Transcript Slide 1

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
 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)
Govt Savings
Energy
Contractor
Payment
Cost
Savings
Government
Savings
Energy Bill
O&M Costs
1. Before
ESPC
Energy Bill
Energy Bill
O&M Costs
O&M Costs
2. During
ESPC
3. After
ESPC
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
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
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!
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).
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.
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
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
ESPCs under consideration since the New
contract went into effect Jan 08
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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)
2010 Will Be a Tough Year for ESPCs
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Impact of Stimulus
Impact of New Contract
Perceived lack of Administration Interest/advocacy
Even contracts under consideration will not likely be
negotiated until 2011
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