FEMP Awaiting Reinstatement of ESPC Authority

March 18, 2004

The Secretary of Energy's energy savings performance contracts (ESPC) authority sunset became effective October 1, 2003. FEMP is waiting for ESPC authority in a continuing resolution or other legislation providing temporary or permanent ESPC authority.

As a result of the ESPC authority sunset, no new delivery orders can be awarded until the ESPC authority is reinstated. However, work can continue on delivery orders that were awarded before October 1, 2003. Alternative finance representatives and project facilitators are continuing to market new projects and work with customers up to and including the Initial Proposal stage of the ESPC process. They are continuing to work with customers as required on awarded delivery orders. Agencies can continue using utility energy service contracts because they are not affected by the ESPC authority.

In the absence of the authority to award delivery orders, it is not advisable for federal agencies to issue a Notice of Intent. The Notice of Intent instructs an energy service company (ESCO) to complete a Detailed Energy Survey (DES). The DES can cost the ESCO a significant amount of investment dollars. Without the delivery order award, the agency would not have a mechanism to repay the ESCO. DOE defers to the agency to continue past the initial proposal should the agency decide to do so.

Re-certification for the Qualified List of Energy Service Companies has been postponed because of the hiatus in the federal government's authority to enter into ESPCs. DOE will implement the re-certification process when ESPC authority is restored by the U.S. Congress.

For guidance about what ESPC activities are permissible during the hiatus, please contact Tatiana Strajnic at 202-586-9230.