Meeting the Moment with Community-First Infrastructure Investment Models

Einstein famously said, “We cannot solve our problems by using the same thinking that created them.” To meet the demands of our moment—addressing inequities in infrastructure and energy investments to build healthy, resilient communities—we believe we must change the way we define our problems, our roles in solving them, and most importantly, our responsibility to innovate and act in response to them. We argue that the starting point for our collective success is to reframe all we do with a Community-First mindset, from regulatory frameworks to evaluations. By doing so we will ensure that communities thrive through resource allocations based on what people need, rather than what markets choose to provide.

This is not as simple as measuring energy impacts and verifying benefits accrued in targeted communities. To do this well we must change the way we think about our role as an industry to truly take advantage of the once-in-a-lifetime opportunity presented by the Infrastructure Investment and Jobs Act (IIJA, 2021).  The IIJA allocates $1.2 trillion to modernize American Infrastructure. Of these dollars, $400 billion is earmarked for energy infrastructure investments. On its heels came the Inflation Reduction Act (IRA, 2022) which includes $80 billion in rebates while outlining clear expectations for Environmental Justice (EJ) expenditures. These dollars represent a rare opportunity to energize the U.S. economy for future growth and to do so in a way that gives all U.S. communities and households opportunities to achieve their economic potential.

Community-First Investment Model

To create true and enduring benefits in communities, we need to shift our mental model from one that views people as enablers of infrastructure investment (Technology-First Investment) to one that views infrastructure investments as enabling the well-being of people (Community-First Investment).^[1] While this shift may read like semantic nit-picking, words are tools that communicate possibility and determine how we address our challenges. By centering the needs of people and communities in our regulatory policy and program design mandates, we can fundamentally change the way we invest our public dollars to create better futures for our communities.

What is the Difference Between Technology-First and Community-First Service Paradigms?

Technology-First Investment Paradigm: The demand side management (DSM) industry has long viewed people to implement technology. We characterize people using technology-centering language using terms that reveal how we think about our roles as energy program designers, regulators, and administrators; to invest in and build out a network of technologies that preserve the reliability of the largest continuous-use system on earth, the electric grid. For example, we focus on how many kilowatts we have installed (or saved) vs. how many communities we have enabled. This is not to say that ensuring the integrity of the grid is of lesser interest; we are saying that we can and should do both.

While this model has served us in generating energy savings and reducing demand, the current moment is asking us to deliver more for society and demands a new paradigm. We must serve our electric grid and communities at the same time.

Community-First Investment Paradigm: A Community-First Investment Paradigm focuses on creating infrastructure and energy programs with the explicit goal of benefiting people while achieving energy goals. The Community-First Paradigm requires us to redesign energy programs and services and make needs-focused community investments to ensure equitable energy infrastructure spending. Needs-based investing should become a requirement, not a nice to have. Using this framework, we can begin to think more expansively about what it means to serve a community. For example, serving a family through infrastructure investments instead of modifying a building’s occupant behavior to reduce energy demand.

Investing in Community from Within Community

Taking the Community-First Investment Paradigm a step further, the industry must identify mechanisms to serve historically marginalized communities by investing in them from within. This means meeting a community’s infrastructure and technological needs by creating solutions that view communities and the individuals within them as the agents of change.

Community-First Solutions to Technology-First Barriers

Cost-to-Serve & Early Adopter Bias: Not all energy and infrastructure investments have the same cost-to-serve. Why? Because not all communities have adequate foundational infrastructure. Cost-to-serve benchmarks mask the industry’s bias and over-investment in newer and/or more affluent communities and inadequate investment in low-income/BIPOC communities over time by looking only at the total average investment. In this way, the cost-to-serve is less of a neutral factor in cost-effectiveness and more accurately a barometer of inequity.

Recommendations

Early Adopter Bias: As an extension of cost-to-serve thinking, early adopters act as the first and primary beneficiaries of public investment. While one might argue this supports the diffusion of innovation, it also over-taxes certain populations (namely low- and moderate-income households) relative to the advantages they receive from them.

