U.S. Environmental Protection Agency
Environmental Financial Advisory Board
Public Meeting Minutes
October 18-19, 2022
Location:
Hyatt Regency Denver Tech Center
Denver, Colorado
and
Virtual Platform
Respectfully submitted by Edward H. Chu, EPA Designated Federal Officer
Certified as accurate by Kerry E. O'Neill, Chair, Environmental Financial Advisory Board
NOTE AND DISCLAIMER: The minutes that follow reflect a summary of remarks and conversation during the meeting.
Such ideas, suggestions, and deliberations do not necessarily reflect consensus advice from the Board. Formal advice
and recommendations may be found in the final advisory reports or letters prepared and transmitted to the agency
following the public meetings. Moreover, the Board advises that additional information sources be consulted in
cases where any concern may exist about statistics or any other information contained within the minutes.
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Contents
Purpose 1
Day 1 2
Welcome, Member Roll Call, and Review of Agenda 2
Welcome 2
Roll Call 2
EPA Region 8 Welcome 2
DFO News 4
EPA Office of Environmental Justice and External Civil Rights 4
EPA Senior Management Update 6
GREENHOUSE GAS REDUCTION FUND (GHGRF) PROPOSED CHARGE 7
Program Objectives 9
Program Structure 10
Execution, Reporting, and Accountability 10
Opportunity Zones Workgroup 11
Pollution Prevention Workgroup 12
Public Comment 12
Adjourn 15
Day 2 16
Welcome and Member Roll Call 16
Roll Call 16
GHGRF Charge Vote 16
Proposed Water Charges for Board Consideration 19
EFAB Chair's Corner 21
DFO Final Thoughts 23
Public Comment 23
Adjourn 24
Appendix 1. Federal Register Announcement 25
Appendix 2. Agenda 26
Appendix 3. EFAB Members, 2022 Roster 28
Appendix 4. Office of Environmental Justice and External Civil Rights Briefing 32
Appendix 5. Inflation Reduction Act Slides 35
Appendix 6. GHGRF slides 39
Appendix 7. GHGRF Proposed Charge 40
Appendix 8. GHGRF Statute Language 43
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Appendix 9. Opportunity Zone Letter 46
Appendix 10. Pollution Prevention Letter and Presentation 54
Appendix 11. Public Comments 67
Appendix 12. Final Approved GHGRF Charge 113
Appendix 13. Office of Water Proposed Charges 117
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Purpose
The U.S. Environmental Protection Agency (EPA) Financial Advisory Board (EFAB or Board) is an advisory
committee chartered under the Federal Advisory Committee Act (FACA) to provide advice and
recommendations to EPA on creative approaches to funding environmental programs, projects, and
activities. The purpose of the meeting was for EFAB to provide workgroup updates and work products,
consider possible future advisory topics, and receive updates on EPA activities.
The meeting was announced in the Federal Register (see appendix 1).
Please see appendix 2 for the agenda.
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Day 1
Welcome, Member Roll Call, and Review of Agenda
Welcome
Designated Federal Officer (DFO) Edward (Ed) H. Chu welcomed attendees and gave an overview of the
two-day meeting. He reminded participants that the meeting would be recorded and livestreamed and
that a meeting summary would be available within 90 days. He thanked those who had made the hybrid
event possible. He noted there were public commenters present and explained how others could submit
comment for the record.
Ed Chu turned the meeting over to the EFAB Chair, Kerry O'Neill, for the roll call (see appendix 3 for
EFAB member affiliations).
Roll Call
Ashley Allen Jones, present
Courtney L. Black, present
Steven J. Bonafonte, present
Angela Montoya Bricmont, present
Matthew T. Brown, present
Stacy Brown, present
Theodore (Ted) Chapman, present
Albert Cho, present
Janet Clements, present
Lori Collins, present
Zachary Davidson, present
Jeffrey R. Diehl, present
Sonja B. Favors, present
Phyllis R. Garcia, present
Eric Hangen, present
Edward Henifin, not present
Barry Hersh, not present
Craig Holland, present
EPA Region 8 Welcome
KC Becker, EPA Region 8 Regional Administrator
KC Becker welcomed attendees to EPA Region 8, which she described as the second largest of EPA's
regions by land area but the smallest in terms of population; it is very rural. She said there are 28 tribal
nations in the region, as well as significant poverty.
KC Becker said that climate change is having a major impact on the area, including extended wildfire
seasons and extreme weather events, such as a decline in snowpack and a scarcity of water.
Craig A. Hrinkevich, present
Margot Kane, present
Thomas Karol, present
George W. Kelly, present
Gwendolyn Keyes Fleming, not present
Cynthia Koehler, present
Colleen Kokas, not present
Joanne V. Landau, present
Lawrence Lujan, present
MaryAnna H. Peavey, present
Dennis A. Randolph, present
Eric Rothstein, present
Sanjiv Sinha, present
William Stannard, present
Marilyn Waite, present
David L. Wegner, present
Gwen Yamamoto Lau, present
David Zimmer, present
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She said that the Bipartisan Infrastructure Law (BIL) offers an unprecedented level of resources, and
although the opportunities are exciting, there are challenges. Providing real time technical assistance
(TA) to communities is a priority so that they can implement projects. Another challenge is having the
human resources and operations and maintenance (O&M) to apply for and then use the funding. With
the region's few technical experts, engineers, and contractors spread across a vast area, there are not
enough people who can apply for and implement opportunities offered by the BIL and other sources. In
addition, some communities find https://www.whitehouse.gov intimidating. Some groups say that it's
not worth the time and effort to apply for grants because even a simple mistake means they won't get
awarded. She said communities in her region want a simple process; they want federal agencies to
coordinate with one another. She said resources will make real differences in communities, and that the
BIL and Inflation Reduction Act (IRA) won't be the end, they will be the beginning.
Ed Chu invited questions from EFAB.
Lori Collins asked if there is a role for non-profit organizations (NPOs) to help bridge the gap between
government resources and community needs. KC Becker said there may be; NPOs may be grantees. It
depends on how statute is written and whether groups exist in particular areas.
George Kelly said asked about defining environmental justice (EJ) for rural areas, and he also asked
whether O&M can be built into performance-based contracting. KC Becker said that when they talk
about environmental justice in Region 8, it's about addressing the most underserved communities,
which looks differently than in urban areas. She pointed to EPA's EJ Screening Tool's initial inability to
capture issues that affect the area. The tool might look at lead-based pipes, for example, which may be
an issue in some communities in Denver. However, some rural areas have no upgraded water system at
all. She noted that adjustments have been made to the tools. Regarding the O&M issue, KC Becker said
she does not have an answer and would like to hear more from the group about how to address the
challenge.
Kerry O'Neill said the conversations over the next couple of days will be well informed by KC Becker's
on-the-ground perspective. KC Becker thanked the group for their focus and for giving their time to
think through the structural changes that they need to make to make resources valuable to whole
community.
MaryAnna Peavey asked how Region 8 going to ensure that TA gets to communities that need it and is
high-quality so that communities receive accurate information—particularly how it will work with State
Revolving Fund (SRF) programs. KC Becker replied that EPA has resources for TA, but EPA does not
control how states spend their SRF monies. She said that they are hiring experts to provide TA. She said
she was not sure how quality control will be done, but that a more immediate challenge is letting
communities know that the resources and TA are available to them.
Ted Chapman observed that co-op models (water and electricity) work in low-density areas and would
allow for additional funding opportunities, such as U.S. Department of Agriculture (USDA) funds and
private banks that serve co-ops. He asked if such an idea might work to increase funding for
infrastructure. KC Becker said that was an interesting idea she does not know much about.
Ashley Allen Jones said the model for delivering health and medical services to Native communities may
be something to piggyback on. KC Becker said that Indian Health Services (his) and EPA cooperate well
to make use of insufficient funding, but resources, staffing, and training are challenges. Keeping people
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on the reservation is a challenge. Reservations need staff and resources, as well as O&M. The clinical
model faces the same challenges.
Dennis Randolph noted the importance of developing capacity in organizations that stays with the
organization, as opposed to hiring consultants that depart. He also remarked on KC Becker's comment
that communities fear audits; he said it important to access and learn from reports. KC Becker said they
are facilitating conversations between local inspector generals (IGs) and states so that everyone
understands expectations. In rural states, the circuit rider concept is important. Associations can do
trainings, but in some rural areas there are unique systems tailored to a specific community, so when
the expert is gone, the person coming after them can't figure the system out. She said training is will
always be important, and she's excited about what Congress has done to help all these places achieve a
high quality of life.
DFO News
Ed Chu said that the spring EFAB meeting normally held in March will be moved to February to be
responsive to the accelerated timeframe of the Greenhouse Gas Reduction Fund (GHGRF) charge. That
charge will require three virtual meetings before the end of the year. These full Board meetings are
tentatively planned for November 17, December 1, and December 15. These meetings will be about an
hour or two at most. The date for the in-person February meeting has not yet been set.
Kerry O'Neill said that when the charge is discussed later, it will become clear why the full Board
meetings need to happen.
EPA Office of Environmental Justice and External Civil Rights
Marianne Engelman-Lado, OEJECR Acting Principal Deputy Assistant Administrator
Robin Morris Collin, Senior Advisor to the Administrator for Environmental Justice
Note: See appendix 4 for the presentation slides.
Marianne Engelman-Lado said that, consistent with administration's environmental justice priorities,
EPA has combined three existing offices (the External Civil Rights Compliance Office, the Conflict
Prevention and Resolution Center, and the Office of Environmental Justice) into a single new national
program: the Office of Environmental Justice and External Civil Rights (OEJECR). She said the President
will nominate a candidate for Assistant Administrator of this new office. In the meantime, Marianne
Engleman-Lado is principal deputy, Robin Morris Collis is Senior Advisor to the Administrator for
Environmental Justice, and Matthew Tejada and Lilian Dorka serve as deputies.
Marianne Engelman-Lado said that the reorganization reflects the priority of environmental justice and
the need for a high level of leadership and coordination. She said the $3 billion from IRA is just a part of
the monies that will be dispersed to low-income and disadvantaged communities. Transparency will also
be a priority. Staffing will increase, including 110 full time employees (FTEs) across EPA's 10 regions.
Hiring has already begun.
Marianne Engelman-Lado mentioned the OEJECR launch event was held in Warren County, North,
Carolina, which is considered to be the birthplace of the environmental justice movement. She said that
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the goal of the work is to protect the health and environment of all people across the country, and
ultimately, they will be judged on whether the make a difference on the ground.
In the webinar chat, Roger Jones asked: Will the Grants Management Division provide technical support
to small/rural communities? Robin Collin said yes, and there is a special program, the Thriving
Communities Technical Assistance Center, or TCTAC, to reach those communities. EPA teamed with
Department of Transportation (DOT), USDA, and Department of Energy (DOE) to ensure rural as well as
urban communities know how to access grant monies. The centers help people figure out what they're
eligible for and how to apply, and how to combine resources.
Sonja Favors asked in the chat: How will the establishment of this office work with state agencies?
Robin Collin said that regional offices have staff dedicated to environmental justice, now in sufficient
numbers to begin to work with people. Environmental justice organizations may want to start by
contacting their regional office, whose staff are in daily contact with state and local officials. Marianne
Engelman-Lado added that the Office of Policy, Partnerships, and Program Development will have
responsibility for partnership with the states. She also said that the Office of External Civil Rights
Compliance works with states all permitting entities are obligated to comply with civil rights laws. They
spend a lot of time trying to provide as much information to states as possible.
Dennis Randolph asked how EPA will deal with the issue that, by simply complying with civil rights laws,
states believe they've achieved environmental justice. In addition, he said he is concerned that
whenever there's talk of infrastructure development, National Environmental Policy Act (NEPA) is raised
as a delay. But NEPA is at the heart of environmental justice. He asked what support EPA will throw into
that battle. Marianne Engelman-Lado said NEPA and civil rights were the statutory foundation for
Executive Order (EO) 12898, and civil rights and environmental justice are being integrated into all EPA
practices.
Robin Collin said spending has urgent time constraints; $3 billion in block grants must be disbursed in
three years and a structure needs to be developed to ensure that funding gets into the right hands. She
said that it is a transformative amount of money for low-income and disadvantaged communities. Her
question for EFAB is: How do the funds get to these communities?
Eric Hangen asked to hear more about the climate justice block grant, such as the timeline for its rollout,
how community-based organizations will be defined, and how funds will work with other initiatives.
Robin Collin said that there are several pockets of money, and they want to put together funding that
makes sense and are within the limits of the law. She said climate justice block grants can't go to states;
they go to community-based organizations (CBOs) or CBO-state partnerships. Greenhouse gas funds,
however, can go to states. Robin Collin said her concern with funding partnerships is that they may not
be partnerships among equals; large capital organizations may fall back on familiar models. Marianne
Engelman-Lado added that OEJECR is charged with new responsibilities, and they are figuring it out as
they go along, ensuring they are consulting with the right people.
Sonja Favors said her concern is that communities may be an after-thought, and that without checks
and balances, communities will not benefit from the impact of these programs. Second, she noted that
communities do not have capacity apply for grants or even to know who to contact who can help them
apply for funding. She said many communities don't even know what questions to ask. She asked what is
changing in the model, particularly at the state level where these programs are managed. Marianne
Engelman-Lado agreed and replied that there are several ways of addressing the issues, such as by
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identifying and addressing specific barriers to resources. Another approach is to address capacity
building in communities, such as bookkeeping and grants stewardship. She said some grants will be for
capacity building.
David Wegner said it is imperative to make this new opportunity work. However, he said that
communities such as unincorporated colonias don't have staff to do anything. He asked how programs
will be assessed to ensure funds go to the right people, that funds are used appropriately, and that goals
are being met. Robin Collin agreed and said that the EPA Administrator conducted a "journey of justice,"
to experience what communities "look and smell like." His mission is to reach communities left behind.
She added that EPA now has more than 30 years of environmental justice experience and has listened to
the National Environmental Justice Advisory Council (NEJAC) to learn from and to be accountable to
communities. Third, she said, they have new tools that track where money is going by community.
Marianne Engelman-Lado emphasized that assessment is built into the Justice40 Initiatives and there
are other mechanisms, such as performance goals in EPA's strategic plan.
Robin Collin shared a link to EJScreen, EPA's Environmental Justice Screening ad Mapping Tool:
https://www.epa.gov/ejscreen
EPA Senior Management Update
Zealan Hoover, Senior Advisor to the EPA Administrator
Note: See appendix 5 for the presentation slides.
Zealan Hoover said that the IRA and BIL has grown EPA from a $9.5 billion to a $100 billion agency over
the next few years, offering a historic opportunity to reduce U.S. emissions by 40% by 2050. When
layered with other EPA, state, and local action, as well as with innovations from private sector, he said
he is confident the U.S. can reduce emissions by 50% overall by 2030.
He said that EPA will play a major role in reducing emissions in hard-to-abate sectors by scaling
programs such as carbon capture and decarbonizing the electric grid.
In addition to $41.5 billion of appropriated funds, there will be an additional $11.7 in new revenue
resulting from reinstating the Superfund Tax.
Zealan Hoover shared an overview of what is happening across the federal government related to the
IRA. He said the majority of funding (a projected $270 billion) is going to tax credits for the electricity
sector, clean manufacturing, electric vehicles, and so on. Regarding discretionary spending, EPA has
about $56 billion, followed by USDA ($47 billion) and DOE ($35 billion). About 15 other agencies
together receive about $24 billion.
About 24 EPA programs received funding, but about 98% of funding goes to six programs: Greenhouse
Gas Reduction Fund ($27 billion); Climate Pollution Reduction Grants ($5 billion); Environmental and
Climate Justice Bock Grants ($3 billion); grants to reduce air pollution at ports ($3 billion); Methane
Emissions Reduction Program ($1.5 billion); and Clean Heavy-Duty Vehicles ($1 billion).
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Zealan Hoover shared EPA's guiding principles for ensuring the monies are well spent and will impact
communities with the greatest need. He shared ways communities can engage with EPA, such as
through listening sessions and public meetings, and he encouraged individuals to visit
https://www.epa.gov/newsroom to sign up for emails and stay current on opportunities to provide
input.
Kerry O'Neill said that the amount of funding is stunning, and she wondered about prioritizing across
the agency. Zealan Hoover said that hiring is a priority to address implementation and management
challenges.
Dave Wegner asked how the program will be synergized across the agency at the policy level. Zealan
Hoover said there are a lot of deputies and coordination tools in place. For example, EPA has a Climate
Task Force and Deputies Committee to coordinate IRA programs, and there is a similar structure for BIL
initiatives. In addition, several interagency workgroups have been formed.
Ed Chu asked about accountability and outcome measurement. Regarding accountability, Zealan Hoover
said there is upfront program design and steps to proactively prevent fraud, such as requiring
application through a SAM.gov account, which has strong fraud prevention elements. There are also
reactive steps to take, such as quality control and fraud checks. The third line of defense is the Inspector
General, whose office has also received funding to support their activities. On measurement, he said
they are working with every program to define success and to find ways to measure that and establish
feedback loops for continual improvement. EPA has a Chief Evidence Officer, and programs are
developing logic models that tie their indicators to their theory of impact.
GREENHOUSE GAS REDUCTION FUND (GHGRF) PROPOSED CHARGE
Alejandra Nunez and Tim Profeta, EPA Office of Air and Radiation
Note: The presentation slides can be found in appendix 6.The charge questions are in appendix 7. The
statute language is in appendix 8.
Ed Chu said that, about two weeks prior, the Board created a subgroup to help EPA come up with a draft
charge that EPA could propose to the Board at large. He said that although Alejandra Nunez and Tim
Profeta are from EPA Office of Air and Radiation (OAR), for the purposes of this project, they represent
the Administrator's Office (AO), which requested a charge. He said that the current session is to make
sure the Board has a clear understanding of what the law says and what the charge questions mean. He
said tomorrow the group can fine-tune the charge and set a timeline.
Alejandra Nunez began by explaining that the GHGRF is a new program resulting from an amendment of
the Clean Air Act that provides $27 billion for EPA to award via competitive grants for technical and
financial assistance. The legislation has three streams. Funding stream 1 provides $7 billion; funding
stream 2 provides nearly $12 billion, and stream 3 provides $8 billion. While funding stream 1 is for
states, municipalities, tribal governments, and other eligible recipients, streams 2 and 3 exclude state,
local, and tribal governments and are for eligible recipients only.
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Funding stream 1 is awarded so that recipients can provide subgrants, loans, and other kinds of financial
and technical assistance. Streams 2 and 3 are for reducing greenhouse gas (GHG) and other forms of air
pollution. Investments in streams 2 and 3 can be direct or indirect.
Alejandra Nunez pointed out that EPA must begin making grants by February 12, 2023, and funds will
remain available to EPA only until September 30, 2024.
Tim Profeta added that there are the following five key ambitions from statute that will have to be
balanced:
1. Projects should reduce or avoid GHG emissions or other air pollution in partnership with the
private sector.
2. Projects should assist communities with reducing or avoiding GHG emissions or other forms of
air pollution.
3. Recipients of direct grants should prioritize investment in projects that would otherwise lack
access to financing.
4. Grantees should retain, manage, recycle, and monetize repayments and other revenue to
ensure continued operability.
5. Indirect investments should provide funding and technical assistance to establish entities that
provide financial assistance to qualified projects at the community level.
Ted Chapman asked whether there are local matches for stream 1 funding. He also wanted to know
whether there are not-to-exceed figures as a part of full project costs; in other words, does any language
say that grants cannot be more than, say, 49% of the total project, or could they be 100% of the
investment?
Alejandra Nunez said there is no such language in the statute; they had described the entire text.
Dave Wegner asked whether the five ambitions are nested together or are they individual? Tim Profeta
said he thinks of it as one strategy, but elements must be balanced. Dave Wegner asked if the vehicle in
mind for leveraging private capital was public-private partnerships or another mechanism. Alejandra
Nunez said that some concepts are very broad, and they would welcome recommendations from EFAB
on the matter. She said it would be ideal to provide Administer Regan with several options and the pros
and cons for each option.
Tim Profeta clarified that single strategy doesn't mean single program.
Craig Holland asked whether technical assistance is defined. If a community group wants to look at a
particular issue, what would they be able to do? Tim Profeta said the statute does not define TA, but
because this is a new section of the Clean Air Act, anything pertinent in the Act would apply.
George Kelly asked whether money spent with indirect investments have to follow the rules for direct
investment. He also asked for clarity on "other pollutants". Tim Profeta said the specific language in the
statute is not carried down to the level of indirect recipient.
Alejandra Nunez turned the discussion to the proposed charge and said that Administrator Regan would
like a robust set of options by mid-December, if feasible. She acknowledged that it's a very tight
timeframe.
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Ed Chu shared that the draft charge included input from Margot Kane, Craig Hrinkevich, Dennis
Randolph, Marilyn Waite, Jeff Diehl, George Kelly, Gwen Yamamoto Lau, Ashley Allen Jones, and Eric
Hangen.
Program Objectives
Alejandra Nunez said that the objectives are tied to the text of the statute. The first objective is
environmental justice and the definition of "low-income and disadvantaged communities". She went
over the three potential charge questions for this objective.
Tim Profeta walked through potential questions under the second objective, Program Efficiency.
Eric Rothstein asked whether there are templates to assess proposals or applications so that everyone is
clear about the information they need to provide and so that those assessing applications can compare
applicants appropriately. Alejandra Nunez said that doesn't exist yet, but EFAB could recommend ways
to do this. Eric Rothstein assured that the analytics are not difficult and simple tools could go a long way
toward offering clarity about what information needs to be submitted to support projects.
MaryAnna Peavey asked if there are existing programs in OAR that the program can leverage. She also
wanted to know if any funding will go to research and innovation. Alejandra Nunez said this program is
the first of its kind, and they are looking across funding pots and other initiatives to see what is there.
Part of the language is about filling gaps, and they would welcome input from EFAB on federal or state
examples. Ashley Allen Jones said that in addition to federal and state examples, EFAB could look at
government grants, foundation grants, community development financial institutions (CDFIs), green
banks, innovation funds, private equity funds, blended funds, and public-private partnerships, to name
a few. Feedback could include the program, a description of how it's done, and pros and cons. Tim
Profeta said that other information could include how programs could be leveraged or partnered with.
Eric Hangen asked if there any "first among equals" as EFAB takes goals into account. Alejandra Nunez
said the Administrator will make a decision, and pros and cons will help because it's not possible to max
out everything.
Craig Holland observed that "leverage" often refers to matching funds at the project level; however, for
funds to be truly impactful, we should be creating new institutions with long-term operating objectives.
He encouraged the Board to take a broad definition. He asked whether EPA could compensate people in
disadvantaged communities for taking part in focus groups or listening sessions.
Alejandra Nunez said EPA has $30 million to administer the program, available until 2031. Tim Profeta
said we don't need to think of these programs as stovepipes; there may be synergies. EPA is not going to
be giving direct grants, but grantees can support TA as a part of the grant.
Ed Chu asked what happens after monies are disbursed. There can be a big difference in money
allocated for administering grants.
Dave Wegner commented that we don't have the metrics on disenfranchised communities figured out.
He asked what the ultimate goal is—to build community capacity to address the issue, or something
else? It would help the Board know EPA's ultimate goal so they can approach the charge with that in
mind. Alejandra Nunez suggested the Board could help them prioritize.
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Tim Profeta said that EPA is coming to the Board very early in the process and they are embracing the
Board's diverse expertise to help frame and narrow the question rather than having it narrowed already.
George Kelly asked if the Board should look at the charge questions relative to the statutory constraints.
He also wanted to know how they should think about potentially duplicative funding. Tim Profeta
replied yes, it needs to be within the statute. To George Kelly's second question, Tim Profeta said the
Board should consider this program in the context of other programs. If the Board thinks things are well
financed already, then that makes a difference.
Program Structure
There are three parts to this bucket of the draft charge. Alejandra Nunez walked Board members
through the first, eligible recipients. Questions here concern who would be eligible entities and what
deployment thresholds the Board recommends, as well as what entities would best enable funds to
reach disadvantaged communities.
Tim Profeta discussed part 2 of the bucket, eligible projects, and the three categories of questions.
These concern the Board's advice on priority markets; factors about each of the major markets, and
advisable contracting vehicles.
Finally, Alejandra Nunez introduced questions concerning the structure of funding, such as program
design requirements. She said EPA wants to create a robust, yet realistic program.
Regarding performance-based contracting, Eric Hangen commented that low-income communities need
pre-development grants. Tim Profeta iterated that EPA is looking for pros and cons, so the observation
fits.
Ed Chu explained that the standard operating procedure (SOP) is to form an exploratory group to work
with EPA to develop a draft proposal, and many of the questions in the draft charge were proposed by
EFAB members in the exploratory group. He urged the group to consider whether EPA should be asking
the group the questions and also whether EFAB can answer them. Are these the right types of questions
we ought to be asking, what expertise do you need, and can you take this on?
Margot Kane asked why loans and debt were included as permissible use of funds. Alejandra Nunez said
it is in the statute. Margot Kane asked why loans were called out rather than equity investments?
Alejandra Nunez did not know.
George Kelly said that he had raised the issue of performance-based contracting, and the group could
define the term. If you don't have it, however, then what are the efficiencies of deploying the money?
He said he was unclear about how it would work. For example, would EPA put out a template contract?
Alejandra Nunez said EPA does not have the specific ideas yet and iterated that they want to hear from
EFAB.
Execution, Reporting, and Accountability
Tim Profeta introduced the third and final section on implementation and oversight. A key question
concerns how to quickly start up and keep the program moving.
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Alejandra Nunez walked EFAB through the other two issues: requirements and governance
mechanisms.
Tim Profeta added there is a balance to strike between the need for oversight of taxpayer money with
desire not to make the process onerous to grantees.
Ed Chu said that under BIL funding, there will be new Environmental Finance Centers (EFCs) set up. Are
there other programs under EPA that could complement this?
Ellen Tarquinio with the Water Finance Center said they will make a big announcement in a couple of
weeks. Currently there are 10 Environmental Finance Centers around the country, and there is a lot of
focus on environmental justice communities. Regionally-focused EFCs will look at how they can use BIL
money in disadvantaged communities. In addition, there will be national EFCs focused on filling gaps.
Alejandra Nunez referred back to the issue of loans and iterated that this is an EPA grant program, and
grants can be used for subgrants, loans, etc., but it won't be an EPA loan program. She also reminded
EFAB of EPA's Justice40 Initiative commitments.
Gwen Yamamoto Lau asked if EFAB can assume that compliance and reporting will continue through
2031. Alejandra Nunez replied yes.
Kerry O'Neill asked the Board to consider forming three subgroups organized along the three major
buckets discussed today. The co-chairs would meet about twice a week through mid-December and
check in with the full Board at the scheduled times. She also asked the Board to consider how to
organize work, and she said she will ask for agreement and for volunteers tomorrow.
Ed Chu said the Administration is asking a very important question early in the game. He said the
balancing requirements means there is no black and white, and the agency wants options. He said there
is a lot of work to do in the next few weeks and this is an unprecedented request for recommendations;
EFAB has an opportunity to make important recommendations that will shape the program.
Tim Profeta thanked the group and said the funding presents a tremendous opportunity not just for EPA
and EFAB, but for the country to make transformational change on issues we care about.
Opportunity Zones Workgroup
Margot Kane and Bill Stannard, Opportunity Zones Workgroup Co-Chairs
Note: The OZ letter is in appendix 9.
After brief opening remarks and discussion, David Zimmer moved to approve the letter with minor
editorial changes, as needed. Lori Collins seconded. A vote was taken by a show of hands; the motion
passed.
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Pollution Prevention Workgroup
Ashley Allen Jones, Pollution Prevention Workgroup Chair
Note: The Pollution Prevention (P2) letter is appendix 10.
Workgroup members and the EPA client, Alison Kinn Bennett, made brief remarks. Lori Collins asked the
workgroup to elaborate on the process for defining a priority business segment alluded to in the first
recommendation. Ashley Allen Jones said that the P2 program has seven priority industries sectors so
there are opportunities geographically and by sector to pull together resources and execute on
programs.
Eric Hangen moved to approve the letter with minor editorial changes, as needed. Craig Holland
seconded.
With a show of hands, the motion passed.
Public Comment
Note: Written public comments are in appendix 11.
Dave Harris, Colorado Clean Energy Fund
Thank you. Good afternoon, everyone. And thank you for the opportunity to speak today. My name is
Dave Harris. I'm the Chief Operating Officer for the Colorado Clean Energy Fund. We are a nonprofit,
climate-first organization that is set out to help the state of Colorado achieve its climate goals. We're
fundamentally designed to fill the funding gaps that may be preventing clean energy projects from
happening in the state. And we do this through the green bank model. I'm representing Colorado Clean
Energy Fund today, but I'm also here on behalf of the American Green Bank Consortium. As some of you
know, this is a collective of over 20 green banks, capital providers, developers, and other clean energy
supporters who are working together to expand and accelerate the innovative, clean energy investment
happening across the country. I'm here to speak directly to $27 billion dollars appropriated to the
Greenhouse Gas Reduction Fund. This initiative signifies a historic moment in our country in the fight to
combat climate change. The organizations within the American Green Bank Consortium, including our
own Colorado Clean Energy Fund, are uniquely positioned to readily deploy the $27 billion. It's our hope
that this Board will provide its recommendation to the EPA to capitalize a National Green Bank. This is
an entity that will operate as a single nonprofit financial institution and will allow for many organizations
to benefit from $27 billion and in turn, allow organizations like ours to mobilize and leverage a much
larger pool of private capital. As Kevin to my left will share here shortly, and as he articulated in his
written statement submitted to this Board on October 11, "capitalizing is single entity that is a National
Green Bank is essential to meeting the stated purpose of the Greenhouse Gas Reduction Fund and is key
to ensuring the rapid deployment of funds to communities across the country, in particular low-income
and disadvantaged communities." While the time today won't allow for examples across the entire
country, I can at least speak to a couple of shovel-ready programs here in Colorado, where funds could
be applied rapidly to benefit disadvantaged communities. We've a program involving a significant
number of cooperative electric utilities that will serve homeowners and renters in disadvantaged
communities and provide them access to solar and other energy efficiency measures. We could readily
deploy between $75 and $100 million through this program, and affordable housing, we have a number
of projects queued up across the rural parts of our state, and disadvantaged, pollution-vulnerable
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communities and metro regions to provide for access to energy efficient equipment, and renewable
energy. We can readily deploy over $50 million to those projects in the near term. We have equipment
replacement programs, community solar, transportation, electrification, many other programs that are
queued up, that could also apply funds quickly. These are just a small handful of examples. But there's
no shortage of demand. To meet this national demand, we would again like to recommend the
capitalization of a single National Green Bank to streamline the process of accessing and deploying the
funds outlined in Greenhouse Gas Reduction Fund.
