# Presentation: 762412

##  	Federal Energy Management Program

**UESC ****	****Projects ****	****	****Workshop**

## FEMP’s Mission

***FEMP’s Mission***

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

## GSA’s Energy Center of Expertise Mission

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

## Federal Energy Management Requirements

- Install all energy and water conservation measures with payback of less than 10 years by 2005 (EPAct)
- Reduce energy consumption (EO 13123)
- Facility energy per square foot to be reduced by 30% in 2005 and 35% in 2010 relative to 1985
- Industrial/laboratory energy to be reduced by 20% in 2005 and 25% in 2010 relative to 1990
- Expand use of renewable energy
- 2.5% of federal facility electricity consumption by 2005 (recommended)
- 2,000 solar roofs by 2000; 20,000 by 2010

**Notes:**
Expanding the use of renewable energy (bullet 3) is a recommendation form the working group formed to implement EO13123.

## Federal Energy Management Goals

- Implement best management practices for water conservation in 80% of federal facilities by 2010
- Reduce greenhouse gas emissions 30% by 2010 compared to 1990

**Notes:**
These come from EO 13123 and are still viable goals.

## Progress Toward Goals

***Progress Toward Goals***

**Building energy costs in 1999 were $3.4 billion; 39.5% less than 1985 expenditures of $5.6 billion.**
**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 per Square Foot**

**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)**

**Notes:**
Mention the pending legislation– Murkowski’s 50% reduction based on 1990 baseline.

## Why should we keep going?

- Solves facility headaches and continues opportunity to save energy
- Increasing energy prices
- Allow for some dollars to be left in the O&M account to pay for mission related requirements
- Most cost effective form of pollution prevention
- The introduction of rolling blackouts

## 	Introductions 			& Why We Are Here

## We’d like to get to know you...

- Please introduce yourself
- Tell us which agency you are with
- What’s your job function?
- Do you have any specific questions you’d like us to answer?

- Hi there!

**Notes:**
Ask about the homework– were they able to find out if there is a AWC in their area?

## Project Financing Resources

- Why we need them: Allows for needed infrastructure improvements without direct appropriations.
- Financing resources available through FEMP:
- Utility Energy Service Contracts (UESC)
- Energy Savings Performance Contracts

## Our Objectives

- During this workshop we will tell you:
- The steps involved in developing Utility Energy Service Contracts.
- What tools and resources are available to assist you in implementing your project.

## Reasons to Choose UESCs

- You work with a known entity
- Your utility has unique expertise and a knowledge of your facility
- It’s an established source
- Flexibility in scope and size, smaller projects feasible
- It’s a partnership that is mutually beneficial!

## Let’s find out why you are here...

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

## Utility Program Basics

## Utility Incentive Programs

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

## Utility Incentive Programs

## Utility Energy Service Contracts (UESCs)

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

## Typical UESC Offerings

**Audits**

**Feasibility **
**Studies**

**Project **
**Financing**

- Technical
- Services

- Financial
- Services

**Rebates**

**Engineering & **
**Design**

**Construction & **
**Installation**

**Project **
**Management**

**Performance **
**Guarantees**

**Training**

**O&M Services**

## UESCs Reallocate the Government’s Utility Budget

**Budget $**

- Decrease energy costs
- Pay for project
- Achieve energy cost savings for the government

**Utility **
**Bill**

**Utility **
**Bill**

**Utility **
**Bill**

**Contractor**
**Payment**

**Govt.**
**Share**

**Govt. Share**

- Energy
- Cost
- Savings

**Before**
**Contract**

**During**
**Contract**

**After**
**Contract**

## Considerations

- UESCs may not be available to all facilities
- Utility may be new to this type of contracting
- Contract process is not rigid
- Agency’s relationship with utility
- Contract term

## Enabling Legislation for Utility Programs

## Energy Policy Act of 1992

**Section 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)*

## 10 USC 2865 and 2866

**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 Acquisition 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

**Notes:**
Issue a caution that if you are using the AWC, use GSA legal opinion

## FEMP’s UESC Enabling Documents

- Details:
- Legislation and Executive actions
- Legal opinions
- Agency guidance
- Available both in hard copy and electronically
- http://www.eren.doe.gov/femp/utility/enabl_docs.html

