Natural Gas LDCs: Options for Utility Financing

November 1, 2002

Photo of a workshop for natural gas LDCs interested in pursuing partnerships with Federal agency customers

Brian Magden of the General Services Administration encourages natural gas LDCs to enter into UESC partnerships with their Federal agency customers at a FEMP-sponsored workshop in New York City, June 2002.

Federal agencies that have numerous alternative financing options and potential partners available to them are in the strongest position to develop high-quality energy efficiency, renewable energy, and water conservation projects at their facilities. FEMP is working to expand agency options to include utility companies that have not traditionally participated in these projects in the past, but have much to offer their Federal agency customers.

Natural gas local distribution companies (LDCs) are largely untapped potential partners for Federal facilities to work with under utility energy service contracts (UESCs). FEMP has been actively encouraging gas LDCs to partner with their Federal customers on these efforts.

A workshop for natural gas LDCs interested in pursuing partnerships with Federal agency customers was held in Atlanta in 2001 and hosted by DOE's Atlanta Regional Office. Participants networked with potential partners, received guidance on developing UESC projects, and were made aware of FEMP resources and contacts. Workshop evaluations indicated that the objective of the workshop was fully met, participants received information and guidance needed to help them develop programs to serve the Federal market for comprehensive energy efficiency, renewable energy, and water projects through UESCs.

Presentations from natural gas LDC experts, such as Stan Knobbe of Southern California Gas Company and others, who have organized special business units in their companies to serve the Federal market, provided honest answers about the challenges of getting started and also showed beyond any doubt that opportunities exist for these programs to be successful. Participants especially appreciated the opportunities to speak with LDC representatives who had extensive experience with UESC projects. Southern California Gas Company, Nicor, Inc., and Onsite Energy Corporation's case studies helped participants identify several potential avenues for getting started.

Following the workshop, natural gas LDC representatives pursued the use of General Services Administration (GSA) areawide contracts with GSA representatives, which allow utility service providers to enter into UESC projects with Federal agency customers within the utility's franchise territory. FEMP continues to follow-up with workshop contacts as initial projects are identified to see if additional assistance would be helpful.

The positive comments and evaluation from participants of the Atlanta workshop resulted in a similar workshop in the Northeast Region, which was held in June 2002 in New York City. Hosted by DOE's Northeast Regional Office and co-sponsored by Keyspan Energy Delivery, the New York workshop helped to generate interest in CHP at two large Federal facilities in Connecticut.

Natural gas LDCs interested in pursuing UESC projects with their Federal agency customers or Federal agency sites interested in working with their local gas LDC should contact their FEMP Regional Office Representative (see list of contacts). For additional information, please contact David McAndrew of FEMP at 202-586-7722 or, or Julia Kelley of Oak Ridge National Laboratory at 865-574-1013 or