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TANSTAAFL: The ESCO Energy Optimization Process at 4 WWTPS

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The Washington Suburban Sanitary Commission (WSSC) serves 1.8 million residents with water and wastewater service with 2 surface water treatment facilities and 5 wastewater treatment plants. In an effort to reduce operating costs and encourage sustainable practices the Commission entered into a series of agreements with an Energy Services Company (ESCO) to perform Energy Performing Contracts (EPCs). These alternative delivery projects involved the Commission conducting upgrades to water and wastewater treatment facilities based on guarantees of reduced operating expenditures.

In this project delivery and financing method, the ESCO in conjunction with the Commission and the owners engineer conducted preliminary evaluations of treatment processes in an effort to identify opportunities for reduction in operating expenses (power consumption, demand management, solids disposal and fuel usage, based on a 15 year payback period. Upon agreement between the owner and the ESCO as to the process improvement, construction cost and reduction in operating costs, the owner and ESCO entered in an agreement whereby the ESCO designed and constructed the improvement (under a modified design-build process) and the ESCO guaranteed the projected operations savings for a 15 year period.

The first series of project involved the expenditure of 10.2 M in construction and design cost with a guaranteed annual savings of 700,000 per year. In the first two years of operation, these projects have saved 1,500,000 per year. While these figures indicate that the Commission has been able to have its cake and eat it too, “There ain't no such thing as a free lunch” (TANSTAFL)”. The process and implementation of these projects demonstrated a number of lessons to the Commission in how to conduct the initial evaluation, design, construction and verification of energy savings. This paper will detail the challenges and lessons learned from the ESCO process and demonstrate the path to success for future ESCO projects.

The process demonstrated the importance of well defined and consistent design standard, particularly for instrumentation and control, electrical and HVAC systems. The Commission was challenged with developing and writing appropriate contractual terms at the preliminary design stage, as that is stage at which the project cost is established and requirements for equipment are developed. In addition, the Commission was challenged with balancing the desires and requirements of multiple groups including operations, engineering, finance, and power management. The paper will present examples of each of the challenges, along with solutions to the challenges that allow the Commission to continue with this project delivery method with greater success.
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Keywords: Design Build; ESCO; Efficiency; Energy; Project Delivery

Document Type: Research Article

Publication date: 2010-01-01

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