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FV: Thanks so much, Emily, and thanks everyone for your patience. This is new technology to us and I think it will go well. I’m happy to be here today. We have a great webinar for you. It’s called ‘Green Purchasing in
Construction and Contracting’ and we have a great lineup of speakers. Today we’ll be hearing about green purchasing in construction and contracting, a few case study examples from different forests, energy savings performance contracts and utility energy service contracts.
Our first speaker I’m happy to introduce is Linda DuLac.
She’s a purchasing agent with the Region 6 Eastern
Washington Acquisition Group, and she leads the green purchasing team with the Sustainable Operations Collective.
So whenever you’re ready, Linda.
LD: Okay, [unint.]. We’re going to be looking at two different topics today: one is green purchasing and construction, and then we’re – in contracting – and then we will be looking at what another forest has been doing that’s outside of the contracting realm on green purchasing and construction.
Next slide.
There are several guidance key – sustainable guidance that we have that you can see listed here. We’re going to look at the very bottom one, the USDA Sustainable Procurement
Program, because that’s really our direction and our policy on sustainable operations for all USDA agencies. Next slide.
And we’re going to just quickly go over the components of the SPT and then each component will have representation on two case studies to show how we’ve met these components. It starts with a recycle content and, and that those components are recycled. Energy efficiency; containing the maximum bio-based content practical; sustainable acquisition is also that, those that are environmentally preferable. Next slide. They also include electronic product environmental assistant, or EPETE. They’re water efficient; they don’t deplete the ozone in the atmosphere, and they’re non-toxic or less toxic with their alternatives. And did you know that the USDA policy states that a preference for all of the above items shall be established in all of our contracts as appropriate? So what we’re going to be doing is looking at components that are – were in a solicitation in a contract for construction of a new building, and then followed by those components that

411174 are a result of sustainable assessments in exit [unint.].
Next slide.
The Cle Elum Ranger District in Region 6 contracted for a new addition to be built. Next slide. The contract line
[regent’s diseptations] were the driving force to design and build a [lead] certified end product. Many of the sustainable products that were included in these contracts can be obtained for your use in your construction of buildings and any maintenance projects that you have in your existing buildings. Next slide. Cle Elum is not unlike many of our district offices and field offices, in that we’re, many are remote: they’re not next to big metropolitan areas and big sources of resources and products. This district happens to be 83 miles from
Seattle, Washington, which is the biggest metropolitan area, but you must cross a major mountain range to get to it. It’s just on the eastern slopes of the Cascade
Mountains, which results in very little precipitation. It snows in the winter, and it’s at the 1900 elevation. All of these are important when we’re looking at sustainable products. Next slide.
In the construction of this building we used, we re-used existing concrete sidewalks. We broke them up and then we reused them, and you can see in walkways and a patio area.
The surplus materials that were left from the breaking up of the existing contracts were sent to a nearby aggregate and cement plant for incorporation into an aggregate mixture. So here’s where we met the USDA Sustainable
Procurement with Recycled Content. Next slide.
We also looked for local rocks for our posts. This resulted in a savings of fuel delivery by getting to other sources that were further away, and it also provided regional aesthetic appearances. Next slide. The building materials that were selected had recycled content. Even the topsoil that was removed during the excavation was set aside and used later in the landscaping of, around the building. Next slide. To meet the Sustainable Procurement for Energy
Efficiency, we had installed smart thermostats to control the day and night temperatures and air exchange. The lights are low wattage fluorescent Energy Star. Light sensors were installed to automatically illuminate sections that were occupied; if they weren’t occupied then lights would go off. The HVAC systems were, consisted of [sent] energy heat pumps and water heaters, and then the windows and doors are

411174 low E. All of these examples can be used to utilize any upgrading that you do for your existing buildings. Next slide.
And then we have the bio-based content. We had a minimum of
50% of wood based materials were certified as bio-based. We used woodchips and bark mulch that were used in the landscaping and the rain garden. Drought-resistant native varieties of trees and plants were, shrubs were selected to reduce our water use. And then of course our janitorial products are all bio-based. Next slide. Cleaning products are non-toxic. The paint was low volatile organic compounds, and you don’t hear that term of VOC, low VOC, that’s what it stands for. The low VOC paint is a really good way for you to meet your Sustainable Procurement. I’ve worked in many different offices and I don’t know how many of them we’ve painted another room or a wall that needed to be retouched. Select those VOC paints, that’s another way for you to meet our legal requirements for using environmentally preferable products. Next slide.
There are several areas that we meant to be water efficient. We used low flow faucets. Next slide. The no flush urinals, it eliminated potable plumbed water for use in flushing. It saves approximately three liters of water per flush. Next slide. And then we had in, the landscaping consisted of a rain garden. As we stated before, the trees and shrubs were selected for drought resistance, that were typically found in our region. This is another easy way for your to meet the Sustainable Operations in your existing buildings, is to remove areas that are grass and replace them with native plants and shrubs that are drought resistant. Next slide. The roof eaves drain into a rockcovered buried pipe, which drains into the landscape rock garden. Again it provides moisture for those drought resistant plantings. Next slide.
And then there were several of the buildings, construction of this building, there were several materials that were selected to, so that, that do not deplete the ozone layer.
And most of them are the low VOC content that included adhesives, sealants, the paint. No products were allowed to contain the urea formaldehyde resin. It did take additional time for a literature research to find these materials. And then we did some on site checking of the product labels to make sure that they complied with the requirement of the low VOC content. It also required us to allow some