Kevin S. Minoli, Alston & Bird LLP
Good afternoon. And thank you, thank you for letting me sit in today; I've been the guy in the back of
the room there all afternoon and early in the morning. You know, this morning, Robin Morris Collin
talked about this Greenhouse Gas Reduction Fund as a transformational amount of money. And it really
is; from a climate change perspective, it is going to do more to fight climate change than any other
investment we've made. And from a community perspective, it has the potential—if we do it right—to
bring communities forward that we have always been leaving behind over the course of the last few
decades of this work. And so it can seem overwhelming and the charge questions that you heard today,
there's a lot of them, and there's a number of different nuances to it. My ask is that you think about the
possibility that maybe it's not as complicated as it seems like it could be. Congress laid out a pretty clear
vision for how to make this work and how to do it on a faster timeframe than it would be if we did it in
the same way that EPA has approached grants in the past. And that's to capitalize a single national
entity, who has been obligated to spend that money and spend those resources that they're given to
then spread that money around and to invest that money into other entities that can either happen, you
know, from EPA, giving grants to all those entities, which will take a long time, or it can happen more
rapidly if it's given to a centralized, nongovernmental institution that can be governed by the terms and
conditions of the grant that can control what they do with it. And they can do that a lot more rapidly. If
they are in fact, given that money at the outset. It's also important because I ask you to be open to the
possibility that it's the better and more effective way to reach the communities that this money is
intended to reach. You know, we've heard about the concern that a lot of low- and middle-income
environmental justice communities maybe do not have the capacity to file grant applications right away.
But there is going to be a number of communities that are not going to have that capacity in 18 months,
when this money has to have been spent. There's a shelf-life for this money, and there's going to be a
lot of communities that are still not going to be ready to file that application. And the beauty is that
Congress actually recognized that when they wrote this law, and gave the power and the responsibility
of this entity that's intended to be the National Green Bank, to then work with those entities that are
not yet ready to invest in them before they would ever be able to submit a successful application to a
federal grant program, to invest in them, to work with them, to establish them, and to give them money
long before they could ever get it another way. And so there's a lot of power to this. And so it seems like
giving it to one entity is going to be exclusionary, but I asked you to think about the possibility that's
actually the best way to expand the pie, expand the number of people who are going to get access to
this money, and to do it more rapidly than we otherwise could.
Adam Kent, Natural Resources Defense Council
Good afternoon and thanks for the opportunity to provide comments. My name is Adam Kent, and I'm
the Senior Advisor in NRDC's Green Finance Center, where we focus on the critical role public and
private finance can play in the shift to a greener and more prosperous and equitable economy. We've
submitted more detailed comments in writing, so during this time, I'm just going to limit our comments
to the first two buckets of EFAB's charge. First, in regards to program objectives, we strongly encourage
EPA to prioritize low-income and disadvantaged communities and households throughout this program.
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Focusing on these sectors, EPA can help accelerate investments and communities that the private
market does not broadly serve. And it has the potential not only to deliver more equitable
environmental and economic outcomes, but it can also fulfill key additionally, market transformation,
and market creation principles. Beyond the dollars focused on the place-based low-income and
disadvantaged communities, EPA should structure and award the unrestricted $12 billion portion with a
priority towards low-income access. We recommend considering this $12 billion dollar pot as people-
based funds following similar Justice40 and additionality principles. Finally, EPA should prioritize
community engagement and outreach in both the development of the application and in the awarding
of the funds. In our written comments, we've provided some potential routes for EPA to consider.
Ultimately, any awardee should demonstrate a proven track record and commitment to working
alongside low-income and disadvantaged communities, as well as environmental and energy justice
organizations. In regard to the second charge around program structure, when thinking about funds
structuring, eligible recipients, and projects, we encourage EPA to consider four key deployment
objectives: speed, equity, flexibility, and collaboration. To meet those objectives, the funds should
primarily route clean energy investments through existing mission-driven institutions and platforms.
These entities should have a demonstrated track record of successfully deploying capital in low-income
and disadvantaged communities, either directly or through their networks. These institutions and
platforms such as CDFIs, housing finance authorities (HFAs), public housing authorities (PHAs),
established green banks, as well as associations of community-based lenders can all deploy capital
quickly to projects in areas that have thus far been overlooked in our country's clean energy transition.
With access to fund capital and technical assistance, lenders can adjust and complement existing loan
products and significantly leverage outside private capital. EPA should define clear impact standards and
metrics for awardees, and awardees should prioritize meaningful improvements to the lived experience
of marginalized and disadvantaged communities through their investments. Also, EPA should afford
flexibility to established institutions regarding how financing products are designed, how customers are
solicited, and how funds are ultimately deployed in projects and technology. Finally, EPA should
encourage established institutions to partner and collaborate on applications. The Greenhouse Gas
Reduction Fund will be most successful in accelerating on equitable, clean energy transformation if
institutions with diverse sets of expertise, geographic focus, and sector experience can work together to
efficiently and equitably deploy capital. Thanks so much for your time and consideration.
Gregory M. Baird, Aging Water Infrastructure
Okay, thank you so much. And I hope everybody can really recognize your time, resources, and expertise
on the EFAB panel. You're looking for solutions for very, very complex issues. There's not always a right
answer. I serve on a number of committees, American Water Works Association, Water Environment
Federation, American Public Works Association, American Society of Civil Engineers, and the
Government Finance Officers Association. And I've seen a lot of obstacles of good utility management
and cost efficiencies, especially when they focus on, say, water and sewer utilities. Now, EFAB, as an
advisory committee, has the ability to be able to address some of the statutory obstacles that are very
limiting for a lot of the EJ and Justice40 programs. Utilities face many financial obstacles, many of which
are the operational expenditure (OpEx) operations and maintenance side of the budget. The EPA is
funding most of the time is only focused on capital expenditure (CapEx) the brick-and-mortar capital
projects. So here we're dealing with the 50-year-old Clean Water Act, but we're over 20-year-old
Treasury legacy wording of construction of publicly owned treatment plants and other things that are
really hampering some of the drinking water and the clean water SRF funding. So, first of all, I would like
to say, can the EPA and State Revolving Funds broadly be applied to, say, statistical analysis system (SAS)
type of products, many of which are directly tied to immediate capital projects, but digital technologies
must be funded and applied to address aging infrastructure, workforce issues, sustainability, and
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affordability issues. So some of that old legacy language in the statutes is really hindering our ability to
be able to leverage artificial intelligence, machine learning, digital twins, and many capital platforms
that are packaged as annual subscriptions, that are really requiring OpEx, that operating budget
planning and approvals. And I'm seeing a higher cost for utilities, by 20% to 30%, of having something
that could be easily done as a SAS program that now needs to get put in as a capital project. And the
very small utilities, they don't even have that capacity. So, it influences capacity building, as well as
increasing cost by always trying to turn everything into a brick-and-mortar capital project. So that's why
I do not see that we're really able to push out and address effectively some of this funding down to the
very small field crews where we have some of these different technologies that they could apply. When
I was a chief financial officer (CFO) for Colorado's third largest water utility—water sewer, storm—I
found that it was actually easier to do a capital project versus an operational budget because there was
something else that needed to get into that line to be able to justify that money. Some of the other
comments that I had is building capacity by adding FTE is focused in these different areas, as well as
even a regional water sewer shed co-ops to be able to have another mechanism for states to be able to
get groups together to be able to share some of their knowledge and information. So, I do have a
number of different comments, but that's just really at a high level is I would plead with the EFAB to be
able to make a recommendation to change some of that statutory language to allow O&M money and
technology funding to be able to get and help some of these low-income communities and smaller
utilities that we are focused on. Thank you.
Adjourn
Ed Chu adjourned the meeting.
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Day 2
Welcome and Member Roll Call
Ed Chu opened the meeting and welcomed members back.
Kerry O'Neill conducted the roll call and reviewed the agenda.
Roll Call
Albert Cho, present
Angela Montoya Bricmont, present
Ashley Allen Jones, present
Barry Hersh, not present
Colleen Kokas, not present
Courtney L. Black, present
Craig A. Hrinkevich, present
Craig Holland, present
Cynthia Koehler, present
David L. Wegner, present
David Zimmer, present
Dennis A. Randolph, present
Edward Henifin, not present
Eric Hangen, present
Eric Rothstein, present
George W. Kelly, present
Gwen Yamamoto Lau, present
Gwendolyn Keyes Fleming, present
Janet Clements, present
Jeffrey R. Diehl, present
Joanne V. Landau, present
Lawrence Lujan, present
Lori Collins, present
Margot Kane, present
Marilyn Waite, present
MaryAnna H. Peavey, present
Matthew T. Brown, present
Phyllis R. Garcia, present
Sanjiv Sinha, present
Sonja B. Favors, present
Stacy Brown, present
Steven J. Bonafonte, present
Theodore Chapman, present
Thomas Karol, present
William Stannard, present
Zachary Davidson, not present
Kerry O'Neill said goals for the day were to vote on charges and form three workgroups. Ed Chu added
that there will be permission to proceed with work. As a matter of process, charge questions have
evolved as working groups have delved into them, and the Board has accepted this as a practice.
Kerry O'Neill said the workgroups will meet weekly and may have questions for the full Board or
recommended modifications to the charge to propose at the November 17 meeting. The second
meeting will be December 1, with the final product for this phase ready for the full Board's review on
Dec. 15.
GHGRF Charge Vote
Note: The approved charge is in appendix 12.
Eric Hangen amended a statement he made yesterday about item B3, program structure; he said he
likes the wording. Regarding B2, he asked whether literature reviews and case studies could inform all
the elements. Kerry O'Neill said yes, research is requested throughout.
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Ed Chu said support will be available as needed so that workgroups can get the work done. He
mentioned P2's workgroup model for bringing in outside experts, and he noted that Alejandra Nunez
and Tim Profeta will be closely engaged.
Stacy Brown asked for clarification on whether projects that would assist small businesses in upgrades
needed to abate hazardous air pollution could be considered an eligible project under the charge.
Alejandra Nunez said the definition of qualified projects is very broad, and she pointed to pollutants
identified in Section 108 of the Clean Air Act. She noted that the language refers to GHG and other
pollution; disadvantaged communities are overburdened by both.
Ed Chu asked for clarification about whether the relationship between GHG and other pollutants is an
"and" or an "or." Alejandra Nunez said it's about GHG and other pollutants.
George Kelly asked whether the questions should be analyzed according to the separate funding
streams. Tim Profeta thought that might be the best approach, although he recommended avoiding a
"stovepipe" approach that might prevent seeing potential relationships among them. Kerry O'Neill
suggested adding a clarification sentence at the end of the second paragraph, so the Board is clear
about what it is voting on, and Ed Chu invited George Kelly to draft a sentence to add.
Sanjiv Sinha observed that the 18-month timeframe results in an average distribution rate of $15 million
per day. He said most politicians speak about it as an upcoming national green bank. He asked if the
Board should focus on the green bank potential and asked how EPA feels about that focus.
In the chat, Marilyn Waite wrote: "Yes, and that's nothing if we can get it going through our community
focused depository institutions, including credit unions and new fintechs."
Alejandra Nunez said EPA doesn't have a specific way of implementing in mind; that's what they're
seeking guidance on. Tim Profeta said EPA is asking for the best counsel with pros and cons on how EPA
should proceed.
Marilyn Waite said that indirect recipients can include depository institution. She said the U.S. credit
union capacity is about $2 trillion, community banks $4 trillion, and minority depository institutions
$300 billion, so the amount is peanuts when compared to capacity of community-focused lenders.
Craig Holland suggested amending the approach section to include potential beneficiaries in
roundtables and to compensate people for their time. Ed Chu said he would take that comment back to
EPA.
Jeff Diehl asked whether "commitment of funds" meant a commitment from EPA to recipients, or
commitment by recipients to projects. Alejandra Nunez said it means funds are available for EPA to
award by that date. Jeff Diehl said, then, it refers to a commitment from EPA to recipients. He said part
of the consideration would then be how would those funds be drawn down by recipients.
Angela Bricmont asked EPA what their ideal deliverable would be. Alejandra Nunez said they would like
options with pros and cons, an analysis of options. She said, given that there are only two months,
they'd like to make the deliverable doable. EPA is not looking for a large written report. Kerry O'Neill
clarified that EPA is not looking for the program design, but for input so EPA can design the program.
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Craig Hrinkevich asked for guidance about administrative costs: Are monies supposed to come back to
direct and indirect recipients? Is it a revolving fund, or a "one and done"?
Tim Profeta said the language is instructions for the grantee on how they should use the funds, and it
refers to continued operability. Alejandra Nunez said it also depends on how financial assistance is
defined - grants vs. loans, for example.
Craig Hrinkevich asked whether, in the draft charge, IB (program efficiency) and 2A (eligible recipients)
should be switched for the purposes of the workgroup tasks. Alejandra Nunez said this is an area where
there are common elements. Kerry O'Neill said there is overlap on all three, so workgroup leaders
would coordinate weekly to address overlapping issues.
Referring to the "Approach" section, Ashley Allen Jones said that the first step would be a
comprehensive literature review. About convening groups, she said it had been suggested EFAB talk to
organizations that give grants or loans. The next level would be talking to potential recipients. She asked
if they have time and capacity for that work. There is a range of incentives to get people at the table,
and perhaps they could talk to people who have done those types of convenings already. She also asked
for clarity on whether the scope is the whole country or specific tracts. She said clarifications on the
approach will help ensure the workgroups are not spread too wide in a limited time. Ed Chu said
workgroups will determine their scope as a part of the workgroup process.
Ashley Allen Jones clarified that she was the one who had added specific focus to the approach. Her
intent was not to exclude other groups, but to strategically offer EPA what they don't necessarily already
have. She didn't want it to appear that they would only talk to private equity people. Eric Hangen said
starting with a literature review is a great idea. A lot of research has been done with beneficiary groups
and there is a treasure trove of conversations to access. He said he would like to broaden the language
in the approach.
Kerry O'Neill asked if the current language is okay or whether it should be amended. Eric Hangen
suggested amending it. Ed Chu suggested those who wanted edits could draft them during the break.
Regarding the literature review, Marilyn Waite cautioned against anchoring bias, since there will be a
lot more literature on CDFIs than on minority depository institutions (MDIs).
After the break, Alejandra Nunez walked the group through the edits. A sentence was added to the
preamble acknowledging the possibility that feedback on the charge questions may need to be
differentiated according to funding stream. At end of document, the group proposed draft language for
the approach. Several edits were suggested until the group agreed on language.
Lori Collins moved to approve the charge; Jeff Diehl suggested a process that allowed workgroups to
address questions as they see fit. Craig Holland seconded Jeff's motion.
Following a voice vote, Kerry O'Neill said motion passed.
Kerry O'Neill called for volunteers to engage in each of three groups; she was looking for a maximum of
five members for each group who can commit to multiple engagements each week. After members
stated their preferences, Kerry O'Neill said she will work with Ed Chu to get back to group with their
assignments and discuss leadership so groups can get going at once.
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Alejandra Nunez said EPA will be very intentional about engaging with communities.
Proposed Water Charges for Board Consideration
Bruno Pigott, EPA Office of Water Deputy Assistant Administrator
With Michael Deane, EPA Clean Water SRF Chief, Raffael Stein, EPA Water Infrastructure Division
Director, Ellen Tarquinio, EPA Water Infrastructure and Resilience Finance Center Acting Chief, and
Joshua Amaris, EPA Clean Water SRF
Note: The proposed charges are in appendix 13.
Bruno Pigottt said the BIL is an unprecedented opportunity to support communities around the country
with drinking water, wastewater, and stormwater infrastructure, and they are working hard to make
funding available in an equitable way. He said that currently they are conducting outreach and
engagement with SRF partners and are seeing initial BIL capitalization grant awards. Michael Deane and
Raffael Stein are providing oversight guidance for reviewing intended use plans (lUPs) to ensure that
disadvantaged communities are not left out. They are proving trainings to states and regions and setting
up workgroups to establish best practices. He said EPA is trying to think of TA in a new way and is
piloting an intensive approach to providing direct TA through a Community Solutions team. Finally, he
said, EFC grants will be supercharged by the new funding.
Bruno Pigott reviewed the nine charges proposed by the Office of Water. Proposed charges 1-3 focus on
the SRF program. The first is the use of SRF additional subsidies to target assistance to neighborhoods or
households in need. This charge involves mechanisms for ensuring services for neighborhoods or
households experiencing financial hardship from increased rates needed to fund infrastructure projects.
The second proposed charge is effective use of water infrastructure investment. Bruno Pigott said EPA is
asking EFAB to research and make recommendations about the current suite of metrics that exist and an
analysis on conducting fiduciary oversight and whether there are other ways to analyze or gauge
whether a program is meeting that requirement. The third proposed charge is improving the efficiency
of implementing EPA funding. A letter sent to Administrator Reagan asked EPA to work with states to
make the process of getting funding from EPA to a community more efficient. EPA is asking EFAB to
research challenges communities experience in receiving EPA funding as well as ways to address those
challenges. EFAB could also propose ways to recognize states that make improvements in reaching
historically underserved communities, such as an awards program, or some other way to spur the
competition.
Proposed charges 4 and 5 concern TA as a driver in protecting water quality, providing clean water, and
protecting public health. Bruno Pigott said these charges will help communities get the TA they need to
be able to take advantage of monies available through BIL funding. He said they are looking to build
long-term capacity for EPA to provide TA. Proposed charge 5 concerns households with decentralized
systems to be able to maintain their system after installation. EPA hopes EFAB can advise on
homeowner maintenance ideas.
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Proposed charges 6-8 are on affordability. Bruno Pigott said proposed charge 6 is on effective customer
assistance programs for communities that are paying back loans. Proposed charge 7 asks for EFAB
strategies to help EPA develop a needs assessment survey on customer assistance programs that work.
Proposed charge 8 deals with rate structuring to mitigate the impact of rate hikes due to infrastructure
projects.
The final proposed charge concerns municipal bond indebtedness. Bruno Pigott said that many
communities are burdened with paying for environmental debt. Small communities in particular may
have to incur debt to pay for environmental mandates. EPA seeks EFAB guidance on finance
mechanisms that could ease the burden for smaller communities.
Kerry O'Neill invited questions from the Board.
Albert Cho asked, of the 9, which are of greatest interest to EPA? In the view of EPA leadership, which
would have the greatest impact if solved? Bruno Pigott replied he is mostly interested in the questions
relating to TA. Michael Deane highlighted those addressing needs for decentralized communities.
Raffael Stein said he would like to do something transformational in water space with BIL funding. Ellen
Tarquinio named charges relating to affordability programs, customer assistance, and also proposed
charge 7. Joshua Amaris said he was most interested in proposed charges 1 and 2.
Cynthia Koehler said that the non-governmental organization (NGO) community is thinking of these
same questions. She said some of these charges could be explored together, such as the TA piece and
affordability. She suggested that EFAB together with EPA can think about an opportunity to tackle a few
of these together. Ed Chu said that, per the standard process, an exploratory workgroup will work with
EPA to discuss priorities, as well as combining issues. The exploratory group will deliberate on charge
questions and propose final charge questions to the Board.
David Zimmer asked whether TA components included issues such as governance, management, and
finance. Bruno Pigott said yes, communities need holistic TA.
Bill Stannard said a key element of the Wastewater Construction Grant Program was ensuring that user
charge systems adequately funded maintenance well into the future. Also, regarding affordability, he
mentioned the Low-Income Household Water Assistance Program (LIHWAP) and wondered if that would
be a part of the analysis. Ellen Tarquinio said EPA has worked with the Department of Health and
Human Services (HHS) and talked with them about challenges. It wasn't explicitly listed but if It should
be part of another charge, the exploratory committee could add it. HHS could be brought into the
discussion. In addition to LIHWAP, there are many other programs to consider.
Raffael Stein said there is interest in Congress in creating a permanent program for EPA, and EPA will
come to the Board if that ever comes about, but in the meantime, EPA has immediate concerns.
Regarding TA, David Zimmer said a lot of people go right to engineering, but we see a need for TA well
before that point. The proposed charge needs to be able to include community education, outreach, and
planning. He said we need to think broad. Regarding proposed charge 1, he said one way his state puts
aside money for TA to disadvantaged communities is through collecting fees beyond what they can
collect from administering the SRF. These can add up to significant monies that can be used to support
communities.
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Eric Rothstein offered support for any charge that has to do with affordability. He suggested that there
is an opportunity to rethink what we mean by water service. He said we think of it as drops of water
through water meters; we don't define it for purposes of cost service analysis or in terms of protecting
public health. A discussion of any of the affordability issues would benefit from rethinking our freedom
to act in support of low-income customers.
On proposed charge 7, Ted Chapman said there used to be a regular needs assessment about every four
years for drinking water; will this be apart from the regular needs assessment? Ellen Tarquinio said it
would be separate; she added that it is currently authorized but not appropriated, so we wouldn't want
to move forward before it is funded.
Dave Wegner noted that the first paragraph of the charge proposal mentioned the Water Infrastructure
Finance and Innovation Act (WIFIA) and asked if it could be brought into the proposed charges. Joshua
Amaris said yes, EPA is open to hearing about that. Dave Wegner then raised the issue of synergies,
such as with Indian Health Services, and asked if EFAB should assume they should try to leverage BIL
funds with other programs to achieve TA goals, in particular. Ellen Tarquinio said yes, and the
exploratory workgroup could look into leveraging other agencies and funding pots. Dave Wegner said
that disenfranchised communities are not always urban, and he noted the requirements associated with
Indian water settlements and how water is used on reservations and pueblos as defined by Congress. He
said we should not ignore this disenfranchised part of water distribution culture.
Given the urgency of the GHGRF charge, Kerry O'Neill suggested the formation of an exploratory
workgroup could discuss key issues and report outs at the meeting planned for early 2023. She asked if
the Board felt comfortable with this.
Albert Cho asked when EPA expected deliverables on the charge. Ellen Tarquinio said they are open to
different kinds of products and approaches, and there are no hard deliverables or timelines. They are
open to deliverables such as webinars and to integrative deliverables.
Bill Stannard moved to establish an exploratory workgroup; Angela Bricmont seconded.
The Board voted in favor.
Kerry O'Neill called for volunteers, and many members indicated interest. Ed Chu recommended that he
and Kerry O'Neill discuss to make sure the workgroup doesn't exceed quorum and recommended a
smaller exploratory group.
Ellen Tarquinio thanked EFAB for voting to form an exploratory workgroup and said it will be very
valuable to EPA.
EFAB Chair's Corner
Kerry O'Neill, EFAB Chair
Kerry O'Neill reviewed with the Board the interest areas mentioned at the spring meeting. These were:
• Community capacity building models given unprecedented funding levels;
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• Environmental risk and cost of capital/Environmental, Social, and Governance (ESG);
• Farm, Ranch, and Rural Communities Federal Advisory Committee (FRRCC);
• Water affordability;
• Expanding SRF capacity; and,
• Lead service line replacement.
Kerry O'Neill said that community capacity building is being explored as a part of the water charge
proposal and the GHGRF.
Dennis Randolph said the two new charges just voted on will cover a couple years. Ed Chu said that
these were indeed ideas mentioned before the two new charges.
Ashley Allen Jones said the issue of TA was too important to drop off the list entirely. Ed Chu said it's
important when the Board identifies gaps rather than have EPA drive all the Board's efforts. Craig
Holland said it is difficult to move a charge forward without an EPA client and the approach has not had
a lot of success in the past. Kerry O'Neill said they will keep it on the list and stay alert for a potential
EPA client.
Dave Wegner asked Craig Holland if his experience was that they should have found an EPA client
before moving forward. Craig Holland said yes, because the agency was not ready to receive the
recommendations and didn't have people or processes in place to use the information.
Ed Chu reminded members of the SOP the received as a part of their onboarding materials that explains
how EFAB would work on new charges.
Kerry O'Neill moved the discussion to environmental risk and cost of capital, which has not found an
internal client. Ted Chapman said the issue is hard to define, and perhaps it can be taken up later.
Regarding the Farm, Ranch, and Rural Communities issue, Ed Chu said that Janet McCabe had
encouraged EFAB to collaborate with other FACAs. Andrew Wynne said the opportunity was broached
during the March meeting. The FRRCC advisory board was going through a membership drive and may
still be getting members onboard. He suggested keeping the issue on the back burner for now.
Ed Chu said there is a ready-made client. Kerry O'Neill observed a lot of overlap on agriculture projects
with the GHGRF charge.
Regarding water affordability, Kerry O'Neill said the issue is covered by new exploratory workgroup.
On expanding SRF capacity, MaryAnna Peavey said it could be incorporated into other charges the
Board is looking at, such as charges on utilization rates. Kerry O'Neill said there was interest in
nontraditional uses of the SRF, so maybe keep it on the list for now. David Zimmer cautioned about
using SRF in untraditional ways. He said each state administers the program differently and there are a
lot of hoops to jump through before executing dollars received.
Albert Cho referred to an earlier discussion on GHG emissions and asked if there is a role for existing
revolving loan instruments to support decarbonization of water infrastructure funded by infrastructure
money. Next, is there a role for sponsorship in affordability agenda? Kerry O'Neill said Albert Cho's
second concern would be addressed by the exploratory workgroup. She asked Albert Cho to email her
some notes.
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 23
Regarding the last topic of lead service line replacement. Cynthia Koehler recommended keeping it on
the list and said a lot has changed since it was first suggested, such as dedicated funds coming out of the
acts. She recommended having a briefing but not moving forward with it now.
DFO Final Thoughts
Ed Chu said they are looking into dates for an in-person meeting at the end of January at EPA. They are
trying to do this because the GHGRF has a 180-day window for EPA to come up with a plan. In case the
December 15 deadline slips, they want to reserve time in January so the Board can approve
recommendations or approve them in parts.
He repeated the dates of the upcoming virtual meetings:
November 17 1-3 pm Eastern
December 1 1-3 pm Eastern
December 15 1-5 Eastern
Kerry O'Neill said the January meeting would be a time for the water exploratory workgroup to check in.
Ted Chapman asked if the White House Environmental Justice Advisory Committee's (WHEJAC) Climate
Resilience Workgroup could report out at the January meeting. Ed Chu said yes, as well as a lead pipe
briefing and an update on SRF.
Public Comment
Note: Written public comments are in appendix 11.
There were two registered commenters for the day, but only one was present.
Andrew Kessler, president, New York Green Bank
Good afternoon. I'm Andrew Kessler, president of New York Green Bank. And thank you so much for the
opportunity to comment today. The New York Green Bank is a billion-dollar New York state sponsored
Investment Fund. We operate as a division of the New York State Energy Research and Development
Authority, NYSERDA, and we're the largest Green Bank in the United States. Our mission is to work with
the private sector to transform financing markets in ways that accelerate clean energy investments on
an equitable basis and in support of New York state's climate goals. Since we opened for business in
2013, we have advanced this mission by making $1.8 billion of investments in more than 100
transactions and asset classes that are critical to the clean energy transition. Our team works every day
to make investments that are market-based, replicable, and scalable, and then we find ways to create
secondary markets for those investments. And since New York passed historic climate law in 2019, we
are committed to ensuring that at least 35%, with a goal of 40% of our investments benefit
disadvantaged communities across New York State. Given New York Green Bank's investment record in
New York, we welcome the EPA's Greenhouse Gas Reduction Fund as a historic opportunity to further
accelerate clean energy investments across the United States. We also welcome the Greenhouse Gas
Fund's emphasis on low-income and disadvantaged communities, which is directly in line with our
commitment to support these communities across New York state. And finally, we welcome and
-------
Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 24
strongly support the Environmental Financial Advisory Board's proposed charge to the exploratory
workgroup for the Greenhouse Gas Fund. We encourage EPA, EFAB, and the workgroup to run a
transparent, consultative process that solicits feedback on the design and the implementation of the
fund from the broader stakeholder community. As a general principle, we encourage competitive
allocation methodologies that are designed to identify recipients that can mobilize capital at scale,
especially in low-income and disadvantaged communities. Such recipients should have a demonstrated
ability to leverage private-sector capital and access secondary markets. Finally, they should have strong
internal controls and compliance programs to ensure responsible stewardship of public funds. For the
zero-admission technologies fund, it will be critical to have a reallocation mechanism that ensures that
funds are not left unused, but instead can be reallocated to other recipients who are able to maximize
the use of these funds. We would also suggest that the fund's compliance requirements can avoid
undue administrative burdens on recipients, while still of course ensuring robust oversight and
protection of public dollars. In particular, we suggest that the states that already have established
criteria for disadvantaged communities be able to use such criteria to satisfy EPA requirements. We look
forward to receiving further guidance in the weeks ahead from the EPA, EFAB, and the workgroup. We
stand ready to engage collaboratively with all market actors to advance this effort. In the meantime, we
thank EPA leadership and staff as well as EFAB and the workgroup for their important work ahead on
making the Greenhouse Gas Fund a success. Thank you very much for the opportunity to make these
remarks.
Adjourn
Ed Chu adjourned the meeting.
-------
Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 |
Appendix 1. Federal Register Announcement
Federal Register/Vol. 87, No. 189/Friday, September 30, 2022/Notices 59415
to a collection of information unless it
displays a currently valid OMB control
number.
DATES: Additional comments may be
submitted on or before October 31,
2022.
ADDRESSES: Submit your comments,
referencing Docket ID No. EPA—HQ-
OLEM—2018—0767, online using
www.regulations.gov (our preferred
method), or by mail to: RCRA Docket
(282 2T), U.S. Environmental Protection
Agency, 1200 Pennsylvania Avenue
NW, Washington, DC 20460. The EPA's
policy is that all comments received
will be included in the public docket
without change, including any personal
information provided, unless the
comment includes profanity, threats,
information claimed to be Confidential
Business Information (CBI), or other
information whose disclosure is
restricted by statute.
Submit written comments and
recommendations to OMB for the
proposed information collection within
30 days of publication of this notice to
www.reginfo.gov/public/do/PRAMain.
Find this particular information
collection by selecting "Currently under
30-day Review—Open for Public
Comments" or by using the search
function.
FOR FURTHER INFORMATION CONTACT:
Craig Dufficy, Materials Recovery and
Waste Management Division, Office of
Resource Conservation and Recovery,
Mail Code 5304T, Environmental
Protection Agency, 1200 Pennsylvania
Ave. NW, Washington, DC 20460;
telephone number: (202) 566-0537; fax
number: (202) 250-8572; email address:
d ufficy. craig@epa.gov.
SUPPLEMENTARY INFORMATION:
Supporting documents, which explain
in detail the information that the EPA
will be collecting, are available in the
public docket for this ICR. The docket
can be viewed online at
www.regulations.gov. Materials can also
be viewed at the Reading Room located
at the EPA Docket Center, WJC West
Building, Room 3334,1301 Constitution
Avenue NW, Washington, DC 20004.
