EERE Success Story—Maryland Advances Energy Efficiency in State Building Portfolio

As in many states, Maryland’s early energy-efficiency efforts began in small facilities with limited resources. Small and medium-sized buildings, those under 20,000 square feet, make up 32% of Maryland’s state building portfolio’s total square footage. The Maryland Energy Administration (MEA) recognized the potential for energy efficiency projects in these buildings, and with support from an Energy Department State Energy Program 2012 Competitive Award, launched an effort to reduce energy waste in small and medium-sized buildings.

Maryland has increasingly utilized energy service performance contracts at its large agencies, which is a budget-neutral approach to make building improvements that reduce energy and water use and increase operational efficiency. By partnering with an energy service company, MEA can use an energy service performance contract to pay for today's facility upgrades with tomorrow's energy savings—without tapping into capital budgets. MEA saw that energy savings performance contracts were successful in larger buildings and opted to use this financing structure to upgrade systems in their smaller facilities. The upgrade effort in Maryland consisted of three parts – education, procurement, and action.

MEA organized a three-day technical training for private energy auditors and agency facility managers to educate them on the best approaches for achieving energy reductions in their buildings. The training focused on common technologies in smaller buildings, such as HVAC and lighting, which could be targeted for energy efficiency upgrades and also usually qualifying for local utility rebates and incentives.

MEA worked with the Maryland Department of General Services to create a consistent and comprehensive system for procurement of energy efficiency measures in small and medium-sized buildings across the state. The Department of General Services drafted a master contract for state agencies to use, which has made the procurement process much more efficient. Within the master contract, the Department of General Services created a list of preapproved energy firms to work on small and medium-sized buildings, which greatly reduced the staff time and effort needed for state agencies to select a contractor for small or single-project scopes of work.

For the final stage in the effort – the action stage – MEA deployed two teams to complete energy audits in 86 small and medium-sized state buildings. Together, the teams audited 1.1 million square feet of state buildings, finding 6.1 million kWh of potential energy savings and $1.4 million of energy cost savings.

After achieving success with its small facilities, the State of Maryland added large facilities and agencies to its efforts. The State’s Department of General Services approves a pre-qualified list of energy service contractors. Agencies may choose any of these contractors to provide project design, engineering, and finance for a “bundle” of improvement opportunities found within one or more of an agency’s facilities.  The bundle – which can represent over $1 million dollars’ worth of improvements – combines quick payback lighting projects with longer payback measures such as boiler or chiller replacements.  An energy performance contract that often works well is one that uses low-cost lighting upgrades to generate cash flow that subsidizes the heavy-equipment projects.

Maryland’s effort is similar to other State Energy Program collaborations in states like Minnesota and Hawaii. The State Energy Program provides funding and technical assistance to states, territories, and the District of Columbia to enhance energy security, advance state-led energy initiatives, and maximize the benefits of decreasing energy waste. The State Energy Program emphasizes the state’s role as the decision maker and administrator for program activities within the state that are tailored to their unique resources, delivery capacity, and energy goals.