411174 additional time for product availability, because the products weren’t off-the-shelf that we could get in the local area. We had to send away for them. Next slide. There were several non-toxic products. The ceramic tile adhesives, the [force] sealants, our carpets are Green
Label Plus, the counter laminates and adhesives are nontoxic products. So when replacing any of the flooring in your existing buildings, be sure to not only look at the type of floor replacement you’re doing, but look at the sealants and adhesives that are being used to lay that product down. Now I know of several, on, in our area, we’ve had just this year a couple of contracts that we awarded to replace several sections of flooring, and it’s an easy way to meet our Sustainable Procurements requirements, by just looking at the type of product and then the adhesives and sealants that you’re going to use to lay it down. Next slide.
There are several sources of sample construction language and they’re’ listed here. This is being recorded so you can go back and take a look at these web sites. Next slide.
Okay, now we’re going to hear from Diane Berry, she’s with the Huron-Manistee National Forest. She’s a public affairs specialist and she has some case studies to share with us, how their forest has met several of the sustainable procurement requirements from the USDA direction. I’m going to turn it over to you, Diane.
DB: All right, thank you. Yes, I am glad to participate today.
I’ve been a member of the Green Team we have here on the
Huron-Manistee National Forest land at Northern [Miller]
Michigan, and I recently shared some of our accomplishments while I was out in the great state of Washington, and had opportunity to meet participants this last spring at
Sustainable Operations. And in sharing some of the accomplishments was asked to be a participant. And I’ll just jump into the first slide talking about energy efficiency in our supervisor’s office, and this is a facility about 15 years old. And we have contracted an assessment of our heating, ventilation and cooling system in our building. We’ve had a lot of difficulties maintaining even temperatures and have had a lot of unseasonal maintenance issues. So we did contract an assessment and were able to identify areas to make some standardized improvements, and we have already realized some of those savings through the uniformity of those programmable thermostats. And I did mention we have seven

411174 zones, actually seven different furnaces within the attic of our one office here. So it’s quite a challenge to have that standardization. And we have already realized, as compared to last year, we’ve reduced the energy consumption by 2,008 kilowatts as compared to last August with our comparable outdoor temperatures during those same periods.
Next slide please. And another thing that we had done to increase the energy efficiency in our supervisor’s office is to install the motion sensors inside the buildings as well as outside the buildings, and of course that ensures that the lighting is only on during usage of the building, and the photo sensors have been installed in the ceilings.
We had a lot of rooms already installed with the motion sensors. We’ve expanded that to include the front foyer, which is always open to the public. The exterior lighting was an addition this year. And in addition to that we did have a number of the high intensity cam lights, there were floodlights that we had replaced early on, and that has seemed to be an immediate realization of cost and energy savings.
Next slide please. And one of the things that we find that we can do, of course, across the forest, and at the individual work station, is the installation of timers, of surge protectors and timers such that people are able to completely shut down their computer systems during the time that they’re not there, so that they are typically off from
7:00 pm until 6:00 am. And we’ve also installed those on our primary printers and copying machines throughout all of our four district offices and our supervisor’s office.
Next slide please. In addition, we have a district office over on the Lake Huron side of the forest, that we have conducted an infrared energy audit of. And that has helped us identify some key areas to direct some our resources too, to help insulate, isolate the areas of our prime heat loss areas. And we conducted that during a cold temperature period and we’re going to repeat that after addressing some of those targeted areas. And included in that assessment was identification of two specific areas where we have gone in and included some insulation and some, the expandable foam. We’re looking at some additional resources to further address some of those heat loss, energy loss areas and possibly do some additional capital improvement funding, this particular office is an area that was an old Air Force

411174 space, administrative office. It was quite old and quite a heat sump air, heat sink, if you will.
Next slide please. In the area of reducing our resource use we have had rain sensors installed at our supervisor’s office as well as one of our ranger districts, and that is a system that allows us to identify the trigger points, such that if we’ve had a recent rain event then those sprinklers will not come on. So that was another accomplishment that our Huron-Manistee National Forest
Green Team accomplished this year at two of our offices.
Next slide please. This slide shows one of our Green Team newsletters that we have distributed to all of our employees and this is just one page showing the cost phasing that was realized through use of our video
[halo]conferencing equipment, and it indicates that just by using that equipment, bringing people together through that technology, we were able to save approximately 30 gallons of fuel and, or at that time over $100 of fuel and, I think more significant, is the total employee time that was not lost in the driving to a face-to-face Green Team meeting, which was 23 employee hours. And in the newsletters we share green tips that people can use at home as well as reminders in the office to power down our computers, we do discuss some of the accomplishments of the Green Team and try to stay current. A lot of timely information is shared
– as you can see in this one we had identified the free electronics recycling event that was held here in Cadillac,
Michigan, and other events included the household hazardous waste collection days. And next slide please.
People always seem to be interested in what it takes to go green, and so I included what our expenditures included this year. And we did have some in surge protectors that were [unint.] out, the forest, we do have four district offices in addition to our supervisor’s office. We did include the energy audit this year, and we will have a follow-up audit, which will be about $75. The [Mayo] ranger district housing upgrades included some window replacements at the seasonal housing locations. The irrigation rain sensors I mentioned, that was two units. The, and again, the supervisor’s office is a leased building so we did go to the channels, contacting the landlord and of course we take ownership of any modifications made to a leased building here, but we certainly are realizing the value and the energy of cost savings from those upgrades. The, you can see the costs that we did spend on those, for the