**Notes:**
You have a prop to hold up.  Each participant should get a copy of this.

## The 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 Planning*

*Project Identification*

*Project Implementation*

## Planning Your UESC

***Planning Your UESC***

- Determine Appropriate UESC Vehicle

**AWC **
**Site Specific Contract**
**Master Agreement**
**BOA**

*Choose UESC vehicle*

- Assemble your Acquisition Team

**Team players**
**Team issues**
**Develop strategy**
**Enlist support**

*Initiate Project Identification*

## Determine Appropriate UESC Vehicle

**AWC **
**Site Specific Contract**
**Master Agreement**
**BOA**

*Choose UESC vehicle*

## UESC Vehicles

- Areawide Contract (AWC)
- Task order placed underneath to establish terms and conditions for energy management services
- Site Specific Contract
- Basic Ordering Agreement (BOA)/ Agency Master Agreement

**Notes:**
Refer to appendix section.  Has other FAR citations and they are numbered consecutively.
FAR 41.204 © :  Shall use an areawide unless.....

## GSA Areawide Contract

- FAR Part 41 Utility Service Contract
- GSA puts in place but all agencies shall use
- Utility service territory IDIQ contract
- Terms and conditions
- Specific project delivery order/task order issued

## Roles in the AWC Process

***Roles in the AWC Process***

- GSA places a blanket contract for utility services.

- Utility and agency negotiate detailed terms and conditions for the specific site.

## Site Specific Contract

- Any site can place
- Includes all terms and conditions (incorporates site specifics)
- No additional DO/TO is required
- Always an available option

- Site

**Notes:**
Use of this type of contract requires a Delegation of Authority from GSA- unless your agency already has one

## Basic Ordering Agreement/ Agency Master Agreement

***Basic Ordering Agreement/ Agency Master Agreement***

- FAR Part 16 Service Contract, requires competition
- Any agency can place with a utility or GSA can place it
- Delivery orders/Task orders with project specifics are placed underneath it

- Agency

- Utility

- BOA/
- AMA

**Notes:**
There is a FAR citation on BOAs...

## Assemble Your Acquisition Team

**Team players**
**Team issues**
**Develop strategy**
**Enlist support**

*Initiate Project Identification*

## Assemble an Acquisition Team

- Put your team together early
- To ensure project buy-in and support
- To reduce turn around time for approvals
- To expedite the procurement process
- To keep each other informed of current and future agency plans that impact the project
- Prepare for team turnover
- Document your process and establish a Project Documentation Plan
- Capture institutional knowledge

## Who Should Be On Your Team?

- Site decision maker
- Technical staff
- Procurement personnel
- Legal rep.
- Budget rep.

- Environmental specialist
- Tenants
- Operations staff
- Maintenance personnel
- Other?

**Notes:**
Either explain the role of tenants or *consider asking the audience how they think some of these folks are involved.  Ask them if they should include unions.

## Acquisition Team Issues 

## Budget and Financial Issues

- Be clear that the utility budget will stay the same and project payments come from savings
- Address the potential need to redirect funds from utility, tenant, and O&M accounts to the utility account in order to pay the bill

## Environmental Protection Requirements

- Project must comply with National Environmental Policy Act (NEPA)
- Team should develop detailed disposal requirements statement for hazardous materials related to the project

- App. 1
- Page 5

- It is in the FAR! Subpart 23.3.

**Notes:**
Refer to FAR Part 23.3 in the appendix.

## Personnel Issues 

- Your acquisition plan should take into consideration:
- Existing maintenance staff and/or contracted operations and maintenance personnel
- Technical personnel
- Staff training

**Notes:**
Reference to first sub bullet– remind audience not to forget that at the end of the ten year contract their will need to be people to continue the O&M.

