President’s Performance Contracting · (2) generate project reporting materials mandated by local, state, and/or federal agencies; and (3) benchmark new projects against historical

1 | Energy Efficiency and Renewable Energy eere.energy.gov

President’s Performance Contracting

Challenge (PPCC)

& ESPC Updates

July 16, 2014

Kurmit Rockwell, PE, CEM, LEED AP

ESPC Program Manager

2

DOE ESPC update

Topics covered

1. Introduction

2. What are ESPCs?

3. PPCC status

4. Guidance updates

5. Training and outreach

6. What’s new at FEMP?

– eProject Builder

– Measurement and Verification

DOE PPCC and ESPC Updates

3

What New Resources are on the Web?

Reallocate the Government’s Utility & O&M Bill:

ESPCs are Budget Neutral

$ for

Energy + Related

Operations & Maintenance

$ for

Energy + O&M

$ for

Energy + O&M

Savings

Excess Savings

Payments to ESCO

Before

ESPC

After

ESPC Term

Stop paying for waste and pollution Start paying for efficiency

4

What New Resources are on the Web?

• Purpose: Achieve energy and water savings & ancillary benefits

• Flexible funding – private financing & appropriated funds

• No agency payments until new equipment is operating

• Cost savings are guaranteed to exceed payments

• Performance of ECMs is guaranteed

• ESCO may perform Operations & Maintenance (O&M)

• Measurement & Verification (M&V) is required

• Maximum term 25 years

Key Features of ESPCs

5

F

Highlights of Key Statistics (Preliminary Data) 2014-2016 Projects

Key Stat Description

Investment $

Agencies identified projects (in the pipeline or awarded) with an estimated $3.81B investment value - 96% of 3.98B commitment.

Projects # Agencies identified 303 projects Many projects proposed are DOE ESPC, 147

Awarded Investment $

149 projects have been awarded with an investment value of $1.48B

Next Phase 111 projects are in the development pipeline, with expectations of a project being awarded

Needs to be Started

43 of the projects are conceptual, not started, or have not completed acquisitions plans

GHG Reductions Reductions of 525,092 tons of CO2 per year (4.884 million MMBtu saved)

Jobs Creation 11,809 jobs created

Federal Energy Management Program: Presidential Performance Contracting Challenge

6

• DOE exceeded the PPCC goal of $100M by achieving $116M by June 30th, 2014

– ESPC, UESC

• Next PPCC goal adds $175 for a total of $275M over 5 years

• Historically – for all DOE sites including sub-agencies – there were:

– 23 DOE IDIQ ESPC projects at 16 DOE sites

– Project investment is $490,250,050

– Annual energy savings was 6,229,989 btu x 10^6 (or 115,984,499 btu x 10^6 cumulatively saved)

DOE Achievements and Goals

7

Federal Energy Management Program: Presidential Performance Contracting Challenge

PPCC Awards December 2011 to Present

INVESTMENT TO DATE

FUTURE

$2 Billion PPCC Goal Agency Forecast

Actual Awards

Investment

Trend

Investment Trend to Reach $2B Goal in January 2015

0

500

1,000

1,500

2,000

2,500

Dec to March 2012 September 2012 March 2013 September 2013 March 2014 September 2014

$ M

illio

ns

Agency Forecast Actual Awards Investment Trend

8

Phase 1

Acquisition Planning

Phase 2

ESCO Selection

Phase 3

Investment Grade Audit, Negotiation and Award

$0

$250

$500

$750

$1,000

$1,250

$1,500

$1,750

$2,000

$2,250

$2,500

No start/Nodata

AcquisitionPlan Done

ReleasedNOO

ESCOSelected

PAdeveloped

NOITA Issued IGASubmitted

Final Prop.Submitted

Awarded

$472.7 $9.0

$199.0 $899.8

$84.9 $210.7

$342.5 $73.0

$1,476.2

$3,286.0 $3,087.0

$2,187.1

$2,102.3 $1,891.6

$1,549.1

$1,476.2

Tota

l In

vest

me

nt,

Mill

ion

s U

SD

Stage Completed Subsequent Stages Completed

Projects in the Pipeline have estimated $3.81B investment value – that is 96% of $3.98B commitment for 2016

Federal Energy Management Program: Presidential Performance Contracting Challenge

9

What New Resources are on the Web?

GUIDANCE • New website section offers information intended to clarify ESPC

authority and provide policy guidance to agencies that are starting an ESPC, have a project underway, or have already awarded an ESPC.

– Refinancing Guidance

– Utility Rates and Weather Normalization

– Bundling of Energy Conservation Measures Under ESPC for Determination of Life Cycle Cost Effectiveness

– Guidance on New Construction under an Energy Savings Performance Contract

ACQUISITION AND PLANNING • Outlines processes and considerations to start planning an

ESPC using the DOE IDIQ. – ESPC Best Practices

– Tri-Party Agreement Template and Sample

What new resources are on the Web?

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What New Resources are on the Web?

FINAL PROPOSAL AND AWARD

• Provides documents and resources for final ESPC proposal and awarding task orders to selected ESCOs. – eProject Builder – Congressional Notification for ESPC Awards – Coming

Soon!