The Docket Center's hours of operations
are 8:30 a.m.—4:30 p.m., Monday-Friday
(except Federal Holidays). The
telephone number for the Docket Center
is 202-566-1744.
Abstract: In order to effectively
implement and enforce final changes to
40 CFR part 258 on a State level,
owners/operators of municipal solid
waste landfills have to comply with the
final reporting and recordkeeping
requirements. Respondents include
owners or operators of new municipal
solid waste landfills (MSWLFs), existing
MSWLFs, and lateral expansions of
existing MSWLFs. The respondents, in
complying with 40 CFR part 258, are
required to record information in the
facility operating record, pursuant to
§ 258.29, as it becomes available. The
operating record must be supplied to the
State as requested until the end of the
post-closure care period of the MSWLF.
The information collected will be used
by the State Director to confirm owner
or operator compliance with the
regulations under Part 258. These
owners or operators could include
Federal, State, and local governments,
and private waste management
companies. Facilities in NAICS codes
9221, 5622, 3252, 3251 and 3253 may be
affected by this rule.
Form Numbers: None.
Respondents/affected entities:
Recordkeeping and Reporting—Solid
Waste Disposal Facilities and Practices.
Respondent's obligation to respond:
The respondents, in complying with 40
CFR part 258, are required to record
information in the facility operating
record, pursuant to § 258.29, as it
becomes available.
Estimated number of respondents:
3,800.
Frequency of response: On occasion.
Total estimated burden: 211,262
hours (per year). Burden is defined at 5
CFR 1320.03(b).
Total estimated cost: $17,286,006 (per
year), which includes $15,075,153 in
annualized labor and $2,210,853 in
annualized capital or operation &
maintenance costs.
Changes in the Estimates: There is an
increase of 25,819 hours in the total
estimated burden currently identified in
the OMB Inventory of Approved ICR
Burdens. On this ICR, one-time burdens
from the cumulative reporting
requirements of the Research,
Development & Demonstration rule
under 40 CFR part 258.4.
Courtney Kerwin,
Director, Regulatory Support Division.
[FR Doc. 2022-21238 Filed 9-29-22; 8:45 am]
BILLING CODE 6560-50-P
ENVIRONMENTAL PROTECTION
AGENCY
[FRL-10233-01-OW]
Notice of Public Meeting of the
Environmental Financial Advisory
Board (EFAB) With Webcast
AGENCY: Environmental Protection
Agency (EPA).
ACTION: Notice of public EFAB meeting.
SUMMARY: The Environmental Protection
Agency (EPA) announces a public
meeting with a webcast of the
Environmental Financial Advisory
Board (EFAB). The meeting will be
shared in real-time via webcast and
public comments may be provided in
writing in advance or virtually via
webcast. Please see SUPPLEMENTARY
INFORMATION for further details. The
purpose of the meeting will be for the
EFAB to provide workgroup updates
and work products, consider possible
future advisory topics, and receive
updates on EPA activities. The meeting
will be conducted in a hybrid format of
in-person and virtual via webcast.
DATES: The meeting will be held on
October 18, 2022, from 9 a.m. to 4 p.m.
Mountain Time and October 19, 2022,
from 9 a.m. to 4 p.m. Mountain Time.
ADDRESSES:
In-Person: Hyatt Regency Denver Tech
Center, 7800 East Tufts Avenue, Denver,
CO 80237.
Webcast: Information to access the
webcast will be provided upon
registration in advance of the meeting.
FOR FURTHER INFORMATION CONTACT: Any
member of the public who wants
information about the meeting may
contact Tara Johnson via telephone/
voicemail at (202) 564-6186 or email to
efab@epa.gov. General information
concerning the EFAB is available at
www. epa .gov/waterfinancecen ter/efab.
SUPPLEMENTARY INFORMATION:
Background: The EFAB is an EPA
advisory committee chartered under the
Federal Advisory Committee Act
(FACA), 5 U.S.C. App. 2, to provide
advice and recommendations to EPA on
innovative approaches to funding
environmental programs, projects, and
activities. Administrative support for
the EFAB is provided by the Water
Infrastructure and Resiliency Finance
Center within EPA's Office of Water.
Pursuant to FACA and EPA policy,
notice is hereby given that the EFAB
will hold a public meeting with a
webcast for the following purposes:
(1) Provide workgroup updates and
work products;
(2) Discuss potential future EFAB
charges; and
(3) Receive briefings on
environmental finance topics from
invited speakers from EPA.
Registration for the Meeting: To
register for the meeting, please visit
www. epa .gov/waterfinancecen ter/
efab# meeting. Interested persons who
wish to attend the meeting must register
by October 6, 2022, to attend in person
or by October 13, 2022, to attend via
webcast. Pre-registration is strongly
encouraged. In the event the in-person
-------
Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 26
Appendix 2. Agenda
U.S. Environmental Protection Agency
Environmental Financial Advisory Board
Draft Agenda
Public Meeting
Hyatt Regency Denver Tech Center
and Virtual Platform
October 18-19, 2022
9:00-4:00 pm Mountain Time
Day One - October 18
9:00 am
WELCOME, MEMBER ROLL CALL, AND REVIEW OF AGENDA
• Edward H. Chu, EFAB Designated Federal Officer
• Kerry O'Neill, EFAB Chair
9:30 am
EPA REGION 8 WELCOME*
• KC Becker, EPA Region 8 Regional Administrator
10:00 am
DFO NEWS
• Edward H. Chu, EFAB Designated Federal Officer
10:30 am
EPA OFFICE OF ENVIRONMENTAL JUSTICE AND EXTERNAL CIVIL RIGHT5*
• Marianne Engelman-Lado, OEJECR Acting Principal Deputy Assistant
Administrator
• Robin Morris Collin, Senior Advisor to the Administrator for Environmental Justice
11:15 am
EPA SENIOR MANAGEMENT UPDATE*
• Zealan Hoover, Senior Advisor to the EPA Administrator
12:00 pm LUNCH ON YOUR OWN
1:00 pm
GREENHOUSE GAS REDUCTION FUND (GHGRF) PROPOSED CHARGE*
• Alejandra Nunez and Timothy Profeta, EPA Office of Air and Radiation
2:45 pm BREAK
3:00 pm
OPPORTUNITY ZONES WORKGROUP
• Margot Kane and Bill Stannard, Opportunity Zones Workgroup Co-Chairs
3:15 pm
POLLUTION PREVENTION WORKGROUP
• Ashley Allen Jones, Pollution Prevention Workgroup Chair
3:45 pm
PUBLIC COMMENT
• Registered Speakers
4:00 pm
ADJOURN
^Discussion and Q&A with the Board will take place after each presentation
-------
Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 27
EPA Environmental Financial Advisory Board
October 2022 Meeting Draft Agenda
Page 2
Day Two - October 19
9:00 am
WELCOME & MEMBER ROLL CALL
~ Edward H. Chu, EFAB Designated Federal Officer
9:30 am
GHGRF CHARGE DISCUSSION AND VOTE
12:00 pm LUNCH ON YOUR OWN
1:00 pm
PROPOSED WATER CHARGES FOR BOARD CONSIDERATION*
• Bruno Pigott, Office of Water Deputy Assistant Administrator
2:00 pm BREAK
2:15 pm
BOARD DISCUSSION ON PROPOSED WATER CHARGES
3:15 pm
EFAB CHAIR'S CORNER
• Kerry O'Neill, EFAB Chair
3:40 pm
PUBUC COMMENT
• Registered Speakers
3:55 pm
DFO FINAL THOUGHTS
• Edward H. Chu, EFAB Designated Federal Officer
4:00 pm
ADJOURN
'Discussion and Q&A with the Board will take place after each guest presentation
-------
Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 28
Appendix 3. EFAB Members, 2022 Roster
Ed Chu, Designated Federal Officer
Tara Johnson, Alternate Designated Federal Officer
NAME
AFFILIATION
LOCATION
PERSPECTIVE
REPRESENTED
CURRENT
TERM
ORIGINAL
APPOINTMEN
T DATE
Kerry O'Neill,
EFAB Chair
Chief Executive Officer,
Inclusive Prosperity
Capital, Inc.
Stamford,
Connecticut
(EPA Region 1)
Environmental/
Non-
governmental
Organization
July 20, 2021-
June 15, 2023
July 28, 2020
Ashley Allen Jones
Founder and Chief
Executive Officer, i2
Capital
Washington,
District of Columbia
(EPA Region 3)
Business -
Financial Services
June 21, 2022-
June 15, 2024
July 28, 2020
Courtney L Black
Deputy Finance
Director, City of Kent
Kent, Washington
(EPA Region 10)
State/Local
Government
June 21, 2022-
June 15, 2025
June 21, 2022
Steven J. Bonafonte
Assistant District
Counsel, The
Metropolitan District
of Hartford
Hartford,
Connecticut
(EPA Region 1)
Legal
June 21, 2022-
June 15, 2024
July 28, 2020
Angela Montoya
Bricmont
Chief Finance Officer,
Denver Water
Denver, Colorado
(EPA Region 8)
State/Local
Government
June 21, 2022-
June 15, 2024
July 28, 2020
Matthew T. Brown
Chief Financial Officer
and EVP, Finance and
Procurement, District
of Columbia Water and
Sewer Authority
Washington,
District of Columbia
(EPA Region 3)
State/Local
Government
June 21, 2022-
June 15, 2025
June 21, 2022
Stacy Brown
President and Chief
Executive Officer,
Freberg
Environmental, Inc.
Denver, Colorado
(EPA Region 8)
Business -
Financial Services
June 21, 2022-
June 15, 2024
July 28, 2020
Theodore Chapman
Investment Banking
Analyst, Hilltop
Securities, Inc.
Dallas, Texas
(EPA Region 6)
Business -
Financial Services
July 28, 2020-
June 15, 2023
September 25,
2017
Albert Cho
Senior Vice President,
Chief Strategy and
Digital Officer, Xylem,
Inc.
Washington,
District of Columbia
(EPA Region 3)
Business -
Industry
June 21, 2022-
June 15, 2025
June 21, 2022
Janet Clements
President and
Founder, One Water
Econ
Loveland, Colorado
(EPA Region 8)
Business -
Industry
June 21, 2022-
June 15, 2025
June 21, 2022
Lori Collins
Owner and Principal,
Collins Climate
Consulting
Charlotte, North
Carolina
(EPA Region 4)
Business -
Industry
June 21, 2022-
June 15, 2025
June 21, 2022
Zachary Davidson
Director of
Underwriting,
Ecosystem Investment
Partners
Baltimore,
Maryland
(EPA Region 3)
Business -
Financial Services
June 21, 2022-
June 15, 2024
July 28, 2020
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 29
NAME
AFFILIATION
LOCATION
PERSPECTIVE
REPRESENTED
CURRENT
TERM
ORIGINAL
APPOINTMEN
T DATE
Jeffrey R. Diehl
Chief Executive Officer,
Providence, Rhode
State/Local
June 21, 2022-
July 28, 2020
Rhode Island
Island
Government
June 15, 2024
Infrastructure Bank
(EPA Region 1)
Sonja B. Favors
Industrial Hazardous
Montgomery,
State/Local
June 21, 2022-
July 28, 2020
Waste Branch Chief,
Alabama
Government
June 15, 2024
Alabama Department
on Environmental
(EPA Region 4)
Management
Phyllis R. Garcia
Treasurer, San Antonio
San Antonio, Texas
State/Local
June 21, 2022-
July 28, 2020
Water
(EPA Region 6)
Government
June 15, 2024
System
Eric Hangen
Senior Research
Fellow, Center for
Impact Finance, Carsey
School of Public Policy,
University of New
Hampshire
Danby, Vermont
(EPA Region 1)
Academic
June 21, 2022-
June 15, 2025
June 21, 2022
Edward Henifin
General Manager
Virginia Beach,
State/Local
July 28, 2020-
June 15, 2018
(retired), Hampton
Virginia
Government
June 15, 2023
Roads Sanitation
(EPA Region 3)
District
Barry Hersh
Clinical Professor and
MSRED Chair, School
of Professional Studies,
New York University
New York, New
York (EPA Region 2)
Academic
June 21, 2022-
June 15, 2025
June 21, 2022
Craig Holland
Senior Director of
Arlington, Virginia
Environmental/
July 28, 2020-
September 25,
Urban Investments,
The Nature
(EPA Region 3)
Non-
governmental
June 15, 2023
2017
Conservancy
Organization
Craig A. Hrinkevich
Public Finance Team -
Red Bank, New
Business -
June 21, 2022-
July 28, 2020
New Jersey Managing
Jersey
Financial Services
June 15, 2024
Director, Robert W.
(EPA Region 2)
Baird & Company, Inc.
Margot Kane
Chief Investment
Philadelphia,
Business -
June 21, 2022-
July 28, 2020
Officer, Spring Point
Pennsylvania
Financial Services
June 15, 2024
Partners LLC
(EPA Region 3)
Thomas Karol
General Counsel
Washington,
Legal
June 21, 2022-
June 21, 2022
Federal, National
District of Columbia
June 15, 2025
Association of Mutual
(EPA Region 3)
Insurance Companies
George W. Kelly
Global Client Strategy
Denver, Colorado
Business -
June 21, 2022-
July 28, 2020
Officer,
(EPA Region 8)
Financial
June 15, 2024
Earth Recovery
Services
Partners
Gwendolyn Keyes
Partner, DLA Piper LLP
Washington,
Legal
June 21, 2022-
June 21, 2022
Fleming
District of Columbia
(EPA Region 3)
June 15, 2025
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 30
NAME
AFFILIATION
LOCATION
PERSPECTIVE
REPRESENTED
CURRENT
TERM
ORIGINAL
APPOINTMEN
T DATE
Cynthia Koehler
Executive Director,
San Francisco,
Environmental/
June 21, 2022-
July 28, 2020
WaterNow Alliance
California
(EPA Region 9)
Non-
governmental
Organization
June 15, 2024
Colleen Kokas
Executive Vice
Lahaska,
Business -
June 21, 2022-
July 28, 2020
President,
Environmental Liability
Pennsylvania
(EPA Region 3)
Industry
June 15, 2024
Transfer,
Inc.
Joanne V. Landau
President and Chief
Croton-on-Hudson,
Business -
June 21, 2022-
June 21, 2022
Investment Officer,
New York
Industry
June 15, 2025
Kurtsam Realty Corp.
(EPA Region 2)
Lawrence Lujan
Executive Director,
Taos, New Mexico
Tribal
June 21, 2022-
June 21, 2022
Taos Public
(EPA Region 6)
Government
June 15, 2025
Utility Service
MaryAnna H. Peavey
Grants and Loans
Boise, Idaho
State/Local
June 21, 2022-
July 28, 2020
Bureau Supervisory,
Idaho Department
(EPA Region 10)
Government
June 15, 2024
of Environmental
Quality
Dennis A. Randolph
City Traffic Engineer,
Kalamazoo,
State/Local
June 21, 2022-
July 28, 2020
City of Kalamazoo
Michigan
Government
June 15, 2024
Public Services
(EPA Region 5)
Department
Eric Rothstein
Principal, Galardi
Montreat, North
Business -
July 28, 2020-
September 25,
Rothstein Group
Carolina
(EPA Region 4)
Financial Services
June 15, 2023
2017
Sanjiv Sinha
Chief Sustainability
Ann Arbor,
Business -
June 21, 2022-
June 21, 2022
Officer, Environmental
Consulting &
Technology, Inc.
Michigan
(EPA Region 5)
Industry
June 15, 2025
William Stannard
Chairman of the Board,
RAFTELIS
Kansas City,
Missouri
(EPA Region 7)
Business -
Financial Services
July 28, 2020-
June 15, 2023
June 15, 2018
Marilyn Waite
Managing Director,
Washington,
Business -
June 21, 2022-
June 21, 2022
Climate Finance Fund
District of Columbia
(EPA Region 3)
Financial Services
June 15, 2025
David L. Wegner
Senior Consultant on
Tucson, Arizona
Business -
June 21, 2022-
June 21, 2022
Water, Climate
Change, and Asset Risk
(EPA Region 9)
Industry
June 15, 2025
Assessment, Water
Science and
Technology Board,
National Academy of
Sciences
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 31
NAME
AFFILIATION
LOCATION
PERSPECTIVE
REPRESENTED
CURRENT
TERM
ORIGINAL
APPOINTMEN
T DATE
Gwen Yamamoto Lau
Executive Director,
Honolulu, Hawaii
State/Local
June 21, 2022-
June 21, 2022
Hawaii Green
(EPA Region 9)
Government
June 15, 2025
Infrastructure Authority
David Zimmer
Executive Director, New
Lawrenceville, New
State/Local
July 28, 2020-
June 15, 2018
Jersey Infrastructure
Jersey
Government
June 15, 2023
Bank
(EPA Region 2)
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 32
Appendix 4. Office of Environmental Justice and External Civil Rights Briefing
&EPA
Office of Environmental Justice
and External Civil Rights
Briefing
The Reorganization
• EPA has combined three existing offices into a single new National
Program Office; the Office of Environmental Justice, the External Civil
Rights Compliance Office, and the Conflict Prevention and Resolution
Center. The new office is the Office of Environmental Justice and
External Civil Rights Compliance (OEJECR).
• A Senate-confirmed Assistant Administrator to lead this office.
• OEJECR will elevate environmental justice and civil rights at EPA and
put it on the same playing field as the Office of Air, Office of Water,
and other national programs.
U.S. Environmental Protection Agency
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 33
U.S. Environmental Protection Agency
-------
Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 34
Staffing Highlights
Environmental Justice
• In FY2021, EPA supported 36 FTE in the EJ Program, With the $100M appropriation for FY2022,
EPA will support 206 FTE in the EJ Program—an increase of 170 FTE.
• 84 FTE in the HQ environmental justice program.
• 12 FTE for dedicated EJ staff in other HQ offices and national programs,
• 110 FTE for EJ staff across the ten EPA regions (an increase from 13 FTE).
External Civil Rights Enforcement and Conflict Prevention
• With FY2022 appropriations, EPA is supporting 18 FTE for the External Civil Rights Compliance
Office.
• With FY2022 appropriations, EPA is supporting 5 FTE for the Conflict Prevention and Resolution
Center.
Total FTE in HQ and the Regions: 229
U.S. Environmental Protection Agency
c/EPA
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 35
Appendix 5. Inflation Reduction Act Slides
/
¦¦¦¦K /K
INFLATION x
REDUCTION
ACT
OCTOBER 202 2
SEPA
OVERVIEW
• The Inflation Reduction Act (IRA) makes historic investments in
climate action that are expected to reduce U.S. emissions ~40% by
2030 while supporting disadvantaged communities and the clean
energy industrial base.
• IRA investments will drive significant emissions reductions over the
next decade while also laying the groundwork for long-term
decarbonization in hard-to-abate sectors.
• EPA will play a major role in delivering these programs. The Agency
received $41.5 billion in appropriated funds and expects to receive
an additional $11.7 billion in future revenue from reinstating the
Superfund Tax on oil and gas production.
-------
Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 36
-SEPA
BREAKDOWN OF CLIMATE S ENERGY FUNDING
Total Climate and Energy Funding ($, billions)
Tax Credits
271
Agencies
1. Pr elufiinary Joint Committee on Tax jti on anatysii. Further CSO pr ojectio ns pending.
Source: Senate Democrats, Jo>ntCommittee on Taxation, CBO
Significant support for the electricity sector (PTC/ITC/45Q./45U),
manufacturing, energy efficiency, electric vehicles, and low carbon fuels.1
Includes $41.5 billion in appropriated spending and $11.7 billion in new
Superfund tax revenue.
At least 15 other agencies received appropriated funding in the legislation.
USDA and DOE were the othertwo major recipients.
Other agencies that received over $1B in appropriations include:
• Department of the Interior ($6.7B)
• Department of Transportation ($5.4B)
• General Services Administrator ($3.4B)
• Department of Commerce ($3.3B)
• U.S. Postal Service ($3B) 4- Electric postal trucks!
• Housing and Urban Development Agency ($IB)
xs,EPA
EPA PROGRAMS
EPA received $41.5 billion in appropriations to support 24 new and existing programs. This makes EPA the second largest recipient of
discretionary funding after USDA.
Six new EPA programs account for 98% of this total funding:
• Greenhouse Gas Reduction Fund ($27 billion)- provide capital to greenhouse gas mitigation projects not currently able to access
private capital, particularly in low-income and disadvantaged communities.
• Climate Pollution Reduction Grants ($5 billion) - Provide grants at the state, local, and Tribal level to develop plans to reduce
greenhouse gas emissions and implement those plans. At least one grant will go to an eligible entity in every state.
• Environmental and Climate Justice Block Grants ($3 billion) Fund community-based nonprofit organizations to support a wide
range of climate and environmental justice activities.
• Grants to Reduce Air Pollution at Ports ($3 billion)-Award rebates and grants for ports to purchase and install zero emission
technology and develop climate action plans.
• Methane Emissions Reduction Program ($1.55 billion) — Fund grants and technical assistance to accelerate emissions reduction
from petroleum and natural gas systems. Also establish a methane waste emissions charge starting at $900 per ton in 2024 and
increasing to $1,500 per ton by 2026.
• Clean Heavy-Duty Vehicles ($1 billion) - Provide grants, rebates, and contract support to replace heavy duty vehicles with zero
emission alternatives. $400 million is specifically for nonattainment areas.
4
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 37
\vEPA
ADDITIONAL PROGRAMS TOTAL $906 MILLION
National Program Office and Program
Funding ($)
KEY TAKEAWAYS
Officeof Air (OAR)
491,OOQOOO
• Many of these programs
Funding to Address Air Pollution - Fenceline Air Monitoring & Screening Air Monitoring
Low Emissions Electricity Program
Diesel Emissions Reductions
Funding to Address Air Pollution at Schools
235,500,000
87,000,000
60,000,000
50,000,000
build on existing programs
and can proceed quickly
through established
relationships with state and
local partners.
Funding for Implementation of the American Innovation & Manufacturing Act on HFCs
38,500,000
• OCSPP's embodied carbon
Funding for Section 211(o) of the Clean Air Act (Renewable Fuels!
GHG Corporate Reporting
Office of Chemical Safety and Pollution Prevention (OCSPP)
Environmental Product Declaration Assistance
15,000,000
5,000,000
350,000,000
250,000,000
programs will inform other
infrastructure projects such
as roads, bridges, and ports.
• A major investment in
permitting will bolster
EPA's capacity to provide
Low-Embodied Carbon Labeling for Construction Materials
100,000,000
Permitting (Multiple Offices)
4(5,000,000
quality, timely
Efficient, Accurate, and Timely Permitting Reviews
Office of Enforcement and Compliance Assurance (OECA)
40,000,000
25,00Q000
environmental reviews and
permitting for critical
projects.
Funding for Enforcement Technology & Public Information
25,000,000
s
INVESTMENTS ACROSS GOVERNMENT BUILD ON
THE INFRASTRUCTURE LAW PASSED LAST YEAR
Inflation Reduction Act
Bipartisan Infra structure Law
Environmental
Justice
$6oB including new grant programs to reduce pollution, the
Greenhouse Gas Reduction Fund with a focus on low-income
communities, & bonus credits for clean energy projects and jobs in
disadvantaged communities
$2iB to clean up legacy pollution; $15B to
replace lead pipes; $ioB for clean buses; $50oM
for LIHEAP
Power Sector
Clean energy tax credits that will more than double wind, solar, and
battery storage deployment; >$ioB for rural electric systems and clean
energy upgrades; $2B for trans mission projects
$16.5B for grid upgrades like transmission;
>$9B for nuclear and hydropower
Transportation
Tax credits for EVs (up to $7,500 new/$4,ooo used); clean commercial
vehicles, EV chargers, and Sustainable Aviation Fuel; $3B for clean
USPS trucks; $iB for other heavy-duty vehicles
>$9oB for public transportation; $66B for rail;
$7.5B for EV charging; $76 for battery supply
chains; $6,4B for state actions
Industry
$6gB forU.S. clean energy manufacturing; $6B for cleaner industrial
facilities; $i.5B for methane reduction
$9.5B for clean hydrogen; $ioB for direct air
capture and carbon capture
Buildings
$96 in rebates for electric appliances and efficiency upgrades; tax
credits for home/business retrofits and efficient new construction; $1B
for affordable housing upgrades; $iB for building codes
$3.58 for Weatherization Assistance Program;
$550M for energy efficiency block grants;
$SOoM for clean & efficient school buildings
Land/Ag
$2iB for climate-smart agriculture and forestry
$i.4B for ecosystem restoration and resilience
Climate
Resilience
$4 5B for drought; $2.6B for coastal communities; $i.8B to reduce
wildfire risk in National Forests; $i.sB for urban tree planting
$5qB for resilience to drought, wildfire, heat,
flooding, coastal impacts, and otherthreats
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 38
xvEPA
GUIDING PRINCIPLES
> Maximize benefits - public health and
climate benefits
> Prioritize environmental justice
> Harmonize management structures,
regulations, funding and grants
> Engage inclusively with stakeholders
> Support and build on EPA regions'
strengths
> Safeguard financial integrity
f/EPA
HOW TO GET INVOLVED
EFWwill host multiple stakeholder engagement activities
inthe weeks ahead including:
> Public sessions with federal advisory committees -
" National Environmental Justice Advisory Council
(NEJAC)
¦ White House Environmental Justice Advisory
Council (WHEJAC)
¦ Environmental Finance Advisory Board (EFA8)
• Clean Air Advisory Committee (CAAC)
¦ Local Government Advisory Committee (LGAC)
> Program-specific public meetings and stakeholder
sessions
> Requests for Information where the public can
provide written input on program design
Check epa.gov/newsnoom for the latest updates and to
sign-up for emails.
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 39
Appendix 6. GHGRF slides
GREENHOUSE GAS
REDUCTION FUND
ENVIRONMENTAL FINANCIAL ADVISORY
BOARD OCTOBER 202 2 MEETING
«»EPA
CONTEXT: STATUTORY PARAMETERS
Funding
Eligib ie
Recipients
Use of
Funds
Conditions
and Carve-
Outs
Funding stream #1
$7 billion in competitive grants
States* municipalities, Tribal
governments, and 'eligible recipients'
(see righthand column)
• Provide eligible applicants with
funding that can be used as
subgrants, loans, other formsof
financial assistance, and technical
assistance
• Distributed technologies on
residential rooftops is specifically
mentioned as an allowable use, in
addition to zero-emission
technologies
Funds must enable low-income and
disadvantaged communities to deploy or
benefit from zero-emission technologies
and carry out GHG reduction activities
Funding streams 02 and #3
$11.97 billion and $8 billion in competitive grants
Eligible recipients defined as:
• A nonprofit that provides capital, including by leveraging
private capital
• Does not take deposits other than fr om repayments and
other revenue from using these grant funds
• Is funded by public or charitable contributions
• Invests in or finances projects alone or with investors
Funds for financial and technical assistance in projects that
reduce or avoid GHG and other forms of air pollution.
Eligible recipients shall make:
• Direct investments in qualified projects
• Indirect investment through funding and technical
assistance to establish new or support existing public,
quasi-public, and nonprofit entities that provide financial
assistance to qualified projects at the state, local
territorial, or Tribal level, as well as community lenders
$8 billion for qualified projects in low-income and
disadvantaged communities
Key Statutory
Deadlines:
• Begin making grants
on a competitive basis
within 180 days of
enactment (February
12, 2023)
• Award all funding
by September 30,
2024
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 40
Appendix 7. GHGRF Proposed Charge
Deliberative - Draft charge document for EFAB workgroup discussion
October 17, 2022
October 2022
EFAB Charge
Greenhouse Gas Reduction Fund
Problem / Question Statement
The Inflation Reduction Act of 2022 amended the Clean Air Act to create a new program - the
Greenhouse Gas Reduction Fund. The Greenhouse Gas Reduction Fund includes: (1) $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, and to carry out
other greenhouse gas emission reduction activities; (2) nearly $12 billion dollars for competitive grants
to eligible entities to provide direct and indirect financial and technical assistance to projects that
reduce or avoid greenhouse gas emissions; and (3) $8 billion for competitive grants to eligible entities to
provide direct and indirect financial and technical assistance to projects that reduce or avoid
greenhouse gas emissions in low-income and disadvantaged communities. These $27 billion dollars are
available to EPA to award grants until September 30,2024.
EPA seeks the advice of the EFAB regarding the following questions. For each charge question, the EFAB
should provide a range of options (including research and literature references and other resources,
where available), outlining their advantages and disadvantages.
I. Objectives
A. Environmental Justice/Definition of "low income and disadvantaged communities"
1. 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?
2. 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?
3. What kinds of technical and/or financial assistance should the Greenhouse Gas
Reduction Fund provide to ensure that low-income and disadvantaged communities are
able to be direct or indirect beneficiaries of Greenhouse Gas Reduction Fund funding?
Please identify supports that could help communities with project implementation.
B. Program Efficiency
1. How can the Greenhouse Gas Reduction Fund 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 that capital to be recycled over time? Where (if at all)
it is appropriate to impose sustainability requirements on direct or indirect beneficiaries
of Greenhouse Gas Reduction Fund funding?
2. Are there programs/structures at the federal or state level that could effectively
complement the Greenhouse Gas Reduction Fund? How can EPA best the leverage
Greenhouse Gas Reduction Fund to support lasting, long-term (beyond 2024)
Deliberative - Draft charge document for EFAB workgroup discussion
October 17, 2022
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 41
Deliberative - Draft charge document for EFAB workgroup discussion
October 17, 2022
October 2022
transformation of the clean energy and climate finance ecosystem, especially for
disadvantaged communities, and greenhouse gas and other air pollution reductions?
II. Program Structure
A. Eligible recipients.
1. Who could be eligible entities and/or indirect recipients under the Greenhouse Gas
Reduction Fund? What should be the thresholds for deployment—both amount and
timing—for Greenhouse Gas Reduction Fund funding by these entities? Please provide
references regarding the total capital deployed by these entities into clean energy and
climate projects.
2. 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?
B. Eligible projects.
1. What types of projects/sectors/market segments could EPA prioritize for funding
through the eligible recipients?
2. Considering each major project type/sector/market segment, discuss:
i. What are the barriers to private sector capital?
ii. 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.
iii. What project-level gaps could the Greenhouse Gas Reduction Fund fill for which
types of projects? What form could capital take to fill these gaps? Please
provide references thatanalyze the deal-level economics for the various types
of projects, including whether and how these may vary by geography.
iv. 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?
3. 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?
C. Structure of Funding. Are there any potential program design requirements that would impact
the ability of recipients to use the Greenhouse Gas Reduction Fund program funds? How could
EPA address these issues through program design? How could recipients comply with relevant
federal requirements? How can the EPA streamline the distribution of funds so that applicable
federal and state review can be accomplished in a coordinated and efficient manner?
III. Execution, Reporting and Accountability
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?
