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Energy Performance Contracts and Government Buildings

Dec. 12, 2014
The greatest difficulties managers of federal facilities face and how to better prepare government buildings to clear those hurdles.

Managers of federal facilities are dealing with a number of challenges today. In this article, Jim Spaulding, director of national sales, federal energy solutions, for Siemens Building Technologies, shares his insights on the greatest difficulties they face, how to better prepare government buildings to clear those hurdles, and how an energy performance contract can support energy-conservation measures.

What are the most common challenges facing federal-facility managers today?

The most common ones are shrinking budgets, a forecasted increase in power cost, and concern over the security of our electrical grid. Shrinking budgets indicate federal-facility managers will have to do more with less. A forecasted increase in power cost means the cost of operating a facility will increase, causing less funding to be available for improvements, including facility-improvement measures (FIMs). Our country’s aging electrical grid poses a threat to the security of federal facilities. At any given time, the electrical grid can be compromised, causing a facility to become non-operational and, in return, causing harm to our economy and the mission the facility was providing. Think about our veterans and the various facilities that support them; a disruption in those services could be devastating. This idea is unsettling to federal-facility managers.

What are the most common/impactful FIMs for government buildings?

The most common FIMs for government buildings are HVAC, water conservation, waste to energy, lighting, and solar. With aging infrastructure, it is important to conduct an energy audit and identify areas where improvements can be made to increase energy efficiency. Also, it is important to remember to approach FIMs in a holistic, total-solution manner, meaning blend your fast-payback FIMs with your longer-payback items to achieve a total energy-savings package. Once the FIMs are implemented, your facility will be able to conserve much of the energy that previously was wasted, and this will be verifiable with a well-thought-out measurement-and-verification plan.

Regarding energy, what are the differences between government buildings and commercial buildings?

Because of their need to be online and operational 24/7, government buildings need to have the ability to go “off grid” to ensure no disruptions in operations. For example, having a non-operational ready Army base could open our country to potential threats. However, when a department store loses energy, it may hurt from a financial perspective, but it does not pose a risk to the country.

What is most hindering energy excellence in government buildings?

The one item that is hindering energy excellence in government buildings the most is having limited to no funding. Being in this position causes facilities to operate inefficiently, decreases morale, and causes personnel to operate inefficiently because their work environment may be uncomfortable. Remember, it takes an investment to increase energy efficiency, money well spent and recouped off the savings in a short period. These investment dollars can come from federally funded sources or through the utilization of a performance-based contract with guaranteed savings.

What can be done to overcome these challenges in government buildings?

Energy efficiency in government buildings can be increased through effective energy-management practices that involve assessing energy performance, setting energy-savings goals, and regularly evaluating progress. An energy performance contract can help federal agencies meet energy-efficiency, renewable-energy, water-conservation, and emissions-reduction goals by removing the need for federal capital dollars and using privately financed dollars under the guidance of prequalified energy-service companies that know how to maximize energy savings. Energy projects need to come from alternative financing methods, such as power-purchase agreements, performance contracts, enhanced utilization leases, utility energy-service contracts, and public-private partnerships.

What is the best approach to an energy-efficient government building?

The best approach to an energy-efficient government building is an integrated approach tailored to the customer’s priorities, based on the customer’s current situation and goals. This approach is both flexible and scalable in nature and consists of five phases: strategy and planning, evaluation and assessment, program implementation, ongoing service and optimization, and measurement and reporting. Whether the customer is strategizing and planning, evaluating, or measuring energy performance, delivering optimal results is key. This is an important integration between energy efficiency, energy supply, and sustainability. The customer can enter the life cycle at any point because it has no beginning and no end. Utilizing this approach ensures the delivery of optimal results.

About Jim Spaulding:

Jim Spaulding is director of national sales, federal energy solutions, for Siemens Building Technologies. His more than 18 years of experience in the federal energy market includes managing contracts throughout the United States for various federal entities, such as the U.S. Department of Energy, the U.S. General Services Administration, the National Park Service, the U.S. Geological Survey, and the U.S. Air Force. He has overseen the execution of energy-savings-performance-contract projects in a variety of occupied and unoccupied facilities, as well as historic buildings, including general administration, courthouses, hospitals, universities, laboratories, and correctional facilities. He can be contacted at 1-224-900-0335 or [email protected].

Did you find this article useful? Send comments and suggestions to Executive Editor Scott Arnold at [email protected].