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Roya Stanley is rolling up her sleeves. As director of the Iowa Office of Energy Independence, Stanley knows that the fledgling agency’s nameplate goal of achieving energy independence will take a tremendous coordinated effort between government, businesses and utilities.

The recent passage of the $787 billion American Recovery and Reinvestment Act has created new momentum for energy-efficiency projects in the state. With that legislation, the Office of Energy Independence (OEI) has gained a big pool of dollars – at least $50 million in federal stimulus money – that it must use to fund energy-efficiency programs before October 2010. The additional funding will accelerate energy-efficiency initiatives by the state, which for the past two years has focused its efforts largely on early-stage research and development funding through the Iowa Power Fund.

“There’s an enormous opportunity,” Stanley said with an eager smile. “That also means there’s an enormous amount of work. But I’m used to working hard.”

Globally competitive

Stanley, who was appointed to head the new state agency in August 2007 by Gov. Chet Culver, said becoming more energy efficient is really about increasing the global competitiveness of both Iowa and the country.

“Energy efficiency is really the foundation of anything you do in the energy arena,” Stanley said. “You start out by increasing your productivity, which is what energy efficiency is; it is genuinely a productivity factor.”

She has specialized in energy-efficiency and renewable-energy programs for more than 25 years at both the state and federal levels. Stanley spent more than 18 years of her career with the Iowa Department of Natural Resources, where she headed the department’s Energy Bureau. From 2000 to 2007, she led the U.S. Department of Energy’s (DOE) National Renewable Energy Laboratory’s efforts in disseminating results of the latest research in renewable and energy-efficient technologies to state and local officials.

Energy efficiency has already become a goal of many businesses. For instance, Stanley said, representatives from a Fortune 500 company recently contacted her to explore what incentives the state had available to help it become more energy efficient so it could improve its bottom line. That request helped spur the concept for a revolving loan fund that will be available for manufacturers to invest in energy-saving equipment.

Iowa expects to receive $40.5 million in stimulus funds to apply to energy-efficiency initiatives that are part of its State Energy Program, which is geared toward the goal of significantly reducing the state’s total energy consumption over the next three years.

“Slightly less than half of that ($40.5 million) will go to buy down the cost of efficiency improvements, which could include renewable-energy projects, to public-sector facilities (such as schools),” Stanley said. “We will expect a significant match from those facilities, but there’s a (state) financing program in place, the Energy Bank program, to assist them.”

The state plans to create separate revolving loan funds that would provide financing for energy-efficiency projects to local governments, nonprofit organizations and private-sector businesses such as manufacturers. Alternative-energy projects, among them biofuels plants, will also be candidates for these funds to make their operations more efficient, she said.

“As we develop these programs, we will be very conscious about collaboration with the appropriate entities,” she said. “We anticipate the utilities will be very actively engaged, and we’ve already started discussions with them and look forward to working with them. It will also require collaboration with engineers, architects and contractors. We also envision working collaboratively with the Iowa Energy Center and the Center for Energy and Environmental Education, recognizing that we’ve got expertise around the state, and now we need to work together and move very quickly.”

The state has also applied for $9.6 million from the Energy Efficiency & Conservation Block Grants program, designed to provide stimulus funds to local governments to pay for energy-saving programs. The state is also likely to receive an additional $3 million to allocate to assist homeowners in purchasing energy-efficient appliances through the Home Performance With Energy Star program, Stanley said.

Communities will be able to use the block grant funding for a wide range of activities related to energy efficiency and renewable energy, such as energy audits and assistance with Energy Star incentives and other initiatives. The transportation sector is another significant opportunity for projects. For instance, cities could use the block grant funding to install smart traffic lights that can reduce idling time by vehicles, she said.

In addition to the funds specifically targeted to Iowa, organizations will be able to compete for a portion of more than $19 billion in stimulus funding targeted for research and development projects related to energy efficiency.

Stretch goal

In its 2008 State Energy Plan, the OEI established a goal of decreasing the state’s per-person energy consumption by at least 25 percent of 1990 levels by 2012. However, because of the state’s increasing energy use, meeting that goal will actually require a nearly 40 percent reduction in energy consumption from 2006 levels, which are the latest figures available (see chart on next page). Between 1980 and 2006, Iowa’s total energy consumption, including all residential, commercial, industrial and transportation energy usage, increased 17 percent.

“It’s a stretch goal, and I think it’s important to recognize that,” Stanley said. However, the timing of the stimulus money will mean that Iowa will be able to pursue that goal much more aggressively, she said.

“We would have been moving in a similar direction, but it would have been more slowly,” she said. “If the governor’s I-Jobs program is created, it will move forward even more quickly.”

In addition to some budget reductions in the past year, the OEI had $7.5 million of its funding redirected toward rebuilding efforts in storm- and flood-damaged areas of the state, Stanley said. That funding was directed to helping both businesses and homeowners rebuild more energy efficiently.

“I would say both the governor and the Legislature have been very supportive, and we anticipate (receiving) our budget for next year to be able to invest,” Stanley said. “That will make our (Power Fund) applicants happy, because we already have several million dollars’ worth of projects in the queue for next year’s funding.”

Since its creation less than two years ago, the Iowa Power Fund Board has awarded $31 million to alternative-energy research and development projects, leveraging $183 million in private and federal funding. The fund has been allocated $50 million in state funds over the past two years toward a $100 million goal.

“At this point, we anticipate the Power Fund will continue to be focused on R&D and early-stage commercialization,” Stanley said, though a few energy-efficiency projects have been funded, such as the AmeriCorps program that provided workers to renovate homes and businesses in storm-damaged areas.

“The stimulus money, conversely, is exclusively for commercialized technologies; it is not to be used for R&D or early-stage commercialization,” Stanley said. “We do anticipate using a small portion of stimulus funds (about $2 million) for demonstrating commercialized technologies that aren’t used very much in this state. One example of that might be photovoltaic technology; you don’t see very much of that in Iowa.

“Another area of renewable technology that we’re interested in and are looking for opportunities to demonstrate is solar hot-water heat, particularly for 24-7 operations that are large users, such as hospitals and prisons. It doesn’t take the place of conventional systems, but it can shave off many degrees of having to bring up the temperature, so you reduce the consumption of conventional fuels.”

Stanley said her office will seek public input on the preliminary plan for using the stimulus money, which it has already submitted to the DOE, before finalizing the plan.

Interest in the funding has been high, she said. “We get a lot of phone calls, and we have received information from many folks about various projects. We are working on an application form, and when we have that we’ll be sharing that with anyone who has contacted us. And of course, it will be available on our Web site.” The form should be ready within four to six weeks, she said.

Potential applicants should be doing their homework now, she said. For instance, in a proposal for a new energy-efficient building, “we can assist with the energy-efficient components of that building, but someone needs to be able to identify what those components are. And we wouldn’t be able to buy the entire boiler, per se, but we could buy down the incremental cost of an efficient boiler versus an inefficient boiler. Or we could buy down the cost of a geothermal system. So we’re encouraging people to do their technical work and know what their costs and paybacks are.”

As in other aspects of the stimulus program, “we need to be investing in projects that are shovel-ready,” Stanley said. “We need to obligate all of the money by Sept. 30, 2010. We’ll only be able to do that with projects we can really understand, and understand that they’re going to happen fairly quickly.”