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115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-575
======================================================================
ENERGY SAVINGS THROUGH PUBLIC-PRIVATE PARTNERSHIPS ACT OF 2017
_______
February 23, 2018.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Walden, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
[To accompany H.R. 723]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 723) to amend the National Energy Conservation
Policy Act to encourage the increased use of performance
contracting in Federal facilities, and for other purposes,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 3
Background and Need for Legislation.............................. 3
Committee Action................................................. 4
Committee Votes.................................................. 4
Oversight Findings and Recommendations........................... 4
New Budget Authority, Entitlement Authority, and Tax Expenditures 4
Congressional Budget Office Estimate............................. 4
Federal Mandates Statement....................................... 10
Statement of General Performance Goals and Objectives............ 10
Duplication of Federal Programs.................................. 11
Committee Cost Estimate.......................................... 11
Earmark, Limited Tax Benefits, and Limited Tariff Benefits....... 11
Disclosure of Directed Rule Makings.............................. 11
Advisory Committee Statement..................................... 11
Applicability to Legislative Branch.............................. 11
Section-by-Section Analysis of the Legislation................... 11
Changes in Existing Law Made by the Bill, as Reported............ 12
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Energy Savings Through Public-Private
Partnerships Act of 2017''.
SEC. 2. USE OF ENERGY AND WATER EFFICIENCY MEASURES IN FEDERAL
BUILDINGS.
(a) Energy Management Requirements.--Section 543(f)(4) of the
National Energy Conservation Policy Act (42 U.S.C. 8253(f)(4)) is
amended by striking ``may'' and inserting ``shall''.
(b) Reports.--Section 548(b) of the National Energy Conservation
Policy Act (42 U.S.C. 8258(b)) is amended--
(1) in paragraph (3), by striking ``and'' at the end;
(2) in paragraph (4), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(5)(A) the status of the energy savings performance
contracts and utility energy service contracts of each agency;
``(B) the investment value of the contracts;
``(C) the guaranteed energy savings for the previous year as
compared to the actual energy savings for the previous year;
``(D) the plan for entering into the contracts in the coming
year; and
``(E) information explaining why any previously submitted
plans for the contracts were not implemented.''.
(c) Definition of Energy Conservation Measures.--Section 551(4) of
the National Energy Conservation Policy Act (42 U.S.C. 8259(4)) is
amended by striking ``or retrofit activities'' and inserting ``retrofit
activities, or energy consuming devices and required support
structures''.
(d) Authority To Enter Into Contracts.--Section 801(a)(2)(F) of the
National Energy Conservation Policy Act (42 U.S.C. 8287(a)(2)(F)) is
amended--
(1) in clause (i), by striking ``or'' at the end;
(2) in clause (ii), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(iii) limit the recognition of operation
and maintenance savings associated with systems
modernized or replaced with the implementation
of energy conservation measures, water
conservation measures, or any combination of
energy conservation measures and water
conservation measures.''.
(e) Miscellaneous Authority.--Section 801(a)(2) of the National
Energy Conservation Policy Act (42 U.S.C. 8287(a)(2)) is amended by
adding at the end the following:
``(H) Miscellaneous authority.--Notwithstanding any
other provision of law, a Federal agency may sell or
transfer energy savings and apply the proceeds of the
sale or transfer to fund a contract under this
title.''.
(f) Payment of Costs.--Section 802 of the National Energy
Conservation Policy Act (42 U.S.C. 8287a) is amended by striking ``(and
related operation and maintenance expenses)'' and inserting ``,
including related operations and maintenance expenses''.
(g) Definition of Federal Building.--Section 551(6) of the National
Energy Conservation Policy Act (42 U.S.C. 8259(6)) is amended by
striking the semicolon at the end and inserting ``; the term does not
include a dam, reservoir, or hydropower facility owned or operated by a
Federal agency;''.
(h) Definition of Energy Savings.--Section 804(2) of the National
Energy Conservation Policy Act (42 U.S.C. 8287c(2)) is amended--
(1) in subparagraph (A), by striking ``federally owned
building or buildings or other federally owned facilities'' and
inserting ``Federal building (as defined in section 551)'' each
place it appears;
(2) in subparagraph (C), by striking ``; and'' and inserting
a semicolon;
(3) in subparagraph (D), by striking the period at the end
and inserting a semicolon; and
(4) by adding at the end the following:
``(E) the use, sale, or transfer of energy
incentives, rebates, or credits (including renewable
energy credits) from Federal, State, or local
governments or utilities; and
``(F) any revenue generated from a reduction in
energy or water use, more efficient waste recycling, or
additional energy generated from more efficient
equipment.''.
Purpose and Summary
H.R. 723 facilitates the use of energy savings performance
contracts (ESPCs) and utility energy service contracts (UESCs)
to utilize private sector investment to upgrade the energy and
water efficiency of Federal facilities without any up-front
cost to taxpayers. The bill helps to reduce Federal energy
costs, while saving money, creating jobs, and reducing waste.
Background and Need for Legislation
The Committee on Energy and Commerce has recognized the
significant benefits of energy efficiency efforts in conserving
domestic resources, saving American consumers money,
strengthening economic competitiveness, and reducing
environmental impacts. The energy efficiency ``resource'' plays
an increasingly important role in the nation's energy strategy.
The advancement of cost-effective efficiency programs and
technologies can contribute to the nation's goal of energy
independence by reducing demand and using supplies in a more
effective manner. H.R. 723 seeks to increase energy efficiency
and water conservation measures in the Federal Government.
According to the Energy Information Administration, the
Federal Government is the single largest energy consumer in the
nation. Congress therefore expects the government to pursue its
own energy efficiency efforts vigorously--not only to conserve
energy resources and taxpayer dollars, but to lead by example.
To that end, H.R. 723 further encourages the federal agencies
to enter into energy savings performance contracts (ESPCs) and
utility energy service contracts (UESCs).
ESPCs and UESCs are proven methods by which Federal
agencies can increase efficiency, thereby reducing energy
costs. In both cases, an approved contractor designs and
installs systems and equipment to reduce the energy consumption
of a Federal facility and gets paid back through savings on
utility bills that result from the project over a stipulated
period of time. By law, and on a negotiated basis, the
government never pays more than it would have paid for
utilities if it had not entered into the contract. Using an
ESPC or UESC in the Federal Government eliminates the need for
appropriated dollars for equipment replacement and for
operations and maintenance of such energy consuming equipment.
For over 20 years, performance-based contracts for energy
savings have provided upgrades to Federal buildings, including
the House and Senate Office Buildings and the U.S. Capitol.
According to the Federal Energy Management Program,
approximately 650 performance contracts worth $8 billion have
been awarded throughout 25 Federal agencies and in all 50
States. These projects have resulted in energy savings valued
at nearly $15 billion, of which approximately $11 billion went
to repay project investments, accruing a net savings of $4
billion to the Federal Government.
Greater use of ESPCs has been impaired by administrative
delay and process issues within Federal agencies, some of which
are the result of ambiguity in the underlying law. H.R. 723
seeks to eliminate administrative roadblocks by clarifying
certain provisions of the law to reduce confusion resulting
from statutory ambiguities. In addition, the legislation
requires additional reporting requirements, thus ensuring
improved transparency.
Committee Action
The Committee on Energy and Commerce has not held hearings
on the legislation.
On June 7, 2017, the full Committee on Energy and Commerce
met in open markup session and ordered H.R. 723, without
amendment, favorably reported to the House by unanimous
consent.
Committee Votes
Clause 3(b) of rule XIII requires the Committee to list the
record votes on the motion to report legislation and amendments
thereto. There were no record votes taken in connection with
ordering H.R. 723 reported.
Oversight Findings and Recommendations
Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII, the Committee has not held hearings on this
legislation.
