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President Obama pushes for $2 billion more in ESPCs

May. 9, 2014 - 06:00AM   |  
By ANDY MEDICI   |   Comments
The Austin Federal Complex in Texas is getting solar panels on its roof and other efficiency upgrades under a General Services Administration energy savings performance contract awarded to Schneider Electric.
The Austin Federal Complex in Texas is getting solar panels on its roof and other efficiency upgrades under a General Services Administration energy savings performance contract awarded to Schneider Electric. (Stacy Riggs/Schneider Electric)

President Obama is doubling down on renewable energy by requiring agencies to enter into an additional $2 billion in special contracts to spur its development at federal facilities.

This is on top of an earlier $2 billion goal from 2011 to 2013 to enter into energy savings performance contracts (ESPCs) – under which a vendor pays the upfront costs of such retrofits in exchange for payments from energy cost savings over time. The contractor guarantees the energy savings for the life of the contract or has to pay the balance.

Agencies have until the end of fiscal 2016 to enter into the additional $2 billion in ESPCs, according to an announcement.

The General Services Administration will also work to identify opportunities for smaller solar projects across Washington D.C. and northern California that can be aggregated into one large contract, according to the announcement.

“The effort seeks to bring together multiple Federal agencies to capitalize on economies of scale with the goal of lower electricity bills for individual sites, and increased renewable energy production, while reducing internal agency overhead costs by sharing procurement and project management resources.,” according to the announcement.

Jeff Sherman, the director of federal energy and sustainability services at energy contractor Schneider Electric, said 60 percent of energy efficiency improvements over the last two years have come from ESPCs.

“Today's announcement by President Obama is an important step in continuing this momentum to achieve federal energy efficiency that will result in cost savings, increased sustainability and a more secure energy future for the U.S.” Sherman said.

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