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Air Force responds to shrinking energy budget with ESPCs

Posted 7/25/2013   Updated 7/29/2013 Email story   Print story


by Jennifer Elmore
AFCEC Public Affairs

7/25/2013 - TYNDALL AIR FORCE BASE, Fla. -- The Air Force Energy Savings Performance Contract program has undergone several key improvements in recent months and is now full steam ahead with an ESPC award in June at Joint Base San Antonio-Lackland, Texas, and the release of three Notices of Opportunity at Robins AFB, Ga., Peterson AFB, Colo., and Edwards AFB, Calif.

The Air Force Civil Engineer Center, which centrally manages the program at Tyndall AFB, Fla., has an additional seven notices of opportunity in draft form and plans to release approximately one a month.

ESPCs, and other forms of third-party funding such as utility energy service contracts, power purchase agreements and enhanced use leases, have become increasingly important with recent budget limitations.

For several years the Air Force has been able to use a portion of its sustainment restoration and modernization, or SRM, dollars as an energy focus fund, said Ken Gray, AFCEC energy director. These dollars were applied only to energy projects that provided the best return through reduced energy use and reduced cost to operate.

"Those funds are going back into a larger pool of SRM dollars, which I suspect over time will become more scarce and difficult to defend against other Air Force needs," said Gray. "As a result, we see a shift in our program over the next several years which would make a larger use of ESPCs and utility energy service contracts."

ESPCs are used to fund energy conservation projects with no upfront cost to taxpayers; they typically have 15- to 25-year performance periods; and come with complex financial terms. ESPCs are executed through an energy service company, or ESCO, that acquires financing for the infrastructure or equipment system to reduce Air Force energy costs and consumption. The ESCOs recover investment costs, plus overhead and profit, from funds made available via lower utility and operation and maintenance costs. UESCs are similar but are entered into with a utility company and are limited to 10-year terms.

An AFCEC ESPC is awarded to one of 16 ESCOs selected through a Department of Energy Indefinite Delivery Indefinite Quantity Contract.

The most recent ESPC to be awarded will retrofit inefficient magnetic ballasts, T12 lamps, incandescent bulbs and high-intensity discharge lamps with T5 and T8 lamps and high-efficiency electronic ballasts in 128 buildings at Joint Base San Antonio-Lackland. 

The base will receive a rebate from City Public Service Energy in the amount of $675,000, said Andy Hinojosa, base energy manager. The rebate will be reinvested into the over-all project cost, which will pay for 23 percent of the total project with an electricity savings of $275,000 annually. The $2.9 million project will be repaid over nine years and is expected to be completed by December.

AFCEC plans to award an ESPC at Edwards AFB, where a data center consolidation is planned.

"This will be a first for the Air Force," said ESPC Program Manager Les Martin. "We're consolidating data centers at Edwards and seeking to reduce the energy use of our (information technology) systems. We also hope to be able to demolish a telephone switch facility that was constructed in the 1950s."

The goal of an ESPC opportunity at Peterson AFB, is to reduce the energy intensity in 40 high-use facilities. Meanwhile, an effort at Robins AFB, is more complicated.

"The Robins effort is a little more involved. It will attempt to optimize central plant operations, develop a net-zero dormitory complex, modernize the base-wide energy management control system and retro-commission the top 40 energy intense facilities," Martin said.

Much of the progress is a result of a rapid improvement event held in November, Martin said. Since the RIE, AFCEC has rewritten the ESPC engineering technical letter that provides technical guidance to bases and major commands on how to execute an ESPC project; created an engagement policy between the Air Force and ESCOs; and centralized the ESPC contracting process at AFCEC.

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