Saving energy to lower utilities costs has been an effective facilities management strategy for decades, and has clear benefits for the environment as well. Rising energy prices and economic difficulties are inspiring owners and operators to look at alternatives when integrating Energy Conservation Measures (ECM) into capital investment plans.

Energy Savings Performance Contracts (ESPC) inject alternative financing mechanisms into an otherwise more traditional asset management function of capital improvement planning and implementation. Until recently, ESPCs were used sporadically in the Federal market. However, a recent Presidential memorandum has sparked a flurry of activity by government agencies.

In December of 2011, President Obama released a memorandum that requires government agencies to utilize a Department of Energy (DOE) contract vehicle to engage the private sector for two billion dollars in ESPC by January 2014. This mandate is being coordinated through the DOE and the Office of Management and Budget (OMB), which will provide technical assistance and oversight for government-wide programs.

The table below indicates the anticipated requirements of each phase: