Navigating FEMA: What Utilities Need to Know

When Hurricane Helene destroyed much of Erwin Utilities Authority’s infrastructure in September 2024, CEO Lee Brown and his team did something that would prove invaluable in the months ahead: they started writing everything down.

Who worked where. Every meal served, tracked by day and by person. Before-and-after photos of every damaged site. Individual work orders for each project, rather than a single order for a general area. The result was what Brown’s team now calls the DRAGON: Disaster Recovery Action Guide & Operational Notebook, a documentation system born from hard experience with the demands of FEMA reimbursement.

“Every little detail matters,” Brown said. “It’s hard to remember what exactly happened each day when you revisit it later.”

Marty Ivy at Mayfield Electric & Water Systems learned similar lessons following the December 2021 tornado that destroyed virtually all of the MEWS infrastructure. FEMA public assistance funding was essential to Mayfield’s recovery. However, it comes with a fundamental constraint both leaders want other utility managers to understand clearly: FEMA is designed to restore what you had, not to fund improvements. A utility that wants to build back stronger by adding redundancy, hardening facilities, or upgrading systems beyond pre-disaster specifications must apply to FEMA for mitigation funding and gain approval, or find additional funding elsewhere.

“It is a double-edged sword,” Ivy said. “We have been successful in rebuilding the infrastructure and buildings we had before the tornado. But to build in significant redundancy, we will have to rely on grants or self-funding through rates.” A proposed new substation, which would give Mayfield a critical second transmission connection from TVA, isn’t covered by FEMA because it represents a new capability, not a restoration. MEWS is working with local, state, and congressional representatives to find a path to fund it.

Navigating FEMA is complex under any circumstances, and the landscape is shifting. At TVPPA’s 2026 legal conference, Wendy Huff Ellard, a disaster recovery attorney with Baker Donelson who spoke alongside Brown, offered practical guidance for utilities working to protect their eligibility for FEMA public assistance funding. With her permission, we’re sharing her top ten tips here.

TEN TIPS TO PROTECT YOUR FEMA FUNDING

1. Document, Document, Document.

There is never too much documentation for FEMA. Take pictures of your damage, find photos of your facility before the storm, pull maintenance records, and keep a daily journal during recovery of who you talked to and why you do the things you are doing. If you receive donations or volunteers to help, keep a record of all details — who, what, when, where, why. All of this will be critical to receiving the maximum amount of funding possible.

2. Insurance.

FEMA requires you to take commercially reasonable efforts to obtain all available proceeds from your insurance carrier. Do everything you can to get your maximum benefit and keep the documentation to prove it. FEMA deducts insurance proceeds from awards to prevent duplication of benefits — but some things your insurance pays, such as business interruption, are not FEMA-eligible. If your settlement clearly delineates those ineligible line items, FEMA should not deduct that amount from your ultimate award.

3. Get Help.

FEMA reimburses applicants for assistance in understanding and correctly using the Public Assistance Program — termed Management Costs. FEMA provides an allocation of up to five percent of ultimate project costs in addition to otherwise eligible funds to help applicants receive and use their awards appropriately. It’s use-or-lose, so it’s wise to seek qualified help to support your award and mitigate the risk that FEMA may deny or retroactively de-obligate funding.

4. Procurement.

Understand and comply with all applicable procurement and contracting requirements. Do not assume FEMA will accept all costs incurred under an emergency contract. If you have already signed contracts without the required federal terms and provisions, contact vendors now to discuss amendments. Do not use cost-plus-percentage-of-cost terms — ask vendors to convert any percentage terms to flat rates. The sooner you can move to full, or at least partial, competitive procurement, the better.

5. Cost Reasonableness.

FEMA will only reimburse what it determines to be the “reasonable” cost of eligible work. Work constantly to ensure you are paying reasonable rates — multiple quotes help document this.

6. Avoid Conflicts of Interest.

Do not hire relatives, your own company, or any company that may appear to have a conflict of interest with your entity.

7. Do Your Own Damage Assessment Now.

Especially with a large-scale event, it may take FEMA months before they can do in-person site assessments. By that time, much of the damage may already be remediated. Detailed damage information is the foundation of your FEMA funding. FEMA is now able to accept applicant-provided damage information and documentation, which may expedite the process while capturing all data in a timely manner.

8. Document Meetings, Advice, and Approvals.

It is common to have numerous assigned FEMA representatives over the life of a Public Assistance claim. Keep records of everyone involved in your claims, as well as any guidance, approvals, or directions you receive. If guidance is given verbally, send a follow-up email with meeting minutes to all attendees so you have a record.

9. Utilize Available Resources.

FEMA provides documentation to help applicants understand eligibility and procurement requirements. Key resources include the FEMA Public Assistance Program and Policy Guide (PAPPG), Version 5; the FEMA Procurement Under Grants Policy Guide; the FEMA Roadmap to Procurement Compliance Checklist; and the FEMA Contract Provisions Guide. All are available at fema.gov.

10. Do Not Take No for an Answer.

Recovery can be overwhelming, and even when FEMA has the best intentions, wrongful denials can occur. Always double-check with your retained grant manager or the applicable recipient to see if a denial may be an error. FEMA has an appeals process for a reason, and many applicants use it with great success.

Wendy Huff Ellard is a member of Baker Donelson’s Disaster Recovery and Government Services practice. This guidance was adapted with permission from her January 2026 publication, “2026 FEMA Public Assistance Program Eligibility and Top Ten Tips to Protect Funding.” For more information, visit bakerdonelson.com.