2015 NASEO Southeast Regional Meeting May 20th, 2015

Dave Blalock, Regional Counsel

(404) 562-5016

david.c.blalock2.civ@mail.mil

UNCLASSIFIED

U.S. Army Regional Environmental & Energy Office-South (REEO-S)

MISSION: To fulfill responsibilities as DoD Regional Environmental Coordinators (REC), engage with state legislators, Federal and state regulators, and nongovernmental organizations, on behalf of the DoD & the Army to enable the conduct of mission and training activities on our installations required to build readiness to execute the Army’s global mission. Conduct strategic communications for the purpose of promoting greater understanding of the Army’s commitment to environmentally sustainable practices & energy security.

AUTHORITY: DOD Instruction 4715.02, 28

REEO Mission Statement

REEO Functions

Service Secretariats,

Services Steering

Committees,

Commands,

OCLL REEOs

Military

Installations

DOD / ARMY

GOVERNMENT

RELATIONS

FEDERAL

STATE

LOCAL

Monitor State Legislation

Monitor Regulations (State and Federal)

Outreach to State Governments and

Stakeholders (includes partnering)

Track Emerging Trends

Legislative/Regulatory Process

Designated Lead Agent for the DoD REC

program

(inter-service & interagency coordination)

REEO NorthDr. Jim Hartman

Aberdeen PG, MD

REEO WestMr. Mark Mahoney

Denver, CO

REEO SouthMs. Susan Gibson

Atlanta, GA

REEO CentralMr. Stanley

Rasmussen (Acting)

Ft. Leavenworth, KS

DoD Regional Environmental Coordinator (REC) AORs

REEO Mission: Protect and advance Army (and DoD) military readiness by

engaging State governments, regional Federal agencies and non-governmental

organizations to promote sustainable installation operations.

Air Force Leads as DoD REC

Army Leads as DoD REC

Navy Leads as DoD REC

Office of Energy Initiatives

UNCLASSIFIED

The Office of Energy Initiatives (OEI) was

established by the Secretary of the Army with

the mission to:

• Serve as the central management office

for the development, implementation and

oversight of all privately financed, large-

scale renewable and alternative energy

projects

• Be the proponent for projects equal to or

greater than 10 MW and work closely

with installations to support 1-10 MW

opportunities

• Use existing DOD land-use and third-

party financing authorities to develop

solar, wind, biomass and geothermal

projects

High-voltage power lines with grid connection to Redstone Arsenal

devastated by tornado on April 26, 2011. (TVA)

Enhancing Energy Security

UNCLASSIFIED

• Army installations are dependent on a

fragile electrical grid subject to

extended outages and decreased

reliability caused by:

− Natural disasters

− National emergencies

• The OEI develops projects to secure

a resilient energy supply for mission

critical operations on Army

installations so they can continue to

conduct their critical national security

missions in times of limited access to

electrical power from the grid. Note:

civil relief operations

Securing the Homeland

Key Authorities for Development

UNCLASSIFIED

Projects by Location

FAR Part 41

10 USC 2922a

10 USC 2667

Acquisition Partners

The OEI leverages existing key Congressional DOD

authorities to deploy renewable energy projects.

• 10 USC 2922a: Contracts for energy or fuel for

military installations

− Authorizes contracts for periods of up to 30 years for the

provision and operation of energy production facilities and

the purchase of energy produced from such facilities

− Requires Office of the Secretary of Defense approval

• Far Part 41: Acquisition of utility services

− Authorizes the Department of Defense (DOD) to acquire

utility services for military facilities for terms up to10 years

− Executable by GSA or delegated authority

• 10 USC 2667 (2668 Easement for GSA projects): Leases

non-excess property of military departments

− Authorizes lease of available non-excess property to

promote the national defense or public interest

− Lease term can be longer than five years within the useful

life of the energy production facility

− Provides for payment in cash or in-kind at fair market value

Project Development Process

UNCLASSIFIED

• Portfolio

strategic

analysis

• Project ID

• Initial screening

Portfolio Development Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Operating Portfolio

Project

Assessment

Project

Validation

Contracts and

Agreements

Construction

Operations

and Support

• Rigorous

due diligence

• Project definition

• Project concept refined by studies to

confirm technical, environmental,

and economic feasibility

• Energy and real estate defined

• Procurement process and continuation of Army and DoD

approvals

• Response to RFP or NOL/negotiation/selection

• Design, financial & interconnection complete

• Construction and Commissioning

Army enterprise view is driven by “portfolio focused” analysis, strategies and goals. Completed projects

provide feedback on operational results and evolution of portfolio performance.

Projects mature across lifecycle; phase activities are “project focused” as opportunities are

converted into operating assets.

• Commercial

Operations

• O&M

• Contract closure

Project Risk Assessment

UNCLASSIFIED

Project Risk Factors are

reviewed on a weekly

basis to identify

roadblocks and key

issues for successful

project development

Project Risk Assessment

• How does project enhance energy security on host/surrounding installations?

• What are the possible impacts to Installation operations or tenant missions?

