The Federal Government is the largest energy user in the United States. Through a myriad of laws and regulations, the Federal Government is required to meet certain goals to reduce energy and water consumption, use more renewable energy, and reduce government-wide greenhouse gas emissions. Federal energy management and conservation projects require funding to generate results. Carefully matching available funding tools with specific project needs can make the difference between a stalled, unfunded project and a successful project generating energy and cost savings. Federal agencies have several options for financing energy efficiency, water conservation and renewable energy projects in federal buildings and facilities: Energy Savings Performance Contracts, Utility Energy Service Contracts and Power Purchase Agreements.
Energy Savings Performance Contracts are contracts between federal agencies and an energy service company. The company conducts a comprehensive energy audit of the federal facilities and identifies improvements to save energy. With approval by the federal agency, the company designs and constructs the project and arranges the necessary financing. The company guarantees that the improvements will generate energy cost savings sufficient to pay for the project over the term of the contract. Contract terms up to 25 years are authorized. The multi-year federal receivable is monetized in order to pay the capital costs of the energy savings project.
Utility Energy Service Contracts are contracts in which the federal agency utilizes its contract with a local energy utility to arrange funding to cover the capital costs of energy efficiency projects at federal facilities. Agencies not covered by such an arrangement may enter into contracts with utilities for the sole purpose of implementing energy projects.
In a Power Purchase Agreement, a developer installs a renewable energy system on a federal facility under an agreement that the federal agency will purchase some or all of the power generated by the system. The federal agency pays for the system through these power payments. After installation, the developer owns, operates, and maintains the system for the life of the contract.
Doyle & Bachman LLP has extensive experience in all aspects of federal energy management contracting. We represent energy service companies, utilities, investment banks, commercial banks, insurance companies and leasing companies involved in all aspects of Federal energy management contracting. Services that Doyle & Bachman LLP offers our clients in this area include: