Funding Water and Energy Projects with DOE's ESPC Contracts

05/02/2017 |

The program involves the merger of public and private sector companies to increase efficiency and sustainability through energy savings performance contracts

After awarding 21 new energy and water saving contracts to private companies by the DOE, FMs are left to wonder: how can I get in on this?

What is special about these indefinite delivery indefinite quantity (IDIQ) energy savings performance contracts (ESPCs) is they are guaranteed cost savings as a result of privately financed energy and water infrastructure improvements to federal facilities, without the need for additional congressional appropriations. No matter what, savings will result.

“This program highlights how the public and private sector partnerships can align with the Administration’s objectives for increased energy efficiency and job creation without burdensome regulations,” says U.S. Secretary of Energy Rick Perry. “A key component is that these energy and water efficiency projects at federal facilities pay for themselves, and the hope is that all federal agencies will utilize this financing method to the fullest extent.”

With an energy savings performance contract (ESPC), the contractor designs, constructs, and installs an energy and water savings project that meets the federal agency’s needs and provides the necessary financing, with no required initial cost to the federal agency. The contractor must provide a guarantee to the federal agency that the improvements will generate annual energy savings sufficient to pay for the project over the term of the contract.

The contractor is paid over the term of the contract from the savings resulting from the project, which must be paid by the federal agency from funds appropriated to, or otherwise made available by, the federal agency for the payment of energy, water, or wastewater treatment expenses and related operation and maintenance expenses.

DOE’s Office of Energy Efficiency and Renewable Energy (EERE) accelerates research and development of energy efficiency and renewable energy technologies and market-based solutions that strengthen U.S. energy security, environmental quality, and economic vitality. Visit the Federal Energy Management Program’s (FEMP) webpage to learn more about how the Energy Department enables federal agencies to optimize building performance to reduce energy and water waste and to increase the energy security and resiliency of federal facilities.

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