New Budget Authority, Entitlement Authority, and Tax Expenditures
Pursuant to clause 3(c)(2) of rule XIII, the Committee
finds that H.R. 723 would result in no new or increased budget
authority, entitlement authority, or tax expenditures or
revenues.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII, the following is
the cost estimate provided by the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 16, 2018.
Hon. Greg Walden,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 723, the Energy
Savings Through Public-Private Partnerships Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Megan
Carroll.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 723--Energy Savings Through Public-Private Partnerships Act of
2017
Summary: H.R. 723 would modify agencies' authority to enter
into energy savings performance contracts (ESPCs), a specific
type of long-term contract used to procure equipment and
services to conserve energy in federal buildings. The bill also
would specify new reporting requirements for federal agencies.
In CBO's view, commitments under ESPCs create direct
spending because agencies enter into such contracts without
appropriations in advance to cover their full costs. On the
basis of that view, CBO estimates that enacting H.R. 723 would
increase direct spending by $441 million over the 2019-2027
period. CBO also estimates that reductions in federal agencies'
energy costs attributable to investments in energy-related
services and equipment procured through contracts authorized
under the bill would total $166 million over the 2019-2027
period (and additional amounts after 2027). Over that period,
CBO also estimates that discretionary spending for certain
services related to those contracts would total $36 million.
Because H.R. 723 would affect direct spending, pay-as-you-
go procedures apply. Enacting the bill would not affect
revenues.
CBO estimates that enacting H.R. 723 would not increase net
direct spending or on-budget deficits by more than $2.5 billion
in any of the four consecutive 10-year periods beginning in
2028.
For purposes of determining budget-related points of order
for legislation considered by the House, section 5109 of H.
Con. Res. 71, the Concurrent Resolution on the Budget for
Fiscal Year 2018, specifies how CBO should prepare cost
estimates for ESPCs. Specifically, that resolution requires CBO
to estimate, on a net-present value basis, the lifetime net
cost or savings attributable to projects financed by such
contracts and to record that amount as an upfront change in
direct spending. Using those procedures, CBO estimates that
H.R. 723 would reduce direct spending by $27 million over the
2019-2027 period. However, H. Con. Res. 71 also specifies that,
in the House of Representatives, any estimated savings
calculated on that basis may not be used as an offset for
purposes of budget enforcement.
H.R. 723 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments.
Estimated cost to the federal government: The estimated
budgetary effects of this legislation are shown in the
following table. Because the bill would affect energy-related
spending by agencies throughout the federal government, the
costs of this legislation would be spread across most budget
functions.
Background: Under current law, a variety of statutory
provisions and executive orders direct federal agencies to meet
certain goals to reduce the amount of energy used, increase the
consumption of electricity that is generated from renewable
sources, reduce emissions of greenhouse gases, and ensure that
federal facilities meet certain standards related to the use of
sustainable resources. To support investments in energy-
efficient and renewable technologies necessary to achieve those
goals, federal agencies sometimes use ESPCs--specific types of
long-term contracts that enable nonfederal vendors to finance
energy-related investments on behalf of the government.
Under such contracts, agencies agree to pay vendors for
energy conservation measures and related financing costs over
time on the basis of anticipated and realized reductions in
energy costs. Typically, an ESPC vendor develops a baseline
estimate of energy consumption that would occur in the absence
of energy conservation measures and estimates the reductions in
energy consumption and energy costs that would result from an
ESPC-funded project. Those estimated reductions are used to set
the annual payments to the vendor for the services and
equipment provided under the ESPC. According to the Department
of Energy, the typical term of those payments under an ESPC is
at least 17 years--that is, it takes at least 17 years, on
average, for the government to realize sufficient savings to
cover the contractual payments due to the vendor. After the
contract is fully repaid, additional savings generated by
energy conservation measures accrue to the government.
ESTIMATED BUDGETARY EFFECTS OF H.R. 723 AS REPORTED BY THE SENATE COMMITTEE ON ENERGY AND NATURAL RESOURCES ON MAY 24, 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
--------------------------------------------------------------------------------------------------
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018-2022 2018-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES IN DIRECT SPENDINGa
Federal Obligations Under ESPCsb
Estimated Budget Authority....................... 0 55 55 55 55 55 55 55 55 55 220 495
Estimated Outlays................................ 0 17 39 55 55 55 55 55 55 55 166 441
INCREASES OR DECREASES (-) IN SPENDING SUBJECT TO APPROPRIATIONa
Reductions in Energy and Energy-Related Costs
Attributable to ESPCs
Estimated Authorization Level.................... 0 -1 -4 -8 -13 -18 -23 -28 -33 -38 -26 -166
Estimated Outlays................................ 0 -1 -4 -8 -13 -18 -23 -28 -33 -38 -26 -166
Appropriations for ESPC- Related Services
Estimated Authorization Level.................... 0 * 1 2 3 4 5 6 7 8 6 36
Estimated Outlays................................ 0 * 1 2 3 4 5 6 7 8 6 36
Total Changes in Spending Subject to Appropriation
Estimated Authorization Level.................... 0 -1 -3 -6 -10 -14 -18 -22 -26 -30 -20 -130
Estimated Outlays................................ 0 -1 -3 -6 -10 -14 -18 -22 -26 -30 -20 -130
--------------------------------------------------------------------------------------------------------------------------------------------------------
Memorandum: Estimated Net Present Value of All Budgetary Effects related to ESPCs under H.R. 723, Following Procedures Specified in Section 5109 of H.
Con. Res. 71, as passed by the House of Representatives on October 25, 2017.
DECREASES IN DIRECT SPENDING AS ESTIMATED ON A NET-PRESENT-VALUE BASISc
Decreases in Direct Spending
Estimated Budget Authority....................... 0 -3 -3 -3 -3 -3 -3 -3 -3 -3 -12 -27
Estimated Outlays................................ 0 -3 -3 -3 -3 -3 -3 -3 -3 -3 -12 -27
--------------------------------------------------------------------------------------------------------------------------------------------------------
ESPCs = energy savings performance contracts. * = between zero and $500,000.
aThe estimates reflect CBO's view of how cash flows related to ESPCs should be recorded in the federal budget. Since ESPCs were first implemented in
1998, however, the Administration has not recorded the full extent of federal obligations under ESPCs upfront when contracts were signed. Instead, the
Administration records ongoing contract payments to vendors on a year-by-year basis as appropriations for such payments are provided. If the
Administration was to continue following that practice for executing ESPCs under H.R. 723, agencies' total energy-related costs would be largely
unchanged during the contract period, when estimated savings from reduced energy use would be paid to vendors under ESPC contracts. As a result, CBO
estimates that there would be no significant reduction in appropriations from implementing H.R. 723 over the 10-year period covered by this estimate.
If expected reductions in energy use continued beyond the contract period, budgetary savings would accrue to the federal government if annual
appropriations for agencies' energy-related spending were reduced accordingly.
bEstimated budget authority reflects the value of energy conservation measures as installed plus the net present value of the portion of vendors'
borrowing costs attributable to contract interest rates that would exceed U.S. Treasury interest rates. Estimated outlays stemming from such
commitments are spread across the period during which the vendor is expected to construct, manufacture, or purchase energy conservation assets on
behalf of the federal government.
cSection 5109 of H. Con. Res. 71, as passed by the House of Representatives on October 25, 2017, specifies an alternative method for estimating the
budgetary effects of ESPCs and similar contracts. That methodology requires CBO to calculate, on a net-present-value basis, the lifetime net cost or
savings attributable to projects financed by ESPCs and to record that amount as an upfront change in direct spending in the year when commitments are
expected to be made. However, H. Con. Res. 71 also specifies that any estimating savings calculated on that basis may not be used as an offset for
purposes of budget enforcement.
