# Presentation: 725234

## Federal Utility Partnership Working GroupBrooklyn, NY April 22-23, 2004

- Brad Gustafson
- Utility Program Manager
- FEMP

## Topics

- FEMP Utility Program Priorities
- Reaching the Contracting Community
- Performance Verification
- Energy Legislation

## KeySpan Energy Delivery (KED) comprises all of the regulated assets of KeySpan including the delivery of gas to New York, Long Island and New England, as well as generating and managing the delivery of electricity on Long Island and serves 2.5 million customers over a 4,300 square mile footprint.

**KeySpan Energy Delivery (KED)** comprises all of the regulated assets of KeySpan including the delivery of gas to New York, Long Island and New England, as well as generating and managing the delivery of electricity on Long Island and serves 2.5 million customers over a 4,300 square mile footprint.

**Meeting Host**

**Notes:**
A member of the Standard & Poor’s 500 Index, KeySpan is the largest distributor of natural gas in the Northeast, with 2.5 million gas customers and more than 12,000 employees. KeySpan is also the largest investor-owned electric generator in New York State and operates Long Island Power Authority's electric system serving 1.1 million customers.   
With headquarters in Brooklyn, Boston and Long Island, KeySpan also manages a dynamic portfolio of service companies. They include: KeySpan Energy Delivery, the group of regulated natural gas and electric utilities; KeySpan Home Energy Services, an energy product, repair and service company for residential and small commercial customers; and KeySpan Business Solutions, a full-service energy product, repair and services company for business customers. KeySpan also has strategic investments in natural gas exploration, production, pipeline transportation, distribution and storage, Canadian gas-processing and fiber-optic cable. KeySpan is traded on the New York Stock Exchange under the symbol "KSE." KeySpan Corporation was formed in May 1998 as a result of the merger of KeySpan Energy Corporation, the parent company of Brooklyn Union Gas, and certain businesses of the Long Island Lighting Company. On November 8, 2000, KeySpan acquired Eastern Enterprises, a Massachusetts business trust, and the parent of several gas utilities operating in Massachusetts and New Hampshire.

## Handouts
Evaluations
FUPWG Bulletin Board
http://www.eere.energy.gov/femp/utility/forum/fupwg-forum
Cell Phones 

- Handouts
- Evaluations
- FUPWG Bulletin Board
- http://www.eere.energy.gov/femp/utility/forum/fupwg-forum
- Cell Phones

**Housekeeping**

## Protection of the UESC Authority.
Build awareness and educate Federal contracting community.
Facilitate expanded market activity through agency actions (e.g. US Army Utility contract SE Region) and build utility awareness.
Continue to provide FEMP Direct Project Support services. 
Continuous improvement of project data.
Gain a better understanding of what drives Alternative Financing markets.
Tell the FEMP UESC story; guidance materials, training, project assistance, energy and cost savings.

- Protection of the UESC Authority.
- Build awareness and educate Federal contracting community.
- Facilitate expanded market activity through agency actions (e.g. US Army Utility contract SE Region) and build utility awareness.
- Continue to provide FEMP Direct Project Support services.
- Continuous improvement of project data.
- Gain a better understanding of what drives Alternative Financing markets.
- Tell the FEMP UESC story; guidance materials, training, project assistance, energy and cost savings.

**FEMP - Utility Program Priorities**

## FEMP’s Utility Program

**FEMP’s Utility Program**

**Informing agencies and utilities to create market and develop industry capability.**

**Over 100 Federal agency procurement team members trained annually.**

**Enabling Documents and other publications add to project quality.**

**Technical support to active projects totaling  $51M FY03****. **

**Between 1994-2004, attendance has grown from 14 to an average of 120 and includes utilities and 8 of the top 10 consuming Federal agencies.**

**Rate of Investment and Savings**

**FUPWG**

## FUPWG

-          **=  FUPWG Attendance**

**          ****UTILITY PROGRAM OVERVIEW                **

**  ****=  UESC Investment**
**     ****$1.373B to date**

- $1.4 billion

- $1.2 billion

- $1.0 billion

- $0.8 billion

- $0.6 billion

- $0.8 billion

- $0.6 billion

- 10/92

- 10/94

- 10/96

- 10/98

- 10/00

- 10/02

- 0.

