
the opportunity to testify on the Greenhouse Gas
Reduction Fund.

My name is Mike, last name is
G-e-n-i-n, Genin. And I'm representing the

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Illinois Municipal Utility Association, also known
as IMUA, and the Illinois Municipal Electric
Agency, also known as the IMEA. We have worked
well with the IFA in the past with regard to
emergency loan financing for municipal gas systems
during the winter storm Uri. We would like to
again thank you, Chair Hobert, and the IFA again
for their quick action and urgent necessary relief
during that time frame.

The IMA is a nonprofit joint action
agency providing wholesale power to 32 municipal
electric systems in the state. And the IMUA is the
advocacy organization representing all 42 municipal
electric systems in Illinois. We are nonprofit
utilities, and well over a majority of our
municipal electric systems are in low-income or
rural downstate communities. We would welcome the
opportunity to potentially to work with the IFA on
the GGRF and help many of these folks benefit from
increased electric vehicles on their roads in
reaching the state's 100 percent clean energy goal
by 2050.

Our organizations are uniquely
positioned and qualified to enable these municipal

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electric utilities and, as a result, their
communities that benefit from the new zero-emission
technologies or the reduction of greenhouse gas
emission technologies. We already administer 19
programs that support energy efficiency and
electric vehicle incentives.

If the IFA is able to secure the GGRF
funds and if we were to have the prospect
department with the IFA, then we can expand our
programs to offer new incentives and opportunities
that would not necessarily be available without
financial assistance. Examples could include
offering customers incentives or rebates for
high-efficiency heat pumps, efficient appliances,
weatherization options, and opportunities to
accelerate the transition to carbon-free vehicle
fleets.

We also have experience in developing
renewable projects such as wind and solar. We
could use this experience to potentially offer the
opportunity of community-based solar for municipal
customers as well as other zero-emission or
greenhouse gas reduction technologies.

In conclusion, thank you for your

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consideration. Thank you for representing Illinois
in assessing GGRF funds. And thank you for the
opportunity to speak today. Thank you.

CHAIR HOBERT: Thank you, Mike. We appreciate
your time and your thoughts.

Next up, Rob, is it Tracy?

MR. LITCHFIELD: Tracy Fox.

CHAIR HOBERT: Hi, Tracy.

MS. FOX: Hi. Thanks to the Director, board
members, and staff who are holding this evening's
session. It is much appreciated.

I have been a community volunteer in
the Peoria area for many years and got involved
with energy policy as it was pretty closely
intertwined with our fight to clean up pollution at
the Edwards Coal Plant. And that led me to be
pretty involved with some of the legislative
drafting done by the Clean Jobs Coalition on CEJA.

And the way that CEJA is drafted,
there's a real opportunity to do not one but two or
three things with the Greenhouse Gas Reduction
Fund. I certainly think that the IFA is well
positioned to carry part of that load, but I also
think there's an important place for smaller, more

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culturally sensitive banking sorts of things such
as what was envisioned in the CEJA Jobs and Justice
Fund. And so I hope that as IFA moves forward it
will think about a role for both banking options as
well as ways that it can lift up not just the
couple of programs called out by CJI and Mr. Duffy,
but the full range of CEJA programs. I would hope
that IFA would coordinate with the Illinois Power
Authority as well as DCEO to see how the full suite
of programs might benefit from this extra funding.

I also just want to dig a little bit
to why I think multiple banking options are needed,
and the first has to do with target audiences.

CEJA and the parts of it that I worked on,
including the Jobs and Justice Fund, really focused
on the needs of very small contractors and new
entrance into the clean energy field. And they're
very targeted to try to bring people who have been
shut out before into clean energy. And that would
be people in environmental justice, people in
cannabis-ravaged communities, people coming out of
the prison system, and people who are foster care
alums.

I think the banking relationship is

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needed to help that. I'm sure folks who could
benefit from the jobs, who could benefit from the
opportunity is going to look pretty different from
what IFA typically deals with, and I think it's
good to have multiple doors. These folks, a lot of
them are used to not having good access to
capital --

MR. LITCHFIELD: 3 0 seconds left.

MS. FOX: -- of having pretty fraught banking
relationships. So I think that duplication is
important.

I also think it's important because
it allows you to do different types of projects.
Small projects that appear in neighborhoods of the
appropriate purview, of a smaller entity like the
Jobs and Justice Fund where answering questions
like what's the urban equivalent of a wind farm,
something that the south side of Peoria District
Council people ask me all the time. Those are the
purview of things the IFA would be well positioned
to address.

And, finally, I ask you not to solve
isolated and outdated projects or problems.

Instead, try to position IFA, its efforts are

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overall greenhouse gas reduction efforts and
solving the problems of everyday people, the need
for clean air, the need for low-cost energy, and
also to position Illinois to catch the next wave.
We don't need to be propping up ethanol plants with
additional carbon piping and working on solutions
that are only going to be good for 2 0 to 3 0 years.

IFA is in the --

MR. LITCHFIELD: Your time is up.

MS. FOX: Okay. You have the experience to
look beyond the obvious solutions, and I encourage
you to do so.

CHAIR HOBERT: Thank you, Tracy. We
appreciate your thoughts.

Rob, do we have anyone else in the

queue?

MR. LITCHFIELD: No, that's it. No speakers.

EXECUTIVE DIRECTOR MEYER: Will, I think
Roxanne has got a comment.

CHAIR HOBERT: Great. Roxanne?

VICE CHAIR NAVA: Thank you, Chair Hobert.

So I just wanted to add to the great
comments. This is really unprecedented times both
in terms to the potential for the funding and

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aggressiveness of the implementation schedule. So
I appreciate hearing everyone speak. You know,
it's important for all of us -- grant applicants,
grant recipients -- because we know that it's
important to do this right, it's important to be
inclusive, it's important to be equitable because I
believe the world is watching us.

I'm glad all the speakers were
constructive, and they were on the same page of
being inclusive and equitable. And we look forward
to hearing from everybody so that we can all move
forward together. Thank you, Chair Hobert.

CHAIR HOBERT: Thank you, Member Nava.
Appreciate those thoughts.

Rob, do we still have nobody in the

queue?

MR. LITCHFIELD: Nobody in the queue.

CHAIR HOBERT: Okay.

ASSISTANT SECRETARY MEYER: Again, this is --
are we ready to adjourn? This is Mark Meyer.
Executive Director --

MR. LITCHFIELD: Wait. We have someone logged
in as "staff liaison."

MS. BECKER: Apologies. I'm using a work Zoom

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account. My name is Lauren Becker, and I'm with
the City of Carbondale, Illinois.

CHAIR HOBERT: Hi, Lauren. Please take up to
three minutes and let us know your thoughts.

MS. BECKER: My thoughts will be short and
sweet. I just want to make sure that I take this
time that you've provided for us to echo the
sentiments of a previous speaker. Coming from the
perspective of a municipal employee, I cannot
stress enough the importance of small projects and
the importance of projects that focus on
strengthening the resilience of our neighborhood.

So a previous speaker had mentioned
this opportunity as an avenue for us to focus on
the new wave, catching the new wave. So I just
want to stress that our community is also looking
to catch the new wave, not additional carbon
piping. We want to be preparing ourselves to be
resilient and focusing on energy sovereignty and
energy security in this new age.

And we welcome the opportunity for
municipal governments to pursue power that we can
own ourselves, pursue power that focuses on
providing those of us who are low income or

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disadvantaged with an opportunity to get a head
start, get a jump because, believe it or not,
utilities in and of themselves can make or break a
family's monthly budget.

So I just want to add those thoughts
coming from the perspective of a municipal staff
member. And I appreciate your time. Thank you
very much.

CHAIR HOBERT: Thank you, Lauren. We
appreciate your time and your thoughts.

Rob, anybody else in the queue?

MR. LITCHFIELD: No.

CHAIR HOBERT: Okay.

MR. LITCHFIELD: Wait. Spoke too soon.
There's Jane -- is it Cogie?

MS. COGIE: Yeah, I'm Jane Cogie. I'm a
member of the Sustainability Commission of
Carbondale. Can you hear me?

CHAIR HOBERT: Yes. Please go ahead, Jane.

MS. COGIE: Thank you. Thank you. Yeah, I
don't really have prepared remarks except I endorse
what two of the speakers mentioned about need for
small projects. One of the main impetus for the
Climate and Equitable Jobs Act is to have clean

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energy accessible to all, but also to have clean
jobs across the state. And having the equity
portion of CEJA for solar developers as well as for
workforce training would involve having the green
fund available -- configured so it's available to
folks in those locations across the state. And I
can speak definitely for Southern Illinois and need
for jobs, and we definitely have low-income folks
who would benefit from those jobs as well as from
them having solar on their house.

I also -- I guess I want to be sure
that funding for projects that involve pipelines to
sequester carbon from ethanol plants or elsewhere
is not in the spirit of moving on to new generation
of clean energy. It's reinforcing the past and
fossil fuels. Nothing wrong with fossil fuels, but
we need to move beyond them at this point.

So I will write a written comment in
addition to this, but I do want to at least speak
out on this level -- this general level to endorse
that focus on local and clean alternative fuels.

Thank you so much for your time.
It's terrific that all this financing is available,
will be available through the green fund, and we

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want to make the best of it. Thanks so much.

CHAIR HOBERT: Thank you, Jane. We appreciate
your time and your thoughts.

Rob, anyone else in the queue?

MR. LITCHFIELD: No, no other speakers.

CHAIR HOBERT: Okay. Well, Joe, Mike, Tracy,
Lauren, and Jane, we appreciate your time and
sharing your thoughts with us.

Member Pawar, Nava, and Poole, we
appreciate your time for joining in as well, as
well as staff in the room and Rob. Thank you.

With that, Mark.

ASSISTANT SECRETARY MEYER: Again, this is
Mark Meyer. The time is 7:32 p.m., and this agency
listening session is adjourned.

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STATE OF ILLINOIS

SS :

COUNTY OF COOK

Valerie Calabria, CSR, RPR, being
first duly sworn, on oath says that she is a court
reporter doing business in the State of Illinois;
and that she reported in shorthand the proceedings
of said meeting; and that the foregoing is a true
and correct transcript of her shorthand notes so
taken as aforesaid, and contains the proceedings
given at said meeting.

VALERIE CALABRIA, CSR, RPR
License No. 84-003928

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Litchfield, Robert

From:

Sent:

To:

Subject

Joyce Btumenshinel
Monday, November m, 0:35 rivi
pubIiccomments@il-fa.com

Request to make Public Comment for the Nov. 17th, evening session on Greenhouse
Gas Reduction fund Listening Session ll

This email is to request the opportunity to make a 3 minutes public comment at the I FA Listening Session,
Thursday, Nov. 17th,

at 7 p.m. regarding the Greenhouse Gas Reduction Fund Agency Listening Session II.

Thank you very much.

Joyce Blumenshine

1


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Litchfield, Robert

From:

Sent:

To:

Subject:

Candace Colby

Wednesday, November 16, 2022 4:32 PM

webmaster@il-fa.com

Public Comment regarding Inflation Reduction Act funds for greenhouse gas
reductions

To Whom It May Concern;

Regarding Illinois' use of funds from the Inflation Reduction Act to be used for greenhouse
gas reductions, I would like to recommend the following:

—	Acquiring more public land/habitat, restoring prairie areas and planting more trees.
-- Not using the funds for carbon capture and sequestration of emissions from power

plants.

-- Enabling more citizens to acquire electric, energy efficient appliances, heat pumps
and so on.

-- Investing in energy upgrades for existing buildings,e.g. insulation, sealing leaks, etc.

—	Investing in passenger rail. In northwest Illinois, we see a need for passenger rail
service from Dubuque to Chicago, with stops in Galena, Freeport and Rockford, to name a
few.

Thank you.

Sincerely,

Candace Colby


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Litchfield, Robert

From:	Ryan O'Donnell 

Sent:	Friday, November 18, 2022 3:39 PM

To:	webmaster@il-fa.com

Cc:	info@il-fa.com

Subject:	Feedback on Greenhouse Gas Reduction Fund

Dear Illinois Finance Authority,

Science and reason make it clear that exploiting non-human animals to use their bodies or their byproducts as
food, clothing, or furniture has disastrous effects on the environment via land use, water consumption and
pollution, crop consumption, and air pollution. Yet funds continue to flow toward problems and not to
solutions.

Fortunately, we have an opportunity with the Greenhouse Gas Reduction Fund to invest in vegan businesses
and organizations that span a wide gamut from technology and man-made meat to sustainable fashion and
food. These investments will have wide effects and make strides in eliminating health disparities, eliminating
food deserts, and reducing dangerous greenhouse gas emissions, like carbon dioxide and gases with much
higher Global Warming Potentials, like methane and nitrous oxides.

Black people are rejecting the cultures of slavery and colonialism more and more. The fact that much of the
wealth in the sustainability and vegan economy is not going to Black people is an injustice that you have the
power to make meaningful steps toward correcting. To be truly modern and equitable, investments from the
Greenhouse Gas Reduction Fund must consider this historical marginalization to specifically uplift Black vegan
environmental entrepreneurs and organizations.

Best,

Ryan O'Donnell (he/yeye)

Chairperson

Environmental and Climate Justice Committee
Chicago Westside Branch of the NAACP

* as o o

Subscribe In Committee Emails


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Litchfield, Robert

From:

Mia Korinke 

Friday, November 18, 2022 2:46 PM
webmaster@il-fa.com
Joe Duffy

Comments on EPA GHG Reduction Fund Regulations

Climate Jobs Illinois Comments on EPA GHG Reduction Fund Regulations.docx

Sent

To:

Cc:

Subject
Attachments:

Good afternoon,

Please see the attached comments on proposed regulations for the EPA Greenhouse Gas Reduction Fund, submitted on
behalf of Climate Jobs Illinois. Please let us know if you have any questions.

Thank you,

Mia Korinke

Campaign Mobilization Director

Climate Jobs Illinois - IL AFL-CIO
E: mkorinke@climateiobsillinois.org

C: 763,607.9263

Facebook I Twitter I ClimateJobsHlinois.org


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CLIMATE JOBS

ILLINOIS

November 18, 2022

TO: Interested Parties

FR: Climate Jobs Illinois (CJI)

RE: Draft of Comments on Implementation of the EPA Greenhouse Gas Reduction Fund

Please direct questions and comments to:

Joe Duffy, Executive Director: 847-370-4807, ioemduffv@qmail.com

Mia Korinke, Campaign Director: 763-607-9263, mkorinke@climateiobsillinois.ora

About Us

Climate Jobs Illinois is a coalition of labor organizations advocating for a pro-worker, pro-climate
agenda in Illinois. Our mission is to advocate for a clean energy economy at the scale climate
science demands, create good union jobs and support more equitable communities. Our
coalition represents hundreds of thousands of Illinois working men and women who are the best
trained and skilled to build Illinois' new clean-energy economy from the ground up. By focusing
on the construction of clean energy sources as a way to combat the climate crisis, Climate Jobs
Illinois offers a compelling new approach to creating an equitable and clean economy. Building
a clean energy economy is an opportunity for labor to lead in climate by creating high-quality
family-sustaining jobs that spur economic development while reducing carbon emissions.

Climate Jobs Illinois is a state affiliate of the Climate Jobs National Resource Center. Climate
Jobs Illinois is directed by a coalition representing hundreds of thousands of union members
across Illinois, our Executive Committee is comprised of leadership from:

t


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• Association of Bridge, Structural,
Ornamental and Reinforcing Iron
Workers Union Chicago & St. Louis

• International Union of Operating
Engineers Local 150

• Mid-American Carpenters Regional
Council

• Midwest Region of Laborers

International Union of North America

• International Brotherhood of Electrical
Workers Local 134

• Great Lakes Region Laborers

International Union of North America

• International Brotherhood of Electrical
Workers State Council

• Service Employees International Union
State Council

• Illinois Education Association

• International Association of Heat and
Frost Insulators and Allied Workers

• Illinois Federation of Teachers
Background

The EPA has provided a list of questions to inform public comments {please see attached). CJI
has developed comments addressing questions in section 2 and section 4.

Section 2: Program Design

Question #2. What should EPA consider in the design of the program to ensure Greenhouse
Gas Reduction Fund grants facilitate additionalitv (i.e.. federal funding invests in projects that
would have otherwise lacked access to financing)?

a. The public sector has lagged behind the private sector in greenhouse gas
emissions ("GHG") reductions due to the absence of suitable financing
instruments.

In the past, public and tax-exempt entities, including school districts, could not make use of
federal solar tax credits. Public entities relied on direct grants and complex tax equity
arrangements for purchasing solar. As a result, project finance and capital investment in the
public sector for renewables and energy efficiency is underdeveloped relative to the private
sector.

Now, with the Act's "direct payment" provision, government entities are eligible to receive the full
amount of solar tax credits as an as-of-right grant, making solar investments more economical
than ever before — solar pays for itself, even in the short-term. However, the public sector
needs access to financing to make use of direct payment.

The Greenhouse Gas Reduction fund should prioritize the public sector to ensure the supply of
capital meets demand. GGRF funds granted to state authorities or non-profit green banks to
create revolving loan funds available to government entities will be critical for facilitating the
decarbonization of the public sector.


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Additionally, given that there will likely be a considerable lag time between paying the full
upfront costs of a solar project, and receiving the direct payment incentive, public sector
institutions will also require financial instruments that bridge the gap and prevent excessive
costs of borrowing.

For example, a short-term bridge loan could cover the total project costs until the government
entity receives its direct payment, after which the entity can switch to a new loan that equals the
total project cost minus the direct payment incentive. Another option would be loans that require
interest-only payments until reception of direct payment. These are both standard practices in
the construction industry.

To facilitate investment in public sector projects, green banks should be encouraged to form
partnerships with local advocacy groups that support public building decarbonization like CJI's
Carbon Free Healthy Schools program.

Question #7: What should EPA consider in the design of the program, in addition to prevailing
wage requirements in section 314 of the Clean Air Act, to encourage grantees and subrecioients
to fund projects that create high quality jobs and adhere to best practices for labor standards,
consistent with guidance such as Executive Order 14063 on the Use of Project Labor
Agreements and the Department of Labor's Good Jobs Principles?

a. Build our green workforce with grants for pre-apprenticeship programs and
revolving loan funds for project financing

The program should require that grantees and subrecipients describe how they will ensure that
projects financed by the funds they receive from the GGRF produce high quality jobs, and that
the local supply of qualified workers is sufficient to take on those jobs. Applicants' responses
should be evaluated against the most effective and proven model for meeting this need, the
established practice of pairing union-affiliated apprenticeship-readiness programs with
apprenticeship programs and Project Labor Agreements (PLAs).

Pre-apprenticeship programs recruit and train people in disadvantaged communities and place
them into apprenticeships. Apprentices are then trained and placed into good-paying union jobs
building new renewable energy infrastructure, with the help of Project Labor Agreements,
through which employers agree to support apprenticeship programs and hire specified
percentages of workers from apprenticeship programs and under-represented communities.

While apprenticeships are funded by the jobs that apprentices take on, pre-apprenticeships
require outside funding. GGRF recipients should be encouraged to pair grants for pre-
apprenticeship programs with revolving, continually operable loan funds designed to finance
projects that employ pre-apprenticeship graduates.


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b. Regional and sectoral development will lead to more sophisticated training
opportunities and better labor standards

High regional volume will create more sustained and sophisticated training pipelines. For
example, Requests for Proposals at the county-level can create project aggregation, resulting in
longer project timelines and more job opportunities so that pre-apprenticeships and
apprenticeships have clear direction to invest resources. Prioritizing plans for sectoral
development — for example, rooftop solar for all public schools in a state — can have a similar
effect.

Aggregated projects have an additional benefit, due to their scale, of lending themselves to
Project Labor Agreements that protect workers' health, wages, and rights.

10. What federal, state and/or local programs, including other programs included in the Inflation
Reduction Act and the Infrastructure Investment and Jobs Act or "Bipartisan Infrastructure Law,"
could EPA consider when designing the Greenhouse Gas Reduction Fund? How could such
programs complement the funding available through the Greenhouse Gas Reduction Fund?

a. The Greenhouse Gas Reduction Fund should coordinate with state and local
programs offering or mandating energy audits and feasibility studies

Solar and energy efficiency improvements often start with studies that identify opportunities to
decarbonize buildings and analyze whether these opportunities are cost-effective. For example,
under the Climate and Equitable Jobs Act, Illinois public schools receive free energy audits.
Under Denver's Bill 21-1310, buildings planning to replace fossil fuel-reliant equipment must file
an electrification feasibility report. Under Maryland's House Bill 662, public buildings that are
planning renovations must undergo similar feasibility studies.

Energy audits and feasibility studies are critical for spurring building decarbonization
improvements, such as energy efficiency upgrades and onsite solar. Once a building owner
understands the economic impact of making building decarbonization improvements, they are
highly likely to undertake projects, it is likely that the next generation of state and local building
decarbonization legislation will mandate building decarbonization improvements in cases where
they are feasible and cost-effective.

Given that deployment of GGRF financing for building decarbonization will depend on widely
accessible and affordable energy audits and feasibility studies, applicants for GGRF funds
should demonstrate their plans to coordinate with existing state and local programs or meet this
need in-house.

Section 4: Eligible Recipients

What types of entities (as eligible recipients and/or indirect recipients) could enable Greenhouse
Gas Reduction Fund grants to support investment and deployment of greenhouse gas and air
pollution reducing projects in low-income and disadvantaged communities?


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a. Public K-12 schools and public higher education are critical institutions for low-
income communities.

Public K-12 schools, public higher education, and hospitals are well-positioned to maximize the
impact of GGRF funds as indirect recipients of GGRF funds. Direct recipients prepared to
provide financing to these institutions should be a priority.

Public K-12 schools are the second largest sector of America's physical infrastructure, after
transportation.1 There are 100,000 public school buildings in the US, more than 50% of which
are at least 50 years old and in need of major renovations.2 Upgrading public schools in low-
income communities will not only improve air quality and reduce greenhouse gas emissions, but
also improve learning for students. Schools with leaky envelopes and broken heating and
cooling systems create uncomfortable learning environments. Polluted air cause high rates of
childhood asthma.3

b. Rural cooperative utilities and public utilities have experience with greenhouse
gas reduction in low-income communities

Public utilities and rural electric cooperatives have existing relationships, expertise, and
experience with implementing greenhouse gas reduction projects in low-income communities.

With assistance from the Rural Energy Savings Program (RESP), rural electric cooperative
utilities already provide energy efficiency loans for members in low-income areas.4 GGRF
funding would complement electric cooperatives' loan programs and help them expand to solar.

Public utilities have a strong track record with greenhouse gas reduction projects in low-income
areas as well. The New York Power Authority recently piloted window heat pumps with the New
York City Housing Authority5, and is working with NYC DOE introduce LED retrofits for schools.'

1	https://www.americanprogress.org/article/case-federal-funding-school-infrastriicture/

2	https://www.gao.gov/products/gao-20-494

3	https://www.epa.gov/system/files/documents/2021-09/climate-vulnerability_september-2021_508.pdf

4	https://www.rd.usda.gov/programs-services/electric-programs/rural-energy-savings-program

5	https://www.nyserda.ny.gov/About/Newsroom/2022-Announcements/2022-08-02-Governor-Hochul-and-
Mayor-Adams-Announce-Clean-Heat-for-

AII#:~:text=NYCHA%20estimates%20a%20need%20for,York%20City's%20Local%20Law%2097.

6	https://www.nyc.gov/office-of-the-mayor/news/787-22/mayor-adams-4-billion-plan-make-new-schools-
all-electric-electrify-1 OO-existing


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Full List of EPA Questions7

Section 1: Low-Income and Disadvantaged Communities

1.	What should EPA consider when defining "low income" and "disadvantaged" communities for
purposes of this program? What elements from existing definitions, criteria, screening tools,
etc., - in federal programs or otherwise - should EPA consider when prioritizing low-income and
disadvantaged communities for greenhouse gas and other air pollution reducing projects?

2.	What kinds of technical and/or financial assistance should the Greenhouse Gas Reduction
Fund grants facilitate to ensure that low-income and disadvantaged communities can participate
in and benefit from the program?

3.	What kinds of technical and/or financial assistance should the Greenhouse Gas Reduction
Fund grants facilitate to support and/or prioritize businesses owned or led by members of low-
income or disadvantaged communities?

Section 2: Program Design

1.	what should EPA consider in the design of the program to ensure Greenhouse Gas
Reduction Fund grants facilitate high private-sector leverage (i.e., each dollar of federal funding
mobilizes additional private funding)?

2.	What should EPA consider in the design of the program to ensure Greenhouse Gas
Reduction Fund grants facilitate additionally (i.e., federal funding invests in projects that would
have otherwise lacked access to financing)?

3.	What should EPA consider in the design of the program to ensure that revenue from financial
assistance provided using Greenhouse Gas Reduction Fund grants is recycled to ensure
continued operability?

4.	What should EPA consider in the design of the program to enable Greenhouse Gas
Reduction Fund grants to facilitate broad private market capital formation for greenhouse gas
and air pollution reducing projects? How could Greenhouse Gas Reduction Fund grants help
prove the "bankability" of financial structures that could then be replicated by private sector
financial institutions?

5.	Are there best practices in program design that EPA should consider to reduce burdens on
applicants, grantees, and/or subrecipients (including borrowers)?

6.	What, if any, common federal grant program design features should EPA consider or avoid in
order to maximize the ability of eligible recipients and/or indirect recipients to leverage and
recycle Greenhouse Gas Reduction Fund grants?

7.	What should EPA consider in the design of the program, in addition to prevailing wage
requirements in section 314 of the Clean Air Act, to encourage grantees and subrecipients to
fund projects that create high quality jobs and adhere to best practices for labor standards,
consistent with guidance such as Executive Order 14063 on the Use of Project Labor
Agreements and the Department of Labor's Good Jobs Principles?

8.	What should EPA consider when developing program guidance and policies, such as the
appropriate collection of data, to ensure that greenhouse gas and air pollution reduction projects
funded by grantees and subrecipients comply with the requirements of Title VI of the Civil Rights

7 https://www.requlations.qov/docket/EPA-HQ-OA-2022-08j59/document


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Act, which prohibits discrimination on the basis of race, color, and national origin in programs
and activities receiving federal financial assistance?

9.	What should EPA consider when developing program policies and guidance to ensure that
greenhouse gas and air pollution reduction projects funded by grantees and subrecipients
comply with the requirements of the Build America, Buy America Act that requires domestic
procurement of iron, steel, manufactured products, and construction material?

10.	What federal, state and/or local programs, including other programs included in the Inflation
Reduction Act and the Infrastructure Investment and Jobs Act or "Bipartisan Infrastructure Law,"
could EPA consider when designing the Greenhouse Gas Reduction Fund? How could such
programs complement the funding available through the Greenhouse Gas Reduction Fund?

11.	Is guidance specific to Tribal and/or territorial governments necessary to implement the
program? If so, what specific issues should such guidance address?

Section 3: Eligible Projects

1.	What types of projects should EPA prioritize under sections 134{a)(1M3), consistent with the
statutory definition of "qualified projects" and "zero emissions technology" as well as the
statute's direct and indirect investment provisions? Please describe how prioritizing such
projects would: a. maximize greenhouse gas emission and air pollution reductions;

b.	deliver benefits to low-income and disadvantaged communities;

c.	enable investment in projects that would otherwise lack access to capital or financing;

d.	recycle repayments and other revenue received from financial assistance provided using the
grant funds to ensure continued operability; and

e.	facilitate increased private sector investment.

2.	Please describe what forms of financial assistance (e.g. subgrants, loans, or other forms of
financial assistance) are necessary to fill financing gaps, enable investment, and accelerate
deployment of such projects.

3.	Beyond financial assistance for project financing what other supports - such as technical
assistance - are necessary to accelerate deployment of such projects?

Section 4: Eligible Recipients

1.	Who could be eligible entities and/or indirect recipients under the Greenhouse Gas Reduction
Fund consistent with statutory requirements specified in section 134 of the Clean Air Act?
Please provide a description of these types of entities and references regarding the total capital
deployed by such entities into greenhouse gas and air pollution reducing projects.

2.	What types of entities (as eligible recipients and/or indirect recipients) could enable
Greenhouse Gas Reduction Fund grants to support investment and deployment of greenhouse
gas and air pollution reducing projects in low-income and disadvantaged communities?

3.	What types of entities (as eligible recipients and/or indirect recipients) could be created to
enable Greenhouse Gas Reduction Fund grants to support investment in and deployment of
greenhouse gas and air pollution reducing projects in communities where capacity to finance
and deploy such projects does not currently exist?


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4.	How could EPA ensure the responsible implementation of the Greenhouse Gas Reduction
Fund grants by new entities without a track record?

5.	What kinds of technical and/or financial assistance could Greenhouse Gas Reduction Fund
grants facilitate to maximize investment in and deployment of greenhouse gas and air pollution
reducing projects by existing and/or new eligible recipients and/or indirect recipients?

Section 5: Oversight and Reporting

1.	What types of governance structures, reporting requirements and audit requirements
(consistent with applicable federal regulations) should EPA consider requiring of direct and
indirect recipients of Greenhouse Gas Reduction Fund grants to ensure the responsible
implementation and oversight of grantee/subrecipient operations and financial assistance
activities?

2.	Are there any compliance requirements in addition to those provided for in Federal statutes or
regulations (e.g., requirements related to administering federal grant funds) that EPA should
consider when designing the program?

3.	What metrics and indicators should EPA use to track relevant program outcomes including,
but not limited to, (a) reductions in greenhouse gas emissions or air pollution, (b) allocation of
benefits to low-income and disadvantaged communities, (c) private sector leverage and project
additionality, (d) number of greenhouse gas and air pollution reduction projects funded and (f)
distribution of projects at the national, regional, state and local levels?

4.	What should EPA consider in the design of the program to ensure community accountability
for projects funded directly or indirectly by the Greenhouse Gas Reduction Fund? What if any
existing governance structures, assessment criteria (e.g., the Community Development
Financial Institutions Fund's Target Market Accountability criteria), rules, etc., should EPA
consider?

Section 6: General Comments

1. Do you have any other comments on the implementation of the Greenhouse Gas Reduction
Fund?


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Litchfield, Robert

From:
Sent:

To:

Subject:

Joyce Blumenshine •

Friday, November 18, 2022 10:12 PM
webmaster@il-fa.com

Federal Greenhouse Gas Reduction Fund Comment Letter

To Director Meister and the Illinois Finance Authority Board,

Thank you to the I FA for holding your two listening session opportunities this November. I attended the
November 10th session to hear your presentation and signed up to give comments on
your November 17th follow-up. Unfortunately, my audio would not connect or work for the November 17th
video link and I phoned in for the audio. The phone number kept saying

the session had not begun. When I phoned the help number in your meeting announcement, a recording
said it was after hours and the office was closed. It was very disappointing

to me not to be able to participate in person. I am mentioning this for any future after-hours sessions you
might hold so you are aware that staffing for guests participating via audio
conference who find that they cannot hear the proceedings is needed.

As a long-time resident of Peoria, it is greatly important to me that the I FA be sure to absolutely prioritize
projects that benefit low-income and disadvantaged communities.

Like other Illinois cities, Peoria has a problematic history of discrimination and lack of equity and
opportunity for minority populations. The I FA will be fulfilling a much-needed and
essential step forward for equity by making sure that your work will absolutely prioritize grants that
clearly benefit low-income and disadvantaged communities.

Solar to assist community groups and housing for minorities are just two needs for assisting savings on
energy costs so that groups and individuals in low-income and disadvantaged

areas benefit from the federal funding. I urge that funding be directed to solar energy, energy efficiency,
and true clean energy projects.

Illinois is seeing a rush of projects such as C02 pipelines and related projects that only enable continued
use of oil, gas, and coal. I urge that projects that enable any continuation of

carbon based fuels not be considered, as they only perpetuate the greenhouse gasses emitted from oil
extraction, fracking for gas, and methane released from coal mining, which all
will just continue to add to rapid climate change.

Thank you very much for consideration of my comments.

Sincerely,

lnvre Blumenshine


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160 North LaSalle Street
Suite S-1000
Chicago, IL 60601
312-651-1300
312-651-1350 fax
www.il-fa.com

To:	Stakeholders

From:	Christopher B. Meister, Executive Director

Date:	November 10, 2022

Purpose: Agency Listening Session Materials related to Greenhouse Gas Reduction
Fund

Staff of the Illinois Finance Authority (the "Authority"), consistent with the Authority's
designation as the Climate Bank of the State of Illinois under Illinois law, will hold an agency
listening session regarding the Inflation Reduction Act which amended the Clean Air Act to create
a new program through the United States Environmental Protection Agency: the Greenhouse Gas
Reduction Fund (the "GGRF"). This first-of-its-kind federal program will provide competitive
grants to mobilize financing and leverage private capital for clean energy and climate projects that
reduce greenhouse gas emissions - with an emphasis on projects that benefit low-income and
disadvantaged communities - and further the Biden-Harris Administration's commitment to
environmental justice. The agency listening session will be held in the Authority' s Chicago Office,

160 North LaSalle Street, Suite S-1000, Chicago, Illinois 60601 on Thursday, November 10,

2022, at 11:00 a.m.

In my view, the GGRF purposes are consistent with the purposes of the Illinois Climate and
Equitable Jobs Act or CEJA, specifically its goals of:

•	putting 1 million Electric Vehicles on Illinois roads by 2030;

•	reaching 100% clean energy in Illinois by 2050; and

•	while prioritizing job creation-training-placement reflecting the diversity of Illinois.

Notice was posted on November 4, 2022 consistent with Authority practice. Efforts were made to
inform interested stakeholders.

Environmental Finance Advisory Board ("EFAB")

Relevant dates as posted on the EFAB website (https://www.epa.gov/waterfinancecenter/efab).
including the following:

•	11/01/22 EPA National Listening Session 1

•	11/09/22 EPA National Listening Session 2

•	12/5/2022 responses due to EPA Request for Information (RFI)

•	Additional EFAB Public Meetings: 10/18-19; 11-17; 12-1; 12-15/2022

•	12/15/2022 EPA receives EFAB Recommendations

•	TBD Applications due to EPA

•	2/12/2023 through 09/30 2024 anticipated EPA deployment of GGRF funds

f IFA

W ILLINOIS Fl


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f IFA

W ILLINOIS Fl

GGRF Website

The following information is posted on the GGRF website (https://www.epa.gov/inflation-
reduction-act/greenhouse-gas-reduction-fund):

"The Greenhouse Gas Reduction Fund is an unprecedented opportunity to accelerate the adoption
of greenhouse gas reducing technologies and position the United States to compete and win the
21st century economy." —EPA Administrator Michael S. Regan.

The Greenhouse Gas Reduction Fund provides $27 billion to EPA for expenditure until September
30, 2024. This includes:

$7 billion for competitive grants to enable low-income and disadvantaged communities to deploy
or benefit from zero-emission technologies, including distributed technologies on residential
rooftops;

Nearly $12 billion for competitive grants to eligible entities to provide financial and technical
assistance to projects that reduce or avoid greenhouse gas emissions; and

$8 billion for competitive grants to eligible entities to provide financial and technical assistance to
projects that reduce or avoid greenhouse gas emissions in low-income and disadvantaged
communities.

EPA is launching a coordinated stakeholder engagement strategy to help shape the implementation
of the Greenhouse Gas Reduction Fund and ensure the full economic and environmental benefits
of this historic investment are realized by all Americans."

Controlling Federal Statute

H.R. 5376: excerpt o/'Inflation Reduction Act of 2022, pp. 248-250

SEC. 60103. GREENHOUSE GAS REDUCTION FUND.

The Clean Air Act is amended by inserting after section 133 of such Act, as added by
section 60102 of this Act, the following:

"SEC. 134. GREENHOUSE GAS REDUCTION FUND.

"(a) Appropriations.—

"(1) ZERO-EMISSION TECHNOLOGIES.—In addition to amounts otherwise
available, there is appropriated to the Administrator for fiscal year 2022, out of any money
in the Treasury not otherwise appropriated, $7,000,000,000, to remain available until
September 30, 2024, to make grants, on a competitive basis and beginning not later than

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f IFA

W ILLINOIS Fl

180 calendar days after the date of enactment of this section, to States, municipalities,

Tribal governments, and eligible recipients for the purposes of providing grants, loans, or
other forms of financial assistance, as well as technical assistance, to enable low-income
and disadvantaged communities to deploy or benefit from zero-emission technologies,
including distributed technologies on residential rooftops, and to carry out other greenhouse
gas emission reduction activities, as determined appropriate by the Administrator in
accordance with this section.

"(2) GENERAL ASSISTANCE.—In addition to amounts otherwise available, there is
appropriated to the Administrator for fiscal year 2022, out of any money in the Treasury not
otherwise appropriated, $11,970,000,000, to remain available until September 30, 2024, to
make grants, on a competitive basis and beginning not later than 180 calendar days after the
date of enactment of this section, to eligible recipients for the purposes of providing
financial assistance and technical assistance in accordance with subsection (b).

"(3) LOW-INCOME AND DISADVANTAGED COMMUNITIES—In addition to
amounts otherwise available, there is appropriated to the Administrator for fiscal year 2022,
out of any money in the Treasury not otherwise appropriated, $8,000,000,000, to remain
available until September 30, 2024, to make grants, on a competitive basis and beginning
not later than 180 calendar days after the date of enactment of this section, to eligible
recipients for the purposes of providing financial assistance and technical assistance in low-
income and disadvantaged communities in accordance with subsection (b).

"(4) ADMINISTRATIVE COSTS.—In addition to amounts otherwise available, there
is appropriated to the Administrator for fiscal year 2022, out of any money in the Treasury
not otherwise appropriated, $30,000,000, to remain available until September 30, 2031, for
the administrative costs necessary to carry out activities under this section.