CBO generally expects that implementing ESPCs will affect
both direct spending and spending subject to appropriation. The
rationale for CBO's longstanding budgetary treatment of ESPCs,
and differences between CBO's view and the Administration's,
are discussed in depth in a CBO report on that topic.\1\ In
brief, upon entering into an ESPC, the government effectively
commits to making payments to a vendor in future years before
having appropriations to cover all of the resulting costs; in
CBO's view, the authority to enter into such contractually
binding agreements without appropriations is a form of direct
spending. ESPCs permit agencies to pay vendors for energy
conservation measures and related financing costs over time on
the basis of anticipated and realized reductions in energy
costs, which are generally paid from discretionary annual
appropriations.
---------------------------------------------------------------------------
\1\See Congressional Budget Office, Using ESPCs to Finance Federal
Investments in Energy-Efficient Equipment, (February 2015),
www.cbo.gov/publication/49869.
---------------------------------------------------------------------------
Basis of estimate: For this estimate, CBO assumes that the
bill will be enacted by the start of fiscal year 2019.
H.R. 723 would make a variety of changes to the ESPC
statute. In particular, the bill would:
Require agencies to implement energy
conservation measures identified as being cost-
effective;
Expand the definition of an energy
conservation measure to include the acquisition of
energy-consuming devices and support structures (such
as appliances located within federal buildings);
Expand the definition of energy savings that
may be included in an ESPC to include the use, sale, or
transfer of energy incentives, rebates, or credits
(such as renewable energy certificates) as well as
savings from reductions in water or energy use, more
efficient waste recycling, or additional energy
generated from energy conservation measures;\2\
---------------------------------------------------------------------------
\2\Renewable energy certificates represent the rights to the
nonpower renewable and environmental attributes of electricity
generated from renewable resources. Such certificates, and other
similar incentives and rebates, can be sold separately from the
underlying units of physical electricity.
---------------------------------------------------------------------------
Authorize agencies to use, sell, or transfer
energy incentives, rebates, or credits as a means of
making payments to vendors under ESPCs;
Require agencies to include anticipated
reductions in operation and maintenance (O&M) costs
when estimating the savings attributable to energy
conservation measures acquired through an ESPC; and
Specify that ESPCs could not be used to
install energy conservation measures at dams,
reservoirs, or hydropower facilities that are owned or
operated by a federal agency.
Taken as a whole, CBO expects that those changes would
allow agencies to use ESPCs to pay for new energy-related
projects that otherwise would not be undertaken under current
law. In general, we expect that broadening the scope of effects
that could be counted as energy savings in particular, by
allowing agencies to include the full extent of anticipated
reductions in O&M costs stemming from ESPC-financed investments
would enable agencies to make investments that might not
otherwise be justifiable within existing requirements. We also
expect that permitting agencies to count incentives such as
renewable energy credits as savings and use them to pay vendors
would lead to greater investments in renewable technologies.
CBO estimates that, under H.R. 723, agencies would use
ESPCs to implement additional energy conservation measures with
an underlying cost of about $40 million annually. That estimate
represents a relatively modest incremental increase in
anticipated spending for energy-related investments. By
comparison, since 2012 overall spending by federal agencies for
energy-related investments has averaged nearly $1.7 billion
annually, with more than 40 percent of energy conservation
measures or about $700 million annually acquired through ESPCs
or similar contracts.
CBO estimates that enacting H.R. 723 would increase direct
spending for contractual obligations to pay for energy-related
investments and, on net, reduce the need for discretionary
spending to cover agencies' annual energy costs.
Direct spending: Under H.R. 723, CBO estimates that direct
spending for the upfront cost of contractual commitments to
acquire additional energy conservation measures through ESPCs
would total $55 million annually. CBO's estimate of direct
spending reflects an amount equal to the annual cost of energy
conservation measures as installed (about $40 million), plus
the net present value of the portion of the contractor's
borrowing costs that are attributable to interest rates that
would exceed U.S. Treasury interest rates (about $15
million).\3\ The portion of the borrowing costs that are
equivalent to the amount of interest the Treasury would pay if
projects were financed with appropriated funds are not included
in our estimate because, for the enforcement of Congressional
budget rules, changes in the amount of interest the Treasury
pays are not reflected in cost estimates. CBO's estimate of
spending reflects its judgment as to when equipment or services
would be provided typically over a three-year period for
equipment. On that basis, CBO estimates that direct spending
under H.R. 723 would total $441 million over the 2019-2027
period.
---------------------------------------------------------------------------
\3\The methodology that CBO follows in preparing cost estimates for
proposals involving ESPCs is consistent with scorekeeping guidelines
set forth in the joint statement of managers that accompanied the
conference reports on the Balanced Budget Act of 1997. See House
Committee on the Budget, Conference Report to Accompany H.R. 2015,
House Report 105-217 (July 30, 1997), pp. 1007-1014, http://go.usa.gov/
hb8Q (PDF, 3.1 MB). In particular, Rule 11 specifies scoring treatments
for legislation that authorizes agencies to enter into capital leases
and other third-party financing arrangements.
---------------------------------------------------------------------------
Spending subject to appropriation: ESPCs permit federal
agencies to pay vendors for energy conservation measures and
related financing costs over time on the basis of anticipated
and realized reductions in energy costs, which are generally
paid from annual appropriations. CBO estimates that reductions
in energy and related costs attributable to ESPCs entered into
under H.R. 723 would occur gradually over the period of time
covered by such contracts--up to 25 years. As a result, most
anticipated savings attributable to projects financed by such
contracts would occur beyond the period covered by this
estimate.
CBO anticipates that ESPC-funded projects under H.R. 723
would, on average, have payback periods averaging about 19
years. Based on an analysis of data related to existing ESPCs,
CBO also estimates that annual reductions in energy and energy-
related costs would equal roughly 11 percent of the underlying
cost of energy conservation measures. On that basis, CBO
estimates that reductions in energy-related federal costs
attributable to ESPCs entered into pursuant to H.R. 723 would
total $166 million over the 2019-2027 period, with additional
savings occurring in later years.
Those estimated savings would be partially offset by
increased spending for certain services related to ESPCs
entered into under the bill. Typically, when using such a
contract, an agency agrees to make payments for services
related to the operation and maintenance of newly installed
equipment. Such agreements include measurement and verification
activities to confirm that projects reduce energy consumption
as guaranteed by the contract. Because the government can opt
out of those services at any time, such contract-related costs
are considered discretionary. For this estimate, CBO projects
that the cost of such services would total about 2.5 percent of
the value of energy conservation measures acquired through
ESPCs. Assuming appropriation of the necessary amounts, CBO
estimates that discretionary spending for optional contract-
related services would total $36 million over the 2019-2027
period and gradually increase as new contracts are entered into
each year and payments on older contracts continue. Netting
those costs against the projected savings in energy and related
costs, CBO estimates discretionary savings of $130 million over
the 2019-2027 period.
Estimated budgetary effects attributable to ESPCs under H.
Con. Res. 71: As previously mentioned, in preparing estimates
for legislation related to ESPCs, section 5109 of H. Con. Res.
71 requires CBO to estimate the net present value of all
budgetary effects attributable to ESPC contracts as a change in
direct spending. Specifically, that methodology requires CBO to
calculate, on a net-present-value basis, the lifetime net cost
or savings attributable to projects financed by ESPCs and to
record that amount as an upfront change in direct spending in
the year when commitments are expected to be made.
Following that methodology, CBO estimates that one year's
worth of projects pursued through ESPCs under H.R. 723 would
involve payments to contractors totaling, on a nominal basis
$89 million over nearly 20 years. Such payments include $40
million for repayments of principal amounts borrowed by the
contractors to finance projects, $28 million in interest costs,
and $21 million in payments for optional contract-related
services. We also estimate that nominal energy savings
attributable to one year's worth of projects would total $101
million over the anticipated useful life of equipment.
