WASHINGTON, DC, March 18, 2002 -- The U.S. Department of Energy (DOE) on Friday announced that five energy service companies have been selected to use performance-based contracts to reduce energy use, manage utility costs and promote renewable energy at federal facilities by using biomass and alternative methane energy sources.

Biomass includes dedicated energy crops and trees, agricultural crop residues, aquatic plants, wood and wood residues, animal wastes and other organic waste materials. Alternative methane is generated in landfills, wastewater treatment plants and coalbeds.

"In his National Energy Plan President Bush directed the federal government, the nation's largest energy consumer, to lead by example," Secretary of Energy Spencer Abraham said. "The contracts the Department of Energy is awarding today encourage innovative, biobased energy technologies to reduce federal energy consumption, without cost to the American taxpayers.

Our goal is to make bioenergy cost-competitive with traditional energy sources."

The energy service companies selected for the Energy Savings Performance Contract (ESPC) program for biomass and alternative methane are:

* Constellation Energy Source, Baltimore, Md.
* DTE Biomass Energy Inc., Ann Arbor, Mich.
* Energy Systems Group, Evansville, Ind.
* Systems Engineering and Management Corporation, Knoxville, Tenn.
* Trigen Development Corporation, Baltimore, Md.
Working with DOE's Federal Energy Management Program (FEMP), these companies will develop, finance and implement projects that guarantee energy-related cost savings at federal facilities by using biomass and alternative methane fuels. In return, the companies receive fixed payments derived from the energy cost savings achieved. Since the capital investment comes from the private sector, the projects do not require government funding. The projects performed under these contracts can be at any U.S. federal site throughout the world.

Although biomass and alternative methane fuel applications utilizing steam or other on-site power generation will be integral to each project, a variety of other conservation measures such as retrofits to lighting, motors, and heating, ventilation and air conditioning systems will be included to reduce energy costs. The total value of these contracts is estimated to be up to $200 million, with energy-related cost savings in excess of that amount.

FEMP has issued three other ESPCs intended to help federal facilities adopt specific emerging technologies that are market-ready but not yet widely used. The other technology-specific ESPCs focus on solar thermal concentrating systems (high temperature solar devices that generate electricity or provide heat used in boilers and laundries), photovoltaics and geothermal heat pumps.

For more information on the Biomass and Alternative Methane ESPC, please visit the DOE FEMP web site at http://www.eren.doe.gov/femp/financing/espc/biomass.html.