WASHINGTON, May 3, 2017 - The Department of Energy (DOE) has awarded 21 energy- and water-saving contracts to private-sector companies aimed at improving the efficiency of federal facilities.
These “indefinite delivery, indefinite quantity” (IDIQ) energy-saving performance contracts (ESPCs) are awarded to energy service companies that provide guaranteed cost savings as a result of privately financed energy and water infrastructure improvements to federal facilities, without the need for additional congressional appropriations.
“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,” said 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.”
Under an ESPC, the contractor designs, builds, 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.
The federal government has been awarding ESPCs at an investment pace of about $2 billion every three years. DOE expects the new ESPC IDIQ contracts to be used for investments resulting in federal infrastructure improvements, energy savings, and job creation. Federal agencies can work with the selected companies under the DOE IDIQ for a period of five years with one extension period of 18 months.