B. What types of requirements could EPA establish to ensure the responsible implementation and
oversight of the funding?
Deliberative - Draft charge document for EFAB workgroup discussion
October 17, 2022
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 42
Deliberative - Draft charge document for EFAB workgroup discussion
October 17, 2022
October 2022
C. What mechanisms could eligible recipients adopt, including governance as well as other
mechanisms, to ensure that their applications and subsequent implementation efforts ensure:
(i) accountability to low-income and disadvantaged communities; (ii) GHG emission reductions;
(iii) leverage and recycling of the grants?
EFAB Mission Fit
EFAB's mission is to explore ways to lower costs and increase investments in environmental protection.
The GHG has the potential to create valuable new capacity through existing and new channels for
funding greenhouse gas reductions, and to specifically deliver gains to disadvantaged communities
where GHG solutions are often compromised by high financing risks (capacity for repayment, access),
lack of clear delivery systems (ability to reach beneficiaries) and awareness of potential solutions. These
areas represent major segments of potential environmental harm and related benefits.
Type of EFAB Engagement
EFAB is positioned to assist EPA by providing focused guidance to EPA on strategies for establishing and
developing the GHGRF.
EFAB is comprised of experts across many segments of environmental finance and program delivery. EFAB
members have deep experience and broad networks that can be quickly leveraged to provide focused
advice to EPA around a critical and rapidly moving agenda. EFAB capacity can provide immediate, actionable
solutions that increase potential success around the GHG program.
Approach
Convene (fast) expert roundtables or listening sessions around topics that will inform implementation of
the GHGRF and summarize key takeaways and recommendations. Orchestrate specific conversations
that reach audiences not otherwise readily accessible to internal EPA staff. Take specific reference from
private equity and venture capital fund-of-fund models and philanthropic "venture fund" models that
have been successful over time in delivering capital to emerging fund managers.
Deliberative - Draft charge document for EFAB workgroup discussion
October 17, 2022
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 43
Appendix 8. GHGRF Statute Language
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.—hi 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 180 calendar days after the date
of enactment of this section, to States, municipalities, Tribal governments, and eligible recipients
for the purposes of providing giants, 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 cany out other greenhouse gas emission reduction activities, as determined appropriate by the
Administrator in accordance with this section.
"(2) GENERAL ASSISTANCE.—hi 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, ther e is appr opriated 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 cany 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—
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 44
"(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.
"(2) INDIRECT INVESTMENT.—The eligible recipient shall provide funding and
technical assistance to establishnew 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 1 aiders 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 grant funds under this section;
"(C) is funded by public or charitable contributions; and
"(D) invests in or finances projects alone or 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 'qualifiedproject' 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—
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 45
"(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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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 46
Appendix 9. Opportunity Zone Letter
ENVIRONMENTAL FINANCIAL ADVISORY BOARD
Members
Kerry O'Neill, Chair
Ashley Allen Jones
Courtney L. Black
Steven J. Bonafonte
Angela Montoya Bricmont
Matthew T. Brown
Stacy Brown
Theodore Chapman
Albert Cho
Janet Clements
Lori Collins
Zachary Davidson
Jeffrey R. Diehl
Sonja B. Favors
Phyllis Garcia
Eric Hangen
Edward Henifin
Barry Hersh
Craig Holland
Craig A. Hrinkevich
Margot Kane
Thomas Karol
George W. Kelly
Gwendolyn Keyes Fleming
Cynthia Koehler
Colleen Kokas
Joanne V. Landau
Lawrence Lujan
MaryAnna H. Peavey
Dennis A. Randolph
Eric Rothstein
Sanjiv Sinha
William Stannard
Marilyn Waite
David L. Wegner
Gwen Yamamoto Lau
David Zimmer
Designated Federal
Officer
Edward H. Chu
September 16, 2022
The Honorable Michael S. Regan
Administrator
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, D.C. 20460
Dear Administrator Regan:
The Environmental Financial Advisory Board ("EFAB") was engaged by the Office of Policy on the
topic of potential roles for EPA in attracting private investment to Opportunity Zones. EFAB took
up a Charge on this topic at its February 11-13, 2020 meeting and further refined the Charge at its
April 20-20, 2021 meeting. EFAB's scope of work for the Charge included:
Facilitating Investment (Marketplace/Matchmaking): Advise EPA on how to enhance the
Agency's approach to encourage increased Opportunity Zone ("OZ") funds investment
into both rural and urban communities alongside existing EPA funding tools, programs,
regulatory/permitting flexibility and federal and state partners.
Provide examples and advice and support to communities, including ways to minimize risk
for investors, and to investors seeking to direct OZ Fund investment into low-income,
minority, and/or otherwise vulnerable communities, reflecting environmental justice
principles. Note where community benefits standards and guidance have been developed
[or are so far lacking] that may be relevant to OZ-funded projects in these communities
and the value of such community benefits can be achieved.
Provide recommendations on where EPA may uniquely be situated to coordinate with
investors and other agencies in encouraging/identifying OZ investment opportunities in
high-priority communities from an environmental justice standpoint, including low-
income, minority, tribal, and indigenous communities that bear disproportionate
environmental risks and damages.
This letter provides advice, examples and recommendations on how EPA can facilitate attracting
more private investment to communities that qualify for investment under the OZ program.
Executive Summary
By definition, communities designated as OZs have a high degree of overlap with people of color,
low-income, and indigenous communities as well as communities with Environmental Justice
("EJ") concerns, and as such these communities are eligible for a range of public funds from
various agencies, particularly HUD, and subsidized private capital enabled programs such as
NMTC investment and USDA and SBA guarantees.
Many of our communities encounter barriers to accessing all of these sources of capital, inclusive
of OZ capital. Frequently, these barriers are non-financial, such as staff capacity, planning
resources, access to technical vendors (particularly for smaller projects), and underdeveloped
Creative Approaches to Funding Environmental Programs, Projects, and Activities
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 47
networks. These barriers exacerbate challenges already present as financial barriers for many
communities, such as limited borrowing capacities and shrinking ratepayer bases.
In the EFAB's deliberations regarding the OZ Charge from EPA, including conversations with practitioners
managing OZ funds (see Appendix), it became clear that the areas under EPA's purview could uniquely
help address certain of these barriers in order to enable both private and public capital to flow to these
communities. As a tactical matter, given the uncertainty around the permanence of the OZ tax benefits,
it is prudent to plan for any action on behalf of the EPA in such a way to create better enabling
conditions for as wide a selection of capital as possible, in order to increase long-term access and
supports for overburdened communities. Additionally, given the scope of programs and activities both
at federal and state levels and when EPA resources tend to be deployed by communities in project
development, it would be challenging and potentially inappropriate for the EPA to play a "matchmaking"
role with private investors managing OZ funds. EPA's primary role and expertise is as a regulator and as
an overseer of various environmental grant and low-cost financing programs.
Better for private investors and / or interested OZ communities to approach the EPA and its grant and
loan program state partners for assistance traversing regulation hurdles and requirements and for
seeking technical assistance optimizing EPA's grant and low-cost financing program opportunities.
Nevertheless, the EPA has an impactful role to play in a number of areas by investing in communities'
planning and fundraising capacities, grant funding for environmental remediation and project
predevelopment, data collection and aggregation around OZ-funded projects with other agencies, and
preferential terms and treatment under existing financing programs. These investments can strengthen
the capacity of disadvantaged and overburdened communities to access not only OZ funds but a wider
range of private and public sources of investment capital for key development and infrastructure
projects. As the expert panel indicated, all of these activities also meaningfully reduce risk for private
investors who may later invest in community projects enabled by these activities.
In summary, given uncertainty around OZ longevity, the EFAB team recommends that the EPA examines
its existing activities, programs and tools with an eye towards improvements that specifically benefit
high priority communities more broadly, in lieu of creating new programs, resources or funding sources
tailored specifically to OZ funding sources, and which changes can be im plemented relatively quickly,
with limited administrative complications. One recent example of this is the Fiscal Year 2023 Brownfield
Multipurpose, Assessment, Revolving Loan Fund, and Cleanup Grants announcement, wherein the EPA
was able to remove matching requirements due to additional funding from the Bipartisan Infrastructure
Law.
Focusing on predevelopment, technical assistance, and planning capacity will reduce project and
investor risk, while also providing necessary supports to under-resourced communities both urban and
rural. As the EPA's existing programs are generally more flexible than other agency sources for project
funding, continuing to value and expand that flexibility to encourage high priority communities to
develop project capacity, and ensuring EPA programs enable or don't conflict with less flexible funding
sources from other agencies, is a uniquely impactful role for the agency. Finally, a collaborative and
interagency approach to data gathering and sharing can be emphasized in order for community benefits
to be better captured and communicated both from OZ-funded projects as well as other projects with
multiple federally subsidized funding sources in high priority communities.
We highlight the successful partnership the EPA formed with FEMA to produce a Memorandum of
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 48
Understanding regarding hazard mitigation funds and SRF funds1, and the recently announced
partnership with USDA, "Closing America's Wastewater Access Gap Community Initiative," as examples
of the collaborative interagency possibilities.3
The EPA's Unique Role: Focus on Enabling Conditions
An evident barrier to accessing private investor capital, including OZ funds, is having met the baseline
conditions for private capital to flow: completed and approved plans, environmental remediation
completed, permits obtained, zoning addressed, utility infrastructure availability, technical vendors (e.g.
engineering) procured and, especially in the west, sufficient water rights/access. Since these are
preconditions before a dollar of private capital will commit to any project, disadvantaged, overburdened
and/or low-income communities must have the resources to address these before even soliciting
investors. In addition, from the disadvantaged community perspective, a lack of awareness and
understanding of the direct, indirect, and induced community benefits related to OZ projects which can
support communities from a broader economic standpoint, as well as enhancing necessary
infrastructure reliability and sustainability, can limit their interest for pursuing OZ funds and projects in
favor of other funding sources. Funding capacity development within disadvantaged and overburdened
communities can facilitate long lasting benefits and further leverage the OZ objectives.
Examples of enabling actions within EPA's existing purview could include:
PREDEVELOPMENT & CAPACITY BUILDING
~ Providing increased flexible grant funds for planning development projects (inclusive of
hiring the human resources necessary to do so), and inclusive of funds to support
community outreach and genuine engagement.
~ Identifying and addressing environmental remediation issues in disadvantaged and
overburdened communities before "shovel readiness" or planning is fully complete,
including potentially providing grant funds for the execution and development of a
remediation action (mitigation) plan.
~ Sharing a "shovel-worthy" checklist - with potential funding sources and estimated
timelines attached to each element-so communities are aware of the preconditions
needed before investor dollars can be attracted to a project.
PRIORITY ALLOCATIONS OF LARGE FUNDING PROGRAMS AT STATE LEVEL
~ Prioritizing applications for SRF loans with principal forgiveness, WIFIA loans, and
Brownfield remediation grants for disadvantaged and overburdened communities that
also qualify for OZ, USDA and NMTC funds (which is already in evidence in aligning
funding with the Justice40 initiative). Benefits of prioritizing State programs such as SRF
grantees include:
(i) Existing relationships and infrastructure - SRFs function as intermediaries
funneling federal and state funds under EPA's SRF Program to most local
communities and their water systems, positioning these state agencies as ready
partners with existing contacts and lending processes;
1 https://www.epa.gov/cw5rf/memorandum understanding between^nvironmerrtaLproteclion^gencv and^epartment
homeland
2 https://www.epa.fiov/newsrelea5es/biden-harris-admini5tration4aunches-epa-u3da-partnershiD-Drovide-wastewater
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 49
(ii) Higher certainty of funding for a project's water-related components, as most
SRF's make a determination of eligibility at the onset of application prior to
environmental and engineering review for funding certification;
(iii) Facilitation of certain water and land permits, as many SRF programs prioritize
and expedite the permitting process for participating projects;
(iv) Decreased financing costs through the use of either SRF funds or WIFIA funds
which, if shared with the water system and/or redeveloper, lead to a higher,
more attractive project return and probability of completion; and
(v) Support for Early Technical Assistance and Capacity Development. The
appropriation of BIL funds to SRF programs prioritizes funding for resource
strapped communities that have environmental justice and affordability
concerns and encourages states to develop processes to provide such support.
These processes will be directly transferable to communities needing similar
assistance in developing and promoting Opportunity Zones projects.
Enabling SRF loans to indude disadvantaged communities to secure professional services to
conduct planning for off-site infrastructure in support of OZ development projects to
enhance related community benefits.
INTERAGENCY COLLABORATION AND AWARENESS
~ Education of local public officials around the available sources of capital across agencies
and guidance on applying (USDA, HUD, etc.) - for example, adding to the Community
Calendar Application information around relevant HUD grant application timelines that
most commonly overlap with community projects
~ Collaborating with HUD, Treasury, and other agencies on a reference database for
communities to access examples of other successful OZ-funded projects, or if this is not
readily available:
o EPA could instead expand upon its OZ "case study" library to provide several case
studies that showcase common funding sources & timelines for OZ projects - ideally
those that happened in communities with EJ concerns - with an emphasis on the
best "matching" funding sources (e.g. twinning tax credits, grant sources)
o Expand case studies to include discussion of direct and indirect community benefits
resulting from OZ investments - however, without improved data available on OZ-
funded projects, this may be limited only to anecdotal information
o Collaborate on comprehensive guidance to assist communities in identification of
community benefits that can be derived from an OZ-funded development and the
funding available to leverage OZ projects to enhance water and wastewater
infrastructure rehabilitation, while limiting adverse affordability impacts
~ Actively encourage interagency working groups to discuss funding program compatibility
and areas of friction across funding sources available to people of color, low-income,
indigenous communities and communities with EJ concerns. This requires a "silo-busting,"
collaborative approach and flexibility that EPA may be uniquely positioned to encourage
among agencies and has already demonstrated capacity around in partnerships mentioned
above with FEMA and USDA, for example.
3 https://www-epa.flov/pirant5/epa flrarit-competilion-calendar-community wants
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 50
We recognize there are many competing priorities and workloads underway at the EPA. In order to
implement any of the above recommendations over time, we suggest prioritization of activities in the
following order.
Begin with alignment with other public funding sources
It should be noted that none of the above is possible without first aligning EPA funding eligibility
criteria with other agency definitions of high-priority communities with EJ concerns to maximize the
range of funding sources made available to these communities and proactively identify where there
is friction between these funding sources. Such alignment should include communities with EJ
concerns in existing funded initiatives at the federal level as identified in the Infrastructure Bill and
Inflation Bill (e.g. Justice40.) The recent Brownfields grant announcement for FY23 is a successful
example of aligning existing EPA resources with increased federal resources and prioritizing
communities that are most likely to also be eligible for various subsidized investment streams such
as OZ funding. Given the extensive array of multiple local, state, and federal grant and investment
programs available to communities today, guidance notes from the EPA on how to access certain
funding sources alongside other federal or state programs, for example where match requirements
can be met across funding streams, could be a worthwhile project led by EPA/DEP offices at the
state level.
Make incremental updates to existing grant and predevelopment EPA funding programs
One of the differentiating benefits the EPA uniquely enjoys is its flexibility in its grant programs - TA
and predevelopment grants specifically- which are the first resources that communities need to get
projects off the ground. These resources are particularly valuable when projects are also funded by
larger but more rigidly constructed programs run by other agencies. In terms of prioritization of
recommendations, EPA might consider updates to existing programs likeTAG, EJSG, OLEM, etc. in
ways that support priority access to these funds for people of color, low-income, and indigenous
communities and communities with EJ concerns and ensure uses of funds include capacity, planning,
and other hard-to-finance predevelopment activities.
As the expert panel indicated, many communities will struggle to attract OZ and other private
funding because they lack the basic infrastructure (water, sewer, etc.) to support such projects.
Various federal programs have offered funds for different phases of work related to infrastructure
engineering and construction. However, it is difficult to navigate the federal funding process to
obtain funding that would support the work from preliminary engineering to design to construction
management and construction as these all tend to be housed in separate programs (and thus,
applications). The recent Infrastructure and Jobs Act"s philosophy guiding the allocation of funds has
provided a potential solution in the Department of Transportation's ("DOT") RAISE grant program,
which encouraged communities to develop applications that stack funds from various component
programs. Stacking grants for planning, predevelopment, construction, and so on through the life of
a project can provide a community with funding from start to finish, reduce speculative risk in
infrastructure development, and meet holistic infrastructure needs of both communities and
developers seeking to invest private capital. Critically, to enable communities to think holistically
about project funding needs, DOT delegated support to its divisions, rather than tunneling all its
funds through State DOTs, avoiding a layer of complexity to the program.
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 51
Consider significantly increasing funding for Environmental Finance Centers ("EFCs") and similar
regional intermediaries.
EFCs have a sense of community needs and planned projects, as well as experience helping
communities access multiple funding sources for projects - both public and private. Additionally,
they are positioned to have relationships in place with private sector capital and can coordinate
between State-level EPA/DEP offices and private sector investors. Increasing funding for EFCs should
also reflect identification of priority communities per the first action recommended above. EFCs
could additionally function as the front line of targeted EPA grant programs for community-led
predevelopment work in redevelopment projects. One example of this is the EPA's 2021 grant
award to the Southwest Environmental Finance Center ("SEFC") to work with improving small public
water systems across the country.4
We thank the EPA for the opportunity to provide advice, examples and recommendations on how EPA
can facilitate attracting more private investment to low-income, people of color, and indigenous
communities and communities with EJ concerns.
Margot M. Kane and William Stannard, OZ Working Group Co-Chairs
Environmental Financial Advisory Board
Enclosure
cc: Edward H. Chu, Designated Federal Officer, Environmental Financial Advisory Board
David Doyle, Land Revitalization Coordinator, Land, Chemicals, and Redevelopment Division,
EPA Region 7
Jon Grosshans, Senior Advisor, EPA Office of Policy
Michelle Madeley, Program Manager, EPA Water Infrastructure Resiliency St Finance Center
Joshua Tapp, Director, Office of Intergovernmental Affairs, EPA Region 7
Andrew Wynne, Senior Advisor, EPA Region 7
Conclusion
Sincerely,
Kerry E. O'Neill, Chair
Environmental Financial Advisory Board
4 https://www.bizioumals.com/albuq uerque/news/2Qjl/05/2l7unm-receives-epa-flrant-fundinfi-html
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 52
APPENDIX
U.S. Environmental Protection Agency Environmental Financial
Advisory Board
Opportunity Zones Workgroup Practitioner Panel
Virtual Public Meeting via Zoom
Thursday, August 26 - 12:00-1:30 pm Eastern Time
Executive Summary
Purpose: To hear from Opportunity Zones (OZ) practitioners who work on OZ investments in
disadvantages communities across the country and were willing to share their experiences to support
the EFAB Opportunity Zones workgroup's charge.
Panelists: Diverse selection of OZ fund managers based in the Southwest, Mid-Atlantic, and Northeast
whose work reflects EPA interests (e.g., rural and disadvantaged communities, investments in operating
businesses, housing, and mixed-use real estate under OZ requirements).
• Alecia Hill - Investment Associate, Enterprise Community Investment, Inc.
• Jonathan D. Tower - Managing Partner, Arctaris
• Stephanie Copeland - Managing Partner, Four Points Funding
Key Insights & Takeaways
• Pre-conditions to potential investment(s):
o Access to and understanding of soft costs (e.g., planning, predevelopment, and risk
assessment at the community level) - Historically marginalized communities may lack
awareness of their environmental risk in planning projects,
o Adequate water infrastructure, quality, and access - Water rights are sometimes
requested by communities before developers are granted permits. These issues cannot
be left until later stages in project development, such as arranging financing. Investors
won't take these risks and are sensitive to what the delay(s) addressing them will cost,
o Community buy-in - Proposed projects should reflect community priorities and have
active support from key stakeholders, including those frequently underrepresented.
• On government involvement:
o Federal agencies and sources, notably HUD, ARPA, and SSBCI, have successfully paired
existing financing and grant products with OZ-qualifying projects and investors,
o Government funding sources at the project level can add so many requirements that
appreciation is suppressed, especially for smaller scale projects in rural settings,
o Consistent communication and streamlined processes are key.
• On community role:
o Prospectuses are insufficient for investors because they don't capture the complexity of
project risks. A more predictable environment for investors to enter is needed,
o Communities should be informed of the risks investors and developers are taking too.
• OZcan make infrastructure payback faster - The structure of OZ investment funds enables them
to recognize a faster ROI on infrastructure investments and pay for deferred maintenance
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 53
thanks to accelerated depreciation, which may be useful for communities who seek investment
in water/wastewater infrastructure.
~ Additional uncertainty (e.g., census tract changes, timeline for certain tax incentives) can
depress investor appetite.
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 |
Appendix 10. Pollution Prevention Letter and Presentation
ENVIRONMENTAL FINANCIAL ADVISORY BOARD
Members
Kerry O'Neill, Chair
Ashley Allen Jones
Courtney L. Black
Steven J. Bonafonte
Angela Montoya Bricmont
Matthew T. Brown
Stacy Brown
Theodore Chapman
Albert Cho
Janet Clements
Lori Collins
Zachary Davidson
Jeffrey R. Diehl
Sonja B. Favors
Phyllis Garcia
Eric Hangen
Edward Henifin
Barry Hersh
Craig Holland
Craig A. Hrinkevich
Margot Kane
Thomas Karol
George W. Kelly
Gwendolyn Keyes Fleming
Cynthia Koehler
Colleen Kokas
Joanne V. Landau
Lawrence Lujan
MaryAnna H. Peavey
Dennis A. Randolph
Eric Rothstein
Sanjiv Sinha
William Stannard
Marilyn Waite
David L Wegner
Gwen Yamamoto Lau
David Zimmer
Designated Federal
Officer
Edward H. Chu
October 18,2022
The Honorable Michael S. Regan
Administrator
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, D.C. 20460
Dear Administrator Regan:
The Environmental Financial Advisory Board (EFAB)is pleased to submit this report,
"Catalyzing Pollution Prevention Finance," developed by the EFAB Pollution Prevention
Workgroup (P2 Workgroup). As you know, EFAB works to provide the EPA administrator and
other leadership with guidance and expertise on a variety of environmental financing and
investment topics, issues, and challenges. EFAB provides critical perspectives from EPA's
diverse customers, partners, and stakeholders - with a particular focus on the financial
community and its capacity to deliver effective financing to advance the nation's most
pressing environmental financing issues. The P2 Workgroup embraced its work with a keen
eye toward EPA's capacity to serve as a catalyst for source pollution prevention, the highest
level of impact in the waste management hierarchy.
P2 Workgroup Approach
The P2 Workgroup approached its task with three concrete goals: (i) engage a diverse set of
financial sector experts, customers, partners, and stakeholders in pollution prevention
finance conversation focused on priority manufacturing sectors; (ii) move swiftly to draw
meaningful conclusions related to challenges of and potential solutions to pollution
prevention funding and finance activities; and (iii) provide recommendations with immediate
actionable items to advance EPA's pollution prevention remit. A Series of three P2 Finance
Forums held between March and August 2022, engaged more than two dozen experts across
diverse segments of the finance field alongside manufacturing support organizations and
specialists in technology, supply chain sustainability and business strategy roles to explore the
topic and inform recommendations.
Recommendations
We have organized our recommendations into three categories of immediately actionable
items that reflect current capacity and funding levels within the P2 program:
(1) Focus P2 Grant Program. Focus a segment of P2 grants on innovative finance
opportunities within a priority business segment, and use P2 grant program to
support a cohort of regional P2 demonstration projects;
(2) Expand Education & Training. Develop sector-based use cases and a series of "P2
Finance Webinars" that highlight success factors in P2 financings; and
(3) Introduce Risk Reduction Tools. Develop underwriting standards for priority sectors,
identify and facilitate priority technology certification efforts, and explore the active
use of existing and new credit enhancements/guarantee programs.
Creative Approaches to Funding Environmental Programs, Projects, and Activities
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 55
The attached brief report entitled "Catalyzing Pollution Prevention Finance," and supplemental
documents incorporated by reference, comprise the full scope of our work. We thank you for the
opportunity to be of service to this important Office within EPA.
Kerry E. O'Neill Ashley Allen Jones
Chair Chair
Environmental Financial Advisory Board EFAB P2 Working Group
Enclosure
cc: Edward H. Chu, Designated Federal Officer, Environmental Financial Advisory Board
David Widawsky, Director, Data Gathering and Analysis Division, Office of Pollution
Prevention and Toxics
Alison Kinn Bennett, Senior Advisor, Sustainability and Pollution Prevention Branch, Office of
Pollution Prevention and Toxics
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 56
CATALYZING POLLUTION PREVENTION FINANCE
ENVIRONMENTAL FINANCIAL ADVISORY BOARD
OCTOBER 2022
Co-Chairs
Kerry O'Neill, President, Inclusive Prosperity Capital, Hartford, CT
Ashley Allen Jones, Founder & CEO, i2 Capital, Washington, DC
EFAB Members
Stacy Brown, President & CEO, Freberg Environmental, Denver, CO
Craig Hrinkevich, Managing Director, Debt Capital Markets, Baird, Red Bank, NJ
Christopher Meister, Executive Director, Illinois Finance Authority, Chicago, IL
Invited Consultants
Tim Larson, President, Ross Strategic, Seattle, Washington
Martha Sheils, Director, New England Environmental Finance Center, Portland, ME
Laura Harwood, Vice President, Eastern Research Group, Arlington, VA
Cena Swisher, Senior Manager, Eastern Research Group, Arlington, VA
Finance Forum Experts
Frank Altman, CEO, Community Reinvestment Fund, Minneapolis, MN
KelsieBouchard, Portfolio Manager, Coastal Enterprises, Inc., Brunswick, ME
Martin Chilcott, CEO & Founder, Manufacture 2030, Oxford, UK
John Cox, Principal, John Cox Consulting, Lancaster, PA
Brad Fletcher, Vice President & Treasurer, Illinois Finance Authority, Chicago, IL
Jeremy Gilpin, Executive Vice President, Greater Commercial Lending, Reno, NV
Bert Hunter, Executive Vice President and Chief Investment Officer, CT Green Bank, Hartford, CT
Sarah Lee, Project Director, Advanced Manufacturing Sector Integration, Washington State Department
of Commerce, Olympia, WA
Matt McKenna, Executive in Residence, Georgetown McDonough School of Business, Washington, DC
Aldric Seguin, Managing Partner, Global Sustainable Future, New York, NY
Catherine Sheehy, Head of Advisory Solutions, Environment & Furniture, UL Solutions, Chicago, IL
EPA Supporting Staff
Tara Johnson, Water Infrastructure and Resiliency Finance Center, Washington, DC
Alison Kinn Bennett, Senior Advisor, Sustainability and Pollution Prevention Branch, Office of Pollution
Prevention and Toxics, Washington, DC
David Widawsky, Director, Data Gathering and Analysis Division, Office of Pollution Prevention and
Toxics, Washington, DC
Andrew Wynne, Project Coordinator, Office of Pollution Prevention and Toxics, Kansas City, MO
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 57
Background
Pollution prevention (P2) is any practice that reduces, eliminates, or prevents pollution at its source.
Financially, it is often cheaper to prevent the creation of pollution than to clean it up afterwards or pay
for control, treatment, and disposal of waste products. For businesses, all forms of waste represent
inefficient expenditures. If a business can reduce or eliminate such expenditures, that immediately
translates to the bottom-line by reducing operating, regulatory, and liability costs.
P2 projects (e.g., new equipment, contractor services) often require cash disbursements upfront, with
potential savings (avoided costs) accruing over time. These projects must often compete for limited
resources with other internal business priorities that are essential for revenue generation. Small
businesses may not be used to borrowing money from external sources or they may not think that they
are able to do so at affordable terms. Accordingly, many potentially attractive P2 projects go unfunded
and unrealized.
EPA has recently convened P2 technical assistance providers to discuss: if/how manufacturers are
financing P2 projects, what challenges small businesses face in attracting lenders, what existing
environmental financing approaches could be modeled/expanded for a broader array of pollution
prevention projects; and what could EPA's role be in facilitating small business access to private sector
financing. As a start, EPA has conducted background research on the types of financing and funding
approaches available to manufacturers to implement P2 projects. EPA's Office of Pollution Prevention
and Toxics was specifically interested in learning more about is the structures, models, and extension
services that could be employed to successfully finance P2 projects.
P2 Finance Forum Key Takeaways1
Forum 1: Finance Sector Insights
~ Credit risk poses a material threat to underwriting P2 loans in the middle market manufacturing
sector, given diversity of business size, profitability, and sophistication. Credit risk can include
company level profit and loss factors, risks related to new/not-well-understood technologies, lack of
clarity in cost savings related to P2 program implementations, and overall fragmentation of the
middle market manufacturing sector, among other factors. Any P2 finance program needs to
directly address credit risk issues.
~ Existing, well-established tools exist that address credit risk at a scaled level, including loan
guarantees (eg. USDA, SBA), tax advantaged lending (eg. New Market Tax Credit) and credit
enhancements in lending pools (eg. first loss capital).
~ The P2 sector has potential to introduce and expand innovative financing structures that have been
utilized successfully in related sustainability sectors (eg. energy service companies, or ESCOs, and
commercial property assessed clean energy, or C-PACE models).
~ Technology certification programs have the potential to provide valuable support to underwriting of
new technologies in priority sectors.
1 See full P2 Finance Forum Recordings and written summaries: https://www.epa.qov/
waterfinancecenter/environmental-financial-advisory-board-efab-pollution-prevention-finance-forum
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 58
~ The Community Development Finance Institution (CDFI) and Green Bank finance sectors provide
robust examples of m ission-related or "co-benefit" lending activities that are highly relevant for P2
lending efforts.
~ Collaborative funding models provide for a greater diversity of funding and capacities to underwrite
businesses in hard-to-reach communities.
Forum 2: P2 Financing Tools and Models
~ Standards and 3rd party certifications can mitigate risks for financial community through clarifying
terms, scope, metrics, and measurements, and enabling benchmarking; credible entity standing
behind organization to confirm technology strategy, for example UL3600 includes waste aversion
validation at a site or across a supply chain to support "circularity of a company's material flow."
~ C-PACE is used across 30 states -counties and municipalities impose standardized, voluntarily
"requested special assessment liens" on behalf of property owners. Supports equipment that is
permanently affixed to buildings, with financial/collateral ties to plant infrastructure.
~ Green Banks provide financing to private property and business owners to increase energy efficiency
of property often providing 15+year financing and lending support alongside commercial capital.
Examples: SME energy efficiency portfolio funded through utility program @ 0% interest; Solar
Power Purchase Agreement Program simplifies and reduces cost to deploy solar; loan loss reserve
program for primary lenders (e.g. E-Loan provides second loss guarantee to lenders).
Forum 3: Distribution Strategies and Partnerships
~ Business leaders must think about sustainability as a matter of continuous improvement: analyze
the value stream, identify where waste lies in that value stream and work hard to find an
intersection of waste and profitability.
