Evaluation of Federal Energy Savings Performance Contracting -- Methodology for Comparing Processes and Costs of ESPC and Appropriatins-Funded Energy Projects PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Evaluation of Federal Energy Savings Performance Contracting -- Methodology for Comparing Processes and Costs of ESPC and Appropriatins-Funded Energy Projects PDF full book. Access full book title Evaluation of Federal Energy Savings Performance Contracting -- Methodology for Comparing Processes and Costs of ESPC and Appropriatins-Funded Energy Projects by . Download full books in PDF and EPUB format.
Author: Publisher: ISBN: Category : Languages : en Pages :
Book Description
Federal agencies have had performance contracting authority since 1985, when Congress first authorized agencies to enter into shared energy savings agreements with Public Law 99-272, the Consolidated Omnibus Budget Reconciliation Act. By the end of FY 2001, agencies had used energy savings performance contracts (ESPCs) to attract private-sector investment of over $1 billion to improve the energy efficiency of federal buildings. Executive Order 13123 directs agencies to maximize their use of alternative financing contracting mechanisms such as ESPCs when life-cycle cost effective to reduce energy use and cost in their facilities and operations. Continuing support for ESPCs at the Administration and Congressional levels is evident in the pending comprehensive national energy legislation, which repeals the sunset provision on ESPC authority and extends ESPC authority to water savings projects. Despite the Congressional and Presidential directives to use ESPCs, some agencies have been reluctant to do so. Decision makers in these agencies see no reason to enter into long-term obligations to pay interest on borrowed money out of their own operating budgets if instead Congress will grant them appropriations to pay for the improvements up front. Questions frequently arise about whether pricing in ESPCs, which are negotiated for best value, is as favorable as prices obtained through competitive sourcing, and whether ESPC as a means of implementing energy conservation projects is as life-cycle cost effective as the standard practice of funding these projects through appropriations. The lack of any quantitative analysis to address these issues was the impetus for this study. ESPCs are by definition cost-effective because of their ''pay-from-savings'' requirement and guarantee, but do their interest costs and negotiated pricing extract an unreasonably high price? Appropriations seem to be the least-cost option, because the U.S. Treasury can borrow money at lower interest rates than the private sector, but appropriations for energy projects are scarce. What are the costs associated with requesting funding and waiting for appropriations? And how is the value of an energy project affected if savings that are not guaranteed do not last? The objective of this study was to develop and demonstrate methods to help federal energy managers take some of the guesswork out of obtaining best value from spending on building retrofit energy improvements. We developed a method for comparing all-inclusive prices of energy conservation measures (ECMs) implemented using appropriated funds and through ESPCs that illustrates how agencies can use their own appropriations-funded project experience to ensure fair ESPC pricing. The second method documented in this report is for comparing life-cycle costs. This method illustrates how agencies can use their experience, and their judgment concerning their prospects for appropriations, to decide between financing and waiting.
Author: Publisher: ISBN: Category : Languages : en Pages :
Book Description
Federal agencies have had performance contracting authority since 1985, when Congress first authorized agencies to enter into shared energy savings agreements with Public Law 99-272, the Consolidated Omnibus Budget Reconciliation Act. By the end of FY 2001, agencies had used energy savings performance contracts (ESPCs) to attract private-sector investment of over $1 billion to improve the energy efficiency of federal buildings. Executive Order 13123 directs agencies to maximize their use of alternative financing contracting mechanisms such as ESPCs when life-cycle cost effective to reduce energy use and cost in their facilities and operations. Continuing support for ESPCs at the Administration and Congressional levels is evident in the pending comprehensive national energy legislation, which repeals the sunset provision on ESPC authority and extends ESPC authority to water savings projects. Despite the Congressional and Presidential directives to use ESPCs, some agencies have been reluctant to do so. Decision makers in these agencies see no reason to enter into long-term obligations to pay interest on borrowed money out of their own operating budgets if instead Congress will grant them appropriations to pay for the improvements up front. Questions frequently arise about whether pricing in ESPCs, which are negotiated for best value, is as favorable as prices obtained through competitive sourcing, and whether ESPC as a means of implementing energy conservation projects is as life-cycle cost effective as the standard practice of funding these projects through appropriations. The lack of any quantitative analysis to address these issues was the impetus for this study. ESPCs are by definition cost-effective because of their ''pay-from-savings'' requirement and guarantee, but do their interest costs and negotiated pricing extract an unreasonably high price? Appropriations seem to be the least-cost option, because the U.S. Treasury can borrow money at lower interest rates than the private sector, but appropriations for energy projects are scarce. What are the costs associated with requesting funding and waiting for appropriations? And how is the value of an energy project affected if savings that are not guaranteed do not last? The objective of this study was to develop and demonstrate methods to help federal energy managers take some of the guesswork out of obtaining best value from spending on building retrofit energy improvements. We developed a method for comparing all-inclusive prices of energy conservation measures (ECMs) implemented using appropriated funds and through ESPCs that illustrates how agencies can use their own appropriations-funded project experience to ensure fair ESPC pricing. The second method documented in this report is for comparing life-cycle costs. This method illustrates how agencies can use their experience, and their judgment concerning their prospects for appropriations, to decide between financing and waiting.
