Setting Escalation Rates Responsibly: FEMP Guidance and the EERC  

Education Type: 
1 Hour
0.2 CEU
Sponsored by: 

DOE Federal Energy Management Program - FEMP

This recorded webinar educates attendees who work with performance contracts to follow FEMP's guidance on escalation rates and to use the Energy Escalation Rate Calculator (EERC). It focuses on the importance of setting escalation rates responsibly – i.e., not unduly low (which raises interest costs and potentially sacrifices project scope) or high (which exposes the customer to the risk that actual monetary savings will fall short of contractor payments). In addition, it trains attendees on the proper use of the online NIST/FEMP EERC tool, including the handling of carbon pricing.


Dr. Joshua Kneifel, Economist, National Institute of Standards and Technology  

Dr. Joshua Kneifel is an economist in the Applied Economics Office of the Engineering Laboratory at the National Institute of Standards and Technology (NIST). He is the project leader for "Metrics and Tools for Sustainable Buildings," a project that uses measurement science to develop and implement metrics, data, and tools for quantifying sustainability performance in buildings. This project implements whole building simulations, life cycle costing, and life cycle assessment to determine the economic, environmental, and occupant consequences of increasing the energy efficiency of building construction. Dr. Kneifel is also the project lead for the Building Life Cycle Cost (BLCC) project funded by the U.S. Department of Energy's Federal Energy Management Program that provides resources to support federal life cycle cost (LCC) analysis, including the Federal LCC Methodology (Handbook 135), Energy Escalation Rate Calculator (EERC) web app, and BLCC software.

Phil Coleman, MS, CEM, CMVP, Lawrence Berkeley National Laboratory  

Phil is a technical advisor to the Federal Energy Management Program's energy savings performance contracting (ESPC) program, focusing particularly on utility rates and measurement and verification of savings. Also, in support of FEMP, he spearheads an effort to educate federal facilities on energy project incentives, demand response, and time-variable pricing. Internationally, Phil has worked with the governments of Mexico, India, Chile, and Jordan on developing public sector energy conservation programs. He received a Master of Science in energy management and policy from the University of Pennsylvania in 1994 and also holds the Association of Energy Engineers' Certified Energy Manager (CEM) and Certified Measurement and Verification Professional (CMVP) designations.

Learning Objectives

Upon completion of this course, attendees will be able to:

  • Identify the benefit of escalating rates, as well as the risk of over-escalating, in performance contracts (ESPCs, UESCs, and PPAs);
  • Identify the key elements in FEMP's escalation rates guidance;
  • Recognize the appropriate escalation rate for any commodity or service in any domestic performance contract; and
  • Identify the appropriate values to key factors (e.g., sector, inflation rate, and carbon pricing policy) in using EERC for a performance contract at your site(s).
Federal Agencies and Facility Criteria: