Energy Efficiency Initiative Finds Broad Support

Even before the Bipartisan Budget Act of 2013, Congressional Republicans and Democrats sought common ground over energy efficiency. Most of the bills and other efforts have stalled or struck out, including the broadly supported but so far still-contentious bill known as the Energy Savings and Industrial Competitiveness Act (S. 1392). Also known as Shaheen-Portman, that bill has become a target for partisan amendments that could undermine its efforts to reduce energy waste. But there was joy in Mudville on December 3, 2013; the Obama Administration announced that it will extend an energy efficiency initiative for federal buildings that has bipartisan and bicameral support.

The original measure was announced by the White House on December 2, 2011. As reflected in other efforts such as Executive Order 13514 of 2009, President Obama has often turned to executive powers to nudge the federal government to “lead by example” toward a more sustainable energy use. The federal buildings initiative was designed to save $2 billion in 2 years from agency energy bills through the use of Energy Savings and Performance Contracts (ESPCs) and Utility Energy Services Contracts (UESCs). Such performance contracts identify deliverables, performance measures or outcomes and make payment contingent on achievement. A utility or energy services company with an ESPC or UESC with a federal agency contracts to save a specific amount of energy through retrofits and other measures. The utility or company will then be compensated for performance achievement. The strategy results means that companies are paid from savings rather than appropriated funds.

The 2011 effort stimulated agencies to upgrade buildings and reduce maintenance costs without charging taxpayers. Savings of $2.3 billion exceeded original goals, and audits have identified additional savings of about $9 billion for various agencies if the program were extended past its planned 2013 expiration date. Congressmen Cory Gardner (R-CO) and Peter Welch (D-VT) lead a bipartisan coalition, calling for an extension. A November 4, 2013, letter to the White House, signed by 118 house members and 28 senators, urged the president to continue using ESPCs and UESCs to achieve energy savings. The letter emphasized, “There is still substantial potential for achieving more savings and the success of the past two years’ effort has created important moment that should now be continued.” In fact, the letter challenged the present to extend the program for five years, with a target of achieving $1 billion in savings per year.

The coalition’s efforts paid off when an extension was announced, although the program is now set to expire in 2016, not 2018 as requested. Representative Gardener applauded the decision and the joint congressional effort to achieve it. “Americans are tired of a Congress that has a seemingly endless inability to work together,” said Gardner, praising the “commonsense initiative” in a press release. Representative Welch also called energy efficiency “a practical idea that cuts through partisan gridlock.” But in a National Journal Daily article, Welch is a bit less sanguine. He expressed concern that the extension did not identify specific energy-saving goals; Rep. Welch contends that concrete efficiency goals lead to better results. Also, Welch argues that legislation is needed to support and enhance the executive initiative. Last November, Welch and Gardner partnered again to introduce a bill expanding the use of performance-based contracts by federal agencies to reduce building energy usage. Notably, the measure would allow agencies to pursue energy performance contracts lasting up to 25 years. Allowing longer contracts would broaden the pool of projects that could achieve savings through energy efficiency retrofits, and could lead to greater savings in energy and taxpayer dollars over time. The idea of a measure supporting performance-based energy contracts also has Senate support, as reflected in a companion Senate bill. “Issues in energy are contentious but efficiency isn’t,” said Welch, vows to work with Gardner and others in the coming months to pass the legislation. “Everyone agrees we need to have this done, so right now what we’re doing is trying to smooth all the edges down and make sure that we do this in a way that works for both sides.”

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