Microgrids for Community Resilience Program: Grant Application Guidelines

The following guidelines are designed to assist potential applicants in applying to the  Microgrids for Community Resilience (MCR) Grant Program.

MCR Grant Program Background and Purpose

The MCR Program provides grants to support utilities, anchor institutions, and local governments to establish microgrid resources to build community resilience regarding electric grid disruptions in Colorado communities. The MCR Program was created by House Bill 22-1013 and expanded with U.S. Department of Energy formula funding (40101d).

HB22-1013 states the following purpose of the MCR Program: In the rural areas of the State in which many cooperative electric associations operate, interruptions in the delivery of electric service present significant threats to the community anchor institutions located in those areas.  The use of microgrids can help increase a community's resilience regarding severe weather or natural disaster events that can affect the electric grid by providing the community with an alternative, reliable source of electricity that is not dependent on the electric grid. Many rural communities lack the resources necessary to develop microgrids, and through grants made to cooperative electric associations and municipally owned utilities, associations and municipally owned utilities can invest in microgrid resources in eligible rural communities within their service territories that are at significant risk of severe weather or natural disaster events (HB22-1013, pg. 2).

Similarly, the Department of Energy formula funding (40101d) program is designed to strengthen and modernize America’s power grid against wildfires, extreme weather, and other natural disasters that are exacerbated by the climate crisis.

Microgrids are one solution in ensuring energy reliability and resiliency. Find out more about additional ways the State of Colorado is advancing energy and grid resiliency.

Technical Assistance Availability

We encourage applicants to have a pre-submission meeting with Julia Masters to discuss your proposed project. This meeting can be anytime before or during the application window/drafting process.

Some highlighted technical assistance resources include:

• Onsite Energy Technical Assistance Partnerships (TAPs): Onsite Energy TAPs assist developing microgrid projects and offer up to 40 hours of free technical assistance.
• Collective Energy: Social benefit organization supporting healthcare clinics and organizations in securing microgrid funding, planning, deploying, and management.
• Clean Energy to Communities: This program provides communities with expertise and tools to achieve their clean energy (including renewable-tied microgrids) goals through partnerships, peer learning, and expert match.

See here for additional microgrid-related technical assistance resources.

Funding & Eligible Applicants

Approximately $11M in planning and construction grants will be available in Spring 2024. Notices of Funding Announcements will be shared through the MCR Program website and grid resiliency email list-serv.

Funding for the MCR Program comes from two sources: (1) State funding from HB22-1013 and (2) Federal funding from the Bipartisan Infrastructure Law, U.S. Department of Energy 40101d formula funding to the State of Colorado. The selection process will determine if the applicant is eligible for State or Federal funding and will depend on the applicant type, project timeline, availability of funds, and other considerations. The table below provides an overview of the differences in funding sources.

• Eligible applicants:
  • State funding (HB22-1013): Rural electric cooperatives and municipal-utilities only that serve one or more eligible rural communities located within the applicant’s service territory are eligible to apply for both planning grants and construction/implementation grants.
  • Federal funding (40101d): All utilities, local governments, and community-based anchor institutions 
    • Community anchor institutions are schools; libraries; [public and non-profit] hospitals or other health-care facilities; law enforcement, emergency medical service providers, or other public safety agencies; government offices; community organizations that support marginalized communities; or other critical community service facilities (HB1013, pg 2-3). Local governments and community-based anchor institutions must submit a Secretarial Eligible Entity Designation Request form. 
    • Local governments and community-based anchor institutions are not eligible for planning grants through this program. For funding support for planning/feasibility studies in microgrid development, please see Energy and Mineral Impact Fund (EIAF) administrative grants (pg 5) or Combined Heat and Power Technical Assistance Partnerships (CHP TAPs) for up to 40 hours of free technical assistance .  If the applicant is a healthcare center, see Community Health Access to Resilience Green Energy (CHARGE) or Collective Energy. 
• Project/funding timeline:
  • State funding: must be spent by June 30, 2026
  • Federal funding: must be spent by April 30, 2028. 
• Funding availability:
  • State funding: $517,800
  • Federal funding: $10,661,810

Types of Eligible Projects 

Projects that will be funded include planning and construction/implementation of microgrid assets.  

• Planning 
  • Planning/scoping
  • Feasibility
  • Preliminary designs
  • Final design studies
• Construction/implementation
  • New generation
  • Storage/battery backup
  • Microgrid controller
  • Other electrical components (HB22-1013, pages 2-3; HB 22-13, page 6)

Eligible communities must be experiencing significant risk due to at least one of the following: a) extreme weather/climate threats risk and vulnerabilities; b) socioeconomic/environmental justice risk and vulnerabilities; c) infrastructure risk and vulnerabilities. Applicants will be asked to include data and narrative in applications reflecting various risks and vulnerabilities. DOLA has created the MCR Climate & Social Risk & Vulnerabilities Mapping Tool to support applicants in understanding and documenting their risks and vulnerabilities as required in the application process.

Proposed microgrid project(s)/plans must center around strengthening resilience to community-based anchor institutions and/or essential infrastructure. Community anchor institutions are schools; libraries; hospitals or other health-care facilities; law enforcement, emergency medical service providers, or other public safety agencies; government offices; community organizations that support marginalized communities; or other critical community service facilities. (HB22-1013, pages 2-3)

Proposed microgrid project(s)/plans that have a higher reliance on non-fossil-fuel-based generation will be prioritized. (HB 22-13, page 6)
 

Matching Dollar Requirements

For all rural cooperative utilities or municipal utilities, a one-third cost match (also known as one-quarter cost share) is required (in-kind and administrative costs are eligible). If the utility is over the threshold of 4 million MWh per year, the match increases from one-third to 100%.

