Successful Federal Energy-Efficiency Program Caught in Political Crossfire

By Published On: October 3, 2003

While the federal energy bill languishes, a little-known provision in it might cause one of the best financial deals for federal facilities in California and other states, in particular military bases, to expire at the beginning of next month if the legislation is not passed. The program has brought $100 million in savings to the Golden State alone, but lawmakers have to act soon to keep it alive. “By hook or crook, we will try and get the program extended,” Jennifer Schafer said. Schafer represents large companies, including Sempra Energy Solutions, Honeywell, and Johnson Controls, that carry out energy-efficiency projects at numerous military bases and other federal facilities. Although just a drop in the massive U.S. military budget bucket, millions of dollars have been saved each year since the mid-1990s by energy-efficiency and green power projects implemented at dozens of army, navy, and marine corps bases in California and around the US. But the conservation program, carried out under a private-public partnership, faces an uncertain future and in a worst-case scenario could die in several days. The program, created in 1992 by Congress with bipartisan support, is set to expire October 1. Its future is currently tied up with the controversial federal energy bill, which few expect to pass by the end of September. As a result, supporters of the efficiency and renewables program have been frantically trying to ensure its continuation. The program is a key tool “which agencies can use to reduce energy costs, obtain new capital equipment, improve indoor environments, and reduce pollution without increasing budget outlays,” Schafer said. At the largest Marine Corps station in the US, the Twenty-Nine Palms Marine Corps base in the Mojave Desert, a $62 million investment in efficiency measures is said to produce nearly $7 million in savings annually. Installed efficiency equipment at the California base include an energy-management control system, a 7 MW natural gas-fueled cogeneration plant that heats the base’s water and buildings, new chilled water plants and efficient boilers, air conditioning upgrades in 30 buildings, and skylights in warehouses to cut lighting use. A 1.1 MW photovoltaic system, the largest in the country, was just installed on the base. Along with the cogeneration plant, it will meet the base’s winter energy demand and reduce the amount of power it buys from Southern California Edison, said Wayne Hofeldt, the base’s energy manager. More efficiency measures are in the works but could come to a screeching halt if the energy-efficiency partnership program is allowed to lapse at the end of September. The efficiency and clean energy projects at Twenty-Nine Palms have been carried under what is known as the Energy Savings Performance Contracting (ESPC) program. Letting this program lapse would surely be a political embarrassment for many federal lawmakers. But cutting it loose from the federal energy bill could lead to a stampede of other, more controversial interests breaking away from HR 6. As a result, the coalition of efficiency contractors are pushing for a stopgap measure that would keep the noncontroversial program alive until energy legislation?in whatever form?is passed. Vehicles under consideration that could extend the program’s life from six months to a year and a half include adopting a Congressional resolution, creating a standalone bill with a limited life span, or attaching it to an appropriations measure. The energy savings contract program grew out of the 1992 Energy Conservation Policy Act, which sought to cut the country’s energy use. The law was passed during the first war with Iraq and under an administration concerned about rising budget deficits. Because of the high up-front costs of energy-efficient equipment and renewable power sources, the government struck a deal with private companies. The contractors conduct energy audits at designated facilities and finance and install the equipment. Certain energy reductions must occur, and in exchange, the contractor receives a chunk of the savings generated from lower utility bills over a set period. The largest single energy consumer in the nation is the federal government. It spends $4 billion a year to supply about 60 million megawatt-hours to its 500,000 buildings. The average age of the structures is 50 years, and much of the infrastructure is in need of replacement. According to Sempra Energy Solutions vice president Erbin Keith, the energy-efficiency investments under ESPC reduce the federal government’s energy costs by hundreds of millions of dollars each year. The biggest cost reductions were in California, where conservation measures have saved $100 million over the last four to five years, Schafer added. Energy-efficient management systems, retrofitted lighting, microturbines, efficient chillers and boilers, and PV systems have also been installed on other military bases and federal facilities in California, in other parts of the US, and around the world. These include Camp Pendleton, Travis Air Force Base, and Miramar. The impacts of the ESPC program sunset are unknown, with various agency officials predicting different outcomes. Some say a break in the program would be no big deal and projects would just pick up from where they left off after getting congressional approval. Others, however, say time-sensitive projects would be history and all other projects would have to start over from scratch. There are efforts not only to keep the environmentally friendly energy program at federal facilities intact but also to expand it. This includes extending eligibility to water-conservation projects, power generation and transportation improvements, and new construction projects. According to Schafer, the public-private energy-efficiency partnership is supported by the Bush administration, the Hill, the powerful Office of Management and Budget, and the Department of Energy. <b>Powering Twenty-Nine Palms</b> The Twenty-Nine Palms Marine Corps base, which sits in the desert region near Palm Springs, covers 935 square miles. Peak load during the scorching summer months reaches 20 MW, but demand drops to 7-8 MW in the winter. One-third of the summer demand and the entire winter load can be met with the on-base cogeneration facility and the newly installed solar powered system. The significant energy savings from efficiency equipment are split between the government and the contractor, Johnson Controls, over a set period of time. Part of the government’s savings is used to fund additional projects. On top of that, the base received a rebate of approximately $4.5 million earlier this month from the California Energy Commission for its 1.1 MW solar power system. There are also plans to replace the base’s vast network of streetlights with LEDs. In addition, a streetlight powered by solar panels and a miniature windmill is being tested.

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