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FUPWG Meeting Proceedings - Brooklyn, NY

April 22-23, 2004
Spring 2004 Meeting
Brooklyn, New York

Introduction

The Federal Utility Partnership Working Group (FUPWG) held its Spring 2004 meeting in Brooklyn, New York, on April 22-23, 2004. A total of 89 individuals attended the meeting, including 28 new members. Organizations represented included 20 utility officials, 6 Federal Energy Management Program (FEMP) representatives, 19 Federal agency representatives, 12 national laboratory representatives, and 32 representatives from energy-related organizations (see meeting participant list). The working group is a joint effort between FEMP and the utility industry to stimulate the exchange of information among participants and foster energy efficiency projects in Federal facilities nationwide.

The agenda included the following presentations:

  • Washington Update
  • Critical Update Part I: Status of the Energy Bill, Project Validation Update, and General Services Administration Update
  • Critical Update Part II: UESC and ESPC Project Data Analysis - What Can We Learn?
  • Fuel Cells/Hydrogen Economy
  • PANEL: Combined Heat and Power/Interconnection
  • KeySpan Energy Efficiency Federal Projects Overview
  • Emissions Trading Opportunities and Federal Success Story
  • Federal Renewable Power Procurement: Reports from the DESC and GSA
  • PANEL: Discussion of Emerging/Niche Technologies

All presentations are available on the FEMP website.

DAY 1 - APRIL 22, 2004


Welcoming Remarks

Wally Parker, KeySpan

Mr. Parker stressed the significance of partnerships between utilities and their Federal agency customers to "bridge the energy gap" in order to achieve energy efficiency and renewable energy goals. He cited as examples, several KeySpan projects involving the installation of gas heat and cooling technologies at Federal sites including the General Service Administration's Courthouse building in Brooklyn and the U.S. Postal Service's airmail facility at JFK airport.

Paul King, Federal Energy Management Program (FEMP) Boston Regional Office Representative

The Department of Energy's (DOE) Boston Regional Office is one of six DOE Regional Offices (ROs) located throughout the U.S. The ROs provide assistance to Federal facilities to meet their mandated renewable energy and energy efficiency goals as established by the Energy Policy Act of 1992 (EPACT) and Executive Order 13123 - Greening the Government through Efficient Energy Management. For example, the ROs provide guidance on alternative financing, including the use of Utility Energy Service Contracts (UESC) and Energy Savings Performance Contracts (ESPC). In addition, the ROs provide agencies with technical assistance by helping to arrange SaveEnergy and ALERT team audits (no cost, low cost recommendations for energy reduction). Other services provide by the Regional Offices include technical training and workshops. To contact the appropriate DOE office in your region, visit the FEMP web site.

Washington Update

Skye Schell, FEMP

Skye Schell currently serves as the Acting Director of FEMP; Beth Shearer, the former Director retired in early January of 2004. In his remarks, Mr. Schell encouraged utilities and Federal agencies to provide ideas to move Federal energy management projects forward. He reported that over the past year, FEMP's Utility Program met several challenges resulting in a number of new accomplishments. Challenges included the "sunset" of Energy Savings Performance Contract (ESPC) authorizing legislation. However, the continuation of UESC-funded projects helped fill the alternative financing gap, and, as a result, UESC's contributed to the Federal sector's continued progress toward achieving utility energy savings goals. Recent accomplishments include Congressional recognition of the importance of renewable energy by introducing a number of bills that include renewable energy requirements for the Federal sector. Mr. Schell concluded his remarks by encouraging FUPWG members to share ideas among one another in order to expand and exceed UESC program goals.

Critical Update Part I: Status of Energy Bill

Utility Program and Energy Bill Update - Brad Gustafson, FEMP

Although several pieces of comprehensive national energy legislation have been introduced and have worked their way through various Congressional committees, no energy legislation has been passed by the current Congress. Two bills, H.R. 6 and S. 2095 (both titled Energy Policy Act of 2003) serve as the House and Senate versions respectively of comprehensive energy legislation. H.R. 6 directs Federal agencies to increase their energy savings by two percent more per year for the next ten years. The bill also strengthens metering requirements and repeals the ESPC sunset authorizing provision. The $13 billion Senate bill, S. 2095, also includes the two percent energy savings goal. The House and Senate are divided over a controversial provision included in the House bill, which requires Methyl Tertiary Butyl Ether (fuel additive in gasoline) manufacturer protection from liability. The National Defense Savings Act (NDSA) which was introduced in both the House and Senate, repeals the ESPC sunset at DOD sites only.

