1 | Energy Efficiency and Renewable Energyeere.energy.gov Alternative Finance & Mitigating...

1 | Energy Efficiency and Renewable Energy eere.energy.gov

Alternative Finance & Mitigating Deferred Maintenance

May 21, 2013

Kurmit RockwellPE, CEM, LEED AP

DOE FEMP

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FEMP Mission

FEMP works with key individuals to accomplish energy change within organizations by bringing expertise from

all levels of project and policy implementation to enable Federal Agencies to meet energy related goals

and to provide energy leadership to the country.

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FEMP-supported Alternative Financing Programs

Energy Savings Performance

Contracts (ESPCs)

Utility Energy Services Contracts

(UESCs)

ESPC ENABLEPower Purchase

Agreements (PPAs)

Several vehicles that allow agencies to fund energy improvements without up-front capital costs or special

appropriations

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FEMP Contacts —Federal Financing Specialists (FFSs)

Scott WolfWestern Region including N. Marianas, Palau, Guam, American Samoa; plus East, South, and Central Asia;the Pacific; and Near East360-866-9163 scott.wolf@ee.doe.gov

Tom HatteryNortheast Regionplus State Dept.202-256-5986thomas.hattery@ee.doe.gov

Doug CulbrethSoutheast Region plus Europe and Western Hemisphere919-870-0051carson.culbreth@ee.doe.gov

Northeast

WestMidwest

SoutheastMidwest

www1.eere.energy.gov/femp/financing/espcs_financingspecialists.html

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Contracts that allow agencies to do energy projects with no up-front capital cost and no special appropriations from Congress.

• Provides development and installation of energy/water conservation measures

• Guarantees resulting cost savings sufficient to cover project costs

Energy Services

Company (ESCO)

• Pays ESCO over term of contract from guaranteed cost savings

• Contract administration for life of contractAgency

ESPC Overview

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$for

Energy + Related

Operations &Maintenance

$for

Energy + O&M

$for

Energy + O&M

Savings

Excess Savings

Payments to ESCO

BeforeESPC

PerformancePeriod

AfterESPC Term

Reallocate the Government’s Utility Bill: Stop paying for waste and pollution Start paying for efficiency

ESPCs are Budget-Neutral

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Comparison of DOE ESPC IDIQ and UESC

DOE ESPCs UESCsPrivate-sector partner Energy services company

(ESCO)Serving utility company

Availability Worldwide Where offered/authorized

Contract type Task orders under DOE IDIQ or conventional contract

GSA Area-wide contracts; Basic ordering agreements

Optimum project size $1 – 2 million or larger Any

Savings guarantees and M&V

Required Negotiable (performance assurance required for annual scoring)

O & M ESCO responsible; who performs is negotiable

Negotiable

Eligible facilities Government-owned Where government pays utility bill

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Why Agencies Use ESPCs

• Fund energy improvements with no up-front capital costs– Preserve appropriations for other needs

• Obtain long-payback ECMs by bundling with short-payback ECMs

• Take advantage of ESCO experience• Operations, maintenance & repair can be included in

contract• They deliver long term guaranteed improvements,

savings, and performance• Bundle facilities across utility territories and regions

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• Acquisition Planning

• ESCO Selection

• Preliminary Assessment

• Notice of Intent to Award

• Request for Proposal

• Investment-Grade Audit

• Proposal

• Task Order Award

• Final Design and Construction

• Project Acceptance

• Post-Acceptance Performance Period

Milestones in the ESPC Process

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ESCO Must Assure and Guarantee Equipment Performance

• Assurances:– Design standards– Standards of service (temperature, humidity levels, etc.)– Post-installation M&V– Commissioning– Defined consequences for substandard performance

(typically agency withholds amount of savings shortfall from payment)

– Responsibility for O&M/R&R

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ESCO is Ultimately Responsible for O&M and R&R

• O&M and R&R of installed equipment are the ESCO’s responsibility

• O&M and R&R TASKS, however, may be assigned to ESCO or agency– General approach is described in contract in Risk,

Responsibility, and Performance Matrix– Details are in M&V Plan or other parts of TO

• Who will carry out O&M and R&R tasks• How performance will be verified• What to do if tasks are not performed

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How ESPCs Address Deferred Maintenance

• New equipment models in like-for-like replacements will almost always require less maintenance

• Equipment choices can emphasize maintenance costs, e.g., replace standard HVAC with ground-source heat pumps

• By including recommissioning of (non-ESPC) equipment in the task order = maintenance

• Ask your ESCO how an ESPC task order can address your maintenance backlogs

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For more about FEMP Alternative Financing Google: “FEMP Project Funding”

“FEMP Alternative Finance Training”

Contact InformationKurmit Rockwell, PE, CEM, LEED AP

Kurmit.Rockwell@ee.doe.gov202-586-2078

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