~ P2 finance efforts should seek opportunities to partner with organizations and business entities who
may have different motivations and value protocols (e.g. excess land for energy generation).
~ Business supply chains often present opportunities for support, for example when OEMs seek
sustainability from within their supply chain).
~ P2 efforts should seek state-level resources to prepare business to be "investor ready" and to
understand the challenges to underwriting and what local lenders look for in loan transactions.
~ Seek out relationships with CDFIs across the country that are concerned with "those people that are
farthest away from the opportunity"; CDFIs are "capillaries of finance" that seek to access hard to
reach markets thorough financial engineering (e.g. guarantees from philanthropy and government).
~ Seek "innovative cluster" potential to expand sustainability in a geographic area in a sector; offer
"wrap-around" services that target a specific challenge and solution.
Recommendations to EPA
P2 Grant Program Strategies
i. Focus next round of P2 grants on grantees with expertise in relevant sectors for primary P2
finance opportunities and relevant capacities to advance P2 finance efforts (single industry
or group of industries with similar P2 issues.)
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ii. Identify and support a cohort of regional P2 pilots that demonstrate robust partnerships for
pre-development support (technical assistance) and innovative funding relationships -to
serve as P2 "demonstration projects."
iii. Through (i) and (ii) above, support development of finance ecosystems that broaden market
acceptance for financing P2 projects.
Education/Training Strategies
i. Develop sector-based use cases for P2 financing (through grantees or consultants).
ii. Develop a series of webinars on P2 success cases and factors contributing to success and
reference P2 Finance Forum learnings.
Risk Reduction Mechanisms
i. Launch technology certification program around priority interventions in one or two
focus sectors.
ii. Develop underwriting standards for P2 on specific waste streams within specific
industries, in conjunction with trade groups and technical experts.
iii. Explore use of existing and new credit enhancements/guarantee programs (e.g. EPA
SRF, SBA, USDA, State-level programs, USDOE, etc.).
Appendix A
Pollution Prevention Finance Forum Summary Slide Presentation.
Additional Resources
https://www.epa.gov/waterfinancecenter/environmental-financial-advisorv-board-efab-pollution-
prevention-finance-forum
Pollution Prevention Finance Finance Forum Workshop 1 - Resource Packet
Pollution Prevention Finance Forum Workshop 1 - Presentation
Pollution Prevention Finance Forum Workshop 1 - Summary of Remarks
Pollution Prevention Live Webinar Recording, Workshop 1, March 9,2022
Pollution Prevention Finance Finance Forum Workshop 2 - Resource Packet
Pollution Prevention Finance Forum Workshop 2-Summary of Remarks
Pollution Prevention Live Webinar Recording, Workshop 2, May 10,2022
Pollution Prevention Finance Finance Forum Workshop 3 - Resource Packet
Pollution Prevention Finance Forum Workshop 3-Summary of Remarks
Pollution Prevention Live Webinar Recording, Workshop 3, August 23, 2022
Thank you to all who participated in the EPA/EFAB Pollution Prevention Finance Forum Series.
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 |
&EPA
Environmental Financial Advisory Board
Engagement with the Office of Pollution Prevention & Toxics:
Strategies to Expand Funding and Financing for OPT
Pollution Prevention Projects
EFAB Briefing-9.20.2022
Financing Small Manufacturer Pollution Prevention Projects
In Collaboration with: EPA Office of Pollution Prevention and Toxics
Office of Chemical Safety and Pollution Prevention - OCSPP
Project Leadership & Working Group
Kerry O'Neill,
CEO, New Prosperity
Capital; Chair, EFAB
!
Ashley Allen Jones,
Founder & CEO, i2 Capital,
Chair, EFAB P2 Workgroup
EdChu, EFAB
Designated Federal
Officer; Deputy
Regional Administrator,
EPA Region 7
Tara, Johnson, EFAB
Alternative Designated
Federal Officer; EPA
Water Finance Center
David Widawsky,
Ph.D. - Division
Director, EPA Office of
Chemical Safety and
Pollution Prevention
Pollution Prevention Workgroup Members
• Kerry O'Neill, CEO, New Prosperity Capital
• Ashley Allen Jones, Founder & CEO, \2 Capital
• Stacy Brown , President and CEO, Freberg
Environmental
• Craig Hrinkevich, Managing Director, Baird
• Chris Meister, Executive Director, Illinois
Finance Authority (EFAB Term Expired 7/2022)
EPA Project Workgroup Members
• David Widawsky, Director, EPA OCSPP
• Alison Kinn Bennett, Senior Advisor, USEPA Office
of Pollution Prevention and Toxics
• Andrew Wynne, Project Coordinator, USEPA Office
of Pollution Prevention and Toxics
• Tim Larson, President, Ross Strategic
• Martha Sheils, Director, New England
Environmental Finance Center
• Laura Harwood, Vice President, Eastern Research
Group
• Cena Swisher, Senior Manager, Eastern Research
Group
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 61
Financing Small Manufacturer Pollution Prevention Projects
In Collaboration with: EPA Office of Pollution Prevention and Toxics
Office of Chemical Safety and Pollution Prevention - OCSPP
Pollution Prevention Charge
Problem
• Gaps in funding for P2 projects for
SMEs
Key Questions
• What challenges do SMEs face in
attracting P2 lenders?
• What financing approaches that
address P2 opportunities?
• What the role that EPA might play
to facilitate access to private
capital for P2 projects?
• Do models and extension
programs exist that could be
employed to expanding financing
for P2 projects?
9/19/2022
Approach
• Orchestrate a series of workshops
with finance sector experts to
explore key questions
• Develop a set of concrete
recommendations for EPA's P2
Program that expand access to
financing
Timeline
• November 2021 - October 2022
EFAB Charge: Financing Small Manufacturer Pollution Prevention Projects
In Collaboration with: EPA Office of Pollution Prevention and Toxics
Office of Chemical Safety and Pollution Prevention - OCSPP
WASTE MANAGEMENT HEIRARCHY
The Waste Management Hierarchy
EXPLORE: BARRIERS TO FINANCING
Food/Beverage,
Auto,
Aerospace,
Fabricated
metals,
Chemicals
ADDRESS
CHALLENGES/OPPORTUNITIES
How could different
financing structures and
models increase
financing?
How would a sector-
based approach to
manufacturers inform
economies of scale in
financing?
How could EPA best
support expansion of
financing and assistance
programs?
NetZero; Supply Chain Sustailiability
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 62
Financing Small Manufacturer Pollution Prevention Projects
In Collaboration with: EPA Office of Pollution Prevention and Toxics
Financing Model
EPA Source Reduction Examples
CDFI - CraftB; loans to transition from dry
cleaning to wet cleaning combined with State
Equipment Replacement Voucher Program =
elimination of hazardous chemicals
State Program - Michigan Small Business P2:
loan to transition conventional imaging to
digital radiology in medical industry reduced
hazardous liquid waste and solid waste
Commercial Financing: loans to support
installation of plural component surface coating
in aerospace and automotive industries =
reduced labor, product purchases, waste
generation and disposal costs (est 1.5 year ROI)
9/19/2022
EFAB Charge: Financing Small Manufacturer Pollution Prevention Projects
In Collaboration with: EPA Office of Pollution Prevention and Toxics
Office of Chemical Safety and Pollution Prevention - OCSPP
Scope of market
Trends in finance for SMEs
Major gaps in finance sector
P2 Finance equation
- Focus sectors reflect industries with high
environmental footprints related to energy, water
and toxic chemical releases
- Identified/quantified impacts to air, water and
biodiversity including broad natural
resource/climate challenges and more specific
human health issues
- Well understood technology/process change with
clear budget parameters
- Identified increase in free cash or decrease in
enterprise risk to justify expenditures and support
underwriting
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 63
Financing Small Manufacturer Pollution Prevention Projects
In Collaboration with: EPA Office of Pollution Prevention and Toxics
P2 Definition & Approach
What is definition of "pollution
prevention" for this project ?
s Any practice that reduces,
eliminates, or prevents pollution at its
source prior to recycling, treatment or
disposal (energy; water, chemicals,
other inputs to manufacturing).
V Reducing the amount of pollution
produced = less waste to control, treat,
or dispose of. Less pollution means
fewer hazards posed to human health
and the environment.
s Sustainable supply chains, products,
and services are growing market
opportunities.
Impacts to: Water, Air, Climate, Land =
Long-Term Biodiversity + Human Health
9/19/2022
EPA P2 Project Types
Process Management
Materials Substitution
Manufacturing Modifications
Resource Recovery
Current EPA P2 Programs
P2 Technical Assistance Grants to
National Emphasis Areas
Highlight Best Practices
Engage Businesses, Facilities,
Organizations, Federal Partners
Environmental & Cost Savings Metrics
Reductions in hazardous releases and
hazardous inputs (pounds)
Reductions in metric tons of carbon dioxide
equivalent: MTC02e
Reduced water consumption (gallons)
Cost savings associated with reducing energy,
water, disposal of hazardous waste, MTC02e
Financing Small Manufacturer Pollution Prevention Projects
In Collaboration with: EPA Office of Pollution Prevention and Toxics
Office of Chemical Safety and Pollution Prevention - OCSPP
Three Finance Forums Convened
Goal: assess barriers to and opportunities for increased financing of SME sustainability
efforts to support EPA P2 programmatic strategies and products
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 |
Pollution Prevention Finance Forum #1
Perspectives on Risks and Potential Financing Models & Tools
Matt McKenna, Executive in Residence
Georgetown McDonough
School of Business
Rural Opportunity initiative
Jeremy Gilpin, Executive Vice President
Greater Commercial Lending
Aldric Seguin, Managing Partner
Global Sustainable Future
Kelsie Bouchard , Portfolio Manager
Coastal Enterprises, Inc.
Major issue: credit risk - comprised of (i) company
level P&L factors, (ii) technology risk, (iii) lack of clarity
in cost savings and ROI on projects
Sector level credit risk - comprised of (i)
fragmentation, (ii) business growth characteristics, (iii)
lack of transparency about nature and level of
challenge (e.g. toxic waste disposal)
Easiest mechanisms to reduce credit risk: loan
guarantees, tax advantaged lending (examples USDA
loan guarantees and Rural Business Investment Cos;
SBA loan guarantees and SBA Small Business
Investment Cos.) Allows private sector to operate with
credit that would typically be outside its scope
Potential to structure financing more effectively using
"shared service" or "shared savings" models (ESCOs)
or innovative fee-based models (CPACE, etc.)
Potential to address technology risk through
certification, information sharing, sector-based
campaigns with established technologies.
Select CDFIs work deeply within communities to
address credit risk in underserved markets and
priority economic sectors. Establish relationships with
technical assistance organizations and technology
experts and to help mitigate risk
Key takeaway: "EPA should focus on reducing the risk of the credit risk profile of the user"
5/19/2022
Pollution Prevention Finance Forum #2
Deep Dive on Specific Tools and Approaches
-i-aR31 Catherine Sheehy, Head of
Advisory Solutions,
Environment & Furniture, UL
Consumer & Furniture
Brad Fletcher, Vice President S
Treasurer, Illinois Finance
Authority
Bert Hunter, Executive Vice
President and Chief Investment
Officer, CT Green Bank
Standards and 3rd party certifications can mitigate
risks for financial community through clarifying
terms, scope, metrics, and measurements, and
enabling benchmarking; credible entity standing
behind organization to confirm technology strategy.
Circularity portfolio: UL3600 includes waste aversion
validation at a site or across a supply chain to support
"circularity of a companies material flow."
C-PACE (Commercial Property Assessed Clean Energy
Program): used across 30 states - counties and
municipalities impose standardized, voluntarily
"requested special assessment liens" on behalf of
property owners. Supports equipment that is
permanently affixed to buildings, with
financial/collateral ties to plant infrastructure.
Green Banks: provide financing to private property
and business owners to increase energy efficiency of
property; 15-year financing,
commercial capital."
Lend alongside
Examples: SME energy efficiency portfolio funded
through utility program @ 0% interest; Solar Power
Purchase Agreement Program simplifies and reduces
cost to deploy solar; loan loss reserve program for
primary lenders (e.g. E-Loan provides second loss
guarantee to lenders).
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 |
Pollution Prevention Finance Forum #3
Corporate Strategy, Partnerships & Distribution Networks
John Cox, Fmr. CEO, Turkey Hill
Dairy, John Cox Consulting
Martin Chilcott, CEO & Founder,
Manufacture 2030
Sarah Lee, Governor's Advanced
Manufacturing Sector Lead,
Washington State Department
of Commerce
Frank Altman, CEO,
Community Reinvestment Fund
Think about sustainability as a matter of continuous
improvement; analyze the value stream and where the waste
is in that value stream and work hard to find an intersection
of waste and profitability
Look for opportunities to partner with people who value
things that you don't necessarily value (e.g. excess land for
energy generation)
Consider seeking support from within the value chain (e.g.
OEMs seeking sustainability from within their supply cnain)
Look for state-level resources to help support businesses in
being "investor ready"; understand what local lenders need.
Form strategic, targeted parterships with businesses to
attract private funding and philanthropy.
Look at network of Community Development Financial
Institutions (CDFIs) across the country that are concerned
with "those people that are farthest away from the
opportunity. CDFIs are "capillaries of finance" that seek to
access hard to reach markets thorough financial engineering
(e.g. guarantees from philanthropy and government).
Look for opportunities to share the cost and complexities
across a sector.
Seek "innovative cluster" potential to expand sustainability in
a geographic area in a sector; offer "wrap-around" services
that target a specific challenge and solution.
EFAB Recommendations
I. P2 Grant Program
• Focus next round of P2 grants on grantees with
expertise in relevant sectors for primary P2 finance
opportunities and relevant capacities to advance P2
finance efforts [single industry or group of industries
with similar P2 issues]
• Identify and support a cohort of regional P2 pilots that
demonstrate robust partnerships for pre-
development support (technical assistance) and
innovative funding relationships - to serve as P2
"demonstration projects"
II. Education/Training
• Develop sector-based use cases for P2 financing
(through grantees or consultants)
• Develop a series of webinars on P2 success cases and
factors contributing to success (referencing workshop
learnings)
III. Risk Reduction Mechanisms
• Launch technology certification program around
priority interventions in one or two focus sectors
• Develop underwriting standards for P2 on specific
waste streams within specific industries, in
conjunction with trade groups and technical experts
• Explore use of existing and new credit
enhancements/guarantee programs (e.g. EPA SRF,
SBA, USDA, State-level programs, USDOE, etc.)
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 |
EFAB P2 Charge Deliverables
Pollution Prevention Pollution Prevention
Finance Forum Finance Forum
Webinar Recordings Resource Package
ENVIRONMENTAL FINANCIAL ADVISORY BOARD
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Pollution Prevention Financing
Recommendations Letter
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Conclusions &
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(PowerPoint)
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 |
Appendix 11. Public Comments
Public Comments Received for Environmental Financial Advisory Board
October 2022 Meeting
Written Comments
• Community and Green Finance Practitioners Collaborative
COMMENT: (attached)
• Beth Lipson, Opportunity Finance Network
COMMENT: (attached)
• Cathie Mahon, Indusiv
COMMENT: [attached)
• Anne McKibbin, Elevate
COMMENT: (attached)
Oral Comments
• Adam Kent, Natural Resources Defense Council
(Comments scheduled for October 18")
TOPIC(S): Greenhouse Gas Reduction Fund design and implementation
ADDITIONAL WRITTEN COMMENT: (attached)
• Gregory M. Baird, Aging Water Infrastructure
(Comments scheduled for October IS'')
TOPIC(S): Building "capacity" and affordability via OPEX grants, SaaS technologies, and
infrastructure asset management requirements, ESG concerns, and
watershed/sewershed ad hoc regionalization "one water" co-ops
ADDITIONAL WRITTEN COMMENT: (attached)
• Dave Harris, Colorado Clean Energy Fund
(Comments scheduled for October 18" - in person)
TOPIC(S): Greenhouse Gas Reduction Fund and the plan for a National Green Bank
• Kevin S. Minoli, Alston & Bird LLP
(Comments scheduled for October 18"1- in person)
TOPIC(S): Greenhouse Gas Reduction Fund
ADDITIONAL WRITTEN COMMENT: (attached)
• Monique Harden, Deep South Center for Environmental Justice
(Unavailable for comment - Comments scheduled for October 19*)
TOPIC(S): Funding community-led solutions to remedy environmental racism
• Andrew Kessler, New York Green Bank
(Comments scheduled for October IS?*')
TOPIC(S): Greenhouse Gas Reduction Fund
ADDITIONAL WRITTEN COMMENT: (attached)
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MEMO
DATE: October 11, 2022
FROM: A collaborative of community and green finance practitioners, including:
• Beth Bafford, Calvert Impact Capital
• Susan Leeds, Garrison Associates, founding CEO of New York City Energy Efficiency
Corporation
• Jessica Luk-Li, Climate Impact Advisors
• Sadie McKeown, Community Preservation Capital
• Esther Toporovsky, Housing Partnership Development Corporation
TO: The Environmental Finance Advisory Board of the Environmental Protection Agency
RE: Leveraging the community finance industry to ensure the Greenhouse Gas Reduction
Fund supports an equitable clean energy transition with immediate impact on household
budgets, community health, and quality job creation in low-income communities
Executive Summary
The Greenhouse Gas Reduction Fund (GHGRF) has the potential to seed, support, and finance
local, state and regional activities to drastically reduce greenhouse gas emissions in support of
the U.S.'s climate commitments. This landmark legislation is vital to creating an equitable, cross-
sector, and collaborative approach to accelerate decarbonization in communities and for
populations that have otherwise not benefited from the transition to a clean economy.
The climate crisis is too big and too urgent to take chances on execution. We need to
incorporate lessons from across the public, private, and social sectors to do this once and do it
right. We need to leverage existing capital infrastructure wherever it exists. We need to finance
the deployment of existing technologies and strategies - solar, storage, wind, building
electrification, electric vehicles - as widely as possible while supporting our energy
infrastructure to prioritize stability, security, access, and affordability.
We are beginning to see an increased level of activity and commitment from the public and
private sectors focused on addressing emissions reductions across the U.S. economy to build a
net-zero future. If we are going to accelerate the pace of adoption and scale while promoting
environmental and energy justice objectives, getting money into markets where it is not
currently flowing is critical. We need a coordinated strategy executed by a broad network of
community-based lending and finance organizations that currently exist across the country.
This brief memo introduces the community development finance industry to make the case that
the many organizations within it are well-positioned to implement the Greenhouse Gas
Reduction Fund to meet the legislation's intent: a targeted and equitable transition that
immediately benefits American families while supporting a drastic reduction in GHG
emissions. Mission-based lenders from the community finance sector provide financing for
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consumers, housing, small business, community facilities, and renewable energy projects in low-
wealth communities in every state in the country. They stand ready to act as crucial funding links
for decarbonization in the communities they serve.
We see two main drivers of achieving the GHGRF's ambitious goal; activation of demand for
clean solutions and flexibility of capital to drive broad adoption.
Activation of Demand: In the absence of regulation, there is currently little to no consumer
demand to implement greenhouse gas reduction technologies, especially in low-income and
disadvantaged communities. GHG reduction technologies often represent an additional cost and
that cost is often perceived as an unnecessary expense. In addition, financial products are not
currently including the requirement for GHG reduction in the products they offer their
customers.
The Inflation Reduction Act was passed to create the incentives to drive that demand and
finance GHG reduction in an economically and environmentally just way. To effectively reach
people, we recommend working with lending organizations that already exist to support low-
income and disadvantaged communities and have the capacity, trust, networks, and know how
to blend economic incentives with the right products and services.
Flexibility of Capital: In addition to meeting demand requirements, it is imperative that the
GHGRF capital is flexible in its use and tools available. Flexibility allows lenders to be market
responsive and serve customers with different needs in different geographies. Lenders should
have flexibility in how to allocate funding between fully repayable loans, forgivable loans, credit
enhancements, and grants. Lenders need flexibility to blend GHGRF capital with other sources
at the home, project, balance sheet, and community level. Flexibility, however, does not mean
that these funds should not come with the highest levels of accountability to ensure maximum
GHG emission reductions and the delivery of real-life co-benefits to meet the spirt of the Act.
To effectively bring supply and demand together to meet the capital needs of disadvantaged
communities, community-based lenders have the patience, the trust, the capability and the
mission to direct this capital appropriately. Historically, community lenders have served as a
model for the private sector to show them how to approach difficult to finance markets and drive
investment to scale.
In summary, this letter conveys the following:
• Community finance organizations are already active in the GHGRF's target communities
across the U.S. providing access to affordable and flexible financial products and
services that can easily be adapted to include the adoption of greenhouse gas reduction.
Many of them offer quality green products today;
• Community finance organizations have done the hard work of building trust in these
communities which will be critical to change household, business, and community-level
behavior and drive demand;
• Community finance organizations have a long history blending different sources of funds
to drive adoption and demand that will be critical in addressing the current cost barriers
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preventing adoption of GHG technologies today, especially impacting the multifamily,
energy efficiency, electrification, low-income solar, and electric vehicle industries. Cost
barriers cannot be overcome with financing alone and require a deft combination of
subsidized financing, forgivable loans and cash incentives;
• Community finance organizations have a proven track record managing public funds and
leveraging private capital to drive results, with the highest levels of transparency and
reporting. This track record will be critical so that the EPA can be confident deploying
the funds flexibly.
As the Environmental Finance Advisory Board works with the EPA to discuss, develop, and
design the implementation of the Greenhouse Gas Reduction Fund, we hope this memo
provides a helpful landscape of the infrastructure that currently exists and is ready for activation
at scale. We welcome more detailed discussions about strategy and execution if and when it is
helpful.
I. There are a wide variety of community-based organizations providing access to
affordable financial products and services to low- and moderate-income
households, businesses, and communities, all of whom qualify as direct or indirect
investees under the Greenhouse Gas Reduction Fund provision.
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
Community Development Financial Institutions (together, "CDCUs"). These CDCUs have a
combined $220 billion in assets and provide access to quality, affordable financial products and
services to their cumulative 15 million members. There are CDCUs in all 50 states and many in
Puerto Rico and other territories. Many CDCUs have been lending in their communities for more
than thirty years and have developed deep trust and relationships with their members.
Map of CDCUs across the country
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Community Development Financial Institutions
There are 1,378 organizations designated as Community Development Financial Institutions
across the US, of which 573 are structured as loan funds ("CDFI Loan Funds"), the majority of
which are non-profit organizations. There are also more than 60 certified Native CDFIs located in
23 states. CDFIs have a combined $200 billion in assets, of which CDFI Loan Funds have
approximately $25 billion in assets and provide access to quality, affordable financial products
and services to their defined "target markets." The industry is designated by and reports to the
U.S. Treasury Department. CDFIs exist to support low- to moderate-income communities'
investment and financial needs. At least 60 percent of any CDFI's lending must go to benefit
their target market every year. There are CDFIs in all 50 states, the District of Columbia, and
U.S. Territories and there are numerous CDFI Loan Funds with a national footprint.
Map of all certified CDFIs across the country (pins are headquarters)
Many CDFIs have been lending in their communities for more than thirty years and have
developed deep trust and relationships in the communities they serve, and in addition to capital,
they provide a wrap-around service model, coupling training and one-on-one technical
assistance to their clients to support borrower success.
Non-profit real estate and solar developers
There are thousands of non-profit developers of affordable housing and/or solar projects across
the country. A subset of some of the largest housing developers have developed a combined
$20B in real estate for the benefit of low- and moderate-income communities. These developers
are active in all of the 50 states and many have a national footprint.
Many of these developers have been developing affordable housing for decades and solar for
the past 10+ years and have built deep trust and relationships in the communities they serve.
They have active portfolios of properties - with hundreds of thousands of units of affordable
housing - that could be rapidly decarbonized with access to the right resources.
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Specialty finance organizations
In addition to all 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- and moderate-income communities. These include organizations like:
• PosiGen, a solar finance organization, works to make solar affordable and easy to access
through their solar leasing program, especially for low-income communities.
• Solstice, a community solar organization, organizes and enrolls low-income subscribers
so they can benefit from affordable solar gardens
• Sunwealth, a clean energy investment firm that finances and manages solar projects in
and for low-income communities, partnering with local installers and community-based
organizations to drive cost savings, carbon reduction, and quality job creation.
• Sustainable Capital Advisors, a specialty financial advisory firm connecting investors with
clean energy infrastructure
• Urban Ingenuity, a specialty finance firm that pairs technical support with innovative
financing to support local solar and energy efficiency projects
. ..among many others, who are active in communities across the country and would be critical
to support and activate to meet the goals of the GHGRF.
II. These community finance organizations provide financial products and services
that are (a) driving the reduction of GHG emissions in low- and moderate-income
communities or (b) could be quickly adapted to drive the reduction of GHG
emissions in low- and moderate-income communities.
Consumer loans
There are more than $40 billion in consumer loans currently in the portfolios of the community
finance organizations listed above, largely made by CDCUs. Many already offer green lending
products, but all of the products below can be adapted to support the adoption of clean
technologies at the household level with the help of low-cost capital, technical assistance, credit
enhancement, and grants from the GHGRF.
Existing product
Green product(s)
Unsecured consumer loans for
home upgrade or repair
• Unsecured consumer loans for home upgrades,
including heat pump installation, electric water heaters,
and other energy efficiency upgrades
• Unsecured consumer loans for more efficient and/or
smart home appliances
Secured auto loans to
purchase new or used vehicles
• Secured auto loans for new or used electric vehicles
Home mortgages
• "Green" mortgages that provide pricing incentives for
homes purchased that meet certain low-carbon
standards
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Small business loans
There are more than $20 billion in small business and commercial real estate loans currently in
the portfolios of the community finance organizations listed above, largely by CDFIs and CDCUs.
Many already offer green lending products, but the following products can be adapted to
support renewable energy and energy efficiency for the country's 30 million small businesses
with the help of low-cost capital, technical assistance, credit enhancement, and grants from the
GHGRF.
Existing product
Green product(s)
Secured small business loan
for building renovations or
upgrades
~ Secured loans for energy efficiency and renewable
energy upgrades for business properties
• Small scale C-PACE loans where C-PACE is enabled,
bringing attractive financing to a broader set of
commercial and industrial buildings
Equipment financing
• Equipment financing for EV or more fuel-efficient long-
haul trucks
• Equipment financing for more efficient or renewable
industrial equipment
Agriculture financing
• Working capital loans to finance the adaptation of
sustainable farming practices
• Purchase of additional farmland to expand regenerative
agriculture
Housing and facility loans
There are more than $45 billion in multi-family housing and community facilities (e.g., schools,
health centers, community centers, etc.) loans currently in the portfolios of the community
finance organizations listed above, largely by CDFI banks and loan funds. Their products below
can continue to be adapted to support deeper energy efficiency and net zero properties with the
help of low-cost capital, technical assistance, credit enhancement, and grants from the GHGRF.
Existing product
Green product(s)
Pre-development and
acquisition financing
• Pre-development and acquisition financing to support
new construction or preservation of affordable housing
with pricing incentives to develop to net-zero or near
net-zero standards
Construction financing for new
construction or substantial
renovation
• Loans to support new construction or substantial
renovation of affordable housing buildings with pricing
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incentives to develop to net-zero or near net-zero
standards
Permanent financing for
buildings
• "Green" mortgages that provide pricing incentives for
buildings that agree to meet certain net-zero or near net-
zero standards and commit to ongoing improvements to
lower emissions
In addition to new lending for construction or substantial rehabilitation, there is a large
opportunity to take the existing housing portfolios of community-based lenders and developers
to incentivize energy efficiency and clean energy upgrades through targeted grant programs.
This would provide fast and direct access to reduced energy costs for hundreds of thousands of
units of affordable housing through a pre-identified and trusted distribution network.
Solar development
There is $1-2 billion of lending or investment that community finance organizations have
provided to develop household rooftop, commercial, and/or community solar for the benefit of
low- and moderate-income communities. The following products are already in the market and
could be dramatically expanded with access to the right mix of grants and low-cost, long-term
debt.
Green product(s)
• Construction to permanent financing for solar development with pricing scale dependent
on income levels of subscribers
• LMI revenue guaranty to guaranty payments of LMI subscribers for a period of time while
payment risk is uncertain
• Pre-development equity and/or loans to solar developers for project preparation with a
focus on projects with a significant portion of LMI subscribers
III. The Inflation Reduction Act includes many incentives for clean technologies that
will not reach low- and moderate-income communities if they are not paired with an
attractive package of support, including no- or low-cost financing and technical,
hands-on services, through trusted partners.
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
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extremely attractive financial packages with hands on technical support provided through
trusted local institutions.
For exampte, 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 Greenhouse Gas Reduction Fund 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 purchase the $42,500 EV, monthly payments could reach a
level that is more palatable for a much broader set of families. This especially true if this offer is
provided by a credit union that the family already knows and trusts with other financial products.
Similarly, the Whole Home Energy Reduction 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 includes both the
value of the rebate as well as the value of ongoing energy savings with a guarantee not to
increase (and likely 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 low-to
moderate-income communities.
For building owners and developers, changing behavior and influencing design remains a
challenge unless paired with economic incentives and hands-on support. Developers of multi-
family housing and other commercial buildings will have access to new incentives but will be
unlikely to take advantage of them unless they are packaged in a way that meets the developer
or owner where they are. Construction, C-PACE, and mortgage lenders to these properties
should leverage funds from the GHGRF to provide a combination of low-rate financing and
technical support to create a near friction-less process. This provides the developer or owner
with clear instructions of how to adapt design to meet the lowest-carbon standards and offsets
any upfront increases in costs with an overall reduction in their cost of financing.
We know behavior change, especially for things in people's lives that aren't necessarily
"broken" like their gas-fueled car, existing HVAC systems, or current business practices, take
very intentional, economically attractive, and relationship-driven approaches to be successful.
IV. The success of this legislation will be dependent on the funds coming out of the
federal government in a way that intermediaries, local lenders, and community-
based organizations can flexibly deploy and use.
In addition to the benefits of the on-the-ground capacity of the existing community finance
industry, these organizations also have experience taking, leveraging, and reporting on
government funds for the benefit of low- and moderate-income communities. It is paramount for
the GHGRF capital to have maximum flexibility. If funds come with too many strings attached it
will greatly hinder deployment, particularly fast deployment. The EPA should hold firm to its
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primary goal of reducing GHG and allow the lenders in the program to determine how to use
that capital to create and enhance products to reach it.
For example, it will be critical for funds invested in low-income and disadvantaged communities
that Davis Bacon requirements are not applied to the end project, business, or asset. These
requirements have greatly hindered previous programs from reaching the Act's targeted
communities.