Mr. Gustafson outlined for the group FEMP's program priorities, which include:

  • Protection of UESC authority - FEMP's role is to firm up the technical aspects of UESC projects
  • Build awareness and educate contractors
  • Facilitate more market activity through agency actions and increased utility awareness
  • Provide direct project support services from FEMP - last year, FEMP was involved in half of UESC-funded projects
  • Improve data collection
  • Provide Federal agencies with information about the UESC mission and objectives

Project Validation Update

Millard Carr, Energy Management Solutions

Alternative Finance Guidance Memoranda (AFGM) is a series of documents approved by the Federal Government's Interagency Energy Management Task Force (IAEMTF). The AFGM provides guidance on issues related to alternative financing. The fifth AFGM in the series, "UESC Performance Assurance," describes the minimum levels of project assurance, recommends the conduct of several audits throughout the term of the project, encourages training in Operations and Maintenance (O&M), and suggests periodic inspection and verification of O&M. Project data has revealed that without monitoring and verification (M&V), appropriated project savings often drop off.

The AFGM document asks project teams to consider the following questions:

  • Who is responsible for performance?
  • What is the purpose of a performance monitoring plan?
  • What should be included in the plan?
  • What are the benefits?
  • How to determine the levels of savings guarantees?

To review the guidance documents, visit the FEMP Web site.

Mr. Carr encouraged FUPWG members to provide feedback on the document by May 3rd - send comments to either Brad Gustafson at brad.gustafson@ee.doe.gov or Millard Carr at millard@carrnet.net. Recommendations will be presented to the IAEMTF.

General Services Administration (GSA) Update

Mark Ewing, General Services Administration

GSA's Public Buildings Service now resides within the agency's Office of Applied Science. Since 1999, GSA has required M&V and guaranteed savings for UESC projects completed at GSA sites. For more information on the GSA Areawide Contract program, visit the GSA Web site.

GSA and Power Measurement are collaborating on an advanced metering pilot project. GSA will fund the installation of the 8500 series meters on GSA sites in the PEPCO service area. GSA seeks to incorporate advanced metering technologies in its facilities regardless of whether legislation mandates the use of meters.

Energy 2004

John Mitchell, Con Edison Solutions

Energy 2004 will be held in Rochester, New York, on August 8-11, 2004. This year's workshop, which is sponsored by the Department of Energy and co-sponsored by DOD and GSA, will host tracks on Acquisition, Alternative Financing, Policy, Renewables, Sustainability, Operations and Maintenance, Energy Security, and New Technologies in Buildings and Vehicles. For more information on Energy 2004, visit FEMP's web site.

Recent Projects

David Dykes, Southern Company

Southern Company, Pacific Northwest National Laboratory, and the U.S. Army are collaborating on a $20 million Master Agreement for Fort McPherson and Fort Gillem to implement a number of energy savings projects. The agreement cites guiding legislation and Federal authorities and is written in a generic fashion. The Master Agreement has been signed by appropriate parties and has been distributed to Army installations throughout the southeast to provide a model for other energy managers to use in writing their own contracts.

Gordon Drawer, FEMP Chicago Regional Office

Since 1988, the Great Lakes Naval Station has provided over $100 million in funding to support energy savings projects that have been implemented in over 185 buildings at the station. The program began in partnership with Exelon, which led to the establishment of a detailed plan to modernize the station's distribution system. An on-site cogeneration plant was constructed, which allows the station to generate its own electricity, reduce emissions, and operate in "island mode" (grid independent) for a period of up to 30 days, if necessary.

Critical Update Part II: UESC and ESPC Project Data Analysis - What can we learn?

Kate McMordie, Pacific Northwest National Laboratory

Since January 1993, the Pacific Northwest National Laboratory, on behalf of FEMP, has collected data on UESC projects. Data is collected on a voluntary basis from participating utilities and Federal agencies. To date, over $1.3 billion has been awarded in UESC projects, resulting in $189 million in annual cost savings to Federal agencies. Total FY 2003 cost savings was $151 million; for FY 2004, total savings to date is $7 million. Project data reveals that UESC investment decreased between FY 2001 and FY 2002. Reasons for this are unclear; however, contributing factors may include contracting difficulties or the impact of the 9/11 terrorist attack.

DOD has the largest number of Federal UESC projects with 64 percent of the total; GSA accounts for nine percent of the total; VA has 6 percent of the total, and the Department of Health and Human Services and the Postal Service accounts for five percent. A total of 7 percent of the projects are spread over the other agencies. A vast majority of the projects use the GSA Area Wide Contract for implementation.

