Army will likely surpass President's goals for Energy Savings Performance Contracts
March 22, 2012
WASHINGTON (March 22, 2012) - - The Army announced today that it is likely to execute $800 million in alternative financed energy efficiency projects in the next two years, more than double the amount that will be asked of the Army as part of the Federal Government's efforts to meet the requirements set forth in President Obama's December 2, 2011 Presidential Memorandum.
Once executed, these new projects will raise the total level of Army investments made through performance contracting to almost $2.5 billion, all at no additional expense to the taxpayer.
Deputy Assistant Secretary of the Army for Energy and Sustainability, Richard Kidd IV, made the announcement during the Seventh Annual National Association of Energy Service Companies Federal Market Workshop in Washington D.C., and repeated it during the Edison Foundation's Institute for Electric Efficiency Conference, entitled "Powering the People 2.0."
Last year, President Obama directed the federal government to enter into at least $2 billion worth of performance-based contracts over the next two years. This mandate will be satisfied through either Energy Savings Performance Contracts (ESPCs) or Utility Energy Services Contracts (UESCs).
ESPCs and UESCs give Army facility managers solutions to facility energy development with minimal, if any, up-front costs. These contracts allow private (non-government) entities to design, provide capital investment, construct, operate, and maintain new energy-efficient equipment, products, or systems for federal facilities. These investments are paid back over time through annual energy savings. In the case of ESPCs, savings are guaranteed in the contract, which can have a maximum lifespan of 25 years.
Since the inception of ESPCs and UESCs, the private sector has invested $1.03 billion in the execution of 157 different Army ESPCs, and $522 million in the execution of 351 Army UESCs. These past investments have resulted in cost avoidance to the Army of $148 million and an energy savings of 7.986 trillion British thermal units (Btu). This energy savings equates to some 2,650 rail-cars of coal, at 140 tons per car.
"The Army, working closely with the Department of Energy and the Defense Logistics Agency, has undertaken significant process improvements over the last two years, cutting cycle times required to award energy performance contracts down to 12-14 months versus a Federal average in 2010 of 26 months. Five of the last eight ESPC projects took less than a year to get awarded," Kidd said. He added, "We are also monitoring progress more closely and, where appropriate, we will get involved to help expedite contract processing."
Kidd points out that the bulk of the Army's success is due to hard work and diligence of the U.S. Army Corps of Engineers, the Assistant Chief of Staff for Installation Management, the Installation Management Command, and especially the work and coordination accomplished by the installations.
"In the Army, we say that every soldier is an energy manager. Many folks are part of the development team. We were on track to accomplish this aggressive plan with or without the Presidential directive, but the federal goal puts into perspective just how far the Army has gone in developing energy projects at no additional expense to the taxpayer," Kidd said.