Adjusting the discount rate for the market risk associated with
the various cash flows, CBO estimates that one year's worth of
projects would generate net savings, on a net-present-value
basis, of $3 million--or $27 million for ESPCs entered into
during the 2019-2027 period covered by this estimate.
However, H. Con. Res. 71 also specifies that, in the House
of Representatives, any savings estimated by CBO using those
procedures shall not be counted as an offset for purposes of
budget enforcement.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.
Section 5109 of H. Con. Res. 71 does not apply to estimates for
the Statutory Pay-As-You-Go Act; thus, the amounts shown here
reflect CBO's estimates of direct spending effects.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 723, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON ENERGY AND COMMERCE ON JUNE 7, 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018-2022 2018-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN THE DEFICIT
Statutory Pay-As-You-Go Impact.................... 0 17 39 55 55 55 55 55 55 55 166 441
--------------------------------------------------------------------------------------------------------------------------------------------------------
Increase in long-term deficit and net direct spending: CBO
estimates that enacting the legislation would not increase net
on-budget deficits or net direct spending by $2.5 billion or
more in any of the four consecutive 10-year periods beginning
in 2027.
Intergovernmental and private-sector impact: H.R. 723
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments.
Previous CBO estimate: On February 16, 2018, CBO
transmitted a revised cost estimate for S. 239, the Energy
Savings Through Public-Private Partnerships Act of 2017, as
reported by the Senate Committee on Energy and Natural
Resources on May 24, 2017.
H.R. 723 and S. 239 are virtually identical and CBO's
estimates of the budgetary effects under the two bills are the
same. However, under H. Con. Res. 71, our revised estimate of
S. 239 would reflect one further difference. Specifically, the
provision that prohibits any savings estimated by CBO to be
considered as an offset for purposes of budget enforcement
applies only to legislation considered by the House of
Representatives, not the Senate. Thus, while H.R. 723 would
have no effect on direct spending for purposes of budget
enforcement in the House, S. 239 would be considered as
reducing net direct spending in the Senate.
Estimate prepared by: Federal Costs: Megan Carroll; Impact
on State, Local, and Tribal Governments: Jon Sperl; Impact on
the Private Sector: Amy Petz.
Estimate approved by: H. Samuel Papenfuss, Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Statement of General Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII, the general
performance goal or objective of this legislation is to
facilitate the use of ESPCs and UESCs to utilize private sector
investment to upgrade the energy and water efficiency of
Federal facilities without any up-front cost to taxpayers. The
bill helps to reduce Federal energy costs while saving money,
creating jobs, and reducing waste.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII, no provision of
H.R. 723 is known to be duplicative of another Federal program,
including any program that was included in a report to Congress
pursuant to section 21 of Public Law 111-139 or the most recent
Catalog of Federal Domestic Assistance.
Committee Cost Estimate
Pursuant to clause 3(d)(1) of rule XIII, the Committee
adopts as its own the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974.
Earmark, Limited Tax Benefits, and Limited Tariff Benefits
Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the
Committee finds that H.R. 723 contains no earmarks, limited tax
benefits, or limited tariff benefits.
Disclosure of Directed Rule Makings
Pursuant to section 3(i) of H. Res. 5, the Committee finds
that H.R. 723 contains no directed rule makings.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 provides that the Act may be cited as the
``Energy Savings Through Public-Private Partnerships Act of
2017.''
Section 2. Use of energy and water efficiency measures in Federal
buildings
Section 2 amends the National Energy Conservation Policy
Act to encourage the increased use of performance contracting
in Federal facilities and other purposes. Specifically, this
section modifies language regarding energy management
requirements, reports, the definition of energy conservation
measures, the authority to enter into contracts, payment of
costs, the definition of federal building, the definition of
energy savings, and miscellaneous authorities.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
NATIONAL ENERGY CONSERVATION POLICY ACT
* * * * * * *
TITLE V--FEDERAL ENERGY INITIATIVE
* * * * * * *
PART 3--FEDERAL ENERGY MANAGEMENT
* * * * * * *
SEC. 543. ENERGY MANAGEMENT REQUIREMENTS.
(a) Energy Performance Requirement for Federal Buildings.--
(1) Subject to paragraph (2), each agency shall apply energy
conservation measures to, and shall improve the design for the
construction of, the Federal buildings of the agency (including
each industrial or laboratory facility) so that the energy
consumption per gross square foot of the Federal buildings of
the agency in fiscal years 2006 through 2015 is reduced, as
compared with the energy consumption per gross square foot of
the Federal buildings of the agency in fiscal year 2003, by the
percentage specified in the following table:
Fiscal Year Percentage Reduction
2006...................................................... 2
2007...................................................... 4
2008...................................................... 9
2009...................................................... 12
2010...................................................... 15
2011...................................................... 18
2012...................................................... 21
2013...................................................... 24
2014...................................................... 27
2015...................................................... 30.
(2) An agency may exclude from the requirements of paragraph
(1) any building, and the associated energy consumption and
gross square footage, in which energy intensive activities are
carried out. Each agency shall identify and list in each report
made under section 548(a) the buildings designated by it for
such exclusion.
(3) Not later than December 31, 2014, the Secretary shall
review the results of the implementation of the energy
performance requirement established under paragraph (1) and
submit to Congress recommendations concerning energy
performance requirements for fiscal years 2016 through 2025.
(b) Energy Management Requirement for Federal Agencies.--(1)
Not later than January 1, 2005, each agency shall, to the
maximum extent practicable, install in Federal buildings owned
by the United States all energy and water conservation measures
with payback periods of less than 10 years, as determined by
using the methods and procedures developed pursuant to section
544.
(2) The Secretary may waive the requirements of this
subsection for any agency for such periods as the Secretary may
determine if the Secretary finds that the agency is taking all
practicable steps to meet the requirements and that the
requirements of this subsection will pose an unacceptable
burden upon the agency. If the Secretary waives the
requirements of this subsection, the Secretary shall, as part
of the report required under section 548(b), notify the
Congress in writing with an explanation and a justification of
the reasons for such waiver.
(3) This subsection shall not apply to an agency's facilities
that generate or transmit electric energy or to the uranium
enrichment facilities operated by the Department of Energy.
(4) An agency may participate in the Environmental Protection
Agency's ``Green Lights'' program for purposes of receiving
technical assistance in complying with the requirements of this
section.
(c) Exclusions.--(1)(A) An agency may exclude, from the
energy performance requirement for a fiscal year established
under subsection (a) and the energy management requirement
established under subsection (b), any Federal building or
collection of Federal buildings, if the head of the agency
finds that--
(i) compliance with those requirements would be
impracticable;
(ii) the agency has completed and submitted all
federally required energy management reports;
(iii) the agency has achieved compliance with the
energy efficiency requirements of this Act, the Energy
Policy Act of 1992, Executive orders, and other Federal
law; and
(iv) the agency has implemented all practicable, life
cycle cost-effective projects with respect to the
Federal building or collection of Federal buildings to
be excluded.
(B) A finding of impracticability under subparagraph (A)(i)
shall be based on--
(i) the energy intensiveness of activities carried
out in the Federal building or collection of Federal
buildings; or
(ii) the fact that the Federal building or collection
of Federal buildings is used in the performance of a
national security function.
(2) Each agency shall identify and list, in each report made
under section 548(a), the Federal buildings designated by it
for such exclusion. The Secretary shall review such findings
for consistency with the standards for exclusion set forth in
paragraph (1), and may within 90 days after receipt of the
findings, reverse the exclusion. In the case of any such
reversal, the agency shall comply with the requirements of
subsections (a) and (b)(1) for the building concerned.
(3) Not later than 180 days after the date of enactment of
this paragraph, the Secretary shall issue guidelines that
establish criteria for exclusions under paragraph (1).
