Diversifying Project Portfolios for Utility Energy Service Contracts

Building a diversified project portfolio enhances utility energy service contracts (UESCs) to ensure Federal agencies get the best value possible. Energy efficiency measures are inherent in UESC projects. However, do not overlook the possibility for renewable energy and water efficiency and other conservation measures.

Building a portfolio of energy service projects lowers overall contracting costs while increasing energy cost savings. This portfolio approach offers additional benefits by reducing contract and administrative burdens and optimizing energy savings.

Renewable Energy

Multiple laws and regulations require agencies to implement and use renewable energy systems in Federal facilities. Leveraging UESCs to bundle renewable energy system development along with energy conservation measures increases contract benefits.

Federal agencies are encouraged to include renewable energy projects within UESC agreements. This portfolio approach can result in lower rates and more conservation for each dollar invested.

Water Efficiency

Executive Order 13423 requires Federal agencies to reduce water consumption intensity (gallon per square foot) 16% by the end of fiscal year 2015 (or 2% per year from 2008 through 2015) compared to a 2007 baseline. Because of this, Federal sites are now incorporating water efficiency measures as part of UESC projects.

Water efficiency technologies often have short paybacks of six years or less. Utilities and agencies are discovering that incorporating water conservation as part of an energy program helps to buy down the overall cost of the project. In one case, a utility was able to include an additional 15% of mechanical work by implementing water efficiency measures in comprehensive energy projects at Federal sites.

As it becomes more difficult to secure internal funding for efficiency projects, working with your local utility can be a very effective way to implement a comprehensive program that incorporates water efficiency measures.

The Water Efficiency section details opportunities and guidance for Federal water management projects.

Metering

Incorporating metering within UESC projects is a practical way to update energy measurement capabilities and to meet advanced metering legislative requirements. The Energy Policy Act of 2005 requires all Federal building to be metered by October 1, 2012. In addition, the Energy Independence and Security Act of 2007 requires metering of natural gas and steam by October 1, 2016. These provisions ensure efficient energy use in Federal facilities. Advanced meters or metering devices must provide data at least daily and measure the consumption of electricity at least hourly.

Installing advanced meters also ensures proper measurement and verification of UESC energy conservation measures. This allows agencies to track project payback and verify results per contract agreements.