Financing
Alternative Financing
Alternative financing sources include funding mechanisms other than appropriated funds such as energy savings performance contracts (ESPC) and utility energy service contracts (UESC).
ESPC
Energy savings performance contracts (ESPC) are partnerships with private sector companies known as energy service companies (ESCOs). These contracts allow installations to improve their infrastructure and implement energy projects while paying for the measures with the anticipated savings being generated by the project over time (10-25 years).
Perhaps more importantly, ESPCs give Army facility managers a solution to facility problems with minimal up-front cost. Applied with care and consideration, ESPCs can help facility managers:
- Reduce equipment breakdowns and emergency repair requests
- Provide better, more productive living and working conditions for your people
- Reduce costs
- Meet environmental mandates such as CFC phase-out
- Save energy and meet management goals
The Energy Policy Act of 2005 reauthorizes Energy Savings Performance Contracts (ESPCs) through 30 September 2016. EISA 2007 permanently extends the ESPC authority.
- View current legislation governing ESPC and UESC (10 USC 2913) - Note: EISA amended 10 USC 2913 to remove the $7,000,000 cancellation ceiling notification requirement.
For more information on ESPC, visit the following:
- Federal Energy Management Program's Energy Savings Performance Contracting
- Project Facilitators List for ESPC
UESC
Utility energy services contracts (UESCs) are similar to ESPCs. The most notable difference is that the projects are financed and implemented through utility companies.
See the authorizing legislation for UESCs . More information is available on the FEMP web site .
Federal Utility Partnership Working Group
The Federal Utility Partnership Working Group (FUPWG) holds bi-annual meetings in the Spring and Fall. The meeting agendas, attendees, and presentations can be found on the FEMP website.
Case Studies
The Army has successfully implemented over $900M investment under Energy Savings Performance Contracts (ESPC) and over $500M of investment under Utility Energy Services Contracts (UESC). Here are some case studies on successful projects:
- Federal Energy Management Program Case Studies on Federal ESPCs
- Federal Energy Management Program Case Studies on Federal UESCs (including Army examples at Fort Knox and Fort Lewis)
Appropriated Funds
Appropriated funds are funds authorized and appropriated by Congress for specified purposes. Examples include: Energy Conservation Investment Program (ECIP), Military Construction Army (MCA), and Operations and Maintenance Army (OMA).
Energy Resilience Conservation Investment Program (ERCIP)
ERCIP is a subset Defense-Wide MilCon Program specifically intended to fund projects that improve energy resilience, contribute to mission assurance, save energy, and reduce DoD’s energy costs. ERCIP accomplishes this through construction of new, high-efficiency energy systems and technologies or through modernizing existing energy systems.
The latest guidance can be found in milBook, DCS, G-9 ODF SharePoint, and in the future look to AKO 2.0.
MCA
Military Construction Army (MCA) funds are regulated by AR 420-1 which prescribes policies, procedures, and responsibilities for Department of the Army (DA) military construction (MILCON).
It establishes Army policies, responsibilities, and procedures for the development and execution of Military Construction, Army, (MCA) and Unspecified Minor Military Construction, Army, programs during peacetime and mobilization. The scope includes planning, programming, designing, budgeting, construction of MCA and UMMCA projects, acquisition of real estate related to MILCON construction, demolition requirements associated with MILCON construction, emergency construction, procedures for restoration or replacement of damaged or destroyed facilities, and other supporting activities.
It prescribes procedures for planning, programming, budgeting, and executing the design and construction portion of the Army Family Housing (AFH) program.
It includes procedures pertaining to the Army portion of the Medical Military Construction (MED MILCON) program.
OMA
Operations and Maintenance Army (OMA) funds are used to pay for such things as energy bills, repairs, and replacement equipment. ENERGY STAR® equipment should be purchased when life-cycle cost-effective.
Army Regulation 37-49 prescribes the budgeting, funding, and reimbursement policies and responsibilities to be followed by Army activities in connection with Army base operations support including OMA funds.