Author: Publisher: ISBN: Category : Languages : en Pages :
Book Description
A study was sponsored by FEMP in 2001 - 2002 to develop methods to compare life-cycle costs of federal energy conservation projects carried out through energy savings performance contracts (ESPCs) and projects that are directly funded by appropriations. The study described in this report follows up on the original work, taking advantage of new pricing data on equipment and on $500 million worth of Super ESPC projects awarded since the end of FY 2001. The methods developed to compare life-cycle costs of ESPCs and directly funded energy projects are based on the following tasks: (1) Verify the parity of equipment prices in ESPC vs. directly funded projects; (2) Develop a representative energy conservation project; (3) Determine representative cycle times for both ESPCs and appropriations-funded projects; (4) Model the representative energy project implemented through an ESPC and through appropriations funding; and (5) Calculate the life-cycle costs for each project.
Author: United States. Congress. House. Committee on Science, Space, and Technology (2011). Subcommittee on Investigations and Oversight Publisher: ISBN: Category : Clean energy industries Languages : en Pages : 176
Author: Publisher: ISBN: Category : Languages : en Pages : 70
Book Description
There is growing interest in energy efficiency (EE) among state policymakers as a result of increasing environmental concerns, rising electricity and natural gas prices, and lean economic times that motivate states to look more aggressively for cost-saving opportunities in public sector buildings. One logical place for state policymakers to demonstrate their commitment to energy efficiency is to 'lead by example' by developing and implementing strategies to reduce the energy consumption of state government facilities through investments in energy efficient technologies. Traditionally, energy efficiency improvements at state government facilities are viewed as a subset in the general category of building maintenance and construction. These projects are typically funded through direct appropriations. However, energy efficiency projects are often delayed or reduced in scope whereby not all cost-effective measures are implemented because many states have tight capital budgets. Energy Savings Performance Contracting (ESPC) offers a potentially useful strategy for state program and facility managers to proactively finance and develop energy efficiency projects. In an ESPC project, Energy Service Companies (ESCOs) typically guarantee that the energy and cost savings produced by the project will equal or exceed all costs associated with implementing the project over the term of the contract. ESCOs typically provide turnkey design, installation, and maintenance services and also help arrange project financing. Between 1990 and 2006, U.S. ESCOs reported market activity of (almost equal to)$28 Billion, with about (almost equal to)75-80% of that activity concentrated in the institutional markets (K-12 schools, colleges/universities, state/local/federal government and hospitals). In this study, we review the magnitude of energy efficiency investment in state facilities and identify 'best practices' while employing performance contracting in the state government sector. The state government market is defined to include state offices, state universities, correctional facilities, and other state facilities. This study is part of a series of reports prepared by Lawrence Berkeley National Laboratory (LBNL) and the National Association of Energy Services Companies (NAESCO) on the ESCO market and industry trends. The scope of previous reports was much broader: Goldman et al. (2002) analyzed ESCO project costs and savings in public and private sector facilities, Hopper et al. (2005) focused on ESCO project activity in all public and institutional sectors, while Hopper et al (2007) provided aggregate results of a comprehensive survey of ESCOs on current industry activity and future prospects. We decided to focus the current study on ESCO and energy efficiency activity and potential market barriers in the state government market because previous studies suggested that this institutional sector has significant remaining energy efficiency opportunities. Moreover, ESCO activity in the state government market has lagged behind other institutional markets (e.g., K-12 schools, local governments, and the federal market). Our primary objectives were as follows: (1) Assess existing state agency energy information and data sources that could be utilized to develop performance metrics to assess progress among ESPC programs in states; (2) Conduct a comparative review of the performance of selected state ESPC programs in reducing energy usage and costs in state government buildings; and (3) Delineate the extent to which state government sector facilities are implementing energy efficiency projects apart from ESPC programs using other strategies (e.g. utility ratepayer-funded energy efficiency programs, loan funds).
Author: United States. Congress. House. Committee on Armed Services. Subcommittee on Readiness Publisher: ISBN: Category : Energy conservation Languages : en Pages : 180
Author: United States Government Accountability Office Publisher: Createspace Independent Publishing Platform ISBN: 9781977945785 Category : Languages : en Pages : 92
Book Description
Constrained budgets and increasing energy efficiency goals have led federal agencies to explore innovative ways to fund energy improvements, including ESPCs. An expected increase in the use of ESPCs has raised questions about agencies' ability to ensure that the government's interests are protected. ESPCs can span up to 25 years and be valued at millions of dollars each. GAO was asked to review federal use of ESPCs since 2005. This report examines the extent to which (1) agencies have used ESPCs and plan to use them; (2) projects have achieved their expected cost and energy savings; and (3) agencies have overseen and evaluated such projects. GAO compiled data on awarded ESPCs; reviewed agency guidance and files for a nongeneralizable sample of 20 ESPC projects that reflected a range of contract award dates, contract values, and other characteristics; and interviewed officials from the seven agencies with the highest energy usage and greatest facility square footage-the Air Force, Army, and Navy within the Department of Defense; the Departments of Energy, Justice, and Veterans Affairs; and the General Services Administration.