For the EPA to get comfortable with deploying funds flexibly, they must recognize 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 organizations in the
community finance industry have decades of experience taking federal, state, and local
government funds with extremely minimal waste, fraud, or abuse. For example, the amount of
fraud in large and quickly implemented government programs like the Paycheck Protection
Program (PPP) is staggering when the flexibility/accountability balance is off kilter. But the PPP
funds deployed by CDFI lenders have been shown to have greater reach into low- and
moderate-income communities with much lower levels of fraud and abuse (more detail on PPP
in the appendix). Similarly, defaults for first time homebuyers working with local non-profit
lenders have a significantly lower default rate than that of other mortgage lenders because of
the hands-on and personalized lending approach.
V. The quickest way to ensure that the Greenhouse Gas Reduction Fund reaches low-
and moderate-income communities to reduce their household energy costs,
Improve their air quality and health, and mitigate climate change is to leverage this
existing infrastructure and allow community lenders to provide a mix of grants and
affordable capital to low-income and disadvantaged communities.
Taken together, the path to the fastest, most equitable impact of the Greenhouse Gas Reduction
Fund will come by matching the broad and deep capacity of the community finance industry
with tailored, targeted demand generation at the local level. Doing this will require a coordinated
strategy that can support this broad network with the right mix of capacity building, technical
support, credit enhancement, and low-cost capital. Strong existing networks and intermediaries
exist across the entire community finance sector, allowing rapid mobilization of new products
and the sharing of best practices across the entire field.
We highly recommend that this industry is allocated a sizable portion of the EPA GHGRF awards
to complement the work of other lenders looking to drive green technology and broader private
capital market transformation.
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APPENDIX A: Background of author organizations
About Calvert Impact Capital
Calvert Impact Capital is a global nonprofit investment firm that helps all investors and financial
professionals invest in solutions that people and the planet need. During its 27-year history, it
has mobilized over $4 billion of investor capital from more than 20,000 investors into more than
500 community finance organizations in the US and over 100 countries. Every dollar lent or
invested is leveraged at least 30 times, catalyzing more than $7 billion annually into
communities.
Over the last three years, Calvert Impact Capital has expanded to offer a suite of products and
services to support the scaling of impact markets, including two new products, one focused on
reducing carbon in commercial buildings and one supporting unbanked small businesses. These
products will leverage traditional financial structures to drive deeper impact at institutional scale.
Calvert Impact Capital also offers loan syndications and capital advisory services, including
consulting on and structuring loans for institutional and accredited lenders seeking
environmental and social impact. Since 2018, Calvert Impact Capital has arranged more than
$750 million of capital for private impact transactions.
About Climate Impact Advisors
Climate Impact Advisors provides strategic advice to environmental lenders, government, and
non-profits. Our mission is to accelerate the development of green financing markets in order to
fight climate change. As former green bank practitioners, we bring our firsthand experience to
address the unique and complex challenges facing policymakers and mission-driven financial
intermediaries.
About Community Preservation Corporation
CPC is a nonprofit multifamily finance company that was founded in 1974 to provide financial
resources to stabilize and revitalize underserved communities. Today, CPC uses its unique
expertise in housing finance and public policy to expand access to affordable housing and drive
down the costs of housing production, advance diversity and equity within the development
industry, and impact the effects of climate change in our communities through the financing of
sustainable housing. Since its founding, CPC has invested over $14 billion to finance the
creation and preservation of more than 225,000 units of housing through its lending and
investing platforms. CPC is a carbon-neutral company and has been rated AA- by S&P.
About Housing Partnership Development Corporation
The Housing Partnership serves as New York City's primary not-for-profit intermediary for the
development of new and rehabilitated affordable housing. For almost four decades, the Housing
Partnership has facilitated partnerships among private sector developers and financial
institutions and City, State and Federal agencies, resulting in the development of over 60,000
affordable homes. This stimulates economic activity and revitalizes neighborhoods.
About Susan Leeds and Garrison Associates
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Susan was the founding CEO of the New York City Energy Efficiency Corporation (NYCEEC) for
eight years where she still serves on the Board and Executive Committee, NYCEEC was one of
the first green banks in the country, Susan is also a consultant to green banks, NYSERDA, the
Massachusetts Clean Energy Center, energy resource hubs in various jurisdictions, and early
and growth stage clean tech companies.
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APPENDIX B: Lessons from the Paycheck Protection Program
When COVID hit our economy in March 2020 and tens of millions of small businesses across the
country shut down, we got a rare, system-wide glimpse of the glaring shortcomings in our
banking system. If the banking system was an electric grid - connecting capital from the sources
to individual businesses - we learned quickly that a massive share of our economy was in the
dark.
The federal government's response for small businesses was mostly through the Paycheck
Protection Program (PPP), which was set-up to distribute funds through banks to existing
customers. What the federal government failed to contemplate was that the vast majority of the
country's 30 million small businesses are not banked by a traditional financial institution and thus
had an extremely difficult time accessing these critical relief funds.
A recent analysis of the Paycheck Protection Program (PPP) found that seventy two percent of
PPP funds were captured by households with incomes in the top twenty percent, adding to
study after study that show the enormous disparities in its distribution.
PPP in its initial form was not set-up for community finance organizations to actively participate.
It wasn't until the enormous disparities came to light that the SBA and the Federal Reserve
changed their policies accommodate more non-bank lenders. The SBA started creating set-
asides for CDFI lenders and the Federal Reserve opened up its PPP Liquidity Facility so that
CDFIs could sell loans to the Fed in the same manner as traditional banks. Once these policy
changes were implemented, there was an enormous increase in PPP lending from certified
CDFIs, who ended up doing more than $34 billion of PPP loans throughout the program.
Overall, CDFI lenders were much more successful at reaching the smallest, community-based
businesses and businesses located in low-income communities. CDFIs did nearly 80 percent of
their lending for less than $150,000 loan sizes versus a program average of 50 percent and 40
percent of CDFI lending went to low-income communities versus a program average of 28
percent.
PPP and other COVID relief and recovery programs provide a relevant and recent test case of
how to leverage government support to scale lending in low- and moderate-income
communities to support populations that exist outside of the traditional finance sector. The Biden
Administration was wise to lean on CDFIs as a critical distribution channel to drive their desired
reach and results.
Sources:
CDFI Fund ACR Report hftps://www, cdfifund gov/sites/cdfi/fi les/2021 -
10/ACR Public Report Final 10062021 SOSCompliant v2.pdf
CDFI Fund Certification List as of 9,14.22, https://www.cdfifund.gov/sites/cdfi/files/2022-
09/CDFI Cert List 09 14 2022 Final.xlsx
CDFIs Continue to Outperform Other PPP Lenders, https://www.ofn.org/cdfis-continue-
outperform-other-ppp-lenders/
12
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 80
~ PPDRTUNITYFINANCE ¦¦§"
NETWDRK ill
Michael Regan, Administrator
US Environmental Protection Agency
Office of the Administrator, Mail Code 1101A
1200 Pennsylvania Avenue, NW
Washington, DC 20460
October 11, 2022
Dear Administrator Regan:
On behalf of Opportunity Finance Network (OFN) I am writing to urge you to work with the nation's
extensive network of community development financial institutions (CDFIs) to ensure the
Greenhouse Gas Reduction Fund (GGRF) reaches the underserved communities most impacted by
climate change. I would also like to request a meeting with the appropriate EPA leadership to
discuss how CDFIs can help GGRF achieve the Biden-Harris Administration's policy goals.
OFN is a national network of more than 380 CDFIs. CDFIs are specialized lenders - community
development banks, credit unions, loan funds, and venture capital funds - that invest to benefit
low-income and low-wealth communities across America. OFN's membership has originated $91
billion in cumulative financing in urban, rural, and Native communities through 2020.1
CDFIs and the Federal Government: Partners in Advancing Environmental Justice
The Environmental Protection Agency (EPA) has an opportunity to design a GGRF application
process that ensures good stewardship of these public funds. To achieve the goals of the GGRF, it
is critical the providers of these funds have a track record of serving low-income communities, not
just a history of providing green products.
As mission lenders with specialized expertise in reaching underserved markets, CDFIs are ideally
positioned to finance projects that reduce greenhouse gas emissions. Clean energy finance in low-
income communities requires specialized lending expertise. Investing in the clean energy
technologies needed to reduce emissions is unaffordable for many households and communities -
especially those already underserved by traditional finance.
Low-income homeowners seeking financial assistance to purchase upgraded heat pumps or install
solar panels will face the same barriers to accessing capital as they do when seeking a mortgage. A
corner store owner looking to upgrade their refrigeration system might not have the collateral or
cash flow needed to secure a bank loan to invest in that technology. Ensuring that GGRF capital
reaches low-income and disadvantaged communities requires partnering with financial institutions
that already have the trust and relationships on the ground,
The CDFI Model: Investing in Communities Other Lenders Overlook
1 Opportunity Finance Network, "Inside the Membership: Statistical Highlights from OFN Membership: 2020",
Published April 14, 2022. Accessed July 1,2022.
httos://cdn.ofn.oro/uDloads/2022/04/14153742/QFN Inside The Membership FY2020.pdf
We Believe In Opportunity. nrU flOP 90' DStreetSW,Suite 1050 ¦ Washington, DC 20024
For All. Uril.UnU P: 202-618-6100 ¦ infosBofn.org
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 81
CDFIs are mission lenders with the networks and relationships needed to deploy capital to low-
income, under-resourced, and traditionally marginalized communities. As capillaries of the financial
system, CDFIs reflect and understand the communities they serve. There are more than 1,300
Treasury-certified CDFIs investing in all 50 states and financing sectors with nearly 40% of CDFI
lending in persistent poverty areas.2 As a condition of maintaining their certification, CDFIs are
required to direct at least 60% of their financial products to low-income areas or people in their
Target Markets - a threshold most CDFIs easily exceed.3 Data from the CDFI Fund's 2020 Annual
Certification Report found that on average loan funds and venture capital funds direct at least 88%
of their lending to their Target Markets, and regulated CDFIs direct at least 75% of their lending to
their Target Markets.4
CDFIs are also experts in the type of place-based investing needed to address localized needs of
climate-impacted communities. The overlap between low-income markets and climate-impacted
communities intersects with many markets served by CDFIs: flood prone areas like New Orleans 901
ward, manufactured housing communities impacted by extreme heat in the Southwest,
farmworkers and rural communities displaced by wildfires in California, coastal communities of
color in Florida and along the Gulf Coast - all communities served by mission lenders working to
address the impacts of climate change.
Further, CDFIs are experts at leveraging philanthropic, public, and private capital and collaborating
with other lending institutions including impact investors, community banks, green banks, and
other CDFIs, For example, the Treasury Department has found that CDFIs leverage a grant
investment 8:1 with private sector investment from banks, foundations, and other impact
investors.5 CDFIs will be able to leverage capital from the GGRF with other funding, deepening its
impact.
CDFI Green Lending in Underinvested Markets
? Loethen and Fabiani, "Persistent Poverty and the Prevalence of CDFIs". OFN, (2021).
3 The CDFI Fund defines an approved target market or eligible market, as one or more investment areas or
targeted populations. Investment area refers to a geographic area that meets requirements set forth in Title
12, Section 1805.201(b)(3)(ii)(D), of the Code of Federal Regulations with a significant unmet need for loans,
equity investments, or other financial products or services or is wholly located within an Empowerment Zone
currently in effect or Enterprise Community (as designated under Section 1391 of the Internal Revenue Code
of 1986 [26 U.S.C. 1391]). Target populations consist of individuals from the following populations: Low-
income targeted population is defined as individuals whose family income, adjusted for family size, is not more
than (1) for metropolitan areas, 80% of the area median family income in metropolitan areas; and (2) for
non-metropolitan areas, the greater of 80% of the area median family income or 80% of the statewide non-
metropolitan area median family income. Other targeted populations include African Americans, Hispanics,
Native Americans, Native Alaskans residing in Alaska, Native Hawaiians residing in Hawaii, other Pacific
Islanders residing in other Pacific Islands, and other groups with CDFI Fund approval.
4 CDFI Annual Certification and Data Collection Report (ACR): A Snapshot for Fiscal Year 2020, Published
October 2021. https://www.cdfifund.oov/sites/cdfi/files/2021-
10/ACR Public Report Final 10062021 508Compliant v2.pdf
5 Remarks bv Secretary of the Treasury Janet L. Yellen on sl.25 Billion Award to CDFIs to Support Economic
Relief in Underserved Communities Affected bv COVID-19. June 15, 2021.
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 82
The nation's network of CDFIs has tremendous capacity to address the energy and environmental
challenges facing economically distressed communities. In 2020, OFN members originated more
than $8 billion in financing, with a majority of members indicating they offer green financing
products.
As noted above, CDFIs MUST lend or invest in low- and moderate-income communities as a
condition of maintaining their certification with the CDFI Fund. While some green banks invest in
low-income neighborhoods, they are not required to do so and, in some instances, may lack the
community relationships needed to ensure this capital reaches low-income and disadvantaged
communities. The urgent need to curb emissions in low-income communities must not be left to
chance - EPA needs to work with CDFIs to ensure these funds reach targeted communities.
Federal Programs that Partner with CDFIs Reach More Underserved Markets
The GGRF should be designed with an intentional focus on low-income, climate-imp acted
communities and the mission lenders that serve them. The Paycheck Protection Program (PPP)
experience demonstrated that when affordable capital is coupled with supportive public policy,
CDFIs not only deliver but outperform other lenders - reaching deeper into low-income markets
than traditional financial institutions. Lessons learned through the PPP experience can improve
outcomes for other public-private partnerships like the Greenhouse Gas Reduction Fund (GGRF).
When PPP was not reaching businesses most in need of help, the federal government turned to the
CDFI industry to ensure PPP and other pandemic relief reached these overlooked markets. Policy
changes were implemented to increase CDFI participation and reach more of their small businesses
customers. As a result, CDFIs and other mission lenders made at least $34 billion in Paycheck
Protection Program (PPP) loans to small businesses - and, according to SBA statistics, were more
successful at reaching financially underserved businesses than any other type of PPP lender.6
As the federal government contemplates the structures of the new GGRF, there is an opportunity to
adopt two major lessons from PPP:
1) Centering the needs of low-income and disadvantaged communities in program design
produces better policy outcomes
2) CDFIs can deliver rapid and targeted deployment of federal funds to underserved
markets when supportive policy changes are coupled with adequate capital and capacity
building resources
Other programs that prioritize CDFI participation like the Small Business Administration's 7(a)
Community Advantage (CA) program and Microioan program are far more successful at reaching
underserved populations. Data from the SBA shows Community Advantage lenders reached more
than three times as many Black, Latinx, and women-owned businesses as traditional 7(a) lenders -
between FY 2016 and FY 2021, CA lenders lent an average of 5.6 times more dollars to Black
owned businesses and an average of 2.5 times more dollars to Hispanic owned businesses than
6 Jennifer A. Vasiloff, "CDFIs Continue to Outperform Other PPP Lenders", OFN, May 2021.
httDs://ofn.org/artieles/edfis-continue-outDerform-other-DOD-lenders
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 83
7(a) lenders,7 CA lenders also lent twice as many dollars to women owned businesses than 7(a)
lenders. More than half of Community Advantage lenders are certified CDFIs, while the 7(a)
program has only a handful of CDFI participants. In the SBA's microloan program which also has
robust CDFI participation, more than 60% of the number of microloans issued in FY 2021 went to
minority-owned or controlled businesses.8
Recommendations for Equitable, Targeted Deployment of GGRF
OFN has recommendations to ensure program funds reach the targeted communities:
• Leverage the extensive existing network of CDFIs to ensure rapid, equitable
investment in all 50 states, across rural, and urban areas, and throughout the
economy. To decarbonize all sectors of the economy, commercial, residential, and
consumer, across all 50 states, we must take advantage of the power of the full existing
ecosystem of CDFIs. We urge EPA to make it explicit that CDFIs are eligible to access these
funds as direct or indirect recipients. To ensure the program meets its statutory intent to
reach low-income and disadvantaged communities, CDFIs that meet the statutory definition
of eligible recipients should be able to apply directly to the EPA individually or as part of a
consortium.
• Develop a separate application for the $8 billion in funding targeted to low-income
and disadvantaged communities. The EPA should develop separate applications to
allocate the $20 billion in GGRF financial assistance not directed to state governments. The
$8 billion in funding designated to low-income and disadvantaged communities requires
specialized market expertise. Applicants should be prioritized based on their track record
and accountability to low-income and disadvantaged communities. The CDFI Fund's
certification process ensures certified CDFIs are accountable to these markets.
• Prioritize Environmental Justice. EPA should consider the current $8 billion set-aside in
the legislation for low-income and disadvantaged communities as a floor and not a ceiling
and include impact for these communities as a funding criterion for awards of funds not set
aside for that purpose. The $12 billion should also conform to the Justice40 Initiative and
target low-income and disadvantaged communities.
• Allocate funding to multiple entities. GGRF funds should not capitalize a single entity or
revolving loan fund. Having multiple recipients increases the government's ability to
achieve its policy and allows lenders to develop customized solutions to meet their
community needs, GGRF funds must also be flexible enough to provide grants to lenders
and end projects. CDFIs and other mission lenders need flexible, low-cost, and long-term
financing to subsidize projects that have high upfront costs. Investments in energy
efficiency are difficult for low-income households and communities to finance despite the
prospect of long-term savings on energy costs and reduced greenhouse gas emissions.
7 SBA Weekly Lending Reports
8 Anthony A. Cilluffo and Anthony A. Cilluffo, "Small Business Administration Microloan Program",
Congressional Research Service, March 30, 2022, https://sop.fas.oro/crs/misc/R41057.Ddf
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 84
GGRF dollars must flow to lenders and subrecipients at least partially as grants to incent
these types of investments in low-income communities.
• Define "low-income and disadvantaged communities" using the established
definition of an eligible "Target Market" used by the CDFI Fund The legislation does
not define the terms "low-income and disadvantaged communities" so EPA should adopt the
existing definition of an eligible "Target Market" used by the CDFI Fund. This definition
meaningfully captures low-income and underserved communities, including consideration of
individual borrower characteristics as well as the communities where borrowers are located.
Adopting it would create standardization and lower costs of compliance as thousands of
mission lenders already track and report lending activity according to CDFI Fund Target
Market definitions.
• Recognize that small scale is not low impact. Distributing funds through a network of
lenders like CDFIs means smaller projects will receive consideration. As the Carsey Institute
notes in the context of small-scale solar projects, "A variety of obstacles contribute to the
scarcity of financing for low-income solar, including small project sizes, lack of developer
balance sheet capacity, both real and perceived issues with credit risk, elevated technical
assistance needs, and greater subsidy requirements to pursue goals such as deep energy
affordability, climate resilience, or job creation."9 It is also important to balance deployment
speed with deep community impact. Deploying this capital in a way that funds projects and
builds CDFI capacity will result in the sustained investments needed to combat greenhouse
gas emissions.
• Ensure a broad range of projects are included as eligible activities. There is no "one-
size fits all" approach to curbing emissions. Rather, it will require investing in a broad set of
projects and interventions based on community needs. CDFIs are working across the
country to address the climate crisis. The included appendix features CDFIs that received
grant funding through OFN's Renewable and Energy Efficiency Financing Grant Program.
Between 2019-2022, OFN provided $5.25 million in grants to OFN members focused on a
wide variety of renewable and energy efficiency financing projects. Small investments of
grant capital will catalyze the creation of innovative new green loan products, development
of new funds focused on energy efficiency, and more.
Conclusion
Environmental hazards and climate-driven disasters disproportionately impact low-income
communities. The federal government needs CDFIs to implement the Greenhouse Gas Reduction
Fund successfully. Even without direct federal support for clean energy financing, CDFIs have
financed businesses and projects that reduce greenhouse gas emissions and air pollution and are
9 Eric Hanaen. Rebecca Reaan. Sarah Boeoe. "Bringing Solar Energy to Low- and Moderate-Income
Communities", Published April 23, 2021. ht±ps://carsev.unh.edu/oublication/brinoino-solar-enerov-low-
moderate-income-oommunities
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 85
iii
poised to do much more. OFN and our network of CDFIs stand ready to partner with EPA to make
meaningful progress on reducing greenhouse gas emissions, particularly in the low-income and
disadvantaged communities prioritized in the law.
Sincerely,
Beth Lipson
Interim President &CEO, Opportunity Finance Network
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 86
Appendix: Examples of CDFX Green Lending from OFN's Energy Efficiency Grants
Biuehub Capital, based in Boston, MA created an electric vehicle (EV) pilot program using
vehicle-to-grid (V2G) technology to lower the costs and increase the reliability of a car for low-
income households, identify barriers to low-income household adoption of EVs, and recommend
policy changes and business initiatives that enable low-income households to transition from gas to
EVs.
Capital Good Fund, based in Providence, RI is planning to expand their DoubleGreen loan
program for energy-efficiency upgrades. Designed to serve the needs of moderate-to-middle
income homeowners with less-than-perfect-credit, the loans serve to upgrade wall insulation, duct
sealing, high-efficiency heating & cooling equipment to make your home more energy-efficient and
safe. Currently serving Rhode Island, Florida, Massachusetts, Delaware, Illinois, and Texas with
hopes of expansion.
Cincinnati Development Fund, based in Cincinnati, OH, created the Affordable Energy Fund,
targeting developer-borrowers who are creating affordable, multi-family housing in the high-
poverty neighborhoods CDFIs serve. The Affordable Energy Fund provides low-cost mezzanine debt
as incentive for developers to identify energy-efficiency solutions, proper implementation, while
preventing the creation of a financial barrier for low-incomes through the added cost of energy-
efficient systems.
Citv First Enterprise, based in Washington, DC is launching the Small Business Renewable and
Energy Efficient Fund (REEF) in partnership with Montgomery County, MD's Green Bank. In the first
phase, the organizations will provide a $650,000 loan fund of secured and unsecured debt to
Montgomery County-based small businesses to accelerate adorable energy efficiency and clean
energy.
Community Loan Fund of the Capital Region, based in Albany, NY is supporting affordable
housing developers moving into the economically distressed neighborhoods of Arbor Hill and
Sheridan Hollow to build-out green infrastructure. They also help nonprofits who serve residents in
those communities make energy updates to their buildings providing cost savings to their limited
budgets. All funds are combined with sustainability education for new and existing residents.
Kentucky Highlands Investment Corporation, based in London, KY, makes loans to small
businesses for energy efficiency improvements and retrofits so they can reduce operating costs to
remain competitive. KHIC has a program that combines energy projects with the USDA's Rural
Energy for America Program (REAP) loan and grant program to a achieve a 3:1 leverage. Only
agricultural producers and rural small businesses are eligible to apply for REAP funds. REAP is a
competitive renewable energy and energy efficiency improvement reimbursement program that
makes grants up to 25% and loan guarantees up to 75% of eligible costs,
Neighborhood Housing Services of South Florida, based in Miami, FL is expanding their
operations to provide innovative solutions to communities facing an affordable housing crisis and
residential as well as business displacement due to climate change, natural disasters,
gentrification, and unexpected economic hardships, such as a pandemic.
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 87
New Jersey Community Capital, based in New Brunswick, NJ finances projects that upgrade
and improve energy efficiency of housing units and other facilities and may lead to LEED
certification. Through their Healthy Communities Fund, they provided the financial resources and
development expertise to drive the construction of safe, affordable, stable, and environmentally
sound housing opportunities in an effort to realize better health outcomes in distressed
neighborhoods.
Northeast South Dakota Economic Corporation, based in Sisseton, SD will use the grant to
educate and provide lending for upgrading or purchasing new energy-efficient products to business
loan customers. Providing education to customers on energy-efficient products that will enhance
small businesses and lower operating costs.
Opportunities Credit Union, based in Winooski, VT, created a loan program for energy-efficient
home appliances with affordable monthly payments for low-income homeowners in Vermont.
Rural Community Assistance Corporation, based in West Sacramento, CA, created the
Biomass Utilization Fund (BUF), a pilot lending program designed to reduce wildfire risk by using
low-value forest wood (biomass) to generate sustainable energy and employment for low-to-
rn ode rate-income (LMI) rural Californians.
The National Housing frost Community Peyelopment Fund, based in Washington, dc will
use the grant to support the Energy Efficiency for All (EEFA), a collaborative that brings together
state and local groups from across the country to help increase energy efficiency investment in
multifamily housing.
Triple Bottom Line, based in Lakewood, Colorado will use the grant to expand and create a
loan loss reserve for their work in providing technical assistance and financing for energy efficiency
and renewable energy improvements in muttifamily affordable housing properties serving low-
income residents.
Virginia Community Capital, based in Richmond, VA operates a Clean Energy Lending program
by providing solar loans for direct ownership, to small businesses and for third party ownership
using power purchase agreements (PPAs) for nonprofits. Virginia Community Capital is also
looking to expand this program geographically, and lend in contiguous states (North Carolina,
Tennessee, Kentucky, West Virginia, Maryland, and Washington DC).
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inclusiv
October 11, 2022
Ed Chu, Designated Federal Officer
U.S. Environmental Protection Agency
Environmental Financial Advisory Board
1200 Pennsylvania Avenue, NW
Washington, DC 20460
RE: Environmental Financial Advisory Board October 2022 Public Meeting
Dear Mr. Chu:
Thank you for the opportunity to submit comments to inform the October 2022 Public Meeting of the
Environmental Financial Advisory Board (EFAB). Our comments will focus on the Greenhouse Gas
Reduction Fund (GHGRF) portion of the Public Meeting agenda.
The Environmental Protection Agency (EPA) should plan the implementation of the GHGRF to ensure it
achieves both the equity and climate goals of the Inflation Reduction Act. Bv expanding capacity for
high-impact green lending in historically redlined communities, counties experiencing persistent
poverty, and states that lack effective infrastructure to make GHGRF investments, the GHGRF can
address the dual problems of disproportionately high energy burden and devasting climate changes
impacts in these communities. These GHGRF investments can and should be designed and deployed by
the local, community-based financial institutions that were created by members of these communities
and have been serving the members of these communities for many years.
Community development credit unions specialize in working closely with people who have historically
been excluded from the mainstream financial system and provide safe, affordable consumer, mortgage
and small business loans. Their nature as member-owned, not-for-profit financial cooperatives creates
strong incentives for them to meaningfully serve people who live in historically redlined communities,
areas with persistent poverty, and in other communities the mainstream financial system fails to serve
equitably. Community development credit unions' deep experience in community-based lending means
that they are an ideal conduit for investments to advance environmental justice while also achieving
critically needed energy cost savings for low- and moderate-Income households.
For example, low-income people typically have longer commuting distances when driving to work than
middle- and upper-income people, forcing them to spend more on transportation and generating more
greenhouse gas emissions. Community development credit unions like USC Credit Union in California
and Clean Energy Credit Union in Colorado have developed innovative, affordable electric vehicle
lending programs specifically designed for low- and moderate-income people to reduce both their
emissions and their fuel costs.
39 Broadway Suite 2140, New York. NY 10006 | T. 212 809 1850
inclusiv.org | info@inclusiv.org
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 89
About Inclusiv & Community Development Credit Unions
Inclusiv is a Community Development Financial Institution (CDFI) Intermediary and nonprofit national
network of community development credit unions committed to promoting financial inclusion through
credit unions. The Inclusiv network represents more than 490 credit unions serving more than 18 million
people in predominantly low-income urban, rural, and reservation-based communities across 47 states,
DC, the U.S. Virgin Islands and Puerto Rico. Fully half of our members are Minority Depository
Institutions (MDIs) or Cooperativas that are governed byand predominantly serve people of color, 58%
of our members are CDFIs, and 75% are Low-Income Designated.
Community development credit unions are cooperatively owned and democratically governed financial
institutions that offer their members:
• Fairly priced loans, including to members with imperfect, limited or no credit history.
• A safe place to save and build assets.
• A place to conduct financial transactions at reasonable cost.
• Financial coaching, first-time homebuyer counseling, and other support services.
• Products, services, and support that can help members to free themselves from high-cost and
predatory debt, gain control over their personal finances, and achieve economic well-being.
Inclusiv, in partnership with the University of New Hampshire, provides training as well as peer support
and capacity building for credit unions and other community-based lenders seeking to build and expand
green lending programs. In just 22 months, more than 300 lenders from nearly 150 deeply mission-
driven financial institutions (primarily community development credit unions, CDFI loan funds, and
community banks) have completed the Inclusiv-University of New Hampshire solar lending training
course. In the past 12 months, just 96 of the community-based lending institutions that have graduated
from our training courses have invested more than $2.24 billion in green loans.
Community-Based Lenders Have a Strong Record of Successful Green Lending
Community development credit unions and other community-based lenders should be key partners in
the planning and disbursement of the GHGRF to ensure the fund reaches and benefits all communities
equitably. They are the ideal vehicle to deliver on the goal and commitment to direct the benefits and
impact of the GHGRF to climate-impacted communities.
Our market research of credit unions, community banks, and CDFI loan funds shows that at least 510
community-based lenders across the country currently offer dedicated green loan products with
another 69 lenders developing new green lending programs.
Community-based lenders are financial institutions that are already out on the frontlines, providing
services that plug holes in our financial system. Each of these 510 financial institutions has designed
green loans products that are uniquely tailored to the clean energy and financing needs of their local
communities and customers. Some community-based lenders have already become leaders in their local
markets, Tucson Old Pueblo Credit Union, for example, originated more than $25 million in solar loans in
2022 alone and is the leading solar lender in Tucson; while Clean Energy Credit Union has reached more
than 7,000 members and deployed $134 million in clean energy financing in the past four years.
These 510 community lenders already finance the full range of consumer, residential, and small business
energy projects, including:
39 Broadway Suite 2140, New Yorfc, NY 100061 T. 212 809 1850
lncluslv.org | info@lnclusiv.org
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 90
• Efficient home appliance upgrades.
• Energy efficiency upgrades.
• New a nd used electric vehicles.
• Solar and solar-powered battery storage projects; and
• Operating capital to grow small businesses that provide clean energy and energy efficiency
installation and contracting services,
As an extension of these 510 community-based lenders that currently offer green loans, the existing
capillary banking system of over 11,000 community-based financial institutions can quickly transition to
finance decarbonization projects in climate-impacted communities providing both clean energy
products (consumer, EV, residential, small business) and supports (financial and homeownership
coaching, entrepreneurial assistance) to make sure borrowers are set up for success. For low-income
and low-wealth borrowers to succeed, the ability to match the climate benefits with household budget
in the form of reduced consumption is critical. CDFIs, MDIs, community banks, and credit unions already
have expertise and proven success doing just that with their borrowers. These lenders are ready to use
GHGRF investments to scale affordable financing that makes green projects accessible to the most
climate-vulnerable communities.
The EPA Should Prioritize Investments that Advance Equity While Reducing Emissions
Although the GHGRF does not permit depository institutions, such as credit unions, to be eligible
recipients of the GHGRF, as non-for-profit financial institutions, credit unions are eligible to receive
indirect investments through the Fund. Inclusiv is a CDFI Intermediary and is committed to making
GHGRF investments accessible to its member credit unions to support the critical greenhouse gas
emissions and air pollution reduction goals of the GHGRF.
