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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 [email protected]
Tom HatteryNortheast Regionplus State [email protected]
Doug CulbrethSoutheast Region plus Europe and Western [email protected]
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
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