November 3, 2016

Industry Input Sought on D.C.'s Heating Operation & Transmission District

Holland & Knight Government Energy Finance Blog
Taite R. McDonald

The U.S. General Services Administration (GSA) has recently issued a Request for Information (RFI) seeking input from industry on how to address inefficiencies and high costs in its Heating Operation & Transmission District (HOTD) located in Washington, D.C. Government agencies use RFIs as a tool to conduct market research on the interest and capabilities of the private sector to provided needed services and products. GSA intends to use responses to this RFI to shape a formal procurement. Companies with creative solutions should consider responding to this RFI, as those very solutions could be incorporated into the final solicitation package.


Built in 1933, the HOTD complex is comprised of a steam generation, chilled water generation, a combined heat and power (CHP) plant, and steam and chilled water distribution systems. The HOTD presently provides steam to 71 locations and chilled water to 11 including both GSA and non-GSA facilities via 12 miles of tunnels and buried lines in D.C.

In recent years, the HOTD has faced a number of operational challenges including:

  1. Demand for steam has declined due to customers becoming more efficient or altogether leaving the system. The remaining customers face higher costs further incentivizing more to leave.
  2. A majority of HOTD's customers are traditional office buildings, leading to an uneven load profile with high usage during work hours and low usage after. The HOTD operates below its design capacity.
  3. GSA is facing mountain capital costs due to aging infrastructure, system reliability issues, deferred maintenance, and evolving technology and regulatory requirements.

What's Being Asked

Given these mounting issues, GSA has issued this RFI in order to solicit potential solutions from industry. Ultimately, GSA strives to achieve two objectives in this effort, namely, to improve:

  1. Mission Efficiency – implement alternative business approaches to more efficiently (in both costs and operations) perform HOTD’s functions
  2. Asset Optimization – extract maximum value from existing and future HOTD assets

To achieve the best possible outcomes, GSA is considering a range of operating and ownership options for the HOTD that could enhance, expand, and/or reposition the system to meet its environmental and resiliency goals and potentially serve a larger customer base and/or provide expanded services. Specific proposals envisioned by this RFI include:

  • Physical upgrades and replacements
  • Decentralizing heating and cooling services
  • Redesigning HOTD into a central generation facility for a local microgrid
  • Running broadband infrastructure through the tunnels

GSA is also considering a range of contracting vehicles from traditional delivery, public-private partnerships, and privatization. To help define the optimal approach, GSA welcomes comments on all possible options for the HOTD, even if they exceed GSA's current authority.

Key dates:

  • A site visit of the HOTD facilities is scheduled for November 10
  • RFI questions are due November 16
  • RFI submissions are due December 22

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