(d) Implementation Steps.--The Secretary shall consult with
the Secretary of Defense and the Administrator of General
Services in developing guidelines for the implementation of
this part. To meet the requirements of this section, each
agency shall--
(1) prepare and submit to the Secretary, not later
than December 31, 1993, a plan describing how the
agency intends to meet such requirements, including how
it will--
(A) designate personnel primarily responsible
for achieving such requirements;
(B) identify high priority projects through
calculation of payback periods;
(C) take maximum advantage of contracts
authorized under title VIII of this Act, of
financial incentives and other services
provided by utilities for efficiency
investment, and of other forms of financing to
reduce the direct costs to the Government; and
(D) otherwise implement this part;
(2) perform energy surveys of its Federal buildings
to the extent necessary and update such surveys as
needed, incorporating any relevant information obtained
from the survey conducted pursuant to section 550;
(3) using such surveys, determine the cost and
payback period of energy and water conservation
measures likely to achieve the requirements of this
section;
(4) install energy and water conservation measures
that will achieve the requirements of this section
through the methods and procedures established pursuant
to section 544; and
(5) ensure that the operation and maintenance
procedures applied under this section are continued.
(e) Metering of Energy Use.--
(1) Deadline.--By October 1, 2012, in accordance with
guidelines established by the Secretary under paragraph
(2), all Federal buildings shall, for the purposes of
efficient use of energy and reduction in the cost of
electricity used in such buildings, be metered. Each
agency shall use, to the maximum extent practicable,
advanced meters or advanced metering devices that
provide data at least daily and that measure at least
hourly consumption of electricity in the Federal
buildings of the agency. Not later than October 1,
2016, each agency shall provide for equivalent metering
of natural gas and steam, in accordance with guidelines
established by the Secretary under paragraph (2). Such
data shall be incorporated into existing Federal energy
tracking systems and made available to Federal facility
managers.
(2) Guidelines.--
(A) In general.--Not later than 180 days
after the date of enactment of this subsection,
the Secretary, in consultation with the
Department of Defense, the General Services
Administration, representatives from the
metering industry, utility industry, energy
services industry, energy efficiency industry,
energy efficiency advocacy organizations,
national laboratories, universities, and
Federal facility managers, shall establish
guidelines for agencies to carry out paragraph
(1).
(B) Requirements for guidelines.--The
guidelines shall--
(i) take into consideration--
(I) the cost of metering and
the reduced cost of operation
and maintenance expected to
result from metering;
(II) the extent to which
metering is expected to result
in increased potential for
energy management, increased
potential for energy savings
and energy efficiency
improvement, and cost and
energy savings due to utility
contract aggregation; and
(III) the measurement and
verification protocols of the
Department of Energy;
(ii) include recommendations
concerning the amount of funds and the
number of trained personnel necessary
to gather and use the metering
information to track and reduce energy
use;
(iii) establish priorities for types
and locations of buildings to be
metered based on cost-effectiveness and
a schedule of one or more dates, not
later than 1 year after the date of
issuance of the guidelines, on which
the requirements specified in paragraph
(1) shall take effect; and
(iv) establish exclusions from the
requirements specified in paragraph (1)
based on the de minimis quantity of
energy use of a Federal building,
industrial process, or structure.
(3) Plan.--Not later than 180 days after the date on
which guidelines are established under paragraph (2),
in a report submitted by the agency under section
548(a), each agency shall submit to the Secretary a
plan describing the manner in which the agency will
implement the requirements of paragraph (1),
including--
(A) how the agency will designate personnel
primarily responsible for achieving the
requirements; and
(B) a demonstration by the agency, complete
with documentation, of any finding that
advanced meters or advanced metering devices
(as those terms are used in paragraph (1)), are
not practicable.
(4) Best practices report.--
(A) In general.--Not later than 180 days
after the date of enactment of this paragraph,
the Secretary of Energy, in consultation with
the Secretary of Defense and the Administrator
of General Services, shall develop, and issue a
report on, best practices for the use of
advanced metering of energy use in Federal
facilities, buildings, and equipment by Federal
agencies.
(B) Components.--The report shall include, at
a minimum--
(i) summaries and analysis of the
reports by agencies under paragraph
(3);
(ii) recommendations on standard
requirements or guidelines for
automated energy management systems,
including--
(I) potential common
communications standards to
allow data sharing and
reporting;
(II) means of facilitating
continuous commissioning of
buildings and evidence-based
maintenance of buildings and
building systems; and
(III) standards for
sufficient levels of security
and protection against cyber
threats to ensure systems
cannot be controlled by
unauthorized persons; and
(iii) an analysis of--
(I) the types of advanced
metering and monitoring systems
being piloted, tested, or
installed in Federal buildings;
and
(II) existing techniques used
within the private sector or
other non-Federal government
buildings.
(f) Use of Energy and Water Efficiency Measures in Federal
Buildings.--
(1) Definitions.--In this subsection:
(A) Commissioning.--The term
``commissioning'', with respect to a facility,
means a systematic process--
(i) of ensuring, using appropriate
verification and documentation, during
the period beginning on the initial day
of the design phase of the facility and
ending not earlier than 1 year after
the date of completion of construction
of the facility, that all facility
systems perform interactively in
accordance with--
(I) the design documentation
and intent of the facility; and
(II) the operational needs of
the owner of the facility,
including preparation of
operation personnel; and
(ii) the primary goal of which is to
ensure fully functional systems that
can be properly operated and maintained
during the useful life of the facility.
(B) Energy manager.--
(i) In general.--The term ``energy
manager'', with respect to a facility,
means the individual who is responsible
for--
(I) ensuring compliance with
this subsection by the
facility; and
(II) reducing energy use at
the facility.
(ii) Inclusions.--The term ``energy
manager'' may include--
(I) a contractor of a
facility;
(II) a part-time employee of
a facility; and
(III) an individual who is
responsible for multiple
facilities.
(C) Facility.--
(i) In general.--The term
``facility'' means any building,
installation, structure, or other
property (including any applicable
fixtures) owned or operated by, or
constructed or manufactured and leased
to, the Federal Government.
(ii) Inclusions.--The term
``facility'' includes--
(I) a group of facilities at
a single location or multiple
locations managed as an
integrated operation; and
(II) contractor-operated
facilities owned by the Federal
Government.
(iii) Exclusions.--The term
``facility'' does not include any land
or site for which the cost of utilities
is not paid by the Federal Government.
(D) Life cycle cost-effective.--The term
``life cycle cost-effective'', with respect to
a measure, means a measure, the estimated
savings of which exceed the estimated costs
over the lifespan of the measure, as determined
in accordance with section 544.
(E) Payback period.--
(i) In general.--Subject to clause
(ii), the term ``payback period'', with
respect to a measure, means a value
equal to the quotient obtained by
dividing--
(I) the estimated initial
implementation cost of the
measure (other than financing
costs); by
(II) the annual cost savings
resulting from the measure,
including--
(aa) net savings in
estimated energy and
water costs; and
(bb) operations,
maintenance, repair,
replacement, and other
direct costs.
(ii) Modifications and exceptions.--
The Secretary, in guidelines issued
pursuant to paragraph (6), may make
such modifications and provide such
exceptions to the calculation of the
payback period of a measure as the
Secretary determines to be appropriate
to achieve the purposes of this Act.
(F) Recommissioning.--The term
``recommissioning'' means a process--
(i) of commissioning a facility or
system beyond the project development
and warranty phases of the facility or
system; and
(ii) the primary goal of which is to
ensure optimum performance of a
facility, in accordance with design or
current operating needs, over the
useful life of the facility, while
meeting building occupancy
requirements.
(G) Retrocommissioning.--The term
``retrocommissioning'' means a process of
commissioning a facility or system that was not
commissioned at the time of construction of the
facility or system.
(2) Facility energy managers.--
(A) In general.--Each Federal agency shall
designate an energy manager responsible for
implementing this subsection and reducing
energy use at each facility that meets criteria
under subparagraph (B).
