Propane Resilience Enhancement Program

Applicants for PREP Part B grants should be propane fractionation, pipeline transport, or wholesale storage and distribution companies that are licensed to do business in Michigan[1] and are undertaking the project to enhance propane supply and resilience. The PREP Part B can cover material, labor, and equipment associated with the installation or rehabilitation of propane storage infrastructure.

Applicants must not appear on the Federal Debarment and Suspension List, and must be in good standing with EGLE programs (i.e. no EGLE grant revoked or terminated and no demonstrated inability to manage a grant or meet obligations in a project contract with EGLE).

[1] Must be a registered corporation with the Michigan Department of Licensing and Regulatory Affairs (DLARA)

Grant funding is restricted to activities that support the development or expansion of propane pipeline, fractionation, or wholesale storage capacity in Michigan. Eligible costs include, but are not limited to, storage tanks, underground storage development/expansion, propane fractionation facilities, loading/unloading equipment, pipelines, and related equipment specific to pipeline integration. Work items listed as eligible as part of the Michigan Department of Transportation’s (MDOT) Freight Economic Development Program (FEDP) will be considered ineligible for this program. A full list of eligible expenses can be found below. Not all eligible costs will necessarily be approved as part of the PREP Part B project.

Work items and activities eligible for funding may include:

• Propane storage tanks
• Underground storage development or expansion
• Propane fractionation equipment
• Propane loading/unloading equipment
• Pipeline and associated metering or monitoring equipment
• Site preparation for additional propane storage, transportation, or fractionation capacity, including grading, excavation, and removing/relocating of utilities
• Propane transport truck turnarounds
• Lighting in the vicinity of the propane storage facility necessary for the loading/unloading of transport trucks
• Safety Management, prevention, and response equipment
• Shelter for loading/unloading propane transport trucks
• Security enhancements/improvements, including cameras, lighting, etc.
• Additional work items will be considered on a per-application basis.

Any activities not directly related to developing or expanding wholesale storage, transportation, or fractionation capacity in Michigan are not grant eligible. For example, project planning expenses are ineligible for funding or reimbursement. Eligibility will be project specific and determined on a case-by-case basis by EGLE/MPSC. Company indirect costs (rent, overhead, etc.) are not grant eligible.

Rail associated work items will be considered ineligible for funding as they are already eligible under MDOT's FEDP.  Applicants are directed to apply for these work items separately through MDOT.

There is no maximum award for this grant, however funding multiple projects is preferred to ensure improved widespread resilience and affordability benefits to Michigan businesses and residents. Remaining Part B funding available is $2,853,600. The program goal is for grantees to contribute at least 50% of projected project costs, however, applications proposing less than a 50% match are encouraged and will be considered in comparison to other applications received.

Applications will be reviewed for suitable use of funds, and successful applications will clearly define project scope, demonstrate pipeline, fractionation, transportation, or storage expansion and improved resilience, and provide an appropriate budget justification. All applications will be scored and processed according to the scoring criteria described below.

Total grant award will be based on reasonably estimated costs and documentation provided by the grantee at the project onset. The grant will function on a reimbursement basis whereas work must occur, and associated invoices or documentation must be submitted to EGLE prior to grant funds being paid to the grantee. A grant agreement is required before any reimbursable costs can be incurred.

For application purposes, a quote/estimate for the proposed work is acceptable as a budget justification. All non-professional services must be competitively bid. A signed contract is needed for services over $50,000 before reimbursement can be made. Force account may be utilized with justification documenting the need. Force account fringe benefits are limited to 40 percent and holiday and overtime pay is not grant eligible.

Applications are evaluated for increased propane storage volume, improved propane transportation capacity (pipeline expansion/enhancement), increased fractionation capacity, geographic distribution (area served or improvement to regional resilience), and resilience enhancement of critical customers. All projects, at a minimum, must increase propane storage capacity or throughput. EGLE/MPSC will use the following factors in evaluating applications:

• Nature and quantity of storage, transportation, or fractionation capacity upgrades at the facility (# of gallons, tanks, new/upgraded equipment, etc. and percent capacity increase)
• Capacity increase to county/region (Geographic distribution/location)
• Throughput capacity increase
• Improved service/reliability to new and/or existing customers
• Improved service/access to propane supply for other market participants
• General location and proximity to major highways and propane consumers
• Overall value, considering grant amount requested, of improvements to regional and/or supply chain resilience or facility resilience
• Project readiness – whether the project is already in progress, is shovel-ready, or still in an early design phase
• Land rights that are already acquired vs. land rights that still need to be acquired at the time of application