Pepco Holdings Inc. (POM), through its business unit Pepco Energy Services Inc., received a $27.6 million comprehensive energy performance and maintenance contract from the Maryland Port Administration. The contract extends over a 13.5 year term.
The contract will cover a total of 14 buildings spanning more than 570,000 square feet including the World Trade Center in Inner Harbor, the Maryland Cruise Passenger Building, and Maryland Port Administration facilities in the Dundalk Marine Terminal, South Locust Point Marine Terminal, and Cox Creek, all located in Baltimore, Maryland.
Under this contract, Pepco Energy will install about 22 energy conservation measures. The main highlight of the project is the implementation of a Geothermal Harbor Heat Sink at the World Trade Center, which will use Baltimore Harbor’s water to cool the World Trade Center. This renewable technology will reduce electricity and water consumption, and chemical treatment, enabling Baltimore City to achieve its 2020 initiatives for the Harbor waters.
Additionally, the contract entails the installation of an aggregate 750 kW high-efficiency photovoltaic system on two building rooftops, which are the largest of the systems installed under the Maryland Department of Transportation solar initiatives.
The electricity produced from these systems will be used to directly power these facilities during peak operational hours. These systems are projected to provide about $93,400 per year in electricity savings.
Pepco Energy will also provide measurement and verification services, along with equipment maintenance over the entire contract term. Maryland Port Administration employees and clients will benefit from this project as well through an Energy Awareness program to be initiated by Pepco Energy Services.
Energy cost savings for the Maryland Port Administration are estimated to be more than $22 million over the life of the contract. The project will also result in a reduction of over 4,100 metric tons of carbon dioxide emissions.
The project will be partially financed through the Maryland Energy Administration’s Project Sunburst Grant, as well as the local utility’s Smart Energy Savers Program utility rebates. Pepco Energy has already begun construction of the project. The company estimates the project to be completed in November 2012.
Pepco Energy Services Inc. is a leader in energy savings performance contracting. Based in Washington, District of Columbia, Pepco Holdings is involved in the transmission and distribution of electricity, as well as delivery and supply of natural gas. The company’s major peers include FirstEnergy Corp. (FE) and Constellation Energy Group Inc. (CEG).
Pepco Holdings currently retains a Zacks #3 Rank (short-term Hold rating). We maintain our long term Outperform’ rating on Pepco.
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