Greg Prudhomme, chief of the compliance management division at Fort Polk, La., is known around base as "the heat pump guy."
For almost a decade, Prudhomme's mission was to make the 4,000 houses on base more comfortable and more efficient by replacing their air-to-air heat pumps with geothermal heat pumps, which are 35 percent to 40 percent more efficient. The old air-to-air pumps tended to break down a lot, keeping the repairpeople busy and adding to the cost of air conditioning and heating for the families living on base. Installing geothermal heat pumps could save money as well as keep living quarters more comfortable.
The initial cost of replacing all 4,000 heat pumps was estimated to be $20 million. Geothermal heat pumps are not in widespread use, so a $20 million investment from Uncle Sam seemed unlikely. Prudhomme found a creative financing arrangement at the Army Corps of Engineers Engineering and Support Center in Huntsville, Ala.
Under a contract arranged by the Corps of Engineers, Fort Polk hired Co-Energy Group of Las Vegas, Nev., to install the geothermal pumps and maintain them for 20 years. Co-Energy Group made the initial $20 million investment and will maintain the pumps for the next 20 years. In return, Co-Energy Group will be paid 87 percent of the energy savings over that 20-year period. Fort Polk will keep the other 13 percent. The geothermal conversion is expected to save the base $2 million a year, so Co-Energy Group will make back its investment plus $14 million and Fort Polk will keep $5 million of the savings.
Fort Polk's conversion was the largest geothermal heat pump project ever attempted.
"Did I get nervous? You bet I did," said Prudhomme. "But the new systems are working wonderfully."
The contracting vehicle Prudhomme used for the geothermal project is an ideal tool for agencies trying to reduce their energy costs but who don't have the funds to make the large initial investments energy-saving projects often require, said Tanya Sadler, energy savings performance contracts (ESPC) program manager at the Energy Department. The contracts require private energy companies to cover the costs of installing and maintaining energy-saving equipment. The companies are then paid out of the money the government saves over a set amount of time, generally up to 20 years.
The Energy Department is awarding super energy savings performance contracts to companies nationwide. Federal agencies will be able to use the department's contracts to partner with private energy companies, Sadler said.
Because agencies are expected to reduce their energy consumption by 30 percent by 2005 compared to 1985 energy use, agencies should start getting energy savings projects under way soon, Sadler said.
"Every day you wait you're losing out on savings," she said.
The Army Corps of Engineers Huntsville center, which managed the contract for Fort Polk, has also set up an energy savings performance contract that agencies can use.
Bob Starling, the energy program manager at the center, said performance contracts focus companies on helping agencies save energy and money.
"If there are no savings, the contractor gets no payment," Starling said.
Agencies can save more money if they can get funding to cover projects' up-front costs. However, often they can't get appropriated funds but still must find ways to reduce energy costs. Energy savings performance contracts are one way to do that.
"It's a good way to leverage scarce dollars," Starling said.
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