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Colorado: The StEPP Foundation A Strategy for making SEP Policies Work Nationally

Supplemental Environmental Project (SEP) policies, first established over 20 years ago, grew out of a recognition that the environment did not benefit when a facility in violation wrote a check for a fine that never benefited the community impacted by the violation. While community projects are possible under the Environmental Protection Agency's (EPA's) current SEP policies, decreased resources in the agencies mean that these policies have languished on the shelf. The time needed to identify projects and oversee them is a scarce resource for both corporate environmental management and state and federal agencies. It is easier for both the public and private parties involved to write a check than to negotiate, do the design work, and implement a new pollution prevention (P2) project that, in many cases, may or may not be directly targeted at the process that caused the violation. In Colorado, the StEPP Foundation (StEPP stands for "Strategic Environmental Project Pipeline") has developed a robust national database of environmentally beneficial project ideas and is overcoming these challenges.

The StEPP Foundation, a Colorado based 501(c)(3), addresses the need to make it easier for companies and government agencies to opt for a SEP during a negotiated regulatory settlement. Incorporated in July of 2001, the StEPP Foundation is dedicated to helping organizations realize their vision of a clean and safe environment by nationally matching projects with funds.

The StEPP Foundation provides project oversight to enhance the success of projects, thereby increasing the number of energy efficient, clean energy, and pollution prevention projects implemented at the local, state, and national levels for the benefit of the public. The idea for this innovative foundation evolved over a number of years in the minds of a small group of Colorado's environmental, P2, and sustainability advocates inside and outside the Colorado Department of Pubic Health and Environment (CDPHE). After countless hours of volunteer time, all the pieces were in place to initiate a partnership between the CDPHE and StEPP in which StEPP provides project ideas and project oversight in support of the Agency's regulatory enforcement process. StEPP leverages resources to meet the opportunity and challenges of Colorado's SEP policy and provides the opportunity nationally to assist other states and federal agencies with their SEP programs.

The Colorado SEP policy allows penalized businesses to choose to write their checks to the StEPP Foundation for the funding of SEP projects. StEPP then manages a solicitation for proposals that includes pollution prevention, energy efficiency, and renewable energy activities that benefit the community in which the violation occurred. A network of committed volunteer experts then reviews the proposals and makes final recommendations. The StEPP Foundation provides the oversight to ensure that the project is successful and that required reports of results are continuously submitted. StEPP also looks for ways to leverage the funding, both through in kind donations, as well as funding from other like-minded organizations that have an interest in increasing the scope of the project. Lastly, StEPP has a media and public awareness office, which seeks to build public awareness and education around the project and its environmental impact.

Since its inception, the StEPP Foundation has been collecting project proposals in its online "pipeline" from all over the country. Though not in response to a particular request for proposal (RFP) or targeted at a specific location, these projects are ready to fund and to be implemented across the country. CDPHE's well-constructed SEP policy explicitly prefers investments in pollution prevention, energy efficiency, and renewable energy (P2/EERE) and allows projects to take place in the community of the violating facility. In 2003, Colorado included a commitment in its Performance Partner ship Agreement with the EPA to offer SEPS in 100% of the air, water, and waste enforcement settlements that are over $10,000.

Positive Results

Measurement of actual environmental results is built into the StEPP process. All proposals must provide estimates of environmental benefit. All awarded projects must report on their progress at specified milestones. The StEPP Foundation has now handled the sourcing, development and implementation of 25 projects, totaling approximately $2,200,000 in direct environmental investment and benefit in 13 Colorado counties. Each of these counties were negatively impacted by major environmental violations. StEPP received over 90 proposals submitted in response to 9 targeted requests for proposals. Each proposal brought together a network around a project, usually involving 3 to 4 formal partners.

An example of the scale of impact is the following. One project recipient, a ski area, is creating a model hydroelectric project tied to its snowmaking system, thus demonstrating the viability of incorporating renewable energy technology into the existing infrastructure at ski resorts. They are currently producing approximately 154,560 kilowatt-hours (kWh) in an average year (115 kW x 24 hours/day x 56 days = 154,560 kWh), just from summer peak runoff generation. At six cents a kWh, revenue is $9,273. The return on the upfront investment for this hydroelectric system is estimated to be 10-12 years. This payback exceeds corporate return on investment requirements and the project would not have occurred without this application of SEP funds.

Another example of the scale of impact is an energy efficiency project performed at small businesses located in a low-income housing area. To date, the StEPP Foundation has completed analysis of 13 small businesses where energy audits and efficiency measures have been implemented. The results are astounding, and listed in the table below:

The community galvanized through StEPP around P2/ EERE projects is extensive. As of August 2003, StEPP has collected over 900 project ideas ready to implement across the country, and representing all 50 states. In addition to those that submit project ideas, there are 20plus volunteers who review proposals and provide administrative support. Furthermore, the capital investments in P2/EERE enabled by StEPP are substantial. All projects are required to demonstrate long term project sustainability in addition to funds received from StEPP. Currently, the average amount requested in these grants is $56,000 and the average amount leveraged is $450,000.

Key Elements, Suggestions, and Challenges

A clear side benefit of the StEPP Foundation is that these grants are able to promote a long-term, environmentally beneficial shift to P2 and clean energy that the free market at this time overlooks. The Foundation is able to respond quickly and effectively to environmental priorities and events through its "cradle-to-grave" SEP sourcing and management program.

More Information

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