Federal Energy Management Program

1. Federal Energy Management Program UESC Projects Workshop

2. EnergyEfficiency Renewable Energy Use Water Conservation Utility Management FEMP’s Mission Reduce the cost of government by advancing energy efficiency and water conservation, promoting the use of renewable energy, and managing utilities at federal sites.

3. GSA’s Energy Center of Expertise Mission To help GSA customers procure utilities that are both cost effective and environmentally responsible, and to assist them in managing their energy use.

4. Federal Energy Management Requirements • Install all energy and water conservation measures with payback of less than 10 years by 2005 (EPAct) • Reduce energy consumption (EO 13123) • Facility energy per square foot to be reduced by 30% in 2005 and 35% in 2010 relative to 1985 • Industrial/laboratory energy to be reduced by 20% in 2005 and 25% in 2010 relative to 1990 • Expand use of renewable energy • 2.5% of federal facility electricity consumption by 2005 (recommended) • 2,000 solar roofs by 2000; 20,000 by 2010

5. Federal Energy Management Goals • Implement best management practices for water conservation in 80% of federal facilities by 2010 • Reduce greenhouse gas emissions 30% by 2010 compared to 1990

6. Progress Toward Goals Building Energy Reduction Goals 145,000 135,000 10% Goal - 1995 (NECPA) 125,000 Actual Energy Use 20.7% Reduction, 1999 (preliminary data) Btu per Square Foot 115,000 20% Goal - 2000 (EPACT) 105,000 30% Goal - 2005 95,000 (EO 12902) 35% Goal - 2010 85,000 (EO 13123) 85 87 89 91 93 95 97 99 01 03 05 07 09 Fiscal Year • Building energy costs in 1999 were $3.4 billion; 39.5% less than 1985 expenditures of $5.6 billion. • Petroleum usage in federal facilities is down by 67% relative to 1985.

7. Why should we keep going? • Solves facility headaches and continues opportunity to save energy • Increasing energy prices • Allow for some dollars to be left in the O&M account to pay for mission related requirements • Most cost effective form of pollution prevention • The introduction of rolling blackouts

8. Introductions & Why We Are Here

9. We’d like to get to know you… • Please introduce yourself • Tell us which agency you are with • What’s your job function? • Do you have any specific questions you’d like us to answer? Hi there!

10. Project Financing Resources • Why we need them: Allows for needed infrastructure improvements without direct appropriations. • Financing resources available through FEMP: • Utility Energy Service Contracts (UESC) • Energy Savings Performance Contracts

11. Our Objectives • During this workshop we will tell you: • The steps involved in developing Utility Energy Service Contracts. • What tools and resources are available to assist you in implementing your project.

12. Reasons to Choose UESCs • You work with a known entity • Your utility has unique expertise and a knowledge of your facility • It’s an established source • Flexibility in scope and size, smaller projects feasible • It’s a partnership that is mutually beneficial!

13. Let’s find out why you are here… • Why did you choose UESC? • Tell us about your potential project.

14. Utility Service Options for Agency Exploration Rebates/Audits DSMBidding UESC Utility Program Basics

15. Utility Incentive Programs • Definition: Any service offered by a utility or developed in conjunction with an agency that assists customers in implementing energy and water conservation projects.

16. Utility Service Options for Agency Exploration Rebates/Audits DSMBidding UESC Utility Incentive Programs

17. Utility Energy Service Contracts (UESCs) • Definition: Specific contracts that allow utilities to provide agencies with comprehensive energy and water efficiency improvements and demand reduction services. Utilities front the capital costs and are paid out of savings.

18. Typical UESC Offerings Technical Services Financial Services Audits Performance Guarantees Rebates Feasibility Studies Training Project Financing Engineering & Design O&M Services Construction & Installation Project Management

19. UESCs Reallocate the Government’s Utility Budget • Decrease energy costs • Pay for project • Achieve energy cost savings for the government Govt. Share Energy Cost Savings Govt. Share Contractor Payment Utility Bill Budget $ Utility Bill Utility Bill Before Contract During Contract After Contract

20. Considerations • UESCs may not be available to all facilities • Utility may be new to this type of contracting • Contract process is not rigid • Agency’s relationship with utility • Contract term

21. Enabling Legislation for Utility Programs

22. Energy Policy Act of 1992 • Section 152(f) - Utility Incentive Programs Agencies: • Are authorized and encouraged to participate in utility programs generally available to customers • May accept utility financial incentives, goods, and services generally available to customers • Are encouraged to enter into negotiations with utilities to design cost effective programs to address unique needs of facilities used by agency (Codified as 42 USC 8256, P.L. 102-486)

23. 10 USC 2865 and 2866 DoD Facilities: • May enter into ”sole source” procurement from gas or electric utilities to design and implement cost effective demand and conservation services • May implement projects with a positive Net Present Value (measured over a period of 10 years or less) • Can count water cost savings in their economic analysis

24. 48 CFR Part 41 Acquisition of Utility Services • GSA authority to prescribe policies/methods governing the acquisition and supply of utility services for federal agencies & delegating authority to specific agencies to purchase utility services • GSA authority to issue areawide contracts for utility services