• Community-First Solution: Addressing Inequitable Foundational Infrastructure. When serving Los Angeles Black and Latinx communities with electric vehicle supply equipment (EVSE), the first barrier KIGT faced was inadequate electric and broadband infrastructure to meet the technological requirements of their EVSE. At a great financial cost to KIGT, the company sought to install a transformer and broadband connections to create the infrastructure conditions necessary to deliver their charging equipment. Many EVSE providers would decline to invest under these circumstances. To ensure that all communities have an equal opportunity to participate in the new technologies and economies created by the industry, we must first address disparities in foundational infrastructure and allocate costs to generation and energy capital expenditures.
• Community-First Solution: Invest for Capacity in Anticipation of Demand. When looking to install EVSEs in DACs, the most common investor refrain is that “the market is not there.” Yet, since EVSE installations can take more than 24 months to complete, we must create investment incentives for EVSE installations even when EVs are scarce, anticipating lagging demand. Failing to do so further solidifies disparities in service and access as EVs begin to displace internal combustion engines (ICEs). Further, for communities that have long sustained the public health downside of ICEs and refineries, failing to provide communities with non-polluting technologies is negligent and fails to address air quality problems.

Volume Bias & Incumbency: Technology-centric approaches focus on introducing profitable technology and incentivizing market transformation. In doing so, programs and projects are designed to move technology as quickly as possible to as many adopters as the market or the incentives can sustain. This bias toward volume all but ensures that our incentives go toward certain equipment irrespective of whether the technology will be used, who ultimately gains from the technology, or who receives the revenue created from this technology.

Building on bias toward volume, many programs reinforce incumbency by failing to examine how current allocation practices disadvantage small, under-capitalized firms in securing contracts for public investment. While recent strides have been made to earmark dollars for women- and minority-owned businesses, rarely do such businesses serve as prime contractors, deliver products as original equipment manufacturers (OEMs), or have control over the flow of capital within contracts.

• Community-First Solution: Prioritize Wealth Creation and Retention within In the EVSE space, KIGT represents the only Black-owned OEM and one of the few independently owned companies. As a result, KIGT is uniquely positioned to both generate trust within Black communities (and other marginalized communities) and, by focusing investments on companies like KIGT, our efforts are more likely to generate wealth within communities least likely to receive private capital investments.
• Community-First Solution: Encouraging Revenue-Sharing Models. In KIGT’s Watts, CA installations, they introduced a novel approach to wealth generation: introducing revenue-sharing agreements with the community members installing EVSEs on their properties. In doing so, KIGT is generating reoccurring revenue for local organizations, directly benefiting the community members they serve.

Laborer Bias: The Technology-Focused model historically treated economic development as purely transactional: how many jobs does it take to install and/or maintain our technology? This approach fails to recognize technicians as community members and providers that deserve to benefit from stable and, ideally, wealth-generating careers. Additionally, this approach fails to look at other avenues for community wealth creation, limiting the scope of benefits to the time and site of an installation in the form of wage labor (blue-collar work) vs salaried positions.

• Community-First Solution: Incubate and Incentivize within Community Providers. To achieve wealth creation and retention within communities, we must rethink how and where we locate white- and blue-collar jobs necessary to sustain our technologies. Companies like KIGT create and maintain local technology positions that are required to service software on their chargers. By creating local tech jobs, KIGT is creating opportunities for communities to retain college graduates who might otherwise feel compelled to seek white-collar employment elsewhere, addressing the often-cited concern of “who is going to service this equipment” when installing EVSEs in DACs – a concern, worth noting, that is rarely raised in affluent communities.
• Community-First Solution: Identify, Preserve, and Buoy Economic Resources. In a separate engagement, KIGT is partnering with Uber to install EVSEs in the communities where a large majority of Uber drivers reside. As Uber seeks to fully electrify its fleet, it is critical to preserve the jobs of its current workers by serving the communities they call home. And, since the drivers’ home communities need electric and broadband infrastructure investments to accommodate EVSEs, making these foundational investments will preserve these important jobs and create economic resiliency.

To meet the challenge of this moment, we must adopt a people-first paradigm to ensure a successful energy infrastructure transformation—and ultimately—ensure what is best for today and many tomorrows.

This blog post was authored by Anne Dougherty (ILLUME), Maass (ILLUME), Paul Francis (KIGT), Dr. Deidre Sanders (ArkSpring).

This article was originally posted in AESP Energy Intel Magazine.

^{[1] A mental model is, put simply, how we make sense of our world and in this case, the work of the DSM industry. Our mental models determine how we define and understand problems, seek solutions, define opportunities, and envision possibilities. Our mental models often define how we operate and often go unquestioned as “normal” or the status quo.}