220.127.116.11 Coordination with Other Agencies. The Department of Housing and
Urban Development (HUD) is coordinating third party financing of district
heating systems to revitalize economically depressed inner urban areas. HUD
has a program of matching block grants to assist municipalities in
attracting private capital. In urban areas near Defense facilities, HUD
would like to have the facility energy requirement be considered as a
possible "base load" of such district heating or cogeneration plants. The
policy of the Department of Defense states that, cooperation with, and
support of, such beneficial programs sponsored by other Federal and local
agencies should be given within the bounds of the installation's legal
authority and with primary consideration given to continued, reliable
mission support. The initiator of any third party contract should contact
the local HUD regional office. The military department entering into a
third party contract, must coordinate with the local utility provider to
minimize any adverse rate impact on their customers and prevent infringement
upon the utility company's franchise rights to serve the area.
2.5.2 Government Ownership. The Government shall own and operate its own
source of electric power if justified by any of the following factors:
a) Commercial sources of electric power and personnel are either not
available or are not of sufficient generating capacity or proximity to meet
the load demands.
b) Economics studies indicate that substantial savings to the
Government will result from owning and operating an electric generating
plant. Economic studies shall use the true cost basis (including all
allocatable items of overhead and personnel, and a depreciation and
maintenance fund for equipment replacement and repair) in evaluating
Government ownership. Only those costs which would remain unchanged,
regardless of whether the services were owned or purchased, may be
neglected in these analyses.
c) Abnormal or fluctuating military electric demand, necessary to
meet current and mobilization requirements, that has discouraged private
investment may justify Government ownership.
d) Government ownership may be justified when there is demand for
complete command control to avoid compromising highly classified security
e) The need for complete demilitarization prior to final disposal,
of certain types of military equipment may justify Government ownership.
f) Other reasons clearly demonstrating a particular Government owned
justify a Government ownership.
2.6 Fuel Selections. Refer to Department of Defense (DOD) 4270.1-M
construction Criteria Manual, Section 9-1, for policy as to selection of
fuels for diesel power plants. The initial or primary fuel shall be the one
that is the most economical in operation consistent with availability and