(B) Covered facilities.--The Secretary shall
develop criteria, after consultation with
affected agencies, energy efficiency advocates,
and energy and utility service providers, that
cover, at a minimum, Federal facilities,
including central utility plants and
distribution systems and other energy intensive
operations, that constitute at least 75 percent
of facility energy use at each agency.
(3) Energy and water evaluations.--
(A) Evaluations.--Effective beginning on the
date that is 180 days after the date of
enactment of this subsection and annually
thereafter, energy managers shall complete, for
each calendar year, a comprehensive energy and
water evaluation for approximately 25 percent
of the facilities of each agency that meet the
criteria under paragraph (2)(B) in a manner
that ensures that an evaluation of each such
facility is completed at least once every 4
years.
(B) Recommissioning and retrocommissioning.--
As part of the evaluation under subparagraph
(A), the energy manager shall identify and
assess recommissioning measures (or, if the
facility has never been commissioned,
retrocommissioning measures) for each such
facility.
(4) Implementation of identified energy and water
efficiency measures.--Not later than 2 years after the
completion of each evaluation under paragraph (3), each
energy manager [may] shall--
(A) implement any energy- or water-saving
measure that the Federal agency identified in
the evaluation conducted under paragraph (3)
that is life cycle cost-effective; and
(B) bundle individual measures of varying
paybacks together into combined projects.
(5) Follow-up on implemented measures.--For each
measure implemented under paragraph (4), each energy
manager shall ensure that--
(A) equipment, including building and
equipment controls, is fully commissioned at
acceptance to be operating at design
specifications;
(B) a plan for appropriate operations,
maintenance, and repair of the equipment is in
place at acceptance and is followed;
(C) equipment and system performance is
measured during its entire life to ensure
proper operations, maintenance, and repair; and
(D) energy and water savings are measured and
verified.
(6) Guidelines.--
(A) In general.--The Secretary shall issue
guidelines and necessary criteria that each
Federal agency shall follow for implementation
of--
(i) paragraphs (2) and (3) not later
than 180 days after the date of
enactment of this subsection; and
(ii) paragraphs (4) and (5) not later
than 1 year after the date of enactment
of this subsection.
(B) Relationship to funding source.--The
guidelines issued by the Secretary under
subparagraph (A) shall be appropriate and
uniform for measures funded with each type of
funding made available under paragraph (10),
but may distinguish between different types of
measures project size, and other criteria the
Secretary determines are relevant.
(7) Web-based certification.--
(A) In general.--For each facility that meets
the criteria established by the Secretary under
paragraph (2)(B), the energy manager shall use
the web-based tracking system under
subparagraph (B)--
(i) to certify compliance with the
requirements for--
(I) energy and water
evaluations under paragraph
(3);
(II) implementation of
identified energy and water
measures under paragraph (4);
and
(III) follow-up on
implemented measures under
paragraph (5); and
(ii) to publish energy and water
consumption data on an individual
facility basis.
(B) Deployment.--
(i) In general.--Not later than 1
year after the date of enactment of
this subsection, the Secretary shall
develop and deploy a web-based tracking
system required under this paragraph in
a manner that tracks, at a minimum--
(I) the covered facilities;
(II) the status of meeting
the requirements specified in
subparagraph (A);
(III) the estimated cost and
savings for measures required
to be implemented in a
facility;
(IV) the measured savings and
persistence of savings for
implemented measures; and
(V) the benchmarking
information disclosed under
paragraph (8)(C).
(ii) Ease of compliance.--The
Secretary shall ensure that energy
manager compliance with the
requirements in this paragraph, to the
maximum extent practicable--
(I) can be accomplished with
the use of streamlined
procedures and templates that
minimize the time demands on
Federal employees; and
(II) is coordinated with
other applicable energy
reporting requirements.
(C) Availability.--
(i) In general.--Subject to clause
(ii), the Secretary shall make the web-
based tracking system required under
this paragraph available to Congress,
other Federal agencies, and the public
through the Internet.
(ii) Exemptions.--At the request of a
Federal agency, the Secretary may
exempt specific data for specific
facilities from disclosure under clause
(i) for national security purposes.
(8) Benchmarking of federal facilities.--
(A) In general.--The energy manager shall
enter energy use data for each metered building
that is (or is a part of) a facility that meets
the criteria established by the Secretary under
paragraph (2)(B) into a building energy use
benchmarking system, such as the Energy Star
Portfolio Manager.
(B) System and guidance.--Not later than 1
year after the date of enactment of this
subsection, the Secretary shall--
(i) select or develop the building
energy use benchmarking system required
under this paragraph for each type of
building; and
(ii) issue guidance for use of the
system.
(C) Public disclosure.--Each energy manager
shall post the information entered into, or
generated by, a benchmarking system under this
subsection, on the web-based tracking system
under paragraph (7)(B). The energy manager
shall update such information each year, and
shall include in such reporting previous years'
information to allow changes in building
performance to be tracked over time.
(9) Federal agency scorecards.--
(A) In general.--The Director of the Office
of Management and Budget shall issue semiannual
scorecards for energy management activities
carried out by each Federal agency that
includes--
(i) summaries of the status of
implementing the various requirements
of the agency and its energy managers
under this subsection; and
(ii) any other means of measuring
performance that the Director considers
appropriate.
(B) Availability.--The Director shall make
the scorecards required under this paragraph
available to Congress, other Federal agencies,
and the public through the Internet.
(10) Funding and implementation.--
(A) Authorization of appropriations.--There
are authorized to be appropriated such sums as
are necessary to carry out this subsection.
(B) Funding options.--
(i) In general.--To carry out this
subsection, a Federal agency may use
any combination of--
(I) appropriated funds made
available under subparagraph
(A); and
(II) private financing
otherwise authorized under
Federal law, including
financing available through
energy savings performance
contracts or utility energy
service contracts.
(ii) Combined funding for same
measure.--A Federal agency may use any
combination of appropriated funds and
private financing described in clause
(i) to carry out the same measure under
this subsection.
(C) Implementation.--Each Federal agency may
implement the requirements under this
subsection itself or may contract out
performance of some or all of the requirements.
(11) Rule of construction.--This subsection shall not
be construed to require or to obviate any contractor
savings guarantees.
(g) Large Capital Energy Investments.--
(1) In general.--Each Federal agency shall ensure
that any large capital energy investment in an existing
building that is not a major renovation but involves
replacement of installed equipment (such as heating and
cooling systems), or involves renovation,
rehabilitation, expansion, or remodeling of existing
space, employs the most energy efficient designs,
systems, equipment, and controls that are life-cycle
cost effective.
(2) Process for review of investment decisions.--Not
later than 180 days after the date of enactment of this
subsection, each Federal agency shall--
(A) develop a process for reviewing each
decision made on a large capital energy
investment described in paragraph (1) to ensure
that the requirements of this subsection are
met; and
(B) report to the Director of the Office of
Management and Budget on the process
established.
(3) Compliance report.--Not later than 1 year after
the date of enactment of this subsection, the Director
of the Office of Management and Budget shall evaluate
and report to Congress on the compliance of each agency
with this subsection.
* * * * * * *
SEC. 548. REPORTS.
(a) Reports to the Secretary.--Each agency shall transmit a
report to the Secretary, at times specified by the Secretary
but at least annually, with complete information on its
activities under this part, including information on--
(1) the agency's progress in achieving the goals
established by section 543; and
(2) the procedures being used by the agency pursuant
to section 546(a)(2), the number of contracts entered
into by such agency under title VIII of this Act, the
energy and cost savings that have resulted from such
contracts and any termination penalty exposure, the use
of such cost savings under section 546(c), and any
problem encountered in entering into such contracts and
otherwise implementing section 546.