25. FEMP’s UESC Enabling Documents • Details: • Legislation and Executive actions • Legal opinions • Agency guidance • Available both in hard copy and electronically • http://www.eren.doe.gov/femp/utility/enabl_docs.html

26. The UESC Process Determine the Appropriate Vehicle Assemble Your Acquisition Team The Utility Audit Establish Terms & Conditions Project Identification Project Planning The Feasibility Study Construction & Installation The Payment Period Engineering & Design Package Project Implementation

27. Planning Your UESC Determine Appropriate UESC Vehicle Assemble your Acquisition Team • Team players • Team issues • Develop strategy • Enlist support • AWC • Site Specific Contract • Master Agreement • BOA Initiate Project Identification Choose UESC vehicle

28. Determine Appropriate UESC Vehicle • AWC • Site Specific Contract • Master Agreement • BOA Choose UESC vehicle

29. UESC Vehicles • Areawide Contract (AWC) • Task order placed underneath to establish terms and conditions for energy management services • Site Specific Contract • Basic Ordering Agreement (BOA)/ Agency Master Agreement

30. App. 1 Pg. 15 GSA Areawide Contract • FAR Part 41 Utility Service Contract • GSA puts in place but all agencies shall use • Utility service territory IDIQ contract • Terms and conditions • Specific project delivery order/task order issued

31. GSA AWC Utility Agency Task Order Utility Roles in the AWC Process GSA places a blanket contract for utility services. Utility and agency negotiate detailed terms and conditions for the specific site.

32. Utility UESC Delivery Order Site Specific Contract • Any site can place • Includes all terms and conditions (incorporates site specifics) • No additional DO/TO is required • Always an available option Site

33. Delivery Order Basic Ordering Agreement/ Agency Master Agreement • FAR Part 16 Service Contract, requires competition • Any agency can place with a utility or GSA can place it • Delivery orders/Task orders with project specifics are placed underneath it Agency Utility BOA/ AMA

34. Assemble Your Acquisition Team • Team players • Team issues • Develop strategy • Enlist support Initiate Project Identification

35. Assemble an Acquisition Team • Put your team together early • To ensure project buy-in and support • To reduce turn around time for approvals • To expedite the procurement process • To keep each other informed of current and future agency plans that impact the project • Prepare for team turnover • Document your process and establish a Project Documentation Plan • Capture institutional knowledge

36. Who Should Be On Your Team? • Site decision maker • Technical staff • Procurement personnel • Legal rep. • Budget rep. • Environmental specialist • Tenants • Operations staff • Maintenance personnel • Other?

37. Acquisition Team Issues

38. Budget and Financial Issues • Be clear that the utility budget will stay the same and project payments come from savings • Address the potential need to redirect funds from utility, tenant, and O&M accounts to the utility account in order to pay the bill

39. Environmental Protection Requirements • Projectmust comply with National Environmental Policy Act (NEPA) • Team should develop detailed disposal requirements statement for hazardous materials related to the project It is in the FAR! Subpart 23.3. App. 1 Page 5

40. Personnel Issues • Your acquisition plan should take into consideration: • Existing maintenance staff and/or contracted operations and maintenance personnel • Technical personnel • Staff training

41. Potential Conflicts and Unique Issues • Consider conflicts involving known and potential mission or facility usage changes • Address unique facility issues like restricted access, special requirements (labs, libraries) or tenant’s operations

42. Your Acquisition Strategy &Project Considerations

43. Identify Your Project Goal • Are you trying to • Solve existing problems? • Make infrastructure improvements? • Reduce utility costs? • Make capital improvements? • Improve O&M? • Save energy?

44. November 20001 Consider the Project’s Parameters Contract Term + Technologies + Site Required ECMs Potential ECMs + + + Facility

45. Collect Facility Data • Historical utility data (including water) • Current building and equipment data • Data on anticipated facility and utility changes • Any past audit or SAVEnergy audit information

46. Prioritize Facility Requirements • Specific facility needs • Facility conditions • Constraining issues • Limited in-house resources • Union considerations • Work environment • Other support contracts

47. Select Potential ECMs • Building envelope • HVAC equipment, distribution and water heating system • Lighting and power system • Energy management and control systems • Heat reclaim systems • Renewable energy systems • Air compression • Combined heat and power, distributed energy resources • Other?

48. Do You Want M&V?What is M&V and what does it do for your project?

49. Measurement & Verification • A means of measuring and/or calculating the energy being consumed and verifying the “savings” or avoided costs • Insures savings persistence • FEMP M&V Guidelines: Measurement and Verification for Federal Energy Projects; (v 2.2) • http://www.eren.doe.gov/femp/financing/measguide.html

50. Assured Continued Savings Good M&V 120 Poor M&V 100 Appropriated project savings 80 % Savings Realization 60 Carr’s observation 40 Two key benefits • Initial savings level • Persistence of savings 20 0 0 5 10 Years post-completion