"(b) Use Of Funds.—An eligible recipient that receives a grant pursuant to subsection
(a) shall use the grant in accordance with the following:

"(1) DIRECT INVESTMENT—The eligible recipient shall—

"(A) provide financial assistance to qualified projects at the national, regional,
State, and local levels;

"(B) prioritize investment in qualified projects that would otherwise lack access to
financing; and

"(C) retain, manage, recycle, and monetize all repayments and other revenue
received from fees, interest, repaid loans, and all other types of financial assistance
provided using grant funds under this section to ensure continued operability.

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f IFA

W ILLINOIS Fl

"(2) INDIRECT INVESTMENT.—The eligible recipient shall provide funding and
technical assistance to establish new or support existing public, quasi-public, not-for-profit,
or nonprofit entities that provide financial assistance to qualified projects at the State, local,
territorial, or Tribal level or in the District of Columbia, including community- and low-
income-focused lenders and capital providers.

"(c) Definitions.—In this section:

"(1) ELIGIBLE RECIPIENT.—The term 'eligible recipient' means a nonprofit
organization that—

"(A) is designed to provide capital, leverage private capital, and provide other
forms of financial assistance for the rapid deployment of low - and zero-emission
products, technologies, and services;

"(B) does not take deposits other than deposits from repayments and other
revenue received from financial assistance provided using grants funds under this
section;

"(C) is funded by public or charitable contributions; and

"(D) invests in or finances projects alone on in conjunction with other investors.

"(2) GREENHOUSE GAS.—The term 'greenhouse gas' means the air pollutants
carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons, and sulfur
hexafluoride.

"(3) QUALIFIED PROJECT.—The term 'qualified project' includes any project,
activity, or technology that—

"(A) reduces or avoids greenhouse gas emissions and other forms of air pollution
in partnership with, and by leveraging investment from, the private sector; or

"(B) assists communities in the efforts of those communities to reduce or avoid
greenhouse gas emissions and other forms of air pollution.

"(4) ZERO-EMISSION TECHNOLOGY.—The term 'zero-emission technology'
means any technology that produces zero emissions of—

"(A) any air pollutant that is listed pursuant to section 108(a) (or any precursor to
such an air pollutant); and

"(B) any greenhouse gas.".

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f IFA

W ILLINOIS Fl

ILLINOIS FINANCE AUTHORITY

Suite S-1000

160 North LaSalle Street

Chicago, IL 60601

312-651-1300

To:

Michael Regan, Administrator, U.S. Environmental Protection Agency
Environmental Financial Advisory Board

Re:

From:

Date:

Christopher B. Meister, Executive Director, Illinois Finance Authority/Climate Bank
December 5, 2022

EPA Docket EPA-HO-OA-2022-0859
Submission 1 of 2

The Illinois Finance Authority/Climate Bank (""IFA/CB"). on behalf of the State of Illinois, is pleased to
provide these responses to the U.S. EPA's request for information in Docket EPA-HQ-OA-2022-0859.
The IFA/CB strongly supports the efforts of the U.S. EPA to leverage Section 134 of the Inflation
Reduction Act to mobilize new capital to invest in the energy transition. The State of Illinois and IFA/CB
stands ready to serve as a lead implementer in deploying the Greenhouse Gas Reduction Fund
("GHGRF") to support projects that reduce greenhouse gas emissions and benefit low-income and
disadvantaged communities.

The EPA is undergoing an important policy-making process through the issuance of this RFI, and the
consideration of the public feedback received herein. The IFA/CB, to support that public policymaking
strategy, embraced the call from Administrator Regan to help shape the future of the GHGRF by holding
two listening sessions where stakeholders could provide oral comments and invited stakeholders to
submit written comments to the Authority. The IFA is providing a copy of the public notices, minutes,
and written comments provided to the State related to this opportunity as a comment in this Docket as a
separate attachment.

The State of Illinois is well-positioned to multiply the impact of these funds. On September 15,2021,
Illinois Governor JB Pritzker signed the Climate and Equitable Jobs Act (Public Act 102-662; ""CEJA"). a
landmark piece of legislation that is putting Illinois on a path to a 100% clean energy future by 2045,
protecting public health from pollution, providing a just transition for communities historically dependent
on fossil fuels, enacting tough utility accountability measures, and creating jobs and wealth in Illinois"
disadvantaged communities. Until the enactment of the federal Inflation Reduction Act, CEJA was the
most comprehensive legislation to move towards a carbon-free economy in the nation.

The law will ensure:

•	100% Carbon-free power section by 2045, with interim steps;

•	50% Renewable energy by 2040;

•	1,000,000 electric vehicles in Illinois by 2030;

•	40% of the benefits and investments in solar power, electric vehicles, and the grid must go to
newly-defined equity investment eligible communities and persons;

•	$82 million/yr investment in workforce development and contractor equity programs; and

•	$41 million/yr investment in former fossil fuel communities and workers.

The law also makes important updates to policies to help the state achieve these goals, including:


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Page 2

•	Extending and expanding the state's energy efficiency program past 2030 and requires the
programs to achieve a 30% reduction in energy use by 2040.

•	Creating a health & safety fund for home weatherization, and expands low-income energy
programs

•	Creating a new stretch energy code for Illinois municipalities

•	Establishing new incentives for energy storage

•	Creating a new integrated grid planning process for the state's utilities, and implements
performance incentives and penalties for their efforts in helping achieve state energy, climate, and
equity goals

•	Speeding up interconnection for distributed energy resources

•	Implementing a new process to designate Renewable Energy Access Plan Zones to enable
forward-looking transmission planning

•	Creating a Displaced Energy Workers Bill of Rights

•	Implementing new ethics requirements and oversight on utilities

•	Supporting low-income customers by prohibiting harmful credit practices and fees

New Climate Finance Tools

CEJA also focused on the need to leverage new climate finance opportunities to accelerate the clean

energy economy in a just and equitable way. The law created several new mechanisms and tools for the

State of Illinois:

•	Designated the Illinois Finance Authority as the State's Climate Bank ("IFA/CB"),

•	Established a Clean Energy Jobs and Justice Fund as a nonprofit green bank focused on equitable
lending and business development, and

•	Created the Jobs and Environmental Justice Grant Program to provide seed capital grants to help
minority businesses gain a foothold in the clean energy market.

CEJA and the Illinois Finance Authority

As the Climate Bank, CEJA provided, without limitation, powers to the Authority to:

« aid in all respects with providing financial assistance, programs, and products to finance and
otherwise develop clean energy and provide clean water, drinking water, and wastewater treatment
in the State and otherwise develop and implement equitable clean energy opportunities in the state
to mitigate or adapt to the negative consequences of climate change in an equitable manner to
further the clean energy policy of the State.

« enter joint ventures and invest in and participate with government entities and private corporations
engaged in the development of clean energy projects;

« use a variety of funding sources, including funds repurposed from existing Authority programs,
subject to the approval of the General Assembly; and

® finance or refinance working capital through a statutory clarification.

Background on the Illinois Finance Authority/Climate Bank

Governor Pritzker's designation of the Authority as the Climate Bank was the next step in the Authority's

Transformation Initiative, adopted in February 2018, and Climate Process, adopted in February 2020.

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Page 3

CEJA did not provide any new State funds to the Authority. Generally, the Authority provides financing
and financial assistance to:

•	promote a vigorous growing economy and avoid involuntary unemployment for Illinois residents;

•	reduce the cost of indebtedness to State taxpayers and residents;

•	otherwise enhance the quality of life in Illinois by benefiting the health, welfare, safety, trade,
commerce, industry, and economy of the people of Illinois consistent with its statutory declarations
of policy; and

•	combat climate change by providing broadly defined financial assistance.

The Authority supports its operations from fees from issuance of conduit bonds and interest from
investments and loans made from the Authority's locally held funds, not from State appropriations. Condit
bonds may be issued to provide financing or refinancing, including working capital, for projects, including,
but not limited to, industrial projects, clean energy projects, conservation projects, housing projects, public
purpose projects, higher education projects, health facility projects, cultural institution projects, municipal
bond program projects, agricultural facility or agribusiness projects, and PACE projects. See. Illinois
Finance Authority Act, as amended, 20 ILCS 3501/801-1 et seq. (the "Act"); Property Assessed Clean
Energy Act, 50 ILCS 50/1 et seq. (the "PACE Act"); 20 ILCS 3501/801-10(b). In addition to the Act and
the PACE Act, other State laws allow Authority financing, including without limitation the Illinois
Environmental Facilities Financing Act, 20 ILCS 3515/1 et seq.

In Fiscal Year 2022, the Authority issued more than $2.3 billion in conduit (generally federally tax-exempt)
bond projects across a variety of economic sectors and statutory project definitions. Currently, the
Authority's primary product is the issuance of federally tax-exempt conduit bonds as permitted by the
federal tax code and State law, on behalf of not-for-profit borrowers generally in the hospital, healthcare,
education, cultural, and senior living sectors. The Authority may issue conduit bonds on behalf of public
entities, local governments and, notably the Illinois Environmental Protection Agency ("IEPA") State
Revolving Fund ("SRF"), a federal-State-local-capital markets financial structure. The Authority may issue
federally tax-exempt conduit bonds on behalf of certain individuals and for-profit companies such as
beginning farmers, mid-sized manufacturing companies (industrial revenue bonds), privately-owned water
utilities and operators of solid waste projects and/or other "exempt facilities" defined by the federal tax
code. Other than PACE projects, the Authority in limited circumstances issues taxable conduit bonds
(without federal exemption on interest earnings) to meet specific objectives of a particular borrower with
respect to a specific project.

Prior to CEJA, the Authority demonstrated its capacity to respond with finance tools creatively, quickly,
and effectively to unforeseen climate challenges. On February 16, 2021, Governor Pritzker, in his
Gubernatorial Disaster Proclamation due to the dangerous winter storm of February 13-14, 2021, called on
all State organizations "to use all resources at our disposal to keep our communities safe amid dangerous
and ongoing winter weather." This dangerous winter storm also impacted Texas, Oklahoma, and Kansas as
well as other parts of the United States with extreme cold. The winter disaster caused unprecedented
increases in energy demand and constrained the supply of natural gas, thus resulting in large price spikes
for wholesale natural gas. Illinois natural gas utilities operated by local governments were adversely
exposed to the dramatic price spikes despite prior measures taken to mitigate both financial and weather-
related risks. On February 25, 2021, the Authority held a special meeting to address the winter disaster.
One local government leader, who spoke at the meeting, anticipated an immediate 900% cost increase for
natural gas on local ratepayers due to the winter disaster. In response, the Authority created the Natural

3


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Gas Municipal Loan program with low-interest rates and favorable loan terms for local governments hurt
by the winter disaster. In just 65 days, the Authority made 14 direct loans to local governments from its
General Fund in a total estimated amount of $7.9 million. This fast action mitigated the harm to local
ratepayers by allowing the local government borrowers to spread increased natural gas costs over a
manageable timeframe. Scientists have acknowledged that with climate change continuing, the outcomes
of these extreme weather events have implications the existing energy infrastructure, including natural gas,
for jurisdictions other than Texas such Illinois, which was directly and negatively impact by decisions in
Texas1. It is anticipated that most of the 14 communities assisted through these loans would qualify as low-
income/disadvantaged and the Authority's loan program benefited these communities by enabling an
effective community response to an unforeseen climate challenge.

The Authority's longstanding partnership with the IEPA SRF program demonstrates its capacity to help
administer complex programs over time and to make such programs more effective to beneficiaries. In
2013, after a nine-year gap, the Authority and IEPA modernized the Illinois SRF bond documents and
successfully re-introduced the Illinois SRF credit to the bond markets. Over five, separative AAA-rated
bond issues in an aggregate par amount of approximately $2.2 billion, the Authority and IEPA benefited
Illinois residents through cleaner water at a lower cost. The last two Illinois SRF bonds, 2019 and 2020,
were designated green bonds in alignment with the International Capital Market Association's Green Bond
Principles, the applicable United Nations Sustainable Development Goals, and Governor Pritzker's
Executive Order No. 2019-06 on climate change. It is anticipated that many of the Illinois communities
that receive SRF loans from SRF bond proceeds would qualify as low-income/disadvantaged. SRF loans
benefit these communities by enabling clean water at a lower cost. The Authority also accessed the capital
markets with a series of professional teams reflecting the diversity of Illinois.

Finally, the Authority understands the paramount importance of effective product and program design.
Since 2018, the Authority has worked to develop and promote the widespread adoption of Commercial
Property Assessed Clean Energy ("C-PACE"). C-PACE is an emerging financial product which provides
enhanced security for the lender compared to the security provided by a mortgage, represented by a
special assessment lien on parity with a property tax without relying on any federal or State public
subsidy, and generally a lower interest rate for the borrower. C-PACE financing is a focus of the
Authority's internal Transformation Initiative and Climate Process. All record owners that utilize C-
PACE financing are new borrowers to the Authority. Between November 2019 and June 30, 2022, the
Authority issued PACE bonds in the aggregate principal amount of $72.4 million on behalf of eight
PACE projects. Importantly, the Authority issued PACE bonds for four of these eight PACE projects
between July 1, 2021 and June 30, 2022. A summary of the Authority's most recent C-PACE closing is
attached as Exhibit A.

Responses to the EPA's Request for Information in EPA-HQ-QA-2022-0859

The IFA/CB offers the following targeted responses to the Agency's RFI, to identify specific
considerations that would make the IFA, as the State's Climate Bank, more successful in achieving the
shared goals of the Greenhouse Gas Reduction Fund.

1 See, Cascading risks: Understanding the 2021 winter blackout in Texas, Energy Research & Social
Science, J.W. Busby, K. Baker, M.D. Bazilian, A.Q. Gilbert, E. Grubert, V. Rai, J.D. Rhodes, S. Shidore,
C.A. Smith, M.E. Webber, May 6, 2021.

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Section 1 - Definitions of low-income and disadvantaged communities

1. What should EPA consider when defining "low income " and "disadvantaged" communities for
purposes of this program? What elements from existing definitions, criteria, screening tools, etc.,
- in federal programs or otherwise - should EPA consider when prioritizing low-income and
disadvantaged communities for greenhouse gas and other air pollution reducing projects?

Disadvantaged communities

Background: As discussed, Illinois CEJA's Equity targets consideration and explicit benefits to newly-
defined Equity Eligible Persons and Equity Investment Eligible Communities which are, among other
criteria, residents of Environmental Justice or R3 areas.

Environmental Justice Communities: Environmental Justice Communities are communities
that have been identified through a calculation utilizing the U.S. EPA tool EJ Screen and a
demonstrated higher risk of exposure to pollution based on environmental and socioeconomic
factors. Importantly, the statute further creates a formal self-designation process at the State level
for communities that believe the data methodology unjustly excludes them.

Restore. Reinvest. Renew. (R3) Areas: R3 areas are communities that have been harmed by
violence, excessive incarceration, and economic disinvestment, as originally defined for
eligibility for R3 grants under Illinois' cannabis law.

The two community designations were thoughtfully considered to ensure that the state's energy policy
and investments both targeted communities experiencing burdens due to pollution, but also those that
have faced socioeconomic harm and historic disinvestment. A census tract with either designation
qualifies as an Equity Investment Eligible Community under Illinois law, which creates opportunities for
residents and businesses to see benefits from solar energy and energy efficiency programs, workforce
development and contractor accelerator programs, electric vehicle deployment, and utility infrastructure
planning.

Illinois seeks to ensure that its State law that preferences investments in such communities and
preferences benefits for such residents is aligned with the requirements of the EPA in the administration
of Section 134 GHGRF investments. The Illinois Climate Bank anticipates creating new finance tools to
drive new capital investment in Illinois' Equity Investment Eligible Communities and create wealth-
building opportunities for Equity Eligible Contractors. We do not believe that having a competing set of
classifications for state policies and climate finance tools would lead to beneficial outcomes to residents
and businesses in disadvantaged communities.

An initial examination has determined that there are 1,452 census tracts in Illinois that are either classified
as an Equity Investment Eligible Community by the State of Illinois or as a Disadvantaged Community
by CEJST. There are 860 census tracts that overlap, meaning they are both Equity Investment Eligible
Communities per Illinois and Disadvantaged Communities per CEJST. There are 201 census tracts that
have been designated by CEJST but are not Equity Investment Eligible Communities. And there are 391
census tracts that are Equity Investment Eligible Communities and not Disadvantaged Communities per
CEJST.

The State of Illinois does not wish for any of these communities to be left behind. While the State
strongly support the use of the CEJST map in the designation of Disadvantaged Communities nationally,
the EPA should also acknowledge the efforts of states that have been working to establish their own
definitions.

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Recommendation: The EPA should allow for States that have established and comparable disadvantaged
community census tract designations to apply for or seek approval for the ability to use those designations
as supplemental to the census tracts identified through CEJST.

Section 2 - Program Design

1. What should EPA consider in the design of the program to ensure Greenhouse Gas Reduction
Fund grants facilitate high private-sector leverage (i.e., each dollar offederal funding mobilizes
additional private funding)?

States that have developed aligned public policy will be best positioned to leverage the GHGRF grants to
mobilize private sector capital to achieve shared climate and energy goals. However, every state has
approached decarbonization and clean energy policy in different ways. Based on their regulatory and
market structures, states have had to pursue differing mechanisms to support and expand renewable
energy, in particular distributed energy. Almost every state has approached incentives for electric vehicles
and electric vehicle supply equipment through different methods. Some states, like Illinois, have taken the
lead to establish strong equity practices as part of its clean energy transition. These states are best
positioned to mobilize private capital to support pollution reduction and equity goals, as new climate
finance tools can leverage the existing state policy to maximize the impact of the federal funds.

States that have thoughtful and embedded clean energy policies should be granted flexibility in the design
of programs to achieve these results. For example, Illinois has established a robust Adjustable Block
Program and Solar For All Program to support distributed solar, and sized REC payment values to meet
the finance gap for various market segments. However, a state without such supportive policies might
need to focus on creating sizable distributed solar finance tools to compensate for the lack of an incentive
program. While this doesn't mean that the Illinois Climate Bank will not focus on distributed solar
finance, it may mean that new finance tools in that domain may be best used for supporting new equity
eligible contractors with start-up loans and capital to prepare them to enter the market and get access to
the REC incentives.

Similarly, on the transportation electrification side, the State may be best able to identify market gaps for
the electrification of vehicles in equity investment eligible communities, in transit agency bus
electrification, or in small commercial fleets. As the State seeks to get 1,000,000 electric vehicles on the
road by 2030, it will need to look beyond subsidies, federal programs, and rate design to ensure that the
benefits of electrification (particularly pollution reduction) are prioritized for environmental justice
communities longed burdened by cumulative pollution impacts.

Recommendation: To maximize private capital mobilization and to ensure benefits can be maximized for
low-income and disadvantaged communities, the EPA should provide flexibility in program design to
States that can demonstrate they have established and complementary statutory and regulatory policy
mechanisms and public finance entities with established track records in place related to:

•	Achieving clean energy goals, including expanding renewable energy and energy efficiency,
electrifying the transportation, and building sectors, and reducing pollution.

•	Supporting minority- and disadvantaged-businesses in formation, business development, and
access to projects.

•	Requiring strong labor standards on projects, including project labor agreements and community
benefit agreements.

•	Have established Climate Banks or Green Banks with statutory goals related to the above.

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Recipients need the flexibility to use funds to invest in effective product and program design aligned with
State law, policy, and market conditions. For example, Illinois C-PACE mobilizes 100% private financing
without any public subsidy, but the Authority has and continues to invest heavily in product design and
market development. Similarly, the Authority/IEPA SRF partnership dramatically increased the
availability of low-cost loans to Illinois communities for drinking and clean water infrastructure, but this
has been a years-long process with a replicable federal-state-capital markets program designed to attract
private capital.

Section 3: Eligible Projects

1.	What types of projects should EPA prioritize under sections 134(a)(l)-(3), consistent with
the statutory definition of "qualifiedprojects " and "zero emissions technology " as well as
the statute's direct and indirect investment provisions? Please describe how prioritizing
such projects would:

a.	maximize greenhouse gas emission and air pollution reductions;

b.	deliver benefits to low-income and disadvantaged communities;

c.	enable investment in projects that would otherwise lack access to capital or financing;

d.	recycle repayments and other revenue received from financial assistance provided
using the grant funds to ensure continued operability; and

e.	facilitate increased private sector investment.

2.	Please describe what forms offinancial assistance (e.g. subgrants, loans, or other forms
of financial assistance) are necessary to fill financing gaps, enable investment, and
accelerate deployment of such projects.

3.	Beyond financial assistance for project financing what other supports - such as
technical assistance — are necessary to accelerate deployment of such projects?

Illinois through CEJA has clear policy objectives:

•	100% Carbon-free power section by 2045, with interim steps;

•	50% Renewable energy by 2040;

•	1,000,000 electric vehicles in Illinois by 2030;

•	40% of the benefits and investments in solar power, electric vehicles, and the grid must go to
newly-defined equity investment eligible communities and persons;

•	$82 million/yr investment in workforce development and contractor equity programs; and

•	$41 million/yr investment in former fossil fuel communities and workers.

Recommendation: EPA should allow and encourage Illinois to use GHGRF funds to pursue the above
policy objectives, particularly with respect the clear and near-term goal of 1,000,000 electric vehicles in
Illinois by 2030.

Section 4 - Eligible Recipients

1.	Who could be eligible entities and/or indirect recipients under the Greenhouse Gas Reduction
Fund consistent with statutory requirements specified in section 134 of the Clean Air Act? Please
provide a description of these types of entities and references regarding the total capital deployed
by such entities into greenhouse gas and air pollution reducing projects.

2.	What types of entities (as eligible recipients and/or indirect recipients) could enable Greenhouse
Gas Reduction Fund grants to support investment and deployment of greenhouse gas and air
pollution reducing projects in low-income and disadvantaged communities?

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3. What types of entities (as eligible recipients and/or indirect recipients) could be created to enable
Greenhouse Gas Reduction Fund grants to support investment in and deployment of greenhouse
gas and air pollution reducing projects in communities where capacity to finance and deploy
such projects does not currently exist?

EPA faces extreme resource and time constraints with only $30 million to support the deployment of $27
billion between 02/12/2023 and 09/30/2024 ("IRA Section 134 (a)). EPA should align with States, such as
Illinois, where State law, policy, and capacity is already aligned with the purposes of the GHGRF. For
example (and without limitation), under IL CEJA, there is the Clean Energy Jobs & Justice Fund, Clean
Energy Primes Contractor Accelerator and Climate Bank).

Congressional intent makes it clear that GHGRF funds are most likely positioned to be directed to a
National Non-Profit Green Bank (or non-profit national financing institution or "NNFI"). While State
energy policies such as IL CEJA could be enhanced through the creation of and partnership with a
potential NNFI, any potential NNFI must be aligned with and in partnership with a State such as Illinois.
For example, there is a significant opportunity to develop a partnership between the Clean Energy Jobs &
Justice Fund and the NNFI to ensure the benefits of the clean energy economy are equitably distributed in
Illinois, including through:

o the provision of innovative financing opportunities, grants, and capital for MBEs and

contractors of color, and for low-income, EJ, and BIPOC communities and businesses,
o assisting low-income, EJ, and BIPOC communities to pay for solar and energy efficiency
upgrades,

o increasing access to no-cost and low-cost loans for MBEs and contractors of color,
o developing financing products designed to compensate for historical and structural
barriers preventing low-income, EJ, and BIPOC communities from accessing traditional
financing,

o leveraging private investment in clean energy projects developed by MBEs and
contractors of color.

Section 134(a)(1)

Recommendation: Regarding the $7B in competitive funds under IRA Section 134(a)(1). EPA should
prioritize States with aligned energy policies and that have recently enacted the statutory powers and
resources to deploy GHGRF quickly and effectively for its intended purposes. Initially, focusing on such
States will reduce the resource and time burden on EPA and provide the opportunity for the EPA to achieve
early wins. After allocation to Such States, EPA would then have time to work together with municipalities
and/or local nonprofit "Eligible Recipients" (IRA Section 134(c)(1)) in States where current State energy
policies are not consistent with the intent/purpose of the GHGRF, in the time-intensive process to start-up
new initiatives. States such as Illinois, which are already aligned with GHGRF purposes, should be
rewarded, and not penalized under any allocation methodology developed and adopted by EPA.

Recommendation: Consistent with federal sovereignty principles, EPA should address Tribal governments
separately from States and other potential GHGRF Eligible Recipients.

Section 134(c)(1)

Regarding the remaining $20B of GHGRF under IRA Section 134(c)(1). which is only open to nonprofit
"Eligible Recipients," it is clear that single-state and local-serving entities may be prohibited from being

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classified as "Eligible Recipients." Per the Section, "Eligible Recipients" must be able to use GHGRF funds
for "Direct Investment" (IRA Section 134(b)(1)) and "Indirect Investment" (IRA Section 134(b)(2)), where
the "Direct Investment" definition mandates that an "Eligible Recipient" use GHGRF funds to "provide
financial assistance to qualified projects at the national, regional, State, and local levels" (IRA Section

Congressional intent reflects the mandate for an "Eligible Recipient" to have national powers, capacity, and
reach. "A single NNFI [independent, non-profit national financial institution! will not be limited by any
jurisdictional boundary - no community is beyond its reach. Therefore, the NNFI approach could directly
invest in qualified projects anywhere in the United States that would otherwise lack funding." H7702,
Congressional Record-House, August 12, 2022, U.S Representative Dingell.

Typically, States must have a State interest nexus before deploying State public resources to other
jurisdictions. The State interest nexus may prevent States, State component parts, or nonprofits created by
State law from successfully applying to EPA for a portion of the GHGRF $20B in Section 134(c)(1).

Recommendation: Because of this apparent limitation on States and State-affiliated entities with respect to
the $20B, any Eligible Recipient selected by EPA, whether it is an NNFI or not, operating in a State where
law and policy is aligned with GHGRF (such as Illinois), should work in concert with the policy makers in
that State - beginning with the State Governor.

Section 5 - Oversight and Reporting

Recommendation: As a body politic and corporate created by State law, the IF A/Climate Bank is a
public-facing and transparent organization accountable to State policy makers. See, Public Access |
Illinois Finance Authority (il-fa.com). EPA should encourage and reward such transparency and
accountability in its reporting requirements. When developing its oversight and reporting framework and
within its extreme time/resource constraints, EPA should recognize and reward potential GHGRF
recipients, such as the IF A/Climate Bank that are public-facing, transparent and accountable.

134(b)(1)(A)).

Respectfully,

Christopher B. Meister
Executive Director
cmeister@il -fa. com

312-590-1044

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EXHIBIT A

Funding Summary

I FA Project No. 12555

Page 1

f IFA

m ILLINOIS FINANCE AUTHORITY

Governmental Unit

City of Springfield

Property

1 North Old State Capitol Plaza, Springfield, IL 62701



Record Owner

Downtown Property, LLC, an Illinois limited liability company, as the titleholder
or owner of beneficial interest in the Property



PACE Project	Bond proceeds will assist the Record Owner in providing all or a portion of the

funds necessary for the acquisition, construction, installation, or modification of
certain improvements affixed to an existing 165,528 sq. ft. mixed-use office and
retail building, including without limitation: (i) replacement of the existing
inefficient elevators with modern and highly efficient elevators, which have a
motor efficiency of 93.6%; (ii) sealing of the storefront front facade to avoid any
unwanted escape of conditioned air; (iii) replacement of 40, lOOw incandescent
and fluorescent lights with 15w LED lights on the building exterior; (iv) sealing
of the lobby fountain's leak that is otherwise currently overflowing water into the
drain at a continuous rate of 0.5 GPM; and (v) replacement of the existing fire
pump that is otherwise facing major failure and leaking water at a continuous rate
of 1.0 GPM.

Financing	Issuance of Illinois Finance Authority Taxable Property Assessed Clean Energy

Revenue Bonds, (Nuveen Green Capital) Series 2022A

Principal:

$1,401,327.98

Interest:

6.84% Fixed

Maturity:

Not to exceed June 3, 2054

Security:

Special assessment on the Property pursuant to the
assessment contract between the Record Owner and the
Governmental Unit (and its permitted assignees)

Structure:

Direct purchase

Source:

PACEWell 4 LLC, as Designated Transferee of Greenworks
Lending LLC, the Capital Provider

Use of Proceeds:

PACE Project Costs
Program Fees
Other Fees
Capitalized Interest
Capital Provider Fees

$1,157,039.00
27,006.64
26,570.39
167,188.83
23.523.12



$1,401.327 98

Impact*	Energy Savings:	19,808 kWh and 137 therms

Energy Utility Bill Savings:	$2,525

Water Savings:	788,400 Gallons

Water Bill Savings:	$6,036

Job Data	6 full-time and 8 part-time construction jobs (30 weeks)

* Average annual estimates as reported by Greenworks Lending LLC, the Program Administrator for
the PACE Project.

For additional information:

Please visit IFApace.com or contact Brad Fletcher at bfletcher@il-fa.com


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EXHIBIT A

Funding Summary

I FA Project No. 12555

Page 2

f

Professional!"

Districts
IFA Fee

Trustee:
Servicer:

Bond Counsel:

Wilmington Trust. N.A.
Greenworks Lending LLC
Folev & Lardner. LLP

U.S. Representative: K

State Senator: 48

Costa Mesa. CA
Darien, CT
Chicago. TL

State Representative: 96

Interim financing provided by Warehouse Fund:	N/A

Long-term financing provided by IFA's issuance of bonds or notes: $7,006.64

f IFA did not participate in the selection process for the Trustee, the Servicer and Bond Counsel or any
other role in the transaction, and did not decide who would be selected as a result of such selection
process except for having a right to object to the Bond Counsel selected by the Capital Provider. IFA is
acting solely as a conduit issuer of the bonds or notes and not as a financial advisor, municipal advisor,
placement agent or underwriter with respect to the issuance of such bonds or notes.

For additional information:

Please visit lFApace.com or contact Brad Fletcher at bfletchergil-fa.com


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Submitted via regulations.gov
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, D.C. 20460

December 5, 2022

Re: Feedback on the Greenhouse Gas Reduction Fund Request for Information,
Docket ID No. EPA-HQ-OA-2022-0859

Dear U.S. Environmental Protection Agency:

The undersigned organizations representing over 30 equity, environmental justice,
community-based, and grassroots organizations and coalitions and industry partners appreciate
the opportunity to provide feedback on the U.S. Environmental Protection Agency's ("EPA's")
request for information related to the implementation of the Greenhouse Gas Reduction Fund
("GHGRF"). The EPA's implementation of the GHGRF will directly impact whether the most
disadvantaged communities benefit from this fund or whether they are left further behind. Given
the Administration's commitment to equity and environmental justice, including the Justice40
initiative, the EPA must take affirmative steps to ensure that the needs of environmental justice
and low-income communities are prioritized. These comments provide general feedback and
comments related to equity considerations in the EPA's administration of the GHGRF as well as
more specific comments responding to specific requests for information.

Specifically, as described further below, to ensure that the GHGRF is administered as justly and
equitably as possible, we make the following implementation recommendations to EPA:

•	Utilize definitions of low-income and disadvantaged communities that are inclusive,
aligned, transparent, and accessible;

•	Disburse initial funding for financial and technical assistance to low-income and
disadvantaged communities as soon as possible;

•	Provide financial and technical assistance in different forms to meet the diverse needs of
low-income and disadvantaged communities, including assistance with capacity building,
project development, and community engagement;

•	Clarify that GHGRF can provide assistance to projects receiving assistance from other
federal programs;

•	Prioritize selecting financial institutions that have proven track records of working with
and investing in low-income and disadvantaged communities;

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•	Maximize the funding dedicated to low-income and disadvantaged communities, and
design GHGRF to break down the historical and persistent financial and structural
barriers that low-income and disadvantaged communities face and have faced;

•	Provide clear, accessible information about the Fund, minimize paperwork burden,
disburse assistance on a timely basis, and provide coordination with other grant and
incentive programs to help ensure project viability;

•	Avoid incorporation of cost-effective tests for low-income and disadvantaged
communities projects;

•	Require project labor agreements and prioritize Community Workforce Agreements with
local procurement standards from Minority, Women, and Disadvantaged Business
Enterprises;

•	Require robust reporting and programmatic evaluation, assess distributional impacts, and
require community engagement; and

•	Prioritize projects that reflect community input, provide concrete benefits to
communities, and do not increase the burdens faced by communities.

We further urge EPA to continue efforts to meaningfully engage with environmental justice
communities, especially considering the accelerated timeline for implementing this program. To
best realize EPA's commitment to environmental justice, we urge EPA to prioritize clean,
community-centered development and ensure that the agency's actions do not perpetuate,
exacerbate, or create pollution burdens in environmental justice communities.

Section 1: Low-Income and Disadvantaged Communities

1. What should EPA consider when defining "low income " and "disadvantaged" communities
for purposes of this program? What elements from existing definitions, criteria, screening tools,
etc., - in federal programs or otherwise - should EPA consider when prioritizing low-income and
disadvantaged communities for greenhouse gas and other air pollution reducing projects?

•	Inclusive and Aligned Definitions: Given the compressed timeframe for implementation
of this program, EPA should initially apply the Justice40 definitions of disadvantaged
communities, as outlined in the interim implementation guidance issued by the Office of
Management and Budget (OMB),1 along with the Treasury Department's New Markets
tax credit definition of low-income communities at 26 U.S.C. § 45D(e). Using these
definitions as starting points will provide for alignment with the Biden Administration's
Justice40 initiative as well as compatibility with recently enacted tax incentives.

OMB directs agencies to define "community" as "either a group of individuals living in
geographic proximity to one another, or a geographically dispersed set of individuals

1 OMB Memorandum M-21-28, Interim Implementation Guidance for the Justice40 Initiative (July 20, 2021).


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(such as migrant workers or Native Americans) where either type of group experiences
common conditions." In determining whether a specific community is "disadvantaged,"
agencies are to consider "appropriate data, indices, and screening tools .. .based on a
combination of variables" (emphasis added) including racial and ethnic residential
segregation, disproportionate impacts from climate change, high energy cost burden, etc.
EPA should thus interpret "disadvantaged communities" through the lens of cumulative
impacts, recognizing that these communities are confronted with many different,
overlapping, and combined environmental, public health, and socio-economic burdens, as
well as varying vulnerability and risk factors. We recommend that EPA consult with the
Agency for Toxic Substances and Disease Registry (ATSDR), which recently developed
an Environmental Justice Index to measure cumulative impacts, as well as states like
California, which has incorporated cumulative impacts into its CalEnviroScreen mapping
tool since the first version released in 2013.

In addition, we recommend that EPA create a mechanism allowing states with their own
environmental justice screening tools (such as California's CalEnviroScreen) to apply for
EPA's approval to use their own state definitions or tools.

•	Transparent and Accessible: EPA should provide clear definitions along with easily
understandable maps and supporting information showing which communities qualify as
low-income and disadvantaged for the GHGRF. Information on the process for
designating low-income and disadvantaged communities should be provided and updated
throughout the process.

•	Self-Nomination Process: EPA should include a self-nomination process for
communities that are left out of the definition of low-income and disadvantaged
communities. Even the best-designed tool will leave out some communities, often due to
the lack of adequate data or narrow selection of indicators which may exclude specific
types of pollution burdens, like pesticide pollution. We recommend that EPA include a
robust self-nomination process with clear guidelines on the definition of "disadvantaged
community," which could be modeled after the Illinois Solar For All Environmental
Justice Self-Designation process.2

2. What kinds of technical and/or financial assistance should the Greenhouse Gas Reduction
Fund grants facilitate to ensure that low-income and disadvantaged communities can participate
in and benefit from the program?

The GHGRF should be designed with a goal of maximizing participation from low-income and
disadvantaged communities to the greatest extent possible, including program design and

2	illinATOsft r-rym/rnn/imlnojc /1(\ 1 C)

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governance, project development, and end use. To accomplish this goal, EPA should incorporate
the following five key considerations in the design of the GHGRF.

1.	We urge EPA to disburse an initial tranche of funds for both financial and technical
assistance to low-income and disadvantaged communities as soon as practicable.

Technical assistance is needed at the community level to begin building trust, educating
community members about potential decarbonization and pollution-reducing strategies,
and connecting interested community members with resources to begin project
development. Capacity-building technical assistance should also facilitate the
participation of community members in the governance and decision-making of financial
institutions who are administering GHGRF funding. Similarly, financial assistance for
workforce development projects should be provided early to help meet the growing
demand for qualified clean energy workers, including electricians, HVAC specialists, and
energy auditors. Investing early in these communities will improve their ability to
participate in and benefit from the GHGRF program going forward. Specifically, we
recommend that EPA disburse an initial tranche of funding for these purposes in February
2023. This would allow EPA to meet statutory deadlines for spending and then take more
time to carry out a robust and inclusive process to design and implement the GHGRF
program.

2.	Eligibility to receive financial and technical assistance must be sufficiently flexible to
maximize the ability of low-income and disadvantaged communities to participate.

Different communities have different existing community assets and technical assistance
needs, and ensuring that a variety of types of recipients are eligible for financial and
technical assistance will ensure that a broad variety of low-income and disadvantaged
communities are able to fully participate in the program. For example, because many
disadvantaged communities are served and supported by a wide variety of entities,
assistance should not be limited to only organizations with 501(c)(3) tax status. In
addition, the process for applying for assistance, both technical and financial, should be
as simple and straightforward as possible, ensuring the process is not burdensome to
communities who are already resource-constrained.

3.	Financial and technical assistance should be provided in many different forms to
meet the differing needs of low-income and disadvantaged communities. Financial
assistance needs to be more than loans, and include grants and flexible, low-cost impact
investing structures that provide opportunities to low-income households with low cash
flow. There are many potential barriers to developing projects in low-income
communities and require building community trust, workforce development and flexible
early stage financing and support. Well-positioned and targeted grants can help build
market confidence in clean energy technologies as well as advance the infrastructure

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needed to deploy zero-emissions technologies. For example, there is a tremendous need
for contractors, particularly minority- and women-owned business enterprises (MWBEs),
that can meet the growing demand for electrification. There is a significant upfront cost
to starting contractor firms and businesses, accounting for equipment purchases,
insurance, permitting and additional lines of credit. A one-time grant could help these
businesses get set up and prepare to meet the growing interest in zero-emissions
technologies.

In addition to financial assistance, technical assistance is also needed to help access and
best utilize loan and financing programs. The technical assistance should be provided to
the ultimate beneficiaries as well as to the direct GHGRF grant recipients (such as
CDFIs, Green Banks, etc) to ensure that they are able to offer technical assistance to the
ultimate beneficiaries (households, companies, contractor firms) of GHGRF resources.
The specific technical assistance for beneficiaries should include credit enhancement,
cash flow management, retrofit planning, and retrofit impact education. In addition,
GHGRF grant recipients, such as CDFIs and green banks, will likely offer programs such
as Property Assessed Clean Energy, Pay As You Save, and other financing programs that
allow beneficiaries to leverage non-traditional methods of paying their loans (e.g. with
energy bill savings). These programs can be helpful in increasing access among
households without the ability to provide upfront capital but can also be difficult to
navigate and even harmful in some circumstances. Technical assistance should be
provided to help households and communities understand these, as well as other, options
that might be available to them. Anecdotal evidence from CDFIs and CDFI networks
suggests that the payback delinquency rate or risk of losses significantly decreases when
technical assistance is provided. This technical assistance will be increasingly helpful for
low-income recipients or recipients located in disadvantaged communities, given the lack
of capacity and understanding that often exists in those communities.

4.	EPA should clarify in guidance that GHGRF can provide assistance for projects that
are receiving assistance from other federal programs, such as the Weatherization
Assistance Program or various tax credits. Not only should GHGRF-provided assistance
be expressly allowed for projects receiving assistance from other programs, technical
assistance should be provided to low-income and disadvantaged communities on how to
design projects that combine different sources of assistance and incentives. For example,
technical assistance should be available to help GHGRF-assisted projects access available
tax incentives, especially in low-income and disadvantaged communities that may have
less experience and expertise with using tax credits.

5.	EPA should prioritize financial institutions that have proven track records of
working with and investing in low-income and disadvantaged communities. Many

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CDFIs have expertise and trusted relationships in low-income and disadvantaged
communities, and are well-positioned to ensure that financial and technical assistance
will reach and benefit these communities. At the same time, we recommend that EPA
ensure that emerging public financing entities, especially those that partner with CDFIs,
are able to fully participate in GHGRF. Many publicly-owned green banks and newly
emerging public banks may have the advantage of close coordination with local
governments and their departments that are already planning and implementing projects
addressing climate and pollution challenges, along with other related issues.

In addition, to ensure that no community is left behind, EPA should incorporate
geographic diversity as a criteria in selecting recipients. We recommend that EPA
consider establishing minimum carveouts, e.g. 40% of general assistance funding and
100% of funding dedicated to low-income and disadvantaged communities must be
awarded to entities embedded in, reflective of, and with established relationships in the
low-income and disadvantaged communities they serve. This may help address and
mitigate the reproduction of racial disparities that have emerged in similar programs, like
the New Markets Tax Credit program, which has historically underinvested in
communities of color and counties with persistent poverty.3

3. What kinds of technical and/or financial assistance should the Greenhouse Gas Reduction
Fund grants facilitate to support and/or prioritize businesses owned or led by members of
low-income or disadvantaged communities?

As discussed above, implementing GHGRF in a phased manner with the early distribution of
resources to low-income and disadvantaged communities will support sustained community
development and deployment of qualified projects. Assistance will likely be needed in many
low-income and disadvantaged communities to help Minority, Women, and Disadvantaged
Business Enterprises (MWDBEs) meet workforce needs. In addition, businesses owned or led by
members of low-income and disadvantaged communities may benefit from technical assistance
with a variety of financial, legal, and logistical challenges. EPA should consider prioritizing the
following specific kinds of technical assistance: technology-agnostic educational information,
market mapping, and gap financing to help MWDBEs access additional available resources.

Technical assistance grants should be provided to eligible recipients to conduct outreach and
education about financing opportunities to low-income and disadvantaged communities,
including through partnerships with trusted community-based organizations (CBOs). Given the
compressed timeline for implementation, EPA should prioritize technical assistance grants to
recipients that already have strong relationships with CBOs serving low-income and

http://hopepolicv.org/mana g'e/wp-content/iiploads/HOPE-Strategjc-Use-of-NMTC-Maxi mi zes-Development-Impact

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disadvantaged communities. EPA should require that such technical assistance provide for
cultural competence, language access, and other accessibility concerns.

Section 2: Program Design

1.	What should EPA consider in the design of the program to ensure Greenhouse Gas Reduction
Fund grants facilitate high private-sector leverage (i.e., each dollar offederal funding mobilizes
additional private funding) ?

A crucial way to facilitate high private-sector leverage is to provide the specific types and
amount of assistance to ensure project viability. Projects that have more initial support in the
form of technical assistance, as well as financial support for initial capital costs, are more likely
to be viable. Specifically, to be effective and ensure the GHGRF can appropriately incentivize
innovation and viable projects in communities, a mix of grants and patient capital will be needed.

GHGRF funds should incorporate the necessary capacity building, technical assistance, project
development, and community engagement support necessary to deliver a pipeline of projects
with meaningful impact over the long run. Technical assistance is needed at the community level
to educate community members about benefits and strategies related to decarbonization and
pollution reduction, and to connect interested parties to project development resources. Technical
assistance will also be necessary to navigate technical issues like grid interconnection. All of
these types of assistance help to ensure project viability, which will in turn facilitate high
private-sector leverage.

2.	What should EPA consider in the design of the program to ensure Greenhouse Gas Reduction
Fund grants facilitate additionality (i.e., federal funding invests in projects that would have
otherwise lacked access to financing) ?

Low-income and disadvantaged communities have been historically left out of clean energy
investments, which remain disproportionately inaccessible to them today, and thus have the
greatest need for targeted investments and opportunities from the GHGRF. EPA should consider
the IRA's $8 billion set-aside for low-income and disadvantaged communities as a floor and not
a ceiling. The $11.97 billion provided for "general assistance" should be deployed to meet the
Justice40 initiative's goals by prioritizing projects that are owned, operated by, or otherwise
directly benefit low-income households or disadvantaged communities. The majority of funding
in the IRA is directed toward tax credits or rebates, which have historically failed to benefit
members of low-income and disadvantaged communities, where residents often do not have
sufficient tax liability to take full advantage of tax credits. For example, in the case of the § 25D
credit, more than 4 in 10 tax filers who have zero or negative tax liability will not be able to
claim these credits and 7 in 10 tax filers will not have sufficient tax liability to take full

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advantage of the credits.4 Directing the GHGRF program to prioritize those households and
communities that are likely to otherwise be left behind will thus provide additionality.

Likewise, most renters, who constitute a majority of low-income and disadvantaged
communities, will be unable to take advantage of IRA's tax credits and rebates, since both types
of incentives would require coordination and cooperation from property owners. Since renters
are largely excluded from participating in and benefiting from renewable energy development,
prioritizing projects that benefit renters will very likely provide additionality. Such projects may
include developing community solar projects that serve renters, or rooftop solar and storage
projects on rental properties.

To ensure robust additionality of GHGRF funding, funding recipients should also prioritize
financing of improvements in public housing and non-profit affordable housing, including
solarization and energy efficiency upgrades. The New York Green Bank's portfolio, for example,
includes loan facilities and other funding to finance energy improvements in public housing,
affordable housing, and public school systems. In the wake of decades of public disinvestment in
housing and education, the GHGRF should be a vehicle for drawing new financial resources into
these neglected sectors, alongside increased public spending. Moreover, a focus on public and
non-profit affordable housing and other public and non-profit facilities such as schools,
municipal buildings, and churches, dovetails with the IRA's provision establishing "direct pay"
of certain energy tax credits for tax-exempt entities. Direct pay tax credits combined with
GHGRF financing could greatly enhance the affordability of energy improvements in these
sectors. Finally, future lending that is subsidized by the GHGRF should adopt sound methods for
assessing additionality of project finance. Impactful and equitable projects that are least likely to
obtain private financing on their own should be typical in portfolios subsidized by the GHGRF,
and these should be periodically audited to assess additionality and community impacts.

Clearly, low-income and disadvantaged communities have an acute need for assistance due to
systematic public and private disinvestment, as well as environmental injustices, so that these
communities often lack the financial infrastructure and resources to receive and distribute
financial assistance. Indirect investments in these communities to establish financial
infrastructure like CDFIs and public banks can be critical for creating markets and providing
capital to deliver benefits to these communities.

3. What should EPA consider in the design of the program to ensure that revenue from financial
assistance provided using Greenhouse Gas Reduction Fund grants is recycled to ensure
continued operability?

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To ensure revenue recycling from GHGRF-provided financial assistance, we recommend that
EPA coordinate with DOE's State and Local Solution Center, within the Office of Energy
Efficiency and Renewable Energy, to provide technical assistance in support of various financing
models to support renewable energy and energy efficiency projects. In particular, EPA should
provide guidance to recipients on developing and implementing financial tools such as on-bill
financing that can help optimize the participation of low-income and disadvantaged households
in various kinds of clean energy programs. This type of guidance and support will be important
to ensure that indirect recipients of financial assistance, especially households with low cash
flow, can participate in clean energy programs.

In addition, EPA should not set any rigid time requirements for repayment and reinvestment of
revenue. Renewable energy projects typically lead to cost savings compared to fossil fuel
alternatives, but the time horizons can vary widely based upon commodity costs and local market
conditions. As renewable energy finance offerings are often tied to underlying energy savings,
EPA should allow recipients to establish flexible timelines for program repayment and
reinvestment based on the unique circumstances of each project.

4. What should EPA consider in the design of the program to enable Greenhouse Gas Reduction
Fund grants to facilitate broad private market capital formation for greenhouse gas and air
pollution reducing projects? How could Greenhouse Gas Reduction Fund grants help prove the
"bankability " offinancial structures that could then be replicated by private sector financial
institutions?

To facilitate broad private market capital formation for greenhouse gas and air pollution reducing
projects, EPA should consider GHGRF implementation as a critical opportunity to break down
the many barriers faced by low-income and disadvantaged communities in the transition to a
clean energy economy. Low-income and disadvantaged communities have faced significant
financial and structural barriers both historically and persisting in the present day, including:

•	Insufficient access to capital;

•	Low home ownership rates;

•	Complex financial arrangements in the context of low-income multifamily housing;

•	Poor market delivery; and

•	Failure to integrate and coordinate programs.

By designing GHGRF to tackle and reduce these barriers, EPA can significantly reduce the
penetration gap between low-income and disadvantaged communities and the rest of the country,
thus demonstrating the "bankability" of such investments.

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For example, EPA can help reduce the barrier of insufficient access to capital by not relying upon
high credit scores or complex and complicated verification requirements to obtain financing
through GHGRF. EPA can also help reduce the barriers to low home ownership rates by
supporting projects that provide benefits to tenants such as California's Solar on Multifamily
Affordable Homes program.

5. Are there best practices in program design that EPA should consider to reduce burdens on
applicants, grantees, and/or subrecipients (including borrowers)?

Given the statutorily-determined short timeline for distributing funding, it is essential that
GHGRF implementation prioritizes CBOs and other entities with a proven track record of
working with low-income and disadvantaged communities. To be equitable, the grant award
process must include a streamlined application process that is not burdensome. We recommend
that EPA consider adopting the following best practices to reduce burdens on applicants,
grantees, and/or subrecipients:

•	Provide clear and accessible information about applicable definitions, eligibility, and
other requirements under GHGRF, with targeted outreach and education in low-income
and disadvantaged communities. Information about the program should be disseminated
in languages prevalent in these communities, so that residents with limited English
proficiency are not excluded. EPA should also provide easily understandable resources
about programs that can benefit tenants and households that live in multi-family
buildings.

•	Provide technical assistance to potential applicants to assist with the grant application
process, prioritizing low-income and disadvantaged communities.

•	Streamline applications to minimize paperwork burden and resources needed to apply.
This should include minimizing requirements for verifying income eligibility, for
example by allowing proof of enrollment in other means-tested programs.

•	Promptly disburse grants, loans, and other forms of financial assistance.

•	Provide a customer service-oriented hotline or similar, easy to access technical assistance
program to help interested community members apply for funding, ask questions about
what constitutes a "qualified project," and be directed to local providers of financial
assistance. This assistance should be available both online and through a direct phone
number, as well as in multiple languages.

•	Support qualified projects by coordinating with other incentive and grant programs. EPA
should ensure that interested applicants can easily leverage resources, incentives, and
support through other existing programs. For example, Philadelphia's Built to Last
program facilitates coordination and service delivery across a variety of programs and

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organizations, screening for eligibility for benefits and adding grants and financing where
needed.5

•	Streamline consumer-facing financing and grant offerings across national, regional, or
multi-state programs to avoid unnecessary fragmentation of programs. Differing program
requirements across states for low-interest-rate loan products create significant
administrability and customer-acquisition barriers for developers and contractors. We
recommend that EPA prioritize funding for programs that serve multiple geographic areas
and fill gaps in underserved areas, rather than relying primarily on single-state programs,
to reduce burdens on both recipients and implementers.

•	Prioritize awarding grants to CBOs and other entities that have a proven track record of
working with low-income and disadvantaged communities. This prioritization will help
ensure that there is no special preference given to applicants who have previously been
awarded other kinds of federal financial assistance. Many applicants may be applying for
federal financial assistance for the first time under this program and should not be
excluded because of historic disadvantages.

6.	What, if any, common federal grant program design features should EPA consider or avoid in
order to maximize the ability of eligible recipients and/or indirect recipients to leverage and
recycle Greenhouse Gas Reduction Fund grants?

In implementing the GHGRF, EPA should avoid the incorporation of cost-effectiveness tests for
qualified projects. Such tests are often regressive and prevent many disadvantaged communities
from accessing critical programs that they qualify for.

7.	What should EPA consider in the design of the program, in addition to prevailing wage
requirements in section 314 of the Clean Air Act, to encourage grantees and subrecipients to
fund projects that create high quality jobs and adhere to best practices for labor standards,
consistent with guidance such as Executive Order 14063 on the Use of Project Labor Agreements
and the Department of Labor's Good Jobs Principles?

As discussed above, we urge EPA to prioritize financial and technical assistance to low-income
and disadvantaged communities so that MDWBEs can meet workforce needs, as well as
prevailing wage, local hire, and apprenticeship requirements.

In addition to Project Labor Agreements (PLAs), EPA should require grantees and subrecipients
to prioritize projects that use Community Workforce Agreements (CWAs). Typically, PLAs
contain provisions that only pertain to labor and management. However, in addition to the
standard PLA language, a CWA incorporates community benefits into the agreement. By
including targeted hiring provisions that specify the percentage of work hours for local residents

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or disadvantaged workers (i.e. low-income or government benefits recipients) and specific
apprenticeship provisions—such as direct entry options for approved pre-apprenticeship
programs, on the job training, and a specified percentage of apprentices from each target
demographic (i.e. disadvantaged workers)—a CWA can ensure that disadvantaged community
members see the benefit of workforce and wealth building opportunities within their
communities.

Further, CWAs include local procurement standards for Minority, Women, and Disadvantaged
owned business enterprises (MWDBE). This provision not only creates opportunities to diversify
the contractors and subcontractors within the project, but also creates additional wealth building
opportunities for community members.

Finally, to ensure that parties are complying with the CWA community benefit provisions, CWAs
include compliance monitoring provisions and sanctions for noncompliance.

Requiring the use of CWAs will ensure that the communities where GHGRF-assisted projects are
implemented, especially low-income and disadvantaged communities, realize both the health and
the wealth building opportunities that the GHGRF is intended to provide.

8. What should EPA consider when developing program guidance and policies, such as the
appropriate collection of data, to ensure that greenhouse gas and air pollution reduction projects
funded by grantees and subrecipients comply with the requirements of Title VI of the Civil Rights
Act, which prohibits discrimination on the basis of race, color, and national origin in programs
and activities receiving federal financial assistance?

To ensure that GHGRF-assisted projects comply with the requirements of Title VI of the Civil
Rights Act, EPA should incorporate the following elements in guidance and policies:

• Reporting and Programmatic Evaluation: EPA should include reporting requirements
in agreements with recipients to provide financial and technical assistance. Wherever
possible, programmatic evaluation should incorporate independent data, including
demographic data (including race, ethnicity, and income), and various environmental
quality and public health indicators, instead of relying solely on data provided by entities
that have benefited from the program. Evaluation should also account for whether
projects meet local permitting and similar applicable requirements.

Evaluation should include community engagement, including whether disadvantaged
communities were meaningfully involved in the project. The evaluation process should
also provide an opportunity for community members to provide input throughout the

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process, including providing a direct phone line for community members to provide
feedback and raise concerns.

In addition to assessing the overall impacts of the program, this oversight and evaluation
should explicitly assess compliance with Justice40. Project developers should be required
to report Justice40 benefits, based on a transparent and accountable methodology
developed by EPA with input from low-income and disadvantaged communities.

•	Assess Distributional Impacts: Based on reported and other data, EPA should assess the
distributional impacts of GHGRF-assisted projects, accounting for income and (imputed)
race/ethnicity. We recommend that EPA assess projects' impacts on the following
indicators in low-income and disadvantaged communities:

o	Energy burden;

o	Pollution exposures;

o	Solar and other clean energy access;

o	Clean energy jobs;

o	Energy resilience; and

o	Energy democracy.

The results of this assessment should inform programmatic changes or future revisions to
the law to reduce disparities in the program and ensure compliance with Title VI.

•	Required Community Engagement: Projects intended to benefit low-income and
disadvantaged communities must only be built with the local community's free, prior, and
informed consent. To ensure such community consent, at a minimum, EPA should direct
providers of financial assistance to report information about community engagement
activities planned and conducted related to potential projects.

This community engagement must be meaningfully accessible to community members,
including the provision of interactive language access in communities with limited
English proficiency and multiple public meetings scheduled at different times of the day
and week. Community engagement activities should be evaluated based on the number of
residents actually engaged, as opposed to dollars spent. Finally, EPA must provide an
enforceable mechanism by which community members can independently register their
objections to a proposed GHGRF-supported project.

9. What should EPA consider when developing program policies and guidance to ensure that
greenhouse gas and air pollution reduction projects funded by grantees and subrecipients
comply with the requirements of the Build America, Buy America Act that requires domestic
procurement of iron, steel, manufactured products, and construction material?

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The Build America, Buy America Act requires that federal financial assistance can only be
obligated for "infrastructure" projects that meet a domestic content procurement preference.6
EPA should issue clear and transparent guidance to providers of financial assistance under
GHGRF on how to make a determination as to whether a project constitutes "infrastructure"
when assessing whether the project is a "qualified project." The White House provided the
following guidance as to how "infrastructure" should be interpreted:

When determining if a particular construction project of a type not listed in the definition
above constitutes "infrastructure," agencies should consider whether the project will
serve a public function, including whether the project is publicly owned and operated,
privately operated on behalf of the public, or is a place of public accommodation, as
opposed to a project that is privately owned and not open to the public. Projects with the
former qualities have greater indicia of infrastructure, while projects with the latter
quality have fewer. Projects consisting solely of the purchase, construction, or
improvement of a private home for personal use, for example, would not constitute an
infrastructure project.7

In other words, GHGRF-assisted projects that are constructed on or in private buildings for
personal use are not "infrastructure" and thus do not implicate the Build America, Buy America
Act. On the other hand, publicly-accessible EV-charging infrastructure would likely implicate the
Build America, Buy America Act's domestic procurement preference.

10. What federal, state and/or local programs, including other programs included in the Inflation
Reduction Act and the Infrastructure Investment and Jobs Act or "Bipartisan Infrastructure
Law, " could EPA consider when designing the Greenhouse Gas Reduction Fund? How could
such programs complement the funding available through the Greenhouse Gas Reduction Fund?

We strongly recommend that EPA design GHGRF to meet the needs of renters and other
low-income households who face barriers to directly accessing benefits provided by programs in
both IRA and IIJA. For example, EPA should consider prioritizing incentives for electrification
and community or rooftop solar and storage deployment to owners of multifamily affordable
housing in low-income and disadvantaged communities. In addition, IIJA provided significant
additional funding for the Weatherization Assistance Program (WAP), but many low-income
homeowners are unable to participate in WAP due to deferred maintenance and upgrade needs
that are not generally eligible for WAP funding. GHGRF can provide gap funding for these
upgrades and reduce deferrals.

6 Pub. L. 117-58 (2021), Division G, Title IX, sections 70901-70953.


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We also recommend that when designing the GHGRF program, EPA consider incorporating the
flexibility to provide financial and technical assistance to replicate or scale up other
complementary programs under IRA, including the diesel emissions reduction program (§
60104) and funding to address air pollution at schools in low-income and disadvantaged
communities (§ 60106).

In addition, we recommend that EPA collaborate with DOE to explore how the energy efficiency
revolving loan fund capitalization program in IIJA can be deployed in a complementary manner
with GHGRF, for example by providing similar gap funding.

Section 3: Eligible Projects

1. What types of projects should EPA prioritize under sections 134(a)(l)-(3), consistent with the
statutory definition of "qualifiedprojects " and "zero emissions technology " as well as the
statute's direct and indirect investment provisions? Please describe how prioritizing such
projects would:

a.	maximize greenhouse gas emission and air pollution reductions;

b.	deliver benefits to low-income and disadvantaged communities;

c.	enable investment in projects that would otherwise lack access to capital or financing;

d.	recycle repayments and other revenue received from financial assistance provided using the
grant funds to ensure continued operability; and

e.	facilitate increased private sector investment.

Initially, it is important that the projects prioritized through the GHGRF meet minimum
requirements to reflect community input and not increase the burdens faced by communities.
Rather, EPA should prioritize projects that provide concrete benefits to communities, rather than
those that are merely sited within low-income or disadvantaged communities. Because this
program is critical to reducing the very real gap between low-income and disadvantaged
communities and the rest of the United States, this type of disconnect between siting and benefits
must be excluded through intentional program design.

Environmental justice communities have not traditionally benefited from beneficial zero-carbon
projects such as wind and solar resources.8 To address this, GHGRF should prioritize those
projects that provide direct benefits to local low-income and disadvantaged communities. In
particular, EPA should direct providers of financial assistance to prioritize projects that guarantee
bill savings and reduce the energy burden of low-income households. EPA should also require
financial assistance providers to take into account other project elements that can provide
potential benefits to the local community, such as whether the project provides for local hiring.


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EPA should further prioritize projects that advance equity and reduce all emissions. While there
are many project types that could ultimately qualify for and receive assistance from GHGRF,
none of these projects should rely on the continued extraction, processing, and combustion of
fossil fuels. This applies not only to the GHGRF's $7 billion funding stream for zero-emission
technology, but also to the GHGRF's $20 billion funding stream for qualified projects.

Qualified projects that benefit low-income and disadvantaged communities can range from
energy efficiency, electrification, renewable energy, and resiliency investments. The GHGRF can
maximize greenhouse gas and air pollution reductions and facilitate energy efficiency and
electrification retrofits by reducing barriers and addressing pre-retrofit costs by providing grants
for energy audits and health, safety, and weatherization upgrades. Especially in historically
under-invested communities, older buildings may face basic health and safety issues like lead,
mold, asbestos, roofing deficiencies, lack of insulation and dangerous wiring—all of which
prevent electrification and require grants and/or low-cost financing to remediate. Once
weatherized, these buildings are attractive electrification candidates that can much more easily
recruit private-sector financing and/or deploy other public-sector incentives. These investments
not only reduce emissions but also deliver air quality and health benefits. By also encouraging
and prioritizing local community ownership and control, EPA can ensure that low-income and
disadvantaged communities realize economic and wealth-building benefits as well.

Implementation of the funding stream for zero-emission technology in low-income and
disadvantaged communities should incorporate provisions to ensure consumer protection and
community benefits. Importantly, this funding stream should not be strictly limited to deploying
rooftop solar, but should instead be flexible enough to account for other types of zero-emission
technology, such as community solar, geothermal district heating, or battery storage, that may
provide a greater combination of health, economic, and resiliency benefits to low-income and
disadvantaged communities in certain geographies.

Investments that do not directly benefit low-income and disadvantaged communities should be
screened out as these types of investments, such as utility-scale renewables, are well funded
through other federal and state programs as well as private capital, and do not require additional
public financial assistance.

2. Please describe what forms offinancial assistance (e.g. subgrants, loans, or other forms of
financial assistance) are necessary to fill financing gaps, enable investment, and accelerate
deployment of such projects.

As discussed above, we strongly recommend that the first tranche of GHGRF funding to be
released in February 2023 include financial assistance for workforce development activities. This

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could include grants and low-interest loans to expand workforce development programs, expand
or establish MWDBEs, and hire, train, and upskill new and existing workers.

Also discussed above, financial assistance, especially in the forms of grants, should be made
available to address barriers to energy efficiency and electrification upgrades, such as energy
audits and health, safety, and weatherization upgrades. There is a gap in funding support for
these kinds of upgrades, which would help underinvested communities become
"electrification-ready" and able to take advantage of other available incentives and programs.

The GHGRF should support zero-cost bridge loans to households and contractors to make IRA's
HOMES rebates and tax credits more accessible. These loans would provide households with the
upfront purchasing power needed to make energy efficiency and electrification upgrades, in the
amounts expected to be provided by applicable incentives. This same approach should also be
applied to contractors providing retrofits eligible for HOMES rebates.

We further recommend that EPA collaborate with the Department of Energy's Solar Energy
Technologies Office to identify the specific types of financial assistance most needed and best
suited to benefit residents of low-income and disadvantaged communities. For example, since
community solar is often the only way that many low-income renters can directly benefit from
and participate in solar development, we recommend that EPA issue guidance to providers of
financial assistance on how to provide guarantees or other kinds of credit enhancement for
equitable community solar projects that provide clear and direct benefits to subscribers,
especially guaranteed bill savings.

3. Beyondfinancial assistance for project financing what other supports - such as technical
assistance — are necessary to accelerate deployment of such projects?

As described above, some additional supports that are critical for the successful, accelerated
deployment of projects include:

•	Working with local financial institutions and community-based organizations that have
established and trusted relationships with the community;

•	Developing clear and transparent program information and guidance to help interested
stakeholders develop projects and understand the program;

•	Technical assistance to ensure that local community-based organizations have the
capacity to develop projects and otherwise participate in the program;

•	Innovative and inclusive financial tools that allow participation, even with low cash flow
or credit ratings;

•	Simplified application and verification processes to reduce potential administrative
burden; and

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• Coordination across multiple programs to ensure that interested stakeholders can layer
and braid incentives and other assistance and increase viability of projects.

Section 4: Eligible Recipients

1.	Who could be eligible entities and/or indirect recipients under the Greenhouse Gas Reduction
Fund consistent with statutory requirements specified in section 134 of the Clean Air Act? Please
provide a description of these types of entities and references regarding the total capital
deployed by such entities into greenhouse gas and air pollution reducing projects.

We envision that the GHGRF will be deployed through multiple intermediaries that can work
with a variety of entities that can provide financial and technical assistance in communities and
to households. As we discussed above, CDFIs have a particularly strong track record and
expertise in place-based investing and collaborating with CBOs, and should be prioritized as
both direct and indirect recipients. In addition, we recommend that minority deposit institutions
and mission-based lenders can also be effective participants in the deployment of
GHGRF-funded assistance. We also support the inclusion of public banks and publicly-owned
green banks as direct and indirect recipients, as appropriate, especially those that partner with
CDFIs and CBOs.

For GHGRF funds to be as flexible as possible, eligible recipients should be required to show
that they are able to deploy grants and other financial assistance on a household-, project-, and
community level. Since some green banks are not currently structured to support household-level
projects, this requirement could encourage legislatures and other decision-makers to make
changes to ensure that green banks can meet the needs of households. Through this emphasis on
working with households, the GHGRF can help to advance innovative financial products that
directly benefit individuals and households.

2.	What types of entities (as eligible recipients and/or indirect recipients) could enable
Greenhouse Gas Reduction Fund grants to support investment and deployment of greenhouse
gas and air pollution reducing projects in low-income and disadvantaged communities?

EPA should ensure that the financial institutions that receive GHGRF funding can reach all
low-income and disadvantaged communities located throughout the country, including Tribal
Nations, insular areas, and rural communities. To establish this wide breadth, EPA should
prioritize funding to CDFIs, community development credit unions, and minority deposit
institutions which have strong track records in place-based investing and working with trusted
community-based organizations to reach residents in low-income and disadvantaged
communities.

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In addition, EPA should ensure that public entities, including public banks and publicly-owned
green banks, can fully participate in providing financial assistance under GHGRF. These types of
entities may benefit from close coordination with state and local governments who are also
working to address climate and pollution challenges and have established relationships with
relevant stakeholders in the communities they serve. Emerging public banks, such as public
banks authorized by California's AB 857 (2019), are also required to partner with CDFIs and can
leverage CDFIs' strong track record of place-based investment and community development
with state or local government powers and complementary programs.

In selecting indirect recipients to provide technical assistance, we recommend that EPA prioritize
providers that have proven track records working with CBOs in low-income and disadvantaged
communities or meet appropriate local procurement standards.

3.	What types of entities (as eligible recipients and/or indirect recipients) could be created to
enable Greenhouse Gas Reduction Fund grants to support investment in and deployment of
greenhouse gas and air pollution reducing projects in communities where capacity to finance
and deploy such projects does not currently exist?

We believe that creating public financing entities that are accessible and accountable to their
communities, like public banks and publicly-owned green banks, can provide significant support
for investment in and deployment of qualified projects, especially in communities where such
financial infrastructure does not currently exist. These kinds of institutions could potentially
leverage and braid both public and private resources, including deployment and service
provision. For example, public banks and similar entities could take advantage of the direct
payment option now available for several different tax credits, which could be leveraged by local
governments to directly create public projects. This approach could potentially help increase
penetration of GHGRF assistance in states where state governments are not prioritizing
environmental justice.

4.	How could EPA ensure the responsible implementation of the Greenhouse Gas Reduction
Fund grants by new entities without a track record?

Robust oversight and reporting requirements will help guide the responsible implementation of
GHGRF grants to new entities without a track record. EPA should consider whether new entities
should be subject to more frequent oversight and reporting checkpoints.

Technical assistance should be provided to new entities to ensure their effectiveness, including
assistance for meeting oversight and reporting requirements, facilitation of connections and
shared resources, and peer support and mentoring from more experienced CDFIs, CBOs, and
other relevant entity types.

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5. What kinds of technical and/or financial assistance could Greenhouse Gas Reduction Fund
grants facilitate to maximize investment in and deployment of greenhouse gas and air pollution
reducing projects by existing and/or new eligible recipients and/or indirect recipients?

As we have discussed above, we strongly recommend that EPA prioritize disbursing an initial
tranche of funding to low-income and disadvantaged communities. This priority funding should
include technical assistance for community capacity-building, including outreach, education, and
planning activities, funding for CBOs, and capitalization and support for establishing new public
banks and publicly-owned green banks. This priority funding should also include financial
assistance for workforce development activities to help meet the workforce needs of the
transition to a clean, renewable energy-based economy. Together, these early investments will
help position these communities to better take advantage of further funding opportunities from
the public or private sector.

Section 5: Oversight and Reporting

1. What types of governance structures, reporting requirements and audit requirements
(consistent with applicable federal regulations) should EPA consider requiring of direct and
indirect recipients of Greenhouse Gas Reduction Fund grants to ensure the responsible
implementation and oversight of grantee/subrecipient operations andfinancial assistance
activities?

Accountable, inclusive, and responsive governance of the GHGRF program is fundamental to
ensuring that funding is effectively addressing the needs of low-income and disadvantaged
communities. EPA should ensure that both direct and indirect recipients of GHGRF assistance
have governance structures that ensure accountability to the appropriate communities. The
specific structures and mechanisms that should be used to provide such accountability must be
informed by and vetted through engagement with members of low-income and disadvantaged
communities.

We recommend that EPA consider requiring direct and indirect recipients report on the following
information:

•	Project location and impacts (including greenhouse gas and other air pollutant emissions
reduced or avoided; as well as economic impacts, like jobs saved or created and amount
of wealth-building opportunities provided)

•	Demographic data (including race, ethnicity, income level) of applicants, indirect
recipients, and project beneficiaries

In addition, we recommend that reporting requirements substantially align with the Justice40
general guidance issued by the Department of Energy. In particular, we recommend that the

20


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GHGRF program reporting requirements include compatible stakeholder engagement
requirements, community benefit plans, and transparent and consistent methodologies for
calculating benefits for Justice40 purposes.

Program evaluation should include an assessment of the impact that the GHGRF has supported
or catalyzed in partnership with other investors and partners. The GHGRF should not be
evaluated based solely on the impact of GHGRF funds, and instead ensure that, whenever
possible, GHGRF resources are additive to other resources in the market.

3.	What metrics and indicators should EPA use to track relevant program outcomes including,
but not limited to, (a) reductions in greenhouse gas emissions or air pollution, (b) allocation of
benefits to low-income and disadvantaged communities, (c) private sector leverage and project
additionality, (d) number of greenhouse gas and air pollution reduction projects funded and (f)
distribution of projects at the national, regional, state and local levels?

Metrics and indicators EPA should use to track program outcomes should include:

•	Demographic data of applicants, direct and indirect recipients, and project beneficiaries

•	Environmental quality and public health data applicable to GHGRF-supported projects
and local communities (including air quality and vulnerability to wildfires)

•	Social and economic indicators related to GHGRF-supported projects and local
communities (including rates of unemployment and Limited English Proficiency)

•	Meaningful community engagement metrics (including number of community members
participating)

Please see our response to #8 under Section 2 (on page 12-13 of this comment) for further
discussion applicable to this question.

4.	What should EPA consider in the design of the program to ensure community accountability
for projects funded directly or indirectly by the Greenhouse Gas Reduction Fund? What if any
existing governance structures, assessment criteria (e.g., the Community Development Financial
Institutions Fund's Target Market Accountability criteria), rules, etc., should EPA consider?

Community accountability is critical to the GHGRF's success, especially with respect to meeting
the Biden Administration's racial equity and environmental justice goals. We support the
integration of flexible but meaningful standards for community accountability applicable to
projects funded directly or indirectly by the GHGRF. We recommend applying the CDFI Fund's
accountability criteria related to advisory/governing board membership and adoption of an
organizational accountability policy, as proposed and previewed in October 2022.9 These
accountability criteria appear to be fairly applicable to other kinds of direct or indirect recipients

21


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besides CDFIs, including other kinds of financial institutions as well as non-profits, including
community-based organizations. We recommend that EPA engage with community-based
organizations and other stakeholders serving low-income and disadvantaged communities in
developing analogous accountability criteria.

Section 6: General Comments

1. Do you have any other comments on the implementation of the Greenhouse Gas Reduction
Fund?

OMB has released Interim Implementation Guidance on implementing Justice40 which specified
that a "covered program" is a Federal Government program that makes covered investment
benefits in one or more of seven areas, including climate change and clean energy and energy
efficiency. The guidance further requires agencies to develop a methodology for calculating
benefits and report benefits to OMB. We recommend that EPA promptly confirm that GHGRF is
a covered program for Justice40 purposes, and plan to report transparently on methodology and
benefits accordingly. As we discussed above, the Justice40 goal should apply to the full GHGRF
program, including the $11.97 billion in "general assistance."

Conclusion

To reiterate, we urge EPA to ensure that the GHGRF is administered as justly and equitably as
possible, by incorporating the following in implementation:

•	Utilize definitions of low-income and disadvantaged communities that are inclusive,
aligned, transparent, and accessible;

•	Disburse initial funding for financial and technical assistance to low-income and
disadvantaged communities as soon as possible;

•	Provide financial and technical assistance in different forms to meet the diverse needs of
low-income and disadvantaged communities, including assistance with capacity building,
project development, and community engagement;

•	Clarify that GHGRF can provide assistance to projects receiving assistance from other
federal programs;

•	Prioritize selecting financial institutions that have proven track records of working with
and investing in low-income and disadvantaged communities;

•	Maximize the funding dedicated to low-income and disadvantaged communities, and
design GHGRF to break down the historical and persistent financial and structural
barriers that low-income and disadvantaged communities face and have faced;

•	Provide clear, accessible information about the Fund, minimize paperwork burden,
disburse assistance on a timely basis, and provide coordination with other grant and
incentive programs to help ensure project viability;

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•	Avoid incorporation of cost-effective tests for low-income and disadvantaged
communities projects;

•	Require project labor agreements and prioritize Community Workforce Agreements with
local procurement standards from Minority, Women, and Disadvantaged Business
Enterprises;

•	Require robust reporting and programmatic evaluation, assess distributional impacts, and
require community engagement; and

•	Prioritize projects that reflect community input, provide concrete benefits to
communities, and do not increase the burdens faced by communities.

We also re-emphasize here the importance of continuing EPA's efforts to meaningfully engage
with environmental justice communities; prioritize clean, community centered development; and
to ensure that the agency's actions do not perpetuate, exacerbate, or create pollution burdens in
communities that have disproportionately suffered the negative effects of fossil fuel development
and use.

Thank you for considering these comments.

