Super Energy Savings Performance Contracts
"...I encourage government officials to utilize ESPCs and Super ESPCs to meet their energy use reduction goals. These efforts will help conserve energy and create a better America for our children and grandchildren."
—President George W. Bush, April 25, 2006
If you're doing all you can to meet your agency's energy efficiency, water conservation, and renewable energy goals but are frustrated by a lack of funds, then a Super ESPC could be the answer.
Alternative financing isn't just an "alternative" anymore—it's an essential tool for meeting our federal energy goals.
The Energy Policy Act of 2005 set new federal energy goals:
- Cut energy use (compared to 2003) by 2% per year in 2006 through 2015
- Increase use of renewable energy to not less than 3% of total electricity use in 2007-2009, not less than 5% in 2010-2012, and not less than 7.5% in 2013 and thereafter.
ESPCs Make Energy and Cost Savings Pay for Improvements
An ESPC is a contracting vehicle that allows agencies to accomplish energy projects for their facilities without up-front capital costs and without special Congressional appropriations to pay for the improvements.
An ESPC project is a partnership between the customer and an energy services company (ESCO). The ESCO conducts a comprehensive energy audit and identifies improvements that will save energy at the facility. In consultation with the agency customer, the ESCO designs and constructs a project that meets the agency's needs and arranges financing to pay for it. The ESCO guarantees that the improvements will generate savings sufficient to pay for the project over the term of the contract. After the contract ends, all additional cost savings accrue to the agency. Contract terms up to 25 years are allowed.
Super ESPCs Streamline the Process
Super ESPCs are indefinite-delivery, indefinite-quantity (IDIQ) contracts established by DOE to make ESPCs as practical and cost-effective a tool as possible for agencies to use. These "umbrella" contracts were competitively awarded to ESCOs who demonstrated their capabilities to provide energy projects to federal customers. The general terms and conditions are established in the IDIQ contracts, and agencies implement projects by awarding delivery orders to the Super ESPC ESCOs. Agencies can implement a Super ESPC project in far less time than it takes to develop a stand-alone ESPC project.
Congress and the President Encourage Agencies to Use ESPCs
"Maximizing energy efficiency and renewable energy is the domestic epicenter in the War on Terror and it is imperative that we maximize the partnerships between the public and private sectors in new and creative ways with a sense of seriousness, national purpose and the urgency the situation merits."
—Alexander A. Karsner
Assistant Secretary for Energy, Efficiency and Renewable Energy
Congress and the President encourage agencies to use ESPCs to finance and implement efficiency improvements and meet their energy goals. Legislation authorizing ESPCs was enacted in 1992, and DOE promulgated regulations for their use in 1995. Super ESPCs were placed to streamline the process in 1998, and ESPCs were reauthorized through 2016 by the Energy Policy Act of 2005.
More than 400 ESPC projects have been awarded by 19 different federal agencies in 46 states. $1.9 billion has been invested in U.S. federal facilities through ESPCs, saving 16 trillion Btu annually, equivalent to the energy used by a city of about 450,000.
Download a fact sheet on investment and savings accomplished by federal ESPCs. (PDF 579 KB, 1 pp). Download Adobe Reader.
What An ESPC Project Can Do For Your Facility
Two Kinds of Super ESPCs
Regional "General-Purpose" Super ESPCs
The entire United States and all U.S. Territories are covered by Regional Super ESPCs. Regional Super ESPCs are intended for projects based on a wide variety of proven energy efficiency and conservation measures. Super ESPC ESCOs have demonstrated their capabilities with the following:
- Boiler and chiller plant improvements
- Building automation and energy management control systems
- Heating, ventilation, and air conditioning (HVAC) equipment
- Lighting improvements
- Building envelope modifications
- Chilled water, hot water, and steam distribution systems
- Electric motors and drives
- Refrigeration
- Distributed power generation systems
- Renewable energy systems
- Energy/utility distribution systems
- Water and sewer systems
- Electricity peak shaving or load shifting
- Energy cost reductions through rate adjustments
- Energy-related process improvements
- Other
Technology-Specific Super ESPCs
Technology-specific Super ESPCs can be used for federal facilities worldwide. These ESPCs emphasize four advanced technologies:
- Geothermal heat pumps
- Photovoltaics
- Biomass and alternative methane fuels
- Solar thermal
The emphasized technology must be the center of a tech-specific ESPC project, but bundling other technologies into these projects is allowed and encouraged.
Benefits of Super ESPCs
Without ESPCs, agencies would have to reassess their budget plans to accommodate investments in ECMs and/or Congress would be asked to appropriate funds today to finance investments to meet currently required energy consumption goals.
—GAO, December 2004
Goals
- Progress in meeting federal energy, water, renewables, and emissions reduction goals
Quality and Value
- Access to private-sector expertise in energy efficiency, water conservation, and renewable energy
- Built-in incentives for ESCOs to provide high-quality equipment, timely services, and thorough project commissioning
- Infrastructure improvements to enhance mission support
- Healthier, safer working and living environments
Your Project, Your Way
- Flexible, practical contract and procurement process
Expert, Objective Technical Support
- FEMP team contracting and financing support, project facilitators, advanced technology experts, and training for agency teams
Smart Management
- Building efficiency improvements and new equipment without up-front capital costs
- Energy improvements without relying on special Congressional appropriations
- Guaranteed energy and related O&M cost savings
- Lower O&M costs
- Enhanced ability to plan and budget energy and O&M accounts
- Less vulnerability to budget impacts of volatile energy prices, weather, and equipment failure
Expert and Objective Technical Support
FEMP's ESPC team can provide technical assistance to assure successful, best-value energy projects.
FEMP project facilitators are experts in the field who guide agencies through the ESPC process. Project facilitators and others on FEMP's team provide consultation to agency customers on contracting and financing issues, measurement and verification, and technology and engineering issues.
The FEMP team's purpose is to help agencies implement projects that are financially smart, technically excellent, and contractually and legally sound.
Getting Started
Contact FEMP's Federal Energy Project Financing Specialists
To get started, FEMP provides free services through the Initial Proposal stage, without the need for an Interagency Agreement. After the Initial Proposal, FEMP services can be provided on a cost reimbursable basis. The Interagency Agreement spells out tasks and costs of FEMP project facilitation.
FEMP also offers free introductory and advanced ESPC workshops.
You may download a pdf of this Super ESPC Overview. (PDF 1.1 MB, 2 pp). Download Adobe Reader.
You can also download the Super ESPC Outreach Toolkit (PDF 5.1 MB, 12 pp) including:
- Super ESPC Program Overview,
- tri-fold program overview brochure,
- getting started/contacts pocket card,
- "Super ESPC—Just the Facts",
- "Fine Tuning for Best-Value Super ESPCs Deals Using the Risk/Responsibility Matrix", and
- three case studies. Download Adobe Reader.