Federal agencies can once again use energy savings performance contracts (ESPCs) to finance new federal energy-saving projects. The President signed into law the extension of the authority to use ESPCs on October 28, 2004. The authority had expired on October 1, 2003, which suspended activity on new projects financed through ESPCs. The reinstatement of the authority, extended to September 30, 2006, is contained in the National Defense Authorization Act for Fiscal Year 2005 (H.R. 4200).
ESPCs are innovative contracting mechanisms to help federal agencies finance and implement energy efficiency improvements. These improvements help reduce the government's energy costs and meet federal energy goals. The use of energy ESPCs was authorized in the 1986 amendments to the National Energy Conservation Policy Act of 1978 (NECPA), which was further amended by the Energy Policy Act of 1992 (EPACT).
The new bill directs the Secretary of Energy to complete a review of the ESPC program within 180 days of enactment of the Act to:
In addition to the extension of authority, Section 1090 of the new bill, Energy Savings Performance Contracts under Title X - General Provisions, amends Sections 801-804 of the National Energy Conservation Policy Act. The amendments are summarized below.
Defines the term "energy savings" to mean -
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 as a result of -
(A) the lease or purchase of operating equipment, improvements, altered operation and maintenance, or technical services;
(B) 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; or
(C) the increased efficient use of existing water sources in either interior or exterior applications.
Defines "energy savings contract" and "energy savings performance contract" to 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 one or more locations. Such contracts shall, with respect to an agency facility that is a public building, be in compliance with the prospectus requirement and procedures of section 3307 of title 40, United States Code.
Defines energy or water conservation measure to mean –
(A) an energy conservation measure, as defined in section 551 of the National Energy Conservation Policy Act; 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 waste water or stormwater, improvements in operation or maintenance efficiencies, retrofit activities, or other related activities, not at a federal hydroelectric facility.