Respectfully submitted,

Just Solutions Collective
Emerald Cities Collaborative
Rewiring America

100% Campaign

Acterra: Action for a Healthy Planet
Building Electrification Institute
California Green New Deal Coalition
Center for Progressive Reform

Center for Sustainable Communities/Sustainability Solutions Group and Institute

Clean Energy Group

CleanAirNow

Climate Justice Alliance

Communities for a Better Environment

EH Electric & HVAC

Energy Savers Inc

Executive Cleaning Operations

Glass Electric Company, LLC

Greenbank Associates

GreenLatinos

23


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Institute for Market Transformation

Mansfield & Mansfield Construction Clean-Up Co. Site Support

National Housing Trust

Natural Resources Defense Council

NC Climate Justice Collective

NDN Collective

New Buildings Institute

Northwest Minority Builders Alliance

Pilgrim Progress Community Development Corporation

Prairie Rivers Network

RENEW Wisconsin

Shake Energy Collaborative

Solstice Initiative

Soulardarity

Spark Northwest

The Wei LLC

Thurston Climate Action Team
Towers Construction Company
United Congregations of Metro East
Urban Design Center
Verde
Vote Solar

24


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From:

To:

Subject:

Date:

Attachments:

Todd Nedwick
EFAB

Input on the GHGRF from 18 affordable housing organizations

Friday, December 9, 2022 3:56:00 PM

imaqeOOl.pnq

Dear members of the Environmental Financial Advisory Board,

Thank you for the opportunity to provide comments as you consider your recommendations
to EPA for the design of the Greenhouse Gas Reduction Fund.

National Flousing Trust (NHT) and 17 organizations representing a cross-section of the
affordable housing industry submitted comments to the RFI urging EPA to ensure that
decarbonizing affordable housing and making housing more energy-efficient are priority uses
of the

Greenhouse Gas Reduction Fund (GHGRF). We also strongly recommend that financing
organizations with significant experience and success serving low-income and disadvantaged
communities, such as Community Development Financial Institutions (CDFIs) and state and
local housing finance agencies (HFAs), be eligible and priority recipients of GHGRF grants.

While our full comments can be accessed here, below are excerpts from our comments that
pertain to the specific questions that EFAB is contemplating.

I. Objectives

a. Environmental Justice / Definition of "low-income and disadvantaged communities"

i.	What considerations should EPA take into account in defining "low-income" and/or

"disadvantaged" communities in order to ensure fair access/that the funding
benefits disadvantaged communities?

• EPA should use existing definitions and methodologies to define "low-
income" and "disadvantaged" communities based on data that is universally
accessible. EPA should align GHGRF definitions with existing criteria,
datasets, and tools to reduce administrative burdens and facilitate
combining GHGRF funding with other programs.

//. How can EPA ensure that communities and organizations who have received little
or no funds in the past receive priority consideration for funding? How could EPA
identify the low-income and disadvantaged communities it should prioritize for
greenhouse gas and other air pollution reduction investments?

Organizations with existing relationships in low-income and
disadvantaged communities and experience lending to such communities
are best positioned to enable projects that reduce greenhouse gas emissions


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and air pollution. These include CDFIs and state and local housing finance
agencies.

•	With regards to the $7 B for states, localities, and Tribal governments: A
carve-out for localities is important to ensure that funding is available to
low-income and disadvantaged communities if state leadership chooses not
to participate for political reasons. EPA should create separate pools of
funding for states, localities, and Tribal governments so that states are only
competing with other states for funding, and likewise for localities and Tribal
governments. For example, EPA could earmark 45% of $7 billion for states,
45% for localities, and 10% for Tribal governments.

iii. What kinds of technical and/or financial assistance should GHGRF funding

recipients provide to ensure that low-income and disadvantaged communities are
able to be direct or indirect beneficiaries of GHGRF funding? Please identify
supports that could help communities with project implementation.

•	One-stop-shop support: GHGRF direct recipients should fund CBOs and
energy efficiency program implementers to provide a single point of contact
and technical assistance to support affordable multifamily housing providers
implement decarbonization projects. Such support is necessary to drive
demand for decarbonization financing.

•	EPA should encourage grant recipients to partner with technical assistance
providers to ensure that borrowers have access to one-stop-shop services.

Partnerships between CDFIs and energy efficiency technical assistance
providers can streamline the retrofit process and ensure owners have access
to financing and project services. For example:

o The Community Investment Corp (CIC) in Chicago works
with Elevate, an energy efficiency technical assistance
organization, to provide energy efficiency services to
building owners. CIC and Elevate have supported energy
efficiency upgrades in 42,000 units,
o Triple Bottom Line Foundation (TBL Fund) in Colorado
provides development services and customized financial
products for green projects for multifamily affordable
housing and disadvantaged communities. Borrowers can
work with the TBL Fund's partner organization, ICAST, to
receive one-stop-shop services.

The GHGRF can spur long-term capital mobilization by structuring a
portion of the funds as subsidies or equity to encourage early adopters to


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undertake decarbonization projects. While using a portion of GHGRF funds
as a subsidy will limit recyclability in the short term, supporting market
development will mobilize private capital in the long term. EPA should
require higher levels of leverage and recycling for other types of investments
that are easier to finance than projects in low-income and disadvantaged
communities.

• Community lenders like CDFIs will require grants to develop affordable
loan products for low-income and disadvantaged communities. To remain
financially sustainable and cover operating costs, CDFIs must earn a return
on their loans. If EPA or its intermediaries expect a return on the capital
provided, it will require CDFIs to charge a higher interest rate to borrowers
to achieve a sufficient spread to remain operable. Fligher-cost loans will be
out of reach for many low-income borrowers. Ideally, EPA and/or its
intermediaries will provide financial assistance to CDFIs in the form of grants
that must not be paid back.

If the capital is expected to be paid back to the intermediaries, it should be
provided as long-term capital at a 0% interest rate. The National Flousing
Trust Community Development Fund (NFITCDF) provides a Green Retrofit
Preservation Loan for affordable multifamily property owners to reduce
energy and water consumption. NFITCDF has faced several obstacles in
deploying these funds, including access to the low-cost, long-term capital
needed to make such loans work. Underwriting loans against energy
savings requires making loans that fully amortize over 15-20 years. CDFIs
generally do not have adequate long-term capital to support this kind of
project.

b. Program Efficiency

i.	How can the GHGRF grant competition be designed so that funding is highly

leveraged (i.e., each dollar of federal funding mobilizes multiple dollars of private
funding)? How can the funding be used to maximize "additionality" (i.e., the extent
to which funding catalyzes new projects that would not otherwise occur)? How can
EPA balance the need for grants for capacity building and short-term results with
financial structures that will allow capital to be recycled over time? Where (if at all)
is it appropriate to impose sustainability requirements on direct or indirect
beneficiaries of GHGRF funding?

• EPA can ensure that GHGRF grants facilitate additionality by prioritizing
underserved markets, specifically affordable multifamily housing. Low-
income and disadvantaged communities lack access to public and private-sector


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financing. Owners and renters in affordable multifamily housing often cannot
afford the upfront costs associated with decarbonization. As such, practically
any deployment of GHGRF funds to facilitate decarbonization projects in
affordable multifamily housing will exhibit additionality.

Decarbonization scopes of work are often value-engineered out of affordable
housing due to cost concerns and limited funding. Demand for affordable
housing far outstrips the level of funding available to finance fully decarbonized
buildings. The Low-Income Housing Tax Credit program is the main source of
equity for affordable housing but is insufficient to meet the demand for
affordable housing. Developers requested nearly $2.8 billion in housing credits
from states in 2020—2.5 times the available authority of $1.1 billion allocated.
The cost of developing affordable housing has increased by 30 percent over the
last few years, creating even more pressure to find cost-cutting opportunities
to maximize the number of units created and preserved each year.

•	EPA should design the GHGRF to support long-term capital mobilization and
market development by allowing financial assistance to be structured as
grants into affordable housing projects. Financing affordable housing
decarbonization is challenging due to the perceived risks of such projects which
increases the cost of capital. The perception of risk is driven by a lack of
familiarity with decarbonization technologies among lenders and building
owners. There's also little information available about the financial impact of
decarbonization due to a lack of performance data. More investment in
decarbonizing affordable housing will increase awareness of new technologies
and project outcomes and reduce the perceived risks. This will bring down the
costs of capital in the long term and drive demand for financing.

II. Program Structure

a. Eligible Recipients

ii. What eligible entities and/or indirect recipients would best enable funds to reach
disadvantaged communities? What are their challenges and opportunities and how
can EPA maximize the use of these channels?

•	The U.S. Treasury approves Community Development Financial Institutions
(CDFIs) which serve low-income and disadvantaged communities, especially
communities of color, rural, and persistent poverty communities. CDFIs include
community development banks, credit unions, loan funds, and venture capital
funds, which share a primary mission of community development and
predominant financing activity in low-income and communities of color. As
capillaries of the financial system, CDFIs provide both technical assistance and


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financing across all fifty states, with nearly 40 percent of CDFI lending in
persistent poverty areas. There are more than 1,200 certified CDFIs nationwide
in every state and D.C.

•	State and Local Housing Finance Agencies (HFAs) play a central role in the
nation's affordable housing system, delivering more than $500 billion in
financing to make possible the purchase, development, and rehabilitation of
over 7.5 million affordable homes and rental apartments for low- and middle-
income households. Low Income Housing Tax Credit (LIHTC) and Housing Bond
financed affordable housing properties have an outstanding performance track
record: only 0.57 percent of Housing Credit developments have undergone
foreclosure, an unparalleled record compared to market-rate properties and all
other real estate classes. This is due to strict state agency underwriting
standards, stringent compliance requirements, and due diligence from the
private sector.

•	Affordable multifamily owners and managers will require technical assistance
and flexibility to complete decarbonization projects. Technical assistance from
trusted partners will drive demand for decarbonization in affordable housing
and maxirrweGHG emission reductions. Affordable housing providers have
limited staff capacity and resources to plan for and implement GHG reduction
projects. Affordable multifamily property owners and managers generally do
not have the expertise to conduct energy audits and evaluate which
decarbonization measures make the most sense to implement. They may also
be unfamiliar with finding qualified contractors to make improvements. If they
commit money and time to complete a retrofit, they will need assurances that
the measures selected and implemented will produce meaningful carbon
savings.

GHGRF should fund technical assistance providers that can provide one-stop-
shop services to affordable housing providers. Funding should support existing one-
stop-shops and be used to stand up new one-stop-shops that would:

o coordinate applying to multiple incentive programs to leverage multiple
funding sources;

o provide project development and technical assistance, such as initial

assessments, audits, and project support;
o act as trusted partners to building owners and build relationships in the
community to identify and recruit affordable housing providers to
participate in the program;
o help the customer evaluate bids and select contractors, and facilitates
scheduling to ease the administrative burden on the owner; and


-------
o inspect contractors' work during installation when necessary, and at
project completion to ensure new equipment is properly installed.

b. Eligible Projects

i.	What types of projects/sectors/market segments could EPA prioritize for funding

through the eligible recipients?

•	Prioritizing affordable housing decarbonization will ensure that low-income
families and individuals directly benefit from the GHGRF while achieving
significant carbon emission reductions. Affordable multifamily housing offers
substantial potential for reducing the nation's carbon emissions in low-income
communities:

o Multifamily is a significant housing sector, especially housing
occupied by LMI households; 42% of apartment households have
incomes below $35,000, compared to 25% of all households,
o Housing accounted for 21% of total U.S. energy consumption in

2021 and nearly 20% of C02 emissions,
o HUD-assisted properties have the potential to generate over
11,548 GWh of solar electricity annually and reduce carbon
emissions by more than eight million metric tons,
o There is a significant opportunity to decarbonize multifamily
housing through electrification paired with energy efficiency. As of
2015, only 5% of multifamily units used electric heat pumps for
space heating. Nearly 6 million multifamily units have fossil-fuel-
burning stoves.

•	GHGRF should also prioritize investments in affordable multifamily housing
projects near public transit and in walkable and bikeable communities which
reduce GHG emissions through fewer vehicle trips of gasoline-fueled cars. EPA

can look to California's Affordable Housing and Sustainable Communities
program (AHSC) to see the benefits of integrating financing for affordable
housing, transportation, urban greening, and community programs to reduce
GHG emissions. AHSC pairs affordable housing with high-quality transportation
investments to foster healthy, well-connected communities, while reducing their
environmental impact. With funding from California's Greenhouse Gas
Reduction Fund, AHSC has invested $2.5 billion to createl5,324 new, transit-
connected affordable homes. The location efficiency of this housing avoids 4.4
million metric tons of GHG emissions.

//. Considering each major project type/sector/market segment, discuss: 1. What are
the barriers to private sector capital? 2. Please provide any citations to relevant


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case studies in low-income and disadvantaged communities, in terms of emissions
reductions and other benefits, including cost effectiveness, wealth creation,
economic empowerment, workforce development, etc. 3. What project-level gaps
could the GHGRF fill for each type of project? What form could capital take to fill
these gaps? Please provide references that analyze the deal-level economics for the
various types of projects, including whether and how these may vary by geography.
4. Beyond assembling the capital stack for a deal, what other barriers and
constraints exist that could constrict the pipeline of successful projects? What
program strategies are needed to respond to these barriers and constraints?

•	Affordable housing owners may find financing products more accessible if the
eligible measures include non-energy efficiency improvements such as
structural upgrades or health and safety improvements that must be
addressed before implementing efficiency upgrades. The Montgomery County
Green Bank's Commercial Loan for Energy Efficiencies and Renewables (CLEER)
Program allows up to 30% of the loan to cover measures that do not directly
result in energy savings. Capital for Change's LIME loan allows up to 25% of loan
proceeds to be used for non-energy efficiency improvements, provided there
are sufficient savings to carry the costs.

•	Address the unique needs of rural and persistent poverty communities. Rural
communities in the United States face some special challenges in reducing
emissions of greenhouse gases and other pollutants. For example, transit-
oriented siting of housing and jobs is not possible in the many rural communities
that lack reliable public transportation. At the same time, rural residents are
more likely than their urban peers to experience substandard housing conditions
and almost as likely to endure burdensome housing costs. Reducing pollutants is
particularly difficult in the 377 counties that experience persistent poverty-
poverty rates above 20 percent for three consecutive decades - and 81 percent
of these counties are outside metropolitan areas.

Capacity building is also sorely needed in rural America. Rural communities
often have small and part-time local governments, inadequate philanthropic
support, and a shortage of the specialists needed to navigate the complexities
of federal programs and modern finance and to compete for government and
philanthropic resources. To ensure rural needs are addressed, we recommend
that EPA:

o Create a rural set aside or a priority for GHGRF applications that will
serve rural areas, with an even higher priority for those that will address
needs in persistent poverty areas;
o Make funding available for community lenders like CDFIs in the form of


-------
grants or long-term interest-free loans so that they can make grants or
very low-interest loans to their partners, particularly those with limited
capacity;

o Include the rural housing programs run by the U.S. Department of
Agriculture (USDA) in any references to federally assisted housing, to
avoid the all-too-common confusion created when regulations or
guidance mention the Department of Housing and Urban Development's
programs but not USDA's.

Todd Nedwick

(he/him/his)

HOUSING
TRUST

202-333-8931X128

tnedwick(a)nhtinc.org

www.nationaLhousingtrust.org

Donate to NHT

FoLLow us on Twitter and Linkedln!


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The Nature Conservancy
4245 N. Fairfax Drive
Arlington, VA 22203-1606

Tel: (703)841-4229
nature.org

U.S. Environmental Protection Agency
Environmental Financial Advisory Board
1200 Pennsylvania Avenue, N.W.

Washington, D.C. 20460

December 8, 2022

RE: Greenhouse Gas Reduction Fund, Recommendations on EFAB Charge Question

Thank you for the opportunity to provide input on the design and implementation of the Greenhouse
Gas Reduction Fund. As an organization that relies on a science-based, collaborative approach, The
Nature Conservancy believe the science is clear that climate change poses a significant threat to our
communities, our economy, and to nature itself. As we work to reduce carbon emissions and achieve
"net-zero" by 2050, we must also seek ways to address the disproportionate effects of air pollution and
climate change on historically marginalized or underserved communities and ensure the benefits of the
clean energy transition are equitably shared. The Greenhouse Gas Reduction Fund (GHGRF) offers one
tool to tackle all of these challenges.

As the Environmental Financial Advisory Board (EFAB) finalizes its recommendations on program
structure and design, we offer the following considerations and additional examples of eligible
recipients and projects to incorporate into your report to the Environmental Protection Agency (EPA).

Eligible Recipients

EFAB has outlined six potential structural options to serve as the basis for distributing funds through the
GHGRF. Given the short timeframe for designing and implementing the program and competing
mandates, we support the combination approach that EFAB has proposed. Strategically offering
resources at multiple levels will leverage varying types of experience of existing institutions—from
community-based organizations with the ability to reach disadvantaged communities to entities with a
broader focus and track record of market activization. Encouraging collaboration across these scales will
be necessary to achieve the objectives of the GHGRF. A patchwork of hyper-local programs with varying
qualifications, financing opportunities, and geographic restrictions may create market confusion that
limits the scale, impact, and ability to leverage and recycle funds. On the other hand, statewide or
regionally focused programs may lack the robust on-the-ground engagement necessary for these
programs to identify and meet community needs and increase accessibility to the intended
beneficiaries. EFAB highlights these types of strengths and challenges in the outline of the six potential
options for program structure. With no single option clearly meeting all of the program objectives, EPA
should pursue the option that enables the agency to strategically allocate portions of the funding across
the different models.

We offer a few additional considerations that could be included in the discussion of the options for
program structure. The state and regional policy backdrop, against which these programs will be


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The Nature Conservancy
4245 N. Fairfax Drive
Arlington, VA 22203-1606

Tel: (703)841-4229
nature.org

administered, is another distinguishing characteristic that could be factored into the pros and cons of
the optional structures and selecting recipients, and is not currently identified by EFAB. For example, a
community-solar-focused sectoral approach will have limited success in a state or region lacking
community-solar enabling legislation. Similarly, commercial property assessed clean energy (C-PACE)
programs that could help facilitate or complement buildings-focused strategies require state and local
authorization.

In addition, the ability of recipients to build, partner with others to provide, or more broadly utilize
turnkey products—financing products for which the end user bears almost no burdens or difficulty
associated with the research, implementation or financing of the project—should be a consideration in
defining the program structure and the types of recipients that may be eligible. Turnkey products are
important for clean energy market mobilization overall but particularly in low-income and
disadvantaged communities. A turnkey clean energy financing product would be built to maximize ease-
of-use for both the end user and contractor providing the service. It might include implementation,
financing at terms that fit the expected life-time and/or provide a built-in cash flow positivity
requirement, and savings measurements for the customer—all in a single, easily understandable
product. The contractor would be trained and certified as a trusted purveyor of the financing product,
have clear forms and easy-to-understand branded collateral, and enjoy an open channel of
communication with the lender (i.e. the provider of the turnkey product). Utilizing the GHGRF to build
financing products with turnkey qualities will not only help reduce market confusion and provide ease of
use on the consumer and program facilitator, it also will provide opportunities for increasing the scale
and longevity of public dollars by leveraging private investment. Broader accessibility to turnkey
products with standardized terms and loan attributes may allow for loans to be bundled and sold in the
secondary market to recapitalize loan-product availability, thus extending the impact of public dollars.

Eligible Projects

As EFAB considers recommendations for how to prioritize projects, sectors, and market segments, we
are encouraged by the Advisory Board's approach to balancing measurable greenhouse gas emissions
reductions and zero-emissions technology deployment with other community benefits and needs.
Funding certain enabling conditions and capacity building will amplify the benefits of the program, but
the impacts of such investments may not be harder to measure. We offer some additional factors to
consider in defining criteria for eligible projects.

In many cases, financing gaps are one of many barriers to investments in clean energy or other projects
to reduce greenhouse gas emissions, such as home ownership, housing quality, and geographic
disparities (e.g., rural versus urban). GHGRF funds could be used to remove some of these other barriers
necessary to unlock or leverage other sources of financing. For example, aging housing stocks may have
structural or other issues that make the homes ineligible for funding through the Weatherization
Assistance Program (WAP), which received a large boost of funding through the recent bipartisan
infrastructure bill. In Virginia, one eligible use of the funds from the Regional Greenhouse Gas Initiative


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TheNature

Conservancy

The Nature Conservancy
4245 N. Fairfax Drive
Arlington, VA 22203-1606

Tel: (703)841-4229
nature.org

is to finance upgrades to houses that would then enable the homeowner to access the federal WAP
funding.

Most renters, who make up a majority of low-income and disadvantaged communities, will be unable to
take advantage of the Inflation Reduction Act's tax credits and rebates. Prioritizing projects that
equitably benefit both property owners and renters will very likely provide additionality since renters
are largely excluded from directly facilitating renewable energy development that would benefit them.
Such projects may include developing community solar projects that serve renters, or rooftop solar and
storage projects on rental properties. These investments may increase property and rental values, so
programs must be designed to avoid displacement of low-income renters and ensure that energy
burden is reduced at the occupant level.

Projects that focus on "kitchen table" home and small-business economics will unlock broader benefits
that support communities. Examples include:

•	Home-scale energy upgrades that partner health, safety, and livability improvements with
energy efficiency and clean energy;

•	Enhanced financing for new and pre-owned efficient vehicles to lower cost of commuting
burden (e.g., hybrid vehicles, high MPG rated vehicles, electric vehicles);

•	Financing energy efficient equipment for small businesses that lower utility cost and cost (e.g.,
laundromats, restaurants, neighborhood groceries, local delivery, automotive service shops
etc.);

•	Community solar projects - where the clear intent of the project is to lower energy burden
compared to standard default service offerings, or to provide long-term cost certainty against
rising costs.

In addition, projects that support the institutions that serve communities can have a positive knock-on
effect for community quality of life and cost of living. Municipal energy improvements such as
streetlighting upgrades could lower operating costs, and delay the need for tax increases. With clean
energy and energy upgrades, hospitals, schools, community centers can all dedicate more resources to
services if options to reduce energy burden are abundant, with favorable financing terms that consider
additional incentives, and the institutions are supported by impartial technical assistance to reduce their
own capacity constraints.

Discussions of eligible projects should also include nature-based emissions reduction projects such as
forest management or reforestation. Natural climate solutions are actions to protect, better manage
and restore nature to avoid the emission of greenhouse gasses, or to capture and store emissions
already in the atmosphere. For example, practices that improve forest management can help forest
owners increase the carbon stored in their trees; cover crops, or the practice of planting ground cover in
the off season, result in healthier, carbon-rich soil; and restoring tidal wetlands sequesters carbon in
submerged soil. The total mitigation potential of natural climate solutions actions in the United States is
1.2 Gt C02e annually, meaning natural climate solutions could prevent or sequester more than one-fifth


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The Nature Conservancy
4245 N. Fairfax Drive
Arlington, VA 22203-1606

Tel: (703)841-4229
nature.org

of annual U.S. greenhouse gas pollution.1 Natural climate solutions projects can require significant
upfront investment but require long wait times for financial return on the investment. Access to project
capital or financing is a significant barrier to these projects. Recently in November 2022, the White
House Council on Environmental Quality, Office of Science and Technology Policy, and Office of
Domestic Climate Policy released a report titled "Opportunities to Accelerate Nature-Based Solutions" in
response to Executive Order 14072, Strengthening the Nation's Forests, Communities, and Local
Economies. We support the report's recommendation for the Greenhouse Gas Reduction Fund program
to provide grants to nonprofit financial institutions to invest in nature-based emissions reduction
projects such as forest management or reforestation.

Low-income and Disadvantaged Communities

In designing and implementing the GHGRF, the focus must be on meeting the needs of the intended
primary beneficiaries—low-income and disadvantaged communities. We know that EPA has received
input from local communities and coalitions detailing how to best leverage the GHGRF to address
environmental justice. We encourage EPA and EFAB to seriously consider these perspectives.

The EFAB Objectives Workgroup has outlined several considerations to help ensure decisions best meet
the needs of low-income and disadvantaged communities and incorporate community input. The
definition and utilization of screening tools is a key decision that will reverberate throughout the
implementation of the program. EFAB has rightly concluded that no one definition will meet the needs
of every region, state, and community. If EPA decides to pursue a combination approach to program
design (i.e., spreading the funds across states/tribal/municipal entities, regional partnerships, sectoral-
focused institutions, etc.), then there is more room for EPA to utilize different approaches to low-
income and disadvantaged communities and screening tools. EFAB should incorporate how the guiding
principles and approaches to the definitions and tools could be applied to or tailored to the program
design options under consideration.

The ability of the GHGRF to provide both financial and technical assistance will enhance the viability of
projects and better serve the communities it is meant to benefit. Community engagement and capacity
building is an important aspect of technical assistance that EFAB could consider adding to its report.
Technical assistance is needed at the community level to educate community members about benefits
and strategies related to decarbonization and pollution reduction, and to connect interested parties to
project development resources. Building GHGRF recipients' capacity for community engagement and
supporting communities through technical assistance work together to help ensure community input
and priorities are reflected in program implementation, provide concrete benefits to communities, and
avoid increasing burdens faced by communities.

1 Joseph Fargione, Steven Bassett, Timothy Boucher et al. 2018. Natural climate solutions for the United
States. Science Advances, 4(11). DOI: 10.1126/sciadv.aatl869


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TheNature

Conservancy

The Nature Conservancy
4245 N. Fairfax Drive
Arlington, VA 22203-1606

Tel: (703)841-4229
nature.org

As EFAB considers the types of technical assistance required to facilitate an effective program, we
encourage looking beyond strictly the GHGRF. The GHGRF is one of many federal, state, and municipal
programs providing funding and resources for low-income and disadvantaged communities to reduce
energy burdens, improve energy efficiency, increase access to clean energy, and lower emissions.
Community outreach and technical assistance are typically underfunded in these programs, creating one
barrier in accessing the assistance. Recognizing the limited funding for GHGRF technical assistance
funding, there may still be room for EPA to create a one-stop-shop or at least information sharing on
programs that are complementary. For example, projects or eligible recipients developing community
solar or installing rooftop solar for renters should be eligible for certain base level renewable energy tax
credits extended or created under the Inflation Reduction Act. The Inflation Reduction Act also created a
bonus tax credit (§§ 48(e) and 48E(h)) for solar projects located in low-income communities and
specifically targeting low-income residential buildings or low-income economic development projects.
To become eligible and receive an additional 10%-20% value above the base tax credit, projects will
submit an application to Treasury for an "environmental justice capacity limitation." Bundling
information and assistance on accessing the GHGRF funding along with information and assistance on
applying for the "environmental justice capacity limitation" will enhance the project's financial strengths
and improve accessibility to both government programs.


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NDN COLLECTIVE

December 5, 2022

Michael Regan, Administrator
US Environmental Protection Agency
Office of the Administrator, Mail Code 1101A
1200 Pennsylvania Avenue, NW
Washington, DC 20460

Re: Docket ID No. EPA-HQ-OA-2022-0859

Dear Administrator Regan, EPA Staff, and Members of the Environmental Finance Advisory Board,

The team at NDN Collective welcomes and appreciates the opportunity to respond to the
Environmental Protection Agency's (the "EPA") Request For Information ("RFI") on the Greenhouse Gas
Reduction Fund (the "Fund") program design and implementation.

As of this year, NDN Collective has become the largest Indigenous-led fund in history in the U.S.,
providing over 600 Tribal Nations and Indigenous groups and organizations and Island Nations a total of
$32 million since 2019. We share this because we are committed to driving resources equitably to Tribal,
Indigenous and Native communities so that Indigenous people can develop sustainable solutions on
their terms, in ways that are culturally and ecologically relevant and meet the unique needs of their
community. The entire NDN Collective ecosystem is creating a paradigm shift in economic development
by grounding investment strategy in Indigenous systems design, recognizing the interconnectedness of
all things and our responsibilities to our homelands and each other. Through our Resilient &

Regenerative Lending Principles, Capital Screens, and underwriting practices, we are supporting not only
new ways of capital flow to support communities, but also capacity building to help Native Nations,
developers, and lenders access the tools and resources to actualize climate, social, and cultural resiliency
and regeneration. Our commitment to this work extends to offering guidance and working with agencies
such as the US Environmental Protection Agency (EPA) to ensure that low-income and disadvantaged
communities (DACs) — especially Tribal Nations, Indigenous communities, and those that are
under-resourced — benefit significantly from the deployment of this Fund. We are also writing to offer
some concrete recommendations to ensure efficiency, effectiveness, accountability, and above all else
equity in implementation.


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Before elaborating on the details of the EPA's Request for Information, we are providing some core
principles and background that we urge the EPA to consider as it makes decisions about program
implementation.

•	More than seventy-five percent of the unelectrified homes in the United States are located on
Tribal lands, according to the American Public Power Association.

•	Tribal communities suffer from higher costs of service, higher interconnection fees, more
blackouts or brownouts and remote and distant service locations.

•	The core recommendation is that federal funding and programming cannot focus on our Tribal
governments alone. The opportunity cost of not investing in the private sector is too high. There
are over 100 Native financial institutions (including NCDFIs), thousands of non-tribally owned
non-profits, economic development corporations, and other key Indigenous-led intermediaries
that can help generate, channel and manage resources, in order to help our communities and
entrepreneurs make the best and highest use of the large influx of capital through the Green
New Deal for Cities Act of 2021, American Rescue Plan Act, and other targeted funding.

•	Invest in building capacity and employment within Tribes to better understand how to build
regenerative business plans and apply funding into climate resiliency. We believe that it is an
issue of equity to distribute and channel resources to where they are needed most. Oftentimes,
in Tribal communities and Nations, non-Native agencies are hired to apply for funding. If these
proposals are passed and funding makes its way to Tribal Nations, departments and capacity
must be built and filled by Native and Indigenous peoples who best understand the issues facing
their people and communities.

•	U.S. governmental agencies can look to NDN Collective's approach to projects we finance as an
example of how to drive equitable, sustainable growth. For example, we are working with
businesses and Tribal ventures in both large-scale solar and wind power across the country,
while remaining cognizant of the nuances that every project holds. Even renewables can have
negative externalities for the ecology and overall well-being of our communities. For example,
wind farms can result in habitat loss, deforestation, and fragmentation, negatively impacting
wildlife and plant life if there is not meaningful upfront planning. To this end we are encouraged
by the Administration's new commitments announced at the 2022 White House Tribal Nations
Summit to establish uniform standards to be implemented across all federal agencies regarding
how Tribal consultations are conducted. We urge EPA to ensure that the agency is complying
with these new standards.

•	Carbon trading is a false solution that will not get us to where we need, reducing carbon and
greenhouse emissions from entering the atmosphere. We urge the EPA to not fund carbon
trading and carbon market offsetting projects and consider funding climate solutions and
projects that sequester carbon and restore our ecosystems but do not compromise other
ecosystems from being degraded. EPA should prioritize climate solutions that are community led,
are effective and have on the ground impacts to climate change mitigation and adaptation.


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Section 1: Low-Income and Disadvantaged Communities

1.	What should EPA consider when defining "low income" and "disadvantaged" communities for
purposes of this program? What elements from existing definitions, criteria, screening tools, etc., - in
federal programs or otherwise - should EPA consider when prioritizing low-income and disadvantaged
communities for greenhouse gas and other air pollution reducing projects?

•	When defining low-income and disadvantaged communities, the EPA should incorporate the
most inclusive definition used in the current administration, for example the definition used for
Justice 40 and for the Climate and Economic Justice Screening Tool, while further recognizing the
unique disparities that situate many Indigenous Peoples and their respective Tribal communities
as low-income and disadvantaged compared to other population demographics of the United
States.

•	Furthermore, we suggest that the EPA incorporate elements of environmental justice such as
climate change, clean energy, energy efficiency, clean transit, remediation and reduction of
legacy pollution, and the development of critical clean water and wastewater infrastructure, as
defined in the Justice 40 Initiative.

•	We also suggest that the EPA include and implement the principles, goals, and actions
established by the Council on Environmental Quality following their action plan for consultation
and coordination with Tribal Nations and Indigenous Peoples.

2.	What kinds of technical and/or financial assistance should the Greenhouse Gas Reduction Fund
grants facilitate to ensure that low-income and disadvantaged communities can participate in and
benefit from the program?

The EPA should make resources plentiful and flexible enough to support and advocate for self-learning,
institutional knowledge, and long-term commitments to help establish experienced professionals and
practitioners from the community to move project development forward. The flexibility of these
resources would further promote the tradition of self-determination for Indigenous Peoples and Tribal
communities and allow them to participate in and benefit from the program.

3.	What kinds of technical and/or financial assistance should the Greenhouse Gas Reduction Fund
grants facilitate to support and/or prioritize businesses owned or led by members of low-income or
disadvantaged communities?

We suggest that the EPA focus on additional grant development, no-interest loans, forgivable loans, and
access to business consultants, experts, and learning cohorts to help facilitate the development and
direction of projects within those low-income or disadvantaged communities. Accessibility to these
options would significantly increase participation in the program and the sustainability of businesses
owned or led by members of low-income or disadvantaged communities.


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Section 2: Program Design

1.	What should EPA consider in the design of the program to ensure Greenhouse Gas Reduction Fund
grants facilitate high private-sector leverage (i.e., each dollar of federal funding mobilizes additional
private funding)?

EPA should consider private sector partners with relationships in target communities, i.e., the
partnership between Native Americans in Philanthropy (NAP) and The National Fish and Wildlife
Foundation (NFWF), as seen in America the Beautiful Challenge 2022. Consideration should also be
prioritized for matching resources for coalition funding and the Biodiversity Funders Group. These
partnerships would improve the successful longevity of pursued projects and better formulate the
relationships necessary for future projects that may arise between the various entities.

2.	What should EPA consider in the design of the program to ensure Greenhouse Gas Reduction Fund
grants facilitate additionality (i.e., federal funding invests in projects that would have otherwise lacked
access to financing)?

Given the considerable lack of economic resources in many low-income and disadvantaged communities,
especially in Indigenous and Tribal communities, the EPA should consider regional focus areas where the
communities mentioned above, which have traditionally been removed from such funding opportunities,
would have prioritization for their projects. In our work, we have found that regional focus areas allow
for implementation that is place-based and designed by the communities and peoples on the ground. In
addition, this approach supports in coordinating efforts and increases the effectiveness of lending,
grantmaking, organizing, and wealth- building programs; and provides a mechanism for organizations or
agencies (the EPA) to grow stronger partnerships with Indigenous communities than simply financing
their work.

3.	What should EPA consider in the design of the program to ensure that revenue from financial
assistance provided using Greenhouse Gas Reduction Fund grants is recycled to ensure continued
operability?

To encourage long-term project sustainability, we suggest the EPA consider a public investment offering
to fund a no-interest loan pool, handled primarily through the EPA in collaboration with other
government agencies, to support the creation and development of sustainable and regenerative
greenhouse gas reduction-focused projects throughout a variety of low-income and disadvantaged
communities. This would create healthy community participation and ensure the probability for
low-income and disadvantaged communities to pursue their respective projects without fear of
economic unsustainability.


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We recommend that the funds go to NCDFIs, Indigenous-led organizations, and groups who invest
heavily and successfully in Tribes, Indigenous Peoples and communities.

4.	What should EPA consider in the design of the program to enable Greenhouse Gas Reduction Fund
grants to facilitate broad private market capital formation for greenhouse gas and air pollution
reducing projects? How could Greenhouse Gas Reduction Fund grants help prove the "bankability" of
financial structures that could then be replicated by private sector financial institutions?

We suggest the EPA consider tax credits, opportunity zones, and guarantee programs specifically
targeted to Native-led efforts similar to the Native Initiatives of the CDFI Fund to facilitate broad private
market capital formation. This approach would help to replicate the bankability process and build
transferable and replicable expertise in Native-led organizations and efforts.

5.	Are there best practices in program design that EPA should consider to reduce burdens on
applicants, grantees, and/or subrecipients (including borrowers)?

To improve accessibility, we suggest the EPA consider developing and implementing a streamlined
application process based on the practical feasibility of a project and its simplification in addressing
greenhouse gas reduction accurately.

We encourage that the EPA waive any matching funds requirement for Greenhouse Gas Reduction Fund
grants as it will leave out many Tribal Nations, communities and Indigenous organizations that are
leading the way in climate change solutions, mitigation and adaptation to not apply or qualify if they do
not have large amounts of matching funds at the moment that the applications are due. We believe that
communities and organizations that are committed and have already been doing this work but might not
have matching funds should not be left out of the application process and access to these funds.

6.	What, if any, common federal grant program design features should EPA consider or avoid in order
to maximize the ability of eligible recipients and/or indirect recipients to leverage and recycle
Greenhouse Gas Reduction Fund grants?

Similar to the above question, we suggest the EPA consider streamlining application and reporting
processes to allow individuals, organizations, and Tribal communities unfamiliar with the process but
needing monies for their respective projects, the added ability to participate.

7.	What should EPA consider in the design of the program, in addition to prevailing wage requirements
in section 314 of the Clean Air Act, to encourage grantees and subrecipients to fund projects that
create high quality jobs and adhere to best practices for labor standards, consistent with guidance
such as Executive Order 14063 on the Use of Project Labor Agreements and the Department of Labor's
Good Jobs Principles?


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The EPA should consider participatory input from the Economic Development Administration (EDA)
regional planning measures in the grant award process. Furthermore, concerning project
implementation and workforce development measures in Indigenous Peoples and Tribal communities,
including feedback from various Tribal Employment Rights Ordinances or Offices (TERO), which were
established and empowered to monitor and enforce the requirements of the Tribal employment rights
ordinance.

8.	What should EPA consider when developing program guidance and policies, such as the appropriate
collection of data, to ensure that greenhouse gas and air pollution reduction projects funded by
grantees and subrecipients comply with the requirements of Title VI of the Civil Rights Act, which
prohibits discrimination on the basis of race, color, and national origin in programs and activities
receiving federal financial assistance?

