On Dec. 2, 2011, President Barack Obama directed all federal agencies to make at least $2 billion worth of energy-efficiency upgrades over the next two years -- at no up-front cost to the taxpayer. The Army has taken on the president's challenge and ... (Photo Credit: U.S. Army) VIEW ORIGINAL

WASHINGTON (Army News Service, Dec. 20, 2012) -- On Dec. 2, 2011, President Barack Obama directed "all federal agencies to make at least $2 billion worth of energy-efficiency upgrades over the next two years, at no up-front cost to the taxpayer."

"The Army has taken on the president's challenge and we've already invested $208.8 million of our $384-million goal in energy-saving initiatives since December 2011," said Katherine Hammack, assistant secretary of the Army for Installations, Energy & Environment, adding that the Army already has enough projects in the pipeline to meet its goal a year from now.

"The president's challenge could not have come at a better time. The Army recognizes that we must make the best use of taxpayer dollars and the entire installation management community has responded creatively using [Energy Savings Performance Contracts] to meet current and future energy needs," said Richard G. Kidd IV, deputy assistant secretary of the Army for Energy & Sustainability.

The Army thus far has awarded 17 Energy Savings Performance Contract, or ESPC, task orders and nine Utility Energy Services Contract,or UESC, task orders to meet its target of $384 million by Dec. 31, 2013.

ESPCs are done by private contractors and include such energy-efficiency improvements as heating, ventilation, air conditioning and lighting. UESCs are done by utility companies and include energy and water projects.

Water conservation is included under ESPCs since water conservation is part of the Army energy program due to similar consumption-reduction goals and the fact that most water savings produce energy savings as a byproduct from pumping and treating less water, according to Randy Smidt, Office of the Assistant Chief of Staff for Installation Management program manager for ESPCs and UESCs.

UESCs and ESPCs incorporate the latest energy-savings technologies, said Smidt, and these could include small-scale renewables like solar photovoltaics, solar-thermal for hot water and air heating and wind power. Fuel for vehicles and aircraft are not included in these energy-saving initiatives that focus on energy used in buildings.

The Army was an early adopter of this energy-saving contract vehicle, according to Kidd. The Army's first UESCs were completed in 1992, and ESPCs followed in 1996. Since then, $1.16 billion in energy contracts have been performed in ESPCs and $543 million through UESCs.

Both UESCs and ESPCs are considered alternative-financing vehicles, said Smidt, meaning that the Army doesn't have to spend any capital up front.

He explained that the developer or utility company performs energy audits or surveys, then designs the projects, secures financing for the needed capital, and builds the projects.

The Army measures energy and cost-baseline performance targets before a project is built, Smidt said. Then they do measurement and verification after a project is built and compare energy and cost savings from before and after and use the difference to pay back the contractor.

ESPCs typically run for 25 years and UESCs up to 10 years, Smidt said.

"You could think of it like a mortgage," he explained. "Once these task orders are paid off, the Army would realize cost savings benefits from energy savings.

"The energy initiatives are good for the Army -- which avoids up-front costs -- good for the energy companies or utilities and good for the workers who do the design, construction, operations and maintenance of the systems," he added.

The biggest challenge, Smidt said, is moving projects with tight timelines through the contracting process.

"The Army has made great strides in moving contracts through the development cycle, from concept to awards," he said. "It used to take 27 months, but we've gotten it down to about 14."

Randy Shed, energy and sustainability program manager for ESPC, UESC, said the Army has become more efficient at moving the contracts through the cycle by "how we review and do consecutive reviews as the contracts work their way up the chain of command.

"Since we've done similar ESPC projects in the past," he said, "we do a better job anticipating the types of questions Army Leadership will ask and ensure clarification and answers are incorporated at the beginning of the process to save on review time. This alleviates having to go back through the chain of command to the lowest levels requesting the data and information."

Smidt added that his office has updated its implementation guidelines based on lessons learned from past energy audits by the Government Accountability Office and the Army Audit Agency over the years.

Energy projects are usually done in all buildings at a particular installation or reserve center all at once, Smidt said. For instance, projects in several hundred buildings were completed on Fort Bliss, Texas; White Sands Missile Range, N.M.; and Fort Buchanan, Puerto Rico.

Smidt said most of the energy project implementation is done by the U.S. Army Corps of Engineers' Huntsville, Ala., office, and the energy section of the Defense Logistics Agency in coordination with the Department of Energy.

Related Links:

Army News Service

Assistant Secretary of the Army for Installations, Energy and Environment Energy News

STAND-TO!: Net Zero Strategy

STAND-TO!: Energy Initiatives

Energy Savings Performance Contracts

Utility Energy Service Contracts