**FUPWG**

## Reaching the Contracting Officer – FY04

**Reaching the Contracting Officer – FY04**

- National Contract Management Association World Congress at Orlando, Florida April 27, 2004.
- ESPCs & UESCs: New Ways to Streamline Procurement
- Cyndi Vallina, Office of Federal Procurement Policy
- Office of Federal Procurement Policy newsletter briefs
- Acquisition / Contracting Rules Track
- Energy 2004

**Notes:**
The FAC, formerly the Procurement Executives Council is an organization of senior procurement officials and other senior management of numerous federal agencies. FEMP is arranging for an alternative financing presentation to get on the agenda of an upcoming Federal Acquisition Council meeting.

NCMA is the primary professional association for contract management professionals. We are working to get an alternative financing (ESPC & UESC) session on the agenda of it's World Congress - coming up April 26-28 in Orlando. 

Contract Management magazine is the primary printed organ of the NCMA. An article has been prepared and submitted for publication. The article is primarily about ESPC's, but also discusses UESC's very positively.

FEMP has secured a commitment from the Office of Federal Procurement Policy for a series of briefs concerning news about ESPCs or UESCs. (Two briefs on ESPCs, two briefs on UESCs are what's likely). This newsletter is circulated to contracting officers and heads of contracting organizations throughout many federal agencies. 

## Alternative Finance Guidance Memoranda

**Alternative Finance Guidance Memoranda**

- AFGM #1 - Authority to Sole Source Utility Service Contracts
- AFGM #2 – Congressional Notification for Utility Projects
- AFGM #3 – Relationship of Anti-Deficiency Act to Multi-Year Contracts
- AFGM #4 – Federal Fund Sources to be Used to Pay for Multi-Year Contracts Under the Utility Incentive Program

## Performance Assurance

**Performance Assurance**

**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**

## Project Validation

- Background
- Who is responsible for performance?
- What is the purpose of a performance monitoring plan?
- What are the benefits?
- What should be included in the plan?
- Determining the levels of verification and guarantees

## Project Validation

- Drivers
- Statutory requirements
- Legal Requirements
- OMB, GAO and others? Showing Interest
- Next Steps
- FEMP will bring to Interagency Energy Management Task Force

## Energy Legislation

**Energy Legislation**

**Title IX Subtitle B  - Federal Energy Programs**
_**Sec. 911.**_** Energy management requirements**
_**Sec. 912.**_** Energy use measurement and accountability**
- Sec. 913. Federal building performance standards
- Sec. 914. Procurement of energy efficient products
_**Sec. 915.**_** Repeal of energy savings performance contract sunset**
_**Sec. 916.**_** Energy savings performance contract definitions**
_**Sec. 917.**_** Review of energy savings performance contract program**
- Sec. 918. Federal Energy Bank
- Sec. 919. Energy and water saving measures in Congressional buildings

***H. R. 6 Conference Report*****Key Features**

## Energy Legislation

**Energy Legislation**

**Title I Energy Efficiency Programs Subtitle A Federal**
**Programs**
- Sec. 101. Energy and Water Saving Measures in Congressional Buildings
**Sec. 102. Energy Management Requirements**
**Sec. 103. Energy Use Measurement and Accountability**
- Sec. 104. Procurement of Energy Efficient Products
- Sec. 105. Voluntary Commitments to Reduce Industrial Intensity
- Sec. 106. Advanced Building Efficiency Testbed
- Sec. 107. Federal Building Performance Standards

***S. 2095 – Energy  Policy Act of 2004 ***
**Key Features**

## Energy Legislation

**Energy Legislation**

**Purpose**
- Authorizes DOD and DOE to continue to use
- ESPC financing vehicle for DoD facilities
**House and Senate Companion Bills:**
***H.R. 3339*** – Introduced November 2003
***S. 2318*** – Introduced April 2004

***National Defense Savings Act***

## Energy Legislation

**Energy Legislation**

**Common House and Senate Provisions**
**Contract Period** 25 years
**Costs and Savings** Contractor incurs costs to implement energy-saving measures
**Requires** Annual energy audit and specified terms and conditions for payments and performance guarantees
**Rulemaking **DOD issues final rule within 90 days of enactment to establish procedures and methods
**ESPC** Contract that provides for performance of services for design, acquisition, installation, testing, operation, maintenance and repair...at one or more locations
**Secondary Savings** Additional energy/cost savings resulting from ESPC contract

***National Defense Savings Act*****Key Provisions**

## 2004 Congressional Calendar

**In Session** Less than 50 legislative days left
**Adjournment** October 1
**Conflicts/Issues** Fall Election, differences over energy provisions/funding priorities
***FY 2005 Budget Resolution*** Serves as guide for preparing FY 2005 appropriations
**FY 2005 Appropriations Process** May see a “Continuing Resolution” for most or all 13 bills

