Utilities Privatization UP A Public Private Venture

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Utilities Privatization (UP)A Public / Private
Venture

• Ms. Mary Helen Dent
• HQ AFCESA/CENU
• 7 May 2008

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Overview

• Authority Business Model
• Program Goals
• Status
• AF UP Program Highlights
• AF Utility System Costs
• Future Projects
• Private Sector Business Opportunities
• Contact Information

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Authority Business Model
Historically, military installations have been
unable to upgrade and maintain reliable utility
systems fully due to inadequate funding and
competing installation management priorities.
Utilities privatization is the preferred method
for improving utility systems and services by
allowing military installations to benefit from
private sector financing and efficiencies.
DepSecDef, 9 Oct 2002

• Consistent with 10 US Code, Sec 2688, OSD
  guidance drives business initiatives
• Leverage private sector resources to revitalize
  utility systems
• Allows Military Departments to focus on core
  mission

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Program Goals

• Remove the DoD from the business of owning,
  managing, and operating utilities
• Restores aging DoD utility systems to industry
  standard to improve reliability and increase
  energy efficiency
• Puts some predictability into future utility
  Operations and Maintenance coststends to level
  the payment structure

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Status of AF Utility Systems

• 661 Total Systems (Active, ANG and Reserve)
• - 59 Owned by others (Mostly Overseas)
• - 97 Privatized before DoD Directive
• 20 Privatized since DoD Directive
• 150 Exemptions (Security or Economic)
• 335 Available for Privatization

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AF UP Program Highlights

• It takes two years from start to award we have
  already initiated activities for anticipated
  award in FY10
• Two separate but concurrent actions
• Conveyance of utility system to successful
  offeror AF executes a bill of sale (in
  perpetuity)
• Procurement of a utility service contract
  contracting officer / FAR process, typically a
  50-year contract

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AF Utility System Costs
Average AF System Costs for first year of
Privatization
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50-year System Costs
Typical Annual Cashflow
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FY08 Active Solicitations

• Base System
• Ellsworth AFB, SD G
• Travis AFB, CA G
• Dover AFB, DE S
• F.E. Warren AFB, WY E
• Goodfellow AFB, TX E
• WrightPatterson AFB, OH E
• March ARB, CA E
• Westover ARB, MA E
• Yeager ANGB, WV E

E Electrical Distribution G Natural Gas
Distribution W Potable Water Treatment
Distribution S Sewage / Wastewater Collection
Treatment
9 Systems
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FY09 Active Solicitations

• Base System
• Creech AFB, NV S
• Holloman AFB, NM G
• Sey-Johnson AFB, NC G
• Shaw AFB G
• Laughlin AFB, TX E
• Tyndall AFB, FL EGSW
• Arnold AFB, TN GSW
• Edwards AFB, CA EGSW
• Tinker AFB, OK EGSW
• Niagara Falls ARS, NY EGSW

• Base System
• Pittsburgh ARS, PA EGSW
• Youngstown ARB, OH GSW
• C Canaveral AFS, FL SW
• Cape Cod AFS, MA E
• Vandenberg AFB, CA EGSW
• Dover AFB, DE G
• MacDill AFB, FL GSW
• McGuire AFB, NJ E
• Travis AFB, CA E
• Little Rock AFB, AR E

45 Systems
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FY10 Projected Solicitations

• Base Systems
• Hanscom AFB, MA EGSW
• Wright-Patterson AFB, OH GSW
• Pittsburgh ARB, PA ESW
• Little Rock AFB, AR GSW
• Fairchild AFB, WA ESW
• Dobbins ARB, GSW
• Eglin AFB ESW
• Dover AFB EW
• Minot AFB ESW

E Electrical Distribution G Natural Gas
Distribution W Potable Water Treatment
Distribution S Sewage / Wastewater Collection
Treatment
27 Systems
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Business Opportunities

• Most AF UP awards are to established utilities
• Rural Electrics, Co-ops, Municipalities, Private
  Sector Utility bidders, regulated unregulated
• Most utility companies sub-out construction or
  large capital projects
• Typical AF Systems have 9M of immediate
  capital upgrade requirements
• Look to successful offerors for opportunities
  (construction/replacement)

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Contact Information

• No public AF UP website, please refer to DESCs
  website http//www.desc.dla.mil/DCM/DCMPage.asp?Pa
  geID246SPos0
• AF UP Program Points of Contact
• Policy Issues [phone],
• Execution Issues [phone],
• Contracting Officers
• AETC CONS [phone]
• DESC -, [phone]

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