Air Force ESPC/UESC Programs (Presented to the JBSA/DTI Workshop)

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Air Force ESPC/UESC Programs(Presented to the
JBSA/DTI Workshop)
Les Martin HQ AFCESA/CENI
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Physical Plant Profile
Air Force Installations
Airfields
Family Housing
10M Acres of Land Twice the size of New Jersey
75,800 Homes Arlington/Alexandria Combined
102 Million Square Yards 152 x DFW Airport
Facilities
Dormitories
Plant Replacement Value
69,500 Dorm Rooms 1 ½ times Doubletree Hotels
255B PRV Nearly the GDP of Peru
626M Sq Ft of Buildings 88 x Microsoft
Corporation 1.5 x GM
As of FY99/4
We Must Reinvest in Air Force Installations A
Force Enabler
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Facility Energy in Scale
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Facility Energy Use/Cost
FY11 ENERGY USE
FY11 ENERGY COST (000)
64,486.55 BBTU
1,077,705.29
1,034,809.96 in FY10 4.1 increase From FY10
65,880.75 BBTU in FY10 2.1 Decrease From FY10
SOURCE FY11 ANNUAL ENERGY MANAGEMENT REPORT TO
CONGRESS
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Big Three Mandates
Goal Gap 4.5
Goal EISA 07
Goal EO 13514
Reduction in Pot Water/SF (MGal/SF)
Reduction in Fac Energy/SF (MBTU/SF)

• FY11 Goal Attainment
• Energy Intensity Reduction
• Goal 18 Attained 16.3
• Potable Water Intensity Reduction
• Goal 7.5 Attained 13.1
• Renewable Energy (EPACT05)
• Goal 5 Attained 6.0
• Renewable Energy (10 USC 2911)
• Target 11 Attained 7.1

10 USC 2911 Target 25 in 2025
Renewable Energy of Electricity Used
Avoided 579M in Utility Costs in FY11 Alone
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AF Facility Energy Strategy

• Reduce demand, increase supply and change culture
• Meet energy mandates (statutory, executive
  orders, AF/DOD)
• Improves creature comfort and helps provide
  energy security (both of which enhance mission
  accomplishment)
• Make smart investments in reliable infrastructure
  to build sustainable installations
• Direct energy project funding seek best ROI w/
  every
• Maximize funding sources ECIP, NRG, other
• Multiply return by leveraging third party funding
• Power Purchase Agreements (PPAs)
• Enhanced Use Leases (EUL)
• Energy Savings Performance Contracts (ESPCs)
• Utility Energy Services Contracts (UESCs)

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Selection Methodology
RE Studies
Audits
Base Reqts REMs
ESCOs
45 days
12-24 mos.
Investment Opportunities

• Prioritization PGM FY
• Constraints
• Staffing
• Funding
• Contracting

• Execution Veh
• Direct
• NRG or ECIP
• Third Party
• UP, ESPC, UESC

Proj Dev, Execution MV

• Validation
• BCA
• Tech Rvw

Conserv

• Execution Veh
• Direct
• ECIP
• Third Party
• PPA, EUL

Large RE

• Reassess
• BCA
• Technology
• Scope

Defer/ Recycle or normal SRM
Eliminate
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Key Selection Criteria for Project Execution
Methods
Methods ? Criteria SRM/NRG ECIP ESPC UESC UP PPA EUL
Type of Work Small Nrg/Wtr Consrv Large NRG/WTR Consrv, Small RE, En Security Large focused ECO, Process NRG Convey existing utility system Med Utility Scale RE for AF use only Large Utility Scale RE for Grid
Ownership AF AF Ktr?AF Ktr base pays annual must pay Developer Developer
Maintenance AF AF Ktr?AF Ktr Developer Developer
Land Availability Factor No Small No No Med Large
Complexity (tech/pgm) Low-Med Med-High Med-High Med High High
Approval Levels Min Const lt 750K MILCON gt 750K Major Repairs SAF/IEI TBD? SAF/IEI
?
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Current ESPC/UESC Criteria

• AFCESA determines execution vehicle
• Prefer simple payback less than 10 years
• UESC feasibility (10 year contract limit)
• Serving utility provider is interested
• May combine multiple sites within serving
  utilitys territory
• Projects are of smaller size
• FEMP Typical UESC ? 1-2M
• ESPC feasibility (25 year contract limit)
• Capital intensive needle movers
• E.g. Decentralize Heat Plants (50M-100M)
• Process Energy Data Centers, Depot Maintenance,
  etc.
• FEMP Typical ESPC ? 10-15M or more

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Current Criteria (cont.)

