The State Energy Program (SEP) provides leadership to maximize the benefits of energy efficiency and renewable energy in each state through communications and outreach activities and technology deployment, and by providing access to new partnerships and resources.
Additionally, SEP helps states improve the security of their energy infrastructure by assisting them with the development of state energy plans. Each state shares its plan with SEP, sets short-term objectives, and outlines its long-term goals. SEP also supports the states in preparing for natural disasters by helping them develop energy emergency plans.
Download a summary fact sheet that highlights how SEP helps states plan and implement energy efficiency and learn more about SEP’s goals and history below.
Program Goals
SEP works with state and territory energy offices to address the following long-term national goals:
- Increase the energy efficiency of the U.S. economy
- Reduce energy costs
- Improve the reliability of electricity, fuel, and energy services delivery
- Develop alternative and renewable energy resources
- Promote economic growth with improved environmental quality
- Reduce the nation's reliance on imported oil.
SEP allows the U.S. Department of Energy (DOE) to work in partnership with state government officials and policymakers in advancing a clean energy future, as they have the authorities for many of the policy and program decisions that govern clean energy investment levels, as well as the opportunity to experiment with new approaches for overcoming long-standing market barriers.
Program Activities
State Energy Formula Grants: DOE awards “formula” grants to states, U.S. territories, and the District of Columbia to support a nationwide infrastructure of state energy offices. The purpose is to increase market transformation of energy efficiency and renewable energy technologies through policies, strategies, and public-private partnerships that facilitate their adoption and implementation. SEP also facilitates state-based activities such as supporting and identifying:
- Financing mechanisms for institutional retrofit programs
- Loan programs and program management
- Energy savings performance contracting
- Comprehensive residential programs for homeowners
- Transportation programs that accelerate use of alternative fuels
- Renewable programs that remove barriers and support supply side and distributed renewable energy.
State Energy Competitive Financial Assistance: Competitive financial assistance allows states to compete for funding designed to meet DOE’s nationally focused initiatives and provides opportunities for states to submit innovative proposals that highly leverage federal funding and create sustainable or clean energy projects focused on specific high-impact market transformation and cross-cutting solutions. The overall objective is for states and territories to develop public-private partnerships to deploy technologies that have the best opportunity for geographic and local economic impact.
State Energy Technical Assistance: Technical assistance is an interdependent component to SEP’s financial assistance activities, making deployment of technology more efficient and effective and enhancing the likelihood of program success. See the State and Local Solution Center for more information about technical assistance.
Program History
Congress created SEP in 1996 by consolidating the State Energy Conservation Program (SECP) and the Institutional Conservation Program (ICP); both programs went into effect in 1975. SECP provided states with funding for energy efficiency and renewable energy projects while ICP provided hospitals and schools with a technical analysis of their buildings and identified potential savings from proposed energy conservation measures.
Several pieces of legislation formed the framework for SEP:
- The Energy Policy and Conservation Act of 1975 (P.L. 94-163) established programs to foster energy conservation in federal buildings and major U.S. industries and also established the State Energy Conservation Program.
- The Energy Conservation and Production Act of 1976 (P.L. 94–385) took the Energy Policy and Conservation Act of 1975 one step further by including incentives for conservation and renewable energy and providing loan guarantees for energy conservation in public and commercial buildings.
- The Warner Amendment of 1983 (P.L. 95-105) allocated oil overcharge funds—called Petroleum Violation Escrow funds—to state energy programs. In 1986, these funds became substantial when the Exxon and Stripper Well settlements added more than $4 billion into the funds.
- The State Energy Efficiency Programs Improvement Act of 1990 (P.L. 101-440) encouraged states to undertake activities designed to improve efficiency and stimulate investment in and use of alternative energy technologies.
- The Energy Policy Act (EPAct) of 1992 (P.L. 102-486) allowed DOE funding to be used to finance revolving funds for energy efficiency improvements in state and local government buildings. (However, no funding was provided for this activity.) EPAct recognized the crucial role states play in regulating energy industries and promoting new energy technologies and also expanded the policy development and technology deployment role for the states. Many EPAct regulations extended through 2000.
In 2009, the American Recovery and Reinvestment Act provided $3.1 billion for SEP formula grants with no matching fund requirements, allowing the program to provide even more leadership and support to states.