Shared savings plan could help Postal Service save energy

Postal Service facilities will be able to purchase energy-saving equipment through a series of new contracts that let utility providers help fund upgrades.

The contracts invite energy auditors to assess facilities and determine where savings can be found through upgrades or new equipment. Agency officials then will have the option of paying for improvements through the regular budget process or through financing offered by the energy company and paid off through later cost savings.

Julie Rios, executive director of energy initiatives for the Postal Service, said the arrangement would help the agency meet new energy efficiency goals announced by President Bush on Wednesday. It will also help to reduce recurring energy costs, she said.

Improvements under the program could vary widely based on the results of the facility energy audits, Rios said. The agency has dedicated funds for the replacement of chillers that rely on ozone-damaging chemicals, and audits could turn up other options like upgrading heating and air conditioning equipment, improving building insulation or changing lighting systems. Another possibility is improving the efficiency of the compressed air systems upon which mail processing facilities rely.

The Postal Service also is looking at making more use of renewable energy sources like solar and wind power. "You're going to evaluate these technologies where there are the right physical conditions, and in general you do need the right support" from economic incentives from states and utilities, Rios said.

In California, where solar rebates are generous, the Postal Service has started work in Oakland on what Rios said was the largest federal solar project outside the military. It has also initiated a fuel cell project in San Francisco.

Rios said her office is still crunching the numbers that will determine when it makes sense to use existing money to pay for the improvements and when the agency would be better served by financing a project through the energy service provider. She said that until that analysis is complete, she could not estimate how much work would eventually be done under the six 10-year contracts that have been awarded, or what savings could be expected.

The contracts are different from those negotiated under the controversial "share in savings" procurement framework, in that if the agency decides to use financing from the energy services provider, the price is negotiated upfront based on project costs, rather than projected savings.

A spokeswoman said similar initiatives through the agency's Shared Energy Savings program resulted in nearly $210 million in projects between fiscal 2003 and fiscal 2005, with $18.8 million in savings.

Those projects also saved 134 million kilowatt-hours of energy and eliminated 10,000 tons of emissions, she said.