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HomeMy WebLinkAboutMemo to REFAC re Round X Solicitation 7-11-2016 (002)MEMORANDUM TO: Renewable Energy Fund Advisory Committee THROUGH: Cady Lister, Lead Economist, AEA FROM: Mary Lynn Macsalka Assistant Attorney General Labor and State Affairs, Anchorage Question Presented and Short Answer: STATE OF ALASKA DEPARTMENT OF LAW DATE: July 11, 2016 TEL. NO.: (907) 269-5191 FILE NO.: AN2016101883 SUBJECT: Round X of the Renewable Energy Fund Grant Program At its meeting on June 28, 2016, the Renewable Energy Fund Advisory Committee (REFAC) requested legal advice from the Department of Law whether the Alaska Energy Authority (AEA) may recommend for funding in Round X of the Renewable Energy Fund (REF) Grant Program only those applications recommended to the legislature for funding in Round IX. The short answer is that, yes, the AEA may recommend for funding in Round X of the REF Grant Program only those applications recommended to the legislature for funding in Round IX. If the REFAC and the AEA choose this route, the practical effect is that the AEA will not be issuing a request for applications this year, and the AEA should give pubic notice of the same. Additionally, the AEA should give Round IX applicants the opportunity to withdraw their applications if they wish. Discussion: In January 2016, the AEA recommended 39 projects to the Alaska legislature for funding from the Renewable Energy Fund Grant Program in Round IX. However, the legislature did not appropriate any REF funding to any of the Round IX recommended projects in its capital budget for fiscal year 2017. Due to the state's current fiscal climate, and in light of the $0 funding to REF projects in Round IX, the REFAC discussed at its June 28, 2016, meeting whether to request new applications for Round X of the REF Grant Program, or to instead recommend to the legislature for funding in Round X only those applications recommended for funding in Round IX. This presents the legal question of whether the AEA is required to solicit grant applications every year as part of its statutory obligation to make recommendations to the legislature for REF grants. A review of the REF statute, AS 42.45.045, and the related REFAC July 11, 2016 Re: Round X of the REF Grant Program Page 2 regulations, 3 AAC 107.600-.695, does not reveal any requirement that the AEA must solicit grant applications every year the program is in effect. Moreover, the Round IX Request for Grant Applications (RFA) does not appear to contain any language that would limit the AEA's ability to only consider Round IX applications in Round X. The REF grant program statute, AS 42.45.045, requires the AEA to do the following, in consultation with the REFAC: • "make recommendations to the legislature for renewable power production grants' 1; • "not later than 10 days after the first day of each regular legislative session, submit to the legislature a report summarizing and reviewing each grant application submitted under [AS 42.45.045] and a recommended priority for awarding grants'2; • "make recommendations to the legislature regarding eligible applicants' projects that finance feasibility studies, reconnaissance studies, energy resource monitoring, and construction of renewable energy projects, natural gas projects, or transmission or distribution infrastructure located in Alaska that meet the requirements of [the statute]3; and • "at least once each year, solicit from the advisory committee funding recommendations for all grants"4. Thus, the REF statute contains two time -sensitive obligations the AEA must undertake each year: (1) submit a report to the legislature regarding the grant applications submitted and a recommended priority for awarding grants, and (2) solicit funding recommendations from the REFAC for all grants. Neither of these requirements imposes an obligation on the AEA to solicit or request new grant applications every year. Thus, while the AEA must solicit from the REFAC recommendations for grant funding each year and make recommendations to the legislature each year, the AEA has no statutory obligation to request new applications for REF grants each year. The regulations governing the REF Grant Program likewise do not require the AEA to request or solicit new grant applications each year. The REF grant program regulations, 3 AAC 107.600-.695, impose the following obligations on the AEA with respect to the solicitation of grant applications: 'AS 42.45.045(d)(2). 2 AS 42.45.045(d)(3). 'AS 42.45.045(e). 4 AS 42.45.045(e). REFAC Re: Round X of the REF Grant Program July 11, 2016 Page 3 • 3 AAC 107.620 requires the AEA to provide public notice of the application period and to publish a request for grant applications on its website with the date, time, place, and method for delivering applications, and a description of the application requirements. However, there is no requirement in 3 AAC 107.620 that the AEA must request new grant applications every year. • 3 AAC 107.625(a) requires that grant applicants submit an application within the time specified and in the format required by the AEA in the request for applications. However, there is no requirement in 3 AAC 107.625 that the AEA must request new applications every year. • 3 AAC 107.635 provides that the AEA "will accept for consideration ... each application received on or before the deadline established in the request for