Federal Energy Management Program Federal Energy Management Program UESC Projects Workshop

Federal Energy Federal Energy Management ProgramManagement Program

Federal Energy Federal Energy Management ProgramManagement Program

UESC UESC

Projects Projects

WorkshopWorkshop

UESC UESC

Projects Projects

WorkshopWorkshop

FEMP’s MissionFEMP’s Mission

Reduce the cost of government by Reduce the cost of government by advancing energy efficiency and water advancing energy efficiency and water conservation, promoting the use of conservation, promoting the use of renewable energy, and managing utilities renewable energy, and managing utilities at federal sites.at federal sites.

WaterWaterConservationConservation

WaterWaterConservationConservation

RenewableRenewableEnergy UseEnergy UseRenewableRenewableEnergy UseEnergy Use

EnergyEnergyEfficiencyEfficiencyEnergyEnergy

EfficiencyEfficiency

Utility Utility ManagementManagement

Utility Utility ManagementManagement

GSA’s Energy Center GSA’s Energy Center of Expertise Missionof Expertise Mission

To help GSA customers procure utilities To help GSA customers procure utilities that are both cost effective and that are both cost effective and environmentally responsible, and to environmentally responsible, and to assist them in managing their energy assist them in managing their energy use.use.

Federal Energy Federal Energy Management RequirementsManagement Requirements

Install all energy and water conservation measures Install all energy and water conservation measures with payback of less than 10 years by 2005 (EPAct)with payback of less than 10 years by 2005 (EPAct)

Reduce energy consumption (EO 13123)Reduce energy consumption (EO 13123)– Facility energy per square foot to be reduced by 30% in Facility energy per square foot to be reduced by 30% in

2005 and 35% in 2010 relative to 19852005 and 35% in 2010 relative to 1985

– Industrial/laboratory energy to be reduced by 20% in 2005 Industrial/laboratory energy to be reduced by 20% in 2005 and 25% in 2010 relative to 1990and 25% in 2010 relative to 1990

Expand use of renewable energyExpand use of renewable energy– 2.5% of federal facility electricity consumption by 2005 2.5% of federal facility electricity consumption by 2005

(recommended)(recommended)

– 2,000 solar roofs by 2000; 20,000 by 20102,000 solar roofs by 2000; 20,000 by 2010

Federal Energy Federal Energy Management GoalsManagement Goals

Implement best management practices Implement best management practices for water conservation in 80% of federal for water conservation in 80% of federal facilities by 2010facilities by 2010

Reduce greenhouse gas emissions Reduce greenhouse gas emissions 30% by 2010 compared to 199030% by 2010 compared to 1990

Progress Toward GoalsProgress Toward Goals

• Building energy costs in 1999 were $3.4 billion; 39.5% less than 1985 Building energy costs in 1999 were $3.4 billion; 39.5% less than 1985 expenditures of $5.6 billion.expenditures of $5.6 billion.

• Petroleum usage in federal facilities is down by 67% relative to 1985.Petroleum usage in federal facilities is down by 67% relative to 1985.

Building Energy Reduction Goals

85,000

95,000

105,000

115,000

125,000

135,000

145,000

85 87 89 91 93 95 97 99 01 03 05 07 09

Fiscal Year

Btu

pe

r S

qu

are

Fo

ot

10% Goal - 1995 (NECPA)

20% Goal - 2000 (EPACT)

30% Goal - 2005 (EO 12902)

Actual Energy Use

20.7% Reduction, 1999 (preliminary data)

35% Goal - 2010 (EO 13123)

Why should we keep going?Why should we keep going?

Solves facility headaches and continues Solves facility headaches and continues opportunity to save energyopportunity to save energy

Increasing energy pricesIncreasing energy prices Allow for some dollars to be left in the O&M Allow for some dollars to be left in the O&M

account to pay for mission related requirementsaccount to pay for mission related requirements Most cost effective form of pollution prevention Most cost effective form of pollution prevention The introduction of rolling blackoutsThe introduction of rolling blackouts

Introductions Introductions & &

Why We Are HereWhy We Are Here

We’d like to get to know you…We’d like to get to know you…

Please introduce yourself Please introduce yourself Tell us which agency you are withTell us which agency you are withWhat’s your job function?What’s your job function?Do you have any specific questions Do you have any specific questions

you’d like us to answer?you’d like us to answer?

Hi there!

Project Financing ResourcesProject Financing Resources

Why we need them: Allows for needed Why we need them: Allows for needed infrastructure improvements without infrastructure improvements without direct appropriations.direct appropriations.

Financing resources available through Financing resources available through FEMP: FEMP: – Utility Energy Service Contracts (UESC)Utility Energy Service Contracts (UESC)– Energy Savings Performance ContractsEnergy Savings Performance Contracts

Our ObjectivesOur Objectives

During this workshop we will tell you:During this workshop we will tell you:– The steps involved in developing Utility The steps involved in developing Utility

Energy Service Contracts.Energy Service Contracts.– What tools and resources are available to What tools and resources are available to

assist you in implementing your project.assist you in implementing your project.

Reasons to Choose UESCsReasons to Choose UESCs

You work with a known entityYou work with a known entityYour utility has unique expertise and a Your utility has unique expertise and a

knowledge of your facilityknowledge of your facilityIt’s an established sourceIt’s an established sourceFlexibility in scope and size, smaller Flexibility in scope and size, smaller

projects feasibleprojects feasibleIt’s a partnership that is mutually It’s a partnership that is mutually

beneficial!beneficial!

Let’s find out why Let’s find out why you are here…you are here…

Why did you choose UESC? Why did you choose UESC? Tell us about your potential project.Tell us about your potential project.

Utility Utility Program Program

BasicsBasics Options for Agency ExplorationOptions for Agency Exploration Options for Agency ExplorationOptions for Agency Exploration

Rebates/AuditsRebates/AuditsRebates/AuditsRebates/Audits DSMDSM BiddingBiddingDSMDSM BiddingBidding UESCUESCUESCUESC

Utility ServiceUtility Service

Utility Incentive ProgramsUtility Incentive Programs

Definition: Any service offered by a Definition: Any service offered by a utility or developed in conjunction with utility or developed in conjunction with an agency that assists customers in an agency that assists customers in implementing energy and water implementing energy and water conservation projects.conservation projects.

Utility Incentive ProgramsUtility Incentive Programs

Options for Agency ExplorationOptions for Agency Exploration Options for Agency ExplorationOptions for Agency Exploration

Rebates/AuditsRebates/AuditsRebates/AuditsRebates/Audits DSMDSM BiddingBiddingDSMDSM BiddingBidding UESCUESCUESCUESC

Utility ServiceUtility Service

Utility Energy Service Utility Energy Service Contracts (UESCs)Contracts (UESCs)

Definition: Specific contracts that allow Definition: Specific contracts that allow utilities to provide agencies with utilities to provide agencies with comprehensive energy and water comprehensive energy and water efficiency improvements and demand efficiency improvements and demand reduction services. Utilities front the reduction services. Utilities front the capital costs and are paid out of capital costs and are paid out of savings. savings.

Typical UESC OfferingsTypical UESC Offerings

AuditsAuditsAuditsAudits

Feasibility Feasibility StudiesStudies

Feasibility Feasibility StudiesStudies Project Project

FinancingFinancingProject Project

FinancingFinancing

Technical Services

Technical Services

Financial Services

Financial Services

RebatesRebatesRebatesRebates

Engineering & Engineering & DesignDesign

Engineering & Engineering & DesignDesign

Construction & Construction & InstallationInstallation

Construction & Construction & InstallationInstallation

Project Project ManagementManagement

Project Project ManagementManagement

Performance Performance GuaranteesGuarantees

Performance Performance GuaranteesGuarantees

TrainingTrainingTrainingTraining

O&M ServicesO&M ServicesO&M ServicesO&M Services

UESCs Reallocate the UESCs Reallocate the Government’s Utility BudgetGovernment’s Utility BudgetB

udge

t $B

udge

t $

Decrease energy costsDecrease energy costs Pay for projectPay for project Achieve energy cost savings for the governmentAchieve energy cost savings for the government

Utility Bill Utility

Bill

Utility Bill

Contractor

Payment

Govt.Share

Govt. Share EnergyEnergyCost Cost

SavingsSavings

BeforeBeforeContractContract

DuringDuringContractContract

AfterAfterContractContract

ConsiderationsConsiderations

UESCs may not be available to all UESCs may not be available to all facilitiesfacilities

Utility may be new to this type of Utility may be new to this type of contractingcontracting

Contract process is not rigidContract process is not rigidAgency’s relationship with utilityAgency’s relationship with utilityContract term Contract term

Enabling Legislation for Enabling Legislation for Utility ProgramsUtility Programs

Energy Policy Act of 1992Energy Policy Act of 1992

Section 152(f) - Utility Incentive ProgramsSection 152(f) - Utility Incentive Programs

Agencies: Are authorized and encouraged to participate in

utility programs generally available to customers May accept utility financial incentives, goods, and

services generally available to customers Are encouraged to enter into negotiations with

utilities to design cost effective programs to address unique needs of facilities used by agency

(Codified as 42 USC 8256, P.L. 102-486)(Codified as 42 USC 8256, P.L. 102-486)

10 USC 2865 and 286610 USC 2865 and 2866

DoD Facilities:DoD Facilities:

May enter into ”sole source” procurement from gas or electric utilities to design and implement cost effective demand and conservation services

May implement projects with a positive Net Present Value (measured over a period of 10 years or less)

Can count water cost savings in their economic analysis

48 CFR Part 41 48 CFR Part 41 Acquisition of Utility ServicesAcquisition of Utility Services

GSA authority to prescribe policies/methods governing the acquisition and supply of utility services for federal agencies & delegating authority to specific agencies to purchase utility services

GSA authority to issue areawide contracts for utility services

FEMP’s UESC Enabling FEMP’s UESC Enabling DocumentsDocuments

Details:Details:– Legislation and Executive actionsLegislation and Executive actions– Legal opinionsLegal opinions– Agency guidanceAgency guidance

Available both in hard copy and electronicallyAvailable both in hard copy and electronically– http://www.eren.doe.gov/femp/utility/enabl_docs.htmlhttp://www.eren.doe.gov/femp/utility/enabl_docs.html

The UESC ProcessThe UESC Process

Assemble Your Acquisition

Team

The Utility Audit

The Feasibility

Study

Engineering & Design

Package

Construction & Installation

The Payment Period

Establish Terms &

Conditions

Determine the Appropriate

Vehicle

Project PlanningProject Planning Project IdentificationProject Identification

Project Implementation

Planning Your UESCPlanning Your UESC

Determine Appropriate UESC Vehicle

AWC AWC

Site Specific ContractSite Specific Contract

Master AgreementMaster Agreement

BOABOA

Choose UESC vehicle

Assemble your Acquisition Team

Team players

Team issues

Develop strategy

Enlist support

Initiate Project Identification

Determine Determine Appropriate Appropriate

UESC VehicleUESC Vehicle

AWC AWC

Site Specific Site Specific

ContractContract

Master AgreementMaster Agreement

BOABOA

Choose UESC vehicle

UESC VehiclesUESC Vehicles

Areawide Contract (AWC) Areawide Contract (AWC) – Task order placed underneath to establish Task order placed underneath to establish

terms and conditions for energy terms and conditions for energy management servicesmanagement services

Site Specific Contract Site Specific Contract Basic Ordering Agreement (BOA)/ Basic Ordering Agreement (BOA)/

Agency Master AgreementAgency Master Agreement

GSA Areawide ContractGSA Areawide Contract

FAR Part 41 Utility Service ContractFAR Part 41 Utility Service Contract GSA puts in place but all agencies GSA puts in place but all agencies

shall useshall use Utility service territory IDIQ contractUtility service territory IDIQ contract Terms and conditionsTerms and conditions

– Specific project delivery order/task Specific project delivery order/task order issued order issued

App. 1Pg. 15

Roles in the AWC ProcessRoles in the AWC Process

GSA Utility

AWC

GSA places a blanket contract

for utility services.

Agency Utility

TaskOrder

Utility and agency negotiate detailed

terms and conditions for the

specific site.

Site Specific ContractSite Specific Contract

Any site can placeAny site can placeIncludes all terms and Includes all terms and

conditions (incorporates conditions (incorporates site specifics)site specifics)

No additional DO/TO is No additional DO/TO is requiredrequired

Always an available optionAlways an available option

Site Utility

UESC Delivery Order

Basic Ordering Agreement/ Basic Ordering Agreement/ Agency Master AgreementAgency Master Agreement

FAR Part 16 Service FAR Part 16 Service Contract, requires Contract, requires competitioncompetition

Any agency can place with Any agency can place with a utility or GSA can place ita utility or GSA can place it

Delivery orders/Task orders Delivery orders/Task orders with project specifics are with project specifics are placed underneath itplaced underneath it

Agency Utility

BOA/ AMA

Delivery Order

Assemble Your Assemble Your Acquisition Acquisition

TeamTeam

Team players

Team issues

Develop strategy

Enlist support

Initiate Project Identification

Assemble an Acquisition TeamAssemble an Acquisition Team

Put your team together earlyPut your team together early– To ensure project buy-in and supportTo ensure project buy-in and support– To reduce turn around time for approvalsTo reduce turn around time for approvals– To expedite the procurement processTo expedite the procurement process– To keep each other informed of current and future To keep each other informed of current and future

agency plans that impact the project agency plans that impact the project Prepare for team turnoverPrepare for team turnover

– Document your process and establish a Project Document your process and establish a Project Documentation PlanDocumentation Plan

– Capture institutional knowledgeCapture institutional knowledge

Who Should Be On Who Should Be On Your Team?Your Team?