• Current ESPC/UESC process based on Oct 10 A7C
  Policy letter FEMP guidance
• Reinvigorate the ESPC/UESC programs
• Satisfy audit concerns - More control/rigor
• ETLs 11-24/12-10 how to for policy adherence
• Opens the aperture process energy, equipment,
  data centers
• Implements the project vetting process
• Installations may entertain marketing material
  from ESCO
• Sets the DoE Super ESPC as preferred
  contracting vehicle
• Multiple tools available to develop ECMs
• Tight MV plans, ESCO responsible for Ops/Maint
• Economically viable ECMs
• AFCESA checkpoints at key milestones

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Current Criteria (cont.)

• Multiple tools available to installations to
  develop energy conservation measures (ECMs)
• Audits, REMs, MAJCOM, FOA, Fac Mgrs, CE Ops,
  Process Owners
• Utilities and ESCOs
• Project Vetting
• Regardless of ECM source, Installation prepares
  summary of ECMs submits to AFCESA through
  MAJCOM for initial vetting
• Vetting process evaluates ECMs to determine how
  best executed in overall Air Force energy
  program ECIP, NRG, ESPC, UESC, PPA,
• AFCESA makes recommendations and seeks MAJCOM
  consensus 100 concurrence by MAJCOMs thus far

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UESC Process

• If vetting selects UESC, then we implement these
  procedures
• Govt Team (CE, CO, JA, Customers, MAJCOM,
  AFCESA) develop project framework/scope
• Base CO develops Master Agreement for Util to
  conduct Preliminary Audit (PA)
• Govt Team evaluates PA and provides written
  comments to Util
• Util provides requested clarification
• Govt Team evaluates PA, and directs Util to
  proceed to Feasibility Study (FS)
• Govt Team reviews FS and provides comments to
  Util
• Util provides updated FS to provide requested
  information
• Govt Team evaluates FS and directs Util to
  develop Engineering/Design (ED)
• Govt Team reviews design, plans/specs provides
  comments to Util
• Util addresses comments and submits final
  proposal
• Govt Team reviews, comments, CO negotiates
  with Util as necessary
• CO awards TO
• Note ? AFCESA Approval points

Today we are looking at a 12-month timeline from
concept to project award
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Measurement Verification Criteria

• MV is considered for all energy projects
• ESPC 42 CFR 8287 requirement ESCO payment tied
  to MV
• UESC Not reqd may include in future UESCs when
  beneficial
• ECIP AFMAN 32-1089 requirement
• NRG EISA 2007 requirement began implementing in
  FY12

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Measurement Verification Criteria

• Option A Partially measured retrofit isolation
• Homogeneous, steady-state systems
• Stipulated operation based on statistical samples
• Option B - Retrofit isolation
• Continuous measurement of affected system
• Option C - Whole building
• Continuous measurement of building
• Option D - Physical Models (i.e., simulations)
• Stipulated based on computer simulations
• Simulation must be calibrated
• Not permitted by AFCESA

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POTUS Memo

• Presidential Memorandum signed on 2 Dec 2011
• Minimum 2B in performance-based contracts within
  24 months
• AF projecting award of 250-280M of ESPC/UESCs
• Payback time of less than 10 years
• All contracts (and ECMs) must be life-cycle cost
  effective
• Prioritize ECMs by greatest return
• Focus on energy savings
• Leverage direct appropriations and performance
  contracting
• AF focus is maximizing ROI while minimizing
  life-cycle costs
• Installation-wide and portfolio-wide contracts
• Multiple installation projects extremely
  difficult to execute
• Focus for 3rd party funds is large, complex
  energy savers

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POTUS Memo (cont.)

• Must follow requirements laid out in ETLs 11-24
  and 12-10
• Located on WBDG web site and Energy COP
• No short cuts to expedite the project award
  timeline
• Not a reason to estimate baseline or skip project
  reviews
• Must still be able to survive potential audits
• Extremely high visibility initiative

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Summary

• Current ESPC/UESC Criteria
• Central management, more rigorous evaluations
• Project Descriptions and Supported
  Facilities/Missions
• Large heat plant decentralizations
• Process Energy Data Centers, Medical, Plug Loads
• Overseas AAFES campus
• Basic Economics
• Must be lifecycle cost effective
• May not save money
• Execution Timeline
• Use the DoE Super ESPC or Area-wide UESC
  contracts
• Measurement Verification Criteria
• Prefer Option C MV when applicable

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