EPA should consider local IIRB compliance and the inclusion of Self Determination and Free, Prior, and
Informed Consent (FPIC) measures. FPIC and Self Determination are specific rights pertaining to
Indigenous Peoples and are recognized in the United Nations Declaration on the Rights of Indigenous
Peoples (UNDRIP). It allows Tribal Nations to give or withhold consent to a project that may affect them
or their territories and have autonomy over the projects that they implement in their communities. Once
they have their support, they can withdraw it at any stage. Furthermore, FPIC enables them to negotiate
the conditions under which the project will be designed, implemented, monitored, and evaluated. This is
also embedded within the universal right to self-determination.

9.	What should EPA consider when developing program policies and guidance to ensure that
greenhouse gas and air pollution reduction projects funded by grantees and subrecipients comply with
the requirements of the Build America, Buy America Act that requires domestic procurement of iron,
steel, manufactured products, and construction material?

For effective compliance measures, EPA should consider creating purchase agreements, adherence to
regional regulatory practices, and buyer's cohorts for common goods.

We also encourage the EPA to comply with the Buy Native Act, which provides for special federal
contracting preferences by DOI and HHS to procure supplies, services, and construction from
Native-owned businesses. At the recent White House Tribal Nations Summit, DOI announced "its goal of
awarding 75% of contract dollars from Indian Affairs (including BIA, Bureau of Indian Education, and
Bureau of Trust Funds Administration) and 10% of contract dollars across the rest of the Department to
Native-owned businesses, using its authority under the Buy Indian Act". We recommend the EPA
implement similar goals and practices.

10.	What federal, state and/or local programs, including other programs included in the Inflation
Reduction Act and the Infrastructure Investment and Jobs Act or "Bipartisan Infrastructure Law," could
EPA consider when designing the Greenhouse Gas Reduction Fund? How could such programs
complement the funding available through the Greenhouse Gas Reduction Fund?


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Regarding collaboration efforts, EPA should highly consider coordination with the Justice 40 Initiative, as
it addresses environmental justice issues and its relationship to marginalized communities regarding
climate issues. This collaboration further benefits the immediate need to address climate change and its
devastating effects, especially for low-income and disadvantaged communities.

11. Is guidance specific to Tribal and/or territorial governments necessary to implement the program?
If so, what specific issues should such guidance address?

Yes. It is essential to create access to opportunities, develop allocations for non-governmental partners
who can do work in the community, like native community-led NGOs, and include additional
communication pathways between the project teams and federal government agencies.

Section 3: Eligible Projects

1.	What types of projects should EPA prioritize under sections 134(a)(l)-(3), consistent with the
statutory definition of "qualified projects" and "zero emissions technology" as well as the statute's
direct and indirect investment provisions? Please describe how prioritizing such projects would:

a.	maximize greenhouse gas emission and air pollution reductions;

b.	deliver benefits to low-income and disadvantaged communities;

c.	enable investment in projects that would otherwise lack access to capital or financing;

d.	recycle repayments and other revenue received from financial assistance provided using the grant
funds to ensure continued operability; and

e.	facilitate increased private sector investment.

To facilitate the effective distribution of grant monies, the EPA should focus on awarding projects that do
not fall into offering false solutions, i.e.,Carbon capture, utilization and storage (CCUS), a technique that
captures, transfers, and stores carbon dioxide. While it protects ecosystems that are sequestering
carbon, it ignores the root cause of climate change and allows for degradation, mining and
exploitation of other ecosystems.lt delays the transition to renewables and is more expensive than
renewables. It promotes increased extraction and pollution of fossil fuels. Other false solutions include
projects that may utilize carbon markets, biofuels, or liquefied natural gas. Avoidance of such false
solutions would more appropriately allocate grant monies to projects that offer better and more
effective and sufficient solutions.

2.	Please describe what forms of financial assistance (e.g. subgrants, loans, or other forms of financial
assistance) are necessary to fill financing gaps, enable investment, and accelerate deployment of such
projects.


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To expedite the process of project deployment, we suggest the EPA consider regenerative financing
(ReFi) as a foundational element regarding distributing grant monies to most effectively solve systemic
problems and regenerate communities and natural environments.

3. Beyond financial assistance for project financing what other supports - such as technical assistance
- are necessary to accelerate deployment of such projects?

We suggest the EPA consider local, regional and national organizational collaboration with that of
potential award grantees as a reasonable way to ensure project buy-in and success more appropriately.

Section 4: Eligible Recipients

1.	Who could be eligible entities and/or indirect recipients under the Greenhouse Gas Reduction Fund
consistent with statutory requirements specified in section 134 of the Clean Air Act? Please provide a
description of these types of entities and references regarding the total capital deployed by such
entities into greenhouse gas and air pollution reducing projects.

Following the statutory requirements specified in section 134 of the Clean Air Act, we suggest that
Indigenous-led nonprofit organizations that work directly with Indigenous Peoples and Tribal Nations and
communities be included as eligible entities to receive federal grant funding through the Greenhouse
Gas Reduction Fund. In addition, we suggest that the EPA allocates an amount of the federal grant
funding solely for Indigenous-led nonprofit organizations to apply towards. Indigenous nonprofit
organizations, such as NDN Collective, have successful funding models that can distribute monies
efficiently to Indigenous communities, projects and solutions that have a direct impact on confronting
the challenges of climate change, and that respect self-determination and have been inclusive of
Indigenous land ethics and adherence to environmental causes.

2.	What types of entities (as eligible recipients and/or indirect recipients) could enable Greenhouse
Gas Reduction Fund grants to support investment and deployment of greenhouse gas and air pollution
reducing projects in low-income and disadvantaged communities?

Per the previous answer, nonprofit organizations, and in our case, particularly Indigenous-led nonprofit
organizations, would enable the expeditious distribution of federal grant funding directly to low-income
and disadvantaged communities, mainly due to their longstanding connections to those communities
through past collaborative projects. NDN Collective defines Indigenous-led as 100% board of
directors/decision makers, and 70% staff. The efficiency of such a distribution of funds would benefit
the respective communities greatly; for many, time is of the essence in addressing the climate challenges
they are experiencing.


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3.	What types of entities (as eligible recipients and/or indirect recipients) could be created to enable
Greenhouse Gas Reduction Fund grants to support investment in and deployment of greenhouse gas
and air pollution reducing projects in communities where capacity to finance and deploy such projects
does not currently exist?

We suggest that the EPA consider creating local, place-based partnership initiatives with similar
goal-based organizations/foundations in close (or the closest) physical proximity to the grantee's
proposed project area. This collaborative approach would help to fully develop the initiatives, empower
existing collaborations as well as initiate potential collaborative processes between the entities in the
future.

4.	How could EPA ensure the responsible implementation of the Greenhouse Gas Reduction Fund
grants by new entities without a track record?

If the suggestion of place-based partnerships is followed, regulatory measures and responsible
implementation of Greenhouse Gas Reduction Fund grant projects for grant recipients without a track
record would be better situated due to their collaboration with established organizations/foundations.In
addition, as recommended above, technical assistance resources would be dedicated to building the
skills and capacity of grantees so program participation and impact is ensured and optimized.

5.	What kinds of technical and/or financial assistance could Greenhouse Gas Reduction Fund grants
facilitate to maximize investment in and deployment of greenhouse gas and air pollution reducing
projects by existing and/or new eligible recipients and/or indirect recipients?

Create access to technical assistance and improve outreach for federal funding opportunities. We know
from extensive work in moving resources to Tribes and Indigenous communities that there are significant
issues and gaps when it comes to moving large amounts of capital in Indian Country, and this must be
acknowledged in the implementation of the American Jobs Plan, Justice 40, and Green New Deal for
Cities Act of 2021. On the one hand, there are billions of dollars in infrastructure needs left on the table
every year and an estimated housing shortage of up to 250,000 units (a number that only includes
housing on federally-recognized tribes, leaving out tribes that are still unrecognized by the U.S.
government and does not acknowledge the dire need for rehabilitations to existing tribal housing). On
the other hand, many Native Nations do not have access to existing grants or technical assistance in
areas like the Department of Energy's Office that would support the strategic planning and development
of renewable energy projects in Indian Country. Further, not all Nations have the physical, governmental,
or organizational infrastructure to take on these funds. There is a lot of groundwork that needs to be
done in our communities that is continuously overlooked by the federal government.

The Biden Administration must work with Tribes to create capacity for technical assistance for Tribal
citizens and Indigenous peoples to understand and troubleshoot available grants, as well as invest in
capacity to promote grant and funding opportunities in multiple languages and through various
platforms. However, each federal agency must devote long-term resources and staff towards working


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one-on-one with individual Tribal Nations to help them achieve the institutional, legal, and human
capital foundations to make the most out of future funding and capital opportunities. Native Nations and
entrepreneurs alike emphasize the dire need for deep and long-term capacity building services to do
meaningful development. This improves our ability to make decisions that focus on smart innovation and
growth to address issues affecting our world's climate.

Section 5: Oversight and Reporting

1.	What types of governance structures, reporting requirements and audit requirements (consistent
with applicable federal regulations) should EPA consider requiring of direct and indirect recipients of
Greenhouse Gas Reduction Fund grants to ensure the responsible implementation and oversight of
grantee/subrecipient operations and financial assistance activities?

Due to the enormous scope that some of the projects may entail, we suggest that the EPA consider the
development of a diverse governing body that includes a variety of individuals from different cultural
and career backgrounds, but which are all centered on their understanding of issues encompassing
greenhouse gas reduction and climate change. Grantees would also benefit from requirements that align
with those of other federal government programs that are effectively granting and lending to
Indigenous-led organizations and initiatives to minimize duplication of efforts.

2.	Are there any compliance requirements in addition to those provided for in Federal statutes or
regulations (e.g., requirements related to administering federal grant funds) that EPA should consider
when designing the program?

No comment (at the moment).

3.	What metrics and indicators should EPA use to track relevant program outcomes including, but not
limited to, (a) reductions in greenhouse gas emissions or air pollution, (b) allocation of benefits to
low-income and disadvantaged communities, (c) private sector leverage and project additionality, (d)
number of greenhouse gas and air pollution reduction projects funded and (f) distribution of projects
at the national, regional, state and local levels?

On metrics and indicators to track relevant program outcomes, we suggest that the EPA consider
including an additional component in budget formation found in the grant application to have those that
apply to make it a necessity to allocate monies to purchase remote sensor monitoring or similar
technologies to monitor greenhouse gas reduction throughout the timeline of the project. Such
monitoring technologies would allow the EPA and the grantee to have accurate data points from which
to examine and adjust project elements, if necessary.

4. What should EPA consider in the design of the program to ensure community accountability for
projects funded directly or indirectly by the Greenhouse Gas Reduction Fund? What if any existing


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governance structures, assessment criteria (e.g., the Community Development Financial Institutions
Fund's Target Market Accountability criteria), rules, etc., should EPA consider?

NDN Fund's Resilient Community Development Principles and related Resilient Impact Assessment
Lending Criteria. We would be happy to meet with the EPA to share these tools.

Section 6: General Comments

1. Do you have any other comments on the implementation of the Greenhouse Gas Reduction Fund?

We want to recommend that the Environmental Protection Agency (EPA) be more inclusionary of
Indigenous-led nonprofit organizations that provide economic assistance to Indigenous communities
directly experiencing and combating climate change issues and implementing solutions for climate
change mitigation and adaptation, including greenhouse gas reduction. While Tribal governments can
offer and allocate grant-awarded monies to adopt clean energy and climate projects within their
respective Tribal Nations, those same monies can also become hindered by a bureaucracy that can
prevent truly effective measures from being implemented throughout those Tribal communities.

Indigenous-led nonprofits, being primarily removed from such governmental bureaucracy, can provide
the most effective opportunity for successful external financing and leverage of private capital for clean
energy and climate projects, particularly those that reduce greenhouse gas emissions in Tribal
communities due to their ability to work directly with those communities in an expedited manner.
We appreciate that the EPA has issued this RFI, and urge you to heed our input as well the input of
Tribes, Indigenous communities, Indigenous led non-profits and financial institutions to design and
implement the Greenhouse Gas Reduction Fund in a manner that directly benefits low-income and
disadvantaged communities.

Sincerely,

NDN Collective

P: +1 (605) 791-3999
408 Knollwood Dr
Rapid City, SD 57701


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December 8, 2022

Chairperson Kerry O'Neill
U.S. Environmental Protection Agency
Environmental Financial Advisory Board
1200 Pennsylvania Avenue, N.W.

Washington, DC 20460

Re: New York State Response to EPA's Request for Information (EPA Docket No. EPA-HQ-OA-2022-0859)

Dear Chairperson O'Neill,

On December 5, 2022, New York State Energy Research and Development Authority ("NYSERDA") submitted a
response to the Environmental Protection Agency ("EPA") Request for Information ("RFI") on the Greenhouse Gas
Reduction Fund ("GHGRF"). NYSERDA respectfully submits the same comments to Environmental Financial
Advisory Board ("EFAB") below, in advance of the December 15, 2022, Board meeting and vote on the final charge.
NYSERDA thanks EFAB for the opportunity to provide input during its process and looks forward to continued
engagement with EFAB in connection with the GHGRF.


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NEW
YORK
	, STATE

KATHY HOCHUL

Governor

NYSERDA

RICHARD L. KAUFFMAN

Chair

DOREEN M. HARRIS

President and CEO

December 5, 2022

The Honorable Michael Regan
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, DC 20460

Re: New York State Response to Request for Information (EPA Docket No. EPA-HQ-OA-2022-0859)

Dear Honorable Regan,

The New York State Energy Research and Development Authority ("NYSERDA") and the NY Green Bank ("NYGB"), a division
of NYSERDA, on behalf of the State of New York, appreciate the opportunity to submit these comments in response to the
U.S. Environmental Protection Agency ("EPA") Office of Air and Radiation's Request for Information under Docket No.
EPA-HQ-OA-2022-0859 in connection with the Greenhouse Gas Reduction Fund (the "GHGRF") authorized under Section
60103 of the Inflation Reduction Act of 2022 (the "IRA"), which amended the Clean Air Act (the "CAA") by inserting Section
134. The GHGRF consists of three programs: (1) the $7 billion zero emissions technology program established under
Section 134(a)(1) of the CAA (the "ZET Program"), (2) the $11.97 billion general assistance program established under
Section 134(a)(2) of the CAA (the "General Assistance Program") and (3) the $8 billion low-income and disadvantaged
communities program established under Section 134(a)(3) of the CAA (the "DAC Program" and, collectively, the
"Programs").

New York appreciates the leadership and funding being put forth by the federal government, and the EPA in particular, by
providing funding, loans and technical assistance to advance the reduction of greenhouse gases and pollution across the
country. These funds will help states, tribes, territories and organizations around the country to equitably advance
improvements in our communities to protect peoples' health and improve our quality of life while reducing the impacts
of climate change and pollution, creating good paying jobs and generating economic growth.

The funding and technical assistance made available as part of this unprecedented federal investment will make a
transformative change in our communities and modernize our homes and businesses. These investments and partnership
with EPA are critical for New York's success. Recognizing New York's nation leading performance in climate and energy
policy and implementation, the primary point of feedback that New York respectfully submits is that EPA allow flexibility
for states, territories, and tribes to use established administrative structures and policies to successfully implement these
funds. For example, as part of New York's Community Leadership Climate Protection Act of 2019 the ("Climate Act"), New
York has drafted a comprehensive definition and tracking system identifying Disadvantaged Communities. NYSERDA and
NYGB are grateful for the opportunity to provide feedback to the EPA on the GHGRF's design and implementation and

New York State Energy Research and Development Authority

Albany

17 Columbia Circle, Albany, NY 12203-6399
(P) 1-866-NYSERDA I (F) 518-862-1091

nyserda.ny.gov I info@nyserda.ny.gov

Buffalo

726 Exchange Street
Suite 821
Buffalo, NY
14210-1484
(P) 716-842-1522
(F) 716-842-0156

New York City

1359 Broadway
19th Floor
New York, NY
10018-7842
(P) 212-971-5342
(F) 518-862-1091

West Valley Site
Management Program

9030-B Route 219
West Valley, NY
14171-9500
(P) 716-942-9960
(F) 716-942-9961


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appreciates the thoughtful and comprehensive approach that the EPA is taking to incorporate market feedback into the
development and deployment of these transformational funds. We hope our responses in the pages that follow will assist
in developing the program, and we stand ready to provide any further insight or support throughout the process of
creating this historic funding opportunity.

About NYSERDA

NYSERDA, a New York State public benefit corporation, is the state energy office of New York State. NYSERDA has been
at the forefront of advancing energy solutions while working to protect the environment since 1975. NYSERDA offers
objective information and analysis, innovative programs, technical expertise, and assistance to help New Yorkers increase
energy efficiency, use renewable energy, and reduce reliance on fossil fuels. NYSERDA has extensive experience and
expertise in the low-to moderate- income market segment, having administered a robust portfolio of initiatives designed
to create access to clean energy solutions and reduce energy burden for the most vulnerable New Yorkers, since 2006. In
addition, NYSERDA has prioritized a just and inclusive clean energy transition, with multiple initiatives to ensure that
disadvantaged communities are positioned to participate in and benefit from the clean energy economy.

About NY Green Bank

The comments submitted to the GHGRF draw heavily on the experience of NYGB, which is a division of NYSERDA. NYGB
is a $1B sustainable infrastructure investment fund which leverages public funds to mobilize greater private investment
in the deployment of clean energy and sustainable infrastructure in New York State. As a division of NYSERDA, NYGB serves
as a cost-effective and complementary component of New York State's portfolio of clean energy programs. NYGB works
with counterparties to develop financing structures that address and alleviate specific funding gaps and barriers in clean
energy capital markets, thereby mobilizing clean energy activity, attracting private sector capital, and accelerating clean
energy deployment in New York State. There is a healthy symbiosis between NYSERDA program activity and NYGB
investments, with NYSERDA particularly focused on technical assistance, regulatory and clean energy policy elements
while NYGB is focused on creating attractive financing precedents that draw private and institutional lenders and investors
into clean energy asset classes and project types where they had not previously been active. NYGB was first announced
in 2013 and since then has committed over $1.8B cumulatively, mobilizing up to $4.5B in total capital through over 100
investments across sustainable infrastructure technology types and asset classes. Through its market-based investment
approach, NYGB has been financially self-sufficient since 2018 and has grown its capital base by over $53 million as of
March 31, 2022, which represents cumulative revenues in excess of cumulative expenses.

Section 1: Low-Income and Disadvantaged Communities

1. What should EPA consider when defining "low income" and "disadvantaged" communities for purposes of this
program? What elements from existing definitions, criteria, screening tools, etc., - in federal programs or otherwise -
should EPA consider when prioritizing low-income and disadvantaged communities for greenhouse gas and other air
pollution reducing projects?

This response applies to the ZET Program and the DAC Program. The EPA should identify disadvantaged communities
based on geographic, public health, environmental hazards, and socioeconomic criteria. Even though location-based
definitions are imperfect, screening tools that identify disadvantaged communities at the census tract level should be
used when possible. Address lookup tools will greatly reduce the administrative burden for program administrators
screening investment opportunities and reporting benefits.


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Further, New York recommends that the EPA allow states with an existing framework and administrative process for
identifying disadvantaged communities and low-income households and communities to defer to these existing
approaches in the administration of GHGRF to reduce administrative burden, market confusion, and ensure equitable
and impactful deployment of funds. Allowing state administrators to continue using state criteria for disadvantaged
and low-income communities to meet EPA requirements will reduce incremental administrative burden for both EPA
and the administrators in areas such as eligibility determination and reporting, and will allow for administrative
resources to focus on making investments that benefit DACs. In addition, NYSERDA works with multiple market actors
in the delivery of programs and investments to disadvantaged and low-income communities. The use of different
criteria to identify eligible communities has the potential to cause confusion amongst service providers, financiers,
and communities themselves, limiting the potential for delivering the greatest impact with EPA funds.

New York is focused on implementing the Climate Act to maximize positive impacts for disadvantaged communities,
including through the administration of state and federal programs. For states that have not yet established such a
framework, NYSERDA recommends that EPA adopt a federal standard such as the Justice40 a Climate Equity Justice
Screening Tool ("CEJST").

Additional information about New York State's criteria for DACs can be found at: https://climate.nv.gov/DAC-
Criteria#comment.

2. What kinds of technical and/or financial assistance should the Greenhouse Gas Reduction Fund grants facilitate to
ensure that low-income and disadvantaged communities can participate in and benefit from the program?

This answer applies to the ZET Program and the DAC Program.

New York recommends that the EPA allow for flexibility in how grant recipients administer funds - both in terms of
products and pricing, and the provision of technical assistance to help incorporate considerations for clean energy
finance into the processes and procedures of actors in low-income and disadvantaged communities, such as affordable
housing providers, non-profits and small businesses. Within New York State, NYSERDA has found that needs for
financial and technical assistance can differ by sector and geography, and that a range of products and supports will
be necessary to achieve impact in difficult to reach markets. By allowing flexibility in product design and pricing,
individual regional needs can be addressed, and then best practices can be shared to scale those solutions, resulting
in faster and broader capital deployment and adoption of clean energy technologies. Furthermore, New York
recommends that the EPA allow for maximum flexibility in what can be provided as technical assistance, allowing for
energy audits, preparation of documentation in support of financial products, preparation of documentation as may
be required for 3rd party validation systems, and other needs as identified by the market and recipients of funds.

Organizations like the NYGB and NYSERDA can align market development and technical assistance interventions with
financial assistance to offer a continuum of supports that can benefit project sponsors and developers by developing
creative financing structures that fill funding gaps and can be replicated for future transactions. Where projects can
demonstrably support market rate debt, there is a benefit to providing capital at those rates, rather than at low or
zero cost, because it demonstrates to private sector investors that they can profit from these types of investments
and helps to crowd-in private sector capital. Over time through replication, standardization and increased private
sector competition for these financing opportunities, financing costs will trend downward.


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Financial Assistance:

As an example of the benefits of allowing for product flexibility and a regional focus in identifying product needs, NYGB
undertook a substantial stakeholder engagement process to better understand financing needs within DACs in NYS,
including outreach to 132 organizations and many conversations with property developers, service providers,
environmental justice advocates, community-based organizations, and Community Development Financial
Institutions ("CDFIs") throughout 2022. These conversations highlighted a particular need for financing solutions in
affordable housing and building decarbonization projects that benefit DACs. NYGB has committed to investing at least
$150M in affordable housing projects and $100M in building decarbonization projects in DACs by December 31, 2025.1

In addition, DAC stakeholder groups highlighted several financing products that would be particularly valuable and
necessary to fill funding gaps, including:

•	Loans to projects that are not credit enhanced by the State of New York Mortgage Agency;

•	Off balance sheet loans;

•	Predevelopment loans;

•	Bridge loans for government and utility incentives;

•	Subordinated debt for mid-cycle projects that could be layered with existing debt;

•	Debt to support funding gaps for buildings seeking to convert from fossil gas to electricity; and

•	Credit enhancement products that facilitate the transfer performance risk from building owners to insurers.

Throughout and following these stakeholder sessions, NYGB developed multiple offerings in these areas, and has seen
particularly high demand for predevelopment loans that allow borrowers to cover project soft costs before they can
obtain construction financing. Other specific examples include community solar and DAC-specific concessionary
lending.

Community Solar Example

NYGB has played a critical role in financing community solar projects in the State. Over time, NYGB has adjusted its
terms and pricing for certain products to incentivize more inclusive subscriber aggregation practices. NYGB initially
allowed developers to offer short term contracts to individual subscribers and eliminated minimum FICO score
requirements. This practice was adopted by other lenders and tax equity investors, which gave developers the
opportunity to market to and subscribe low-to-moderate income earning ("LMI") New Yorkers and those living in
DACs. More inclusive lending practices give more New Yorkers greater access to the benefits of community solar,
including bill savings.

In alignment with NYSERDA's Inclusive Community Solar Adder2 and in response to stakeholder feedback regarding
the added cost of identifying and marketing to LMI subscribers, NYGB is now incentivizing inclusive subscriber
aggregation practices by offering tiered pricing. Specifically, NYGB's loan agreements provide for reductions in interest
rates to projects that can demonstrate certain minimum levels of LMI subscribers in New York. NYGB estimates the
net present value of interest rate reductions to be as much as 3 cents/watt for projects with 100% LMI subscribers.

1 See page 17 here: https://documents.dps.nv.Eov/public/Common/ViewDoc.aspx?DocRefld={D9BA5CDD-5DC3-45B7-B4AA-

C9C78A98B9FD}.

2https://www.nyserda.ny.gov/AII-Programs/NY-Sun/Contractors/Dashboards-and-incentives/lnclusive-Community-Solar-Adder


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DAC-Specific Concessionary Lending

Although NYGB offers most of its lending at market rates to demonstrate to private sector investors that sustainable
infrastructure loans are viable investments, NYGB recognizes that subsidized or concessionary pricing has historically
played a very critical role in supporting project development within disadvantaged communities. In an effort to
animate providers of concessionary capital to invest more capital and specifically target investments that lead to
greenhouse gas reductions, NYGB announced in May 2022 that it intends to launch a new $250M concessionary
funding pathway in early 2023 to CDFIs and other market intermediaries with a track record, strategy and pipeline to
support the development of sustainable infrastructure in DACs.3

Technical Assistance:

New York recommends that EPA also provide flexibility in how grant recipients deliver technical assistance. NYSERDA
believes that technical assistance is an important component of the GHGRF, and eligible recipients should be given
flexibility in administration - for example, some organizations may have internal expertise and others may deploy
technical assistance through external parties. Eligible recipients should be able to clearly demonstrate in their
application that they have a business plan to provide technical assistance, whether internally or through external
relationships. This should be a key criterion for any applicant, and EPA should seek to deeply understand the format
and structure of collaboration between the lending institution and the technical service provider, if they are different
organizations. New York also recommends that the EPA allow for flexibility of what kind of technical assistance can
be provided to the market, as stated above.

There is a particular need to build skills in understanding building decarbonization strategies as it affects portfolios of
affordable housing and how such organizations can build their asset management capacity to both access financing
for decarbonization and train asset managers and building operators to manage buildings for energy savings.

NYSERDA recommends EPA include access to capital to enable technical assistance and support, in the form of
engineering studies and Integrated Physical Needs Assessments ("IPNAs"). Coordinated financial and technical
assistance strategically supports low-income communities and maximizes available financial support/initiatives to
inform capital planning and achieve greater energy savings. Often building owners do not have the in-house technical
capacity or resources to drive increased energy performance of their portfolios, and access to performance data is key
to advancing the underwriting of clean energy projects. Inclusive of support to deliver engineering analyses and IPNAs,
the GHGRF should include funding to support regional expertise and build technical assistance capacity. This regional
support would be used to provide information to individuals, small businesses, and affordable housing owners about
the benefits of the clean energy economy, ways to reduce energy use and costs, and how to make more informed
energy decisions.

New York recommends that EPA include access to capital to support the implementation of technical assistance
through existing market channels. Where available, EPA should leverage state-led programs delivering technical
assistance to the market, given their existing broad infrastructure. In addition to direct soft cost support, NYSERDA
recommends EPA support building capacity through regional onsite support to work with DACs to leverage financial
and technical assistance support.

3 Please see page 32 here: https://greenbank.ny.gOv/-/media/Project/Greenbank/Files/2021-22-NYGB-Annual-Business-Plan.pdf


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In DACs specifically, New York recommends that the EPA consider additional financial incentives, including cost buy
downs, access to low/no-cost loans, and direction installation programs to expedite and coordinate the deployment
of resources. Further, capacity building within community-based organizations to connect potential projects and
building owners with incentives orfinance solutions should be considered in the scope of technical assistance available
through these funds. EPA should leverage existing state and local infrastructure to support the deployment of
resources where available and to maximize benefit and impact to disadvantaged communities.

3. What kinds of technical and/or financial assistance should the Greenhouse Gas Reduction Fund grants facilitate to
support and/or prioritize businesses owned or led by members of low-income or disadvantaged communities?

New York recommends the EPA allow for recipients to have full flexibility in providing a diverse mix of technical
assistance. In addition to the uses recommended above, advancing opportunities for members of low-income or
disadvantaged communities is a critical component of a just transition. Financial and technical assistance should be
focused on addressing the range of barriers to starting and operating a clean energy business, including supporting
soft-skill development, technical trainings, entrepreneurship, business operations, and legal support. In addition to
activities supporting businesses located in Disadvantaged Communities, NYSERDA recommends that investment
guidance also include preference supporting the provision of financial assistance to businesses owned by Minority and
Women Business Enterprises.

Section 2: Program Design

1. What should EPA consider in the design of the program to ensure Greenhouse Gas Reduction Fund grants facilitate
high private-sector leverage (i.e., each dollar of federal funding mobilizes additional private funding)?

Significant private sector capital is necessary to fund the energy transition in the United States that is necessary to
achieve climate goals. High private-sector leverage should, therefore, be a high priority objective of the GHGRF. High
private-sector leverage can result from either (i) the contribution of public funding alongside private sector funds, or
(ii) the expected replacement of public funds with private capital at a later point in time.

New York recommends that EPA look to NYGB as an example of how to create and implement a model that can
effectively facilitate high private-sector leverage. As discussed further below, NYGB has been successfully operating
for close to ten years, investing in projects that reduce greenhouse gas emissions, mobilizing private sector
investment, and benefiting disadvantaged communities.

New York also recommends EPA design the program so that grants can be allocated by recipients in a manner that is
flexible, commercial, and focused on addressing specific funding gaps to allow for maximum impact of capital. EPA
should allow grants made through the program to be offered in a variety of product types to address evolving financing
gaps, and for debt and equity products to be fully repaid, with principal and interest recycled into future activities to
ensure maximum impact with each public dollar.

Finally, New York recommends that, to facilitate high private sector leverage, the GHGRF program should support
institutions that have a demonstrated successful track record of leveraging private sector funds. Those entities are
generally those that are structured similarly to private sector entities that are commercially oriented and flexible,
running a familiar transaction underwriting process while working alongside and bringing in other private sector
investors.


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NYGB as an example: demonstrating the value of being commercially oriented and flexible

NYGB has utilized its $1B of capitalization to catalyze $4.5B of sustainable infrastructure investment since inception.
Its ability to achieve this type of leverage has resulted from its focus on remaining nimble, flexible, commercial and,
while oriented toward a government mission and the public interest, utilizing private-sector derived investment skills
and a commercial mindset (i.e., robust underwriting criteria; risk analysis, mitigation and commensurate pricing; and
a sophisticated approach to investment portfolio management). With an outward face and positioning that is
commercially familiar and understood, NYGB is able to attract additional private capital investment either (i) upfront
alongside NYGB as a co-investor; (ii) replacing NYGB in a follow-on refinancing; or (iii) utilizing an NYGB financing
structure in a separate transaction. Importantly, private investors will not risk investing alongside or buying an
investment from a financial institution that they do not understand or trust to behave in a rational and economic
manner - to attract private capital, you have to act like private capital. Some of NYGB's operating principles and
features are further detailed below:

A Market-Responsive Orientation

NYGB is market-responsive with a focus on deployment. NYGB does not generally design and announce programs
around narrowly-defined, pre-determined prerequisites. Between the design and launch of a program, the perceived
need may not have materialized or may no longer be relevant. Rather, NYGB broadly invites any developer to apply
for funding if their project/business satisfies three criteria paraphrased below:

i.	it is economically and technical feasible, and should afford a financial return that exceeds NYGB operating
costs and expected portfolio losses on a portfolio basis:

ii.	it should contribute to greenhouse gas reductions; and

iii.	it should contribute to clean energy market transformation and the mobilization of private sector
investment.

With regard to these criteria, NYGB seeks to identify clean energy/GHG-reducing investment opportunities that can
earn a market rate commensurate with the investment's risk and that enable NYGB to preserve/grow its capital base
to recycle into new investments. These investment opportunities exist because markets are not efficient and
institutional investors tend to be risk-averse and cautious. NYGB seeks to identify clean energy financing market
barriers and gaps for otherwise economically feasible projects. Often, these barriers and gaps are simply the result
of private institutional investors' hesitancy to devote the time and effort to approve new investment sectors and
financial products without reasonable assurance of a pipeline of subsequent investment opportunities. In those
cases, NYGB acts as the "first mover" demonstrating financeability several times over and publicizing the investment's
structure, benefits and protective features, until private investors accept and begin to adopt the structure.

Importantly, NYGB has the financial flexibility to make investments in any form (debt, preferred, equity) and in any
tenor. This affords NYGB maximum flexibility to identify and make financial gap-filling investments that support
meaningful and rapid project deployment in NYS, lead to GHG emission reductions, and transform markets by
spurring private sector investment activity.


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Extensive Private Sector Financial Experience

NYGB's senior investment professionals (i) have extensive private sector experience at global financial institutions
across a swath of disciplines including project finance, leveraged finance, securitization, mergers & acquisitions, and
special situations/restructuring; (ii) apply this deep experience to collaborate internally and externally with other
market participants; (iii) can understand and address developers' and private investors' needs; and (iv) have the
knowledge and experience to structure investments in any form (senior debt, subordinated debt, preferred equity,
etc.) and for any purposes (bridge financing , warehouse financing , inventory finance, pre-development loans,
construction loan, mini-perm, term loan, etc.) to overcome a financing gap or barrier.

This team is complemented by its Risk, Legal and Finance functions who also possess extensive private sector
experience and who collaborate closely throughout the transaction due diligence, approval, execution, funding, and
payment processes.

Private Sector Processes

To be seen an attractive counterparty/financier for private sector developers and an attractive co-investor for private
sector investors, NYGB has structured itself and manages itself like a comparable private sector fund. All NYGB's
investment and portfolio management activities are similar to those of private sector institutions: they occur on
comparable time frames with fast turnarounds and decisions as necessary; they require only customary disclosures,
reporting and other conditions; and they respect proprietary or confidential information. NYGB's diligence and
underwriting processes are thorough, reflecting best practice in private sector lending activity. And as a steward of
public funds, NYGB has established robust investment and business standards, including extensive risk management
principles.

Early on, NYGB transactors spent inordinate time explaining to developers why NYGB would not provide grants but
rather sought to make loans, and then why NYGB's investment and monitoring requirements were so methodical.
Similarly, financial institutions were slow to invite NYGB to participate in transactions as they perceived NYGB as a
political entity primarily. Both groups had to get comfortable with NYGB's business proposition and processes before
accepting NYGB as commercially familiar and welcoming NYGB as a financial counterparty/partner. It should be
expected that any new green bank entity will be required to undertake a similar market education process.

Experience Working with New/Small Companies

Working with new/smaller companies in the clean energy sector was a new experience for NYGB's investment
professionals, but NYGB has accumulated a wealth of knowledge and practical experience over eight years and 100+
transactions to date. Many of these transactions involved small companies, with limited financial resources but an
experienced / passionate management team with a good business model. They and their partners, if any, were
relying on NYGB to provide the capital that will bridge the capital barrier/financing gap and facilitate project
deployment. In developing fit-for-purpose solutions, NYGB therefore emphasizes cost and simplicity. While the cost
to diligence and document a project finance transaction can run well into six figures, NYGB has learned how and
where it can limit these costs while protecting its interests as lender, identifying which elements are essential and


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which unnecessary; which are "pinhole risks" and which can be resolved practically rather than perfectly. Simplicity
is also important when companies do not have the staff or the sophistication to handle an administer a complex
financing.

Through its ongoing consultation and collaboration with borrowers, NYGB becomes a quasi-financial advisor.
Although first and foremost the lender, NYGB seeks to facilitate growth and regularly upsizes and adapts its financing
structures as a business grows and its business strategy and financial needs evolve. With smaller firms, NYGB may
engage in a certain amount of "handholding" initially, introducing the firm to financial market standards and
expectations. Ultimately, when the borrower finds other private capital to replace NYGB, often set up with NYGB's
assistance, then NYGB has fulfilled its investment criteria to "crowd in" capital and transform markets, for the
particular transaction and more broadly for the technology sector's future success.

Although private funding can be mobilized by providing a guarantee or a loss reserve, these approaches are not
optimal long-term strategies that would likely be adopted by private investors as such public sector credit
enhancement tools are subsidizing and de-risking private capital. When that support goes away, private sector capital
interest may evaporate. Instead, NYGB has sought to identify investment opportunities that earn a market rate
commensurate with the risk and preserve/grow its capital base to recycle into new investments. NYGB works
alongside private sector lenders and developers to understand their needs and objectives and develop financial
structures that meet them. NYGB is market responsive, seeking to identify financing market barriers and gaps for
otherwise economically feasible projects. Often, these barriers and gaps are the result of private investors hesitancy
to devote the time and institutional effort to approve new investment sectors and products without reasonable
assurance of a pipeline of subsequent investment opportunities.

2. What should EPA consider in the design of the program to ensure Greenhouse Gas Reduction Fund grants facilitate
additionality (i.e., federal funding invests in projects that would have otherwise lacked access to financing)?

New York recommends that EPA utilize GHGRF grants to enable organizations that already focused on additionality
(i.e., those opportunities that would otherwise have lacked access to financing) to do so at greater scale through
additional federal resources. Rather than require recipients to demonstrate new types of additionality considerations
- i.e., creating new lines of business, supporting new market areas, or taking on less well mitigated risks - New York
recommends EPA also support recipients in expanding and scaling existing programs, products, and activities with
strong track records of success and efficacy.

NYGB serves as an example of an organization with additionality considerations deeply embedded into its core
structure. Any investment made by NYGB is undertaken only if the underlying transaction or project is unlikely to have
been funded in as efficient or scalable a manner absent NYGB's investment. NYGB's adoption of this broad market
view in evaluating additionality of qualifying investment opportunities includes considering the unique benefit NYGB
brings to a proposed financing arrangement, specifically considering whether the transaction would occur in private
markets, but i) involving less favorable terms as to tenor, cost, fees and other key transaction attributes; and ii) would
likely not happen at the market breadth needed to scale the sector. This approach to additionality has allowed NYGB
financing to support private sector entities on "near frontier" opportunities, i.e. those that are similar to, but just
beyond, those currently being supported by private sector investors. By focusing on those not-quite-but-near widely
financeable opportunities, NYGB is able to transition those project types more quickly into the mainstream,
accelerating adoption by other private sector actors.


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Since inception, NYGB's positioning, and origination strategy has included the integration of additionality
considerations in proposed investments. As part of NYGB's transaction approval process, there is a robust evaluation
of a new investment's strategic fit, including GHG reduction, market transformation, and additionality. A proposed
NYGB investment must be able to demonstrate that it is not crowding out private capital and that it can animate
private capital through replication and greater scale.

3. What should EPA consider in the design of the program to ensure that revenue from financial assistance provided
using Greenhouse Gas Reduction Fund grants is recycled to ensure continued operability?

To ensure GHGRF grants are effectively recycled to facilitate continued operability, EPA should prioritize allocating
capital to entities with a demonstrated track record of generating meaningful returns on investments, and an ability
to grow an initial capital base to expand future product offerings and services. EPA should also allow recipients to
allocate a portion of funds toward operating costs and manage those operating costs to maximize deployment and
minimize losses, including in deployment to sub-recipients. Finally, EPA should require applicants to submit a business
plan, and progress should be measured and evaluated against that plan as they deploy funds to ensure fund money is
being used in a way that will ensure continued operability.

Pricing of Products:

New York recommends that EPA provide financial assistance to qualified, eligible recipients in the form of grants that
are not expected to be repaid, and those eligible recipients should be expected to utilize those grant dollars to advance
business models that are self-sustaining once an initial capitalization has been provided through the GHGRF. NYGB
serves as an example of how to ensure revenue generated through sub-recipients can be recycled to ensure continued
operability, and to demonstrate how an entity can generate enough revenue to become financially self-sustaining.

NYGB investment terms are determined by perceived credit risk and exposure assumed by NYGB and other investment
participants, adopting a traditional private sector approach to identifying and valuing risk. Wherever possible, NYGB
investments reflect market pricing for comparable transactions, including ongoing and upfront fees. Specific NYGB
pricing for any proposed transaction is set at a level comparable to the reasonable commercial expectation for similar
efficient private sector funding. This means that in pricing its products, NYGB considers current market rates as well
as commercial market expectations of rates at a point when the market for the relevant investment is expected to be
more liquid. In certain circumstances, NYGB can consider receiving a lower-than-market liquidity premium if its
involvement is expected to demonstrate material benefits to market expansion and future liquidity. This allows NYGB
to play a key role in advancing transactions that might not otherwise happen without its involvement.

Becoming self-sufficient entails careful consideration of product risks and mitigants together with pricing, establishing
clear milestones and check points, and a careful monitoring of the investment portfolio.

Capital Redeployment:

Another consideration we recommend EPA should prioritize to ensure that recipients are able to be self-sustaining is
the ability to efficiently recycle funds. Unlike grant dollars or other pools of public funds that are dispensed once to
qualifying projects in a non-refundable capacity or in subsidy form, funds entrusted to entities such as NYGB should
be disbursed under commercial arrangements generating investment income and requiring repayment in accordance
with agreed terms appropriate to each product and client/partner project, i.e. market or concessionary depending on
the target market. This means that each dollar granted to a sub-recipient will cycle through successive investments,
compounding benefits overtime. The accumulation rate of these benefits will be tied to the weighted average holding


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period of the financial products that NYGB or any other sub-recipient provides to its clients. The multiplier effect will
be expanded as commercial markets are increasingly able to accommodate clean energy financings across emerging
sustainable infrastructure asset classes.

Another means of capital redeployment is via pooling of projects to enable the issuance of Asset Backed Securities-
type products that can attract institutional investors. Mitigation and adaptation investment projects are often too
small with respect to institutional investors' requirement of diversified asset pools. Approaches that pool projects,
notably those that facilitate project bundling, can help address this constraint. To attract private sector capital in
climate mitigation and decarbonization investment, especially for low-and-moderate income communities and DACs,
there is a need for innovative financial instruments in addition to those that already exist, including blended and
structured financing and risk sharing, where public financial resources like NYSERDA capital can partly reduce and
mitigate risks for investments. NYSERDA has successfully deployed revolving loan funds under the Green Jobs Green
NY Program, with funding of $350 million of residential loans, including $75 million of loans to LMI borrowers. 4 The
program has best in class secondary liquidity through a Green Bond asset backed securitization program approach
that is well received by fixed-income investors. NYSERDA has also catalyzed lending in the LMI sector via an offering
of a Loan Loss Reserve ("LLR") product that provides risk mitigation to lenders, including CDFIs, by providing loss
reserves on a portfolio approach. NYSERDA benefits from the revolving nature of the LLR fund to leverage private
capital upwards of 10:1 in the market. The net impact of the LLR approach has resulted in longer terms, expansion of
credit grades, and significantly lower interest rates available for LMI borrowers.5

4. What should EPA consider in the design of the program to enable Greenhouse Gas Reduction Fund grants to facilitate
broad private market capital formation for greenhouse gas and air pollution reducing projects? How could Greenhouse
Gas Reduction Fund grants help prove the "bankability" of financial structures that could then be replicated by private
sector financial institutions?

New York recommends the EPA prioritize the provision of grant funds to qualified entities oriented to developing and
delivering financing solutions to crowd in private sector capital providers, who are also specialized in decarbonization
or have partners that are specialists in decarbonization, will create the multiplier effect that ensures the long-term
goals and intentions of this fund are achieved.

It will be essential for successful EPA grant recipients and sub-recipients to be staffed with individuals familiar with
structuring and underwriting credit transactions, who are well-versed in those sources of private market capital and
have an ability to develop structures that address specific market needs and financing gaps. Effectively demonstrating
"bankability" of any financing structure or product means ensuring that product is adopted effectively by the
marketplace. This may require taking the time to develop and structure an initial transaction based on sound and
accepted commercial principles while showingthat something new can be done, and then selling down or co-investing
to demonstrate the viability of such transactions to other investors.

NYSERDA and NYGB both have a strong track record of driving this type of activity, frequently referred to as market
transformation. In New York, this has been demonstrated through the impact of NYGB's lending on the community
solar financing market's evolution. When New York State first established its community solar policy in 2015, the

4	https://www.nvserda.nv.gov/researchers-and-policvmakers/green-iobs-green-new-vork

5	https://www.nvserda.nv.gov/AII-Programs/Loan-Loss-Reserve-Program


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market was faced with an unfamiliar business model, a nuanced policy framework, and complex revenue streams.
Investors did not know how to evaluate risk or determine the market value of projects. By closing some of the earliest
transactions in New York's community solar market and creating precedents, NYGB led the way for commercial lenders
to follow. Today, private financiers have become significantly more involved in the market and as conventional lenders
have become comfortable financing the long-term ownership and operation of community solar assets, more
competitively priced private term financing has become available.

NYSERDA recommends that direct recipients focus on wholesale investments that are potentially attractive to financial
institutions. Direct grant recipients may select a combination of sub-recipients, some to make wholesale investments
and others to aggregate pools of retail investments. Working on a wholesale basis in partnership with private sector
intermediaries encourages scale, which NYGB has demonstrated as a successful approach to mobilize both the capital
and institutional capabilities of private market players, building upon existing and extensive private lending platforms.

5.	Are there best practices in program design that EPA should consider to reduce burdens on applicants, grantees, and/or
subrecipients (including borrowers)?

EPA should allow recipients to follow established banking and private capital investment practices that are well
understood by the market. EPA should design an application approach that is efficient, transparent and asks
organizations to demonstrate how they plan to use the funds through a business plan. Reporting obligations for this
program should be reasonable and not overly burdensome and similar to the industry standard for private sector
investors. Reporting should demonstrate performance against the business plan, and critical financial and impact
metrics should be reported at least annually.

6.	What, if any, common federal grant program design features should EPA consider or avoid in order to maximize the
ability of eligible recipients and/or indirect recipients to leverage and recycle Greenhouse Gas Reduction Fund grants?

New York recommends that as the EPA gathers best practices, those best practices be shared with all Recipients so
that we can all learn from and benefit from best practices around the country.

7.	What should EPA consider in the design of the program, in addition to prevailing wage requirements in section 314 of
the Clean Air Act, to encourage grantees and subrecipients to fund projects that create high quality jobs and adhere
to best practices for labor standards, consistent with guidance such as Executive Order 14063 on the Use of Project
Labor Agreements and the Department of Labor's Good Jobs Principles?

New York recommends that as the EPA gathers best practices, those best practices be shared with all Recipients so
that we can all learn from and benefit from best practices around the country.

8.	What should EPA consider when developing program guidance and policies, such as the appropriate collection of data,
to ensure that greenhouse gas and air pollution reduction projects funded by grantees and subrecipients comply with
the requirements of Title VI of the Civil Rights Act, which prohibits discrimination on the basis of race, color, and
national origin in programs and activities receiving federal financial assistance?

New York recommends that as the EPA gathers best practices, those best practices be shared with all Recipients so
that we can all learn from and benefit from best practices around the country.


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9.	What should EPA consider when developing program policies and guidance to ensure that greenhouse gas and air
pollution reduction projects funded by grantees and subrecipients comply with the requirements of the Build America,
Buy America Act that requires domestic procurement of iron, steel, manufactured products, and construction
material?

New York recommends that as the EPA gathers best practices, those best practices be shared with all Recipients so
that we can all learn from and benefit from best practices around the country.

10.	What federal, state and/or local programs, including other programs included in the Inflation Reduction Act and the
Infrastructure Investment and Jobs Act or "Bipartisan Infrastructure Law," could EPA consider when designing the
Greenhouse Gas Reduction Fund? How could such programs complement the funding available through the
Greenhouse Gas Reduction Fund?

New York recommends that EPA consider the Clean Water State Revolving Loan Fund as well as the Department of
Energy's Loan Programs Office and State Energy Program. EPA may also wish to consider NYGB when designing the
GHGRF, since NYGB has established a successful track record as the leading state green bank. NYGB's Operational
Supplement6 provides a useful overview of NYGB's investment criteria, key performance indicators, investment
process, risk management and oversight framework, and impact measurement and reporting. NYGB also recommends
that EPA clarify that recipients and subrecipients may use GHG Funds to invest in projects and companies that receive
federal tax benefits or other federal benefits pursuant to the Inflation Reduction Act, the Bipartisan Infrastructure Law
or any other law. Any restriction on the ability to invest in projects that receive such federal benefits would be
administratively burdensome and place a drag on fund utilization.

Section 3: Eligible Projects

1. What types of projects should EPA prioritize under sections 134(a)(l)-(3), consistent with the statutory definition of
"qualified projects" and "zero emissions technology" as well as the statute's direct and indirect investment provisions?
Please describe how prioritizing such projects would:

a)	maximize greenhouse gas emission and air pollution reductions

b)	deliver benefits to low-income and disadvantaged communities

c)	enable investment in projects that would otherwise lack access to capital or financing

d)	recycle repayments and other revenue received from financial assistance provided using the grant funds to
ensure continued operability

e)	facilitate increased private sector investment

New York recommends that EPA prioritize projects that use proven clean technologies that can be adopted at scale
and will increase deployment of clean energy and/or demonstrate potential for greenhouse gas reductions. To be
clear, by "scale" New York is not referring to multi-billion dollar investments, rather, it is referring to market-oriented,
replicable investment opportunities. In order to encourage other lenders and investors into the market, it is essential
that they see these opportunities as viable for success and a clear pathway towards building a pipeline. It is critical

6 https://greenbank.nv.gov/Resources/Public-Filings


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that recipients such as NYSERDA/NYGB would support projects that benefit many communities (through replicable,
scalable investments) rather than a few (as would be the case with a select number of large investments).

Developing and implementing scalable, replicable products is the clearest pathway to facilitating increased private
sector investment, which will drive more greenhouse gas reductions, deliver more benefits to DACs, and enable the
more rapid adoption of national climate policies. Focusing on proven technologies that are relativelyfamiliarto market
participants, and transaction structures that are relatively easier to replicate, will help speed the market adoption of
a particular technology and close financing gaps. Private investors want to invest in projects that can be built quickly
and generate a reliable cash flow, either from the sale of clean energy or savings resulting from a tangible increase in
energy efficiency. Therefore, EPA should consider qualified projects to be those that utilize proven clean technology
and focus on addressing financial market failures.

To maximize the reduction of greenhouse gas emissions and pollution, NYSERDA recommends that the EPA consider
issuing guidance that specifically supports and encourages uses of the funds that will result in the installation of
weatherization and building envelope improvements, that will reduce air infiltration and improve insulation, as well
as result in improved glazing measures. Additionally, NYSERDA recommends that EPA's guidance include preference
for water efficiency measures be specifically included, particularly those that will help reduce the demand for hot
water. Measures, and packages of measures, that support weatherization, improved building envelope performance
and water efficiency, will in turn more easily allow for electrification of both space and water heating. Projects that
include an efficiency + electrification approach should also be prioritized for funding. New York has done extensive
research that shows that when these efficiency and electrification improvements are combined, the resulting homes
and buildings have a significantly reduced greenhouse gas and emissions impact, and result in a healthier, and more
comfortable and resilient home or building.

New York recommends that EPA give recipients flexibility in determining how to allocate capital across different types
of projects and different technology types - and not establish a minimum project size. NYGB's investment focus areas
have shifted over time as some markets mature and new financing gaps are identified. This is demonstrated in the
considerable range in size of investments made by NYGB - from less than $1M to more than $100M. This flexibility
has allowed NYGB to support market participants and their projects in areas where capital is most needed and to allow
market needs to dictate terms and products for maximum impact.

2. Please describe what forms of financial assistance (e.g., subgrants, loans, or other forms of financial assistance) are
necessary to fill financing gaps, enable investment, and accelerate deployment of such projects.

New York recommends that EPA allow recipients flexibility to work with counterparties to determine what innovative
financing products and other eligible subgrants can fill funding gaps, and to analyze the cost of capital that a project
can support. NYSERDA believes that recipients and sub-recipients can provide a variety of forms of financial assistance,
while still maintaining overall profitability, as mandated by the GHGRF.

As one successful example, NYGB has a demonstrated track record that can be used as a model for the design of the
GHGRF. NYGB was created as a market-focused and market-responsive entity in identifying and addressing clean
energy financing gaps and barriers and retaining flexibility in NYGB strategy and operations is critical.

NYGB primarily provides market rate debt to projects that can support this cost of capital but cannot access financing
through traditional markets. Even if a project can support market rate debt, there can still be challenges finding
financing because traditional financiers don't approve new investment products without intense scrutiny and are


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more likely to focus on tried-and-true structures. There need to be many sizeable deals, perhaps big enough to be
syndicated, so that largerfinanciers can see a viable pathway to developing a business around a technology orfinancial
product. NYGB is experienced in identifying and developing these opportunities.

Providing loans at market rates demonstrates to financing markets that clean energy investments can be profitable.
By "crowding in" private sector capital through this demonstration effect, climate goals can be achieved at an even
more rapid rate, while lowering borrowing costs for clean energy developers overall. This has been NYGB's strategy
since inception, and it has demonstrated success by mobilizing over $4.5B of private sector capital with $1.8B of NYGB
investments.

It has been beneficial for NYGB to be able to adjust the cost of capital to meet counterparty needs and fill financing
gaps to animate markets. As one example of this flexibility, after hearing from stakeholders working in low-income
and disadvantaged communities that lower cost capital would be beneficial for these types of projects, NYGB
announced a $250 million pool of lower cost capital specifically for projects that benefit disadvantaged communities.7

EPA should consider offering tranches of capital within each Program - capital that can be offered at market rate,
capital that is low-cost, and capital that is zero cost. As part of applications, Eligible Recipients can outline how much
of each type of capital they can put to work in their pipeline of projects.

3. Beyond financial assistance for project financing what other supports - such as technical assistance - are necessary
to accelerate deployment of such projects?

New York recommends that the EPA consider funding integrated technical assistance, along with regional services to
build capacity, disseminate information, and support project implementation. Where available, EPA should leverage
existing state resources to deploy coordinated technical assistance with financial assistance. Additionally, EPA should
seek coordinated approaches to financial and technical assistance to streamline the customer's access to
programming and expedite delivery of resources. New York recommends that the EPA allow for the broadest flexibility
for recipients to provide a wide range of technical assistance as part of the program.

Section 4: Eligible Recipients

1. Who could be eligible entities and/or indirect recipients under the Greenhouse Gas Reduction Fund consistent with
statutory requirements specified in section 134 of the Clean Air Act? Please provide a description of these types of
entities and references regarding the total capital deployed by such entities into greenhouse gas and air pollution
reducing projects.

New York recommends that the EPA consider the track record of any entity that applies for GHGRF funds. Key areas
for EPA to assess in an entity's application include the qualifications of the management team, investment track
record, the business plan, terms for deploying capital, risk and other monitoring systems for loans, and policies and
procedures that in are place for making investment decisions and managing the portfolio. Entities that have a strong
track record of deploying capital into greenhouse gas reducing projects and have best-in-class risk and portfolio
management processes, are best positioned to successfully execute transactions with GHGRF funds.

7 Please see page 32 here: https://Ereenbank.nv.Eov/-/media/Proiect/Greenbank/Files/2021-22-NYGB-Annual-Business-

Plan.pdf.


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New York suggests that EPA should identify green banks as eligible recipients and indirect recipients under the GHGRF.
Green banks have demonstrated a successful model for deploying capital into greenhouse gas and air pollution
reducing projects and animating the market for these types of investments. Enabling green banks to access additional
capital through the GHGRF will further accelerate the development of financing markets for greenhouse gas reducing
projects.

EPA should have the discretion to reasonably interpret the term "non-profit organization/' as used in Section 134(c)(1)
of the Clean Air Act, to include not just private not-for-profit corporations, but also government-sponsored entities
that are (1) created by state legislation to advance state public policy, (2) tax-exempt and (3) not operated on a for-
profit basis. Such entities include many state green banks with a demonstrated ability to deploy capital at scale in
support of GHG emission reductions and disadvantaged communities.

2.	What types of entities (as eligible recipients and/or indirect recipients) could enable Greenhouse Gas Reduction Fund
grants to support investment and deployment of greenhouse gas and air pollution reducing projects in low-income
and disadvantaged communities?

EPA should consider the low-income and disadvantaged community investment track record of any entity that applies
for funds under GHGRF. EPA should consider green banks as entities that can enable the GHGRF grants to support
investment and deployment of greenhouse gas and air pollution reducing projects in low-income and disadvantaged
communities. Green banks can be flexible with their capital to fill funding gaps, including where there are specific
needs in low-income and disadvantaged communities. Green banks have also demonstrated the ability to deploy
funds into projects in low-income and disadvantaged communities. Since January 1, 2020, 20% of NYGB investments
have benefitted disadvantaged communities, and NYGB has a goal of at least 35% of investments bringing benefits to
DACs over the period of January 1, 2020, to December 31, 2025.

3.	What types of entities (as eligible recipients and/or indirect recipients) could be created to enable Greenhouse Gas
Reduction Fund grants to support investment in and deployment of greenhouse gas and air pollution reducing projects
in communities where capacity to finance and deploy such projects does not currently exist?

New York recommends that EPA focus on eligible recipients that have a track record of deploying funds into
greenhouse gas and air pollution reducing projects. It is more effective and less risky for established organizations
with the technical knowledge, infrastructure, and track record to extend their operations or enter into joint ventures
that support investment in and deployment of projects in communities which themselves do not currently possess
this capacity.

New York recommends that EPA give direct recipients the ability to evaluate indirect recipients as part of their due
diligence process. Established organizations have due diligence processes in place to evaluate organizations that they
lend to, the same way that due diligence is done on a sponsor of a project.

4.	How could EPA ensure the responsible implementation of the Greenhouse Gas Reduction Fund grants by new entities
without a track record?

New York recommends that EPA focus on eligible recipients that have a track record of deploying funds into
greenhouse gas and air pollution reducing projects. These organizations have the system in place to responsibly
implement GHGRF grants, and if they choose to lend to entities without a track record, direct recipients are
responsible for due diligence, deployment, and performance by indirect recipients, and they have the necessary
experience to manage that investment in an indirect recipient.


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Section 5: Oversight arid Reporting

1.	What types of governance structures, reporting requirements and audit requirements (consistent with applicable
federal regulations) should EPA consider requiring of direct and indirect recipients of Greenhouse Gas Reduction Fund
grants to ensure the responsible implementation and oversight of grantee/subrecipient operations and financial
assistance activities?

New York recommends that EPA requires direct recipients to be governed by a professional board of directors and a
management team with a strong track record and industry experience. In addition, EPA should require direct
recipients to deliverto EPA annual audited financial statements and an annual business plan, which includes reporting
on financial and impact metrics from the previous year and goals for the future year. Direct recipients should be
subject to EPA audit rights.

Direct and indirect recipients should be required to establish and implement policies and procedures regarding
business ethics, conflicts of interest, confidential and material nonpublic information, gifts, political contributions, etc.
that are similar to those required for investment advisers and securities industry professionals.

EPA should require direct recipients to conduct satisfactory due diligence with respect to the governance of indirect
recipients. Indirect recipients should be required to provide direct recipients with annual and quarterly financial
statements as well as periodic metrics reports. As with direct recipients, indirect recipients that are financial
intermediaries should be subject to EPA audit rights. However, projects and companies that receive funding indirectly
should be subject to audit rights of the relevant direct and indirect recipients, rather than EPA. EPA should be able to
rely on the relevant direct and indirect recipients to exercise their audit rights to obtain relevant information from
underlying projects and companies. This will reduce the administrative burden on both EPA and underlying projects
and companies.

EPA should also consider setting up an independently managed complaints hotline, to allow a confidential
whistleblowing mechanism.

2.	Are there any compliance requirements in addition to those provided for in Federal statutes or regulations (e.g.,
requirements related to administering federal grant funds) that EPA should consider when designing the program?

New York recommends that EPA does not require any compliance requirements in addition to those provided for in
Federal statues or regulations. Green banks, CDFIs, and other organizations that are applying for funds have significant
existing compliance requirements that hold them accountable to the public.

3.	What metrics and indicators should EPA use to track relevant program outcomes including, but not limited to, (a)
reductions in greenhouse gas emissions or air pollution, (b) allocation of benefits to low-income and disadvantaged
communities, (c) private sector leverage and project additionality, (d) number of greenhouse gas and air pollution
reduction projects funded and (f) distribution of projects at the national, regional, state and local levels?

New York recommends that EPA use all of the metrics outlined above to track program outcomes and demonstrate
impact of the GHGRF. EPA should consider using metrics to evaluate entities on their overall effectiveness in deploying
GHGRF dollars against their business plan, and to evaluate if there are unused funds that can be deployed elsewhere
for greater impact. In addition to the metrics outlined above, NYGB measures:

• Committed Funds


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•	Deployed Funds

•	Current Portfolio Mix

•	Cumulative investments, deployed funds and principal repaid

•	Total Project Costs (Cumulative)

•	Estimated Gross Energy and Environmental Benefits, for example:

o GHG Reductions

o Reduction in Energy Use Against Historic Baseline
o Elimination of Fossil Fuel Use

•	Active Pipeline

•	Percentage of investments that benefit to Disadvantaged Communities

•	Financial Performance indicators including

o Cumulative Revenue, Expenses and Income Earned

o Return on Investment - Gross and Net, Annual and Cumulative Percentages
o Position Impairments
o Capital Redeployment Cycle Time

NYSERDA recommends that EPA appoint an internal team to aggregate reporting from all recipients and report publicly
to show overall impact from the GHGRF. Finally, NYSERDA recommends that for indirect investments, direct recipients
set the reporting requirements during the investment process based on the direct recipient's own reporting
requirements to EPA. Indirect recipients should report to the direct recipient, not directly to EPA.

More information can be found on NYGB reporting on the public filing page of its website,
https://greenbank.ny.gov/Resources/Public-Filings. The following link will prompt a download of NYGB's Metrics.
Reporting and Evaluation Plan.

NYSERDA has managed a robust evaluation team for several decades, performing independent review and analysis
of program performance. New York recommends that the EPA allow for recipients to dedicate a portion of any
award to conduct evaluation work similar to what NYSERDA has successfully completed on its programs. Additional
information about NYSERDA's evaluation work can be found at:
https://www.nvserda.nv.gov/About/Publications/Evaluation-Reports

Section 6: General Comments

1. Do you have any other comments on the implementation of the Greenhouse Gas Reduction Fund?

With regards to the ZET Program, New York recommends that EPA design the program to award funds to applicants
on a first-come-first-served basis. Awards should be based on (1) the applicant's demonstrated need for funding to
provide financial and technical assistance to low-income and disadvantaged communities and (2) the applicant's
demonstrated ability to provide financial and technical assistance to low-income and disadvantaged communities.
This approach will ensure that ZET Program funds are awarded on the most efficient and timely basis and achieve the
maximum benefit to low-income and disadvantaged communities.

If EPA decides to allocate funds to states using a formula-based approach prior to making awards, New York
recommends that EPA use a formula that allocates funding based on the number of households or persons in low-
income and disadvantaged communities within a state. Such a formula should rely on (1) the population census tracts


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designated as qualified Opportunity Zones by the Secretary of the Treasury and (2) the Climate and Economic Justice
Screening Tool published by the Council on Environmental Quality (or, alternatively, the EJScreen tool published by
EPA). NYSERDA recommends that EPA not set any allocation floor, since that risks allocating funds to states in amounts
in excess of what they can reasonably deploy to achieve emission reductions in low-income and disadvantaged
communities.

Importantly, any allocated funds that have not been awarded within 12 months (or other reasonable timeframe after
allocations are determined) should be forfeited and reallocated to other states. Applicants will be able to apply for
such reallocated funds, subject to the September 30, 2024 statutory deadline for EPA to award funds. Given the
pending September 30, 2024 statutory deadline, it would be inefficient to reallocate funds using the same formula as
the original allocation, since there is not likely to be sufficient time for multiple reallocations. Instead, EPA should
reallocate funds to states based on the amount of allocated funds that have been awarded to them so far. This will
ensure that funds will be reallocated to states that have the highest likelihood of successfully applying for—and
disbursing—funds. Otherwise, EPA risks reallocating funds to states that are unlikely to successfully apply for or
disburse funds.

New York recommends that EPA not require any timeframe for disbursing awarded funds. Any timeframe may
pressure awardees to reject impactful projects that need additional time to achieve development milestones before
they are ready for funding. A timeframe may also incentivize awardees to fund projects prematurely to avoid a claw
back. However, if EPA decides that a timeframe is necessary, New York strongly recommends that EPA provide a long
timeframe (at least 3-5 years). This will allow awardees to ensure that projects can achieve sufficient development
milestones to be ready for financing before funding becomes subject to a claw back.

In addition, New York recommends that EPA exercise its discretion to interpret the term "zero emissions technologies"
broadly, consistent with the broad definition of the term in CAA Section 134(c)(4). In order to address market
confusion, EPA should clarify that zero emissions technologies are not limited to distributed technologies on
residential rooftops. EPA should also clarify that CAA Section 134(a)(1) permits recipients to use grant funds to make
loans and investments to financial institutions that provide financing for zero emissions technologies in low-income
and disadvantaged communities (just as eligible recipients are able to make indirect investments pursuant to CAA
Section 134(b)(2)).

Finally, consistent with the recommendation made in Section 1 above, it is critical that states be able to use their own
definitions of low-income and disadvantaged communities for purposes of complying with the requirements of CAA
Section 134(a)(1).


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New York appreciates the opportunity to respond to this Request for Information. If EPA staff have any questions
regarding any of these responses, we would be grateful for the opportunity to clarify or provide additional feedback
to support this important work and funding being provided by the EPA.

Respectfully Submitted,

/*. 8 
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A Nonprofit Housing and Community Development Organization

Self-Help
Enterprises

December 5, 2022

Michael S. Regan
Administrator

U.S. Environmental Protection Agency
Electronically submitted via www.regulations.gov

Re: Request for Information - Greenhouse Gas Reduction Fund; Docket ID No. EPA-HQ-OA-2022-0859

Dear Administrator Regan,

Self-Help Enterprises (SHE) appreciates the opportunity to provide comments on the Greenhouse Gas
Reduction Fund (GGRF) program design and implementation. Self-Help Enterprises is a nationally
recognized community development organization whose mission is to work together with low-income
families to build and sustain healthy homes and communities. The pioneer and leading provider of mutual
self-help housing in the United States, SHE's efforts today encompass a range of efforts to build better
homes and communities for farmworkers and other hard-working families. Since 1965, SHE has helped
more than 6,400 families to build their own homes, rehabilitated over 6,800 unsafe homes, developed over
2,100 units of affordable rental housing, and has provided technical assistance for reliable access to safe
drinking water and sanitary sewer infrastructure to more than 327 small communities. We care deeply
about air quality, climate change, and the disproportionate impact on low-income and disadvantaged
communities.

SHE welcomes the GGRF as an historic opportunity to further accelerate clean energy investments across
the United States, and particularly welcomes the emphasis on low-income and disadvantaged communities.
This directly aligns with SHE's commitment to supporting these communities. With respect to the design
and implementation of the GGRF, we encourage the Environmental Protection Agency (EPA) to consider
the following priorities:

1. Eligible Recipients:

We would ask that the EPA prioritize Community Development Financial Institutions (CDFIs) as the primary
capital deployment vehicle for the GGRF. We believe that CDFIs would be ideal stewards of GGRF funding
because of their long-standing track record of mission lending. There are more than 1,300 Treasury-
certified CDFIs investing in all 50 states. Having developed the trust, deep familiarity and connection with
low-income and disadvantaged communities, CDFIs already have the infrastructure in place to rapidly
deploy funding that will accelerate decarbonization and effectuate the EPAs greenhouse gas reduction
goals.

NeighborWoHu*

CHARTERED MEMBER

Main Office: 8445 W. Elowin Court ¦ P.O. Box 6520 ¦ Vis alia CA 93290 ¦ Phone (550)651-1000 ¦ Fax (559)651-3634

info@selfhelpenterpises.org * www.selfhelpenterprises.org


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GGRF Comment Letter

Page 2 of 2

2.	Eligible Projects:

We encourage the EPA to include funding that is targeted to affordable housing in the set of eligible
activities and we encourage priority for non-profit organizations. Non-profit organizations who own and
operate affordable housing should be given priority for funding, as these organizations struggle to attract
rehabilitation capital and the fixed income of affordable rents makes it impossible to recapitalize assets.
Further, investments in affordable housing owned and operated by non-profit organizations benefit the
low-income residents and the surrounding community. Investments in affordable housing help ensure
these funds are achieving the stated climate mitigation goals, while also ensuring housing remains
affordable to low-income community members as the operating costs associated with rising heat and an
increased cost of energy. We encourage energy efficiency, conversion to all-electric, and renewable energy
to all be eligible investments.

3.	Structure of Funding:

It is critical that the GGRF funds be as flexible as possible to meet the needs of low-income individuals living
in disadvantaged communities and the front-line practitioners who serve them. Providing a mix of grants,
forgivable grants and equity-like investments will help ensure affordability for the end users. Specifically,
low- and moderate-income homebuyers cannot absorb any additional debt to cover the increased costs
related to green and sustainable materials and features. Further, existing multifamily residential portfolios
have already leveraged debt and cannot afford to pile on additional debt and remain financially viable for
owners and affordable to residents as the properties undergo green retrofits. This challenge also extends
to community facilities and community-serving retail uses that are already leveraging as much hard debt as
possible. All these projects need concessionary financing and by allowing a flexible structure, these
investments will ultimately determine how deeply projects can go in terms of greenhouse gas reduction
improvements while ensuring the equitable deployment of GGRF funds.

4.	Include Technical Assistance:

We strongly encourage technical assistance be an integral part of the program design. In California's Low
Income Weatherization Program (LIWP), technical assistance was a main focus. The program administrator
visited the affordable housing community, inspected the systems and crawled in the attic and under
buildings. This allowed them to design the most impactful program of investments based on the specifics
of the community. We encourage a technical assistance component or at a minimum that technical
assistance and engineering be eligible expenses in the program.

Thank you for the opportunity to provide comments and highlight our priorities in executing the GGRF. We
look forward to working with you to ensure the Greenhouse Gas Reduction Fund is a success. If you have
any questions, please contact me at tomc(5)selfhelpenterprises.org or (559) 802-1620.

Sincerely,

Thomas J. Collishaw

President and Chief Executive Officer


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From:
To:

Subject:
Date:

Jorv Fleming
EFAB

Comment Submission

Thursday, December 8, 2022 2:06:13 PM

Dear EPA EFAB Members,

I submitted a comment to the EPA on behalf of the South Carolina Clean Energy & Resilience
Accelerator, an emerging green bank in South Carolina (comment ID: lbb-7 lan-tha4).

I have a further comment that is specific to EFAB:

I have not seen considerations from EFAB that they are engaging the State Department as part
of its expert review process or acquiring information on existing green banks outside the
United States. Several other countries across the world have green banks or similar
institutions, including some at a national scale. EFAB should request the State Department
provide a briefing that provides information on these institutions and their impacts so that the
EFAB can consider it when making its final recommendations. It is unwise for the EFAB to
ignore functioning institutions in other places, including some in countries that are allies of the
United States or have similar market characteristics, when making its own recommendation on
similar institutions in the United States.

Best,

Jory Fleming

Jory Fleming

MBA, Quantic School of Business & Technology, '22
MPhil Environmental Change & Management, Oxford '19
BS Marine Science & Geography, Geophysics minor, UofSC '17
)ory.fleminp-@scclear.orp- | www.scclear.orp-


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Introduction

To Environmental Protection Agency Staff,

Thank you for this comment opportunity. ! am working to deploy a green bank in South
Carolina. In 2020, the State Energy Office of the South Carolina Office of Regulatory Staff (SC
Energy Office) brought together a green bank working group. This was recommended out of
a stakeholder-driven process under their Energy Efficiency Roadmap Initiative. In 2021, this
working group started coordinating with the American Green Bank Consortium and held
consultations with existing green banks from across the country.

Beginning in September 2021, I led a comprehensive market assessment evaluating the
benefits of a green bank in South Carolina. The purpose of this assessment was to identify
financial barriers across the state and identify gaps that a green bank could meaningfully
address. This work was done in coordination with the SC Energy Office and included an in-
depth analysis of conditions in our state that includes the expertise of over 60 organizations
who spoke to us. This assessment was finalized in September 2022 and is referenced below.

The assessment identified many issues and financial barriers that impact residents,
businesses, municipalities, and communities. These financial barriers limit the scale and
speed of project investment across a variety of sectors that could otherwise benefit South
Carolina. I am currently taking our findings forward and hoping to address these barriers by
forming a green bank that would operate across South Carolina,

The South Carolina Clean Energy and Resilience Accelerator (SC CLEAR) is pursuing
designation as a 501 c3 and is a member of the American Green Bank Consortium. In this
letter, I am writing to share our perspective as an emerging green bank in relation to the
Greenhouse Gas Reduction Fund, which presents an opportunity to accelerate our
deployment. I draw mainly on our market assessment and current outlook in addressing the
EPA's request for information. My comment does not represent the 60+ organizations who
contributed their expertise to our market assessment or the SC Energy Office.

SC GREEN BANK ROADMAP

FEB. 2021

AUG. 2021

MAR. 2022

SC Energy Office

Convenes
Interest Webinar

DEC.2020

Report
Drafting
Begins

MAR. 2021

SEP. 2021

Figure 1: The roadmap that led to today's efforts to deploy a greeri bank in South Carolina.


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Comment Structure

My comment does not align neatly with the individual questions posed by the EPA, with
information potentially referring to multiple posed questions. I have thus organized this
comment under four overall themes, with related information organized underneath the most
relevant theme.

References

Fleming, J. & Windsor, C. (2022). The Role of a Green Bank in South Carolina: A Market &
Feasibility Assessment. University of South Carolina.

https://scholarcommons.sc.edu/geog facpub/231

Note: The EPA RFI Guidance states that outside information will not be viewed. With that in
mind and where pertinent, graphics and data sources from the report will be included or
noted in footnotes. Further information can be found in the report, linked above.

Section 134(a)(2) and Section 134(a)(3)

The EPA should consider designating significant funding from these sections to a National
Green Bank. The potential for a new long-term and stable partner that provides financial and
technical assistance over an indefinite time horizon has the potential to be truly
transformative in South Carolina.

• The EPA should not adopt a funding approach that prioritizes disbursement of funds
under these sections to a large quantity of organizations or projects. That approach
would prioritize states with greater financial capacity and quantity of applicants.
Relevant points from our market research include:

o South Carolina, both overall and geographically within the state, tends to have
lower quantities of banks, specialized financial institutions and/or philanthropic
investment. For example, South Carolina has fewer CDFIs on average1, has a
lower spatial density of community foundations,2 and rural areas of the state
are largely financially underserved.3
o In South Carolina there are currently few financial products from local financial
institutions designed for sectors like energy efficiency or clean energy.
Examples of current offerings are often extensions of existing products like
home equity loans or auto loans (that encompass a home level 2 charger with
an EV purchase). Local financial institutions struggle to connect supply and
demand in these sectors, which limits the number of current offerings in the
state that are custom programs or financial products,
o Prior to our current efforts to deploy SC CLEAR, there was not an operating
green bank in the state.

1	Community Development Financial Development Institutions Fund, total number of certified CDFIs as of March
14, 2022.

2	Wu, VS. The Geography and Disparities of Community Philanthropy: A Community Assessment Model of Needs,
Resources, and Ecological Environment. Voluntas 32, 351-371 (2021).

