USMC Installations Energy Strategy
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energy systems or the improvement and
modernization of existing systems.
EIP – ENERGY INVESTMENT PROGRAM
Managed by MCICOM and provides O&M
funds to construct, repair, and replace utilities
systems and facilities. The EIP program is
run by Headquarters Marine Corps to provide
funding for energy reduction projects.
EROI – ENERGY RETURN ON
INVESTMENT TOOL
MCICOM GF-1 MS Excel Energy Project
Prioritization Model, with full eROI
implementation expected to roll out for
USMC regions and installations in FY 2013.
ESPC – ENERGY SAVINGS PERFOR-
MANCE CONTRACT
ESPCs enable federal agencies to implement
energy projects with no upfront capital
costs. An ESPC is a contract between a
consumer and an energy service company
(ESCO) for the purpose of achieving
energy cost savings. The ESCO conducts a
comprehensive energy audit for the federal
facility and identifies improvements to save
energy, and guarantees the improvements
will generate energy cost savings sufficient
to pay for the project over the term of
the contract. After the contract ends, all
additional cost savings accrue to the agency.
http://www1.eere.energy.gov/femp/
financing/espcs.html
EUL – ENHANCED USE LEASE
A method for funding construction or
renovations on federal property by allowing
a private developer to lease underutilized
property, in exchange for cash or in-kind
consideration. This authority enables
the Navy to maximize the utility and
value of installation real property and
provide additional tools for managing the
installation’s real estate assets to achieve
business efficiencies.
https://portal.navfac.navy.mil/portal/page/
portal/navfac/navfac_ww_pp/navfac_hq_
pp/navfac_bdd_pp/navyeul
FSRM – FACILITIES SUSTAINMENT, RES-
TORATION, AND MODERNIZATION
FSRM is an Operation and Maintenance,
Marine Corps (OMMC) appropriation that
is centrally managed by HQMC. FSRM
funds are generated within DoD based
on a facilities model that predicts annual
requirements to ensure that facilities are
sustained at appropriate levels over their
respective life cycles. After being allocated
to the installations, a portion of the funding is
retained at HQMC for funding of larger FSRM
projects. The installations are authorized to
use their FSRM funding for locally approved
projects. HQMC calls for the submission of
larger FSRM projects, also known as M2/R2
projects, two years in advance of the funding
becoming available. Installation commanders
will normally go out with a “call for work” to
their tenants and subordinate units, and once
received by the installation, those projects
are separated into larger (M2/R2) and
smaller (M1/R1) projects.
ITC – INVESTMENT TAX CREDIT
A U.S. federal corporate tax credit
that provides a tax break to applicable
commercial, industrial, utility, and agricultural
sectors. Eligible technologies for the ITC are
solar water heat, solar space heat, solar
thermal electric, solar thermal process
heat, photovoltaics, wind, biomass,
geothermal electric, fuel cells, geothermal
heat pumps, cogeneration, solar hybrid
lighting, microturbines, and geothermal
direct-use. The tax credit varies depending
on the technology.
http://www.dsireusa.org/incentives/
incentive.cfm?Incentive_Code=US02F
LIFECYCLE COST
The upfront cost of a project/ improvement
plus the total predicted maintenance and
energy costs for the entire expected lifetime
of the project/improvement.
MILCON – MILITARY CONSTRUCTION
MILCON involves the construction of facilities
that cost in excess of $750K. MILCON
includes any construction, development,
conversion, or extension of any kind carried
out with respect to a military installation,
for all types of buildings, roads, airfield
pavements, and utility systems. MILCON
appropriations are separate from all other
appropriations approved by Congress
in that once funding is approved by
Congress, construction must begin within
three years and be completed within five
years. A MILCON project includes all
construction work necessary to produce
a complete and usable facility or complete
and usable improvement to an existing
facility. Additionally, instances may occur
when maintenance and repair work will be
accomplished as MILCON, either because
it is part of a large project or a decision has
been made to use MILCON instead of
O&M funds.
NPV - NET PRESENT VALUE
A method used to evaluate the potential
profitability of an investment or project. The
difference between the present value of
cash inflows and the present value of cash
outflows. NPV is used in capital budgeting
to analyze the profitability of an investment
or project. NPV analysis is sensitive to the
reliability of future cash inflows that an
investment or project will yield.
PAYBACK
The number of years it takes for the energy
savings from an improvement to equal the
upfront cost.
Simple Payback –
Total Cost ÷ Anticipated Savings/Year =
Payback Period (years)
Modified Payback –
incorporates an estimate of increasing
energy prices, discount rates, and other
factors to determine a more realistic value of
the savings
PPA – POWER PURCHASE AGREEMENT
On-site renewable power purchase
agreements (PPAs) allow federal agencies to
fund on-site renewable energy projects with
no up-front capital costs incurred.
With a PPA, a developer installs a renewable
energy system on agency property under an
agreement that the agency will purchase the
power generated by the system. The agency
pays for the system through these power
payments over the life of the contract. After
installation, the developer owns, operates,
APPENDIX A: Useful Information for Energy Leaders — continued