411174 energy conservation, which included the HVAC assessment as well as the timers, the lighting systems. And we have
[unint.] that, and that’s not, it’s going to be repaid within a three year time frame. The Huron forest upgrades I mentioned, the insulating, the caulking, the sealing of the windows, the focus on the areas where we had a direct conduit between the interior and the exterior of the building, and then a last item I included was the Green
Team awards. And we hadn’t included any [Rocky Mission] awards for a few years on our Green Team but we recognize it’s important to reward the people who have put the effort in to further the reduction of our environmental footprint on our forest, and some of the things that we have provided as Green Team are the, are reusable water bottles, our famous steel travel mugs, and it was such a Green Team award that brought me to the Sustainable Operations opportunity here by seeing Ashley Owens with her
Sustainable Operations t-shirt on! So I think it’s important that we show how proud we are to be part of this effort and to get the conversation going.
Some of the other green tips that we have shared, we do, we had a story of electronics that we, that’s shared at one of our safety meetings. And we’re now of course focusing on the green purchasing, and there’s a lot of great web sites that we’ve gone tapping into. So that’s all I’d like to share with you unless you have any questions for me right now.
FV: Thanks so much, Diane. We’re actually going to hear from one more person and then we’ll take questions for Linda,
Diane and Jennifer, our next speaker. So thank you Linda and Diane, you guys gave some great examples of different products and things you can purchase to help reduce your environmental footprint. So now I’d like to introduce Jen
Knudson, she’s the facility engineer on the Caldwell
National Forest and she’ll be sharing about their water bottle filling stations. So whenever you’re ready, Jen.
JK: Hi! So I’m Jen, and we got approved for this project. It was a micro-grant from our Sustainability Operations from the regional office. We, this became a need for us because we were having a huge amount of, number one and number two plastic bottles being used in our office. We have no way to recycle them in our local community. The reason that we were getting why people were wanting to bring bottled water to our office was because it had a bad taste in the

411174 building. They didn’t like the chlorination from the city.
We explored putting in a whole-building filtration system but that area was wrapped in asbestos pipe. And I had seen this water bottle filling station and it looked like a really, maybe a better way to address the problem, to reduce the amount of plastics we had. It has really encouraged people also to fill up their water bottles before going out to the field. This is located at our supervisor’s office. Next slide.
And so we installed two complete drinking water fountains, and on the top portion there’s a water bottle filling station. Both of the water filling stations together were about $2,286. Just the top portion, what you see, can be a retrofit kit for an LK drinking water fountain. Those are approximately $700 for the [unint.] cost of those. I think that you probably should check the model and make sure that it matches. There are other brands of water bottle filling stations. There’s also service mount, and there’s outside ones that are also available for recreation sites. I hear that National Park Service also uses these types of water bottle filling stations at some of their highest use, for their visitor centers. We, because this was a retrofit project, our building was built in the early ‘60s, it was originally a GFE building. It is all masonry on the interior and exterior, so we had to knock out some bricks and move plumbing and electrical around to get, the plumbing fixtures had to match up with the requirements of the water fountains. We partnered also with our Wellness
Committee here at the supervisor’s office, and everybody in the office got a recycled aluminum, and it’s coated on the inside and out with an FDA approved coating, aluminum water bottle, and it was made in the USA! So we’re really excited about that, right here in Washington State, actually.
The water bottle filling station that is on the second floor upstairs where there is field crews to access that line, and it has been getting twice as much use as the one that’s downstairs in our visitor area. So that was kind of interesting. I fully expected with people coming into meetings and everything that the one down in the conference room, next to that conference room, would be used ore, and then – but it’s been opposite, the one with the field crews has been used a lot more. This, these drinking water fountains went online on June 1 st and so we have four months worth of records. Next slide. And so far on our counter, they each have a counter, we’ve used a total, or saved,

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3,800 plastic bottles form the landfill. And I think that’s more of an estimate based on how much water is used and each time that it’s used. But it still gives you an idea of just often that these are being used. We’ll be collecting information too on what, how many we’re saving throughout the winter season when we don’t have the field crews. It’ll be interesting to see if the conference room with more meeting [unint.] gets more use down there.
We’re really excited because we do have less plastic bottles being collected at the supervisor’s office, which was our goal. Everyone in this office loves this project.
They come by and say thank you often. They’re really excited for an easy way to fill their water bottles, filling their water bottles. It’s really easy to use, you just hold the bottle up to it and there’s a sensor that activates it, and when you pull the bottle away it stops.
So there’s nothing to push, there’s, it’s really easy to use. I was worried that maybe only wide-mouth bottles would work with the water bottle filling station, but the stream is really direct, and it even works with like store bought water bottles fairly easily. The drinking water fountains that we installed are now ADA compliant, I was very excited by that benefit that we received from this. But it’s been a really good small project that our employees have really enjoyed. We have benefited from a sustainability standpoint immensely with reducing plastic bottles that we cannot recycle. And in addition our employees are staying hydrated with it, with water, when they go out to the field. And that is all I have to say.
FV: Thanks so much, Jen. That’s a great example of thinking through a product that you could purchase and have it have a sustainability benefit. So now we’ll pause for questions for these three speakers before we move on to the next two.
So if you have a question please press *1 for either Linda,
Diane or Jen. So Emily are there any questions?
MOD: I’m seeing no questions on the line but I did just get a text question. My office does mostly road construction. How do we incorporate green requirements into those?
FV: That’s a great question. Linda, do you?
LD: Yeah, that’s a real tough one. There are some construction that we just can’t pinpoint something evident with doing green purchasing. There are some, depending on what you’re

411174 laying on the ground, though, there are some cement and asphalts that you can take a look at if you’re using any type of cement, which usually you don’t use cement in road construction. But some of the asphalts you can take a look at the content of those. If you’re using gravel, selecting the source that is the closest to the job site will help eliminate the fuel consumption of hauling. And really, that question is one that, you know, we look at the easy things to identify and then there’s ones that are questionable on whether we can do any sustainable procurement for. And I would love to have any feedback from anyone that’s out there that has examples or ideas about it, because it’s a hard one. Also, Jen suggested how about biodiesel for road construction. There’s one way of doing it.
And we’re hoping to, when we get the toolkit, green purchasing toolkit operational, we’re hoping that we’ll get feedback from the field on areas that have been identified or things that they’ve done so that we can share them. Road construction again is a really good one to take a look at.
FV: Thanks, Linda.
MOD: We have a question on the line.
FV: Great.
SS: Hi, Jen. I’m [Satvil Sakhar] in Region 8, I’m in engineering. I have just a couple of questions on the water system micro-grant project.
JK: Okay.
SS: First question is, what was the source of supply of your water that you’re treating? And second is, what kind of treatment, is that [wet salt mortise] or something else?
JK: We are connected to a municipal system in our city. It’s a small city, approximately 4,000 people. Their treatment is chlorination. We have no additional treatment after the water enters our building. Since it’s so old there wasn’t another way. The water bottle filling stations do have a filter on them that are, that need to be changed once every six months. And they’re about $100 apiece for a new filter.
SS: Okay. So they’re just adding chlorine to the water, right?
People did not like the chlorine taste, right?

