U.S. Navy photo by Gary Wagner Naval Facilities Engineering Command Washington is spearheading a handful of initiatives intended to replace the 58-year-old Goddard Power Plant at NSF Indian Head with cleaner, more efficient facilities.

Participants in the meeting, hosted by the Town of Indian Head in the Village Green Pavilion on July 21, included representatives from energy developers and providers to major capital development firms, such as Honeywell, Facchina, Siemens, Constellation, Ameresco, Pepco, Chevron and Mirant, to name a few.

Attendees from the public sector represented Maryland’s Department of Business and Economic Development, the Tri-County Council for Southern Maryland, Charles County and the Indian Head Defense Alliance.

The industry forum followed quickly the Navy’s public release of a draft request for qualifications (RFQ) for the project. The draft RFQ outlined the scope of the EUL, Navy’s goals and objectives, and the evaluation process for source selection.

During the forum, a series of formal presentations by Navy spokespersons provided background on NSF Indian Head’s history and current mission functions and economic impact, followed by a detailed explanation of the power plant project proposed on the installation and the process for submitting project proposals to the Navy.

Navy is proposing a special venture project called an enhanced use lease (EUL) to construct a new natural gas-fired power plant on NSF Indian Head. EUL is a tool that the military services are permitted to use to leverage underutilized facilities and land to resource the modernization of infrastructure on military bases.

The property proposed for outleasing on NSF Indian Head includes two sites. One site, encompassing approximately 20 acres inside the base’s restricted area adjacent to the existing Goddard Power Plant, is offered for development of a commercial-scale, natural gas-fired electrical power generation facility.

The second site – the ‘‘snow cone” former housing area located between Riverview Housing and the Town of Indian Head’s Village Green – is proposed for development of a private commercial or light industrial facility, such as a data center, within the 15-acre site.

Through the RFQ, the Navy will seek to competitively select a developer to lease both sites, and has the option to enter into negotiations with a separate developer for each site.

Cleaner, More Efficient Power

Under the EUL proposed for Indian Head, a privately constructed and operated energy facility would replace the Goddard Power Plant currently operating on the base with a modernized, more energy efficient power generation facility that would better support the installation’s mission activities.

The EUL for Indian Head proposes a natural gas burning power plant to replace the coal-burning Goddard facility originally built in 1952, and the last remaining coal-burning power plant operated by the Navy. As restrictive air quality standards have been established for industrial facilities, the aging plant has gone through multiple retrofits to remain compliant with current regulations.

The energy producing facility proposed in the EUL for Indian Head will adhere to stricter air quality standards currently being considered by the state of Maryland and be consistent with Navy’s current energy strategy focused on reducing greenhouse gas emissions and lessening dependence on fossil fuels.

Navy is also considering the use of an Energy Savings Performance Contract (ESPC) to provide NSF Indian Head with decentralized steam and a 3.5 megawatt co-generation facility (electricity and steam).

The ESPC and potential EUL projects are complementary. The EUL project would assist in providing greater energy reliability and back-up power to the installation and its supported commands, while the ESPC would involve the replacement of current installation steam and a portion of power-generation facilities inside the security perimeter.

An ESPC project at NSF Indian Head would involve contracting with an energy service company (ESCO) to finance, design and construct a co-generation power generation facility to be located closer to principal industrial facilities operated by Indian Head Division, Naval Surface Warfare Center in the production of energetic materials. Relocation of steam generation to the vicinity of these facilities will significantly reduce the 37 miles of above-ground steam distribution pipe to a smaller, more efficient system.

Navy would manage and maintain the ESPC facility designed to meet Navy demand for energy while consistent with the installation’s security and operational requirements.

Military Construction Proposed

In providing the opening remarks for the forum, Capt. Hugh Hemstreet, Commanding Officer for NAVFACWASH, emphasized that the Navy is committed to pursuing every opportunity to provide for improved steam generation at Indian Head as a critical mission support issue.

In concert with this effort, the Navy has also applied for military construction funding for fiscal year 2012 for a new steam generation plant, he announced.

‘‘We would prefer to use MILCON to reach a steam solution,” Hemstreet explained, ‘‘because we would see an immediate return on investment to the Navy.”

In the event that funding doesn’t materialize for the MILCON, he added, the Navy will continue to move forward with the ESPC. ‘‘In combination with our EUL proposal, we will be able to close Goddard.”

The balance of the industry forum agenda included a tour of both sites on NSF Indian Head being offered for outleasing in the EUL proposal.

Throughout the industry forum, attendees were encouraged to submit questions regarding the project to facilitate discussion and feedback. At the conclusion of the event, all questions were then answered formally by a panel of Navy officials representing Naval Support Activity South Potomac and Naval Facilities Engineering Command Washington.

Altogether, Naval District Washington is offering three enhanced use lease projects this fiscal year to develop an energy generation facility on Naval Support Facility Indian Head, a modernized work campus on Naval Air Station Patuxent River, and an improved recreation complex for Naval Recreation Center Solomons.

For each of the EUL projects, the Navy will then provide a final request for qualifications, evaluate proposals submitted by developers, select an offeror and enter into contract negotiation. Navy anticipates being able to begin execution of leases for each of the EUL projects by 2012.

Mutually Beneficial Development

The legal framework that established EUL allows an installation to offer up underutilized property – that is, a site that is not being put to optimum use – to private industry for development through a long-term leasing agreement. The proposed development must be compatible to the mission activities of the installation and improve the use of base property in a way that enables the installation to be more efficient in fulfilling its mission.

EULs provide tangible benefits to military installations through the opportunity to realize reductions in base operating costs or capital costs through cash or in-kind services such as maintenance, repair or demolition. Revenues received from the enhanced use lease can also be used to fund other installation needs.

EULs provide developers the opportunity to respond to a market demand and generate a profit. The community benefits from EUL projects because the proposed developments can serve as catalysts for economic growth and increased job opportunities, as well as provide increased tax revenues.

The military services are pursuing more EUL opportunities as a means of maintaining or upgrading an aging shore infrastructure and addressing emerging mission requirements, primarily because funding available through the traditional military construction, or MILCON, process routinely falls short of the need.

NDW’s first three EUL projects flow out of a Regional Infrastructure Modernization Plan developed in 2008 to evaluate and prioritize facility requirements represented in the 20-plus Navy installations and properties within the region.

‘‘We have $5 billion in regional facilities requirements,” estimates Hemstreet. ‘‘We realize we have to look at innovative ways to leverage assets beyond the traditional military construction program to try to satisfy those requirements,” he says.