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Air Force ESPC/UESC Programs (Presented to the JBSA/DTI Workshop)

Air Force ESPC/UESC Programs (Presented to the JBSA/DTI Workshop). Les Martin HQ AFCESA/CENI. Physical Plant Profile. Air Force Installations. Airfields. Family Housing. 10M Acres of Land Twice the size of New Jersey. 75,800 Homes Arlington/Alexandria Combined.

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Air Force ESPC/UESC Programs (Presented to the JBSA/DTI Workshop)

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  1. Air Force ESPC/UESC Programs(Presented to the JBSA/DTI Workshop) Les Martin HQ AFCESA/CENI

  2. Physical Plant Profile Air Force Installations Airfields Family Housing 10M Acres of Land Twice the size of New Jersey 75,800 Homes Arlington/Alexandria Combined 102 Million Square Yards 152 x DFW Airport Facilities Dormitories Plant Replacement Value 69,500 Dorm Rooms 1 ½ times Doubletree Hotels $255B PRV Nearly the GDP of Peru 626M Sq Ft of Buildings 88 x Microsoft Corporation 1.5 x GM As of FY99/4 We Must Reinvest in Air Force Installations – A Force Enabler 2 2

  3. Facility Energy in Scale

  4. Facility Energy Use/Cost FY11 ENERGY COST ($000) FY11 ENERGY USE 64,486.55 BBTU $1,077,705.29 $1,034,809.96 in FY10 4.1% increase From FY10 65,880.75 BBTU in FY10 2.1% Decrease From FY10 SOURCE: FY11 ANNUAL ENERGY MANAGEMENT REPORT TO CONGRESS

  5. Big Three Mandates FY11 Goal Attainment • Energy Intensity Reduction Goal: 18% Attained: 16.3% • Potable Water Intensity Reduction Goal : 7.5% Attained: 13.1% • Renewable Energy (EPACT05) Goal: 5% Attained: 6.0% • Renewable Energy (10 USC 2911) Target 11% Attained: 7.1% Goal Gap 4.5% Goal EISA 07 Goal EO 13514 % Reduction in Pot Water/SF (MGal/SF) % Reduction in Fac Energy/SF (MBTU/SF) 10 USC 2911 Target: 25% in 2025 % Renewable Energy of Electricity Used Avoided $579M in Utility Costs in FY11 Alone 5

  6. AF Facility Energy Strategy • Reduce demand, increase supply and change culture • Meet energy mandates (statutory, executive orders, AF/DOD) • Improves ‘creature comfort’ and helps provide energy security (both of which enhance mission accomplishment) • Make smart investments in reliable infrastructure to build sustainable installations • Direct energy project funding; seek best ROI w/ every $ • Maximize funding sources: ECIP, NRG, other • Multiply return by leveraging third party funding • Power Purchase Agreements (PPAs) • Enhanced Use Leases (EUL) • Energy Savings Performance Contracts (ESPCs) • Utility Energy Services Contracts (UESCs)

  7. Selection Methodology Audits RE Studies Base Reqts & REMs ESCOs ~ 45 days 12-24 mos. • Prioritization& PGM FY • Constraints • Staffing • Funding • Contracting Investment Opportunities • Execution Veh • Direct • NRG or ECIP • Third Party • UP, ESPC, UESC NRG ECIP Proj Dev, Execution & M&V • Validation • BCA • Tech Rvw Conserv ESPC • Execution Veh • Direct • ECIP • Third Party • PPA, EUL PPA Large RE EUL UP • Reassess • BCA • Technology • Scope Defer/ Recycle or normal SRM Eliminate

  8. Key Selection Criteria for Project Execution Methods

  9. Current ESPC/UESC Criteria • AFCESA determines execution vehicle • Prefer simple payback less than 10 years • UESC feasibility (10 year contract limit) • Serving utility provider is interested • May combine multiple sites within serving utility’s territory • Projects are of smaller size • FEMP Typical UESC  $1-2M • ESPC feasibility (25 year contract limit) • Capital intensive “needle movers” • E.g. Decentralize Heat Plants ($50M-$100M) • Process Energy: Data Centers, Depot Maintenance, etc. • FEMP Typical ESPC  $10-15M or more

