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Audit Report: IG-0822

September 10, 2009

Management of Energy Savings Performance Contract Delivery Orders at the Department of Energy

The American Recovery and Reinvestment Act established a series of energy-related goals, one of which was to make Federal facilities more energy efficient. The use of the Energy Savings Performance Contract (ESPC) concept, a mechanism for financing large scale energy improvements in Federal facilities, is likely to be an integral part of this effort. Under this arrangement, a private-sector energy services company (ESCO) develops and installs energy improvements in exchange for a share of future savings. Typical improvements include: energy efficient lighting; building management control systems; and, heating, ventilating, and air-conditioning system improvements. The Federal agency repays the ESCO for its capital investment over a period of years from the savings generated. Payments over the life of the ESPC, some extending for as long as 25 years, are based on projected energy use and estimated energy savings agreed to by the Government.

Topic: Management and Administration