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Posted 12/30/2016

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The White House announced Dec. 28 that federal agencies have exceeded its Presidential Performance Contracting Challenge (PPCC) to award $4 billion in energy efficiency contracts by the end of 2016.

The White House made the announcement saying, “Today we are proud to announce that the President’s challenge has been exceeded, with 21 Federal agencies awarding 340 projects with over $4.2 billion in value.”

“This is a big milestone that shows not only how the private and public sectors can work together to achieve joint objectives, (but also) the hard work that agencies put forward to meet an ambitious goal,” said Christine Harada, Federal Chief Sustainability Officer, in the White House Council on Environmental Quality.    

In 2011, President Barack Obama challenged federal agencies to facilitate $2 billion in energy efficiency upgrades to federal buildings.  In 2014, the president announced an additional $2 billion goal, resulting in a total of $4 billion in energy efficiency performance contracts through 2016.  The Army’s commitment toward the goal was to award $1 billion in Energy Savings Performance Contracts (ESPC) and Utility Energy Service Contracts (UESC).

The U.S. Army Corps of Engineers (USACE), Engineering and Support Center in Huntsville (Huntsville Center), Alabama, which is widely recognized as the Army’s center of expertise on energy performance contracting, was instrumental to the Army’s success by awarding $869.8 million of the more than $1 billion in energy performance contracts in support of the PPCC.  In fact, a team including Huntsville Center and USACE Headquarters personnel earned the Department of Energy’s (DOE) 2016 Federal Energy Management Program (FEMP) Director’s Award for their efforts resulting in more than $1 billion in energy performance contracts awards toward the PPCC goal that supported the Army, Navy, Air Force and Civil Works.  Huntsville Center’s cumulative ESPC and UESC capital investment represents nearly 88 percent of the Army total and more than 25 percent of the $4 billion PPCC.

Under an ESPC, energy service companies (ESCOs) compete to finance, design, construct and manage energy projects and maintain the systems long-term.  ESPCs range from 10 years to a maximum of 25 years, with the ESCO being paid back over the term of the contract from cost savings generated by the energy efficiency improvements they make.

Since FY11, the Huntsville Center has awarded 96 energy performance contracts totaling $1.04 billion supporting the Army, Navy, Air Force and USACE Civil Works.

Of the $1 billion awarded, $869.8 million was in support of the Army, $68.54 million was in support of the Navy; $50.25 million was in support of Air Force; $16 million was in support of USACE Civil Works, $28 million was in support of the Defense Logistics Agency; and $56 million was in support of the Defense Intelligence Agency.

The Huntsville Center energy performance contracting program has successfully integrated renewable energy generating assets into projects to help meet federal clean energy and renewable electricity goals.  Examples include projects at White Sands Missile Range, New Mexico; Fort Bliss, Texas; Fort Campbell, Kentucky; Fort Buchannan, Puerto Rico; and Los Angeles Air Force Base, California, that provided a total of more than 11 megawatts of solar generated power and 825 kilowatt hours of wind generated power. In addition, Huntsville Center integrated a UESC with a Power Purchase Agreement at Fort Campbell that will provide a cumulative 5 MW of solar power.

In concert with other strategic initiatives, USACE signed a Memorandum of Understanding (MOU) in 2014 with the DOE FEMP to work in partnership to advance U.S. government-wide adoption of performance contracting processes. The MOU has effectively contributed to the Army and Department of Defense’s success in achieving the goals of the PPCC.  It will support the efforts of other federal agencies to meet federal energy and water reduction goals.  As a result of this MOU, FEMP has provided resources to Huntsville Center to initiate several projects to support the U.S. Air Force (USAF).

The USACE Civil Works PPCC goal was set at $12.5 million in 2011, and was surpassed in January 2016 with the award of three ESPC projects totaling $16 million at civil works facilities.

The first USACE Civil Works project awarded an ESPC in FY15 was in support of USACE Mobile District’s project to implement lighting upgrades along the Tennessee-Tombigbee Waterway (TTWW).  The $3 million project was a "proof of concept" initiative, intended to demonstrate the viability of using an ESPC to implement energy conservation measures at a series of small, geographically dispersed facilities, including high-mast lighting at the 10 locks and dams along the 234-mile navigation channel that collectively comprise the TTWW. System-wide, the ESPC is guaranteed to deliver 21.7 percent in energy savings, or about 5.1 billion British thermal units (Btu) and $160,000 per year. In addition to significant energy efficiency improvements, the TTWW has also witnessed operational safety improvements for overnight barge traffic as a result of the high mast lighting installed at various locks.  For this effort, Mobile District received a Department of Energy, 2016 Federal Energy and Water Management Program Award.

Following the TTWW, USACE awarded two additional ESPCs that collectively comprise the USACE Civil Works $16 million PPCC contribution. A $5.5 million project for three similar river-based navigation systems in the Pittsburgh District was awarded in January 2016.  Through lighting upgrades, thermostat installations and transformer replacements, the project is guaranteed to deliver 23 percent energy savings.  USACE also has invested $7.4 million in a project at the Humphreys Engineer Center Support Activity, Virginia, that is guaranteed to deliver a 16 percent in overall energy savings through the installation of various energy conservation measures.

energy efficiency energy performance contracting program Energy Savings Performance Contracts ESPC federal clean energy and renewable electricity goals Power Purchase Agreement PPCC Presidential Performance Contracting Challenge UESC USACE Civil Works Utility Energy Service Contracts