FEMP Project Facilitators Optimize the Value of Super ESPC Projects
April 20, 2004
FEMP project facilitators (PFs) are qualified, experienced guides who can lead and support an agency acquisition team to provide expert oversight in developing, implementing, and verifing savings from energy conservation measures (ECMs) using DOE Super Energy Savings Performance Contracts. FEMP PFs are objective, expert consultants for technical, financial, and contractual issues who help to optimize the financial value of ESPC projects. Factors influencing the best financial value and benefits of direct PF support include:
- Reducing procurement process cycle time;
- Achieving fair and reasonable pricing of ECMs;
- Minimizing interest rates and life-cycle costs;
- Employing cost-effective Measurement & Verification
(M&V) protocols; and
- Providing technical knowledge of advanced technologies—geothermal heat pumps, biomass and alternative methane fuels (BAMF), solar, photovoltaic.
PFs reduce cycle time and the use of agency resources by helping to assemble the right team; providing education and dedicated assistance to reduce agency workload for Delivery Order (DO) Request for Proposals (RFP) preparation, proposal review, and pricing evaluation; and evaluating "what-if" scenarios. They enhance communication with routine conference calls and by facilitating key meetings. They also have the experience to guide agencies to the best resources and practices, and ensure that agency partnerships with ESCOs are balanced. Other Super ESPC program resources include FEMP training on how to place an ESPC DO and ensure energy and cost savings throughout the contract term, Practical Guide to Savings and Payments in Super ESPC Delivery Orders, Delivery Order Guidelines, M&V Guidelines, and sample documents and templates.
PFs assist the ordering agency in achieving fair and reasonable pricing with tools and resources including ECM price benchmarks from previous projects, ECM locators, the Financial Value Calculator, and the Geothermal Heat Pump (GHP) Construction Cost& Maintenance database.
Finally, PFs understand financing and know how to minimize costs. Their expertise includes contract clauses; structuring the financing and timing the payments; using FEMP's Financing Value Calculator to compare financing offers; and determining price reasonableness. Finance rates depend on term, investment size, and index rates. Factors that influence the interest rate include financier's perception of project risk, ESCO's creditworthiness, ESCO's track record, technical risk, level of M&V, and terms and conditions of contract. Strategies to lower interest rates include make-whole and no-offset clauses to reduce risk to the financier.
FEMP also has M&V specialists who can help agencies use cost effective strategies to ensure persistent savings. FEMP M&V resources include documented best practices and guidance for:
- Assigning responsibility;
- Determining accurate baselines;
- Developing a site-specific M&V plan;
- Developing a detailed commissioning plan;
- Determining project acceptance;
- Verifying equipment performance; and
- Providing guidance for GHP-specific M&V protocols.
PF support is free through agency review of the initial proposal. Beyond the initial proposal, support is on reimbursable basis through tailored PF support packages to meet their needs. The typical ESPC project support package includes the following services for $30,000:
- Develop delivery order RFP;
- Assist with Notice of Intent to Proceed;
- Facilitate kickoff meeting for Detailed Energy Survey;
- Continue to review project development;
- Review final proposal—technical feasibility, energy models, price reasonableness;
- Assist in technical and price negotiations;
- Revise delivery order RFP (negotiation changes);
- Facilitate post-award kick-off meeting;
- Review post-construction M&V report;
- Make project acceptance recommendations; and
- Review yearly M&V report.
Using a FEMP PF is the most effective best practice for achieving a best-value Super ESPC project. As experienced players, PFs instill confidence in team members and decision makers to ensure success.
For more information about FEMP Project Facilitators, please contact Tatiana Strajnic at 202-586-9230.