(b) Reports to the President and Congress.--The Secretary
shall report, not later than April 2 of each year, with respect
to each fiscal year beginning after the date of the enactment
of this subsection, to the President and Congress--
(1) on all activities carried out under this part and
on the progress made toward achievement of the
objectives of this part, including--
(A) a copy of the list of the exclusions made
under sections 543(a)(2) and 543(c)(3);
(B) the information required under section
543(b)(2); and
(C) a statement detailing the amount of funds
awarded to each agency under section 546(b),
the energy and water conservation measures
installed with such funds, the projected energy
and water savings to be realized from installed
measures, and, for each installed measure for
which the projected energy and water savings
reported in the previous year were not
realized, the percentage of such projected
savings that was not realized, the reasons such
savings were not realized, and proposals for,
and projected costs of, achieving such
projected savings in the future;
(2) the number of contracts entered into by all
agencies under title VIII of this Act, the difficulties
(if any) encountered in attempting to enter into such
contracts, and proposed solutions to those
difficulties;
(3) the extent and nature of interagency exchange of
information concerning the conservation and efficient
utilization of energy; [and]
(4) the information required under section 161(d) of
the Energy Policy Act of 1992[.]; and
(5)(A) the status of the energy savings performance
contracts and utility energy service contracts of each
agency;
(B) the investment value of the contracts;
(C) the guaranteed energy savings for the previous
year as compared to the actual energy savings for the
previous year;
(D) the plan for entering into the contracts in the
coming year; and
(E) information explaining why any previously
submitted plans for the contracts were not implemented.
(c) Other Report.--The Secretary, in consultation with the
Administrator of General Services, shall--
(1) conduct a study and evaluate legal,
institutional, and other constraints to connecting
buildings owned or leased by the Federal Government to
district heating and district cooling systems; and
(2) not later than 18 months after the date of the
enactment of this subsection, transmit to the Congress
a report containing the findings and conclusions of
such study, including recommendations for the
development of streamlined processes for the
consideration of connecting buildings owned or leased
by the Federal Government to district heating and
cooling systems.
* * * * * * *
SEC. 551. DEFINITIONS.
For the purposes of this part--
(1) the term ``agency'' has the meaning given it in
section 551(1) of title 5, United States Code;
(2) the term ``construction'' means new construction
or substantial rehabilitation of existing structures;
(3) the term ``cogeneration facilities'' has the same
meaning given such term in section 3(18)(A) of the
Federal Power Act (16 U.S.C. 796(18)(A));
(4) the term ``energy conservation measures'' means
measures that are applied to a Federal building that
improve energy efficiency and are life cycle cost
effective and that involve energy conservation,
cogeneration facilities, renewable energy sources,
improvements in operations and maintenance
efficiencies, [or retrofit activities] retrofit
activities, or energy consuming devices and required
support structures;
(5) the term ``energy survey'' means a procedure used
to determine energy and cost savings likely to result
from the use of appropriate energy related maintenance
and operating procedures and modifications, including
the purchase and installation of particular energy-
related equipment and the use of renewable energy
sources;
(6) the term ``Federal building'' means any building,
structure, or facility, or part thereof, including the
associated energy consuming support systems, which is
constructed, renovated, leased, or purchased in whole
or in part for use by the Federal Government and which
consumes energy; such term also means a collection of
such buildings, structures, or facilities and the
energy consuming support systems for such
collection[;]; the term does not include a dam,
reservoir, or hydropower facility owned or operated by
a Federal agency;
(7) the term ``life cycle cost'' means the total
costs of owning, operating, and maintaining a building
over its useful life (including such costs as fuel,
energy, labor, and replacement components) determined
on the basis of a systematic evaluation and comparison
of alternative building systems, except that in the
case of leased buildings, the life cycle costs shall be
calculated over the effective remaining term of the
lease;
(8) the term ``renewable energy sources'' includes,
but is not limited to, sources such as agriculture and
urban waste, geothermal energy, solar energy, and wind
energy; and
(9) the term ``Secretary'' means the Secretary of
Energy.
* * * * * * *
TITLE VIII--ENERGY SAVINGS PERFORMANCE CONTRACTS
SEC. 801. AUTHORITY TO ENTER INTO CONTRACTS.
(a) In General.--(1) The head of a Federal agency may enter
into contracts under this title solely for the purpose of
achieving energy savings and benefits ancillary to that
purpose. Each such contract may, notwithstanding any other
provision of law, be for a period not to exceed 25 years. Such
contract shall provide that the contractor shall incur costs of
implementing energy savings measures, including at least the
cost (if any) incurred in making energy audits, acquiring and
installing equipment, and training personnel, in exchange for a
share of any energy savings directly resulting from
implementation of such measures during the term of the
contract.
(2)(A) Contracts under this title shall be energy savings
performance contracts and shall require an annual energy audit
and specify the terms and conditions of any Government payments
and performance guarantees. Any such performance guarantee
shall provide that the contractor is responsible for
maintenance and repair services for any energy related
equipment, including computer software systems.
(B) Aggregate annual payments by an agency to both utilities
and energy savings performance contractors, under an energy
savings performance contract, may not exceed the amount that
the agency would have paid for utilities without an energy
savings performance contract (as estimated through the
procedures developed pursuant to this section) during contract
years. The contract shall provide for a guarantee of savings to
the agency, and shall establish payment schedules reflecting
such guarantee, taking into account any capital costs under the
contract.
(C) Federal agencies may incur obligations pursuant to such
contracts to finance energy conservation measures provided
guaranteed savings exceed the debt service requirements.
(D) A Federal agency may enter into a multiyear contract
under this title for a period not to exceed 25 years beginning
on the date of the delivery order, without funding of
cancellation charges before cancellation, if--
(i) such contract was awarded in a competitive manner
pursuant to subsection (b)(2), using procedures and
methods established under this title;
(ii) funds are available and adequate for payment of
the costs of such contract for the first fiscal year;
and
(iii) such contract is governed by part 17.1 of the
Federal Acquisition Regulation promulgated under
section 25 of the Office of Federal Procurement Policy
Act (41 U.S.C. 421) or the applicable rules promulgated
under this title.
(E) Funding options.--In carrying out a contract
under this title, a Federal agency may use any
combination of--
(i) appropriated funds; and
(ii) private financing under an energy
savings performance contract.
(F) Promotion of contracts.--In carrying out this
section, a Federal agency shall not--
(i) establish a Federal agency policy that
limits the maximum contract term under
subparagraph (D) to a period shorter than 25
years; [or]
(ii) limit the total amount of obligations
under energy savings performance contracts or
other private financing of energy savings
measures[.]; or
(iii) limit the recognition of operation and
maintenance savings associated with systems
modernized or replaced with the implementation
of energy conservation measures, water
conservation measures, or any combination of
energy conservation measures and water
conservation measures.
(G) Measurement and verification requirements for
private financing.--
(i) In general.--In the case of energy
savings performance contracts, the evaluations
and savings measurement and verification
required under paragraphs (2) and (4) of
section 543(f) shall be used by a Federal
agency to meet the requirements for the need
for energy audits, calculation of energy
savings, and any other evaluation of costs and
savings needed to implement the guarantee of
savings under this section.
(ii) Modification of existing contracts.--Not
later than 18 months after the date of
enactment of this subparagraph, each Federal
agency shall, to the maximum extent
practicable, modify any indefinite delivery and
indefinite quantity energy savings performance
contracts, and other indefinite delivery and
indefinite quantity contracts using private
financing, to conform to the amendments made by
subtitle B of title V of the Energy
Independence and Security Act of 2007.
(H) Miscellaneous authority.--Notwithstanding any
other provision of law, a Federal agency may sell or
transfer energy savings and apply the proceeds of the
sale or transfer to fund a contract under this title.