Community development credit unions have deep ties with their local communities, extensive
experience developing financial products to meet the needs of lower-income households and people
who have been excluded from the mainstream financial system, and a strong track record of green and
climate resilience-focused lending. Although our comments focus on community development credit
unions, CDFI loan funds, community banks, and mainstream credit unions share many of the same
positive characteristics. These institutions are typically able to leverage public investment like the
GHGRF as much as tenfold and could bring the total impact of the fund to more than $200 billion in
green lending over the next three to five years.
The EPA should align the GHGRF award criteria with Justice40 goals. The GHGRF can rely on the clear
strengths of high-impact community development credit unions in reaching low-income people and
people of color, and in their demonstrated record of success in green and resilience-focused lending. We
urge the EFAB to help the EPA to develop equitable disbursement criteria for the GHGRF by focusing on:
• Expanding capacity for high-impact ereen lending in historically redlined communities, counties
experiencing persistent poverty, and states that lack effective infrastructure to make GHGRF
investments. Directing investments to MDI credit unions and CDFI credit unions with a racial equity
mission is a straightforward way to reach this goal and aligns with the Justice40 initiative.
Communities of color face higher energy cost burdens than white communities and, to date, have
been largely excluded from the clean energy transition, which has shut people of color out of both
savings and job opportunities.
• Ensuring green lending and climate resilience lending is responsive to local needs and that loan
39 Broadway Suite 2140, New Yorfc, NY 100061 T. 212 809 1850
lncluslv.org I info@lnclusiv.org
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 91
products are accessible to frontline and historically disinvested communities. Credit unions are
financial cooperatives that are democratically governed by their members on a one member, one
vote basis. Community development credit unions know and serve these communities and their
structure ensures they are accountable to their members.
• Leveraging public dollars for additional impact. As described above, community development credit
unions and other community-based lenders can leverage public funding as much as tenfold.
• Prioritizing institutions with a strong track record ofereen lending or climate resilience lending.
Including the two community development credit unions with strong green lending records
described above, 428 credit unions across the country and 19 of Puerto Rico's cooperativas have a
strongtrack record of both solar and climate resilience lending. Cooperativa Jesus Obrero, for
example, has financed more than 500 PV solar systems across the island of Puerto Rico and
renewable energy lending makes up 10% of its total loan portfolio.
• Seeking robust stakeholder feedback. Community development credit unions should be key partners
in the planning and disbursement of the GHGRF to ensure the fund reaches and benefits the
communities that are most climate-vulnerable and most excluded from our mainstream financial
system.
By keeping the priorities above front and center in GHGRF disbursement criteria decisions, the EPA can
meet the greenhouse gas emissions and air pollution reduction goals of the Inflation Reduction Act
while advancing racial and environmental justice in frontline communities.
Thank you for the opportunity to provide input at this critical juncture in the implementation of the
GHGRF. Please contact Neda Arabshahi, Vice President, Inclusiv Centerfor Resiliency and Clean Energy
(narabshahi(5)inclusiv.org) with any questions.
Sincerely,
Cathie Mahon
President/CEO, Inclusiv
39 BroaAway Suite 2140, New York, NY 100061 T. 212809 1850
inclusiv org | info@iriclusiv org
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 92
ELEVATE
773-269-4037
ElevateNP.org
322 S. Green St.
Suite 300
Chicago. IL 60607
October 11, 2022
U.S. Environmental Protection Agency
Environmental Financial Advisory Board
Via efab(5>epa.gov
Thank you for the opportunity to provide a written statement in advance of the Environmental
Financial Advisory Board's (EFAB) October 18 public meeting. Elevate is an Illinois-
headquartered nonprofit that works nationwide, with extensive projects in historically
disinvested communities in the Midwest and West Coast states. We design and implement
energy efficiency, solar, building decarbonization, clean water, and workforce development
programs that lower costs, protect the environment, and ensure that program benefits reach
those who need them most. We help owners and tenants of affordable rental apartment
buildings, public housing authorities, and home-based childcare centers to retrofit their
buildings and manage their energy use. We are also a partner in the philanthropy-funded
Justice40 Accelerator, which is helping community-based organizations grow their capacity so
that they may participate fully in federally funded programs.
We are pleased to see that the EFAB's agenda includes discussion of the Greenhouse Gas
Reduction Fund ("Fund"), created by the Inflation Reduction Act. We were thrilled that the
Fund was included in the legislation and are eager for it to drive benefits to affordable housing
and low income and disadvantaged communities. The details of the Fund's implementation will
determine how effective it is at reaching these communities, and we hope that the EFAB and US
EPA will carefully consider the principles below as the program is implemented.
Financing for Clean Energy Projects Must be Coupled with Technical Assistance
Our experience working with owners of subsidized and naturally occurring affordable housing,
nonprofit building owners, and homeowners with low incomes has taught us that building
owners often do not have the capacity or expertise necessary to identify and complete clean
energy retrofits. They need to work with program implementers who can help them manage
the projects, preferably through a one-stop model that assists with the entire project, from
assessing the building to identifying and managing financing and funding opportunities, to
managing construction and ensuring quality installations. We hope that you will carefully
consider the linkage between organizations providing the Fund's financing, program
implementers, contractors, and building owners.
1
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 93
ELEVATE
773-269-4037
ElevateNP.org
322 S. Green St.
Suite 300
Chicago, IL 60607
Grants are Needed to Fund Technical Assistance
Technical assistance is critical to getting projects off the ground, but interest rates must also be
kept low enough that low income and disadvantaged communities can use and benefit from the
funding. Consequently, we hope that EPA will seriously consider using grants to fund technical
assistance needs, fully or partially, while ensuring that loan terms remain accessible for
communities with low incomes.
The Fund Must Finance Small Projects
To ensure that the Fund's benefits reach into communities, it must finance local projects.
Examples might include electrification of smaller apartment buildings or solar systems for
houses of worship or local nonprofits. These projects will be relatively small but bring benefits
that are clearly visible to community members. Consequently, the Fund should be designed to
ensure broad availability and to accommodate smaller financing amounts and grants.
Community Development Finance Institutions Should Play an Important Role in the Program
Community Development Finance Institutions (CDFIs) have both the lending expertise and the
community connections needed to help ensure Fund resources make a difference in
communities. Funding and opportunity for financing should be available CDFIs, with priority
given to those that serve affordable housing and projects that directly benefit disinvested
communities. CDFIs, along with program implementers, will be important elements of the
ecosystem of organizations necessary to ensure the Fund reaches its goals,
Again, thank you for the opportunity to comment and we look forward to working with US EPA
and the EFAB in any way we can to make the Greenhouse Gas Reduction Fund successful.
Thank you,
Anne McKibbin
Principal Director, Policy
Elevate
Anne.McKibbiniS>ElevateNP,ore
2
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 94
NRDC
VIA EMAIL
Kerry E. O'Neill
Chairperson
Environmental Protection Agency (EPA)
Environmental Financial Advisory Board (EFAB)
efahsepa.gov
Re: Comments related to EPA's Greenhouse Gas Reduction Fund
Dear EPA Environmental Financial Advisory Board:
On behalf of the Natural Resources Defense Council (NRDC), we are pleased to submit these
comments focused on the design and implementation of EPA's newly created Greenhouse Gas
Reduction Fund (GHGRF). NRDC is an international nonprofit environmental organization with more
than 3 million members and online activists. Since 1970, our lawyers, scientists, and policy advocates
have worked to protect the world's natural resources, public health, and environment.
Over the last decade, NRDC has increasingly focused on how public funds could dramatically increase
private investment in the clean energy transition and help to accelerate the shift to a greener, more
prosperous economy that benefits everyone. Our experience co-founding and serving as the Secretariat
of the global Green Bank Network, our work alongside community development financial institutions
(CDFIs) and credit unions charting innovative clean energy models, and out on-the-ground efforts
working to equitably deploy clean energy solutions has made clear how critical our financial system is
in reducing carbon emissions, bolstering climate resilience, and supporting development that is
sustainable and equitable. NRDC's private/public finance expertise puts us in a unique position to
comment on the design and implementation of EPA's GHGRF, which we believe can be a critical tool in
accelerating a more equitable clean energy transition.
We understand that EPA is just beginning the design and implementation process for the GHGRF, and
thus our comments for EFAB focus on four key considerations. These four principles will be critical for
a fund deployment that appropriately balances die speed at which we need to reduce GHG emissions
with die essential work of fueling a sustainable clean energy transition that delivers tangible and
lasting benefits to low-income and disadvantaged communities and households.
Additionally, Market Creation, and Ecosystem Development
EPA should require applicants to (1) demonstrate how GHGRF funds will accelerate deployment of
key GHG-reducing projects and technologies in under-served markets; (2) show how blending
public and private capital will drive new market creation anchor 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 must be used strategically to rally and redirect private investment into low-carbon, climate-
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 95
resilient projects that produce tangible outcomes, especially for low-income and disadvantaged
households.
By prioritizing low-income and disadvantaged sectors, EPA can help accelerate GHG-reducing
investments in communities lhat 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. By focusing on these sectors, the GHGRF can be the lynchpin that
induces additional flows of capital that transform and create markets to deliver tangible benefits in
communities long overlooked.
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) 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. In addition, renewable
energy and other zero emission technologies, as well as transportation infrastructure that is located in,
serves, and in which such communities have an equity stake also fit this bill. Finally, projects that
deliver deep GHG reductions (e.g. deep energy retrofits); are not currently covered by olher I.MI-
focused programs (e.g. pre-weatherization, electrification-ready services, etc.); or deliver grid and
resiliency benefits (solar + storage), all are areas where GHGRF funds could he catalytic and further
leverage other IEA investments and incentives in these areas.
Correspondingly, GHGRF investment criteria should screen out projects that cannot convincingly
demonstrate a need for GHGRF capital to drive project benefits directly and overwhelmingly to low-
income and disadvantaged communities. Projects that may fail this "but for" test could include mature
technologies such as utility-scale renewables; market segments well-served by current financing such
as transmission; and areas that are well funded via other federal provisions in IRA and IIJA. Many non-
low-income focused entities - such as corporates, investment-grade rated institutions with no
demonstrated mission focus, affluent customers, and commercial real estate developers - do not
require public financing assistance to adopt GHG-reducing and decarbonization technologies.
We also encourage EPA to take an ecosystem development approach to GHGRF design and
implementation. A mix of grants and financial capital will be needed to fulfill this vision. Financial
assistance needs to be more than loans, and include (recoverable and non-recoverable) grants and
flexible, low-cost impact investing structures that don't excessively rely on cash flow from low-income
residents. Building community trust, project development, workforce development, small business
support, and flexible earlv-stage financing represent just some of the challenges in finding "investable"
projects in low-income and disadvantaged communities.
GHGRF funds should address these issues head-on, and incorporate the necessary capacity building,
technical assistance, project development, and community engagement support that will ultimately be
needed to deliver a pipeline of GHG-reducing projects with meaningful impacts over the long run.
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
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 96
addition, many lenders would benefit from a technical assistance platform to provide lender education,
product information, uniform standards, as well as metrics for decarbotiization, professional
certification standards for third parties, and capacity building.
In thinking about what ecosystem supports are needed, it may be helpful to think about what each
technology or product vertical (e.g. multifamily affordable decarbonization; EVs; etc.) needs to scale
and reach all communities. For instance, the financial, technical, and capacity issues associated with
delivering community solar to low-income households looks different and requires different solutions
than what is needed for net zero new construction affordable housing. By fleshing out the deployment
hurdles in each distinct vertical, EPA can take a more tailored and informed approach in its GHGRF
design. Additionally, EPA may consider creating selection criteria for awards that specifically ask
applicants to describe and address deployment hurdles in each vertical in which the applicant intends
to deploy GHGRF resources.
Finally, a critical piece of ecosystem development is a focus on community ownership and wealth
building. While it's true that a major goal of the GHGRF is on the energy demand side - namely,
increasing access to cleem energy and its co-benefits while decreasing energy costs/burden - like other
parts of the IRA (for example, the tax incentives provided for the creation of apprentices), there is great
potential for disadvantaged communities to share in the benefits of suvvhriits clean energy. Hie
benefits include (1) expanding the clean energy workforce to community members; (2) increasing the
number of small, BIFOC-, and woman-owned business directly or indirectly supporting projects; (3)
growing the number of lenders investing in improvements to key community-identified local
infrastructure needs as part of project financing; (4) investing profits or surpluses in key community
assets; (5) supporting community ownership models like community land trusts and cooperatives as
they transition to clean energy; and (6) entering into carried interest or profit-sharing arrangements
with partner organizations, individuals, or groups. The EPA should appropriately weigh community
ownership and wealth building strategies when designing GHGRF and incentivize consortia with
partners (deep impact investors) who can equitably deliver these supply-side outcomes.
Prioritize Low-Income and Disadvantaged Communities and Households Across the Entire
$27 Billion
Given $15 billion of the GHGRF is specifically earmarked for low-income and disadvantaged
communities, a key decision facing EPA is how to define such communities. We recommend applying
the White House's Justice40 Initiative's definition of disadvantaged communities1 as a starting
point, and modifying it to include other key climate, energy, and economic factors. 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, hi 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.
1 https://www.whitehouse.gov/wp-content/ uploads/2021/07/M- 21-28.pdf
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 97
Second, EPA should structure and award the unrestricted portion of the GHGRF ($11.97 billion)
with a priority toward low-income household access, as well as small businesses that may be based
outside of a low-income community but still serve it. While many low-income individuals and
households live in low-income and disadvantaged communities, many do not. The same is true for
BIPOC-owned businesses and other small businesses that low-income households rely on. It is
therefore critical that the unrestricted portion of the GHGRF follow similar Juslice40 and additionally
principles as the place-based S15 billion. We recommend considering the $11.97 billion as "people-
based" fluids, whereby these fluids can also reach low-income households and small businesses who
may not specifically be located in a qualified "low income or disadvantaged community" area. EPA
should also establish an eligibility testing regime that does not impose undue administrative cost and
burden to qualify households or businesses. In addition, GHGRF awardees of this unrestricted pot of
funds should similarly demonstrate a mission-based focus as discussed elsewhere in this letter.
Finally, EPA should prioritize low-income and disadvantaged community engagement and outreach
in both the development of the GHGRF application, and in the awarding of funds. In the
development of the GHGRF application, it may be helpf ul for EPA to model its community
engagement after other federal programs like Department of Energy's Communities LEAP Program or
EPA's own Brownfields Program, as well as leverage its Regional Offices and the newly established
Office of Environmental Justice and External Civil Rights to ensure diverse voices are heard and
incorporated throughout the GHGRF implementation process. Any GHGRF' awardee should
demonstrate a proven track record and commitment to working alongside low-income and
disadvantaged communities, as well as environmental and energy justice organizations. This may
include community representation at the board and leadership levels; explicit partnerships with
environmental or energy justice organizations to inform business models; or committed and funded
community engagement plans designed to iniorm business models.
Fast, Equitable, and Flexible Deployment
To deploy capital quickly and equitably, the GHGRF should mule clean energy investments
through existing mission-driven institutions and platforms. These entities should have demonstrated
track records of successfully deploying capital in low-income and disadvantaged communities either
directly or through their networks. EPA should prioritize applicants that have; (!) clear
client/ borrower networks in low-income and disadvantaged communities; (2) an established lending
and/or grantmaking infrastructure, including prudent lending/grantmaking standards and existing
products that can be modified to include GHG reduction technologies; (3) a specific and credible
commitment to modify existing products to drive GHG reductions; (4) existing reporting frameworks
that can be used to track performance; and (5) demonstrated organizational accountability mechanisms
to the communities they serve.
These institutions and platforms, such as Community Development Financial Institutions (CDFIs),
established Green Banks, Housing Finance Agencies (HFAs), Public Housing Authorities (PHAs), as
well as associations of community-based lenders like Credit Unions and Minority Depository
Institutions (MDIs), can all deploy GHG-reducing capital quickly to projects in areas Lhat have thus far
been overlooked in our country's clean energy transition. With access to GHGRF capital and technical
assistance, lenders can adjust and complement existing loan products - such as predevelopment, rehab,
equipment, construction, and refinance loans - to finance GHG reducing technologies. The GHGRF
represents a critical opportunity to adapt and leverage the vast existing community and green finance
infrastructure throughout the country to pursue GHG reduction goals in low-income and
disadvantaged communities.
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 98
EPA should afford flexibility to established institutions that meet the above-listed criteria regarding
how financing products are designed, how customers are solicited, and how funds are ultimately
deployed in GHG reducing projects and technologies, flexibility will allow lenders to be market-
responsive and serve customers with different needs in different geographies. Prescriptive financing
products and underwriting methods can hamstring lenders. For example, lenders should have
flexibility in how to allocate funding between fully repayable loans, "soft" loans, and grants. While the
EPA should afford lenders flexibility to set rates and terms, the benefit of GHGKF zero or low-cost
Rinding should be substantially passed through to project beneliciaries. Explicitly, the EPA should
require the all-in financing costs to be less than comparable market terms for similar risked
investments. Lenders need flexibility in how to "blend" GHGRF funds with other capital sources (both
at the project and balance sheet level). Although such flexibility is beneficial, lenders should be
required to report on key outputs and outcomes on a consistent basis with metrics drat state GHG
reduction and other key goals - such as # and type of households served - per dollar of GHGRF capital
grant on a term-consistent basis. EPA should also prescribe GHG measurement methods and
technology guidance for lenders, leveraging independent 3rd parties and standardized processes, as
well as encouraging shared infrastructures and platforms when applicable.
Complementary to the primary approach discussed above, EPA could also use a smaller tranche of
GHGRF funds to invest in and spur new institutions and innovative approaches that address
persistent gaps in the marketplace. Such institutions could be new local, state, or regional Green
Banks, CDFls, or nonprofit loan funds. In places where there are limited or insufficient intermediaries
to adequately serve low-income and disadvantaged people and communities, EPA should look to
invest in new entities that have a business model that explicitly seeks to complement (not compete
with) existing institutions (part of the concept of additionality discussed herein). In addition to
accountable and inclusive governance and performance standards, such entities should have a credible
model to either (1) help bring together commercial, public, and mission-driven capital to drive GHG
reduction in low-income and disadvantaged comnumilies not currently met by existing institutions; (2)
seek to fill funding gaps (e.g. pre-developmeni, bridge loans, taking on specific risks that established
lenders may avoid due to polity restrictions); and/or (3) address specific barriers in local, state, or
regional markets inhibiting the existing deployment infrastructure.
Governance and Performance Standards
EPA should award applicants that can credibly demonstrate both (1) inclusive governance practices
with responsiveness and accountability to low-income and disadvantaged communities and (2) best
practices of nonprofit and financial governance. Other Federal programs, such as those rem by US
Department of Treasury's CDF1 Fund or the US Department of Health and Human Services Federally
Qualified Health Centers, may serve as good examples for EPA to consider when deciding on GHGKF
governance parameters. At minimum, consideration should be given to board and leadership
representation, board charters, investment/credit policies, as well as organizational policies such as
conflicts of interest standards, procurement policies, and document retention. In addition, applicants
witli a demonstrated track record of effectively stewarding federal and/ or slate funds through other
programs (e.g., Paycheck Protection Program, CDFI Fund, utility ratepayer funds, etc.) should be
scored highly. Similarly, indirect regulated recipients of funding, such as credit unions and minority
depository institutions should fare well in scoring if they can demonstrate a record of best-in-class
regulatory compliance.
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 99
EPA should also define clear impact standards and metrics forawardees 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. % reduction in energy burden and utility7 shut offs; employment outcomes;
projects with clear ties to community ownership; etc.). One potential resource for EPA to consult is
University of Michigan's newly released Energy Equity Project report, which provides a framework to
measure and further energy equity outcomes.2 Ultimately, for the GHGRF to successfully meet
Justice40 goals, impacts will need to be focused on people-centered benelits.
We recommend that EPA consider a short list of clear, overarching, quantifiable program outputs and
outcomes that till project verticals should measure and evaluate (e.g. GHG reductions, leverage,
underserved market location, etc.), and a more tailored set of metrics specific to each project vertical
(e.g. building electrification; EVs; etc.). EPA should identity' 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. Hie GHGRF presents an opportunity for EPA to establish clear standards on impact
reporting and measurement for all recipients to follow.
In addition, EPA should ensure that GHGRF awardees can rely on independent 3rd-party professionals
to provide assessments, validate project scopes, validate GHG savings estimates, and also provide
reliable cost estimation services. 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.
We thank the EFAB and the EPA for their consideration of our comments. If we can be of any further
assistance, please do not hesitate to contact us.
Sincerely,
Adam Kent (akent@nrdc.org)
Doug Sims fdsims'ffinrdc.org)
Sarah Dougherty (sdoughertv@nrdc.org)
Natural Resources Defense Council
1152 15th Street NW, Suite 300
Washington, DC 20005
2 Energy Equity Project, 2022. "Energy Equity Framework Combining data and qualitative approaches to ensure
equity in the energy transition." University of Michigan - School for Environment and Sustainability (SEAS).
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 100
Environmental Financial Advisory Board Meeting Oct 18, 2022
Public Comments by Gregory M. Baird, greg.m.baird@agingwaterinfrastructure.org
Dear EFAB members-thank you for your time, resources, and expertise in discussing and
struggling with finding solutions for many complex issues.
EFAB is an EPA advisory committee chartered under the Federal Advisory Committee Act to
provide advice and recommendations to EPA on creative approaches to funding environmental
programs, projects, and activities.
I wanted to take a few moments to raise some common themes and questions for your
consideration.
Utilities face many financial obstacles many of which are on the OPEX- operations and
maintenance side of the budget. EPA funding most of the time only focuses on CAPEX -brick and
mortar capital projects.
Can "Building Capacity" for water/sewer and storm utilities include a 3-year grant for "new"
hired employees focused on infrastructure asset management, regulatory compliance, and
finance/communications? As a municipal finance officer in California, I saw the benefit to the
police department which would receive such grants to reduce crime with the city tasked with
finding the revenue to maintain the positions beyond year 3.
Can EPA/SRF funding broadly be applied to SaaS type of products that may not be directly tied
to an immediate capital project? Technology must be funded and applied to address our aging
infrastructure, workforce, sustainability, and affordability challenges. Artificial Intelligence,
Machine Learning, Digital Twins, and many cloud platform products are packaged as SaaS
annual subscriptions requiring OPEX-operation's budget planning and approvals. If the EPA
funding favors only capital project justification, then many SaaS product and cloud offerings
geared for mid to small and very small utilities with capacity building benefits for field crews are
left untapped, As the CFO of Colorado's third largest municipal water utility, I found it was
easier to fund a capital project versus adding a new operational budget line item.
States are faced with the impossible and overwhelming duty of monitoring compliance issues of
hundreds of public water/sewer systems. Local governance and capacity issues drive water
quality and infrastructure neglect and failures. Can combined watershed/sewershed ad hoc
regionatization "one water" co-ops be formed for peer-to-peer reporting on infrastructure risk
and reliability, staff capacity, water sustainability and quality - funded as a program with SRF
money?
Environmental, social, and governance (ESG) principles implies that an organization has a
strategy which focuses on the three pillars of the environment, social, and governance. This
includes taking measures to lower pollution, C02 output, and reduce waste. It also means
having a diverse and inclusive workforce, at the entry-level and all the way up to the top. ESG is
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 101
costly arid time-consuming to undertake. While a worthy cause and probably achievable for
larger municipalities and their utilities, thousands of capacity building utilities need to focus on
the basics of utility infrastructure management, sustainable service delivery, compliance, rate
affordability, communications, and funding. 85% of all water utilities report under a
municipality/public works department, less than 10% have accessed SRFs, 30% may even fail to
submit a lead(Pb) service line inventory by 2024. The issues are complex but there must be a
focus on the basics of utility management and governance.
Thank you for your time and consideration,
Gregory M. Baird
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 102
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
CGC
Coalition for Green Capital
October 11, 2022
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-
The Greenhouse Gas Reduction Fund ("GGRF" or "Fund") represents a historic investment in the
fight against climate change. It is designed to reduce or avoid greenhouse gas emissions and
other forms of air pollution by accelerating investment in clean energy technologies in every
community in the United States, including low-income and disadvantaged communities that are
often left out of public and private investments. For EPA, the $27B appropriated to the Fund by
the Inflation Reduction Act ("IRA" or "Act") is unprecedented, and the deadlines established in
the Act leave the agency with little time to stand up an entirely new grant program. As
emphasized by Senator Van Hollen, Senator Markey, and Representative Dingell in their
September 9,2022, letter to EPA Administrator Michael Regan ("Congressional Letter"), meeting
those statutory deadlines is critical to the Fund's ability to reduce emissions of greenhouse gases
and other forms of air pollution at the levels called for by the President, and we encourage the
Environmental Finance Advisory Board ("EFAB") to advise EPA on how the agency can implement
the Act within the Congressionally-mandated deadlines.
The Congressional Letter, in conjunction with a statement for the Congressional Record made by
Representative Dingell, documents the legislative history of the GGRF and Congress's intent for
how EPA should implementthis new program. We commend both to the EFAB, and have included
them as Attachment I and Attachment II to these comments. We further encourage the EFAB to
provide EPA with advice that is consistent with Congress's intent, as documented by the
Members of Congress that were the lead sponsors of the legislation that was incorporated into
the IRA to create the GGRF. Together, the Letter and the Statement provide EPA with a roadmap
for how to implement the GGRF and award the full amount appropriated by Congress within the
time provided in the Act.
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 103
The Letter and Statement explain that Congress's intent in creating the GGRF was to capitalize a
single national, nonprofit financial institution - often referred to as the National Green Bank.
Consistent with well-established financial protocols, Congress understood that consolidating the
grant money in a single National Green Bank would actually expand the number of entities that
would benefit from the funding provided through the GGRF and the total amount of "funding
and technical assistance" that will be delivered to these entities. That is true for several reasons.
• Congress drafted the legislation not only to provide financial assistance to qualified
projects, but also to provide technical assistance and financial assistance to new or
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. Simply put, the National Green Bank is required to share the funding it receives
with all entities that are committed to accelerating investment in clean energy
technologies in every community in the United States.
• Unlike a traditional grant program with a one-time application window, the National
Green Bank will have the ability to expand continually the network of new or existing
entities that receive funds through the GGRF long after the application window closes. No
existing membership organization or network can be certain that its current members
alone can meet the environmental justice mandate included in the GGRF. The National
Green Bank's flexibility is essential to meeting the President's Justice40 goals, because
low-income and disadvantaged communities are less likely to currently be served by
financial institutions that will be prepared to provide green financing on Day 1.
Recognizing this. Congress included a requirement that the National Green Bank provide
both technical assistance and financial assistance to help create new and develop existing
public, quasi-public, not-for-profit, or nonprofit entities that will provide financial
assistance to qualified projects, including projects located in low-income and
disadvantaged communities.
• Congress recognized that to accelerate the construction of the clean power platform in
the most critical communities in the country, the National Green Bank will need to focus
"funding and technical assistance" on geographic and demographic targets. To this end,
the National Green Bank will depend upon partnerships in those communities with
nonprofit financial institutions of all kinds. Continual focus on well-selected communities
will require a consistent strategy with an adaptable and flexible approach to problem
solving by the National Green Bank and its partners in those communities. By providing
the money to a single National Green Bank and requiring the bank to in turn provide
technical and financial assistance to new and existing financial entities, Congress found a
creative solution that overcame the time-based limitations of a traditional grant program.
• Capitalizing one single independent National Green Bank offers both the benefits of
flexibility and speed in decision-making that private sector financing entities enjoy and
the restraint on profit-seeking that should attach to the recipient of taxpayer funds. That
flexibility will allow the National Green Bank to prioritize delivery of funds to communities
with the greatest need, and to quickly respond as demands and needs change over time.
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 104
Finally, it is important to note that this flexibility does not come at the expense of accountability.
In fact, capitalizing a single National Green Bank will allow for more effective and efficient
accountability by consolidating the responsibilities and obligations in a single entity. The National
Green Bank will be responsible for ensuring the funds are used consistent with the requirements
of the IRA and the terms and conditions contained in the grant agreement. That grant agreement
will include key aspects of the National Green Bank's governance and business plan, which will
enable effective oversight by EPA and Congress.
As intended by Congress, capitalizing a National Green Bank is an essential component for
meeting the stated purpose of the GGRF and is key to ensuring the rapid deployment of funds to
communities across the country, and in particular low-income and disadvantaged communities.
We commend the EFAB for taking on this important charge and encourage you to provide advice
to EPA that is consistent with Congress's intent, will assist the agency in meeting its
responsibilities under the IRA, can make a meaningful difference in the effort to reach low-
income and disadvantaged communities, and helps the GGRF realize its full potential.
If I or anyone at the Coalition for Green Capital can be of assistance as you complete your work,
please do not hesitate to contact me.
Kevin S. Minoli
Alston & Bird LLP
Kevin.Minoli@Alston.com
202-860-5581
Counsel to the Coalition for Green Capital
Enclosures
cc: Reed Hundt
Robert Sussman
Sincerely,
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ATTACHMENT I
Page | 4
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(Emigress of tfjc United States
3Dasl|iugtmi, S
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 107
financial assistance provided using grant funds under this section to ensure
continued operability."
Furthermore, the GIIGRF requires recipients to make indirect investments to promote climate
finance efforts throughout the country by:
"provid[ing] 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."
A national climate bank is uniquely structured to meet all of the requirements of the GHGRF. It will
bring together a comprehensive, diverse, and inclusive network of state and local financing entities
in the public and non-profit sectors. We have championed the effectiveness of a standalone national
institution that is authorized to capitalize both current and newly formed state and local banks,
along with all other entities eligible to receive indirect assistance through our legislation. This
approach allows these subnational entities, nonprofits, and lenders to make their own investments
tailored to the needs of their communities, with the financial and technical support of the national
climate bank. In the aggregate, a national climate bank and its network is expected to produce $10
billion of public-private investment over a decade for every SI billion in initial capital.1
The GIIGRF will provide a national climate bank with the funding it needs to immediately begin
investing in qualified projects that would otherwise tack access to financing on favorable terms.
There are $200 million worth of projects targeting low-and-moderate income communities,
nonprofits, public schools, and affordable housing that are shovel-ready, in addition to the $21
billion in clean technology projects that are in the larger pipeline.' With so many projects ready to
go. it is vital that we establish an organized central entity that is able to fund qualified large-scale
projects and coordinate downstream financial entities to implement a system that efficiently reduces
emissions and supports disadvantaged communities in those efforts.
