We are thrilled to announce our partnership with Veterans Affairs (VA) facilities on a groundbreaking Utility Energy Service Contract (UESC) project. This first-of-its-kind initiative aims to provide energy-saving solutions through Energy Conservation Measures (ECMs) to federal government agencies. As the primary contractor, Black Hills Energy will act as the subject matter expert for ECMs on the utility side of the meter, while Energy Systems Group (ESG) will handle ECMs on the customer’s side.
The journey began in 2019 when our business development team started acquisition planning for this project. Unfortunately, COVID-19 caused a two-year delay. However, in 2022, we made another attempt and were selected as the utility partner. Together with the VA, we interviewed qualified ESCOs and chose ESG as our partner.
Throughout the project, our team and ESG held bi-monthly meetings with the VA to review and define the project scope. We conducted several site visits to perform audits and assess existing field conditions of the ECMs. The feasibility study, which began in June 2022 and was completed in November 2024, involved detailed design development, energy savings calculations, construction cost estimates and the preparation of a financing package. The final preliminary audit report included high-level findings for six ECMs, with an estimated cost of $19.4 million. The implementation phase began in December 2024 and is expected to be completed by December 2026.
The current UESC project with the VA involves the Hot Springs and Fort Meade VA facilities in South Dakota. The following energy conservation measures will be performed:
- New boiler plant design at Fort Meade hospital
- Steam plant conversion from fuel oil to liquid natural gas (LNG) fuel at Hot Springs hospital
- Pipe insulation campus-wide at both facilities
- Steam trap audit and repair/replacement campus-wide at both facilities
- Replacement of water supply pumps at Hot Springs hospital
- Walk-in freezer and cooler refrigeration system upgrade
We extend our heartfelt thanks to our internal partners from Treasury, Finance, Legal, Tax and Accounting teams for their invaluable support and collaboration throughout this project. Their expertise has been instrumental in navigating the complexities of the UESC project, safeguarding its success from acquisition planning to implementation.