Site decision makerSite decision maker Technical staffTechnical staff Procurement Procurement

personnelpersonnel Legal rep.Legal rep. Budget rep.Budget rep.

Environmental specialistEnvironmental specialistTenantsTenantsOperations staffOperations staffMaintenance personnelMaintenance personnelOther?Other?

Acquisition Team Issues Acquisition Team Issues

Budget and Financial IssuesBudget and Financial Issues

Be clear that the utility budget will stay Be clear that the utility budget will stay the same and project payments come the same and project payments come from savingsfrom savings

Address the potential need to redirect Address the potential need to redirect funds from utility, tenant, and O&M funds from utility, tenant, and O&M accounts to the utility account in order accounts to the utility account in order to pay the billto pay the bill

Environmental Protection Environmental Protection RequirementsRequirements

ProjectProject must comply with National must comply with National Environmental Policy Act (NEPA)Environmental Policy Act (NEPA)

Team should develop detailed disposal Team should develop detailed disposal requirements statement for hazardous requirements statement for hazardous materials related to the projectmaterials related to the project

App. 1Page 5

It is in the FAR! Subpart 23.3.

Personnel IssuesPersonnel Issues

Your acquisition plan should take into Your acquisition plan should take into consideration:consideration:– Existing maintenance staff and/or Existing maintenance staff and/or

contracted operations and maintenance contracted operations and maintenance personnelpersonnel

– Technical personnelTechnical personnel– Staff trainingStaff training

Potential Conflicts and Potential Conflicts and Unique IssuesUnique Issues

Consider conflicts involving known and Consider conflicts involving known and potential mission or facility usage potential mission or facility usage changeschanges

Address unique facility issues like Address unique facility issues like restricted access, special requirements restricted access, special requirements (labs, libraries) or tenant’s operations(labs, libraries) or tenant’s operations

Your Acquisition StrategyYour Acquisition Strategy & &

Project ConsiderationsProject Considerations

Identify Your Project Goal Identify Your Project Goal

Are you trying toAre you trying to– Solve existing problems?Solve existing problems?– Make infrastructure improvements?Make infrastructure improvements?– Reduce utility costs?Reduce utility costs?– Make capital improvements?Make capital improvements?– Improve O&M?Improve O&M?– Save energy?Save energy?

Consider the Project’s Consider the Project’s ParametersParameters

Potential ECMs

Required ECMs+

Facility

SiteSite TechnologiesTechnologies++ Contract Contract TermTerm

++

++20001

November

Collect Facility DataCollect Facility Data

Historical utility data (including water)Historical utility data (including water)Current building and equipment dataCurrent building and equipment dataData on anticipated facility and utility Data on anticipated facility and utility

changeschangesAny past audit or SAVEnergy audit Any past audit or SAVEnergy audit

informationinformation

Prioritize Facility RequirementsPrioritize Facility Requirements

Specific facility needsSpecific facility needsFacility conditionsFacility conditionsConstraining issuesConstraining issues

– Limited in-house resourcesLimited in-house resources– Union considerationsUnion considerations– Work environmentWork environment– Other support contracts Other support contracts

Select Potential ECMsSelect Potential ECMs

Building envelopeBuilding envelope HVAC equipment, distribution and water heating HVAC equipment, distribution and water heating

systemsystem Lighting and power systemLighting and power system Energy management and control systemsEnergy management and control systems Heat reclaim systemsHeat reclaim systems Renewable energy systemsRenewable energy systems Air compressionAir compression Combined heat and power, distributed energy Combined heat and power, distributed energy

resourcesresources Other?Other?

Do You Want M&V?Do You Want M&V?

What is M&V and what does it What is M&V and what does it do for your project?do for your project?

Measurement & VerificationMeasurement & Verification

A means of measuring and/or calculating A means of measuring and/or calculating the energy being consumed and verifying the energy being consumed and verifying the “savings” or avoided coststhe “savings” or avoided costs

Insures savings persistenceInsures savings persistenceFEMP M&V GuidelinesFEMP M&V Guidelines: Measurement and : Measurement and

Verification for Federal Energy Projects; (v Verification for Federal Energy Projects; (v 2.2)2.2)– http://www.eren.doe.gov/femp/financing/measguide.htmlhttp://www.eren.doe.gov/femp/financing/measguide.html

