15160000May14 Curt Wexel, PE...

15160000May14 Curt Wexel, PE /ACSIM-ISP/703-545-2470/[email protected] 1Assistant Chief of Staff for Installation Management

Army Utilities Privatization (UP)& Water Security

Defense Communities National Summit

5 June 2014

Curt Wexel, P.E.UP Program Manager

Assistant Chief of Staff for Installation ManagementInstallation Services Directorate

Privatization and Partnerships Division

mailto:[email protected]

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What is Utilities Privatization (UP)?

UP transfers ownership and uses a Utility Service Contract to upgrade to industry standards.

• UP is Army’s preferred re-investment strategy• Leverages private funding & skills• UP is unlike other privatization initiatives:

– Army sells the utility system, but owns the real-estate– After sale, Army is a customer, not a vested partner– 50-yr Utility Service Contracts authorized by 10 USC §2688

UP helps Army, taxpayers, energy, environment




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The Case for Utilities Privatization (UP)

Affordable Risk Insurance Transfer Liability Risks Leverage Private Funds

Reduced Leaks & Losses 31% less gas use [21 UP sites] 28% less water [23 UP sites] $57M/yr utility savings 2.3 year simple payback

Improved Energy Security 28% life-cycle cost avoidance Full sustainment platform

Utility Privatization (UP) leverages industry expertise and financing, where cost-effective, to upgrade utilities for more safe, efficient, and sustainable service.




Fort Belvoir: Before & After FY09 UP




“Cost Avoidance”

28% Average

UP Evaluation Decision

Upgrade

Current Government UP

50-Y

ear

$ Co

st

UP Central Funds (OMA)

Operate & Maintain

Reality “Should Cost” Offer

OMA Funded ~75% of Req’t

Select best option for FULL Sustainment

Unfunded

Scarce MILCON Funds

Repair & Restoration

OMARelatively stable Installation Cost

Government is unable to perform as it “should”




UP Supports Energy & Environment

Fix & Upgrade Infrastructure Reduced leaks & lossesImproved Energy & Water SecurityHelps meet Energy & Water goals

UP Compatible with Energy, Safety, EnvironmentNet Zero energy, water, waste Load management (UP Provider can do UESCs)Project initiatives (from Army or UP Provider)Utility Service Contract is separate from commodity

UP can tie-in PPAs, solar arrays, cogeneration …




Army UP Program Results

· 86% of evaluations complete 307 out of 355 U.S. systems evaluated for UP

· 144 Privatized Systems: 39 Electric, 38 Gas, 31 Water, 33 Wastewater, 3 Heat/Power

$2B (28%) Life-Cycle O&M Projected Cost Avoidance

PLUS benefits of efficient, safe, reliable service… and commodity savings

• $57M/yr in FY13• 2.3 yr payback of award costs




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Actual Field Efficiency

31% Less Gas Use

@ 21 UP Sites$46 M/yr cost avoidanceFY13 vs FY03 baseline

28% Less Water Use

@ 23 UP Sites$11 M/yr cost avoidanceFY13 vs FY07 baseline

Bubbles proportionate to usage

Water

Gas

per Energy Policy Act of 2005

per Executive Order 13423




144 Privatized Utility SystemsAberdeen PG - E, G, W, WW Aberdeen (Edgewood) - GAdelphi Lab - GA.P. Hill - E, W, WWBelvoir - E, G, W, WWBenning - E, G, W, WWBliss - E, G, W, WWBlue Grass AD - GBragg - E, W, WW, GCampbell - G, W, WWDetrick - GDetroit Arsenal - GDevens - E, G, W, WWDix - E, GEustis - E, G, W, WWGordon - E, G, W, WWGreely - E, W, WW, PHawaii - WHood – W, WWHuachuca – EHunter AAF - EIrwin - E, W, WWJackson - W, WWKnox - E, W, WWLeavenworth - E, W, WWLee - E, W, WWLeonard Wood - E, GLetterkenny AD - W, WWLewis – GMeade - E, G, W, WW

McCoy - E, GMcNair - E, GMonmouth - GMonroe - E, W, WWMyer - E, GNatick Lab - E, GOahu/ Schofield Barracks – WWOrd Community - E, G, W, WWParks RFTA - E, G, W, WWPicatinny Arsenal - E, GPickett - E, WPolk – W, WW, EPres Monterey - E, G, W, WWRed River AD - E, W, WWRedstone Arsenal – WWRichardson - E, G, W, WW, PRucker - E, G, W, WWSam Houston - E, GSierra AD - E, GSill - G, W, WWStewart - EStewart Sub-Post - GStory - E, G, W, WWSunny Point MOT - ETooele AD - GVancouver Barracks - GWainwright - E, W, WW, PWalter Reed AMC - GYakima Training Center - G

FY14 Henderson Hall – EPicatinny Arsenal – W, WW

FY15 Gillem Enclave – E, G, W, WWFort Polk – GJB Lewis-McChord – E, W, WWFort Campbell – E

FY16 Fort Hood – E, G Oahu – EFort Riley – E, G, W, WWFort Jackson – G Aberdeen PG – W, WWUSAG W.Point – E, G, W, WW

FY17 Anniston AD – W, WW Fort Leonard Wood – W, WW Fort Buchannan – E, W, WWOahu – W

TBD: Tobyhanna AD – W, WW Myer/ McNair & ANC – W, WWPine Bluff ARS – GRedstone ARS – E, G, W Iowa AAP – E, G, W, WW Rivanna Station – E, G, W, WWArlington Nt’l Cemetery – E Mark Center – WWArlington Nt’l Cemetery – G

The UP schedule gives priority to evaluate deteriorated utility systems (ISR Q3 or Q4)

Pending EvaluationsArmy UP Working Schedule – April 2014

W= water WW= wastewater E= electric G= natural gas P= heat & power



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