Talk about the massive workforce realignment coming soon– huge segment of the feds. will be eligible for retirement.
A76- (Millard reference):  union involvement when possibility of govt. employees replaced  

## Potential Conflicts and Unique Issues

- Consider conflicts involving known and potential mission or facility usage changes
- Address unique facility issues like restricted access, special requirements (labs, libraries) or tenant’s operations

**Notes:**
Refer to facility closures as one example of mission and usage changes.

## Your Acquisition Strategy &Project Considerations

## Identify Your Project Goal 

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

## Consider the Project’s Parameters

- Potential ECMs

- Required ECMs

- +

**Facility**

**Site**

**Technologies**

**+**

**Contract Term**

**+**

- +

- +

## Collect Facility Data

- Historical utility data (including water)
- Current building and equipment data
- Data on anticipated facility and utility changes
- Any past audit or SAVEnergy audit information

## Prioritize Facility Requirements

- Specific facility needs
- Facility conditions
- Constraining issues
- Limited in-house resources
- Union considerations
- Work environment
- Other support contracts

## Select Potential ECMs

- Building envelope
- HVAC equipment, distribution and water heating system
- Lighting and power system
- Energy management and control systems
- Heat reclaim systems
- Renewable energy systems
- Air compression
- Combined heat and power, distributed energy  resources
- Other?

**Notes:**
Talk about demand reduction and commissioning as a means to save. 

## Do You Want M&V?What is M&V and what does it do for your project?

## Measurement & Verification

- A means of measuring and/or calculating the energy being consumed and verifying the “savings” or avoided costs
- Insures savings persistence
*FEMP M&V Guidelines*: Measurement and Verification for Federal Energy Projects; (v 2.2)
- http://www.eren.doe.gov/femp/financing/measguide.html

## Assured Continued Savings

**Good M&V**

**Poor M&V**

**   ****Two key benefits**
**Initial savings level**
**Persistence of savings**

- 120

- 100

- 80

- 60

- 40

- 20

- 0

- 0

- 5

- 10

**% Savings Realization**

**Years post-completion**

**Carr’s **
**observation**

**Appropriated**
**project **
**savings**

**Notes:**
Data collected by Texas A&M

## Do All You Can

- Include all the opportunities available through UESC
- energy efficiency, water efficiency, alternative electric and/or gas supply, on-site power generation/CHP, renewables and renewable power purchases
- Incorporate a synergistic and interactive approach to the measures

## Bundling ECMs

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

## Benefits of Bundling

- Provides technical solutions while assuring synergy of measures
- Savings from short-term payback ECMs can contribute to the ability to accomplish longer-term equipment, or related facility improvements
- Can reduce long standing maintenance  headaches, such as HVAC, that usually have long paybacks

## Fuel Neutral Approach

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

## How Utility Restructuring Impacts UESCs

- Utilities want to retain you as their customer
- Your energy costs are changing
- Sources of service are changing– you may not know who to contract with

## Impacts of DoD  Privatization

- Decrease to facility’s discretionary O&M fund availability
- Annual costs will probably increase
- Loss of future flexibility in managing systems
- But energy savings can help offset cost of privatization so don’t let it delay your project in areas that aren’t being privatized!

## Gain Support & Momentum for the Project

- Start early– include everyone
- Prepare a briefing and include:
- Benefits to the site
- Summarize the financing process
- Be prepared to overcome resistance to change

**Notes:**
Emphasize this!!!

## The Cost of Delaying a Project

**Low**

**Med**

**High**

**Life Cycle Cost**

*Delayed appropriations*

*Financing*

*Appropriations available today*

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

*No action taken*

## Available Resources

- Use GSA and FEMP for advice and support, briefings to project teams and management
- Find background information on web sites:
- _[http://www.eren.doe.gov/femp/financing](http://www.eren.doe.gov/femp/financing)_
- http://gsa.gov/pbs/xu/
- Order the UESC video from FEMP that showcases this process

## Available Resources

**DOE Regional Offices**
- Boston - Paul King (617) 565-9712
- Philadelphia - Bill Klebous (212) 264-0691 or Gene Lesinski (215) 656-6976
- Seattle - Cheri Sayer (206) 553-7838
- Atlanta - Doug Culbreth (919) 782-5657
- Denver - Randy Jones (303) 275-4814
- Chicago - Sharon Gill (312) 886-8573

**Notes:**
Refer to appendix on Resources for all contact information.