The document discusses energy savings performance contracts (ESPCs). It defines an ESPC as a mechanism that allows public agencies to implement energy efficiency projects with no upfront capital costs, with payments made from project savings. ESPCs are commonly used by federal, state, and local governments to retrofit buildings. The Department of Energy's Federal Energy Management Program supports ESPCs through contracts with energy service companies and project facilitation. Examples of ESPCs in the Southeast are provided. Technology vendors can engage with ESPCs by providing efficient equipment and partnering with energy service companies.

1. 1 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
Energy Savings
Performance
Contracts
Southeast Sustainability Summit
August 21, 2013
Julia Kelley
Group Leader
Residential, Commercial and
Industrial Energy Efficiency

2. 2 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
What we’ll cover
• What is an Energy Savings
Performance Contract (ESPC)
• Who Uses ESPCs?
• Explanation of DOE and ORNL
involvement in ESPCs
• ESPCs in the Southeast – News and
Examples
• How do energy efficient technology
vendors engage?

3. 3 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
What we’ll cover
• What is an Energy Savings Performance Contract
(ESPC)
• Who Uses ESPCs?
• Explanation of DOE and ORNL involvement in ESPCs
• ESPCs in the Southeast – News and Examples
• How do energy efficient technology vendors engage?
• How can the public sector encourage ESPCs in your
state or city?

4. 4 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
What is an ESPC?
An Energy Savings Performance Contract
(ESPC)
allows Federal agencies to procure facility
energy
improvements:
• with no up-front capital cost and,
• without special appropriations
from Congress

5. 5 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
ESCO and Agency Roles
• An Energy Services Company (ESCO)
– designs and constructs the energy project
– obtains financing to cover costs
– guarantees cost savings to cover payments
over contract term
• The Agency:
– Negotiates and awards task order
– Pays for the project over time from
savings generated from improvement

6. 6 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
The Difference Between Federal ESPCs
and Conventional Design/Build Process
• Financing - maximum contract terms –
25 years
• Cost savings guaranteed to exceed payments
• Performance of installed energy conservation
measures (ECMs) is guaranteed
• ESCO is often responsible for O&M
• Measurement and verification of savings
is required

7. 7 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
ESPC Payments
• Key: ESPCs are
budget neutral
• ESPCs are paid
from savings –
guaranteed
$
Energy
+ O&M
Cost
Savings
Before ESPC
Contract
During ESPC
Contract
After ESPC
Contract
Utility Bill
+ Energy
Related
O&M
ESPCs: Why the interest?
Utility Bill
+ Energy
Related
O&M
Utility Bill
+ Energy
Related
O&M
Payments
to ESCO
Savings
Excess Savings

8. 8 Managed by UT-Battelle
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Energy Conservation Measures (ECMs)
In all Technology Categories
• Boiler and chiller plants
• Energy management control systems
• Building envelope
• HVAC
• Chilled/hot water and steam distribution
• Lighting
• Electric motors and drives
• Refrigeration
• Distributed generation

9. 9 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
Energy Conservation Measures (ECMs)
in All Technology Categories
• Renewable energy
• Energy/utility distribution
• Water and sewer
• Electrical peak shaving/load shifting
• Rate adjustments
• Energy-related process
improvements
• Commissioning
• Advanced metering
• Appliance/plug load reductions

10. 10 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
What we’ll cover
• What is an Energy Savings Performance Contract
(ESPC)
• Who Uses ESPCs?
• Explanation of DOE and ORNL involvement in ESPCs
• ESPCs in the Southeast – News and Examples
• How do energy efficient technology vendors engage?

11. 11 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
Who uses ESPCs?
• Public sector including:
– Federal government
– School districts
– Municipalities
– State government
– Universities
• Available to private sector but . . . .
– Not as popular in the private sector
– Want a faster payback
– Some high profile private ESPCs – including Empire
State Building

12. 12 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
What we’ll cover
• What is an Energy Savings Performance Contract
(ESPC)
• Who Uses ESPCs?
• Explanation of DOE and ORNL involvement in
ESPCs
• ESPCs in the Southeast – News and Examples
• How do energy efficient technology vendors engage?

13. 13 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
DOE’s Federal Energy Management
Program
Mission
– 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 to
provide energy leadership to the
country.

14. 14 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
FEMP Support of ESPCs in federal sector
• Developed and Manages IDIQ Contract with
ESCOS for ESPCS for all federal agencies to
use
• Assigns project facilitators to ESPC projects
• Offers Renewable Energy and Advanced
Technologies Planning and assistance to
federal sites
• Provides ESPC training

15. 15 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
What we’ll cover
• What is an Energy Savings Performance Contract
(ESPC)
• Who Uses ESPCs?
• Explanation of DOE and ORNL involvement in ESPCs
• ESPCs in the Southeast – News and Examples
• How do energy efficient technology vendors engage?

16. 16 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
North Carolina – ESPC project example
• Appalachian State University – campus-wide
renovation for campus in Boone just
announced in July
• $16.5 million project
• Includes:
– Heating and air-conditioning upgrades
– Lighting upgrades
– Water conservation upgrades
• Will employ up to 266 workers over a 22-month
construction period
• 13 year pay-back for project

17. 17 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
SE Energy Savings Performance
Contracting Dollars per capita
• Source: Energy Services Coalition
• Estimated amount of ESPC investments in state
and local buildings as reported
Boxes: Total
Investment in
Performance
Contracting in
Millions

18. 18 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
ESPC by State – Enabling Legislation
• Visit:
– http://web.ornl.gov/info/esco/legislation/newesco.shtml
• Includes clickable map with
– State energy program web sites
– Citations and links to state enabling legislation for
performance contracting
– Information on public sector applicable areas
• School districts
• Municipalities
• State colleges and universities counties
• State
• Any public agency
• Let us know if your state info needs updating

19. 19 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
What we’ll cover
• What is an Energy Savings Performance Contract
(ESPC)
• Who Uses ESPCs?
• Explanation of DOE and ORNL involvement in ESPCs
• ESPCs in the Southeast – News and Examples
• How do energy efficient technology vendors
engage?

20. 20 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
How do energy efficient technology
vendors engage?
• It’s the ESCO that purchases the equipment for
the project
• National Association of Energy Service
Companies
– www.naesco.org
– Site includes “finding a provider”, market analysis,
etc.
– 2013 NAESCO 30th Annual Conference, Nov. 12-14
in Orlando, FL

21. 21 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
FEMP Info for technology vendors
• List of ESCOs that have competed and been awarded a master
DOE ESPC contract
• List of ESCOs that have been screened by a qualifications review
board of federal agencies
http://www1.eere.energy.gov/femp/financing/espcs_companies.html
• Guide on Selling Energy-Efficient Products to the Federal
Government
– http://www1.eere.energy.gov/femp/pdfs/selling_eeproducts_to_
gov.pdf
• Doing business with the federal government fact sheet
– http://www1.eere.energy.gov/femp/pdfs/doing_business_with_g
ov.pdf

22. 22 Managed by UT-Battelle
for the U.S. Department of Energy Presentation_name
Julia Kelley
Phone: 865-574-1013
Email: kelleyjs@ornl.gov