PROJECT SUMMARY
Fort Detrick, an installation of the Department of the Army, plays a central role in the biomedical technology growth occurring in Frederick County, Maryland. The Fort is home to the U.S. Army Medical Research and Material Command, National Cancer Institute, and 38 other tenants.

The newest tenant is the National Interagency Biodefense Campus (NIBC), which is home to some of the highest bio-safety level labs in the world. Given the sensitive nature of the research, the Fort required a central utility plant that is able to provide reliable steam and chilled water for the labs.

The Central Utility Plant (CUP) at Fort Detrick, Maryland, which began commercial operations in April 2008, is the first energy project established through the U.S. Army Corps of Engineers’ Enhanced Use Leasing program. It delivers highly reliable steam, chilled water and conditioned backup emergency power to some of the highest level bio-safety containment laboratories in the world: the National Institutes of Health’s National Institute of Allergy and Infectious Diseases Integrated Research Facility, the Department of Homeland Security’s National Biodefense Analysis and Counter-measures Center, U.S. Army Medical Research Institute of Infectious Diseases and Fort Detrick’s Steam Sterilization Plant.

PROJECT OBJECTIVES
The primary objective of the public-private partnership is to provide highly-efficient, secure and reliable power to the National Interagency Biodefense Campus (NIBC). Due to the sensitive nature of the NIBC’s biosafety-level 3 and 4 biodefense labs, a power loss would create a potentially dangerous situation.

PROJECT DESCRIPTION
Partners
The public sector partners are Fort Detrick and the US Army Corps of Engineers (USACE). Fort Detrick is a U.S. Army Medical Command installation, which provides command and control of the Army’s fixed-facility medical, dental and veterinary treatment facilities as well as preventive care, medical research and development. The USACE provides vital public engineering services to strengthen national security and reduce risks from disasters.

The private sector team, made of Keenan Development Associates and Chevron Energy Solutions, formed Keenan Fort Detrick Energy LLC to design, construct, operate and maintain the CUP at Fort Detrick’s NIBC. These companies were selected out of ten competing teams due to its creative plan and its ability to integrate the plant’s development into the environmental policy in support of the mission at Fort Detrick. Design and construction of the CUP was carried out by Chevron Energy Solutions; the company will also operate the plant over the lifetime of the contract. Keenan Development owns the plant and leases the land upon which it sits from Fort Detrick.

Implementation Environment–Legislative and Administrative
The U.S. Army Corps of Engineers (USACE) created the Enhanced Use Leasing program (EUL), which allows the USACE to work with the private and public sectors to undertake land lease agreements for the development of projects on military installations. Under Section 2667 of Title 10 of the United States Code, each of the Departments of Defense has the authority to enter into a range of financial leasing opportunities. Since its original inception section 2667 has been expanded to create additional tools for managing installations. Installations can undertake the following:

• Enter into long-term leases
• Receive cash or in-kind consideration for income from leased property, which can be used for:
  • Repair and improvement of facilities
  • Construction of new facilities
  • Lease of facilities
  • Payment of utility services
  • Maintenance services

EUL potentially can be used for restoration of historic buildings, energy production, bio-mass, wind, solar, geothermal, coal gasification, waste to energy, cogeneration, central utility plants, vehicle test tracks, golf courses, inter-modal, offices, labs, laundries, training centers, MWR (Morale, Welfare and Recreation) retail and wetlands.

Financial Agreement
The $105 million CUP was financed through the issuance of a 25-year private revenue bond. In lieu of rent, the Army receives in-kind consideration equal to the fair market value of the leased assets in the form of capital improvements and other services on Fort Detrick. Bondholders recoup their investment through the payments the Army makes on behalf of itself and NIBC tenants for the power, chilled water and steam they receive from the CUP.

Contract Provisions
The USACE and the private sector team entered into a 36.5 year EUL, with a 13.5 year option. The USACE proposed an opportunity to develop, manage and maintain a CUP to provide power, steam and chilled water to accommodate market growth on and off Fort Detrick.

For energy production from the CUP, the USACE and the private sector team have a 10-year FAR-based (Federal Acquisition Regulation) energy services contract with two renewable options. Since many different government agencies are represented in the NIBC, all with their own procurement rules, the Army entered into one standard energy contract and the agencies pay the Army, who then pays Chevron, for their energy.

Chevron, on behalf of the private sector team, warrantees 99.999% availability of conditioned electricity that meets the internationally-recognized power quality standards of the Information Technology Industry Council. Chevron also warrantees 99.99% availability of both steam and chilled water that meets specified pressure and temperature ranges, respectively.

Implementation Metrics
The CUP, situated on 10 acres within the boundaries of the NIBC, supplies chilled water, steam and conditioned emergency backup power for up to 72 hours. The CUP is manned 24 hours a day, 7 days a week, 365 days a year. Equipment at the plant includes:

• Five 1,200-HP dual fire tube boilers, providing over 200,000 PPH of 125 PSIG steam
• Two, 1,800-ton electric centrifugal chillers and a 2.5-million gallon, 27,000-ton-hours thermal energy storage tank
• Five, 1.67-MVA diesel UPS mechanically-coupled to rotary flywheels and two 2.0-MVA diesel generators
• 100,000-gallon #2 diesel fuel oil backup

Commentary
The CUP was delivered on time and under budget, which was critical for the NIBC. In the spring of 2005, the first two NIBC lab facilities that would require steam and chilled water from the CUP were nearing design completion when the private sector team was just beginning its planning and technical due diligence. Through constant work and a strong partnership, financial closing was reached in just 15 months (including contract negotiations and NEPA) and construction was completed in 18 months. The partnership was very instrumental in getting the CUP running in time for the sensitive, biomedical research facilities.

By entering into a larger, standard energy contract, the Army made the PPP possible because Chevron was able to forecast and set a contract that will be beneficial to everyone involved. If each government agencies had to negotiate for its own power, the project might not have been viable because of the uncertainty of multiple energy contracts. Although the energy service contract is short, the potential energy contract extensions allowed the private sector team to meet quality requirements because they were able to take a long term approach (28 years after extensions instead of just 10 years). Preventative and scheduled maintenance combined with a capital replacement schedule based on life-cycles of the installed equipment will help keep the CUP in good working order.

The CUP has led to improved efficiencies in the operations of the NIBC. By utilizing the secure, central utility plant, the labs retain approximately 15 percent of facility space for mission use that would otherwise have gone to energy-related services. Likewise, the labs reduced the technical staff needed to operate energy related services and can focus on their research.

The CUP at Fort Detrick is the most secure CUP in the whole Department of Defense system. The private sector team has guaranteed the security of the plant through financial guarantees and is capable of providing backup power for NIBC for up to 72 hours.