Energy Division - Energy Savings Performance Contracting (ESPC) Program

The U.S. Army Engineering and Support Center, Huntsville, is considered the Army’s expert in Energy Savings Performance Contracts (ESPC). In consultation with the garrison, the Energy Service Company (ESCO) provides capital and expertise to make comprehensive energy and water reduction, energy resilience and security efficiency improvements on facilities, and maintains them in exchange for a portion of the generated savings. ESPC is a tool used to support the Army’s Installation Energy and Water Resilience Policy as reflected in Army Directive 2020-03. ESPCs can be implemented and paid for from energy savings within the maximum 25-year contact length. The partnership between the garrison, ESCO, CEHNC and Army stakeholders requires a high degree of commitment and work in good faith from the partners to enable successful outcomes as an ESPC is a long-term relationship.
 

Benefits

An ESPC is one of the acquisition tools an installation can use to meet the goals set out by Executive Order 13834 to reduce energy and water consumption. Actual energy cost savings pay for the ESPC efforts on a yearly basis. An ESPC project provides many key benefits to the installation including the following:

1. Mission resiliency by ensuring installations can continue to operate when energy supplies are disrupted
2. Mandatory savings guarantees savings must exceed payments each year
3. Mandatory Measurement and Verification (M&V) of savings, and of equipment performance
4. Infrastructure system upgrades (more efficient systems)
5. Infrastructure improvements that pay for themselves over time (no up-front funding is required for capital improvements)
6. Ability to purchase long-payback equipment by bundling with short-payback Energy Conservation Measures (ECMs)
7. Reduced vulnerability to budget impacts from utility rate hikes and extreme weather
8. Guaranteed equipment performance

Advantages of implementing ESPC projects through Huntsville Center include the following: 

1. Standardized and streamlined processes
2. Centralized project management -- We are a “one-stop shop.”
3. Dedicated and experienced project development team to award, manage projects, provide technical engineering and legal support
4. Easier to monitor a portfolio of projects vs a single project at garrison level
5. Third-party M&V contract support

The ESPC is a relatively large program within Huntsville Center with 120 active projects, $2.5 billion in capital investments, and an average of 13% in excess energy savings above the guaranteed amount in FY2019. The average ESPC project capital investment amount has been increasing over the years and in FY2020 stands at about $22 million.

The ESCO performs operations and maintenance on major systems, allowing limited Department of Public Works maintenance resources to be spent on other activities. These third-party financed agreements allow the garrison to focus appropriated funds on mission critical requirements.

ESPC project savings are cumulative, creating savings for the installation year after year throughout the project contract period and often replacing equipment near the end of its service life with higher efficiency energy solutions.

Huntsville Center has a nationwide ESPC Indefinite Delivery/Indefinite Quantity (IDIQ) Multiple Award Task Order Contract (MATOC) with 17 ESCOs. Task orders are competed among the MATOC vendors using the center’s streamlined procurement process. This proven business model is considered one of the leaders in the Department of Defense. Successes associated with this program include task orders awarded to Kwajalein Atoll, Marshall Islands, and Fort Huachuca, Arizona. Huntsville Center is also working overseas with efforts in Korea and Germany.

ESPC Services
ESPC provides several types of Energy Conservation Measures (ECMs) for government facilities.

Installation Hotline – Assistance is available to Army installation energy managers and Directorate of Public
Works personnel for all ESPC services. Call 256-895-1349.

Download the ESPC Fact Sheet (PDF) HERE.

(as of September 2020)