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Performance Contracting for Energy Conservation
Did you know that federal facilities have a way to make infrastructural efficiency upgrades and repairs without any upfront costs? Federal agencies may use performance contracting vehicles such as the Utility Energy Service Contracts (UESCs) and Energy Savings Performance Contracts (ESPCs) to finance such upgrades/repairs.
These contracts offer federal agencies a practical, result-driven approach, to reduce energy consumption while modernizing facilities. Federal facilities work with their utility or energy service providers to finance facility improvement/projects instead of paying large upfront costs. Once the project is completed, companies are paid based on the cost savings from these improvements.
The Energy Policy Act of 1992 (codified as 42 U.S.C § 8256) reinforced by the Energy Act of 2020 (42 U.S.C. § 8253(f)(4)),1,2 authorized and encouraged federal agencies to negotiate contracts, accept incentives and design cost-effective energy- and water-saving measures with utilities and energy providers.2 These laws provide federal agencies with the flexibility to acquire UESCs and ESPCs.
Additional guidance is provided to help federal agencies power up the energy-savings journey through the UESC/ESPC process, as laid out in the Department of Energy (DOE) Federal Energy Management Program (FEMP) 5-Phase Roadmap.
Phase 1. Acquisition phase
Phase 2. Utility selection and preliminary assessment phase
Phase 3. Project development
Phase 4. Project implementation, construction and project acceptance
Phase 5. Post acceptance performance/performance period
Each phase is further divided into actionable steps for successful acquisitions and implementation of high-quality projects.3,4 Agencies can replace equipment, customize services or accept goods available through these programs.5
These projects are beneficial to both federal facilities and their utility providers. Federal agencies reduce energy consumption, especially during peak demands, incur less in energy needs for utility companies and prevent the costly construction of new power grids.6 The energy improvements help to conserve energy and boost local economies with job creation.7 When facilities improvements are combined with an individual's energy-saving actions, the total energy savings could increase significantly. The Take Action article lists more of these energy-saving actions that you can take on an individual scale.
Spotlight
| NIH Freezer Challenge Participants
Congratulations NIH! Out of 286 organizations from 36 countries, NIH was recognized for winning the prestigious, organization-wide Honorable Mention in the International Laboratory Freezer Challenge.
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Take Action
| Opportunities for Reducing Energy Consumption
Here are some ideas and easy steps for reducing energy consumption: turn off the lights, turn off devices, activate the sleep setting on all office machines, and use “smart" power strips. Ask facilities operations/maintenance personnel for guidance on other energy conservation measures.
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Fun Fact
Did you know? Anywhere between 5% to 15% of an individual's home electricity bill comes from "phantom loads", which is energy used when devices are in standby mode.1 Unplugging devices or turning off surge protectors may not seem like much, but it certainly adds up!
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Division of Environmental Protection | Office of Research Facilities | Office of Management
National Institutes of Health | U.S. Department of Health and Human Services
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