Assured Continued SavingsAssured Continued Savings

Good M&V

Poor M&V

Two key benefitsTwo key benefits

– Initial savings levelInitial savings level

– Persistence of savingsPersistence of savings

120

100

80

60

40

20

00 5 10

% S

avin

gs

Rea

liza

tio

n%

Sav

ing

s R

eali

zati

on

Years post-completionYears post-completion

Carr’s observation

Appropriatedproject savings

Do All You CanDo All You Can

Include all the opportunities available Include all the opportunities available through UESCthrough UESC– energy efficiency, water efficiency, energy efficiency, water efficiency,

alternative electric and/or gas supply, on-alternative electric and/or gas supply, on-site power generation/CHP, renewables site power generation/CHP, renewables and renewable power purchasesand renewable power purchases

Incorporate a synergistic and interactive Incorporate a synergistic and interactive approach to the measuresapproach to the measures

Bundling ECMsBundling ECMs

Definition: bundling is the combination Definition: bundling is the combination of long- and short-term payback ECMs of long- and short-term payback ECMs at a single facility that supports a at a single facility that supports a comprehensive project package.comprehensive project package.

Benefits of BundlingBenefits of Bundling

Provides technical solutions while assuring Provides technical solutions while assuring synergy of measuressynergy of measures

Savings from short-term payback ECMs can Savings from short-term payback ECMs can contribute to the ability to accomplish longer-contribute to the ability to accomplish longer-term equipment, or related facility term equipment, or related facility improvementsimprovements

Can reduce long standing maintenance Can reduce long standing maintenance headaches, such as HVAC, that usually have headaches, such as HVAC, that usually have long paybacks long paybacks

Fuel Neutral ApproachFuel Neutral Approach

If a technology is cost effective and If a technology is cost effective and results in energy savings it should be results in energy savings it should be considered without regard to fuel considered without regard to fuel source.source.

How Utility Restructuring How Utility Restructuring Impacts UESCsImpacts UESCs

Utilities want to retain you as their Utilities want to retain you as their customercustomer

Your energy costs are changingYour energy costs are changingSources of service are changing– you Sources of service are changing– you

may not know who to contract withmay not know who to contract with

Impacts of DoD Impacts of DoD Privatization Privatization

Decrease to facility’s discretionary O&M Decrease to facility’s discretionary O&M fund availabilityfund availability

Annual costs will probably increaseAnnual costs will probably increase Loss of future flexibility in managing Loss of future flexibility in managing

systemssystems

But energy savings can help offset cost of But energy savings can help offset cost of privatization so don’t let it delay your privatization so don’t let it delay your

project in areas that aren’t being privatized!project in areas that aren’t being privatized!

Gain Support & Momentum Gain Support & Momentum for the Projectfor the Project

Start early– include everyoneStart early– include everyonePrepare a briefing and include:Prepare a briefing and include:

– Benefits to the site Benefits to the site – Summarize the financing processSummarize the financing process

Be prepared to overcome resistance to Be prepared to overcome resistance to changechange

The Cost of Delaying a ProjectThe Cost of Delaying a Project

LowLow

MedMed

HighHigh

Lif

e C

ycle

Co

stL

ife

Cyc

le C

ost

Delayed Delayed appropriationsappropriations

FinancingFinancingAppropriations Appropriations available todayavailable today

Any delay in project implementation Any delay in project implementation results in loss of life cycle savingsresults in loss of life cycle savings

No action No action takentaken

Available ResourcesAvailable Resources

Use GSA and FEMP for advice and support, Use GSA and FEMP for advice and support, briefings to project teams and managementbriefings to project teams and management

Find background information on web sites:Find background information on web sites:– http://www.eren.doe.gov/femp/financinghttp://www.eren.doe.gov/femp/financing– http://gsa.gov/pbs/xu/http://gsa.gov/pbs/xu/

Order the UESC video from FEMP that Order the UESC video from FEMP that showcases this processshowcases this process

Available ResourcesAvailable Resources

DOE Regional OfficesDOE Regional Offices

– Boston - Paul King (617) 565-9712 Boston - Paul King (617) 565-9712

– Philadelphia - Bill Klebous (212) 264-0691 or Philadelphia - Bill Klebous (212) 264-0691 or Gene Lesinski (215) 656-6976Gene Lesinski (215) 656-6976

– Seattle - Cheri Sayer (206) 553-7838Seattle - Cheri Sayer (206) 553-7838

– Atlanta - Doug Culbreth (919) 782-5657Atlanta - Doug Culbreth (919) 782-5657

– Denver - Randy Jones (303) 275-4814Denver - Randy Jones (303) 275-4814

– Chicago - Sharon Gill (312) 886-8573Chicago - Sharon Gill (312) 886-8573 App 2