Legislative Highlights :: January 10, 2007

Establishing the Advanced Research Projects Agency - Energy (ARPA-E) Act

Signed into law as part of the America COMPETES Act, August 9, 2007

Reported (as amended) by the Full Committee May 23, 2007

Reported (with amendment) by the Energy & Environment Subcommittee May 10, 2007

Introduced in the House January 10, 2007

H.R. 364 establishes an Advanced Research Projects Agency for Energy (ARPA-E) within the U.S. Department of Energy, similar to the successful DARPA program within the Department of Defense. With a lean and agile organization ARPA-E will assemble cross-disciplinary research teams focused on addressing the nation's most urgent energy needs through high-risk research and the rapid development of transformational clean energy technologies. By leveraging talent in all sectors - from private industry, to universities, to government labs - ARPA-E will foster a robust and cohesive community of energy researchers and technology developers in the U.S. This bill follows on the direct recommendations of the National Academy of Sciences’ report “Rising Above the Gathering Storm."

This section establishes the Advanced Research Projects Agency – Energy (ARPA-E) within the Department of Energy. Similar to the Department of Defense’s Advanced Research Projects Agency (DARPA), this new organizational structure will support revolutionary and transformational energy research where risk and pay offs are high.

The stated goal of ARPA-E is to enhance the Nation’s economic and energy security through research and development of technologies that reduce U.S. dependence on foreign energy sources, improve energy efficiency of the U.S. economy, reduce the impact of the energy sector on the environment, and ensure the U.S. leadership in developing energy technologies. To achieve this ARPA-E will support collaborative, targeted, high-risk, high pay-off research to accelerate the innovation cycle for transformational energy technologies.

ARPA-E shall be headed by a Director, appointed by the Secretary. No other program within DOE will report to ARPA-E. The Director will administer competitive grants, cooperative agreements, or contracts to universities, private companies, research foundations, industry collaborations, and consortia. These consortia can include federal laboratories, in addition to the aforementioned parties, and can be led by federal laboratories. Funds may be used for activities in any stage of the innovation spectrum from early-stage basic research to late-stage demonstration. A special emphasis should be placed on activities that serve to bridge between these stages and, ultimately, across the “valley of death” to commercial applications of the technologies.

The organizational structure of ARPA-E will be flat and nimble to avoid bureaucratic impediments that stifle innovation today. The Director shall designate Program Managers who will have flexibility in establishing R&D goals for the program, publicizing goals, convening workshops of potential research participants, issuing solicitations, selecting projects and building research teams, monitoring their progress, and prescribing restructuring or elimination of projects as needed. Program managers will make selections for all projects under ARPA-E based on merit, taking into account factors such as novelty, scientific and technical merit, applicant’s capabilities, the applicant’s consideration of commercial applications of the research and inclusion of commercial partner, and other criteria as the Director determines. As with DARPA, the Director of ARPA-E will have special authority to hire program managers and other technical, managerial, and financial staff for limited terms, and at a salary commensurate with what such staff would expect to make in the private sector. In finding and attracting qualified and specialized staff the Director may contract with outside recruiting firms.

In addition, the Director shall ensure that ARPA-E’s activities do not duplicate and are coordinated with other federal research and technology transfer programs, and shall seek opportunities to demonstrate ARPA-E research and technologies through procurement in the federal government.

This section establishes the Energy Transformation Acceleration Fund administered by the Director of ARPA-E. $4.9 billion is authorized for FY 2008 thru 2012, to remain available until expended. Funding for the initial year of ARPA-E operations shall not be available unless the DOE Office of Science funding increases from the previous year (2007).

This section also lays out general guidelines for how money should be allocated in a given fiscal year. To ensure ARPA-E maintains focus on potentially transformational research, not more than 50 percent shall be for late-stage demonstrations and commercial applications of technologies and research. To ensure ARPA-E engages a wide network of energy researchers and technology developers beyond the traditional federal research enterprise, such as those in private industry and universities, not more than 8 percent of funds are to be made available directly to Federally Funded Research and Development Centers (FFRDC’s). (However, FFRDC’s can receive, in addition to the 8 percent, payment for services from ARPA-E grantees, contractors, cooperative agreement participants regardless of the source of funds.) To maintain the low overhead that has allowed organizations such as DARPA to remain agile, no more than 10 percent of funds shall be used for administrative expenses. To ensure robust technology transfer and outreach, 2.5 percent of funds shall be dedicated to these activities. To ensure that ARPA-E funds go towards funding the best research, and utilize the existing federal research infrastructure where possible, for the first five years no funds should be used for construction of new buildings or facilities.

The Director of ARPA-E has the flexibility to seek advice either from an existing DOE advisory committee, or to establish a new advisory committee. The Director may also seek advice and review from the National Academies of Science and Engineering, and any other professional or scientific organization.

At the end of five and one-half years, the President’s Committee on Science and Technology (PCAST) shall complete an evaluation of the performance of ARPA-E in achieving its goals and mission, to be made available to Congress and the public. In this evaluation the Committee is required to recommend whether ARPA-E should be continued or terminated as well as provide lessons-learned from its operation.

This clarifies that authorities granted by this Act are in addition to, and do not supersede or modify, existing authorities of the Secretary of Energy.

Organizations supporting H.R. 364. 

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