Other trends to be investigated include determining the amount of Btu savings accrued per dollar invested, UESC projects assessed by time and region, potential future project activities, and changes in contracting mechanisms used by Federal agencies.

Chuck Goldman, Lawrence Berkeley National Laboratory (LBNL)

LBNL and PNNL collected and merged data on 800 UESC projects, 2,050 ESPC projects, and 125 DOE Super ESPC projects. The two laboratories assessed the data to determine tends in project size, retrofit strategies, and costs and savings of UESC and ESPC projects. In addition, the analysis compared the Federal project investment to public and institutional project investment. The analysis revealed that 66 percent of projects in the combined database represent public and institutional facilities, 27 percent represent the private sector; and seven percent are Federal UESC and non-DOE ESPC projects. The analysis also revealed the following trends:

Trends in UESC vs. ESPC project activity

  • Projects with funding greater than $2 million account for most UESC and ESPC investment
  • Large projects (greater than $2 million) account for an increasing share of the ESPC market activity, while most UESC projects cost less than $2 million
  • A growing share of ESPC projects include large distributed generation/central plant projects

Trends in Federal Project Activity vs. Institutional Project Activity

  • On a square foot basis, Federal projects cost less than institutional sector projects
  • Median Federal market energy savings are higher than other institutional sector customers
  • A total of 214 Federal projects yielded $550 million in net economic benefits compared to 965 institutional projects yielding $1.2 billion

Questions and Answers:

Q: How can you verify the credibility of data if it is confidential?
A: ESCOs provide researchers with accredited data. ESPCs are held to more stringent reporting requirements than UESCs.

Fuel Cells / Hydrogen Economy

Bill Eisele, South Carolina Electric & Gas

A hydrogen economy is an economy that relies on hydrogen as the primary source of energy. A hydrogen economy will require moving away from fossil fuels toward greater use of technologies such as fuel cells. Fuel cells are electrochemical energy conversion devices used to convert hydrogen and oxygen into water, thereby producing electricity and heat. Because it will take some time to lower the cost to produce, transport, and store hydrogen, the conversion to a hydrogen economy will be a long-term process. A conundrum exists in that consumption is driven by cost and, conversely, the cost to produce hydrogen is driven by consumption. The short-term barrier to a hydrogen economy is a large capital investment in infrastructure.

Questions and Answers:

Q: What is the reliability for fuel cells, and what are the operations and maintenance requirements to maintain a fuel cell?
A: For information on reliability, visit the DOD Fuel Cell Web site.

PANEL: Combined Heat and Power/Interconnection

Moderator - Pete Grzybowski, KeySpan

David Dykes, Southern Company

Mr. Dykes discussed the interconnection requirements and parallel operations of non-utility generators (NUG). Utilities set minimum requirements for hooking up an NUG to the power grid and required that the NUG place no negative impact on the system.

Interconnection requirements are established in order to maximize safety, minimize damage to property, among other issues. The types of protective devices used are determined by the NUG's geographic location, size and type of operating equipment, and whether the power flow is one-way or two-way; each interconnection is unique. Under an interconnection agreement, NUG responsibilities include: requirements in voltage, flicker, frequency, and power factor. The utility usually agrees to operate and maintain all protective equipment, including utility grade relays, instrument transformers, circuit breakers, and communication channels.

Abbas Kaffashan, Con Edison

Mr. Kaffashan described interconnections issues specific to Con Edison. The Con Edison service territory comprises 604 square miles and serves over three million customers with a peak load of 12,000 MW. Con Edison's interconnection process begins with a preliminary discussion between the non-utility generator and the utility regarding methods of interconnection, a review of the specifications for operations and maintenance, and testing. Three operating modes for combined heat and power (CHP) include supplemental - wherein the CHP system runs continuously, in parallel with the utility grid; isolated - wherein the CHP system has no interconnection with the Con Edison system; and standby - wherein the CHP system runs continuously, but pulls from the Con Edison system if the CHP system goes down. Con Edison does not permit buy-back on its distribution network system.

Bill Cristofaro, Energy Concepts Engineering

Mr. Cristofaro discussed interconnections as they relate to CHP, citing function and issues related to interconnections. Interconnection agreements are intended to help maintain power system reliability, facilitate energy savings, maintain equipment safety, and maintain power quality for CHP systems. To protect the grid from compromising these goals, the interconnection is outfitted with a CB-52 shunt, which acts as a circuit breaker and prevents disturbances in electrical relay. Several occurrences can cause the interconnection to trip including a utility blackout, utility brownout, brief disturbance (not visible to human eye), and cogeneration plant problems.