3	Federal Financial Institutions Examination Council (2022). List of Distressed or Underserved Nonmetropolitan
Middle-Income Geographies.


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• The creation of a single entity as a National Green Bank is more likely to support the
deployment of funds in South Carolina by both a green bank and other financial
institutions.

o Due to current supply/demand disconnects, price or risk uncertainty, the fact
that green lending is outside traditional activities, and other considerations by
local financial institutions, it will likely take them time to design distinct financial
products in energy and resilience sectors and grow demand for them,
o The capacity to work with a single entity has two distinct advantages:

¦	Sufficient capital to incentivize investment into these new sectors

¦	The institutional stability to engage in scaling investment over a longer
time horizon.

• A South Carolina green bank could work in coordination with a
National Green Bank to involve a growing number of local
lenders in green lending overtime in concert with a growing
market and perceived demand. This scenario is more likely to
succeed than an approach that would involve convincing as
many SC lenders as possible to apply for competitive grants
over a highly compressed time horizon of the next two years in
market sectors that they are not currently heavily involved in.
o A South Carolina green bank is likely to have capital needs that extend beyond
the end-date of funding time horizons indicated in Section 134(a)(1). It would
be easier to form a long-term partnership with a single entity to meet these
needs. For example, a South Carolina green bank could establish an initial
program such as a revolving loan fund, and continually tap the National Green
Bankto recapitalize the fund as it scales on an as-needed basis,
o Working with a fewer number of entities on a regional and national scale
would allow a South Carolina green bank to focus its efforts on growing
partnerships and networks within the state of South Carolina instead,
o A South Carolina green bank, and potentially other eligible financial

institutions, would benefit from a National Green Bank with respect to certain
financial products. For example, it would be significantly easier to establish a
single loan loss reserve from a National Green Bank than fund many smaller
reserves across different states. A South Carolina green bank could utilize the
larger reserve to accelerate investment within the state without the logistical
and operating expenses of managing its own smaller fund,
o A South Carolina green bank is likely to begin a single program first and grow
to address more financial barriers over time through additional programs. A
National Green Bank could support the development of new programs by
serving as a hub for technical assistance in financial product design, meeting
Federal requirements, etc.

Section 134(a)(1)

The $7 billion sub-set of funds designated to States, municipalities, Tribal governments and
eligible recipients presents an opportunity to accelerate investment in South Carolina. The
EPA should consider diversifying the timeline for applications, quantities, and types of
funding provided underthis branch of funding.


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Considerations related to a South Carolina Green Bank

Eligibility & Timeline

•	The EPA should be aware when considering eligible recipients and the universe of
possible applicants under Section 134(a)(1) that in the Southeast green banks are
currently non-profits or quasi-public entities. Many operate without state support.
Some, including North Carolina and Texas, formed green banks only recently in 2021.

•	South Carolina is in the Southeast and has a green bank in development but not yet
deployed (SC CLEAR). SC CLEAR plans to seek 501 c3 status in 2023. If the state of
South Carolina indicates interest in supporting green bank deployment and
transitioning SC CLEAR to a quasi-public entity (similar to how other states have
supported non-profit green banks), the absolute earliest this support would be
available is Q2 / Q3 2024 (as a result of state budget cycles).

•	The EPA should consider the factors above when evaluating eligibility, how
applications are reviewed and evaluated, the types of funding offered, and when
different grant applications are open. South Carolina and other Southeastern states
should be proportionately supported through Section 134(a)(1).

o Newly formed green banks will have different funding needs than green banks
that already have staff, financial products and programs in place, and large
balance sheets.

o SC CLEAR views Section 134(a)(1) as an opportunity to capitalize a program
that addresses a financial barrier in an un-served or under-served sector in
South Carolina and assist with building the institutional capacity needed to
deliver such a program. SC CLEAR would benefit from specificity and time
considerations in funding applications in order to fairly compete in the
applicant pool.

Programs & Market Sectors

•	The EPA should consider designing a balanced approach to program evaluation in
applications to funds under this section. In South Carolina, about half of the electricity
provided to the grid is zero-emission nuclear power4, which could decrease the
greenhouse gas emissions reductions of a new program relative to another
geographic area. Depending on how the EPA elects to evaluate programs, a solar
panel or energy-efficiency investment in South Carolina could thus be "worth less" in
terms of greenhouse gas emissions reductions that an identical investment in a
different area, creating a geographic inequality in fund disbursement to South
Carolina (and other parts of the country).

•	To the extent practicable while still meeting the intent of the Greenhouse Gas
Reduction Fund, the EPA should consider additional costs, benefits, or other forms of
impact in addition to greenhouse gas emissions reductions when evaluating
applications.

o For example, South Carolina is expected to have the 8th highest climate costs
among states by end of century, with every county exceeding the national

4 U.S. Energy Information Administration (2022). South Carolina State Profile and Energy Estimates.
https://www.eia.gov/state/analysis.php?sid=SC


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average for annual average damages to its GDP (many by double or more).5
Our market assessment also found that investment into projects that reduce
greenhouse gas emissions can have public health, resilience, or other co-
benefits. Examples include an energy-efficiency retrofit that also concurrently
addresses interior mold or a solar + storage project in a community center that
saves money and also increases resilience during extreme weather events.

• In considering different projects that could fall within "zero-emission technologies"
and/or "other greenhouse gas reduction activities" the following findings from our
market assessment are relevant:

o South Carolina has a functioning solar market and a state tax credit for solar
panels. However, solar is a very low percentage (-2%) of the state's total
electricity generation6. After passage of the Energy Freedom Act in 2019, total
solar net generation more than tripled7, but this was largely due to utility scale
solar investment. Residential rooftop solar investment is a low percentage of
the total market (in terms of generation), and the market is also geospatially
sporadic.8 The changes to the tax credit under the IRA are more likely to shift
the market for non-profits and municipalities because they can take advantage
of the 30% federal credit now, but the small increase is less likely to shift
considerations in the residential market or disadvantaged communities
considering a similarly sized federal credit (and sizeable state credit) was
already available. These investments can be transformative and have large
energy savings or emissions reductions, but also have project sizes that would
still be in the tens of thousands of dollars.

5	Costs calculated using data from Hsiant et al. (2017) and the U.S. Bureau of Economic Analysis, methodology
detailed in the market assessment under footnotes 34 - 36. Further climate costs impacts from sources like the
Federal Reserve Bank of Richmond and other sources is evaluated alongside GDP calculations in the "Climate
Conditions" section of the assessment. Further, South Carolina's key climate impacts of concern do not necessarily
align with other states (for example, property damages in SC's coastal counties are projected to exceed $250
million per year by 2050 due primarily to sea level rise, which would not apply to states without a coastline).

6	U.S. Energy Information Administration (2022). South Carolina State Profile and Energy Estimates.
https://www.eia.gov/state/analysis.php?sid=SC

7	U.S. Energy Information Administration (2022). Net generation for all solar, annual [Data set],
https://www.eia.gov/electricity/data.php

8	SC Energy Office (2022). State Energy Database [Data set]


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Distributed Solar Installations in South Carolina

Residential & Commercial Market Segments

Figure 2: Current market snapshot for distributed solar in SC.

o Energy Efficiency needs are high in South Carolina, with outdated building
codes and older or manufactured housing that contributes to high energy
burden. For example, South Carolina fairs poorly in achieving energy
efficiency, saving only -0,35% in energy savings from retail electric sales (half
the national average).9 According to one estimate, 99% of households in South
Carolina would have energy savings from switching to energy efficient
appliances (with low- to middle-income households saving more than the
average household in every county).10 Project costs are lower (~$3,000 for a
small-scale weatherization project), and energy savings can be significant
(-20%) but are likely lower in terms of emissions reductions than other project
types.

9	Bradley-Wright, F., Pohan, H. & Schober, M. (2022). Energy Efficiency in the Southeast - Fourth Annual Report.
Southern Alliance for Clean Energy. https://cleanenergy.org/wp-content/uploads/Energy-Efficiency-in-the-
Southeast-Fourth-Annual-Report.pdf

Berg, W., E. Cooper, and M. DiMascio. 2022. State Energy Efficiency Scorecard: 2021 Progress Report,
Washington, DC: ACEEE. https://aceee.org/research-report/u2201

10	Rewiring America (2022). Benefits of Household Electrification - South Carolina.
https://map.rewiringamerica.org/states/south_carolina-sc


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Energy Efficiency Savings

Energy bill savings in low to middle income households from
switching to modern, electric appliances

4

Average Annual LMI
Household Savings
(2015 $)

~
r	— 420

Min: 412

Max: 508

Figure 3: Estimated LMI energy efficiency savings.

•	The EPA should consider that financial programs can address multiple sectors with the
same product (whether it is a revolving loan fund or another model). However, the
EPA should also evaluate the degree to which applications are responding to gaps or
financial barriers within states and balance total emissions reductions with other
equity considerations that applicants might seek to address. For example, our market
research suggests that LMI households are possibly more likely to utilize a revolving
loan fund for energy efficiency improvements as compared to rooftop solar (which in
most cases would have lower project costs and lower emissions reductions).

•	When evaluating "zero-emission technologies" and/or "other greenhouse gas
reduction activities", there are complex considerations. For example, in South
Carolina the state weatherization program deferred more homes in 2020 than were
weatherized due to issues including health & safety.11 Should a health and safety
investment that unlocks weatherization program funding incorporate the resulting
emissions reductions? Other considerations could include experimental sectors (like
hydrogen or certain carbon removal technologies) or scientifically debated emissions
reductions sectors (like land-use or soil carbon). I advise the EPA to adopt a definition
broader than residential rooftop solar, but that each further sector should be carefully
evaluated by the EPA, acting on advice from published scientific findings and a variety
of internal federal agencies and external organizations. The EPA should nottreat all
further sectors equally but should consider both emissions reductions benefits and
co-benefits that address equity and energy burden considerations, and should adopt
a definition that does not inadvertently fund expensive industrial technologies or
other decisions that would rapidly dilute funds in Section 134(a)(1) among a limited
pool of applicants.

•	When evaluating applications submitted for funding under this section, the EPA
should consider that programs designed to address the financial barriers faced by

11 South Carolina Office of Economic Opportunity (2022). South Carolina WAP Database. [Data set].


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low-income and disadvantaged communities could take time and/or partnerships to
deploy after a funding application is granted. Green banks or other potential
applicants deploying the funds will need to coordinate with a variety of actors
including state agencies (e.g., disbursement of some IRA rebates flows through state
energy offices), utilities (who offer independent programs and could partner for
innovative models like on-bill financing), and contractors (who would accept the
financial assistance to conduct project work).

Considerations separate from a South Carolina Green Bank

The EPA should consider that in South Carolina, many municipalities may not have a single
planner on permanent staff. The EPA should be aware that 54% of rural communities in South
Carolina are beneath the national median in their governmental capacity.12 During our
market assessment, we found several communities did not apply to highly attractive federal
grant programs for a variety of reasons including complexity and length of application, the
logistical capacity to administer funds or meet imposed federal requirements, the financial
barrier imposed by a cost-match requirement (even an extremely small one), and not even
being aware of the funds at all.

•	The EPA should separate applications for funding into streams designed individually
for the different institution types indicated in Section 134(a)(1). The EPA should
recognize that state agencies or larger municipalities are more likely to have the
capacity for complex or lengthy funding applications.

•	Considering the factors above, the EPA should make it possible for smaller
municipalities to complete any application designed for them within the span of 3
hours or less by a single person. That person should have access to intensive support
through the team administering the grant program and/or EPA regional offices.
Further, the EPA should go beyond holding general events like webinars and instead
reach out to smaller municipalities on an individual basis through multiple
communications such as email, phone, letter, and in-person outreach.

•	Requirements imposed on small municipalities as a condition of grant funding should
be designed to be as easy as possible, as each requirement will likely result in some
communities in South Carolina deciding notto apply.

•	The EPA should be aware that a cost-match requirement, regardless of size, will pose
a significant barrierto some municipalities in South Carolina and would likely result in
some communities in South Carolina deciding notto apply.

•	The EPA should be aware that the South Carolina Commission for Minority Affairs
recognizes Native American Indian Entities that the federal government does not13,
and that distinct communities such as the Gullah-Geechee live in South Carolina. If
legally possible, the EPA should enable such groups and communities to apply for
funds as Tribal governments and communicate such eligibility to them directly.

12	Headwaters Economics. 2022. A Rural Capacity Map.

13	South Carolina's Recognized Native American Indian Entities (2022). South Carolina Commission for Minority
Affairs, https://cma.sc.gov/minority-population-initiatives/native-american-affairs/south-carolinas-recognized-
native-american-indian-entities


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Low-Income and Disadvantaged Communities

EPA should recognize that low-income and disadvantaged communities do not lookthe
same across the entire country. The EPA should appropriately balance considerations of
national, geospatial, and/or quantitative approaches with the unique insights and knowledge
that different organizations can bring to understanding what environmental and energy
justice looks like in their state, locality, or other geographic area.

•	A South Carolina green bank and other local financial institutions may be working on
considerations for communities that are financially underserved that do not neatly
align with income or other socio-economic data, For example, in South Carolina
renters have often been excluded from policy incentives or programs compared to
homeowners.

•	Our market assessment discovered that in South Carolina, income requirements with
precise thresholds often create a so-called "benefits cliff" where people just above the
threshold need financial assistance but do not qualify for it (or programs are not
available because institutions are not incentivized by funders to offer one). The EPA
should try to avoid replicating this issue with this new fund.

•	Disadvantaged communities in South Carolina can be on very small spatial scales. For
example, if spatially averaged energy burden is 3% statewide or a maximum of 7% for
the most affected county, but can be as high as 27% for the lowest income
households.14 Some of these households will be in areas with a low average energy
burden.

Energy Burden

Figure 4: Energy Burden in South Carolina, most recent data, county average.

• Justice 40 Initiative geographic delineations do not agree with one another in South
Carolina, with different federal agencies adopting different definitions that could
exclude large communities based on decisions made at a national level by entities not
in South Carolina.15 These areas also do not always align with geographies that

14	U.S. Department of Energy (2022). Low-Income Energy Affordability Data,

15	Council on Environmental Quality (2022). Interagency Climate and Economic Justice Screening Tool. [Data set],
https://screeningtool.geoplatform.gov/en/methodology

Department of Energy Office of Economic Impact and Diversity (2022). Justive40 Initiative. [Data set],
https://www.energy.gov/diversity/justice40-initiative


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financial institutions are incentivized to invest in under the Community Reinvestment

Act,16

Justice 40 Initiative: Disadvantaged Communities

i: Disadvantaged Communities	Financially Underserved Areas

Financially Underserved Areas

Community Reinvestment Act Designation

Community Reinvestment Act Designation

V

: gure 5: Disadvantaged communities according to different: federal agency priorities (left) and federal financial
regulator priorities (right). None of these determinations are made in South Carolina.

• Some institutions in South Carolina and local environmental justice leaders might have
locally informed views on disadvantaged communities and can be well-equipped to
guide the flow of funds. These institutions and leaders might use data or frameworks
that Justice 40 does not currently encompass, such as race or persistent childhood
poverty.

Oversight and Reporting

The EPA should consider that the level of expertise and knowledge of greenhouse gases may
vary among applicants. As a climate scientist, I am aware that quantifying the greenhouse gas
emissions avoided by an energy efficiency or clean energy project over its lifetime is a
challenging task. That number will vary based on the project and vary over time at different
locations as the utility provider concurrently makes independent changes to the grid. The
EPA should appropriately balance the need for a rigorous, externally evaluated and
scientifically based approach to quantifying the combined impact of the Greenhouse Gas
Reduction Fund with frameworks and financial support that support applicants as much as
possible with tracking and verification of greenhouse gases.

The EPA should consider that many programs implemented in South Carolina would need to
involve contractors conducting a variety of products. Requirements that a green bank,
financial institution, or municipality would need to pass along to contractors have the
potential to decrease the impact of the greenhouse gas reduction fund. The EPA should keep
in mind that those installing solar panels, upgrading appliances, or weatherizing homes are
likely going to be small businesses that might elect not to take on projects if program
requirements are numerous, complex, or logistically taxing.

Jory Fleming
Founding Organizer

South Carolina Clean Energy & Resilience Accelerator

16 Federal Financial Institutions Examination Council (2022). List of Distressed or Underserved Nonmetropolitan
Middle-Income Geographies.


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SSPN

December 5, 2022

The Honorable Michael S. Regan
Administrator

U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, DC 20460

Re: Comments related to EPA's Greenhouse Gas Reduction Fund
CC: Environmental Financial Advisory Board

Dear Administrator Regan:

On behalf of the Southeast Sustainability Directors Network (SSDN) and the Urban Sustainability
Directors Network (USDN), we are pleased to submit these comments focused on the design and
implementation of EPA's newly created Greenhouse Gas Reduction Fund. More than ever, the pressure
is on local governments to drive progress on sustainability and climate action. Collectively, USDN and
SSDN serve our members to help them advance sustainability and equity within their work

Since 2008 USDN has brought local government sustainability practitioners together to learn,
collaborate, and accelerate the work of local sustainability. By equipping them with the knowledge,
resources, and partnerships they need to succeed, USDN helps advance change locally in member
communities as well as across the field of practice. The aggregate impact and influence of our collective
work makes an equitable, resilient, and sustainable society more attainable. USDN represents over 250
communities representing over 100 million residents, sharing best practices and accelerating
transformative change across the United States and Canada.

SSDN is a network of local government sustainability professionals representing over 110 city, county,
and tribal governments in 10 states across the Southeast. Through peer-to-peer learning and
collaboration, SSDN and its members work together to accelerate, scale, and implement programs to
build more sustainable and resilient communities. As part of this work, SSDN regularly engages in direct
conversations with utilities and key stakeholders to help ensure that clean energy programs are
developed and implemented as effectively as possible.

We understand that EPA is beginning to design the Greenhouse Gas Reduction Fund, therefore we have
focused our comments on the following key considerations.

Section 1: Definitions of tow-income and disadvantaged communities

What should EPA consider when defining "low income" and "disadvantaged" communities for purposes
of this program? What elements from existing definitions, criteria, screening tools, etc., - in federal

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programs or otherwise - should EPA consider when prioritizing low-income and disadvantaged
communities for greenhouse gas and other air pollution reducing projects?

•	Several comments have suggested using existing Treasury Investment Areas and certified
Community Development Financial Institutions or minority depository institutions to determine
"disadvantaged communities." Although these are vital elements to define "disadvantaged
community/' USDN and SSDN believe that it is too limiting and represents a fraction of
underserved areas, leading to a limited representation in many states. EPA should not create
new definitions and methodologies, nor should it rely on data that is not universally accessible.
Instead, EPA should align GHGRF definitions with existing criteria, datasets and tools. We
recommend an expansive definition of disadvantaged that is comparable to the Justice40
definition. Such a definition would allow communities to utilize the data that is most
appropriate and reliable for their community rather than to rely on a single map or dataset. This
is consistent with recent grant solicitations advertised by EPA which require a threshold of one
disadvantaged category from the Climate and Economic Justice Screening Tool (Accessible Here)
while allowing for use of data from other sources (e.g., studies, census, and third-party reports)
to be included to give a more complete picture of the benefit to disadvantaged communities
and populations.

•	We also recommend including other key climate, energy, and economic factors in the definition
of disadvantaged community. Specifically, when applicable, other key variables could be:
energy insecurity, energy cost burden, present and anticipated climate impacts, lack of access to
credit or capital, and presence and growth of high-quality jobs supported by GHGRF resources.
In addition, it will be important for EPA to consider how low income and disadvantaged
communities definitions map to other existing and potentially complementary federal programs,
such as New Markets Tax Credit eligible tracts, HUD Multifamily and Public Housing locations,
and Low-Income Housing Tax Credit locations. Programs that have track records of insufficiently
or ineffectively targeting disadvantaged communities (e.g., Opportunity Zones) should be
excluded or cross referenced with other criteria to ensure the integrity of this program.

The Graphic below highlights the discrepancy between the potential data sources that could be utilized
by EPA for the determination of "disadvantaged status" for a selected region of Southwest Florida (From
Left to Right: Climate & Economic Justice Screening Tool 1.0; Draft Climate & Economic Justice Screening
Tool; and Treasury Investment Area). While Treasury Investment Areas may have a broader reach this
may be counteracted due to the lack of a certified CDFI in the given region (according to the most recent
data published on CFDIFund.gov). Furthermore, there has not been sufficient time to explore the
implications of the recent revisions of the CEJST 1.0 as it was published on November 22, 2022

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Section 2: Program Design

Are there best practices in program design that EPA should consider to reduce burdens on applicants,
grantees, and/or subrecipients (including borrowers)?

•	Given the diversity of existing and readily implementabie infrastructure throughout the nation
(and within individual states), the EPA should interpret "eligible recipient" with the flexibility
indicated in statute. For example, not all areas have green banks or CDFIs that are positioned to
serve communities-flexibility within guardrails is critical to reaching as many communities and
borrowers as possible,

•	Recommend that technical assistance is provided by, or alongside the eligible lending entity, to
ensure recipients receive flexibility and support in managing funding. EPA could consider
utilizing existing technical assistance centers to provide such support, including but not limited
to Environmental Finance Centers, Thriving Communities Technical Assistance Centers,
Brownfields Technical Assistance Centers, and other similar entities.

•	Recommend a balanced approach that provides multiple options for lending, including digital
and traditional in person lending, ensuring no one is left behind.

o It is likely that some individuals may not be able to access a physical location and others
may not have digital capacity. Providing multiple pathways to access lending is critical,
o Some individuals may desire to remain "unbanked" as they don't trust institutions with
their money or personal data; it will be important to find a different way to reach these
individuals.

o Creating a broad ecosystem of prospective partners that can help leverage capital is
critical to reaching as many communities and borrowers as possible. For example,
philanthropic partners should be considered as prospective
applicants/grantees/subrecipients and partners,
o Ensuring capital reaches small, nimble organizations that are close to the ground will

expedite efficacy, reduce overhead and streamline bureaucracy,
o The EPA should immediately deploy capacity building funds to eligible entities, so that
they may build capacity in order to meet these needs.

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•	Please provide clear and ample timelines regarding the Notice of Funding Opportunity (at least
60 days to respond to all stages), when the funding will be available, and clear language about
the minimum and maximum award amounts.

What federal, state and/or local programs, including other programs included in the Inflation Reduction
Act and the Infrastructure Investment and Jobs Act or "Bipartisan Infrastructure Law," could EPA
consider when designing the Greenhouse Gas Reduction Fund? How could such programs complement
the funding available through the Greenhouse Gas Reduction Fund?

•	Other Inflation Reduction Act programs, such as the Climate and Environmental Justice Block
Grant and DOE's Energy Futures program, have encouraging elements intended to spur
collaboration between local governments and community-based organizations. Many local
governments have expressed an interest to be engaged in the planning and coordination as this
program is implemented, regardless of who receives funding. EPA should attempt to promote
similar collaboration within and between funding streams as local governments should be a
stakeholder in implementation efforts in their communities. Promotion of collaboration should
include allowing funding to be used to convene the collaborative entities and find new, suitable
partners.

What, if any, common federal grant program design features should EPA consider or avoid in order to
maximize the ability of eligible recipients and/or indirect recipients to leverage and recycle Greenhouse
Gas Reduction Fund grants?

•	In the rollout of the Greenhouse Gas Reduction Fund Program, we recommend a delayed or
phased approach that conforms with statutory requirements while also allowing state and local
governments enough time to plan how they will use the funding.

•	Section 134(a)(1) makes $7 billion available to EPA to make competitive grants to States,
municipalities, Tribal governments, and eligible recipients, as defined in the statute, to provide
subgrants, loans, or other forms of financial assistance as well as technical assistance to enable
low-income and disadvantaged communities to deploy or benefit from zero-emission
technologies, including distributed technologies on residential rooftops, and to carry out other
greenhouse gas emission reduction activities.

o The pathway for funding for this stream should be through local and Tribal governments
whenever possible because local and Tribal governments can be more efficient in
ensuring that funding will be implemented at the neighborhood or community level in
ways that match local conditions and needs.

o Recommend that local governments and Tribes are prioritized to receive this funding or
that a specific portion of the total funding is designated within the $7 billion for local
governments and Tribes so that all of this funding is not leveraged entirely by state
governments and other entities. This set aside may be time-limited and become
available to other eligible entities after a period of time if not awarded to local
governments.

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o Provide local governments with clear guidance and best practices for leveraging this
funding.

Section 3: Eligible Projects

What types of projects should EPA prioritize under sections 134(a)(l)-(3), consistent with the statutory
definition of "qualified projects" and "zero emissions technology" as well as the statute's direct and
indirect investment provisions?

Investments that benefit low-income and disadvantaged communities include energy efficiency,
electrification, and resiliency investments in buildings and facilities like: (1) affordable housing - both
ownership and rental, (2) small and BIPOC-owned businesses, (3) nonprofits, (4) local government and
community facilities, and (5) small, religious, and educational institutions. These investments can not
only reduce GHG emissions, but also dramatically improve indoor air quality and health outcomes.
Where applicable, EPA should also encourage ownership and community control given the long history
of capital extraction many low-income and disadvantaged communities have endured.

•	Projects should be additive (i.e., not required under federal, state, or local laws, regulations, or
court orders). This should be true whether under the $7 billion or the $20 billion allocations and
regardless of whether the funding is obtained through a state level green bank or another
mechanism/pathway permitted in this program.

•	Prioritize community-led initiatives that fund electrification, weatherization, and energy
efficiency projects, green infrastructure and nature-based solutions, alongside renewable
energy, including wind, green hydrogen, and rooftop solar (as appropriate for local conditions
and as commercially available).

•	Prioritize projects on existing buildings that can be retrofit and/or support onsite renewables
and storage.

•	Prioritize projects that provide co-benefits (i.e., address multiple equity and/or adaptation,
mitigation, urban redevelopment, brownfields, or other sustainability priorities).

•	Recommend that EPA prioritize projects that maximize greenhouse gas emissions reductions as
well as utilize proven, commercially available technology.

•	Ensure ongoing geographic balance of recycled funds through regulatory and reporting
frameworks.

Please describe what forms of financial assistance (e.g., subgrants, loans, or other forms of financial
assistance) are necessary to fill financing gaps, enable investment, and accelerate deployment of such
projects.

•	Recommend that the $7 billion funding stream to provide competitive grants to States,
municipalities, Tribal governments, and eligible recipients, as defined in the statute, should be
implemented, should align to the local needs being funded. A mix of locally appropriate
financial assistance in the form of grants, loans, and incentives would be appropriate to fulfill
this vision.

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Section 4: Eligible Recipients

Who could be eligible entities and/or indirect recipients under the Greenhouse Gas Reduction Fund
consistent with statutory requirements specified in section 134 of the Clean Air Act? Please provide a
description of these types of entities and references regarding the total capital deployed by such entities
into greenhouse gas and air pollution reducing projects.

•	The legislation includes references to "municipalities." While under 42 U.S. Code § 7602 the
Clean Air Act defines municipalities to include "city, town, borough, county, parish, district, or
other public body created by or pursuant to State law;" the CAA also separately identifies "air
pollution control agency." Recommend that the rule have an expansive view of local
governments to include a politically recognized jurisdiction, including cities, towns, and counties
as well as regional entities such as Metropolitan Planning Organizations, Councils of
Governments, and Environmental Protection Commissions.

•	Recommend that the $20 billion funding is prioritized for entities that can demonstrate
knowledge of, experience working with, and connection to, the communities where lending is
occurring. In order to reach the most individuals and entities in need of funding, this may
include in person services, digital services, and language translation services.

•	Request that local governments, including those in rural areas in locations not identified as
serviced by a CDFI and those that fulfill other requirements as determined by EPA are made
eligible to receive funding through the $20 billion currently defined as competitive grants for
"eligible recipients."

What types of entities (as eligible recipients and/or indirect recipients) could enable Greenhouse Gas
Reduction Fund grants to support investment and deployment of greenhouse gas and air pollution
reducing projects in low-income and disadvantaged communities?

• By prioritizing low-income, climate impacted, and disadvantaged sectors, EPA can help

accelerate GHG-reducing investments in communities that the private market does not broadly
serve. These communities and households have an acute need for assistance due to systemic
public and private disinvestment and environmental injustices, and there currently exist limited
strategies to protect these households from harm resulting from GHG pollution. Funding should
be prioritized for projects in the following communities:

o Communities of color, which include any geographically distinct area the population of

color of which is higher than the average population of color in the State;
o Communities that are already or are likely to be the first communities to feel the direct
negative effects of climate change. Refer to the following: FEMA National Risk Index and
CEQ Climate Mapping for Resilience and Adaptation Tool:
o Distressed neighborhoods, demonstrated by indicators of need, including poverty,
childhood obesity rates, academic failure, and rates of juvenile delinquency,
adjudication, or incarceration;
o Low-income communities, defined as any census block group in which 30 percent or

more of the population are individuals with low income;
o Rental properties (especially multi-family units and Low-to-Moderate Income (LMI));
o Immigrant communities; and

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o Rural areas.

How could EPA ensure the responsible implementation of the Greenhouse Gas Reduction Fund grants by
new entities without a track record?

•	Recommend the development of strong equity criteria. This criteria would require that any
entity directly receiving funding through the two streams that comprise the $20 billion would
need to have extensive experience working with and lending to BIPOC, disadvantaged, and low-
income communities.

•	EPA should require applicants to (1) demonstrate how funds will accelerate deployment of key
GHG-reducing projects and technologies in underserved markets; (2) show how blending public
and private capital will drive new market creation and/or market transformation; and (3)
articulate clear, measurable equity-based outcomes in addition to pollution-related ones. Given
the enormous amount of capital required to reduce GHG emissions and decarbonize our
economy, public dollars should be used strategically to rally and redirect private investment into
low-carbon, climate-resilient projects that produce tangible outcomes, especially for low-
income and disadvantaged households.

What kinds of technical and/or financial assistance could Greenhouse Gas Reduction Fund grants
facilitate to maximize investment in and deployment of greenhouse gas and air pollution reducing
projects by existing and/or new eligible recipients and/or indirect recipients?

•	Technical assistance should be provided at multiple levels of GHGRF implementation to support
GHGRF direct recipients and financial partners (CDFIs, green banks, community solar
aggregators, etc.), build capacity among community-based organizations (CBOs), and provide
support services to building owners. Providing direct technical assistance in the form of capacity
building, project development, and community engagement support, coaching, training,
templates, and peer learning around best practices will ensure that they are successful in
lending, develop a pipeline of sustainable projects, support local workforce development, and
build the local economy.

•	Technical assistance is needed at the community level to educate both households and potential
borrowing organizations about decarbonization benefits and strategies, and to connect
interested parties to vendors and other project development resources including financing
alternatives. In addition, many lenders would benefit from a technical assistance platform to
provide lender education, product information, uniform standards, as well as metrics for
decarbonization, professional certification standards for third parties, and capacity building.

Section 5: Oversight and Reporting

What types of governance structures, reporting requirements and audit requirements (consistent with
applicable federal regulations) should EPA consider requiring direct and indirect recipients of Greenhouse
Gas Reduction Fund grants to ensure the responsible implementation and oversight of
grantee/subrecipient operations and financial assistance activities?

•	Recommend strong consumer protection provisions.

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• Recommend the development of guardrails for new and existing lending entities to ensure that
there is accountability. These guardrails may include (LPDD Model Law: Green Bank State and
Local Legislation):

o Development and consistent application of transparent underwriting standards,

standard contractual terms, and measurement and verification protocols for qualified
projects;

o Creation of performance data that enables effective underwriting, risk management,
and pro forma modeling of financial performance of qualified projects;

o Prepare an annual or quarterly report for the community being served on the lending
and other financing activities, specifying the investments made in disadvantaged and
Climate-Impacted Communities;

o Audited annually with generally accepted auditing standards by independent certified
public accountants;

o Complies with requirements of the Consumer Credit Protection Act (15 U.S.C. 1601 et
seq.);

o Requires that laborers employed by contractors and subcontractors in construction
work financed directly by the green bank, will be paid wages not less than those
prevailing on similar construction in the locality, as determined by the Secretary of
Labor under sections 3141 through 3144, 3146, and 3147 of title 40, United States Code;

o Collects and makes available to the public in a centralized database on an internet
website, information regarding rates, terms and conditions of all financing support
transactions.

What metrics and indicators should EPA use to track relevant program outcomes including, but not
limited to, (a) reductions in greenhouse gas emissions or air pollution, (b) allocation of benefits to low-
income and disadvantaged communities, (c) private sector leverage and project additionality, (d) number
of greenhouse gas and air pollution reduction projects funded and (f) distribution of projects at the
national, regional, state and local levels?

•	EPA should define clear impact standards and metrics for awardees to drive significant GHG and
air pollution reductions, as well as meaningful energy and environmental justice impacts for
low-income and disadvantaged communities. Awardees should prioritize meaningful
improvements to the lived experience of marginalized and disadvantaged communities through
investments in GHG reducing projects (e.g., percent reduction in energy burden and utility shut
offs, employment outcomes, projects with clear ties to community ownership, etc.). Ultimately,
for the GHGRF to successfully meet Justice40 goals, impacts will need to be focused on people-
centered benefits.

•	We recommend that EPA consider a short list of clear, overarching, quantifiable program
outputs and outcomes that all projects should measure and evaluate (e.g., GHG reductions,
leverage, underserved market location, etc.), and a more tailored set of metrics specific to each
project (e.g., building electrification, electric vehicles, etc.).

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•	EPA should identify when national, standardized approaches to measuring outcomes could best
be applied, when a regional approach makes sense, or when a more local recipient-level
reporting is needed. Currently, many green lending entities communicate impact differently.
The GHGRF presents an opportunity for EPA to establish clear standards on impact reporting
and measurement for all recipients to follow.

Section 6: General Comments

Do you have any other comments on the implementation of the Greenhouse Gas Reduction Fund?

•	Not all states currently have green banks and not all states will have the ability to establish a
green bank. Similarly, not all localities may have a CDFI situated to serve them under this
program. As a result, a flexible framework will ensure that the greatest number of projects,
people, and places are served.

•	The funds need to be obligated by EPA by September 30, 2024. Allow for project periods of up
to 5 years for awardee expenditure of obligated funds without fear of funding being revoked.

•	The law states that the $27 billion is a minimal funding level, not a cap. The EPA should develop
and implement the regulations accordingly.

•	Recommend sub-state, regional, statewide, or multi-state coordination to receive funding
through the $7 billion funding stream.

•	Recommend that EPA provide recurring webinar series, including Question & Answer, Listening
Sessions, and Training, in the lead up to, and upon deployment of, this opportunity and
throughout the period of eligibility.

We thank the Environmental Financial Advisory Board and EPA for their consideration of our comments.

If we can be of any further assistance, please do not hesitate to contact us.

Sincerely,

Shauna Sylvester, USDN Executive Director. shaunasvlvesterffiusdn.org

Cynthia McCoy, USDN Federal Engagement Director, cynthiamccoy@usdn.org

Meg Jamison, SSDN Executive Director. megffisoutheastsdn.org

Ann Livingston, Policy Director, SSDN, Ann@Southeastsdn.org

Michael Dexter, SSRC Director, SSDN, Michael(5)Southeastsdn.org

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The Honorable Michael Regan
Administrator

U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, DC 20460

1600 Pennsylvania Ave., NW
Washington, DC 20006

Innovation & Implementation
The White House

The Honorable John Podesta
Senior Advisor for Clean Energy

December 5, 2022

RE: The Inflation Reduction Act of 2022 - Section 60103, Greenhouse Gas Reduction Fund: Joint
State Recommendations

Dear Administrator Regan and Senior Advisor Podesta:

Thank you for the opportunity to provide comments on the program design and implementation of the
Greenhouse Gas Reduction Fund (GHGRF) established in Section 60103 of the Inflation Reduction Act

As the heads of energy and/or environmental agencies in Connecticut, Colorado, Illinois, Louisiana,
Maine, Michigan, Nevada, New Jersey, New Mexico, Pennsylvania, and Vermont we recognize how
critical the $27 billion GHGRF allocation is to expanding and accelerating state climate change
mitigation, advancing clean energy markets and reducing costs for our residents and businesses. These
funds have the potential to catalyze large numbers of local jobs, substantially lower energy burdens for
low-income and disadvantaged communities, and improve environmental and energy justice in our states.

Congress intended states to be key partners in the administration of this program. We stand ready to work
collaboratively with you on fund deployment and administration. This letter is specifically focused on the
subset of GHGRF monies directly available to states - $7 billion allocated to zero-emission technologies
(ZET funds). However, we are also interested in partnering with you on the equitable allocation of the
remaining approximately $20 billion, as these funds are critical to our state goals and local economies.
For this reason, we encourage EPA to establish a strong, transparent, and accessible governance structure
through which states and disadvantaged communities can have direct and ongoing input into funding
prioritization of the $20 billion. This governance structure is especially critical if a large portion of funds
will flow through a small number of entities.

In parallel, we encourage EPA to treat the $7 billion in ZET funds separately from other GHGRF monies.
By doing so, we believe that EPA can maximize GHGRF impact, efficiency, and equity. Below, we
provide recommendations that are intended to help EPA in meeting its short ZET funding allocation
timeline while enabling robust disadvantaged community engagement. The recommendations also ensure
coordination across proposed projects and investments to avoid unnecessary duplication, leverage existing
programs and funding streams to the fullest extent possible, support established state and federal equity
goals as well as existing climate strategies, and are competitively selected. Lastly, our ZET funding
recommendations emphasize flexibility, to enable the $7 billion to adapt to market differences among
states, regions, and communities, and to further unlock financing and private capital for project types and
communities experiencing barriers not addressable by financing alone.

