The Department of Energy (DOE) announced the award of 16 new Indefinite Delivery Indefinite Quantity (IDIQ) Energy Savings Performance Contracts (ESPCs) 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.
“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,” said former energy secretary Samuel W. Bodman.
In August 2007, 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 DOE awarded the new contracts 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)
• FPL Energy Service Inc. (North Palm Beach, Fla.)
• Honeywell International Inc. (Golden Valley, Minn.)
• Johnson Controls Government Systems LLC (Milwaukee)
• Lockheed Martin Services Inc. (Cherry Hill, N.J.)
• McKinstry Essention Inc. (Seattle)
• NORESCO, LLC (Westborough, Mass.)
• Pepco Energy Services (Arlington, Va.)
• Siemens Government Services Inc. (Reston, Va.)
• TAC Energy Solutions (Seattle)
• The Benham Cos. LLC (Oklahoma City)
• 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 upfront 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 that 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.