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DEFENSE COMMUNITIES 360

Energy Task Force to Rely on Multiple Partnering Authorities

  • November 10, 2011
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Army officials plan to take advantage of a variety of third-party financing authorities to partner with the private sector to build large-scale renewable energy projects on their installations, but some most likely will be relied on more than others.

“EULs [enhanced use leases] are probably the leading one,” Katherine Hammack, assistant secretary for installations, energy and environment, said last week following an industry summit held at the Washington Navy Yard. The advantage of EULs is they are conducive to large-scale land leases, she said.

Three other authorities also were discussed during the summit:

  • power purchase agreements (10 USC 2922a)
  • utility energy services contracts (10 USC 2913)
  • energy savings performance contracts (10 USC 2865)

The Energy Initiatives Task Force — which was formally established in September to serve as the Army’s central office to plan and execute projects larger than 10 megawatts — will consider other authorities as well:

  • utility purchase authority (FAR Part 41)
  • cooperative agreements (31 USC 6305)
  • sale of electrical power from alternative energy and co-generation facilities (10 USC 2916)
  • easement authority (40 USC 1314)

A recent policy decision by the Pentagon has made power purchase agreements a more useful tool for the services to acquire renewable energy from projects located on their installations. Now the services will be able to enter into power purchase agreements for up to 30 years; previously, they had been limited to 10 years, which is too short for investors and developers.

The new policy should allow the services to approve new power purchase agreements without seeking approval from DOD. Currently, the deputy undersecretary of defense for installations and environment needs to approve those agreements. The department, however, has told the Army that if its first two power purchase agreements are carried out without any problems, it will delegate approval authority to the Army’s assistant secretary, Richard Kidd, deputy assistant secretary for energy and sustainability, said after the summit.

That decision could save considerable time as seeking DOD’s approval adds three to six months to the acquisition process. “That translates into money for developers,” Kidd said.

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