(IRA).

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ZET Funding Recommendations:

Signatories to this letter recommend the following processes and program implementation strategies for

ZET funds.

A. Use a formula-based allocation to states: We recommend that ZET funding first be offered via
formula-based grants to states, with a minimum allocation per state. As a first step in this process,
states would need to indicate interest and identify the specific state agency or other state-specific
entity that would receive and administer the funds.1

Upfront grants received by states would seed the program and provide for administrative
functionality.2 Upon receiving a formula-based grant and prior to awarding funds to eligible projects,
states would be required to submit a competitive project selection process to EPA for review and
approval. At minimum, EPA-approved project selection processes should create a call for projects
(open to all entities within a state that are eligible to receive ZET funds under Section 60103), a
competitive ranking process of those projects, and a publication process for a final Intended Use Plan
within a specified period of time. Final Intended Use Plans would detail the pipeline of competitively-
selected, eligible projects that would receive funds within a state.

Using this allocation method, the EPA could quickly allocate large portions of funding while enabling
competitive and equitable project selection, and ensuring coordination among the various entities
within a state that are eligible to receive these funds. Requirements issued by the EPA to guide the
development of Intended Use Plans should require robust stakeholder engagement, especially with
disadvantaged communities, to help determine localized priorities to be reflected in project scoring
and ranking processes. Other EPA requirements could establish minimum criteria that must be
considered when scoring and ranking project proposals or could be used as minimum requirements
for a portfolio of competitively selected projects.

Should a state opt not to receive formula funds, unallocated funds could be reallocated by EPA into a
nationally competitive pool. This pool should be used by EPA to fund eligible multi-state, regional,
and national projects and coalitions, as well as supplemental individual state applications.3,4
Applicants for regional and national funds should be required to collaborate with impacted states. In
addition, should a state that initially opted to receive formula funds fail to submit an approvable final
Intended Use Plan within the specified period of time or not fully allocate all formula-based funds via
their final Intended Use Plan, those unallocated funds could also be reallocated to the nationally
competitive pool.

Altogether, this proposed allocation method would achieve rapid funding allocation from EPA, robust
stakeholder engagement, realistic application development timelines, project alignment with existing

1	State climate offices, energy offices, green banks, or non-government entities may have the appropriate resources
and expertise to administer these funds. Flexibility for states to choose the most appropriate administrator will
maximize deployment efficiency and success.

2	EPA's current State Revolving Funds (SRF) program, could serve as a model from which to build this type of

allocation process

3	For example, states with greater qualified project demand than available initial grant funding could apply for
additional funds from the nationally competitive pool.

4	EPA's Water Infrastructure Finance and Innovation Act ("WIFIA") program, offers a potential model for such a
direct and competitive application process with EPA.

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local, state and federal climate and equity strategies, synergies with and leveraging of existing
programs (including the ability to address gaps or barriers to deployment of other federal funds under
the IRA and the Bipartisan Infrastructure Law), applicant coordination to minimize proposal
duplication, and flexible project scoring approaches that can support locally-identified priorities - all
of which are critical to advancing equity in funding deployment.

B.	Ensure fund use flexibility: Significant gaps in climate and clean energy markets are not addressable
with financing alone. Financing deployment may be hindered by market failures or inefficiencies
such as workforce limitations, inequitable education and career pathways, unequal information and
data sharing, or regulatory delays. Each state, market, and disadvantaged community is likely to have
its own gaps or market barriers that, if remedied, could unlock significant private investment. By
allowing ZET funding to act as flexible, gap-filling monies to complement increased and more
accessible financing, EPA can help to unlock private capital for projects and communities that
currently experience systemic financial inequities.

Specifically, EPA should permit the $7 billion of ZET funds to be awarded to projects as grants,
rebates, loans, or other financial offerings and products that will best serve a community. EPA
guidance should permit the funds to be used for staff, technical assistance such as application
assistance, community engagement, project financial management support, long-term project
management, operation, monitoring, and evaluation work, and workforce development that enables
increased zero-emission technology deployment. Cost-share should not be required since identifying
matching funds can be a substantial barrier to many disadvantaged communities.

As states that administer a variety of energy and environmental programs, the signatories of this letter
recognize that funding gaps and barriers vary greatly by market, state, and community. For this
reason, we encourage EPA to retain the substantial flexibility provided in the ZET statutory language
and while ensuring that development of Intended Use Plans engage local, income eligible and
disadvantaged communities to determine their specific preferences and fund use priorities.

C.	Permit the use of state-specific definitions: To further support equitable funding deployment and to
enable leveraging of existing programs and funding streams, we recommend EPA provide guidance
on how states can utilize any state-specific definitions for "low-income", "disadvantaged
communities" and other related terms such as "environmental justice zones" alongside national tools
like the EPA's EJScreen and CEQ's Climate & Economic Justice Screening Tool. States have local
knowledge of community needs that may be more refined than a national tool, making it especially
important that state definitions be permissible for use in GHGRF funding allocation decisions.

Thank you for the opportunity to submit comments on this important program. We look forward to

continuing to collaborate with EPA throughout the GHGRF development and implementation phases.

Sincerely,



Katie S. Dykes, Commissioner
Connecticut Department of Energy &
Environmental Protection

Will Toor, Executive Director
Colorado Energy Office

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Will Hobert, Chair

Illinois Finance Authority/Climate Bank

Thomas F. Harris, Secretary
Department of Natural Resources
State of Louisiana

Melanie Loyzim, Commissioner

Maine Department of Environmental Protection

Liesl Eichler Clark, Director

Michigan Department of Environment, Great

Lakes, and Energy

David Bobzien, Director
Nevada Governor's Office of Energy

Shawn LaTourette, Commissioner

New Jersey Department of Environmental

Protection

Sarah Cottrell Propst, Cabinet Secretary
New Mexico Energy, Minerals and
Natural Resources Department



0,



James Kenney, Cabinet Secretary
New Mexico Environment Department

J

Ramez Ziadeh, P.E., Acting Secretary
Pennsylvania Department of Environmental Protection

Julie Moore, Secretary

Vermont Agency of Natural Resources

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I CAST

Stakeholder Comment Team; This comment team, hereby referred to as the "Team," is made up of the
Triple Bottom Line Foundation, ResourceSmart LLC, and ICAST (International Center for Appropriate and
Sustainable Technology). The "Slide Deck" referred to within these comments is the "EPA Environmental
Financial Advisory Board GHGRF Charges."

About TBL Fund

Triple Bottom Line Foundation (TBL Fund) is a nationally recognized, Dept. of Treasury-certified,
community development financial institution (CDFI). It provides energy financing for clean energy
projects that benefit low- and moderate-income (LMI) communities,
primarily families living in multifamily affordable housing (MFAH) and
Indigenous Tribal communities. TBL Fund staff combine expertise in
affordable housing, project finance, and clean energy deployment. Since its inception in late 2014, TBL
Fund has grown its services and expanded nationally, while steadily improving its financial health and
maintaining a 0% default rate on all of its clean energy investments. TBL Fund has facilitated green
retrofits for over 30,000 LMI households—achieving over $25M in lifetime utility cost savings and
abating 643,883 tons of carbon emissions.

About ResourceSmart

ResourceSmart is a limited liability corp. (LLC) that provides tax equity financing for clean energy
projects, primarily solar PV and energy storage projects that benefit LMI
communities: families living in MFAH and Indigenous Tribes. ResourceSmart has built
a $100M pipeline of projects to monetize the investment tax credits and accelerated
depreciation. Since the passage of the Inflation Reduction Act (IRA) it is quickly
creating a pipeline of energy efficiency (EE) and decarbonization projects to monetize
the 179D and 45L tax credits for MFAH projects nationally.

About ICAST

ICAST (International Center for Appropriate and Sustainable Technology) is a 501c3 nonprofit with a

mission to provide economic, environmental, and social benefits to communities. It has a 20-year history

of designing and managing utility, state, and federal programs to deliver clean

energy solutions to the multifamily (MF) housing market, primarily MFAH, To help

property owners undertake the retrofits, ICAST pioneered an award-winning one-

stop-shop (OSS) approach that includes design, engineering, construction

management, financing, reporting, and other services, depending on the needs of each customer. In
2023, ICAST will facilitate clean energy and health and safety upgrades in ~50,000 apartments. It has
extensive expertise driving the adoption of green solutions in the MF and Tribal market, having
managed many programs designed to scale high-efficiency heat pumps, solar, and other solutions for
this market segment. ICAST has managed over $10M in federal grant funding from the Environmental
Protection Agency, Department of Energy, Department of Treasury, Department of Housing and Urban
Development, Small Business Administration, Department of Agriculture and Economic Development
Administration.

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Section 1: Program Structure

1.	Eligible Recipients

a.	The Team is unclear as to details of the "strategic allocation of capital along value-chain
activities/' and what that means in relation to carbon savings. How will grants manage
pieces of the value chain of activities that do not provide direct carbon savings goals? If
the program funding can be utilized for the myriad of activities in the value chain, how
can grantees ensure that savings are generated and that funding doesn't
disproportionately go to elements that provide no direct savings?

b.	The Team is curious as to how much of the money do you think will go to the actual
financing/funding of projects versus the support activities such as training/workforce
development and measurement and verification? Is there a simple guideline on the % of
funding which can be utilized in each category or at least direct project financing vs
support activities?

2.	Technology Adoption

a. On page 10, the Team is curious as to what "Technology Adoption" infers on a more
detailed level. There is already funding for the items listed in its box, within the other
sections (i.e., transportation, buildings, housing, agriculture, municipalities). Is there
another reason for having it in a separate column? The Team is also interested as to the
linkage between Technology Adoption, which looks as if it might be designated for
technology accelerators/research and development and the Justice40 initiative. It seems
risky for generating greenhouse gas (GHG) savings, with no direct tie to GHG. A great
example of this was the solar energy giant, Solyndra, who filed for bankruptcy after
receiving about half a billion dollars in taxpayer-backed loan guarantees.

3.	Eligible Projects - Types of Projects

a.	The Team recognizes that verbiage can play an important role in defining eligibility. For
example, within the "Buildings - Commercial" section, nursing homes are included as
examples but not office buildings. Then you add in Justice40 Principles, and questions
arise as to the correlation of fulfilling the Justice40 goals and nursing homes. The Team
recommends that the EPA define "Buildings - Commercial" section to ensure that
resources are allocated to those with need.

b.	Grant funding is also needed for Technical Assistance (TA). In page 12 of the Slide Deck,
the Team is wondering if grant funding will be provided to fill this gap? We do not see
grant funding included anywhere on this page and was thus wondering how the lending
products will fill the TA gap if there is no grant funding.

4.	Eligible Projects - Barriers

a. For uptake barriers, and many of the other barriers themselves, the Team suggests that
coordinating with Utility Energy Efficiency Programs and WAP subgrantees fall into the
"strategy" categories - further encouraging the involvement in existing programs.

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b. For prerequisite barriers, and many other barriers as well, the Team is worried to see
that strategies involves coordinating directly with State Energy Offices (SEO). SEOs will
already be overwhelmed, further contributing to the barrier itself. Additionally, the
Team is struggling to see how SEOs will work with commercial buildings.

i. On page 33 of the Slide Deck, it also states: "Don't create bureaucracy that
could lead to delays. Going through them for this would do that." We believe
that overly involving the SEOs as direct strategies to overcoming barriers has the
high potential of contributing to the barrier itself. SEO's should be informed and
coordinated with in that there is not a duplication of efforts between GHGRF
grantees and SEO's. However, relying on SEO's for guidance or coordination of
project execution is inadvisable as this will greatly complicate and slow projects.

5. Structure of Funding

a. Potential Program Design and Design Requirements

i.	The Team suggests prioritizing background and experience over financial
capacity - that there be a focus on specific sector experience (i.e., sector
experience in green financing products being a requirement).

ii.	The Team also has a list of questions that were not answered in the Slide Deck,
pertaining to pages 14 and 15:

1.	What does collective action mean in this section?

2.	Is there a direct recipient baseline, i.e., how much is the minimum for
projects? (For the distribution of funds being in an efficient manner, the
Team would like the EPA to decide what the minimum award will be.)

iii.	We encourage the EPA to be open to collaboratives who will take whatever the
minimum baseline of money is. Look for collaboratives of people who serve
MFAH nationally, a collaborative of CDFIs who do green lending nationally, or a
collaborative of partners with cross-sector experience.

Section 2: Objectives

1. Overarching Concepts

a. Technical Assistance should be tied to projects and prove a direct connection to GHG
emission reduction; however, there is no need to reinvent the wheel. The Team
suggests that the EPA ensures that the GGRF aligns with programs who are doing this
capacity building already. Structures already exist and there is not a need to waste
funding on creating infrastructure that can create future GHG reductions. The Team
strongly urges funding to go to shovel-ready projects, with a caveat. Significant capacity
does not need to be created through the funding; the EPA can prioritize existing
structures and organizations that can prove they have sound plans and experience
implementing similar projects. Funding can easily be wasted by getting stuck in the
weeds with setting up new programs/organizations, and significant capacity building
efforts to re-tool programs/organizations who have no experience with greenhouse gas
emission reducing projects.

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b. Additionally, in balancing "shovel ready" and "capacity building" projects (via page 21)
the Team believes there should be clarification and clear guidelines established within
the capacity building category. Within capacity building, there is pre-development
project work (such as pipeline development) and there is "pure" capacity building work
such as training, workforce development, etc. The program should ensure that the vast
majority of funding have directly attributable GHG emissions reductions. Additionally,
shovel ready funding should take into consideration organizations that have years of
successful experience which may not have individual shovel-ready projects but have
many in the pipeline, and a historical precedent to show that GHG gas emissions will be
reduced.

2. Program Efficiency - Design Elements

a.	The macro-level goal of the program should be to define how much non-direct to GHG
emission reducing project money is usable (ie administration, training, workforce
development). The Team encourages the EPA to set a standard so programs can be built
successfully.

b.	As a minimum, projects should be able to leverage private capital to monetize the tax
credits and depreciation available through the IRA that are tied to clean energy projects.
The issue with private capital is that most of it, especially at any scale, is expensive. So,
the more a low-income (LI) project leverages private capital, the less the financial
viability of the project, which in turn implies less benefits accrue to the LI community.
The Team believes that EPA will need to decide what is more important: leverage or
benefits to LI and DAC. Some sources of private capital, example from Foundations
(program-related investments - PRI) and community reinvestment act (CRA)
investments from Banks, can be lower cost, and could be leveraged while still providing
benefits to the LI and DACs. The Team suggests prioritizing background and experience
over financial capacity - that there be a focus on specific sector experience (i.e., sector
experience in green financing products being a requirement). The Team believes that EJ
communities should have lower leveraging requirements than others, down to nothing.

c.	Another LI investment leveraging opportunity that EPA needs to be wary of is the
Community Solar programs that many states have instituted that require a certain
percentage of their subscribers to be LI and/or from a DAC. The private capital leveraged
for these projects are often at higher rates because the LI and DAC subscribers are
viewed as high-risk for the Community Solar project. A 100% LI/DAC community solar
project can offer more savings to its LI/DAC subscribers because it does not leverage
"wall street" capital at a premium, but instead accesses PRI and CRA and other lower
cost but socially responsible funds. We also implore the EPA to watch out for "impact
investors" and "Environmental, Social and Governance (ESG) investment funds." Some
groups have been selling the idea that ESG and similar sustainable investments can
make more returns than typical investments and are treated similarly to venture capital.
However, despite this ESG branding, they do not offer low-cost financing and are often
the most expensive capital available. Leveraging for the sake of leveraging these

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expensive sources of capital can in fact, reduce the benefits that accrue to the LI and
DAC.

3. EJ/Definition of LI and DACs.

a.	The EPA should use existing definitions. ICAST encourages the definitions to be that
families earning less than 80% of area median income (AMI) are considered LI and
families earning under 120% AMI is a standard definition of low to moderate income
(LMI) that many federal agencies such as HUD and IRS use, plus all State Housing
Finance Agencies that dole out the Low-Income Housing Tax Credits use currently. The
Team encourages EPA to include this definition so that the definition continues to
remain the same across the board. Disadvantaged communities (DACs) should be
defined as census tracts that are designated at an unfortunate disadvantage. EPA should
consider utilizing existing frameworks of DAC designation including the DOE's working
definition. Working with existing definitions of low income and DAC will allow for
leveraging of existing program funding and expertise. Without such alignment, further
administrative burdens will be placed on the EPA program, expending funds on
compliance issues that could be avoided. Native American Tribes should also receive
DAC designations so long as they meet basic income criteria.

b.	When qualifying LI communities or DACs or facilities such as MFAH properties, ICAST
emphasizes that there should be a focus on qualifying an entire community (e.g. Tribe)
or an entire MFAH property, rather than trying to qualify individual residents or tenants.
Most if not all current programs serving the LI or DAC qualify entire communities and
not place an administrative burden on the program to individually qualify residents
(which also places an unpleasant experience for the LI families to have to prove their LI
status again and again when they have done so previously to qualify for the various
subsidy programs). So, allowing a property owner or manager to certify their residents
are LI, based on the various subsidy programs they are qualified for and the fact that the
owner/manager has proof of their income should suffice for EPA. (E.g., The DOE's
weatherization assistance program (WAP) also qualifies entire MF properties if over 2/3
of the tenant's income qualify.)

info(a)icastusa.org | 866.590.4377 | www.icastusa.org


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From:	Linda Norris Waldt

To:	EFAB

Cc:	Frank Franciosi

Subject:	USCC Comment on Zero Emissions/Climate Change $27B Fund

Date:	Monday, December 5, 2022 5:18:49 PM

Attachments:	imaaeOOl.pna

To Whom it May Concern:

The US Composting Council is pleased to comment on the deployment of the upcoming
Inflation Reduction Act funding available for zero emissions and greenhouse gas reduction
projects.

The US Composting Council is a trade organization with 30 years of history as the voice of
the composting industry. We represent 900 organizations and 2,500 individuals, with a
mission of advancing compost manufacturing, compost utilization, and organics recycling to

benefit our members, society, and the environment.

We are pleased to see the $27 billion in funding receiving such careful consideration by the
Environmental Financial Advisory Board (EFAB) of the US Environmental Protection
Agency.

The compost industry is a vital player in local economies, bringing more small businesses,
green living wage positions, and orders to full local supply chains. We choose to call our raw
materials resources, rather than wastes, because they are turned into local materials that bring
numerous ecosystem benefits of drought and stormwater resilience; microbial activity; and
carbon sequestration.

Using REFED estimates (2016 report) of 52.4M tons of food waste disposed, with
13.8M being inedible, we estimate a need for (averaging at 50,000 TPY-a medium
size facility) 550-600 facilities to absorb this volume and divert from landfills. This
would sequester approximately 4.94M tons of GHG equivalents and provide
approximately 14,000 new jobs. The capex investment amount to build these
facilities would be more than $3 billion.

We urge you to:

1.	Call out Composting Facilities and Compost Users as eligible applicants for these
funds, due to the compelling reasons above.

2.	Provide these funds to eligible Green Banks who are systemically and with
intention providing loans to business such as compost manufacturers and others
who provide soil health and carbon sequestration services. This type of loan has
not been widely publicized or discussed in the green banking industry.

We look forward to hearing about a wide dispersal of these funds to attack carbon drawdown from

all angles.

Sincerely,

Frank Franciosi, Executive Director
ffranciosi@compostingcouncil.org
Linda Norris-Waldt, C.A.E. (she/her/hers)

Director, Advocacy, Corporate & Chapter Relations
US Composting Council
M: 240-315-8876

E: lnorriswaldt@comDostingcouncil.org

CAPTURING CARBON COMR§ST2023

RENEWING SOIL	January 24-27 Ontario, California


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December 8, 2022

Hon. Edward H. Chu,

Designated Federal Officer
Environmental Financial Advisory Board
U.S. Environmental Protection Agency

Hon. Kerry O'Neill,

Board Chair

Environmental Financial Advisory Board
U.S. Environmental Protection Agency

Via Electronic Mail - EPA Environmental Financial Advisory Board efabgepa.gov
RE: Greenhouse Gas Reduction Fund

Dear Mr. Chu, Ms. O'Neill, and Members of the U.S. Environmental Protection Agency's
Environmental Financial Advisory Board

Introduction

This letter is authored by three instrumentalities of the state of Vermont: the Vermont Housing Finance
Agency, Vermont Economic Development Authority, and Vermont Bond Bank. Together, operating as the
Vermont Public Finance Climate Collaborative, we are laying the groundwork to mobilize GHGRF dollars
in Vermont in the most effective, efficient, and inclusive ways possible.

Our common aim is to have the greatest possible impact on greenhouse gas (GHG) emissions reduction
in the shortest amount of time for the most people, with a particular focus on low-income households
and disadvantaged communities that have been traditionally underserved by private capital. With our
combined 150 years of experience working with partners around the state to facilitate equitable lending
in service of the public good, we are ready to receive and deploy funds.

We believe that a collaborative approach will be necessary nationwide to effectively deploy Greenhouse
Gas Reduction Fund (GHGRF) dollars under the existing time constraints. In Vermont, this vision involves
our state instrumentalities bringing our financial expertise and leveraging capacity in partnership with
the State of Vermont, the state's utilities, and a wide array of nonprofits and community action groups
who will bring the technical expertise to quickly commit funding to projects that meet GHG-reduction
goals.

Through this extensive statewide network, we have communicated our vision and gathered input from
many interested stakeholders across Vermont, and we intend to continue to include as many voices and
as many partners as possible moving forward. The suggestions below represent our shared perspective
on ways the GHGRF could be managed to best enable state collaboratives like ours to meet this moment
and transform our energy systems by innovating through cooperation to deliver critical financing to
those who most need it and those who will make best use of it.


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Suggestion One: Allow states to define disadvantaged communities

Each state has unique and specific challenges related to historically disadvantaged groups and
environmental impacts of climate change. In Vermont, as in rural communities nationwide, income
alone does not always tell the story of what defines a disadvantaged community. Costs related to
heating and transportation, combined with high housing costs, stress many rural populations that would
not otherwise be defined as disadvantaged. Permitting states to create a specific definition of a
disadvantaged community would allow project funders to most effectively, inclusively, and justly 1)
target the appropriate people and communities, 2) bring down otherwise insurmountable barriers to
participation, and 3) reduce GHG emissions while improving household and community well-being.

Suggestion Two: Reward collaboration that substantively reduces GHGs

Collaborative approaches across sectors (including residential, commercial, and governmental) will be
necessary to effectively reach as many disadvantaged households and communities as possible. This can
be accomplished by allowing for joint applications that provide a roadmap for reducing GHGs, aiding
disadvantaged communities, and reporting, while also allowing for separate awards to match the unique
needs of applicants and communities. EPA should encourage coalitions of organizations with technical
expertise in GHG-reduction projects, organizations experienced in financing and leveraging private
capital, and organizations with experience in serving disadvantaged groups, as these key capacities may
not currently be present in a single entity in all communities nationwide.

This approach would allow the EPA to not be overly dependent on any one recipient type while instead
focusing on program objectives and the underlying strategic plan. Furthermore, it would allow the EPA
to leverage the diverse capabilities of a variety of effective, established organizations starting on day
one in a way that would be particularly efficient for both the EPA and downstream indirect recipients.

Suggestion Three: Recognize the existing capacity of public lending instrumentalities

EPA has highlighted the importance of efficient use of funds and leveraging of capital in deploying the
GHGRF. To achieve these goals, EPA should prioritize public lending instrumentalities, for which finance
and compliance are core competencies. Public lending instrumentalities were originally created in
recognition that some public needs required an entity that could bridge the gap between the activities
of government and the private sector, a role that continues to be relevant today. Nationwide, public
lending instrumentalities have decades of experience in leveraging private capital through multiple
channels in both the private and public debt markets.

These instrumentalities are often called upon to implement policy-oriented programs in collaboration
with states and routinely manage their financing and their compliance with complex state and federal
programs. In Vermont, as in many other states, instrumentalities play a key role in the implementation
of EPA programs in particular - such as the Clean Water and Drinking Water State Revolving Funds,
which look a lot like the GHGRF could look.

Instrumentalities uniquely have an ability to act as a "lender intermediary plus," by which they can both
interface with states, regions, and sectors while also bringing the technical capacity to leverage GHGRF
dollars. Moreover, instrumentalities can uniquely participate in all aspects of the GHGRF funding sources
for maximum efficiency and leverage potential.


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Suggestion Four: Provide flexibility through "block grant" awards and floors for award amounts

Flexibility will be critical in allowing each state, region, and/or locality to shape programs that fit their
needs and their capacity for deploying funds. Block grant-type awards will provide the greatest flexibility
to leverage outside funds or develop unique products. However, each of the above applications will
have start-up costs that are fixed and largely divorced from the size of the community. As a result, a
floor on competitive awards should be incorporated.

Suggestion Five: Support disaggregated grants for technical assistance

Technical assistance support, in the form of grants, should be disaggregated from lending dollars, to
allow a broad system of providers to assist low-income and disadvantaged communities. EPA should
allow lending institutions to engage in cooperative agreements with technical providers to leverage their
experience in recommending appropriate energy efficiency measures in projects and their capacity to
measure impacts. Related assistance dollars should be prioritized for experienced providers.

Conclusion

As state instrumentalities created by state statute and driven by a mission to serve all stakeholders
statewide, advance public wellbeing, and leverage various forms of investment capital to meet market
gaps, we are excited about the opportunities created by the Greenhouse Gas Reduction Fund, and we
are grateful for the opportunity to share our perspective with EFAB.

We recognize that we are at an inflection point. A lot has to happen, and it has to happen quickly.
Effective, efficient coordination and execution are paramount. In a nutshell, we believe that the sort of
intrastate collaborative we are developing in Vermont has the capability and capacity to play a major
role in ushering in the greener, more inclusive future imagined by the GHGRF. Prioritizing collaboratives
like ours would enable comprehensive and efficient operations within states. At the same time, they
would also streamline operations at the national level by providing the EPA with appropriate state-level
partners able to both efficiently deploy capital and efficiently report impact.

In addition to the above suggestions, comments from the Vermont Public Finance Climate Collaborative
related to specific elements of the EFAB charge (as identified by the three workgroups) are shared below
as Appendix A.

Sincerely,

Vermont Municipal Bond Bank Vermont Economic Development Vermont Housing Finance
(d/b/a Vermont Bond Bank)	Authority	Agency


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Appendix A

I. Objectives

a.	Program Efficiency - Design Elements and Direct Recipient Type

The inherent tensions of the GHGRF identified by the working groups (between equity/access
and leverage, between program efficiency and environmental justice, between rapid
deployment and capacity building) and the related competing mandates will be best addressed
by entities familiar with the process of balancing the interests of diverse stakeholder groups and
prioritizing resources appropriately. State instrumentalities working collaboratively with both
public sector and private sector partners have been doing such balancing and prioritizing on a
daily basis for decades to implement programs like the SRF program. In terms of the recipient
types described in the workgroup slides presented Dec. 1, instrumentalities collaborating across
sectors and throughout a state (as we are doing with the Vermont Public Finance Climate
Collaborative) are uniquely able to leverage the strengths of the various recipient types
(intermediaries, collective actors, and states) and to work effectively with a national
organization to achieve the variety of desired objectives (leverage, additionality, capital
recycling, capacity building, and long-term operability).

EPA should consider maximum flexibility in the award of GHGRF funds through block grants to
ensure private sector leverage and high-risk positions for emerging technology and
underrepresented borrowers. Loan funds maintained by public facing or community lenders are
in most need of patient capital or equity. In the case of public lenders with experience in capital
markets, this allows for more opportunities to structure debt that is secured by both loans and
residual equity.

For example, Moody's Investors Service's Public Sector Pool Programs and Financings
Methodology allows broader flexibility on underlying credit quality of borrowers, while
achieving an investment grade rating, when loan pools can withstand a default tolerance of 20
percent or more.

Additionally, capitalizing GHGRF loan funds with equity dollars will provide greater opportunity
to create self-sustaining programs that respond to increasing costs over time.

b.	Program Efficiency - Complementary Programs and Structures

The SRF program provides a great template for how the GHGRF could function, and the entities
currently managing SRFs are ready to receive and deploy GHGRF dollars funds appropriately to
meet GHGRF objectives. The nature of the program, with state finance instrumentalities
collaborating with public and private entities with complementary expertise in financial
management, environmental matters, engineering matters, etc., is perfectly suited for the
objectives of the GHGRF. Additionally, the state departments, agencies, and instrumentalities
that collaborate to manage the SRF program have existing relationships throughout the value
chain (inc. the furthest upstream federal departments and the furthest downstream recipients
in the smallest, most rural, most disadvantaged communities). They also have the structures in


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place for effectively and efficiently prioritizing projects based on environmental value and
economic value.

c.	Environmental Justice - Definition and Support Considerations

We strongly encourage the EPA to allow states discretion and control in defining
"disadvantaged," so that those who best understand the historical inequalities and
contemporary challenges of our communities can define the areas most underserved. Local
knowledge of on the ground conditions cannot be replaced with one size fits all data
approaches.

Within states we know the local data that highlight unmet needs, especially in rural areas, that
can be masked by traditional U.S. Census Bureau data. There are many ways communities have
been historically marginalized based on their isolated geography, race, lack of access to capital,
or small scale that might continue to be overlooked if the EPA looks only at data available from
the Census Bureau.

Many federally administered programs such as those provided through the Small Business
Administration, US Treasury, and HUD allow for states to shape the deployment of capital based
on state definitions of "disadvantaged". The EPA's own DWSRF guidelines, for example, have
long allowed states to define "economically disadvantaged" communities. In all cases, these
locally influenced definitions that balance accountability and transparency with efficient funding
awards.

EPA should include rural communities in its consideration of disadvantaged communities. Rural
communities often lack access to financing, service providers and economies of scale that make
projects more feasible in more urban areas. Rural communities also face unique challenges,
including much higher transportation-related energy burdens, and are more likely to rely on
costly, high emissions producing fuel oil or propane.

While tools like the Climate and Economic Justice Screening Tool are impressive, the publicly
available, nationally consistent datasets do not scale down low enough to meet the most rural
communities that have been or will be hardest hit by climate change impacts and bear a
disproportionate energy burden.

d.	Environmental Justice-Technical and Financial Assistance

EPA should allow for technical and financial assistance to help municipalities and institutions
serving low-income and disadvantaged communities to incorporate financial strategies and
greenhouse gas reduction measures (in both renovations and construction of new replacement
facilities) in savvy ways that provide the greatest possible long-term cost reductions to the
greatest number of people in the community. This broadly includes many categories of work to
originate GHG-reduction projects. In particular, funding should be available to undertake project
aggregation work that can either result in overlooked projects and/or a higher cost of renewable
energy implementation.

Technical assistance support, in the form of grants, should be disaggregated from lending
dollars, to allow a broad system of providers to assist low-income and disadvantaged


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communities. This will help bridge the gap between the financial capacity and leveraging
experience of many lending institutions and the technical expertise needed to plan projects,
recommend appropriate projects, and measure impacts.

EPA should consider funding technical assistance on a statewide or regional basis for efficiencies
of scale and to ensure that all communities have access to technical resources.

e.	Financial Assistance - Tools to increase the accessibility of capital to low-income and
disadvantaged communities

An effective way to support low-income and disadvantaged communities with financial
assistance in a comprehensive way would be to support organizations like state
instrumentalities, which currently provide lending and financial assistance to communities
statewide, by helping them build the capacity to incorporate more robust (and more heavily
subsidized) GHGRF-related advisory services and capital planning services. Not only do state
instrumentalities have the capability to do the work, but they also have the relationships that
will allow for immediate, comprehensive outreach.

f.	Indicators of Success

State instrumentalities and partners have been employing rigorous standards and practices to
maintain accountability and ensure success for decades. To continue to build reporting
capability for an expanded menu of grant and loan programs, capacity building grants would be
helpful.

II. Program Structure (States/Municipalities/Tribes, National Green Bank/Fund, Collective Action
- Regional, Collective Action - Sectoral, Lender Intermediaries, Combination of Structures)

We formed the Vermont Public Finance Climate Collaborative with the guiding idea that rather
than stand up a brand-new organization to serve our state, we'd be better off innovating by
collaboration - and harnessing the capabilities, relationships, and resources of existing finance
instrumentalities and other partners through smart coordination and collective action. As noted
above, instrumentalities collaborating across sectors and throughout a state are uniquely able to
leverage the strengths of the various recipient types. We are intermediaries, collective actors,
and (as quasi-state agencies) effectively states; and we are ready to work with a national
organization to achieve the variety of desired outcomes (leverage, additionality, capital
recycling, capacity building, and long-term operability).

Looked at another way, we see the value of a combination of structures interwoven for effective
program implementation. And we envision state instrumentalities playing a lead role in
developing the right combinations for their respective states. One key to realizing that vision
efficiently will be an application and relationship management processes that welcomes
intrastate collaborations as both individual entities in some ways (e.g. by allowing for joint
applications) and as individuals in some ways (e.g. by allowing for different entities within the
intrastate collaborative to receive funds independently).

This approach would allow the EPA to not be overly dependent on any one recipient type while
instead focusing on program objectives and the underlying strategic plan. Furthermore, it would


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allow the EPA to leverage the diverse capabilities of a variety of effective, established
organizations starting on day one in a way that would be particularly efficient for both the EPA
and downstream indirect recipients.

Instrumentalities uniquely have an ability to act as a "lender intermediary plus/' by which they
can both interface with states, regions, and sectors while also bringing the technical capacity to
leverage GHGRF dollars. Moreover, instrumentalities can uniquely participate in all aspects of
the GHGRF funding sources for maximum efficiency and leverage potential.

III. Execution, Reporting, and Accountability

a.	Metrics for Success - From Application to Post-Implementation

As the workgroup has noted in the slides presented Dec. 1, a wide-ranging set of metrics will be
required, so intrastate collaborations among diverse organizations will be required to fully
address them. For all the different buckets of funding, it'll be essential that entities responsible
for deploying funds be capable of integrating sectors in their states.

b.	Mechanisms to ensure accountability to low-income and disadvantaged communities

State instrumentalities that were created by state statute with a specific mandate to deliver the
lowest cost of capital possible to communities (and to serve all communities statewide) are
already accountable to state governments for their level of success supporting communities
with appropriate financing. Furthermore, because they monitor their constituent communities
around the state on an ongoing basis and are intrinsically incentivized (as existing creditors) to
communities statewide, they are well positioned to be accountable to communities themselves.
To the extent that new, GHGRF-specific reporting and compliance procedures will need to be
implemented, state instrumentalities ought to be able to adapt and/or expand the nature of
their reporting processes with relative ease as it would be more of an incremental change or
adaptation to existing reporting procedures.

One size fits all solutions to addressing the needs of overlooked communities or populations
have a poor track record over the course of community development history. Instead,
collaborative arrangements of mission driven parties, each working to their comparative
advantage, have a stronger track record of success (e.g. Vermont's Weatherization at Scale
Coalition). This reality should be incorporated into the GHGRF program design by allowing
collaborations of organizations working together to achieve desired outcomes. This could be
driven by a formal multi-year strategic plan (in place of an intended use plan) that broadly
establishes how organizations will target sectors, regions, and deserving populations while
laying out responsibilities. It should not, however, use a traditional and static project
prioritization approach given on-going technological change and variability in the timeline of
project delivery. For oversight, an advisory committee, like the advisory board required of
community development entities (CDEs) and community development finance institutions
(CDFIs), could help to ensure that intrastate collaborations are meeting objectives - and
addressing ground level needs.

It should be noted that a collaboration among organizations could be an especially effective way
to help ensure equitable allocation of financial resources. By design, a collaborative approach


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requires each participant to define their strengths in furthering the collective goals. This could
include applications such as revolving loan programs through instrumentalities, permanent
working capital for pre-development with community non-profit partners, and grants to clean
energy development funds to identify and support emerging technologies.

c.	Mechanisms to ensure greenhouse gas emission reductions

Intrastate collaborations can and should include partners with experience and expertise in
greenhouse gas reduction technology implementation and related reporting.

d.	Mechanisms to ensure the leveraging and recycling of the grants

EPA should consider explicit authority for recipients to relend to other eligible recipients over
time to ensure a decentralized and on-going source of capitalization for green lenders as needs
change. If relevant and possible, EPA should provide flexibility on investment and reinvestment
terms of program funds to keep pace with inflation and generally respond appropriately to
changing market dynamics.

e.	How to ensure additionality of projects

The concept of additionality should be broadly conceived in the interest of ensuring significant
and on-going reductions in GHG. State instrumentalities and collaborating partners working on
the ground in communities throughout the state have intimate first-hand knowledge of the
market dynamics in the state - and a solid understanding of the barriers preventing
stakeholders from implementing more GHG reductions. Supporting state collaboratives like ours
with both loan capitalization and TA grant dollars would be an effective way to ensure that
communities are both made aware of opportunities they might have otherwise missed and
provided with both the appropriate TA and the appropriate financial product to help them take
those perhaps they wouldn't have taken otherwise.

In many cases, additionality may be achieved by lowering costs - thereby allowing borrowers to
implement more GHG reduction related capital or equipment. This seemingly straightforward
analysis may not always be obvious. For example, public schools typically have ready access to
debt finance but may prioritize less expensive upfront costs to meet community affordability
constraints. Increasing debt capacity through lower financing costs will reduce this tension and
result in more beneficial outcomes - and greater additionality.

f.	How to promote continued operability

The best way to promote continued operability is to support entities with 1) an established
history of successfully maintaining operations over several decades (like state instrumentalities),
2) a proven ability to manage revolving loan funds (as instrumentalities do with the SRF
program), and 3) a demonstrated aptitude for innovating through collaboration (which is likely
to be the most effective way to respond to eventualities and evolve effectively in the year
ahead).


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