**2004 Congressional Calendar**

## Thank you

Brad.Gustafson@EE.DOE.GOV

202 586-5865

- Thank you
- Brad.Gustafson@EE.DOE.GOV
- 202 586-5865

## END

## Optional Slides

## Energy 2004

**Energy 2004**

- _[Acquisition: Contracting Rules!](http://www.energy2004.ee.doe.gov/tracks-acquisition.htm)_
- _[Alternative Financing: Making Projects Happen](http://www.energy2004.ee.doe.gov/tracks-altfinance.htm)_
- _[Developing World Class Operations and Maintenance](http://www.energy2004.ee.doe.gov/tracks-om.htm)_
**Energy Security: Supply, Technologies and Strategies**
**New Technologies: Successful Applications for Buildings and Vehicles**
**Policy, Planning and Leadership**
**Renewables: Real, Relevant and Affordable**
**Sustainability: From Dreams to Operations**

**Rochester, New York, August 8-11**

## Reaching the Contracting Officer

**Reaching the Contracting Officer**

- Alternative Financing Session at the Federal Acquisition Conference
- Tyson Corner, VA; June 12, 2003.
- Huntsville, AL; June 17, 2003.
- Acquisition Track at Energy 2003

- Completed in FY03

**Notes:**
FAC - This session was accompanied by a FEMP booth featuring UESC case studies, UESC video and copies of the Enabling Documents. It was an outreach/education effort targeted at federal contracting officers. More than 30 attendees total for the sessions, hundreds for the exhibit booths.

Orlando, FL; August 17-20, 2003. Track Organizer: Billy Wise of Southern Company
Track included sessions on: "How to Buy Green/Mandatory Products", "Power Purchasing Techniques" and "Performance Contracting with the GSA Schedule". Track was designed to attract contracting officers to Energy 2003.

## FEMAC

- Required by Executive Order 13123, the Federal Energy Management Advisory Committee provides the Department of Energy with input on a range of issues critical to meeting mandated Federal energy management goals. In October 2000, the Secretary of Energy selected 11 individuals to serve on the committee, which is chaired by the Director of the Federal Energy Management Program (FEMP). In compliance with the executive order, the committee is composed of officials from Federal and state governmental agencies; the energy service, utility, and equipment manufacturing industries; building design and construction professions; and other energy organizations. In 2003, new members were appointed in accordance with the by-laws of the committee.

**Notes:**
Federal Energy Management Advisory Committee

Required by Executive Order 13123, the Federal Energy Management Advisory Committee provides the Department of Energy with input on a range of issues critical to meeting mandated Federal energy management goals. In October 2000, the Secretary of Energy selected 11 individuals to serve on the committee, which is chaired by the Director of the Federal Energy Management Program (FEMP). In compliance with the executive order, the committee is composed of officials from Federal and state governmental agencies; the energy service, utility, and equipment manufacturing industries; building design and construction professions; and other energy organizations. In 2003, new members were appointed in accordance with the by-laws of the committee.

## DEPARTMENT OF DEFENSE (DOD)
Base Realignment and Closures (BRAC) Prospects for additional base closures in FY 2005 remains a controversial issue in Congress. Some members are pressing the Administration to wait until FY 2007, but the Department of Defense, in recent testimony before the House Committee on Armed Services stated that proceeding with the next round in FY 2005 will benefit and not hinder the Administration’s war on terrorism. The environmental clean up costs for closing military bases draws funds from military activities, according to critics of the proposed base closures. To date, a total of 55 major bases have been realigned and 97 major bases have been closed along with the realignment and closure of an additional 235 minor bases resulting in a savings of $38.5 billion. The overall cost to date of the BRAC program is $22 billion.

- DEPARTMENT OF DEFENSE (DOD)
***Base Realignment and Closures (BRAC) ***Prospects for additional base closures in FY 2005 remains a controversial issue in Congress. Some members are pressing the Administration to wait until FY 2007, but the Department of Defense, in recent testimony before the House Committee on Armed Services stated that proceeding with the next round in FY 2005 will benefit and not hinder the Administration’s war on terrorism. The environmental clean up costs for closing military bases draws funds from military activities, according to critics of the proposed base closures. To date, a total of 55 major bases have been realigned and 97 major bases have been closed along with the realignment and closure of an additional 235 minor bases resulting in a savings of $38.5 billion. The overall cost to date of the BRAC program is $22 billion.

***BRAC***