  10. Current Criteria (cont.) • Current ESPC/UESC process based on Oct 10 A7C Policy letter & FEMP guidance • Reinvigorate the ESPC/UESC programs • Satisfy audit concerns - More control/rigor • ETLs 11-24/12-10; “how to” for policy adherence • Opens the aperture; process energy, equipment, data centers • Implements the project vetting process • Installations may entertain “marketing material” from ESCO • Sets the DoE “Super ESPC” as preferred contracting vehicle • Multiple tools available to develop ECM’s • Tight M&V plans, ESCO responsible for Ops/Maint • Economically viable ECMs • AFCESA ‘checkpoints’ at key milestones

  11. Current Criteria (cont.) • Multiple tools available to installations to develop energy conservation measures (ECMs) • Audits, REMs, MAJCOM, FOA, Fac Mgrs, CE Ops, Process Owners • Utilities and ESCOs • Project Vetting • Regardless of ECM source, Installation prepares summary of ECMs & submits to AFCESA through MAJCOM for initial vetting • Vetting process evaluates ECMs to determine how best executed in overall Air Force energy program: ECIP, NRG, ESPC, UESC, PPA, … • AFCESA makes recommendations and seeks MAJCOM consensus; 100% concurrence by MAJCOMs thus far

  12. UESC Process • If vetting selects UESC, then we implement these procedures… • Gov’t Team (CE, CO, JA, Customers, MAJCOM, AFCESA) develop project framework/scope • Base CO develops Master Agreement for Util to conduct Preliminary Audit (PA) • Gov’t Team evaluates PA and provides written comments to Util • Util provides requested clarification • Gov’t Team evaluates PA, and directs Util to proceed to Feasibility Study (FS) • Gov’t Team reviews FS and provides comments to Util • Util provides updated FS to provide requested information • Gov’t Team evaluates FS and directs Util to develop Engineering/Design (ED) • Gov’t Team reviews design, plans/specs & provides comments to Util • Util addresses comments and submits final proposal • Gov’t Team reviews, comments, & CO negotiates with Util as necessary • CO awards TO Note: “” = AFCESA Approval points Today we are looking at a 12-month timeline from concept to project award

  13. Measurement & Verification Criteria • M&V is considered for all energy projects • ESPC: 42 CFR 8287 requirement; ESCO payment tied to M&V • UESC: Not req’d; may include in future UESCs when beneficial • ECIP: AFMAN 32-1089 requirement • NRG: EISA 2007 requirement; began implementing in FY12

  14. Measurement & Verification Criteria • Option A – Partially measured retrofit isolation • Homogeneous, steady-state systems • Stipulated operation based on statistical samples • Option B - Retrofit isolation • Continuous measurement of affected system • Option C - Whole building • Continuous measurement of building • Option D - Physical Models (i.e., simulations) • Stipulated based on computer simulations • Simulation must be calibrated • Not permitted by AFCESA

  15. POTUS Memo • Presidential Memorandum signed on 2 Dec 2011 • Minimum $2B in performance-based contracts within 24 months • AF projecting award of $250-$280M of ESPC/UESCs • Payback time of less than 10 years • All contracts (and ECMs) must be life-cycle cost effective • Prioritize ECMs by greatest return • Focus on energy savings • Leverage direct appropriations and performance contracting • AF focus is maximizing ROI while minimizing life-cycle costs • Installation-wide and portfolio-wide contracts • Multiple installation projects extremely difficult to execute • Focus for 3rd party funds is large, complex energy savers

  16. POTUS Memo (cont.) • Must follow requirements laid out in ETLs 11-24 and 12-10 • Located on WBDG web site and Energy COP • No short cuts to expedite the project award timeline • Not a reason to estimate baseline or skip project reviews • Must still be able to survive potential audits • Extremely high visibility initiative

  17. Summary • Current ESPC/UESC Criteria • Central management, more rigorous evaluations • Project Descriptions and Supported Facilities/Missions • Large heat plant decentralizations • Process Energy: Data Centers, Medical, Plug Loads • Overseas AAFES campus’ • Basic Economics • Must be lifecycle cost effective • May not save money • Execution Timeline • Use the DoE Super ESPC or Area-wide UESC contracts • Measurement & Verification Criteria • Prefer “Option C” M&V when applicable

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