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The AFIG program promotes the use of alternative fuel vehicles from fuels such as biomass.

Pennsylvania

• Alternative Fuels Incentive Grant Program
• Energy Harvest Grants
• Pennsylvania Energy Development Authority Grants, Loans, and Loan Guarantees
• Sustainable Energy Funds

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Alternative Fuels Incentive Grant Program

Pennsylvania’s Alternative Fuels Incentive Grant (AFIG) program, established by the state legislature in 1992, promotes the development of infrastructure for and use of alternative fuel vehicles in Pennsylvania in an effort to improve air quality throughout the state. The program also funds advanced alternative fuel vehicle technology research, development, and demonstration projects. Among the fuels promoted by the AFIG program are: compressed and liquefied natural gas, ethanol, methanol, hydrogen, hythane, liquid petroleum (or propane gas), electricity, and fuels derived from coal and biomass. The program is administered by the Pennsylvania Department of Environmental Protection (PADEP).

Each year, PADEP makes millions of dollars in grants available through the program to companies, organizations, local governments, schools and universities, and private individuals. The grants cover a percentage of the added cost of purchasing alternative fuel and hybrid electric vehicles and converting conventional fuel vehicles to operate on alternative fuels. The remainder is paid by the grantee from other sources. Grants are also available to cover costs directly associated with the design, preparation, and construction of refueling and recharging infrastructure. To date, the AFIG program has awarded more than $70 million dollars to more than 880 projects throughout Pennsylvania.

The fund receives about $5 to $6 million annually from the General Fund. The amount received is equal to 0.25 mills of the utilities gross receipts tax collected during each fiscal year. The AFIG program is typically open for competitive proposal submission one time during the year for projects covering a 24-month period starting July 1 after the proposals are due. Applications are accepted during open windows of opportunity, which generally run from April thru June. (Contact the program coordinator for exact dates.) For a project to be eligible, costs cannot be incurred prior to the stated performance of work period.

Landfill gas utilization projects could receive funding if they meet the following criteria:

• The applicant must be located in Pennsylvania or registered or incorporated under the laws of the Commonwealth of Pennsylvania to conduct business in the state.
• The landfill project must operate in Pennsylvania for a minimum of three years.
• The captured landfill gas must be used as a fuel for vehicles.

Note: Captured landfill gas used for powering anything other than a vehicle is not eligible.

Energy Harvest Grants

In 2003, the Pennsylvania Departments of Environmental Protection (DEP) and Agriculture initiated a program that provides $5 million annually in grants to improve air quality, preserve land, protect local watersheds, and provide economic opportunities for the state's agricultural community. The initiative, the Pennsylvania Energy Harvest, finances the implementation of clean and renewable energy technologies that have measurable benefits in terms of pollution reduction, environmental quality, and reduced energy use.

The initiative is part of a plan for state government agencies to obtain 18 percent of their electricity from renewable and alternative energy resources, including biomass, wind, solar, small-scale hydroelectric, landfill methane, coal-bed methane, and waste coal. The DEP also invites applications for projects involving clean or renewable energy resources other than those listed above.

Funding under the Pennsylvania Energy Harvest Grant Program is available to local governments, conservation districts, nonprofit organizations, schools and school districts, and colleges and universities. Farms and other businesses with fewer than 100 employees can apply through an eligible sponsor.

Beginning in 2008, Energy Harvest requests are limited to no more than $500,000. Also, all applications will be required to quantify water quality benefits resulting from the project to be eligible for review.

For information about the next round of grant opportunities, contact the DEP Grants Center at 717-705-5400. More information about individual grant recipients and their projects is available on the program Web site.

Pennsylvania Energy Development Authority Grants, Loans, and Loan Guarantees

The Pennsylvania Energy Development Authority (PEDA) is an independent public financing authority that finances clean, advanced energy projects in Pennsylvania. The Authority was created in 1982 by the Pennsylvania Energy Development Authority and Emergency Powers Act, and was revitalized by Governor Rendell through an April 8, 2004 Executive Order. PEDA can provide funding in a variety of forms, though most awards are grants and loans. Other funding programs are available through the Department of Community and Economic Development, www.newpa.com.

In tandem with the state’s renewable portfolio standard, financing from PEDA is driving investment in solar energy; wind; low-impact hydropower; geothermal; biologically derived methane gas, including landfill gas; biomass; fuel cells; coal-mine methane; waste coal; integrated gasification combined cycle; demand management measures, including recycled energy and energy recovery, energy efficiency and load management; and clean, alternative fuels for transportation. PEDA financing is available to for profit businesses, local governments, and nonprofit organizations operating in Pennsylvania and to businesses interested in locating their advanced energy operations here.

Thus far, PEDA has made 81 awards totaling almost $32 million in funding for clean energy projects including five landfill gas energy (LFGE) projects that have been approved for over $2.4 million in funding.

PEDA’s April 2008 solicitation will offer $12.8 million in grant funding. There is a maximum individual award of $1 million. All projects must include a research component, and cost-share is required.

Sustainable Energy Funds

The Pennsylvania Public Utility Commission (PUC) approved the establishment of the Sustainable Energy Funds (SEFs) in 1998 as a condition for the final settlement of the electric restructuring plans of the state’s five largest electric companies. Under the settlement, five funds totaling approximately $55 million were established to address environmental and economic development issues across the state. The funds are:

• The Sustainable Development Fund in the PECO Energy Company territory
• The Sustainable Energy Fund of Central Eastern Pennsylvania in the PPL Electric Utilities, Inc. territory
• The West Penn Power Sustainable Energy Fund in the Allegheny Power territory
• The GPU Sustainable Energy Fund for the territories of Pennsylvania Electric Company and the Metropolitan Edison Company. The GPU Sustainable Energy Fund has a single board of directors but maintains two separate funds for its two territories.

The board membership of the SEFs and their bylaws are subject to PUC approval. The SEFs received their funding from the distribution utilities, which collect funds as part of the distribution rate of 1/100 of a cent per kilowatt hour ($0.0001/kWh).

The funds were established to:

• Promote the development of renewable energy and advanced clean energy technologies and services.
• Encourage the adoption of energy conservation and efficiency technologies and services.
• Facilitate the growth of sustainable energy businesses that design, manufacture, sell, install, or maintain these technologies.

The SEFs provide financial assistance in the form of loans, near-equity, and equity investments and grants. Landfill gas is considered a renewable resource in Pennsylvania. As such, landfill gas utilization projects are eligible for funding.

In May 1999, the PUC created a Pennsylvania Sustainable Energy Board (PASEB) to provide oversight, guidance, and technical assistance to the five regional boards that oversee the Sustainable Energy Funds. The PASEB and each regional board work together to identify potential opportunities, prioritize the regional funds’ objectives, and develop an outreach plan to garner further support for the initiatives. The PASEB also serves as an information clearinghouse and develops educational programs for SEF Boards.

The SEFs differ from most other state funding resources because they actively involve local communities in the decision-making process. Local residents serve on the SEF boards, and the funds are administered locally. Grassroots marketing of the funds draw local project proposals and regional funding opportunities. Hometown projects result in local awareness of the SEFs and of the technologies they promote.