The Energy Department’s Federal Energy Management Program Office doesn’t have a big budget. FEMP can’t pay for an energy efficient roof or for an agency to make their building LEED platinum.
But what FEMP can do is through its Assisting Federal Facilities with Energy Conservation Technologies (AFFECT) program is give agencies just enough of a boost to get a project from concept to reality.
Tim Unruh, the director of FEMP, said the AFFECT program is a springboard to larger green government efforts.
“We’ve been using this program to help agencies focus their efforts and get some projects that use both agency funding and FEMP funding, or potentially even private sector funding through performance-based contracts to help enhance their energy efficiency or improve their renewable energy profile,” Unruh said in an interview with Federal News Radio. “The total budget for this program is not that large, $3 million this year and the previous awards were about $5 million. That money doesn’t have the ability to pay for entire projects. So one of the key pieces that is required in statute is we look for ways to leverage that money with agency appropriations as well as with private sector dollars. So what we use the program for is to try to spur development. We know the small incentive can have a larger impact because people need that additional money to ease a project just over the finish line to make it financially viable or lifecycle cost effective.”
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FEMP awarded four agencies a portion of the $3 million fund under AFFECT.
The Justice Department’s Drug Enforcement Administration (DEA) is launching its first renewable energy system and Energy Savings Performance Contract (ESPC) by installing a photovoltaic system in El Paso, Texas.
The Agriculture Department’s Forest Service is installing solar panels at 11 installations across Oregon and Washington to provide at least 50 percent of all electricity needs. At four locations, the solar cells will provide 100 percent of the Forest Service’s electricity needs.
Unruh said while all the projects are exciting, the State Department’s plan to build an 11.9-megawatt photovoltaics system at 10 different overseas U.S. diplomatic posts, really stands out for several reasons, including the fact that it will more than double the use of renewals.
“One of our goals with this money is we want to find out if we can help leverage one project to cause other projects to happen, and the State Department is a great example of that,” he said. “There is an opportunity that if this project can go well for the State Department in the one region they are doing this in, it could lead to about $300 million in other projects to other regions within the Department of State.”
Unruh added that if State can develop the processes to do this type of project at one location, the agency can take that experience to make other green government projects easier and more successful.
“In the Department of State some of the rates that are being paid by these locations is about 40 cents per kilowatt hour, whereas the national average is around 10 cents per kilowatt hour so there is a great opportunity to reduce costs through these solar photovoltaic installations,” he said.
The fourth project is with the Marine Corps Installation Command, which plans to build a 10-megawatt biomass steam turbine generator in Albany, Georgia. The goal is to reduce the command’s annual electricity consumption by approximately 4,600 megawatt-hours annually.
Along with FEMP’s funding, many times agencies sign ESPCs with vendors to help get an energy efficiency project going. Under an energy savings performance contract, the agency partners with the vendor to build the renewable energy capability and the vendor is paid based on the savings accrued from the project.
FEMP highlights several examples where agencies used ESPCs to save money and upgrade facilities. The Obama administration committed to spending $2 billion through these contracts back in 2011 as a way to create jobs and improve federal facilities.
ESPC’s have come under some criticism recently. The Government Accountability Office found in June 2015 that in 14 out of 20 projects contractors overstated cost and energy savings, while agencies lacked the expertise to manage and oversee these types of procurements.
Unruh said Energy recognizes agencies need to think differently when using ESPCs.
“The challenges that we have with those contracts tend to be the procurement cycle. It’s a different type of procurement then what agencies are used to doing because it’s buying a project that at the beginning literally has no scope. The scope is developed by the agency and the energy service company as they develop the project,” Unruh said. “We’ve seen a significant amount of investment across federal facilities. We have total awarded projects just a little over $2.5 billion so far, and we have a pipeline that’s awarded plus expected to be awarded of $5.5 billion. So we’ve really seen a growth in the use of this tool to improve facilities and reduce costs.”
Unruh said FEMP will begin working closely with the facilities to plan the projects with specific milestones.
He said agencies should begin to see savings as soon as the construction phase is completed.
“The cost savings accrue in different ways. In one way the improvements made to facilities did not cost appropriations from Congress,” Unruh said. “Once the savings have paid off that capital investment, the federal government reaps the remaining savings. We have also done some analysis that Oak Ridge National Lab has done where they found there are some peripheral benefits of these contracts that also benefit the federal government that go beyond the contract value itself.”
Unruh said FEMP knows its funding may not have a measurable impact on the federal government’s use of energy, but providing the confidence and experience that these types of projects are possible is the ultimate end goal.
That confidence becomes even more important because agencies have a goal of reducing energy usage over the next 10 years by at least 25 percent.