Wednesday, April 6, 2011

Open Kimonos and Bureaucratic Titans: Making Army Net Zero Work

In the spirit of the “open kimono” the Army opened up last week to reveal…..another kimono. On 5 April the Assistant Secretary of the Army for Installations, Energy and Environment, Ms. Katherine Hammack and the Deputy Assistant Secretary of the Army for Energy and Partnership held a bloggers roundtable. The purpose of the event was to discuss the announcement of the installations selected in the Net Zero Energy, Water and Waste competition. Plan is for five in each of the three categories. The goal is to accomplish this by 2020. Ms. Hammack stated that she would announce the winners on 19 April at the AUSA ILW Army Installations Symposium and Exposition. The news here is how this program is to be funded.Existing Authorities!

Ok, no real shocker there. This is recognition of the need to accomplish the task with dwindling resources. The challenge will be to streamline the processes to be able to get to the Net Zero goals by 2020. From the vision statement, the Army said:
The Army is leveraging available authorities for private sector investment, including using power purchase agreements (PPA), enhanced-use leases (EUL), energy savings performance contracts (ESPC), and utilities energy service contracts (UESCs) as tools to achieve these objectives.
Third party financing has many obstacles. PPAs require cooperation of the utilities and electricity produced at competitive rates. EULs require a PPA to work and PPA may not be economic. ESPCs require measurement and verification performed by the same vendor who performed the work, a bit off putting for some commanders. UESCs require no M&V at all. All physical work done on federal property requires National Environmental Policy Act (NEPA) work, which if left to the contractor, increases the cost of the project (if the government picks up work it can be done cheaper and faster). An example of the contractor having to bite that bullet is the Fort Irwin effort. In that case, an EUL is used, coupled with a PPA. According to a U.S. Army Corps of Engineers' paper, this $2 billion/13 year 500MW solar project, begun in December 2008 is now in the second year of what is hoped to be a two year NEPA permitting process.

Granted that this is a HUGE project, it still takes four to five years to get to the point that a shovel goes into the ground. That will be true of any size project. A current UESC with which I am very familiar, has been ongoing for two years without dirt moving. Of course we are looking for agility in a partnership between utilities and the government, two of the largest bureaucracies on the planet. ESPCs are already awarded contracts to sixteen large companies and small business nips at their heels to get noticed and for the opportunity for scraps of work. ESPCs and UESCs are Department of Energy contracts and streamlining them must come from DOE. According to the ASA’s office, they are working very closely with DOE on this. Seems as if Mr. Kidd still has friends at FEMP!

The Army has consolidated operational and installation energy policy under Ms. Hammack. Unity of command is always a good idea. The challenge comes in the execution. Policy charts the course, but the hand on the tiller must be an implementer. For installation energy, that is clearly LTG Lynch, CG of IMCOM…. or LTG Van Antwerp, USACOE if it is new construction.

On the operational side, the Army has no central focus. It must be divided up among the various acquisition entities that move at their own institutional pace. Recently the ASD, OEPP touted the deployment of the Advanced Medium Mobile Power Sources (AMMPS) as a great energy savings tool, which it will be. But, the AMMPS has been in PM, Mobile Electric Power’s product development line over a decade. It is difficult to find an energy innovation deployed by the Army since Marine General Zilmer asked for some help in 2006. Unless there is an organization with a uniformed lead, execution will continue to seriously lag policy. Dan Nolan

Undefined Acronyms:
AUSA: Association of the United States Army
ILW: Institute of Land Warfare
PM: Program Manager
IMCOM: Installation Management Command
FEMP: Federal Energy Management Program


Jeremy said...

I've been following your updates for the past few months and want to thank you for your work.

As a civilian, though, I can find it sometimes daunting to wade through all the abbreviations you use. Perhaps something of a glossary could be useful?


Dan Nolan said...

Great comment. Have added a section at the end for previously undefined acronyms. Additionally, added a correction to the definition of NEPA. Should be the National Environmental Policy (not Protection) Act.

Keep 'em coming. Dan

lach.litwer said...


Great blog, I enjoy reading your insights and analysis. One point of clarification, I don't believe it's correct that ESPCs require the M&V to be done by the same company which did the work. In fact, my understanding is that M&V is supposed to be done independently (which makes way more sense).