On May 11, the Washington Department of Community, Trade, and Economic Development (“CTED”) filed an application with the United States Department of Energy to receive American Recovery and Reinvestment Act (“ARRA”) funds for Washington’s State Energy Program (“SEP”). The application contains funding for renewable energy, energy efficiency, and farm energy assessments. Once the SEP is approved, funding will commence through CTED with advice from the Clean Energy Leadership Council.

Energy Efficiency and Renewable Energy Loans and Grants Program

Washington’s SEP dedicates $38.5 million to a loan and grant fund for innovative renewable energy projects that use commercial or near commercial energy technologies. These funds may also be used for cost-effective energy efficiency projects. The goal of this program is to produce renewable energy or reduce energy consumption in a manner which leverages ARRA funds to create or retain as many jobs as possible. The first request for proposal (“RFP”) under this program should be issued in June 2009. CTED anticipates issuing up to 25 loans and 15 grants.

Community-Wide Urban Residential and Commercial Energy Efficiency Program

Washington’s SEP dedicates $14.5 million for the development and deployment of at least three large neighborhood based building energy efficiency projects. This will further the state’s policy goal of annually weatherizing twenty thousand homes and business over the next five years. The Washington State University Extension Energy Program will coordinate and collaborate with CTED on the design, administration, and implementation of the projects.

Energy Efficiency Credit Enhancement

Washington’s SEP provides $5 million toward credit enhancement mechanisms to generate high levels of leverage for energy efficiency projects that go beyond direct loans. CTED will create risk reduction mechanisms that allow financial institutions to lend to a broader pool of applicants with lower rates and longer loan terms. The risk reduction mechanisms include loan guarantees, loan loss reserves, credit enhancements, and leverage revolving loan funds.

The Farm Energy Assessments Program

Washington’s SEP directs $500,000 to increase on-farm energy efficiency. These funds will be used to create tools for farm energy analysis, and to train staff in the use of such tools. Afterwards, farmers will be provided with a tool to analyze current farm practices and proposed changes.

Clean Energy Leadership

Washington’s SEP will be carried with advice from the Clean Energy Leadership Council. The Clean Energy Leadership Council will consist of representatives from Washington’s major clean energy companies, supporting organizations, and the state’s legislature. The council will be co-chaired by the director of CTED. The Council will develop strategic recommendations to develop clean energy industries within Washington, review energy investments, and recommend potential clean energy programs and projects for possible federal funding through the SEP.