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Briefing on Historic Performance, Mandates, and Outlook

Energy Savings Performance Contracting. Briefing on Historic Performance, Mandates, and Outlook by the Federal Performance Contracting Coalition. What is an ESPC?. Under ESPCs, the private sector competes to develop projects at facilities

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Briefing on Historic Performance, Mandates, and Outlook

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  1. Energy Savings Performance Contracting Briefing on Historic Performance, Mandates, and Outlook by the Federal Performance Contracting Coalition

  2. What is an ESPC? Under ESPCs, the private sector competes to develop projects at facilities ESCo’s install new energy efficient equipment, arrange the financing for the upgrades, and provide a measurable performance guarantee The maximum contract term allowed is 25 years Financing is paid back from the guaranteed energy savings (to be no more than energy costs would have been without the project)

  3. 1. Before ESPC: Funds are wasted on energy and O&M costs 2. During ESPC: • Private Sector finances, installs and maintains new energy efficient equipment, at no upfront cost to government • Energy $avings are guaranteed by contractor • Government pays off investment with $avings on utility bill 3. After ESPC: Government keeps the savings after investment is paid off

  4. Federal Energy Mandates and Goals 30% energy intensity reduction of 30% by 2015 (note that this is far less ambitious than the President desire to green of 75% of Federal Buildings) Increased on-site renewable energy generation –ACES sets a goal of 20% by 2020 Emissions reductions presumably as ambitious as the mandate being discussed in congress of at least 17% by 2020

  5. What will it take to meet the Executive Order and EISA Energy Goals? Based on 2008 DOE Federal Energy Management report, federal government will have to invest $9 billion between 2009-2015 This is approximately $1.4 Billion per year!

  6. What has been the Historic Funding? • FY 2003 through FY 2008, the Federal government invested $3.74 billion in energy efficiency improvement projects ($622 M per year) • Direct Appropriations totaled $1.73 Billion (46%) • Privately financed energy efficiency investments totaled $2.01 Billion. • $1.426 Billion (38%) through ESPCs • $588 Million (16%) through Utility Energy Service Contracts (UESCs).

  7. 2009 Data Over 46 projects in over 20 states Total investment value of over $690,000,000* Over 10,000 jobs created *Not all projects have been included. Number may increase significantly.

  8. Reasons for Good 2009 ESPC Results Last year to use the “old” SuperESPC contract so agencies wanted to award projects that were started under the “old” process $623 M includes FY09 and Calendar year 09 One extremely large contract accounted for $183 M of this amount

  9. 2010 Expectations • Note: “Old” DOE contract was extended an additional 2 months to bring projects to award • Under the new DOE contract: • Projects awarded: 1 (follow on from Task Order) • Projects announced: 7 • Projects under development or consideration: 6

  10. ESPCs under consideration since the New contract went into effect Jan 08 Bureau of Land Management NASA-JPL Bureau of Prisons Coast Guard Veterans Administration VSN22 Department of Health and Human Service Fort Lee –Army GSA Regions 7 (used sole source exception) Forest Service (since pulled)

  11. 2010 Will Be a Tough Year for ESPCs Impact of Stimulus Impact of New Contract Perceived lack of Administration Interest/advocacy Even contracts under consideration will not likely be negotiated until 2011

  12. What Can the Administration do to Reverse the Trend? Use the bully pulpit to inform energy managers across the government that this Administration supports ESPC use Embolden FEMP and ensure adequate resources and ADVOCATES Change the way the Project Facilitators are used/funded (make them advocates) Support legislative change to enhanced competition

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