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Utility Energy Service Contract Guide: A Resource for Contracting Officers Working on UESC Projects

A Utility Energy Service Contract (UESC) is a limited-source contract between a federal agency and serving utility for energy management services including energy and water efficiency improvements and demand-reduction services. In a UESC, the Contracting Officer (CO) will lead the acquisition effort, supported by technically knowledgeable staff working closely with the utility, to assess potential, investigate technical and economic feasibility, and ensure a fair and reasonable price for design and implementation of the project. The UESC Guide is a compilation of samples and templates developed as a resource to help COs implement Task Orders (TOs) for UESCs under existing U.S. General Services Administration (GSA) Areawide Contracts (AWC). All samples and templates provided in this guide were derived from actual UESC project contract documents and will be available for download on FEMP’s website at https://www.energy.gov/node/850656. Templates in Microsoft Word can be modified to address each agency’s unique acquisition process.

Federal Energy Management Program↗

UESC Overview and FEMP Resources for Project Success

The first part of this webinar provides an introduction to utility energy service contracts (UESCs) and describes the features and benefits of utilizing UESCs to install energy conservation measures at federal sites. The second part introduces the newly launched UESC On-Demand Training Series and other recently published FEMP resources. The modular series of short webinars has been designed to provide in-depth understanding of UESCs and is a great resource for federal agencies and utilities interested in UESC projects.

37 INORGANIC, ORGANIC, PHYSICAL, AND ANALYTICAL CH↗

New Construction and UESCs

Presentation at the Federal Utility Partnership Working Group Seminar held November 7-8, 2019, in Washington, DC, reviews the implementation of utility energy service contracts in new federal construction projects.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Performance Assurance Planning Guide for Utility Energy Service Contracts: 2025 Edition

Administered by the U.S. Department of Energy's (DOE) Federal Energy Management Program (FEMP), the Utility Program has fostered collaboration among federal agencies and their serving utilities for more than 25 years. The Utility Program supports agencies using Utility Energy Service Contracts (UESCs), a well-developed, effective contracting vehicle that enable the latest approaches to cost-effective energy management at federal sites. Federal agencies have successfully used UESCs to award over 2,000 energy and water efficiency and renewable energy projects, investing approximately $\$$2.8 billion in furthering the Federal Government's efforts to reduce energy intensity. Authorized by 42 U.S. Code section 8256 (10 U.S. Code section 2913 for the Department of Defense), a UESC is a limited-source acquisition between a federal agency and an eligible serving utility for energy management services that generate savings from the implementation of energy- and water -conservation measures (collectively referred to as ECMs), with 42 U.S. Code section 8287 (Defense Federal Acquisition Regulation Supplement, Part 241), providing the term of a UESC, which may extend up to 25 years. Through a UESC, the utility partner assesses designs, and implements the desired ECMs - which can range from lighting retrofits and renewable energy systems, to combined heat and power plants or other technologies and strategies, and may provide financing for the project. The agency may use any combination of appropriations and third-party financing to pay for the project, providing useful flexibility. There is no limit to the project size, big or small, that can be implemented using a UESC. To assist agencies implementing a UESC, FEMP has developed a Utility Energy Service Contract Guide and this companion guidance document to help agencies and their utility partners better understand the best practices for to ensure UESCs continue to perform and generate savings throughout their performance period. These best practices utilize a combination of effective project management, communication, documentation, and a detailed Performance Assurance Plan. This plan is a project specific set of actionable protocols that define important tasks and responsibilities throughout the contract term and reflects the site conditions, complexities, agency capabilities, and operating and maintaining planned ECMs.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Performance Assurance Planning: Continuous Design-Level Performance of Each Energy Conservation Measure in a Utility Energy Service Contract is Fundamental to Achieving Projected Results

Design-level performance of each energy conservation measure (ECM) in an awarded utility energy service contract (UESC) is fundamental to achieving the projected results through the term of the contract and over the life of the measure. Because the authority for a UESC does not require contractual guarantees of energy, water, or cost savings, FEMP developed a protocol for emphasizing sustained performance to help ensure projected savings are realized. The information and templates offered within this paper reflect responsible project management and oversight, align with UESC best practices, and satisfy the conditions for annual scoring provided by the Office of Management and Budget (OMB). OMB memorandum M-12-21 requires, 'energy savings performance assurances,' 'measurement and verification (M&V) of savings through commissioning and retrocommissioing,' and 'competition or an alternatives analysis as part of the selection process.'

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Holistic Energy Management Yields Cost Savings and Resilience Benefits for the U.S. Coast Guard Academy

As the U.S. Coast Guard's third largest energy consumer, the 86-year-old Coast Guard Academy in New London, Connecticut, was ripe for an energy management overhaul. That overdue overhaul was made possible by the largest utility energy service contract (UESC) in U.S. Department of Homeland Security history. Awarded in September 2017, the $72.6 million contract provided for $39 million in capital improvements and is expected to cut total energy costs by 80% - more than $2 million - each year. On-site generation of 82% of the site's electricity needs will dramatically improve site-wide resilience, and savings generated from implementation of the project will pay for all project costs. The UESC project team developed and executed an energy management project to meet several priority objectives, including implementing essential infrastructure improvements, increasing reliability, and enhancing resilience - and engaged the Federal Energy Management Program (FEMP) Utility Partnerships Program for project assistance.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Utility Energy Services Contracts: Enabling Documents