(b) Implementation.--(1)(A) The Secretary, with the
concurrence of the Federal Acquisition Regulatory Council
established under section 25(a) of the Office of Federal
Procurement Policy Act, not later than 180 days after the date
of the enactment of the Energy Policy Act of 1992, shall, by
rule, establish appropriate procedures and methods for use by
Federal agencies to select, monitor, and terminate contracts
with energy service contractors in accordance with laws
governing Federal procurement that will achieve the intent of
this section in a cost-effective manner. In developing such
procedures and methods, the Secretary, with the concurrence of
the Federal Acquisition Regulatory Council, shall determine
which existing regulations are inconsistent with the intent of
this section and shall formulate substitute regulations
consistent with laws governing Federal procurement.
(B) The procedures and methods established pursuant to
subparagraph (A) shall be the procedures and contracting
methods for selection, by an agency, of a contractor to provide
energy savings performance services. Such procedures and
methods shall provide for the calculation of energy savings
based on sound engineering and financial practices.
(2) The procedures and methods established pursuant to
paragraph (1)(A) shall--
(A) allow the Secretary to--
(i) request statements of qualifications,
which shall, at a minimum, include prior
experience and capabilities of contractors to
perform the proposed types of energy savings
services and financial and performance
information, from firms engaged in providing
energy savings services; and
(ii) from the statements received, designate
and prepare a list, with an update at least
annually, of those firms that are qualified to
provide energy savings services;
(B) require each agency to use the list prepared by
the Secretary pursuant to subparagraph (A)(ii) unless
the agency elects to develop an agency list of firms
qualified to provide energy savings performance
services using the same selection procedures and
methods as are required of the Secretary in preparing
such lists; and
(C) allow the head of each agency to--
(i) select firms from the list prepared
pursuant to subparagraph (A)(ii) or the list
prepared by the agency pursuant to subparagraph
(B) to conduct discussions concerning a
particular proposed energy savings project,
including requesting a technical and price
proposal from such selected firms for such
project;
(ii) select from such firms the most
qualified firm to provide energy savings
services based on technical and price proposals
and any other relevant information;
(iii) permit receipt of unsolicited proposals
for energy savings performance contracting
services from a firm that such agency has
determined is qualified to provide such
services under the procedures established
pursuant to paragraph (1)(A), and require
agency facility managers to place a notice in
the Commerce Business Daily announcing they
have received such a proposal and invite other
similarly qualified firms to submit competing
proposals; and
(iv) enter into an energy savings performance
contract with a firm qualified under clause
(iii), consistent with the procedures and
methods established pursuant to paragraph
(1)(A).
(3) A firm not designated as qualified to provide energy
savings services under paragraph (2)(A)(i) or paragraph (2)(B)
may request a review of such decision to be conducted in
accordance with procedures to be developed by the board of
contract appeals of the General Services Administration.
(c) Task or Delivery Orders.--(1) The head of a Federal
agency may issue a task or delivery order under an energy
savings performance contract by--
(A) notifying all contractors that have received an
award under such contract that the agency proposes to
discuss energy savings performance services for some or
all of its facilities and, following a reasonable
period of time to provide a proposal in response to the
notice, soliciting from such contractors the submission
of expressions of interest in, and contractor
qualifications for, performing site surveys or
investigations and feasibility designs and studies, and
including in the notice summary information concerning
energy use for any facilities that the agency has
specific interest in including in such task or delivery
order;
(B) reviewing all expressions of interest and
qualifications submitted pursuant to the notice under
subparagraph (A);
(C) selecting two or more contractors (from among
those reviewed under subparagraph (B)) to conduct
discussions concerning the contractors' respective
qualifications to implement potential energy
conservation measures, including--
(i) requesting references and specific
detailed examples with respect to similar
efforts and the resulting energy savings of
such similar efforts; and
(ii) requesting an explanation of how such
similar efforts relate to the scope and content
of the task or delivery order concerned;
(D) selecting and authorizing--
(i) more than one contractor (from among
those selected under subparagraph (C)) to
conduct site surveys, investigations,
feasibility designs and studies, or similar
assessments for the energy savings performance
contract services (or for discrete portions of
such services), for the purpose of allowing
each such contractor to submit a firm, fixed-
price proposal to implement specific energy
conservation measures; or
(ii) one contractor (from among those
selected under subparagraph (C)) to conduct a
site survey, investigation, feasibility design
and study, or similar assessment for the
purpose of allowing the contractor to submit a
firm, fixed-price proposal to implement
specific energy conservation measures;
(E) providing a debriefing to any contractor not
selected under subparagraph (D);
(F) negotiating a task or delivery order for energy
savings performance contracting services with the
contractor or contractors selected under subparagraph
(D) based on the energy conservation measures
identified; and
(G) issuing a task or delivery order for energy
savings performance contracting services to such
contractor or contractors.
(2) The issuance of a task or delivery order for energy
savings performance contracting services pursuant to paragraph
(1) is deemed to satisfy the task and delivery order
competition requirements in section 2304c(d) of title 10,
United States Code, and section 303J(d) of the Federal Property
and Administrative Services Act of 1949 (41 U.S.C. 253j(d)).
(3) The Secretary may issue guidance as necessary to agencies
issuing task or delivery orders pursuant to paragraph (1).
SEC. 802. PAYMENT OF COSTS.
Any amount paid by a Federal agency pursuant to any contract
entered into under this title may be paid only from funds
appropriated or otherwise made available to the agency for
fiscal year 1986 or any fiscal year thereafter for the payment
of energy, water, or wastewater treatment expenses [(and
related operation and maintenance expenses)], including related
operations and maintenance expenses.
* * * * * * *
SEC. 804. DEFINITIONS.
For purposes of this title, the following definitions apply:
(1) The term ``Federal agency'' means each authority
of the Government of the United States, whether or not
it is within or subject to review by another agency.
(2) The term ``energy savings'' means--
(A) a reduction in the cost of energy, water,
or wastewater treatment, from a base cost
established through a methodology set forth in
the contract, used in an existing [federally
owned building or buildings or other federally
owned facilities] Federal building (as defined
in section 551) as a result of--
(i) the lease or purchase of
operating equipment, improvements,
altered operation and maintenance, or
technical services;
(ii) the increased efficient use of
existing energy sources by cogeneration
or heat recovery, excluding any
cogeneration process for other than a
[federally owned building or buildings
or other federally owned facilities]
Federal building (as defined in section
551); or
(iii) the increased efficient use of
existing water sources in either
interior or exterior applications;
(B) the increased efficient use of an
existing energy source by cogeneration or heat
recovery;
(C) if otherwise authorized by Federal or
State law (including regulations), the sale or
transfer of electrical or thermal energy
generated on-site from renewable energy sources
or cogeneration, but in excess of Federal
needs, to utilities or non-Federal energy
users[; and];
(D) the increased efficient use of existing
water sources in interior or exterior
applications[.];
(E) the use, sale, or transfer of energy
incentives, rebates, or credits (including
renewable energy credits) from Federal, State,
or local governments or utilities; and
(F) any revenue generated from a reduction in
energy or water use, more efficient waste
recycling, or additional energy generated from
more efficient equipment.
(3) The terms ``energy savings contract'' and
``energy savings performance contract'' mean a contract
that provides for the performance of services for the
design, acquisition, installation, testing, and, where
appropriate, operation, maintenance, and repair, of an
identified energy or water conservation measure or
series of measures at 1 or more locations. Such
contracts shall, with respect to an agency facility
that is a public building (as such term is defined in
section 3301 of title 40, United States Code), be in
compliance with the prospectus requirements and
procedures of section 3307 of title 40, United States
Code.
(4) The term ``energy or water conservation measure''
means--
(A) an energy conservation measure, as
defined in section 551; or
(B) a water conservation measure that
improves the efficiency of water use, is life-
cycle cost-effective, and involves water
conservation, water recycling or reuse, more
efficient treatment of wastewater or
stormwater, improvements in operation or
maintenance efficiencies, retrofit activities,
or other related activities, not at a Federal
hydroelectric facility.