• Has the project been approved by Installation, Army HQ, and DoD staffs?

Mission/

Security

• What is the estimate of the baseline capital cost?

• What is the value of any RECs or other incentives?

• What is the predicted resource? Has it been validated?

• What are existing utility rate and alternative tariffs?

• What are the impacts of the project to the POM?

Economics

• What is the real estate approach, and what authority is being used?

• Identify/mitigate real estate, siting, constructability, access, land-use.

• Is the project consistent with the Installation Master Plan?

Real Estate

• What are the regulatory limits for interconnection, net-metering?

• What is the status of getting required PUC approvals?Regulatory

and Legal

• Will the installation consume all electricity generated?

• What is the status of state RPS and other incentives to drive demand?

• If power is to be sold off the installation, have off-takers been identified?

• Can the utility wheel power to other potential off-takers?

Market / Off-

Take

• Is there sufficient line and substation capacity? What upgrades required?

• Are flow studies required? What it the status?

• System upgradeable for smart-grid and energy storage technologies?

Technical /

Integration

• What are the major environmental issues?

• Which parties will perform ECP and NEPA requirements and when?Environment

• What is acquisition strategy and timeline to implement?

• What performance risks are there with the developer or other partners?Procurement

• The Army Guide outlines approach and processed for project development – The development and due diligence process can be used across each of the early phases of the

lifecycle

– Projects should be analyzed using the 8 Assessment Criteria and evaluated for viability

– Projects with sufficient viability to justify increased investment should be moved forward; those that are not viable should be suspended

Iterative Project Development

UNCLASSIFIED

Portfolio

Development

Phase 1Project

Assessment

Phase 2Project

Validation

Phase 3Contracts and

Agreements

Phase 4Construction

Phase 5Operations

and Support

Operating

Portfolio

Mission/Security

Economics

Real Estate

Regulatory

Off-Take

Integration

Environmental

Procurement

8 Assessment Criteria

HI

AK

Tooele Army Depot

Ft. Huachuca

Yakima Training Center

Schofield Barracks

Redstone

Arsenal

Ft. Bliss

Ft. Irwin

Ft. Detrick

Ft. Irwin, CA

13 MW solar

Competitive energy purchase

through DLA

Ft. Detrick, MD

15 MW solar

Energy purchase awarded

to Ameresco Inc.

Ft. Drum, NY

28 MW biomass

Energy purchase awarded

to ReEnergy Holdings LLC

Schofield Barracks, HI

50 MW biodiesel

Lease with HECO

Ft. Drum

Ft. Hood

Ft. Greely

Ft. Huachuca, AZ

18 MW Solar

GSA Areawide Contract

with TEPRedstone Arsenal, AL

25 MW renewable CHP

Competitive energy

purchase through HNC

Ft. Pickett

Ft. Gordon

Ft. Benning

Camp Parks

JFTC Los Alamitos

Camp Roberts

Redstone Arsenal, AL

Up to 18000 MW hours per year solar

MATOC energy purchase notice of

intent to award to SunPower

Ft. Hood, TX

Onsite solar, offsite wind

Competitive energy purchase through DLA

Anniston Army

Depot

Ft. Rucker

Ft. Devens

Camp Edwards

Tooele Army Depot, UT

874 acres for wind/solar

Competitive lease through USACE

Ft. Bliss, TX

17 MW solar

GSA Areawide Contract

with EPE

Ft. Benning

30 MW solar

GSA Areawide Contract

with GA Power

Ft. Stewart

Ft. Stewart, GA

30 MW solar

GSA Areawide Contract

with GA Power

Ft. Gordon, GA

30 MW solar

GSA Areawide Contract

with GA Power

UNCLASSIFIED

Contracts & Agreements, Construction, and OperationsInstallation Project Status:

Operations

Construction

Contracts and Agreements

Project Assessment &

Validation

• Fort Knox• Through a combination of energy initiatives, becomes the first Army

installation capable of functioning off the grid.

• Fort Campbell

• Total 5 MV Solar PV on closed landfill. 10-year Utility Energy Service Contract (UESC) with Pennyrile Rural Electric Cooperative Corporation (1.9 MW).

• Pennyrile awarded $3.1M grant from State of Kentucky.

• 28-year Power Purchase Agreement (PPA) for a 3.1MW executed through the PPA MATOC Small Business Solar Pool not to exceed the same tariff as is being paid for conventional electricity .

Other projects

UNCLASSIFIED

Enterprise-Wide Portfolio

OEI projects are developed through an enterprise

approach to capitalize on the Army’s diverse

installations.

• On or bordering Army land

- Not dependent on assets hundreds of miles away

- Supported through defensible transmission

infrastructure on post

• No taxpayer dollars

- Power purchased using current utility bill

- All projects are at or below the projected cost of

grid energy

- Providing energy resiliency at no additional cost

to the Army

• Leverages private financing

- Uses existing DOD land-use and energy purchase

authorities

- Built with private capital investment

- Owned, operated, and maintained by the private sector

UNCLASSIFIED

Fort Drum, New York

Fort Huachuca, Arizona

• The Army is committed to deploying renewable energy to provide a secure and resilient energy supply for Army installations.

• RECS are required for some Federal renewable energy goals; but the Army, by policy, will not purchase RECs solely for goal attainment.

• The Army will not sell RECs from projects owned by the Army.

• RECs from 3rd party financed projects will be evaluated on a project-by-project basis to determine if the Army will:

– Receive the project RECs,

– Receive replacement RECs, or

– Allow the developer to use the RECs for regulatory or economic purposes.

Army Policy for Renewable Energy Credits (RECs)

UNCLASSIFIED

Photo from Alstom 2010, NREL/PIX 18207

Photo from SunPower 2013, NREL/PIX 23816

Multiple Award Task Order Contract

UNCLASSIFIED

• Power purchases will be funded through existing must-pay utility bills

• Total ceiling of the contract is $7 billion

– Refers to total dollar value of energy available for purchase, under all Power Purchase

Agreements task orders, for the entire term (up to 30 years)

– Is not an award for a $7 billion contract

• Awards under the MATOC are subject to the Davis Bacon Act and the Buy American Act

• The MATOC is also available for smaller scale Army projects

• The OEI uses multiple procurement vehicles in addition to the MATOC

The Multiple Award Task Order Contract is an Indefinite Delivery Indefinite Quantity contract vehicle

that establishes a pool of qualified firms/contractors for four renewable energy technologies (i.e.,

solar, wind, biomass, and geothermal).

• MATOC pool of qualified renewable energy firms includes:

– 17 Biomass Companies

– 6 Geothermal Companies

– 50 Solar Companies

– 21 Wind Companies

• Task order winners will finance, build, own, operate, and

maintain the generation assets

• The Government will buy power from the asset through 10

U.S.C. 2922a for a contract term of up to 30 years

Bottom Line

UNCLASSIFIED

• Today’s Army requires access to

diverse and reliable energy

resources to maintain mission

essential functions

• The OEI develops long-term

projects using off-the-shelf

technologies to provide clean,

reliable, and affordable energy

generation on Army installations

• By improving the energy resiliency

and security of Army installations,

we can continue to conduct critical

national security missions and

support our troops both at home

and abroad

Keep CurrentStay up to date with the OEI through

the website and social media

www.oei.army.mil

Additional Energy-Related REEO Functions

Service Secretariats,

Services Steering

Committees,

Commands,

OCLL REEOs

Military

Installations

DOD / ARMY

GOVERNMENT

RELATIONS

FEDERAL

STATE

LOCAL

Liaison to the Department of Defense

Energy Siting Clearinghouse

Southeast Regional Group for Energy

Security/Sustainability (SERGES)

Working with the Army

UNCLASSIFIED

ASA(IE&E): http://www.asaie.army.mil/ ACSIM: http://www.acsim.army.mil/ USACE: http://www.usace.army.mil/

Renewable Energy on Army Lands

• Large Scale Renewable Energy Projects (>10MW): http://www.asaie.army.mil/Public/ES/oei/

• Siting Clearinghouse: http://www.acq.osd.mil/dodsc/

Science and Technology

• Army Acquisition Business Website: https://acquisition.army.mil/asfi/

• Base Camp Integration Laboratory: https://pmfss.natick.army.mil/

• Communications-Electronics Research, Development and Engineering Center: http://www.cerdec.army.mil/business/index.asp

• Natick Soldier Research, Development and Engineering Center: http://nsrdec.natick.army.mil/business/index.htm

• National Defense Center for Energy and Environment: http://www.ndcee.ctc.com/

• Network Integration Evaluation: http://integration.army.mil/

• Rapid Equipping Force: http://www.ref.army.mil/

Facilities Energy Innovation

• Net Zero: http://www.asaie.army.mil/Public/ES/netzero/

• Strategic Environmental Research and Development Program (SERDP) & Environmental Security Technology Certification Program (ESTCP): http://www.serdp.org/

Vehicle Innovation

• Tank Automotive Research, Development and Engineering Center: http://www.army.mil/tardec

• Aviation & Missile Research, Development & Engineering Center: http://www.redstone.army.mil/amrdec/Business/index.html

Small Businesses

• Army Small Business Innovation Research Program: https://www.armysbir.army.mil/sbir/Default.aspx

19

Questions

Office Director Email Phone

REEO CentralStanley

RasmussenStanley.L.Rasmussen@usace.army.mil (816) 389-3448

REEO North James Hartman james.r.hartman32.civ@mail.mil (410) 278-6991

REEO South Susan Gibson susan.p.gibson.civ@mail.mil (404) 460-3131

REEO West Mark Mahoney mark.a.mahoney.civ@mail.mil (303) 844-0950

REEO Webpage: http://www.asaie.army.mil/Public/ESOH/REEO/

DoD REC Webpage: https://www.denix.osd.mil/index.cfm

OEI Webpage: www.oei.army.mil /