Fort Knox Strikes Energy-Savings Gold in Innovative UESC Partnership

June 1, 2002

A photo of the installation of geothermal heat pump systems at the Army's Fort Knox.

The installation of geothermal heat pump systems are among the many energy-conserving upgrades at the Army's Fort Knox.

The U.S. Army's Fort Knox, "the Home of Armor," and home to one of the nation's gold reserves, faced a big challenge: cutting energy use without the funding to make energy-conserving upgrades. Gary Meredith, Energy Project Manager at Fort Knox, Kentucky, struck gold in a partnership with Nolin Rural Electric Cooperative. Meredith and Nolin's Vice President Vince Heuser came up with a plan for Fort Knox to meet energy-reduction goals through investments financed by the Cooperative. Says Meredith, "I like working with the Cooperative because of their no-nonsense approach to getting the job done to our specifications with the minimum amount of paperwork. Keeping it simple has kept costs down and is a key to success. The efforts of the entire utility and especially Vince Heuser have reflected a can-do attitude and have always been positive. The good-of-the-community attitude that radiates from this utility is a wonderful thing indeed and shows the foresight of top management and its governing board."

Heuser says Nolin is "committed to helping our members in whatever way we can. As a member-owned cooperative, our primary focus is not increasing revenue, but helping our members save money." This is exactly what the utility did for Fort Knox. Nolin and Fort Knox entered into a utility energy savings contract (UESC) in 1996, now totaling nearly $18 million in project investment and spanning numerous delivery orders. Annual savings exceed $2.8 million due to reductions of 13.8 million kilowatthours of electricity and 280,000 million cubic feet of natural gas.

Fort Knox, with a population of 26,900, is virtually a small city served by multiple utilities and businesses. Together, the Cooperative and the Fort identified projects and formalized them in simple delivery orders that included a geothermal heat pump installation, a boiler-chiller replacement, lighting retrofits, window replacements, and a high-efficiency motor retrofit. After each project is implemented, Fort Knox repays the loan over a 10-year period as part of its electric bill. The program costs the utility nothing, and the energy savings generated by the retrofits offset Fort Knox's project costs. Headquarters U.S. Army Training and Doctrine Command, Fort Knox's major command, reimburses the installation for payments made to the utility company for these projects as an incentive to aggressively pursue energy conservation measures and meet assigned goals.

Rural electric cooperatives offer Federal agency sites with energy efficiency and renewable energy projects a key advantage—low interest rate financing from the National Rural Utilities Cooperative Finance Corporation (CFC). The monthly variable interest rate Nolin charges Fort Knox has been less than 4 percent. (This rate has only once risen above 7 percent over the past 5 years.) Interest payments form a significant portion of financed projects, so the low rates available through a UESC with rural electric cooperatives can be a great deal for Federal customers. The National Rural Electric Cooperative Association and CFC recently hosted a FEMP workshop to train other cooperatives in developing UESC business.

Fort Knox has received recognition for their energy efficiency efforts under this project, including the Army Energy Conservation Award for 1997. The Fort's energy-savings achievements are held up as a model for other Army installations.

For more information on utility energy service contracting with rural electric cooperatives, please contact Lisa Hollingsworth of DOE's Atlanta Regional Office at 404-562-0569 or lisa.hollingsworth@ee.doe.gov, Julia Kelley of Oak Ridge National Laboratory at 865-574-1013 or kelleyjs@ornl.gov, or David McAndrew of FEMP at 202-586-7722 or david.mcandrew@ee.doe.gov.