A microprocessor computer can sense conditions between the unit and the utility; when these disturbances occur, the computer sends a signal to the shunt within 1/10 of a second, shutting down the cogeneration unit. The interconnection point may create problems for the owner such as demand spikes and reduced kWh production; lag time in bringing the onsite power system back to generating capacity; and operational difficulties. To reduce the likelihood of the cogeneration system tripping, owners can install alarms and trip set puts can be adjusted to a wider margin of tolerance. Interconnection technologies have brought about a decrease in interconnection costs, increase in reliability, and an increase in both utility and NUG owner satisfaction. Issues to be resolved include protection technology for bringing synchronous plants in parallel with network and other systems. Administrative issues that need to be addressed include increasing utility response time, legal contracting issues, and consistent standards.

Questions and Answers:

Q: Are there common problems across the country that roof installers (with photovoltaic installations) may incur with interconnection?
A: There are no problems with interconnecting photovoltaics, but the high costs associated with the two-way relay of power may be an impediment.

DAY 2 - APRIL 23, 2004


Emissions Trading Opportunities and Federal Success Story

Peter Zaborowsky, Evolution Markets

Regional emissions reduction credits (ERC) are required under the Environmental Protection Agency's (EPA) New Source Review (NSR) program. The NSR program specifies levels for the emission of NOx, SOx, volatile organic compounds (VOCs), and particulate matter (PM). State agencies certify ERCs, which are then traded to new or expanding sources that must meet the Lowest Achievable Emission Rate under NSR. For example, 0.015 pounds of NOx per MMBtu is required for new gas-fired combined cycle power plants. The credits are traded on an illiquid market; namely trading is contingent on new plant construction. Federal agencies can reduce emissions by switching to a lower polluting fuel, incorporating energy efficiency measures, repowering with cleaner fuel sources, and curtailing energy use. Federal agencies should take inventory of their emissions reduction potential and compare the market value of these savings with the cost to purchase ERC.

Chandra Shah, National Renewable Energy Laboratory

FEMP and EPA collaborated to help Federal agencies evaluate their potential emissions trading opportunities, including the identification of potential revenue sources, project costs, and project paybacks. FEMP and EPA have provided assistance for two emissions trading pilot projects. At the Naval Medical Center of San Diego, the project included a $16 million cogeneration upgrade financed by San Diego Gas & Electric through the use of a UESC. The upgrades included the replacement of turbines and standby diesel generators; the NOx reduction estimate is 10 to 20 tons per year and the reduction in NOx emissions would generate $1.15 million in ERCs that the medical center could sell in the local air quality district market. The medical center's utility bill was reduced annually by $200,000 - $400,000 over the life of the six-year UESC project. Another pilot project at the EPA's Chelmsford site is pending.

Ms. Shah predicts that Federal emissions projects are likely to be successful if facilities follow these procedures:

  • Document emissions reductions with M&V
  • Minimize implementation costs
  • Determine if emissions should be retired
  • Hedge against emissions market uncertainty (e.g. policy changes)

Questions and Answers

Q: The generation bubble in the Southeast has caused people to seek emissions credits. Is there any rule of thumb to sell them?
A: An ERC purchaser must be located within the local air shed.

Q: What authorities exist for civilian and DOD emissions?
A: The only authority that exists is the DOD authority specified in the FY 1998 National Defense Authority Act, which expired in December 2003. The provision allowed DOD installations to seek part of a $500,000 nation-wide allotment toward emissions-savings projects.

Federal Renewable Power Procurement: Reports from DESC and GSA

FEMP Update - Chandra Shah, National Renewable Energy Laboratory

The Federal goal for purchasing power from renewable energy sources is 1,384 GWh, which can be attained by reducing Federal facility electricity use by 2.5 percent per year through 2005. The goal includes the purchase of power from sources such as solar, wind, geothermal, and biomass energy. These sources "count" toward the renewable goal if they are a separate purchase other than what is already in the system mix and are not double-counted through the use of Green Tags. Federal agencies have several options for purchasing renewable power, which include:

  • Participating in a regulated utility green pricing program
  • Purchasing renewable energy certificates
  • Entering a competitive electric market
  • Utilizing procurement agency supply schedules

Most states have utilities that offer green pricing programs; exceptions include Utah, Louisiana, Arkansas, and several states in the Northeast (since much of the Northeast has deregulated markets). Renewable energy can be considered as two independent products: 1) regular electricity that is sold to the local grid and 2) the associated environmental attributes. The environmental attributes are called renewable energy credits (REC) and may also be referred to as Green Tags, Green Energy Certificates, or Tradable Renewables Certificates.