Author: Publisher: ISBN: Category : Languages : en Pages : 4
Book Description
This updated publication, produced for DOE's Federal Energy Management Program (FEMP), is an overview of DOE's streamlined energy savings performance contracting ("Super ESPC") process. It is intended for Federal energy and facility managers, contracting officers, procurement staff, private energy service companies (ESCOs), and any others involved in this contracting process. A Super ESPC is an indefinite-delivery, indefinite-quantity contract that allows a qualifying, preselected ESCO to pay the initial capital cost of energy efficiency improvements or renewable energy technologies at a Federal facility. The ESCO is then repaid over time from the Federal agency's resulting cost savings over the term of the contract, which can be up to 25 years. Among other benefits, Super ESPCs allow Federal agencies to obtain energy efficiency improvements and new technologies without having to go through the entire contracting process or having to pay the up-front costs of new equipment and services.
Author: Publisher: ISBN: Category : Languages : en Pages :
Book Description
This report presents the results of Level 2 of a three-tiered evaluation of the U.S. Department of Energy Federal Energy Management Program's Super Energy Savings Performance Contract (Super ESPC) Program. Level 1 of the analysis studied all of the Super ESPC projects for which at least one Annual Measurement & Verification (M & amp;V) Report had been produced by April 2006. For those 102 projects in aggregate, we found that the value of cost savings reported by the energy service company (ESCO) in the Annual M & V Reports was 108% of the cost savings guaranteed in the contracts. We also compared estimated energy savings (which are not guaranteed, but are the basis for the guaranteed cost savings) to the energy savings reported by the ESCO in the Annual M & V Report. In aggregate, reported energy savings were 99.8% of estimated energy savings on the basis of site energy, or 102% of estimated energy savings based on source energy. Level 2 focused on a random sample of 27 projects taken from the 102 Super ESPC projects studied in Level 1. The objectives were, for each project in the sample, to: repeat the calculations of the annual energy and cost savings in the most recent Annual M & V Report to validate the ESCO's results or correct any errors, and recalculate the value of the reported energy, water, and operations and maintenance (O & M) savings using actual utility prices paid at the project site instead of the 'contract' energy prices - the prices that are established in the project contract as those to be used by the ESCO to calculate the annual cost savings, which determine whether the guarantee has been met. Level 3 analysis will be conducted on three to five projects from the Level 2 sample that meet validity criteria for whole-building or whole-facility data analysis. This effort will verify energy and cost savings using statistical analysis of actual utility use, cost, and weather data. This approach, which can only be used for projects meeting particular validity criteria, is described in Shonder and Florita (2003) and Shonder and Hughes (2005). To address the first objective of the Level 2 analysis, we first assembled all the necessary information, and then repeated the ESCOs' calculations of reported annual cost savings. Only minor errors were encountered, the most common being the use of incorrect escalation rates to calculate utility prices or O & M savings. Altogether, our corrected calculations of the ESCO's reported cost savings were within 0.6% of the ESCOs' reported cost savings, and errors found were as likely to favor the government as they were the ESCO. To address the second objective, we gathered data on utility use and cost from central databases maintained by the Department of Defense and the General Services Administration, and directly from some of the sites, to determine the prices of natural gas and electricity actually paid at the sites during the periods addressed by the annual reports. We used these data to compare the actual utility costs at the sites to the contract utility prices. For natural gas, as expected, we found that prices had risen much faster than had been anticipated in the contracts. In 17 of the 18 projects for which the comparison was possible, contract gas prices were found to be lower than the average actual prices being paid. We conclude that overall in the program, the estimates of gas prices and gas price escalation rates used in the Super ESPC projects have been conservative. For electricity, it was possible to compare contract prices with the actual (estimated) marginal prices of electricity in 20 projects. In 14 of these projects, the overall contract electricity price was found to be lower than the marginal price of electricity paid to the serving utility. Thus it appears that conservative estimates of electricity prices and escalation rates have been used in the program as well. Finally we calculated the value of the reported energy savings using the prices of utilities actually paid by the sites instead of the contract prices. In 16 of the 22 projects (where this calculation was possible), the recalculated annual cost savings were greater than the annual cost savings reported by the ESCO. In the aggregate for the 22 projects analyzed, the annual cost savings calculated using actual energy prices were found to be 111% of the ESCO-reported savings. Using statistical methods to expand this estimate to the entire 102-project population of Super ESPC projects, we estimate that the total annual cost savings calculated using actual energy prices instead of contract energy prices are about 110% of the reported annual cost savings. We can combine the results of the Level 1 and Level 2 studies to estimate overall cost savings realized by the government for the entire 102-project population of Super ESPC projects examined in Level 1.
Author: 
Author: 
Author: 
Author: 
Author: 
Author: United States. Congress. House. Committee on Science, Space, and Technology (2011). Subcommittee on Investigations and Oversight
Author: 
Author: United States. Congress. House. Committee on Armed Services. Subcommittee on Readiness
Author: United States Government Accountability Office
Author: 
Author: