A new national appetite for energy efficiency and renewable energy—especially within federal government buildings—means Johnson Controls  is well-positioned to expand its leadership in the marketplace.
The company was recently awarded two federal contracts that could result in more than $5 billion over the next five years according to Iain Campbell, vice president and general manager – North America, Johnson Controls. Campbell testified this week in Washington, D.C., at the House Subcommittee on Energy and the Environment hearing, “Energy Efficiency: Complementary Policies for Climate Legislation.”
“These contracts, along with the recently passed American Recovery and Reinvestment Act, increase the nation’s focus and investment in energy efficiency, especially in federal, state and local government facilities,” said Campbell, “Energy efficiency should be the first priority in addressing climate change as a way of containing the cost of climate protection policies and creating new jobs.”
The contracts are Indefinite Delivery Indefinite Quantity (IDIQ) Energy Savings Performance Contracts (ESPCs) issued by the U.S. Department of Energy (DOE) and the U.S. Army Corps of Engineers. IDIQ contracts provide a framework for agencies to work with prequalified contractors. ESPCs help federal government agencies meet energy efficiency, water conservation, and renewable energy goals by guaranteeing that project savings, through reduced utility and operational costs, will equal or exceed all costs associated with implementing the upgrades.
“We have been delivering performance contracting for over 20 years, with over 1,900 projects executed and $4 billion in energy performance guarantees,” continued Campbell. “This effort cuts federal energy costs, reduces greenhouse gas emissions and upgrades infrastructure, while at the same time creating ‘green-collar’ jobs to design, install and maintain energy efficiency and renewable energy strategies.”
The new DOE contract prequalifies Johnson Controls to develop projects at federal buildings, nationally and internationally, up to the $5 billion contract maximum. Federal agencies can begin using the DOE ESPC contract any time in the next five years. Individual projects, or task orders, can last for up to 25 years. The total $80 billion IDIQ contract maximum is shared with 15 other companies.
The Army Corps contract is limited to government installations or facilities in the United States, its territories and possessions. The contracts have a five-year base ordering period and one optional five-year ordering period with a possible payback period of up to 25 years for each task order. The IDIQ total capacity of these contracts is $900 million, which is shared with 15 other companies and is expected to be increased substantially in the coming months.
Johnson Controls recently signed an $89 million ESPC contract with Oak Ridge National Laboratory in Oak Ridge, Tenn., to reduce energy use by 850 million BTUs per year, reduce water consumption by 170 million gallons a year and to include a large biomass gasification system to the campus. Other examples of Johnson Controls involvement in ESPC projects include:
•Energy Efficiency - Veterans Affairs Medical Center, California: Saving almost 3 million kilowatt-hours of electricity, more than 70,000 therms of natural gas, and more than $500,000 annually through upgrades in lighting, heating and operational equipment.
• Renewable Energy - Twentynine Palms Marine Base, California: Saving $7 million per year in energy costs by installing eight acres of solar panels and other technologies.
• Water Efficiency - Denver Federal Center, Colorado: Irrigation control system and low-flow faucets and toilets provide water savings for the project totaling nearly 11 million gallons per year.
“These projects demonstrate the power of using energy and water savings to fund renewable projects,” explains Campbell. “Johnson Controls has a center of excellence with a dedicated team of professionals working with our global network of local offices providing renewable energy support, wherever practical, as well as integrating the operations and maintenance necessary to make sure renewable energy systems work to their optimum levels.”
The federal government is the largest single user of energy in the United States. In addition to previous Executive Orders requiring federal buildings to reduce energy use, the American Recovery and Reinvestment Act designates at least $18 billion for energy efficiency in federal buildings. Campbell says federal agencies will benefit by using the IDIQ contracts to pay for the improvements and from the high level of accountability provided by strict standards for measurement and verification of both energy and dollar savings, thus maximizing the taxpayer contribution and reducing the government’s risk.
About Johnson Controls
Johnson Controls is the global leader that brings ingenuity to the places where people live, work and travel. By integrating technologies, products and services, we create smart environments that redefine the relationships between people and their surroundings. Our team of 140,000 employees creates a more comfortable, safe and sustainable world through our products and services for more than 200 million vehicles, 12 million homes and one million commercial buildings. Our commitment to sustainability drives our environmental stewardship, good corporate citizenship in our workplaces and communities, and the products and services we provide to customers. For additional information, click here .