Utilities Privatization Supports Army Effort to Improve Installation Resilience

Utilities Privatization Supports Army Effort to Improve Installation Resilience

Washington, D.C. — The Army’s utility privatization program has produced enormous financial benefits, as well as improved reliability and reduced consumption for utilities that have been transferred to the private sector, Curt Wexel, utilities privatization program manager for the Army’s assistant chief of staff for installation management, told the DOD Energy & Water Forum Friday. For the 152 utility systems that have been privatized, the service estimates the net present value of its savings, compared to continued Army ownership, is $3.4 billion. On average, the service experiences a 29 percent cost avoidance for each utility system that is privatized. Other benefits include improved reliability, a 16 percent net reduction in water use and a 35 percent net reduction in natural gas consumption.

To date, the Army has privatized 43 percent of the utilities across its U.S. installations, covering electric, gas, water and wastewater systems.

The Army considers utilities privatization one of its primary tools for enhancing the resilience of its installations. The service has invested more than $1 billion in energy resilience projects, with $490 million allocated to utilities privatization. Given the investment required to transfer assets to the private sector, the service can only privatize utilities when it is cost effective, Wexel said. Officials focus on the most critical missions, he said. “We can’t afford to do UP [utilities privatization] everywhere.”

Dan Cohen
Dan Cohen
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