IMPLEMENTATION, CONSTRUCTION, PROJECT ACCEPTANCE

• Provides guidance on the implementation stage of ESPC projects. – ESPC Past Performance Questionnaire

MEASUREMENT AND VERIFICATION (M&V)

• Details the execution of M&V activities to determine performance and cost savings across DOE ESPCs. – DRAFT M&V Guidelines Version 4.0 – Out for review and

comment!

What new resources are on the Web? (cont’d)

11

Training

Available in a variety of formats

• Three-day ESPC Comprehensive Workshop

• On-site/Agency-customized Workshops

• 24/7 Webinars

– Introduction to ESPC

– Financing and Pricing Evaluation for ESPC

– Introduction to Alternative Financing and Renewable Energy Technology

– Measurement and Verification of ESPCs

– Streamlining ESPCs for Small Sites

• eCourse: online equivalent to three-day comprehensive workshop

– Available on the Defense Acquisition University/Federal Acquisition Institute Platform: Energy Savings Performance Contracting

• http://icatalog.dau.mil/onlinecatalog/courses.aspx?crs_id=1945

Training

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• Your first point of contact!

• The FFS is DOE’s coordinator of the ESPC process.

• The FFS helps the agency to:

– Determine whether a “pay-from-savings” project is feasible;

– Educate agency staff about ESPCs;

– Develop support in the agency needed to initiate a project and see it through in a timely manner; and

– Establish the preliminary scope and goals for the project.

– Provide guidance anytime through project development and afterward

– Acquire FEMP resources where needed.

FEMP Federal Financing Specialists (FFS)

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Scott Wolf

Western Region

including N. Marianas, Palau,

Guam, American Samoa; plus

East, South, and Central Asia;

the Pacific; and Near East

360-866-9163

[email protected]

Tom Hattery

Northeast Region

plus State Dept.

202-256-5986

thomas.hattery@

ee.doe.gov

Doug Culbreth

Southeast Region

plus Europe and Western Hemisphere

919-870-0051

[email protected]

Northeast

WestMidwest

SoutheastMidwest

www1.eere.energy.gov/femp/financing/espcs_financingspecialists.html

FEMP Federal Financing Specialists (FFS) FEMP Federal Financing Specialists (FFS)

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• FEMP Project Facilitators (PF)

– Engaging the services of a DOE-qualified PF is required by IDIQ

– PF works with the agency on a day-to-day basis to guide Federal agencies through the ESPC process.

– PF is available to agency through the first year M&V after award.

• DOE National Laboratories – Provide technical assistance for ESPC renewable and CHP projects. – Provide life of contract support to agencies. – Laboratory technical experts augment the technical resources

required to address legacy contracts not available from project facilitators or ESCOs.

• DOE/Golden Office Guidance on Acquisition Planning – Federal Acquisition Regs require planning for all acquisitions

including ESPCs. – IDIQ Contracting Officer assists agency acquisition staff.

Additional FEMP Assistance – From start to award and beyond

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eProject Builder ("ePB") is a web-based system managed on behalf of the Department of Energy by LBNL. ePB enables Energy Services Companies (ESCOs) and their customers to securely:

(1) upload and track project-level information;

(2) generate project reporting materials mandated by local, state, and/or federal agencies; and

(3) benchmark new projects against historical project performance data.

Federal Energy Management Program: eProject Builder

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• New ESPC data entry and tracking system with performance benchmarking capabilities – ePB ready to host projects – FEMP will include in IDIQ re-compete

• ESCOs enter information by: (1) direct input into user interface or (2) upload via MS Excel template

– Secure website hosted by U.S. DOE national laboratory

• Benefits: – Standardizes data entry across local/state/federal sectors – Promotes customer confidence through transparency – Archives information for

performance tracking and analysis

– ESCO has ability to market successes to prospective customers

– Reduces transaction costs

Federal Energy Management Program: eProject Builder

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• Majority of ESPC investment (72%) uses Option A M&V

• Newer M&V reports (TOs awarded 2006 and after) are good, and provide agencies with detailed summary of savings and any operational problems that exist

• Some older projects conform to earlier, less rigorous M&V standards

Current State of Measurement and Verification Efforts

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1. Strengthens Option A by defaulting to annual measurement of key parameters (recognizing that this may not be necessary for all ECMs)

2. Refocuses Option C to stress short-term applicability

3. Provides recommended M&V templates for most ECMs

4. Revises and condenses the document, moving many auxiliary sections to stand-alone documents available on the FEMP website

Changes in Draft M&V Guideline 4.0

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• Current FEMP M&V guidelines are the product of 15 years of experience with federal ESPC

• We have proposed incremental changes to FEMP’s current M&V methodology that we believe will do more to ensure savings persistence throughout the life of the contract

• Currently out for public comment: http://energy.gov/sites/prod/files/2014/07/f17/draft_mv_guidancev4_2.pdf

Next Steps for M&V

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Questions?

Kurmit Rockwell

202-586-2078

[email protected]

Questions