A one-third cost match is calculated by taking the amount that the entity contributes and dividing it by the grant request amount. For example, if a project request is $30,000, the cost match would be $10,000 ($10k/$30k =  33.33% or one-third).  

Local governments and anchor institutions must provide a 100% cost match.

Maximum Award Request 

For all planning grants, applications should not exceed the maximum award of $36,000.

For all construction (storage/controller) grants, applications should not exceed the maximum award of $2,000,000.

For all construction (generation) grants, applications should not exceed the maximum award of $94,000.
 

Project Scoring

All applications will be reviewed by the MCR Selection Committee. The DOLA Executive Director makes all final funding decisions, subject to Department of Energy approval of Federally-funded projects. If a project is awarded and approved by DOE (as applicable), DOLA staff will work with the grantee on the contracting process.

The following scoring rubric relates to the application questions.

• Project Description and Management (20 points) 
  • Problem, opportunity, or challenge is clearly identified 
  • The project has multiple community benefits 
  • The application has included demonstration/letters of support from community-led groups, anchor institutions, local governments, or organizations representing socially vulnerable populations
• Project Readiness (30 points) 
  • Steps have been taken in advance of applying for the grant 
  • Project aligns with other local and/or regional plans
  • Utility has utilized and/or promoted energy efficiency and demand-side management programs
  • Examples of year-round considerations that electric cooperatives and municipal utilities can consider are detailed on the ICF International website
• Measures of Risks and Vulnerability (30 points)
  • As specific as you can be for your service territory or project’s location, please refer to the MCR Climate & Social Risk and Vulnerabilities Mapping Tool to highlight risks and vulnerabilities including:
    • Socioeconomic risks and vulnerabilities are referenced and outlined through narrative and data 
    • Climate risks and vulnerabilities are referenced and outlined through narrative and data
      • Steps have been taken to ensure microgrid assets are protected from threats of climate impacts
    • Infrastructure risks and vulnerabilities are referenced and outlined through narrative and data
      • Project is expected to improve grid reliability
• Budget and Timeline (10 points)
  • Project budget template includes relevant minimum match amount, description of how cost estimates were determined, cost match commitment letter upload
  • Project can begin shortly after awarded funds
  • Project timeline is reasonable and funds will be able to be expended within funding window

Post Grant Award

Utilities will submit a standard quarterly progress and financial report template, which the State will provide to awardees. Technical assistance with reporting requirements will be available.

All applicants should be prepared to report to DOLA the following financial reporting on a quarterly basis:

• Amount of total project funding, by funding source, that has been encumbered and expended to date
• Projected timeline for full expenditure of funds
• In addition to the standard financial reporting, all Federal awardees will be expected to report the following metrics, as well as any additional qualitative metrics that the awardee deems relevant to their project:
  • Number of outages
  • Number and type of customers served by substation, specifically considering disadvantaged, fossil energy, and rural communities and tribes served
  • Number and type of critical infrastructure served by substation (e.g., resilience hubs, community centers, transportation, fuel supply, food and water services)

All projects must meet performance criteria based on the commitments made in their application and grant award. Projects may be denied reimbursement or may be required to pay back funds if performance criteria are not met. Applicants must follow your organization’s procurement rules. If rules are not in place, State procurement rules must be followed.

If projects are funded with Federal funds, all Grant awards made under this Program shall comply with applicable law, including regulations contained in 2 CFR Part 200 as amended by 2 CFR Part 910.

• National Environmental Policy Act (NEPA): Awards using Federal funding are subject to the National Environmental Policy Act (NEPA); 42 U.S.C. § 4321, et seq., which requires Federal agencies to integrate environmental values into their decision-making processes by considering the potential environmental impacts of their proposed actions. For additional information, visit the DOE NEPA website. While NEPA compliance is a Federal agency responsibility and the ultimate decisions remain with the Federal agency, all recipients selected for negotiation of an award will be required to assist in the timely and effective completion of the NEPA process. NEPA compliance activities should be accounted for in the project scope, schedule, and budget. If an Application is selected for negotiation of award, applicants will be required to complete an Environmental Considerations Summary.
• Davis-Bacon Act (DBA): Projects awarded will need to comply with the Bipartisan Infrastructure Law Section 40101d that all laborers and mechanics employed by the applicant, subrecipients, contractors or subcontractors in the performance of construction, alteration, or repair work funded in whole or in part under this funding shall be paid wages at rates not less than those prevailing on similar projects in the locality, as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code commonly referred to as the Davis-Bacon Act (DBA). Applicants shall provide written assurance acknowledging the DBA requirements above, and confirming that the laborers and mechanics performing construction, alteration, or repair work on projects funded in whole or in part by 40101d are paid or will be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by subchapter IV of Chapter 31 of Title 40, United States Code (Davis-Bacon Act). For additional guidance on how to comply with the Davis-Bacon provisions and clauses, see Davis-Bacon and Related Acts and Protections for Workers in Construction under the Bipartisan Infrastructure Law. Further guidance will be provided upon award.
• Build America Buy America (BABA) Act: Projects awarded Federal funds will need to comply with Build America Buy America (BABA) Act, which applies a domestic content procurement preference requirement to Federally funded public infrastructure projects.  If the project is anticipated to not meet BABA, a waiver is available, and must be submitted at the time of the application. Please see waiver guidance.
• Quarterly progress reports: Applicants should be prepared to submit a Project Management Plan and Quarterly Progress Report.

Contact Information

Please direct any questions to the MCR Program Manager:
Julia Masters
julia.masters@state.co.us
303.349.1616