Phoenix Convention Center Phoenix, Arizona Introduction to UESC Webinar Project Financing UESC Basics: Project Financing Through your Utility Julia Kelley.

Phoenix Convention Center • Phoenix, Arizona

Introduction to UESC Webinar

Project Financing UESC Basics: Project Financing Through your Utility

Julia KelleyOak Ridge National Laboratory

August 11, 2015

Energy Exchange: Federal Sustainability for the Next Decade2

DOE Federal Energy Management Program

Mission

The U.S. Department of Energy's Federal Energy Management Program (FEMP) works with key individuals to accomplish energy change within organizations by bringing expertise from all levels of project and policy implementation to enable Federal agencies to meet energy-related goals and provide energy leadership to the country.


UESC Presentation Agenda

• Basics• Authorizing Legislation• Contracting Overview• UESC Process• UESC Resources

Presentation Agenda


What are UESCs?

Contracts that allow utilities to provide Federal agency sites in their service territory with comprehensive energy and water efficiency

improvements and demand-reduction services.

• Assesses the opportunities• Provides financing through a third party• Purchases the equipment and gets it installed• Assures equipment performance and standards of service

• Pays utility over term of contract from cost savings achievedAgency

A UESC is a Partnership

Utility


0102030405060708090

100

Pre-construction Payment Period End of Contract Term

Thou

sand

s

Project Re-payment w/ Financing

Cost of Energy Cost of Project & Financing Residual Savings

Project Re-Payment with Financing


Funding Strategy

UESC projects can be funded through appropriations and financing

Any combination of appropriations and financing is allowed.

100% Financing

100% Appropriations

42 USC 8253 (EISA of 2007) reinforces funding flexibility


Benefits of doing UESC projects

For the Utility Company:

• Increased incentive program impact and participation

• Reduce need for new generation

• Improve reliability through improved customer load profiles

• Assist federal customer goals

• Meet Public Utility Commission Requirements

• Provide exemplary customer service

For the Federal Agency:

• Meet energy and greenhouse gas mandated goals

• Meet water efficiency goals

• Obtain low cost financing for projects

• Work with knowledgeable trusted professional energy partner

• Make energy cost savings infrastructure improvements

• Replace outdated energy-consuming equipment

• Limited source or sole-source contracts


• A UESC can be any size

• A UESC can include energy, water and renewable energy measures

• A UESC can include commissioning

• UESCs may not be available to all facilities

• Utility may be new to this type of contracting

• Contract process and documents arenot prescribed

• Contract term

Considerations


Utility Energy Savings

UESCs Are Utility Incentives – They Vary by Utility

42 USC 8256 (EPAct 1992) authorizes the

use of utility incentives

TECHNICAL

Audits

Feasibility Studies

Engineering & Design

Installation

Performance Assurance

Training

O&M Services

Project Management

FINANCIAL

Rebates/Incentives

Project Financing


EPACT 1992: Codified as 42 USC 8256; L.G. 102-486

Section 546(c) Utility Incentive Programs: Agencies

• Are authorized and encouraged to participate in utility programs generally available to customers

• May accept utility financial incentives, goods, and services generally available to customers

• Are encouraged to enter into negotiations with utilities to design cost effective programs to address unique needsof facilities used by the agency

All Federal Agencies

UESC Authorizing Legislation & Regulations


10 USC 2913 Energy Savings Contracts and Utilities

Title 10: Armed Forces; Chapter 173• Encourages participation in gas or electric utility programs for the

management of energy demand or for energy conservation

• Accept financial incentives, goods and services generally available from the utility

• Direct negotiation with energy savings contractors selected competitively and approved by the utility

• Repay with funds available for the purchase of utility services

DOD Agencies

UESC Authorizing Legislation & Regulations


Agencies within the franchised service territory may order Energy Management Services for DSM and improved efficiency

• A UESC Task Order is placed underthe AWC

• TOs for UESCs may have terms upto 25 years: GSA Legal Opinion (but agencies can differ on this)

OPTIONALMaster Agreement(Contract Terms &

Conditions)

GSA Utility

Areawide Contract

Agency Utility

Task Order

Where an AWC Exists


GSA Energy Conservation Measure (ECM) Criteria

1. The ECMs must reduce energy or water consumption or demand;

2. The ECMs must be directly related to energy or water use or demand reduction;

3. The majority of the work must be for 1. or 2.; and,

4. The ECMs must be an improvement to real property(land, buildings and anything attached and integrated, not personal property)

http://www.gsa.gov/HDR_0_home


Agencies can place a Separate Contract for Energy Management Services,when no AWC is available

Separate Contract/Master Agreement

(Contract Terms & Conditions)

