The Department of Energy (DOE) announced the award of 16 new Indefinite Delivery Indefinite Quantity (IDIQ) Energy Savings Performance Contracts (ESPCs) on Deceber 15th that could result in up to $80 billion in energy efficiency, renewable energy, and water conservation projects at federally-owned buildings and facilities.
ESPCs help to meet the federal government’s energy efficiency, water conservation, and renewable energy goals. The federal government is the largest single user of energy in the United States and these awards demonstrate a commitment to sound government stewardship by recognizing efforts to save energy, reduce federal energy costs, cut greenhouse gas emissions, bring more cutting-edge technologies to use, strengthen national security, and create a stronger economy.
“This set of awards will ensure that federal agencies have access to powerful tools for alternative financing at a scale that is needed to meet our challenge of reducing energy intensity, increasing the use of renewable energy, and decreasing water consumption.” U.S. DOE Secretary Samuel W. Bodman said.
In August 2007, Secretary Bodman launched the Transformational Energy Action Management (TEAM) Initiative, a Department-wide effort aimed at reducing energy intensity across the nationwide DOE complex by 30 percent. The TEAM Initiative aims to meet or exceed the aggressive goals for increasing energy efficiency throughout the federal government already laid out by President Bush through Executive Order 13423, which directed federal agencies to: reduce energy intensity and greenhouse gas emissions; substantially increase use and efficiency of renewable energy technologies; adopt sustainable design practices; and reduce petroleum use in federal fleets.
The new contracts were awarded to the following Energy Service Companies (ESCOs):
- Ameresco, Inc. (Framingham, Mass.);
- Chevron Energy Solutions (Eagan, Minn.);
- Clark Realty Builders (Arlington, Va.);
- Consolidated Edison Solutions, Inc. (White Plains, N.Y.);
- Constellation Energy Projects & Services Group, Inc. (Baltimore, Md.);
- FPL Energy Service, Inc. (North Palm Beach, Fla.);
- Honeywell International, Inc. (Golden Valley, Minn.);
- Johnson Controls Government Systems, LLC (Milwaukee, Wis.);
- Lockheed Martin Services, Inc. (Cherry Hill, N.J.);
- McKinstry Essention, Inc. (Seattle, Wash.);
- NORESCO, LLC (Westborough, Mass.);
- Pepco Energy Services (Arlington, Va.);
- Siemens Government Services, Inc. (Reston, Va.);
- TAC Energy Solutions (Seattle, Wash.);
- The Benham Companies, LLC (Oklahoma City, Okla.); and,
- Trane U.S., Inc. (McEwen, Tenn.).
The goals set out in Executive Order 13423 and the requirements put forth by Congress in the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007 include a 30 percent reduction in energy intensity and a 16 percent reduction in water use by 2015, and an increase of renewable energy to 7.5 percent of electricity needs by 2013 for Federal facilities. ESPCs enable agencies to undertake energy savings projects without paying up-front capital costs. ESPC task orders typically are placed competitively and can be used for energy and water efficiency and renewable energy projects.
Under an ESPC, the contractor designs, constructs, and obtains the necessary financing for an energy savings project, and the agency makes payments over time to the contractor from the savings reduction in the utility bills which are paid by the agency’s appropriated funds over time. The contractor guarantees the energy improvements will generate savings. Moreover, the aggregate annual amount of payments to the contractor and payments for utilities cannot exceed the amount that the agency would have paid for utilities without an ESPC. After the contract ends, all continuing cost savings accrue to the agency.
The new contracts provide for a maximum individual contract value of $5 billion over the life of the contract, eliminate technology specific restrictions, and allow federal agencies to use these contracts in federal buildings, nationally and internationally. In addition, ESPCs now include a greater emphasis on renewable energy and water conservation projects.
For further information on the new ESPCs please see the feature box on the FEMP website.