applications" and will determine whether each application meets the minimum threshold requirements for completeness and eligibility. However, again, there is no requirement that the AEA request new applications every year. The remaining REF grant program regulations likewise do not contain any express requirement that the AEA request the submission of new applications for grants every year. The regulations require, however, that the AEA evaluate grant applications for the purpose of ranking applications and making recommendations to the legislature for grants.5 If the AEA and REFAC choose not to request new applications in Round X, and instead recommend in Round X only those applications recommended for funding in Round IX, the AEA has already evaluated those applications for the purpose of ranking the applications and making recommendations to the legislature, and does not need to do so again. The AEA, in consultation with the REFAC, would submit the same ranking and funding recommendations to the legislature at the beginning of the next legislative session. The AEA would publish the same prioritized list of grant applications on its website in Round X and would make the same recommendations to the legislature as required under 3 AAC 107.660(b) and (c).6 5 See 3 AAC 107.655(a) ("the authority will perform an evaluation for the purpose of ranking applications and making recommendations to the legislature for grants"). 6 See 3 AAC 107.660(b) ("the authority will (1) make a final prioritized list of all recommended projects") and (c) ("The authority will publish the final prioritized list on its website, and will provide it to the legislature in accordance with AS 42.45.045(d)(3).") REFAC July 11, 2016 Re: Round X of the REF Grant Program Page 4 Execution of Round X and Practical Considerations: If the AEA and the REFAC choose not to request new applications in Round X, the AEA must provide the public with clear notice of that fact. We further recommend that the AEA directly notify all of the applicants whose projects were recommended for funding in Round IX that the AEA intends to submit the same prioritized list of recommended projects and the same funding recommendations it made in Round IX to the legislature at the beginning of the next legislative session for Round X. Specifically, we recommend that the public notice regarding Round X clearly explain that the AEA is not accepting new applications, and is re -submitting its Round IX recommendations to the legislature in the next regular legislative session. To avoid creating confusion, the AEA should be careful not to use the terms "request for applications", "RFA", or variations thereof in the public notice. The AEA may want to explain in the public notice that the legislature did not appropriate funds to any of the applications recommended for funding in Round IX, and that the REFAC and AEA wish to conserve both community and state resources by submitting the same list and recommendations to the legislature for consideration in the next legislative session. We further recommend that AEA contact all of the applicants who were recommended for funding in Round IX to advise them that the AEA will be making the same ranking and recommendations to the legislature in Round X. This notification should provide the same information as the public notice regarding Round X, and should also give the applicants the option to withdraw their applications by a date certain. Those applicants who were recommended for funding in Round IX and who do not withdraw their applications will be included in the AEA and REFAC's ranking and funding recommendations for Round X. If a Round X project is awarded funding by the legislature in the next legislative session, regulation 3 AAC 107.670 gives the AEA the authority to request any additional information from the applicant that the AEA considers necessary to complete the award process - or any other stage of the grant process. Thus, if the AEA determines it needs information from a Round IX applicant to bring the applicant up to date for purposes of Round X or for purposes of negotiating a grant agreement with a grantee, it has the authority to do so. If the applicant or grantee fails to timely provide adequate information in response to a request from the AEA; the AEA "may reject the application, modify the ' 3 AAC 107.670(a) ("As it considers necessary to perform a complete review of an application or project, and at any stage in the review, evaluation, recommendation, or award process ..., the authority will request that an applicant or grantee provide additional information.") REFAC Re: Round X of the REF Grant Program July 11, 2016 Page 5 authority's recommendations to the legislature, or cancel a notice of intent to award a grant." 8 However, unless the AEA believes additional information is necessary, AEA should not accept additional information from applicants. Accepting additional information could be considered to be a new or updated application, and unfair to other potential applicants. We can assist the AEA staff with preparing the public notice documents for Round X should the REFAC and the AEA decide to limit its consideration of applications in Round X to those recommended for funding in Round IX. Please let us know if you have any questions. cc: Brian Bjorkquist, Senior Assistant Attorney General Sean Skaling, Policy and Programs Director, AEA s 3 AAC 107.670(c).