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JK: Right, they don’t like the chlorine. I think it’s mainly a chlorine issue and there’s old pipes in here, and I think there’s a perception that maybe they’re, that it doesn’t taste good because of the old pipes. But overall I think that maybe they’re used to less chlorination. I think part of it has to with our location on the city system. And then under chlorinating in certain areas.
SS: Oh, okay. Yeah, I’m also on the water board. One of the issues that comes up is that if you provide additional treatment, are you monitoring if you’re changing the water quality in any way or fashion, and if that is still safe.
JK: Right.
SS: Because there are certain things. And another question is, how do you deal with other offices that are in the municipal system that people don’t like the taste, and how do you fund those projects. And I’m wondering if you do a pilot project, then that means to show that this is a good idea and we can go forward for other offices. So if there are additional requests, I mean is this something that can take off?
JK: Yeah I definitely think that this system that can be used in lieu of doing additional building filtration. We do have other offices that we could probably employ this technology at that they would really enjoy. You know, we probably would have considered doing a whole building filtration systems like an RO system, a reverse osmosis system or something like that, but just the way the plumbing comes in and totally encased in asbestos, asbestos insulation, we wouldn’t be able to do that cost effectively. This seemed like a more cost effective way to address just the taste of the water within the building. Since it doesn’t affect the quality of the water.
SS: Okay so it’s basically maybe chlorine removal or some kind of carbon filter that comes with this or?
JK: Yeah it’s a carbon filter for it. It’s really small, it’s probably about three and a half inches in diameter, and it screw locks in.
SS: Yeah, it’s like your [unint.] for carbon [unint.], okay, thanks.

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JK: Yeah, you’re welcome.
FV: This is Katie. I just wanted to share that Jen made a small write-up about these drinking water fountains and I shared it with my Green Team mailing list and the P&W lab in
Corvallis is going to install them. So like [Sakhar] suggested the thing that was successful at one unit, they were excited to install it at their location. And then I have a question online, it’s from Holly and it’s for Diane.
And she’s just asked, how is your forest able to spend funds on a leased building? Did you have to do anything for that? She thought it was not allowed.
DB: Well, we did approach the lease, the landlord like I mentioned, and I presented all of the items that we were planning to modify within a leased building, and of course we emphasized that [unint.] of the environment we are committed to efficiently use energy and reduce the consumption of resources and we referenced the executive orders that require us to do so. And we, I specifically laid out as I mentioned what steps we wanted to take to reduce our environmental footprint, including the wireless rain sensor installation, the upgrading of the exterior lighting fixtures, the ceiling mounted motion sensor system, and we estimated that taking those measures would reduce our consumption of electricity by about 13,000 kilowatts per year, or 5% of our total annual usage in
2011, so I think we presented a strong case. We did indicate that we intended to incur the initial costs of those items to accomplish our mandates, and all of our lighting upgrades would be installed by a licensed electrician, and again emphasized that we expected cost savings. Now, we’re the ones that pay the electric bill so it certainly was a good investment for us. So we did send the specifics to the landlord and we got approval from the landlord. Of course we did mention that those improvements should also enhance the value of the building. And we got approval. We also went through the union to identify such because there were some changes in working conditions with motion sensors and the timers. So we got overwhelming support.
FV: That sounds great. Thanks, Diane. So I think we should move on to our next speakers but if you are on the line and you still have questions for Linda, Diane or Jennifer please save them till the end. So now we’re going to transfer into

411174 different products that you can purchase to make your building and construction more sustainable into different ways to finance those types of projects. So I’m happy to introduce Bob Slattery. He’s a SPEC, E-S-P-C-T member and he’ll be talking about energy saving performance contracts.
So whenever you’re ready, Bob.
BS: Okay, can you hear me?
FV: Yes, you sound good.
BS: Okay. All right, yes, my name is Bob Slattery, I’m glad to be here with you today. I am with Oak Ridge National
Laboratory and just a little background. ORNL is a
Department of Energy laboratory and in particular my day to day activity I’m involved in the support of Department of
Energy Federal Energy Management Program or DOE-FEMP programs related to energy savings programs that all agencies can take part in to address the various policies and mandates that are out there. So we’ll jump to our next slide.
SO in today’s environment with either the lack of appropriations or dwindling appropriations for projects such as energy efficiency upgrades the topic of financing these type of activities is certainly a popular item. And so when we look at the field of financing vehicles for an agency’s use in implementing energy service projects and improvements without obviously the upfront capital costs there actually are a number of different paths that one can go. These are four different items that fall into that category. The first being enhanced use leases, power purchase agreements, utility energy service contracts, what we call UESCs which my colleague Julia Kelly will speak of after me. And we’ll also be [unint.] here today is energy savings performance contracts or ESPCs. Next slide.
So what is an ESPC? Essentially it is a contract that allows an agency to procure facility improvements with no upfront capital costs and without any special appropriation from Congress. So under these contracts an agency would engage with an ESCO, what we call an energy service company, and they would come out and perform a comprehensive energy audit of your facility or set of facilities to identify areas of improvement, places where energy and water could be saved. And then in consultation with the Federal Energy, that ESCO will in turn design a