Before agencies can receive RECs, the renewable energy produced must first be certified. The Center for Resource Solutions (CRS) offers Green-e certification for RECs. The certification requires that 50 percent of the product be derived from renewable sources; in addition, CRS maintains a code of conduct and an annual audit. For more information, visit www.green-e.org.

The Western Area Power Administration (WAPA) has established a renewable power program in which it provides limited authority for WAPA to purchase power on behalf of Federal agencies. For more information, contact Mike Cowan at cowan@wapa.gov.

John Nelson, Defense Energy Support Center

The Defense Energy Support Center (DESC) purchases energy on behalf of Federal agencies including NASA, the Coast Guard, DOE, EPA, the Veterans' Administration, and the Department of the Treasury, among other agencies. In 2003, DESC issued an energy procurement solicitation for the EPA Research Triangle project. The solicitation specified the funding level, a preference for locally derived energy, and a mix of 50 percent wind and 50 percent landfill renewable-derived energy. Sterling Planet was awarded the landfill gas portion, which totaled 10 million kWh of RECs, and 3 Phases Energy Services was awarded the wind portion of the project, which totaled almost 20 million kWh of RECs.

Brian Madgen, General Services Administration

GSA has the expertise to perform research and feasibility analyses for purchasing green power, prepare requests for proposals and statements of work, evaluate bids for technical and financial soundness, and award and monitor contracts. GSA procures retail power in all deregulated states, and contracts approximately $200 million per year. GSA requires that Federal agencies sign an interagency commitment in the form of a Memorandum of Understanding so that GSA can purchase renewable power on the real-time market. GSA purchases renewable power for EPA, DOE, the Department of Agriculture, the World Bank, and the United Nations, among other organizations. Procurements are bid in an auction for a flat $/kWh by traders at SAIC and World Energy Solutions. Auctions allow GSA to request and compare generic and green power prices, calculate the green power premium, and ensure that awards are made based on robust competition and real-time information.

PANEL: Discussion of Emerging/Niche Technologies

Moderator - Julia Kelley, Oak Ridge National Laboratory

One of FEMP's activities is focused on New Technology Demonstrations. The purpose of the program is to help introduce new energy-efficient and renewable energy technologies into the Federal sector and elsewhere. FEMP supports a limited number of technology demonstrations to provide independent performance data to Federal decision-makers and support timely Federal adoption of energy saving and environmentally beneficial technologies. To view completed projects and review projects in progress, visit www.eere.energy.gov/.

Synopsis of Wireless Steam Traps - Gary Gates, U.S. Navy

Wireless stream traps provide instant notification of failure modes, provide real-time assurance, and can be integrated into an alarm system. The traps cost approximately $1,200 - $1,500, installed, with a three-and-one-half to four-year payback. Savings are dependent on steam and condensate costs.

Synopsis of Winsulator - Interior Storm Window - Bill Eisele, South Carolina Electric and Gas

The Winsulator is a clear acrylic, interior storm window with UV blocker that is magnetically attached to an interior window. Benefits include a reduction in heating and cooling requirements, blockage of over 95 percent of UV rays, a reduction in heat gain, elimination of fading, and a 60 percent reduction in outside noise. The Winsulator costs $12-15 per square foot. For more information on the Winsulator, visit www.winsulator.com.

Synopsis of Plug Load Power Management Devices - Bill Eisele, South Carolina Electric and Gas

These devices are operated by motion sensors that turn non-essential office and other plug-load type of equipment off when not in use, such printers and fax and vending machines. The plug-load devices have proven effective in drink and snack machines. The device regulates product temperature and shuts off power when the area the equipment is located in is unoccupied. The technology costs between $50 - $180. Savings from the use of these devices are highly variable. Federal facilities installing the devices have realized 49 percent savings with a three-year payback with Vending Miser. Other plug load power management devices can be found by visiting www.bayviewtech.com and www.wattstopper.com.

Synopsis of Stairwell Motion Sensors - Brian Magden, General Services Administration

Stairwell motion sensors are occupancy-controlled stairwell lighting fixtures that can be financed under UESCs. The sensors have a 90-minute battery backup. They are especially cost effective in high-rise buildings in which stairwells are rarely used. The sensors reduce operating hours by 98 percent, maintenance is reduced to zero, and lamp life averages 2,000 hours. The product costs between $230 and $290 relative to the type of fixture, size, and fixture location. Each fixture saves approximately 500 kWh and has a payback period of 5-21 years. For more information, visit www.cooperlighting.com.