As a centralized institution, a national climate bank will reduce costs for financial entities, attract
private capital investments, and support a more efficient project-financing pipeline, while also
seeding and providing technical support to state and local climate banks, minority depository
institutions, community development financial institutions (CDFIs), and other nonprofits. Green
banks have already proven successful on the local and state level, and a national bank would
support those efforts while providing additional coordination for larger projects at the regional and
national level. Green banks have been established or are being considered for development in 37
states and in Washington, DC, and are supported by governors of both parties.3 A national climate
bank will optimize our federal investment and provide a unified national approach to climate
mitigation, while supporting state and local banks' abilities to meet their individual needs. A green
bank network will be able to rise to the challenge that climate change presents with the leadership
and guidance of a national climate bank.
1 "Supporting a Clean Energy Recovery: Jobs and Emissions Impacts of a $100 Billion Clean Energy and Sustainability
Accelerator" (Vivid Economics Limited, December 18, 2020).
' "National Green Bank: Project Ready Day One - Conversations with the American Green Bank Consortium," July 7,
2021, htto://coalitioni'on2reencapital.com,'wp-content/uploads.'lNational-Green-Bank-Proiect-Readv-Dav-One_pd{'.
3 Nevada's green bank, the Nevada Clean Energy Fund, was signed into law bv Republican Governor Sandoval.
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 108
To carry out the requirement that 40 percent of funds within the GHGRF be dedicated in support of
environmental justice communities, a national climate bank can use trusted community partners,
such as local green banks and CDFIs, to target investments within disadvantaged communities.
These partnerships will allow the benefits of clean technologies to reach communities that have
been left behind for too long. Moreover, the national climate bank will lower costs for all
consumers, including low-to-moderate income households, by deploying tested financial
instruments that will reduce energy consumption, costs, and emissions for everyday activities.4
Capitalizing a national climate bank will provide long-term, comparatively low-cost solution to
reduce our reliance on fossil fuels and greenhouse gas emissions, while decreasing families' energy
bills and creating new clean energy jobs. As authors of the legislation upon which the GIIGRF is
based, we urge you to maximize the impact of these funds through the capitalization of a national
climate bank which will have the capacity to make direct investments in qualified projects at the
national and regional levels and provide funding and technical assistance to state and local
financing entities. We look forward to working together as EPA establishes the implementation
procedures for the GHGRF, per the statute and intent of the Inflation Reduction Act, and thank you
for your efforts on this historic project.
Sincerely,
., Edxvard J. Markey Debbie Dingell ^
t ii '!S, p.". V" . United States Senator Member of Congress
United States Senator
4 The Climale Access l'und of Maryland is developing, managing, and financing a community solar array on the rooftop
of the Henderson-Hopkins School in Baltimore, MD. This project will be open to 175 low-to-moderate-income
households in East Baltimore, and will save each subscriber an estimated $200 annually on electricity.
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ATTACHMENT II
Page | S
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CONGRESSIONAL RECORD —HOUSE
H7702
lease sales provided through the Inflation Re-
duction Acl are somehow being rushed
through or will be conducted with insufficient
administrative process. That is simply not the
case.
These sales were scheduled under the
Obama Administration under the 2017-2022
five-year plan. Thai Interior department sub-
jected the plan to a large programmatic envi-
ronmental impact statement. They then under-
went a multi-sale EIS. These sales then also
went through a supplemental EIS. Thus, the
idea that any further process should be re-
quired is just not credible and that is why the
bill requires '.hem to occur by a date certain.
It is in our national interest to do so as
quickly as possible so that the energy crisis
does not become even worse and so that the
fuel and revenue Ihese sales will generate can
find their way into our economy sooner than
later.
Mrs. DINGELL. Madam Speaker, I rise in
strong support of the Inflation Reduction Act
we are considering today and would like to
speak specifically to the inclusion of the
Greenhouse Gas Reduction Fund, which is
based on important legislation I authored to
address the climate crisis.
The Inflation Reduction Act appropriates
$27 billion to the Environmental Protection
Agency (EPA) to finance climate specific
projects that will reduce carbon emissions,
which will be dispensed through the Green-
house Gas (GHG) Reduction Fund. The GHG
Reduction Fund is the product of more than
13 years of legislative effort by numerous
members of the House and Senate and pro-
vides resources to fulfill the vision and mission
of this legislative effort to capitalize a national
climate bank that will support a swift transition
to an equitable, clean-energy economy.
In the House, the GHG~Reduction Fund is
based on H.R, 806, the Clean Energy and
Sustainability Accelerator Act. I introduced this
important legislation to provide the maximum
funding possible to and capitalize a single
independent, non-profit national financing insti-
tution ("NNFI")—the first ever national green
bank—that would in turn make its financial
and technical resources available to commu-
nities across the country. It is our hope, as the
administration implements the GHG Reduction
Fund, it will consider the benefits and structure
of the Clean Energy and Sustainability Accel-
erator Act.
It is our hope the Environmental Protection
Agency would make awards through the GHG
Reduction Fund to capitalize a single NNFI. as
intended under the Clean Energy and Sustain-
ability Accelerator Act, and for that NNFI to
use that capitalization funding to leverage pri-
vate investment in amounts several times
greater than the initial public investment. Once
capitalized, the bill requires the entity to make
direct investments into qualified projects at the
national, regional, state, and local levels and.
importantly, lo make indirect investments into
such projects by providing financial and tech-
nical assistance to an open, inclusive, and
ever-expanding network of state and local
nonprofit financial institutions—including exist-
ing and newly established green banks and
community development finance institutions—
that are committed to making investments in
the products that will compose the clean
power platform on which the economy must
run.
The GHG Reduction Fund makes an historic
investment into low income and disadvantaged
communities as well, mandating that at least
40 percent of the over S20 billion be used to
benefit qualified projects and the financing en-
tities that support qualified projects within
these communities, but we expect that the full
investment in these communities will be far
larger through leverage and investments from
the remainder o* the Fund.
The GHG Reduction Fund, and the Amer-
ican people, would benefit most and achieve
its purpose most effectively through the cap-
italization of a single independent NNFI, as
originally intended in the Clean Energy and
Sustainability Accelerator Act, A single inde-
pendent NNFI will not be limited by any juris-
dictional 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. In addition, the NNFI approach can
indirectly invest in any community by providing
the funding and technical assistance nec-
essary to establish new financial institutions
and further capitalize and strengthen existing
ones. The NNFI would grow a diverse, open,
and inclusive network of state and local green
banks and other mission driven financing enti-
ties.
Capitalizing a single independent NNFI at
scale, through the GHG Reduction Fund,
would also enable public investment to be le-
veraged more efficiently which, in turn, drives
much greaier private capital investment in
qualified projects, whether at the national, re-
gional, state, or local level. And the Inflation
Reduction Act requires the entity to "retain,
manage, recycle, and monetise all repayments
and other revenue" generated using the cap-
italizalion grant. We count on EPA to assure
that the NNFI will be subject to the appropriate
regulations and requirements that would apply
to similar non-profit institutions that have been
capitalized with federal or nonfederal dollars.
At the same time, Ihe relationship between
EPA and the single independent nonpro'it na-
tional financing institution should be designed
to preserve its operational flexibility and ability
to respond quickly to market conditions to exe-
cute with the speed that the climate crisis de-
mands.
Finally, the Inflation Reduction Act sets a
180-day period for EPA to complete all these
steps: establish the GHG Reduction Fund,
issue a gran* solicitation, award capitalization
grants, and disburse the funds, These aggres-
sive deadlines were established because the
GHG Reduction Fund cannot achieve its pur-
pose unless the full amount of funds appro-
priated to this program are put into use
through a NNFI approach immediately. Dis-
bursing all the funds within 180 days though a
single independent NNFI. as originally in-
tended under the Clean Energy and Sustain-
ability Accelerator Act will ensure that we can
expeditiously address the urgent threat of cat-
astrophic climate change, in an equitable man-
ner, on day 181. A swift disbursement of the
maximum funding amount possible will allow
the climate bank to leverage more private fi-
nancing—thereby ensuring our public invest-
ment has a far reaching impact,
The impacts of climate change have created
an emergency situation that poses a substan-
tial danger to the health and safety of the
American public, and the award and disburse-
ment of the maximum amount of funds appro-
priated to the GHG Reduction Fund cannot be
delayed. We recognize that the timeline will
August 12, 2022
require EPA. at every step in the grant proc-
ess. to evaluate approaches that can reduce
the amount of time that it would otherwise
lake to complete thai step—and it is our inten-
tion that EPA will utilize all legally-authorized
strategies that are necessary to ensure the full
amount of the funding is disbursed on time.
Mr. THOMPSON' of California Madam
Speaker, 1 strongly support H.R. 5376, the In-
flation Reduction Act of 2022.
I am particularly pleased that the legislation
before the House includes major provisions of
my GREEN Act, including incentives for a vast
array of clean and renewable energy sources,
This legislation represents the most sweep-
ing and ambitious climate policy ever to pass
the Congress.
It reduces our dependence on fossil fuels
while accelerating the development of solar,
wind, and other renewable energy sources.
And it incentivizes individuals to limit green-
house gas emissions from their homes, their
businesses, and their vehicles.
I am also extremely supportive of the health
care provisions in this bill.
Allowing Medicare to negotiate the price of
prescription drugs has been a priority for
Democrats in Congress for decades—and this
bill not only ensures that seniors don't go
broke paying for their medicines, but also
saves taxpayers hundreds of billions of dol-
lars.
Given the negotiations of the past 18
months, this bill could not accommodate every
single priority or proposal.
And I am hopeful that my colleagues will
work with me moving forward to ensure that
the corporate minimum tax—a policy I sup-
port—does not inadvertently burden compa-
nies, like some in my district, who suffered se-
vere net operating losses in previous years
due to natural disaster.
This bill is a tremendous step forward for
our country. It pays down our deficit, reduces
the cost of prescription drugs, extends health
insurance subsidies 4or low-income Americans
and invests hundreds of billions of dollars in
clean and renewable energy.
I am proud to have helped author this legis-
lation, and I strongly support its passage,
Mr. WELCH. Madam Speaker, as many of
my colleagues know, I have worked for years
to protect patient access to pharmacies across
this nation. It is the intent of the United States
House lhat this legislation, and in particular,
Section 1860D-14C(c) MANUFACTURER
DISCOUNT PROGRAM shall operate in Ihe
same manner as the Medicare Part D Cov-
erage Gap Discount Program found under 42
USC 1395w-1t4a. CMS shall implement this
provision lo operate in Ihe same manner with
respect to a pharmacy. In that way, this sec-
tion shall not result in any reduction in phar-
macy reimbursement or require or permit price
concessions or other remuneration from the
pharmacy. We will convey this intent to the
Centers for Medicare & Medicaid Services as
they develop the rules that will govern this dis-
count program. I will continue to look for addi-
tional ways to help patients and lo preserve
and protect our pharmacies that are so essen-
tial to communities across Vermont and our
country.
Ms. BONAMICI. Madam Speaker, I rise
today in support of a transformational piece of
legislation, the Inflation Reduction Act.
The Inflation Reduction Act's historic invest-
ments will reduce costs for families and indi-
viduals, expand access to affordable health
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Environmental Financial Advisory Board Meeting, Oct. 18-19, 2022 | 111
NEW YORK
STATE OF
OPPORTUNITY-
NY Green Bank
A Division of NYSERDA
To: Kerry O'Neill, Chairperson, Environmental Financial Advisory Board
From: Andrew Kessler, President, NY Green Bank
Re: Oral Statement Delivered at EFAB October 2022 Public Meeting
D ate: October 21,2022
On October 19, 2022, NY Green Bank ("NYGB") President Andrew Kessler provided an oral
statement to the Environmental Finance Advisory Board ("EFAB") during its October 2022 public
meeting on the topic of the Environmental Protection Agency's ("EPA") Greenhouse Gas
Reduction Fund (the "Fund") established pursuant to the Inflation Reduction Act of 2022. NYGB
is pleased to hereby submit a written copy of the oral statement NYGB thanks EFAB for the
opportunity to provide its input during the public meeting and looks forward to continued
engagement with EFAB in connection with the Fund.
*
"NY Green Bank welcomes the Environmental Protection Agency's Greenhouse Gas Reduction
Fund 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, which is directly in line with our commitment to supporting these communities
across New York.
NY Green Bank is a $1 billion-dollar New York State-sponsored investment fund. We operate as
a division of the New York State Energy Research & Development Authority, and we are the
largest green bank in the United States. Our mission is to work with the private sector to transform
financing markets in ways that accelerate clean energy investments on an equitable basis and in
support of New York State climate goals.
Since we opened for business in 2013, we have advanced this mission by making SI.8 billion of
investments in more than 100 transactions in asset classes that are critical to the clean energy
transition. Our team works every day to make investments that are market-based, replicable and
scalable, and then we then find ways to create secondary markets for those investments. And, since
New York passed its historic climate law in 2019, we are committed to ensuring that at least 35%
- with the goal of 40% - of our investments benefit disadvantaged communities across New York
State.
NY Green Bank welcomes - and strongly supports - tire Environmental Financial Advisory
Board's proposed charge to the Exploratory Workgroup for the Fund. We encourage the EPA
EFAB and the Workgroup to run a transparent consultative process that solicits feedback on the
design and implementation of the Fund from the broader stakeholder community.
We encourage EFAB to consider the following general principles across tire Fund:
• Competitive allocation methodologies that are designed to identify recipients that can
mobilize capital at scale, especially in low-income and disadvantaged communities
1
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STATE Of
OPPORTUNITY-
NEW YORK
NY Green Bank
• An application process that identifies recipients with a demonstrated ability to leverage
private sector capital and access secondary markets
• Strong internal controls and compliance programs to ensure responsible stewardship of
public dollars, while avoiding undue administrative burden on Fund recipients
• An allowance for states that already have established criteria for disadvantaged
communities to be able to use such criteria to satisfy EPA's requirements
For the Zero Emission Technologies Fund specifically, it will be critical to have a reallocation
mechanism that ensures that funds are not left unused but can instead be reallocated to other
recipients who are able to maximize the use of these funds.
We look forward to receiving further guidance in the weeks ahead from the EPA EFAB and the
Workgroup. We stand ready to engage collaboratively with all market actors to advance this effort.
In the meantime, we thank EPA leadership and staff - as well as EFAB and the Workgroup - for
their important work ahead on making the Greenhouse Gas Reduction Fund a success. Thank you
for the opportunity to make remarks."
2
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Appendix 12. Final Approved GHGRF Charge
EFAB Public Meeting - October 18-19, 2022
FINAL APPROVED EFAB CHARGE
Greenhouse Gas Reduction Fund
Proposed by: EPA Office of the Administrator
Problem / Question Statement
The Inflation Reduction Act of 2022 amended the Clean Air Act to create a new program-the
Greenhouse Gas Reduction Fund (GHGRF). The GHGRF includes: (1) $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, and carry out other greenhouse
gas emission reduction activities; (2) nearly $12 billion for competitive grants to eligible entities to
provide direct and indirect financial and technical assistance to projects that reduce or avoid
greenhouse gas emissions; and (3) $8 billion for competitive grants to eligible entities to provide direct
and indirect financial and technical assistance to projects that reduce or avoid greenhouse gas emissions
in low-income and disadvantaged communities. These $27 billion are available to EPA to award grants
until September 30,2024.
EPA seeks the advice of EFAB regarding the following charge questions. For each question, EFAB should
provide a range of options (including research and literature references and other resources where
available), outlining their advantages and disadvantages.
To the extent that the analysis needs to be differentiated depending on the three different GHGRF
funding streams listed above, EPA welcomes feedback on considerations specific to each,
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?
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?
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.
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 "additionally" (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 sustainsbility
requirements on direct or indirect beneficiaries of GHGRF funding?
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EFAB Public Meeting - October 18-19, 2022
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?
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.
ii. What eligible entities and/or indirect recipients woufd best enable funds to
reach disadvantaged communities? What are their challenges and opportunities
and how can EPA maximize the use of these channels?
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?
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?
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?
III. Execution, Reporting, & Accountability
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)?
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EFAB Public Meeting - October 18-19, 2022
b. What types of requirements could EPA establish to ensure the responsible
implementation and oversight of the 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?
EFAB Mission Fit
EFAB's mission is to explore ways to lower costs and increase investments in environmental protection.
The GHGRF has the potential to create valuable new capacity through existing and new channels for
funding greenhouse gas reductions and to specifically deliver gains to disadvantaged communities
where greenhouse gas solutions are often compromised by high financing risks (i.e., capacity for
repayment, access), lack of clear delivery systems (i.e., ability to reach beneficiaries), and lack of
awareness of potential solutions. These areas represent major segments of potential environmental
harm and related benefits.
Type of EFAB Engagement
EFAB is positioned to assist EPA by providing focused guidance to EPA on strategies for establishing and
developing the GHGRF.
EFAB is comprised of experts across many segments of environmental finance and program delivery.
EFAB members have deep experience and broad networks that can be quickly leveraged to provide
focused advice to EPA around a critical and rapidly moving agenda. EFAB capacity can provide
immediate, actionable solutions that increase potential success around the GHGRF.
Approach
• Convene (fast) expert roundtables and/or listening sessions around topics that will inform
implementation of the GHGRF and summarize key takeaways and recommendations.
• Use a mix of interviews, roundtables and/or listening sessions to reach out to conveners,
researchers, and others who have engaged deeply with the ecosystem of players who could
potentially be involved in the implementation of the GHGRF, ranging from end user beneficiaries
to community-based organizations to investors, with a focus on reaching audiences not
otherwise readily able to access internal EPA staff.
• Take reference from a range of models that could be used to deliver capital to a diverse range of
communities.
EFAB asks EPA to provide a public comment process where a variety of stakeholders may provide input
to ensure that EFAB does not miss critical perspectives and viewpoints, which a comment deadline of
December 1, 2022.
EFAB GHGRF Charge Workgroups
Kerry O'Neill - EFAB Chair; CEO, Inclusive Prosperity Capital
Objectives
Name
Title / Affiliation
Margot Kane
Workgroup Co-Chair; Chief Investment Officer, Spring Point Partners LLC
Cynthia Koehier
Workgroup Co-Chair; Executive Director, WaterNow Alliance
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EFAB Public Meeting - October 18-19, 2022
Ashley Allen Jones
Founder and CEO, i2 Capital
Angela Bricmont
Chief Finance Officer, Denver Water
Stacy Brown
President and CEO, Freberg Environmental, Inc.
Theodore Chapman
Investment Banking Analyst, Hilltop Securities, Inc.
Janet Clements
President and Founder, One Water Econ
Jeffrey Diehl
CEO, Rhode Island Infrastructure Bank
George Kelly
Global Client Strategy Officer, Earth Recovery Pa rtners
Lawrence Luja n
Executive Director, Taos Pueblo Utility Service
Dennis Randolph
City Traffic Engineer, City of Kalamazoo Public Services Department
SanjivSinha
Chief Sustainability Officer, Environmental Consulting & Technology, Inc.
David Wegner
Senior Consultant on Water, Climate Change, and Asset Risk Assessment, Water Science
and Technology Board, National Academy of Sciences
Gwen yamamoto Lau
Executive Director, Hawaii Green Infrastructure Authority
II. Program Structure
Name
Title / Affiliation
Ashley Allen Jones
Workgroup Co-Chair; Founder and CEO, i2 Capital
Lori Collins
Workgroup Co-Chair; Owner and Principal, Collins Climate Consulting
Stacy Brown
President and CEO, Freberg Environmental, Inc.
Jeffrey Diehl
CEO, Rhode Island Infrastructure Bank
Eric Hangen
Senior Research Fellow, Center for Impact Finance, Carsey School of Public Policy,
University of New Hampshire
Craig Holland
Senior Director of Urban Investments, The Nature Conservancy
Craig Hrinkevich
Public Finance Team - New Jersey Managing Director, Robert W. Baird & Company, Inc.
Margot Kane
Chief Investment Officer, Spring Point Partners LLC
George Kelly
Global Client Strategy Officer, Earth Recovery Partners
Lawrence Lujan
Executive Director, Taos Pueblo Utility Service
Marilyn Waite
Managing Director, Climate Finance Fund
Gwen Yamamoto Lau
Executive Director, Hawaii Green Infrastructure Authority
III. Execution, Reporting, & Accountability
Name
Title / Affiliation
Theodore Chapman
Workgroup Co-Chair; Investment Banking Analyst, Hilltop Securities, Inc.
Mary Anna Peavey
Workgroup Co-Ch3ir; Grants and Loans Bureau Supervisor, Idaho Department of
Environmental Quality
Ashley Allen Jones
Founder and CEO, i2 Capital
Stacy Brown
President and CEO, Freberg Environmental, Inc.
Jeffrey Diehl
CEO, Rhode Island Infrastructure Bank
Phyllis Garcia
Treasurer, San Antonio Water System
Eric Hangen
Senior Research Fellow, Center for Impact Finance, Carsey School of Public Policy,
University of New Hampshire
George Kelly
Global Client Strategy Officer, Earth Recovery Partners
Cynthia Koehler
Executive Director, WaterNow Alliance
Dennis Randolph
City Traffic Engineer, City of Kalamazoo Public Services Department
Gwen Yamamoto Lau
Executive Director, Hawaii Green Infrastructure Authority
EPA Client
Alexandra Nunez - EPA Office of the Administrator
Timothy Profeta - EPA Office of the Administrator
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Appendix 13. Office of Water Proposed Charges
PROPOSED CHARGES FOR EPA'S
ENVIRONMENTAL FINANCIAL ADVISORY BOARD
OFFICE OF WATER
Protecting Historic Investment into Water Infrastructure for the Future: Congress and President Biden
have delivered a historic influx of funding for water infrastructure to communities through the
Bipartisan Infrastructure Law and the American Rescue Plan Act. These efforts build on the successful
EPA State Revolving Fund and Water Infrastructure Finance and Innovation Act programs. While
communities are eager to utilize this funding and many are familiar with best practices, some
communities - especially those that may be disadvantaged or designated environmental justice
communities - may need additional assistance to ensure that this influx on one-time funding is
sustainably invested. The agency recognizes that a factor of this sustainability may require harmonizing
these investments with its regulatory efforts. There are several benefits to sustainable financial planning
including greater financial predictability, ability to address areas of historic underinvestment and unmet
need, future financial self-sufficiency, and improvements to relationships with local decision-makers and
customers. EPA looks to support communities in realizing the long-term benefits of sustainable
investments and asks for EFAB's expertise in possible ways the agency could accomplish this goal.
STATE REVOLVING FUNDS
CHARGE 1: UTILIZATION OF SRF ADDITIONAL SUBSIDIES TO TARGET ASSISTANCE TO
NEIGHBORHOODS OR HOUSEHOLDS IN NEED
The CWA specifically allows CWSRF programs to provide additional subsidization to communities that do
not meet a state's affordability criteria, but where the assistance recipient seeks additional subsidization
to benefit individual ratepayers in the residential user rate class that will experience a significant
hardship from the increase in rates necessary to finance the project if additional subsidization is not
provided. This provision has not been widely implemented by the SRF programs and EPA wishes to
support its use in states. State program managers and utilities have identified potential difficulties in
pursuing this opportunity to invest in needed projects while also assisting customers who face
affordability challenges. Some utilities cannot charge differing rates to customers within the same rate
class; EPA and states are not sure how SRF funds would flow from the federal Treasury though state
programs to the assistance recipients and then "credited" to the customers the additional subsidization
is intended to benefit. The Agency asks EFAB to research the possible flow of funds, through rate
structures or other mechanisms, for additional subsidization provided under this authority reaches
ratepayers that would experience a financial hardship as a result of an increase in rates necessary to
fund the project.
• Clean Water Act section 603(i)(A)(ii) states that "Additional subsidization may be provided "to
benefit a municipality that does not meet the affordability criteria of the State if the recipient—
(I) seeks additional subsidization to benefit individual ratepayers in the residential user rate
class; (II) demonstrates to the State that such ratepayers will experience a significant hardship
from the increase in rates necessary to finance the project or activity for which assistance is
sought; and (III) ensures, as part of an assistance agreement between the State and the
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recipient, that the additional subsidization provided under this paragraph is directed through a
user charge rate system (or other appropriate method) to such ratepayers."
CHARGE 2: EFFECTIVE UTILIZATION OF WATER INFRASTRUCTURE INVESTMENTS
With the passage of the Bipartisan Infrastructure Law, states have found themselves in the unique
position of receiving historic allotments of funding in addition to the annual SRF allotment, that can be
used through the SRFs for water infrastructure needs. Many states have managed their programs in a
timely and expeditious manner and are situated well to absorb these new resources and address water
quality and public health concerns. However, some state programs, experience lower fund utilization
and may or may not have a difficult time spending these new funds in addition to their current assets.
EPA has often stressed the importance of timely and expeditious use of funds be it through handbooks,
program guidance, and policy memos such as the ULO policy. The Agency is wondering if there are other
ways of thinking about or ways to analyze the fund and ensure all resources are utilized in states for
water quality and public health.
The Clean Water Act and the Safe Drinking Water Act require expenditure of funds in an expeditious and
timely fashion. The Agency requests EFAB research and make recommendations about the current suite
of metrics and analysis EPA does in conducting fiduciary oversight and if there are other ways to analyze
or gauge whether a program is meeting this requirement. Of interest is understanding and assessing
cash balances given the wide variability in capitalization levels of the unique programs and the differing
levels of fund complexity from non-leveraged to funds that regularly leverage, EFAB could look to the
lending industry for standard practices to contextualize recommendations about loan portfolio
management with respect to cash balances observed within the SRF context. Are there additional
opportunities for ratio analysis, trend analysis, incorporating audited financial statements, and cash flow
modeling and to what extent can the Agency adopt best practices?
CHARGE 3: IMPROVING EFFICIENCY OF IMPLEMENTING EPA FUNDING
In its July 6, 2022, letter to Administrator Regan, the Local Government Advisory Committee (LGAC)
recommended: "EPA should work with states to make the process of getting funding from EPA to a
community more efficient, and even developing a related metric to encourage state-to-state
competition." While LGAC recognized that some states and communities did not need this guidance,
they identified a need for incentrvization for others. The agency, as part of the effort to promote
collaboration between its advisory councils, would ask EFAB to research challenges communities
experience in receiving EPA funding and ways to address these challenges. EFAB could also propose
ways to recognize those states who make improvements in efficiently reaching historically underserved
communities, such as an awards program, and measurement methodology.
TECHNICAL ASSISTANCE
CHARGE 4: SUSTAINABLE TECHNICAL ASSISTANCE
The Bipartisan Infrastructure Law provided an unprecedented level of investment in developing and
providing technical assistance to communities. This investment requires a similar level of unprecedented
coordination to identify community challenges and translate those needs into technical assistance. The
agency also recognizes that addressing these needs may extend beyond the technical assistance funding
provided under the Bipartisan Infrastructure Law, This proposed charge would ask EFAB to consider
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ways technical assistance could be established in a sustainable manner to reflect the agency's long-term
commitment to assisting communities with effectively utilizing funding. The Board could also research
different aspects of technical assistance and provide insight on the future of this assistance.
CHARGE 5: DECENTRALIZED WATER SYSTEMS OPERATIONS & MAINTENANCE
Homeowners with decentralized (septic) systems face a unique challenge in that they are responsible for
the care and maintenance of their systems. There is little financial or logistical support to ensure that,
after these systems are installed, they are sustainable in the long-term. This charge is for the EFAB to
advise the agency on options for how to address the long-term operations and maintenance (O&M)
around decentralized wastewater systems to ensure that once new systems are installed, there is also a
plan for O&M that is realistic and achievable, Disadvantaged communities are at higher risk of
premature system failures simply due to lack of proper O&M; the EFAB should provide advice on options
for how to help these communities ensure their investments are protected.
AFFORDABILITY
CHARGE 6: COMMUNITY ASSISTANCE PROGRAMS
With funding provided to states and communities through the Bipartisan Infrastructure Law and the
American Rescue Plan Act, utilities have developed or increased availability of Customer Assistance
Programs (CAPs). These programs serve to help economically disadvantaged customers pay their utility
costs or reimburse the utility for customer nonpayment. To achieve these goals, communities
throughout the country have implemented varying methods to apply these customer assistance
programs. This charge would ask the Board look into successful community assistance programs and
propose ways that other communities could institute and fund similar programs to meet their needs.
This charge would focus on the funding approaches currently being used and potential new approaches,
such as SRF financing or private sector financing, for these assistance programs. An important aspect
would be exploring ways that communities could fund and implement these within the bounds of their
state regulations.
CHARGE 7: BIL SECTION 50108 NEEDS ASSESSMENT FOR RURAL AND URBAN LOW-
INCOME COMMUNITY WATER ASSISTANCE
Congress has directed the Agency to conduct a needs assessment for nationwide rural and urban low-
income community water assistance authorized in section 50108 of the Infrastructure Investment and
Jobs Act (Public Law 117-58). This study would examine the prevalence of municipalities, public entities,
or Tribal governments serviced by rural, medium, or large water providers that service a
disproportionate percentage of qualifying households with need or have taken on an unsustainable level
of debt due to customer nonpayment. As part of the assessment of needs, the Agency could evaluate
water assistance programs and water affordability, such as evaluating information on rate structure,
service disconnections due to customer nonpayment for services, service restorations following
disconnection for nonpayment, customer arrearages, unpaid bills sent to the local taxing authority for
collection, and any information regarding water assistance programs or payment plans offered. The
Office of Water would ask the Board to provide advice on the content of this survey, how to best
execute the survey, and the content of the resulting report.
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CHARGE 8: RATE STRUCTURING
Management of water systems is often sustained by customer revenues. As costs for water
infrastructure and operations and maintenance (O&M) continue to rise, vulnerable, low-income,
minority, and tribal communities bear this burden disproportionately to others. Developing a rate
structure that best supports the system's priorities and objectives will help systems meet their CWA
obligations and reduce the burden on its customers. Communities across the country are examining
ways they currently set rates and looking for guidance on ways, within the boundaries of their state
regulations, that rate design could be adjusted to offset costs to their most vulnerable residents while
still making progress on their capital infrastructure projects. This proposed charge for EFAB would
consider what options exist for rate structuring to help households who would be adversely affected by
significantly increased rates and can be accomplished within the bounds of existing state legal
requirements or restrictions. Options might include percentage of income plans, lifeline rates, income-
based rate structures, senior assistance plans, payment restructuring programs, and customer charge
waivers.
MUNICIPAL BOND INDEBTEDNESS
CHARGE 9: MUNICIPAL BOND INDEBTEDNESS
Communities throughout the country, and in particular within the Great Lakes Region, are heavily
burdened with environmental debt. Smaller communities may disproportionately face carrying this debt
to pay for environmental mandates while larger communities within the region do not have these
responsibilities. This proposed charge asks EFAB to investigate possible financing mechanisms that could
ease this burden for smaller communities and, if feasible, ways the municipal bond indebtedness burden
could be alleviated through regional partnerships.
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