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NORESCO Awarded $106 Million Cogeneration Project for U.S. Navy in Japan

Project to Save More Than $343 Million During 20-Year Term

Business Wire, November 30, 2006 – WESTBOROUGH, Mass.--(BUSINESS WIRE)--NORESCO, a national leader in guaranteed energy savings solutions, has been awarded a $106 million project to build a cogeneration power plant at Commander, Fleet Activities, Yokosuka (CFAY), Japan, in support of the Naval Facilities Engineering Command Far East (NAVFAC Far East).

The plant, scheduled to be operational by summer 2008, will provide approximately 39 megawatts (MW) of new capacity. It will provide 14.5 MW of electricity at 50 Hz to support Base activities and 24.5 MW of 60 Hz power capability to provide additional shore power for Navy ships in port. Through efficient heat recovery, the cogeneration system will also provide steam generation capacity. Overall, the system will enhance system reliability, save energy, improve operational flexibility to meet the complex mission requirements, and reduce CO2 emissions by more than 1.3 million tons.

Developed as an energy savings performance contract (ESPC), the project will be funded by guaranteed cost savings over a 20-year term. This self-funding structure eliminates the need for capital appropriations to pay for the energy infrastructure improvements. Annual cost savings in excess of $14 million to the Navy will pay for the financing of the complete installation and provide $144 million for operations, maintenance, and repair services on major equipment over the contract term. The plant will be operated, managed, maintained, and repaired by an integrated contractor/government operations team.

“This historic project is the culmination of exceptional effort on the part of the NAVFAC Far East, in Yokosuka, Japan, and the Naval Facilities Engineering Command Southwest Specialty Center Contracts Core in Port Hueneme, California,” said Neil Petchers, President and CEO of NORESCO. “Their dedication and commitment to energy conservation and security were instrumental to this energy partnership with NORESCO. This project will provide substantial energy and cost savings to the Government, reduce our dependence on foreign oil, and have a positive environmental impact through a dramatic reduction in harmful emissions and greenhouse gases, while supporting the mission readiness of the Yokosuka Naval Base. To provide these infrastructure improvements in support of our service men and women stationed at Yokosuka is an honor. It is also a responsibility that NORESCO takes with the highest possible level of commitment.”

NORESCO is one of the largest U.S. energy services companies specializing in the development, design, construction, financing, and operation of energy and environmental efficiency projects, performance contracting, and central energy plants. Its clients include various departments of the U.S. government, school districts, local governments, and industrial and commercial businesses. Over the past two decades, NORESCO has implemented more than $2 billion in energy and infrastructure projects at more than two thousand sites throughout the U.S. and abroad.

Commander Fleet Activities, Yokosuka comprises 568 acres, and is located 43 miles south of Tokyo at the entrance of Tokyo Bay and approximately 18 miles south of Yokohama. CFAY is the largest overseas U.S. Naval installation in the world, and its mission is to maintain and operate base facilities for the logistic, administrative, service and recreational support of the U.S. SEVENTH Fleet, U.S. Naval Forces Japan, and other operating forces forward-deployed in the Western Pacific.

NAVFAC manages the planning, design, construction, contingency engineering, real estate, environmental, and public works support for U.S. Navy shore facilities around the world. It provides the Navy’s forces with the operating, expeditionary, support, and training bases they need. As a major Navy Systems Command and an integral member of the Navy and Marine Corps team, NAVFAC delivers timely and effective facilities engineering solutions worldwide.

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