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Alternative Financing

Alternative financing sources include funding mechanisms other than appropriated funds such as energy savings performance contracts (ESPC) and utility energy service contracts (UESC).


Energy savings performance contracts (ESPC) are partnerships with private sector companies known as energy service companies (ESCOs). These contracts allow installations to improve their infrastructure and implement energy projects while paying for the measures with the anticipated savings being generated by the project over time (10-25 years). The attached memo provides Army policy guidance for implementation of ESPC. View the ESPC Policy Handbook. View the White House letter supporting use of ESPC (5/3/06).

Perhaps more importantly, ESPCs give Army facility managers a solution to facility problems with minimal up-front cost. Applied with care and consideration, ESPCs can help facility managers:

  • Reduce equipment breakdowns and emergency repair requests
  • Provide better, more productive living and working conditions for your people
  • Reduce costs
  • Meet environmental mandates such as CFC phase-out
  • Save energy and meet management goals

The Energy Policy Act of 2005 reauthorizes Energy Savings Performance Contracts (ESPCs) through 30 September 2016. EISA 2007 permanently extends the ESPC authority.

  • View current legislation governing ESPC and UESC (10 USC 2913) - Note: EISA amended 10 USC 2913 to remove the $7,000,000 cancellation ceiling notification requirement.

For more information on ESPC, visit the following:


Utility energy services contracts (UESCs) are similar to ESPCs. The most notable difference is that the projects are financed and implemented through utility companies.

See the authorizing legislation for UESCs . More information is available on the FEMP web site .

Federal Utility Partnership Working Group

The Federal Utility Partnership Working Group (FUPWG) holds bi-annual meetings in the Spring and Fall. The meeting agendas, attendees, and presentations can be found on the FEMP website.

DOD/EEI Model Agreement

Case Studies

The Army has successfully implemented over $900M investment under Energy Savings Performance Contracts (ESPC) and over $500M of investment under Utility Energy Services Contracts (UESC). Here are some case studies on successful projects:



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