411174 project that will meet the agency’s needs based off of those findings. And that ESCO will incur all costs to implement that project, purchase equipment, install it, and basically complete the project in its entirety. And then at the same time obtaining the financing on the private market for that project. The unique element within an ESPC is that the ESCO, or this energy service company, will guarantee that the improvements implemented will generate energy cost savings which are sufficient enough to pay for the project over the term of the contract. These, and after these contracts end, then of course all of the savings that are accruing from any of this, these improvements will go directly to the agency. And the contracts can be up to a term of 25 years as allowable by law. Next slide.
So this is just a quick graphic that discusses that concept. Before an ESPC contract there on your left-hand side, you would have your current utility bill and what we would call energy-related costs, and this could be operations and maintenance expenses that you have related to your energy systems, to keep things operating, obviously. During the ESPC contract from that set of measures or improvements that the ESCO was able to identify and implement, there would be a certain amount of savings and this could be direct energy and water savings or it can even apply to operation and maintenance cost savings. That would come off of your utility bill obviously, and then a large portion of that savings is then used to pay back that
ESCO over the term of the contract. Much like a home mortgage, you’re just paying down you know, year after year on the borrowed amount. And then a lot of times there is a little excess savings that may accrue to the agency. It’s typically very small, normally you, an agency would choose to arrange the contract such that the majority of the savings go toward paying down that, that loan if you will.
And then of course after the contract ends, all of the savings from that activity then accrue directly to the agency and you’re left with that lower utility bill. So in a sense ESPCs are considered budget neutral, and, well, I can jump to the next slide.
So what are some of the key points when we talk about a federal ESPC? One, we’ve already discussed that these projects are financed. The unique element of these contracts is that the savings have to be guaranteed by the
ESCO, that is a mandatory requirement. And then that guarantee comes out of energy and water cost savings or it

411174 could come out of energy and water-related cost savings. So again that’s where we’re speaking of things more like operation and maintenance tied to toes type of activities.
The savings must exceed the payments in each year, so it has to be balanced out over the term of the contract, it can’t be front end or back end loaded in the sense that each year you must demonstrate that there are savings at, are sufficient enough to make that payment to the ESCO. A unique element also of ESPC is something called measurement and verification. This is a mandatory requirement. And here we’re speaking of at multiple times throughout the project’s life cycle, the ESCO is required for instance at the very beginning to come in and physically take measurements of the systems you have in place prior to retrofits, so that they can capture live data, real time data on the consumption of that equipment. They are then required to also do that after retrofit, so if there is an actual calculation of before and after of consumption and then, you know, computation of savings. And this continues annually throughout the contract, where each year that ESCO typically will come out to the site and perform an annual review or audit of the measures that were put in place, and again there’s more measurement and verification activity to back up that guarantee that they’ve made.
Another element is that ESCOs under these contracts can assume, if the agency would desire, they can take responsibility for the OEM, the ONM on a number of these measures. So if you happen to have more complex systems implemented, the ESCO can take responsibility for operating those during the term of the contract. ESPCs apply only to federally owned facilities but that is a worldwide application. We actually have examples of ESPC projects being performed in Japan and Spain and other locations of the world, where federal agencies exist. And again the contract term cannot exceed 25 years. Go to the next slide.
Okay, maybe one we could have started with, but are these legal? Sometimes the idea of a federal agency or the federal government financing things through the private market sounds a little bit new to some, but yet in fact they are, ESPCs are authorized and encouraged by law and executive order. And I’ve listed a number of those laws and executive orders, not to go into any great detail, but there’s a lot of history there, and as far as precedents, the first federal ESPC projects were implemented back in the mid-90s. The current Department of Energy program that

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I support has been in operation now for 14 years and we have over 270 projects, and almost $2.5 billion of capital investment through that program itself. Go on to the next slide.
So I kept using the term ‘measures’ and we’re speaking of energy conservation measures, and the acronym ECMs in the
ESPC world. Under that DOE program that I just referenced, those measures are actually divided up into 18 different categories, literally from A to Z. Anything that can save energy or save water, or again save costs associated with those type of energy systems can be implemented. So it can be as simple as coming in and doing lighting and water retrofits, which we’ve heard about here today from some of your other colleagues, all the way through rather advanced systems: biomass boilers, renewable energy systems, even to the point of coming in and just recommissioning your facility, looking for areas of tuning of current equipment, if you can demonstrate that it shows savings, that can be part of this program. Go to the next slide.
So one of the phases of an ESPC project, and generally we’ll break this up into a five phase approach, the first being acquisition planning. This is a project for which you would assemble an internal team of both contracting representatives, technical representatives, you know, other facility staff, so there’s a host of activities to prepare for this type of contract. The second phase would be going out and engaging with the field of ESCOs that are qualified for these programs. There are various mechanisms for downselecting those ESCOs. You could get all the way down to one or more, and ask them to then come out and perform what would be called a preliminary assessment. And this would just be a more general site assessment. It would be them showing up physically to look at opportunities. Based on their findings you can then either downselect to a final
ESCO or continue, you know, if you want to continue with the project you would move on to phase three, which is called an investment grade audit. And here’s where they’re really getting down into the fine details and beginning that measurement and verification so that they can build up a formal proposal that has a guarantee tied to it. So this is a really in-depth audit and final proposal process on the ESCOs part. Assuming you award a task order to that
ESCO they would perform the construction of the various measures and go through a project acceptance phase. And then the fifth and final phase is the performance period,