Utility

UESCTaskOrder

Agency

Where an AWC Does Not Exist


UESC With a Basic Ordering Agreement (BOA)

• When an AWC does not exist or when an Agency’s Policy requires the use of a BOA

• When there is potential for more than one UESC Task Orders

FAR Part 16.703UESCTaskOrder

UESCTaskOrder

Agency Utility

Basic Ordering Agreement

UESCTaskOrder

Utility Energy Services – Contracting Vehicles Overview


UESC Task Order (TO) Award Process

Overarching Documents

TO Award for UESCStep1: Acquisition Planning through Utility Selection

Step 2: Project Development

Implementing the TOStep 3: Design and Installation

Step 4: Post-Acceptance

Area-wide contract Master Agreement (Optional)

Agency developed initial SOW

Acquisition strategy / planning

Draft initial J&A

Survey interest of eligible

utilities

Provide fair consideration to

interested utilities

Agency selects utility and notifies

all utilities of selection

EMSA for PA & FS

Utility conducts / Agency supports and evaluates PA

Utility conducts / Agency supports and evaluates FS

Agency requests firm-fixed price

for D&I

Finalize J&A

Award D&I TO

Report project to FEMP &

GSA

Utility submits design; agency

reviews/approves

Utility installs ECMs / Agency monitors

Utility performs / Agency receives O&M training,

commissioning, etc.

Utility proves ECMs performance

Agency accepts projects

Invoices and Payments Ongoing performance assurance and annual savings verification Close out contract at end of term


Preparation 3-7 months

• Pre-work• Site Needs• Funding• Training• Initial Contract Document

Project Development to Award 3-10 months

Identify ECMsProposalFinal Contract Documents

Installation and Post Installation6 months to several years

• Installation and Performance• Post Installation

UESCProcess

UESC Process


The minimal performance assurance plan recommended by the Federal Energy Management Program for alternatively financed UESC energy conservation measures is:

• Establish baseline pre-installation

• Start-up performance verification (based on measured date) prior to acceptance

• Performance verification at the end of the warranty period (based on measured data)

• Operations and maintenance training (required in the more common instance where the agency continues to operate and maintain installed equipment)

• Provision of continuing training throughout the contract period as specified in the contract as determined by the needs of the facility

• Periodic inspections and verification of appropriate O&M performance

• Performance discrepancy resolution

http://www1.eere.energy.gov/femp/pdfs/41898.pdf

UESC Performance Assurance Plan

http://www1.eere.energy.gov/femp/pdfs/41898.pdf


• Types of contracts• Laws and regulations• Technology resources• Case Studies• Training Opportunities

Utility Energy Service Contracts Guide: A Resource for Contracting Officers Working on UESC Projects

http://energy.gov/eere/femp/utility-energy-service-contracts

FEMP UESC Website

http://energy.gov/eere/femp/downloads/utility-energy-services-contracts-guide-0








• Federal Utility Partnership Working Group (FUPWG) Seminar– Establishes partnerships and facilitates communications among

Federal agencies and utilities– Develops strategies to streamline sound projects– Next meeting: Tues-Wed Nov. 3 & 4, 2015 Houston, TX

• Energy Lawyers & Contracting Officers Working Group meeting Nov. 4 • UESC live classroom workshop Nov. 5-6

http://energy.gov/eere/femp/federal-utility-partnership-working-group

Getting Started – Partnering Avenues

http://energy.gov/eere/femp/federal-utility-partnership-working-group


• Monthly live webinars:

• Intro to UESC – August 26

• Placing UESC Task Orders Under the GSA Areawide – Sept. 16

• FEMP On Demand Training

• Customized webinars/ Classroom training– November 5-6 in Houston

https://www4.eere.energy.gov/femp/training/

Additional Training Opportunities

https://www4.eere.energy.gov/femp/training/


Direct Project Support• Guide agency teams through the

UESC process• Assist development of contract

documents and provide document templates

• Technical review of audits, feasibility studies, and proposals

• In-depth technical support• Build partnerships and facilitate

relationships

DOE FEMP Sponsored Project Support


Utility Program Lead

David McAndrew

DOE EERE FEMP

202-586-7722

[email protected]

Webinar Instructor

Julia Kelley

Oak Ridge National Laboratory

865- 574-1013

[email protected]

Contacts

Phoenix Convention Center Phoenix, Arizona Introduction to UESC Webinar Project Financing UESC Basics: Project Financing Through your Utility Julia Kelley.

Documents

federal sustainability

comprehensive energy

energy leadership

energy change

federal agencies

energyrelated goals

federal agency sites

uesc projectsfor