By most accounts, the Infrastructure Investment and Jobs Act (IIJA – also referred to as the Bipartisan Infrastructure Law) and the Inflation Reduction Act (IRA) should lead to a significant increase in electric utility investments in advanced generation, transmission, and distribution technologies. The grants, subsidies, and incentives of the IIJA and IRA are massive, historic, and cover an expansive set of technologies. The IRA, for instance, will provide tax incentives for stand-alone storage and advanced nuclear and extends credits for wind and solar. Yet, in our work with investor-owned and publicly owned utilities we have observed that, while the size of the opportunity may be clear, the best approach to pursuing the funding may not be. Funding opportunities in the IIJA and IRA must be considered in the context of a utility’s long-term vision and near-term strategic priorities. Moreover, risks associated with implementation of some of these specific programs will be significant, and we can expect much more government oversight and review than in previous government programs. This point has been emphasized by the DOE Inspector General, who has recently called for additional program controls.
Alongside the strategic questions, utilities must determine the most effective structure for teams to effectively analyze, prioritize, and pursue IIJA and IRA opportunities. Many utilities today operate lean and cannot easily scale up activity levels with internal resources. The breadth of opportunity, the potential scale of investment, and the federal and state processes that must be followed to receive IIJA and certain IRA funds demand that utilities devote significant resources and senior-level focus to the effort. As a result, utilities must be deliberate in how they frame out and resource the program and carefully consider linkages with other company processes (e.g., strategy, capital planning, regulatory, etc.).