411174 and this would be the years of the contract for which these measures perform to that guarantee, and for which you’d make those payments to that ESCO. Under the DOE program, the DOE-ESPC program, they actually have a series of federal financing specialists, which are available to you to help you engage in these type of programs and provide education, and get you started. And one of the unique elements of the DOE program is they actually supply a project facilitator. It’s more or less a handoff from the financing specialist will get you started, the project facilitator will pick up with that phase one and take you through pretty much the end of phase four and the first year of phase five. We’ll go to the next slide.
So I mentioned the Department of Energy contract. So what is that exactly? The Department of Energy ESPCs are indefinite delivery, indefinite quantity, or IDIQ contracts, that have been already awarded competitively to a series of 16 different ESCOs by DOE-FEMP, the Federal
Energy Management Program. And agencies will in turn negotiate and issue, award task orders for these energy projects off of these established DOE IDIQ contracts. Why was this set up this way? It’s really to streamline the entire contracting process and to make it as cost effective for use by various agencies. It is possible and are there other approaches, you could do a standalone or individual contract, in that sense you’re going out on your own, just utilizing a very basic authority to do ESPCs and establishing your own contract. It has been done in the course of history here over the past 15 years. Typically you see Department of Defense, some of the very large agencies going that approach. And general statement is, it does require quite a bit of effort to kind of build that contract up from the base. There are other vehicles besides the Department of Energy contract. The Army Corps of
Engineers actually operates its own ESPC program, utilizes almost the same series of ESCOs. And then there’s GSA, actually operates a schedule, Schedule 84, which has a vehicle for implementing ESPC work, and a new piece to that schedule is that ESPC Enable Program. So we’ll jump to the next slide and talk just a little of that, little bit of a detour from the standard ESPC program. So we’ll go next slide.
Sorry. Okay. ESPC Enable is a new funding pilot program, and it actually is a Department of Energy program that’s utilizing the GSA contract vehicle. So this is sort of a

411174 team approach here from two agencies to implement a new program in the ESPC space. And this is specifically tailored for federal facilities with buildings under
200,000 square feet, which has traditionally been an underserved market. So we call this our small site ESPC program. It can also be utilized where we’ll call it the traditional larger program, simply doesn’t lend itself perhaps to a particular facility, but in general it’s targeted to smaller site locations. And what it offers is a standardized and streamlined process to quickly award projects and realize savings utilizing this GSA Schedule
84. And where it differs from the other program is it’s got, right now the scope is targeting three select measures, and that is lighting, water, and basic HVAC controls. And that’s both from the needs of typical small facilities tend to fall into that basket of measures, and it also allows for a rather rapid implementation and quick turnaround of these types of projects. And just as a footnote here, a point of note actually, our very first
ENABLE pilot project is currently underway in Forest
Service Region 6, at Deschutes and Ochoco Natural Forest, and Jennifer Letz, your sustainability coordinator, is leading the charge on that activity. Jump to the next slide.
So why would an agency utilize ESPC? Essentially to fund energy improvements in the absence of appropriations. One other benefit is that you can bundle longer payback measures with those shorter. So things like we’ve heard today, you know, some of the lighting and controls and things like that with three year paybacks, they generate a lot of savings given the lower cost of those type of measures, and that savings can be added to things like HVAC equipment or more complex or longer payback measures to result in an overall net benefit to the project. You would have 16 ESCOs to choose from, utilizing the DOE program, and you would then be able to take advantage of that ESCO and FEMP experience. This is also striving to help you meet different mandates put forth by the government. And they would offer the guarantee of savings resulting from those measures.
Just a little background. So the Forest Service does have some history with ESPC. Currently under that DOE program, that DOE IDIQ contract I spoke of, there’s approximately five, or there are five projects with an approximate investment of $7, $8 million. Next slide.

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So if you’re interested in more information I’d suggest you could go to the FEMP-ESPC web site at the following link.
There you will find some further information as to how to contact the financing specialists that I spoke of. They are divided up by region of the country. And then if you were interested in getting a lot more detail there is a comprehensive three day workshop that FEMP puts on several times a year across the country. This is a free workshop to agencies and goes obviously in a lot more detail in terms of how to get started with these types of programs. And my contact information is there if anyone has any questions later on or wants to learn more about these different programs please feel free to give me a call or email. Okay, that’s all I had.
FV: Thanks so much, Bob. And we’ll be taking questions for Bob at the end, after we hear from our last speaker, Julia
Kelly. So I’d like to introduce Julia Kelly, she’s a
[unint.] Utility team member, also at the Oak Ridge
National Lab, and she’ll be talking about utility energy service contracts. So whenever you’re ready, Julia.
JK: Thank you very much. Can everyone hear me?
FV: Yes, you sound clear.
JK: Great. This is Julia Kelly from Oak Ridge National
Laboratory where I work in support of the Department of
Energy’s Federal Energy Management Program, and I’m kind of a counterpart to Bob Slattery because he works in support of the ESPC program and I work in support of the UESC program, Utility Energy Service Contracts, so that’s what
I’m going to be talking with you about today. Next slide please. Taking a look at what is a UESC, this is another alternative, it’s an alternative to ESPC, that you have available to you. In this case, you are placing a contract with your serving utility company to work with them on comprehensive energy and water efficiency projects at your sites. And under this scenario, the utility company can provide project financing if you need that, they can front the capital costs. It’s not mandatory, so if you have appropriations dollars and want to work with your utility company, you could do a UESC using your own in-house dollars, but of course that’s becoming increasingly difficult as agencies’ budgets shrink, so utilities are an option for providing the financing for these projects. They

