The Infrastructure Act’s Impact on the Energy and Technology Industries


February 15, 2022

The Infrastructure Investment and Jobs Act (IIJA) is slated to provide unprecedented levels of federal spending toward physical infrastructure, allocating $1.2 trillion not only for funding roads, bridges, and rails, but also for funding projects like high-speed internet, electric grid modernization, and an electric vehicle (EV) charging station network.

To date, more than half of the total $1.2 trillion funds has been authorized toward “traditional” infrastructure, leaving approximately $550 billion left to be applied toward additional projects, including expanding broadband distribution and advancing clean tech energy. Most of this money will be allocated through the states and individual departments of transportation.

Morgan Lewis lawyers detail below some of the key energy and technology provisions that are expected in the next round of funding allocations.

Investing in Cleantech

Cleantech companies are paying attention to both the bill and its grant process, as more than $70 billion in funds is expected to be directly allocated for power and grid-related expenditures.

Various grants have been established for projects related to advancing energy storage, carbon capture, reclaimed mining, and regional clean hydro hubs. The bill also establishes an Office of Clean Energy Demonstrations in the Department of Energy (DOE) to oversee more than $20 billion that's been set aside for energy technology demonstration projects alone. And with an emphasis on US-made products, the IIJA earmarks $6 billion over five years for the domestic processing and manufacturing of batteries to be used in energy storage applications.

It's important to review all agreements related to the dispersing of funds for innovative technologies to ensure all obligations and rights related to intellectual property are properly covered.

Modern Electric Grid

The Act underscores Congress’s desire for a modern electric grid that embraces both 21st century tech and is resilient against severe storms, wildfires, and other related natural disasters.

To aid these efforts, Congress has modified the construction oversight process. Now, transmission developers who run into permitting problems at the state level have an opportunity to appeal for help from the federal government. The Voluntary Energy Cyber Sense Program was created to identify and promote cyber-secure products for use in the bulk-power system and allow technology vendors to receive a federal evaluation of the cybersecurity of their grid equipment.

The IIJA also allows the DOE itself to partner with merchant transmission developers who wish to build new, tech-advanced transmission lines by paying part of the costs for these projects.

Electric Vehicles

Another provision of IIJA is the authorization of two EV-related studies: one on the environmental impact of EVs, and the other on the how forced labor in China may impact the EV supply chain—a major concern, given that the Biden-Harris administration's goal of a 50% reduction in greenhouse gas emissions by 2030 will rely on consistent EV manufacturing. Public service commissions are now required to review all service territories and regulated entities within their jurisdiction and determine the best ways to incentivize EV development and deployment, furthering the aforementioned intention of creating a national network of EV charging and usage.

Expanding Broadband Technology

In an effort to have broadband more evenly distributed across the country, $65 billion of the IIJA is being put toward expanding this technology—a vast increase from the $47.3 billion the federal government spent between 2009–2017 to deploy greater broadband infrastructure to rural areas.

Most of the funding will be distributed within two programs: (1) The National Telecommunications and Information Administration’s (NCIA’s) Broadband Equity, Access, and Deployment Program, in which each state will receive $100 million, plus additional funding determined by the Federal Communication Commission’s (FCC) Broadband Map that plots underserved areas across the United States; and (2) the FCC’s Affordable Connectivity Program, a subsidy for low-income families that cannot afford broadband.

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