Federal energy-savings contracts get second life

Federal energy-savings contracts get second life

WASHINGTON, Oct 11, 2004 AFX-Asia

A popular Energy Department program that encourages government buildings to undertake energy-efficiency upgrades is about to get a second life and unlock as much as $300 million in federal contracts.

The Energy Savings Performance Contracts program allows government facilities to sign contracts for energy-efficiency building improvements, intended to reduce annual energy costs without paying any up-front costs.

Legislation reauthorizing the now-defunct program is headed to the president's desk for his signature.

The program expired in October 2003, placing roughly $300 million in energy-efficiency projects in limbo, according to the Energy Department.

The single biggest program participant is the Defense Department -- specifically military bases, in terms of the number of contracts they have entered into and the dollar value of the deals.

The types of improvements typically contracted for include new windows; automated heating and cooling controls; and updated heating, ventilation and air-conditioning equipment. These improvements are credited with reducing electricity demand and cutting emissions.

The improvements are financed and installed by energy service companies at no initial cost to the government. The contractor is then paid a percentage of the dollars saved from the upgrades each month for a set number of years. The payments are guaranteed not to exceed the energy bill savings.

Sen. Jim Inhofe, R-Okla., a champion of the program, successfully tucked the provision reauthorizing the program for an additional year into the $447.2 billion National Defense Authorization conference report.

The reauthorization will fund the program through fiscal-year 2005 and be retroactive to Oct. 1, 2003.

Energy service firms participating in the program include Bechtel National, Chevron Energy Solutions , Consolidated Energy Solutions, First Energy Solutions , FPL Energy Services , Honeywell , Johnson Controls, Progress Energy Solutions , Reliant Energy Solutions and TECO Energy Services .

This story was supplied by CBSMarketWatch. For further information see www.cbsmarketwatch.com .

News Provided By