411174 can work with you to assess the opportunities for energy efficiency improvements at your site. And then they take charge and get the equipment purchased and installed at your site to your specifications. And then the agency will then pay the utility company back over time, over the length of the contract term, until the utility is reimbursed for the equipment and their services. And the agency is able to pay the utility company back over time because they have energy cost savings from the installation of that new energy efficient equipment. So this is really a type of partnership between a utility company and the federal agency. And it has to be the utility company that is serving your site. So it’s the franchised utility company where you’re one of, in their franchised service territory and they have some kind of meters for gas or electricity usually at your site, and those are the entities you can partner with on these types of arrangements. Next slide please.
This is similar to a slide that Bob showed earlier, where you have a financing arrangement. In this case, if you have a financing arrangement with your utility company under a
UESC, before you do the project you’re paying the full cost of your utility bill as shown in the bar chart on the left side. And then once you have the new equipment, energy efficient equipment installed at your site with the help of your utility company, you have an energy cost savings and you’re using that to pay the utility company back over the contract term for their services and the equipment that they installed. And then at the end of the contract term you’ve finished paying the utility company back so you don’t have that green bar in the middle where you have the cost of reimbursing them, and you’re still enjoying the benefit of having energy cost savings at your site from the new energy efficient equipment. Next slide.
So another way to look at what UESCs are all about is that they’re kind of a type of program where utilities offer incentives to their commercial customers or their federal agency customers, and the offerings that utilities bring to bear to help you can vary somewhat by utility, but with a
UESC you often see technical services and financial services. The technical services, many of them look like the steps involved in getting a UESC accomplished, which we’ll look at a little bit more closely later. But there’s going to be some type of audit of your facilities and feasibility studies done, and then an engineering and

411174 design package, and then the construction and installation of the new equipment. Other technical services could include performance assurance. This is short of a performance guarantee - as Bob said, performance guarantees are mandatory with ESPCs, but one of the key differences between these programs is that with UESCs performance guarantees are not mandatory and in fact you rarely see them. You can with some utilities negotiate for a performance guarantee, but you don’t often see that.
Instead you see some other form of performance assurance or way of verifying that you’re getting the energy savings that you want to achieve with your project. And I’ll talk a little bit more about that later, because FEMP does have some guidance on doing performance assurance with UESCs.
And then you might see, very likely, some training on the new equipment for your operations and maintenance staff as part of the technical services offered under the UESC. And you might see some operations and maintenance planning which is a great idea to help insure that you continue to achieve the energy savings you want. And project management to, overall project management of course is part of a UESC.
On the financial side we’ve talked a little bit about the fact that UESCs, with UESCs utilities can offer third party financing to bring to the table. They can also offer specialized types of rebates and incentives that can make it more appealing for you to try out new and emerging technologies at your site. And we, FEMP does have a nice tool on their web site to help you identify what are the rebates and incentives that are offered by your serving utility company in your area. Now, wondering again, why are these legal? You know, Bob cited some reasons why ESPCs are legal. UESCs’ authority goes back to 42 US Code 8256, or the Energy Policy Act of 1992. In that Act and in that subsequent code, that is where federal agencies are authorized to take advantage of utility incentives. And that is really the authorizing legislation for utility energy service contracts. Next slide.
Some general considerations you should think about when deciding whether or not a UESC is right for you. One is that UESC can actually be any size. You’ve heard about perhaps that UESCs are for smaller sized projects. Actually it’s also true that they can be done with much larger projects, so they can kind of be scaled to meet your needs.
A UESC can include energy efficiency technologies, water efficiency and renewable energy measures. It can include

411174 commissioning as a service, you don’t actually see that except for the startup commissioning is often included as a service, but ongoing commissioning programs, you don’t see that as frequently but it can be included if that’s of interest to you. One important consideration is that UESCs may not be available to all federal facilities, and that’s simply because not all utility companies offer UESCs. It’s up to the individual utility company whether they want to offer this service, and if they don’t offer it in their territory then you’re out of luck and you need to turn to some other options. Another consideration is that a utility might be new to this type of contracting. We are seeing some additional utilities come on board and offer this service, but that shouldn’t cause you to hesitate to do business with them on a UESC. They will oftentimes get a subcontracting team put together that has more experience with these types of arrangements if they are new to this type of contracting, and that’s perfectly okay to get the job done for you.
With UESCs there’s not really a set contract process or set contract documents, although FEMP does have a template that you can use to help you get started. But these contracts can be flexible to meet your needs. You also want to think about your agency’s relationship with your serving utility company. Do you have a representative with that utility company and a positive relationship with them? Contract term is also consideration with UESCs. Bob mentioned that
ESPCs cannot exceed 25 years. With UESCs that term limit depends on the agency. For the Forest Service UESCs cannot exceed ten years. Next slide.
And here again is the UESC authorizing legislation from the
Energy Policy Act of 1992. It allows you to accept utilities’ financial incentives, goods and services and really encourages federal agencies to enter into these types of negotiations with utilities. Next slide please.
So what are the ways that you can actually go about placing a utility energy service contract? One of the most common ways is using the GSA area-wide contract as your kind of umbrella vehicle. The General Services Administration has a broad authority under FAR part 41 to enter into agreements with utility companies across the country, and they have what they call area-wide contracts in place with many franchised utility companies. And under those agreements, once a utility has an area-wide contract in place with GSA,

411174 that enables them to offer, to place task orders for energy management services, with any agency in their service territory. So a UESC would simply be a type of energy management service, and the agency and the utility company under the umbrella of that area-wide agreement that GSA placed would go ahead and place task orders for their UESC projects, the different phases of the projects. They night also if they wanted to, put down an optional master agreement. That would be useful if you planned to do a whole series of multiple projects. You could have a master agreement with general terms and conditions, and your task orders, under that. But that master agreement is quite optional and you can just place individual task orders for your projects under the auspices of that area-wide contract.
If you’re not sure if your serving utility company has an area-wide contract in GSA, you can call them to find out.
You can call me and I’ll look it up, or there’s a place on the GSA web site I can talk you to, that gives a complete list of those. If they don’t have an area-wide contract in place, you can still do a UESC with them. You would just need to do a separate or site-specific contract outside the scope of that area-wide. Next slide please.
There’s a great variety of potential energy conservation measures available that you can do with a UESC. This listing is not comprehensive but I just wanted to give you the idea that hopefully you’ll consider doing a comprehensive project and consider a lot of different kinds of energy conservation measures and bundle them together in one project. Next slide. Let’s take a quick look with this slide at what the UESC process looks like from the beginning through the end. We have it on this diagram divided into three phases. A project preparation phase, a project development to award phase, and then a construction and post-construction phase. And that project preparation phase would be sort of pulling your team together, identifying your site needs, identifying how you’re going to fund the project through third party financing or etc.
Getting the team trained on what a UESC is all about and then launching that initial contract document with the utility company that gets them started in that project development to award phase, where they work with you on identifying energy conservation measures appropriate for your site, and then issue the proposal to you and then you work with them on final contract documents that lead to the