The Federal Energy Management Program's 'Utility Energy Service Contracts: Enabling Documents' provide legislative information and materials that clarify the authority for federal agencies to enter into utility energy service contracts, or UESCs.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Utility Energy Service Contract Boosts Chemical Weapons Destruction Mission at Army Pueblo Chemical Depot

For six decades, the U.S. Army has safely and securely stored chemical munitions at the Pueblo Chemical Depot in Colorado. To help fulfill international treaty obligations and to meet a congressional deadline of 2023 for the elimination of these aging weapons, initial destruction of the Pueblo chemical weapons stockpile began in 2015. A utility energy service contract (UESC) executed in 2016 between the U.S. Army Corps of Engineers and the Depot’s serving utility, Black Hills Energy (BHE), directly supported this mission with the installation of a new electrical substation that was essential to the Depot’s need for uninterrupted power.

Army Pueblo Chemical Depot↗

Best Practices for Smart Grid-Interactive Efficient Building Ready Performance Contracts

Grid-interactive efficient building (GEB) measures reduce costs and optimize energy use for additional grid services by coordinating building energy loads and providing continuous demand management. Incorporating GEB energy conservation measures (ECMs) in performance contracts is reliant upon multiple factors. These factors include site selection with utility tariffs and incentives favorable to GEB, the identification of GEB as a priority in the initial stages of the contracting process, integration of GEB within comprehensive performance contracts with multiple other ECMs, and careful consideration of GEB measurement and verification (M&V) for energy savings performance contracts (ESPCs) and performance assurance for utility energy service contracts (UESCs).

building energy loads↗

PV Production - Conceptual Location Analysis

The purpose of a Conceptual Location Analysis is to identify potential project/building sites in the planning phase of a project. The analysis includes review and comment on the potential sites by relevant disciplines. Site criteria encompasses DOE and NNSA requirements pertaining to real property and environmental stewardship and additionally addresses SNL site planning objectives such as sustainability and efficiency. This analysis is intended to be used as a tool to provide a comprehensive perspective on siting decisions, and is not intended to supersede previous siting decisions or agreements. This conceptual location analysis is for the siting of PV for power production. The goal of this Conceptual Location Analysis is to weigh different sites, and come to a consensus on preferred sites for potential solar arrays through an Energy Savings Performance Contract (ESPC) or a Utility Energy Service Contract (UESC).

14 SOLAR ENERGY↗

Financing Microgrids in the Federal Sector

Recent high-impact events such as hurricanes and wildfires highlight the need for energy system resilience. One potential impact of these events is the loss of utility grid power to federal sites, negatively affecting the ability to carry out their missions. Depending on the need to sustain critical functions, it may be important to continue operations during an outage of the electric grid, or at least have power restored quickly after the event. One approach to addressing this need is through a microgrid. Microgrids can provide a more reliable solution than the traditional approach of using a backup generator at individual buildings. A microgrid can enhance a site’s electrical power system during normal operations, as well as provide reliable backup power to critical loads when electric utility power is interrupted. Many times, certain components of a microgrid (and potentially the entire system) can be justified economically and paid for out of energy savings or avoided costs. In cases where savings can cover the project costs, one of several privately financed procurement mechanisms may be used to implement the project. Procurement options available to all federal agencies include utility energy services contracts (UESC), energy savings performance contracts (ESPC), and utility services contracts (USC); other mechanisms such as a power purchase agreement (PPA), enhanced use lease (EUL), and utility privatization (UP) may also be useful to agencies that have the authority to use them. Implementing a microgrid in a comprehensive effort that also includes energy efficiency can provide an important savings component, while reducing power requirements for critical loads, thus reducing the cost of the microgrid and associated distributed energy resources (DER). However, it can be difficult to achieve enough savings and avoided costs to cover the entire microgrid system, so leveraging these avoided costs in combination with appropriated funds may be necessary to implement the full project. When a site is deciding if a microgrid is the best solution, activities early in the process include identifying critical loads and existing DERs, conversations with the local electric utility, and implementation options that work best for the agency and site. This paper explores procurement options and agreements that may be useful to federal agencies interested in implementing microgrids at their sites. Microgrid complexities, implementation considerations, and suggestions to get started are also discussed. This information will be most useful to agencies when they are exploring electric energy system resilience options and/or considering different procurement options to meet their needs.

24 POWER TRANSMISSION AND DISTRIBUTION↗

Guidance and Recommendations for Streamlining Reporting for Federal Energy and Water Efficiency Projects

Federal agencies are required to report on their progress in meeting various energy and water management requirements. These reporting requirements encompass energy and water projects at federal facilities, including projects that are alternatively financed, e.g., conducted through energy savings performance contracts (ESPCs) or utility energy service contracts (UESCs). The purpose of this guidance is to provide recommendations to streamline federal agency reporting. The guidance recommends the use of eProject Builder (ePB), a project development and archiving tool for energy projects. ePB carries additional value in its simplification of federal agency reporting by dovetailing with the Federal Energy Management Program’s (FEMP’s) EISA 432 Compliance Tracking System (CTS).

32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI↗