Operation of Fixed Generators

Second Appeal: City of Lima, FEMA-4077-DR-OH: Operation of Fixed Generators

Conclusion:  The City of Lima’s fixed generator costs are eligible; however, the eligible cost associated with that usage is limited to the cost of the fuel consumed during the performance of eligible work. 

Summary Paragraph

During the incident period of June 29 through July 2, 2012, strong winds and severe storms produced extensive damage, causing downed utility lines and widespread power outages for multiple days.  The City of Lima (Applicant) utilized three portable and six fixed generators during the event to support emergency protective measures at the waste water treatment plant, street department, a lift station, water treatment plants, a fire station, the Hall of Justice, and the public works building.  FEMA prepared Project Worksheet (PW) 1034 for $41,296 to fund usage of the portable generators, force account labor costs, and fuel for the fixed generators.  FEMA did not reimburse the usage of the six fixed generators based on FEMA’s schedule of equipment rates.  The Applicant submitted a first appeal for $50,103 requesting that FEMA use equipment rates for the fixed generators to determine eligible funding.  The Regional Administrator denied the first appeal, explaining that the ownership costs of permanently mounted generators are built in to the cost of operating the facility.  The Applicant reiterates its position in its second appeal; however, the applicant has not provided sufficient justification for reimbursing the use of fixed generators based on equipment rates.

Authorities Discussed

• 42 U.S.C. § 5170b(3)

• 44 CFR § 206.226

• Public Assistance Guide, FEMA 322 (June 2007), pages 54-55, 85

• Public Assistance Digest, FEMA 321 (Jan 2008), page 135

Headnotes

• 42 U.S.C. § 5170b(3) and 44 CFR § 206.225(a)(3) provide that generally, those prudent actions taken by an Applicant to ensure the continuation of essential public services and protect lives and public health are eligible for assistance.

• FEMA 322, Public Assistance Guide (June 2007), at 54-55 provides that the cost of obtaining power from alternate sources is considered an increased operating expense and is not eligible.  The guidance does provide an exception for increased operating costs constituting “reasonable short-term additional costs to an applicant that are directly related to accomplishing specific emergency health and safety tasks as part of eligible emergency protective measures.”

  • Application of this guidance necessitates a distinction between portable and fixed generators.

  • FEMA reimburses the use of portable generators based on FEMA equipment rates or similar set rates. 

  • FEMA does not reimburse the use of fixed generators based on equipment rates.  However, if fixed generators are used in the performance of eligible emergency work, FEMA will reimburse the fuel consumed during the performance of that work.