411174 construction and post-construction phase, where they’re going on to your site and actually installing the equipment, making it operational and then you move on from that to the post construction phase where if you have financed your project, you’re paying the utility company back over time, you’re enjoying the benefits of the new energy efficient equipment at your site. And you can see that on this slide I’ve listed some time ranges, like three to seven months for project preparation, three to ten months project development to award. Let me tell you, don’t hold those to me because they vary considerably from project to project. And just anything can come along to make something go faster or slower in your specific project example. Next slide please.
This is the slide I wanted, I mentioned to you earlier about performance assurance planning for UESCs. FEMP has a best practices guide about performance assurance for UESCs and how to make sure that you’re getting the energy savings that you want from your project, and that guide is available for a free download from the web link at the bottom of the screen. But it includes a lot more information of course than what’s on this slide, but some of the key elements of performance assurance planning are making sure you established a baseline pre-installation, having a startup performance verification period, performance verification at the end of the warranty period, operations and maintenance training for your staff, provision for continued training throughout the contract period, period inspections and verification of appropriate
O&M performance for the different types of equipment, and then some plan that’s laid out in advance for performance discrepancy resolution. If you’ve got a piece of equipment that, hey, for some reason I don’t see that I’m getting the energy savings from this equipment that I anticipated, you have a plan worked out on how you resolve that in advance with the utility company, should it arise. Next slide please.
So if you would like more information about utility energy service contracts, please visit the FEMP UESC web site.
You’ll find the enabling, an enabling documents book there with lots of information about, it’s kind of our main tool for UESC contracts. It’s got the template for the contract language, it’s got legal opinions, agency guidance, etc. on
UESCs. And on the web site itself there’s all kinds of types of contract information, laws and regulations, how to

411174 get the best value from your project, case studies and a lot more. Next slide.
And here just putting in one more plug for that UESC enabling documents book, it also has information about sole source justification, because since you can only do a UESC with the serving utility for your site, you can oftentimes issue these contracts on a sole source or limited source basis, and this tells you some additional information about how to do that. Next slide.
Okay, and I wanted to also say that FEMP likes to collect data on utility energy service contracts. You can do a UESC without any permission from FEMP. We just are here to help support your efforts, but we would sure appreciate it if you’d share information if you’re doing a UESC with us so we can just track the use of that contract vehicle and understand the trends in its use and gauge its success. And we do keep that information close hold, we don’t share information about individual projects. Thank you. Next slide.
And this is the final slide with my contact information, if you have follow up questions after the webinar.
FV: Thank you so much, Julia. You and Bob provided some great information. So we have some time for questions, if you guys have any questions for Julia, Bob or any of the previous speakers. You can press *1 on your phone and it will open up your line. Are any questions coming through,
Emily?
MOD: No questions on the line.
FV: Okay.
MOD: We do have one question now.
SS: Hi, this is [Satvil], since I heard there was no answer I thought I’d take the opportunity to go ask a question or two. First of all great presentation. I’m not on the webinar, I’m just on the phone, and Bob and Kelly, great job, Julia. Because I could get enough information just by phone, not even looking at the web, so. Couple of questions that I have, one is for Bob. When was this Schedule 84
ENABLE pilot started?

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BS: They actually, the, yeah, the Region 6 project, the very beginning step, we’ll call it a kickoff meeting, was back in March. So they’ve been working on this for, yeah, I guess now five or six months I would say. Yeah, they’re actually in the process this week of, the ESCO is out on site performing that investment grade audit that I spoke of, so.
SS: Yeah, the reason I ask is we are in the middle of, we already have a preliminary assessment for Region 8 research here on the ESPC, we already have ESCO selected, so it seems like that’s the reason we probably did not take that route. The second is on UESC. I heard one comment that it is for any size facility, and some folks think that it is smaller facilities. Even in the smaller range, is there too small of a size probably utilities may not get interested,
Julia?
JK: It really depends on the serving utility for that site, because a lot of times these utility companies don’t particularly offer UESCs because they’re trying to make a profit. They can do ones that are smaller because they just want to have a positive relationship with the federal agencies in their service territory. And so it’s worthwhile to check with your utility if you think you have a smaller size project, check with them and see if that’s something they would be willing to take on. I think a lot of times people use as a rule of thumb, and Bob can correct me if
I’m wrong about this, that in ESPC, an ESCO of course is a for-profit company, and so they have to have almost the economies of scale of a larger project to make it work for them financially. So a lot of times they won’t look at a project that’s like less than a million dollars. And Bob, you know, correct me if that rule of thumb is out of whack now.
BS: Yeah, no that’s right, and when you [unint.] 270 projects in that other portfolio, and that, those, the average of those projects is up in the $10 to $15 million range. And it does, right about when you get to a million dollars, that’s sort of the bottom end for that, but that large traditional IDIQ contract. But so yeah, I think, you know, typically that that’s typically where a UESC has been filling in that space, in the sub-one million. And now that was sort of the impetus behind the new ENABLE ESPC was, how do we bring ESPC to that, that smaller project realm and provided yet another tool.

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JK: That’s right. So now you’ve got some options available to you if you have a smaller sized project, you can look at doing a UESC with your utility company or you can explore the new ENABLE program option as well.
SS: Thank you.
FV: Thanks for your question. And it looks like we’re coming up on 11:30 but just one more call. Are there any other questions on the line?
MOD: No other questions on the line.
FV: All right, well, thank you very much to all of our speakers today.