**Executive Order 13123 -- Fact Sheet**

**Greening the Government through Efficient Energy Management**

**Signed June 3, 1999**

**Document web address:**

Entire document: <http://www.eere.energy.gov/femp/pdfs/eo13123.pdf>

**Background**:

EO13123 further defines requirements for agencies in meeting energy
savings goals and strongly supports the use of alternative financing
methods, including ESPCs, to achieve these goals.

**Specific language**:

Sec. 202. Energy Efficiency Improvement Goals. Through life-cycle
cost-effective measures, each agency shall reduce energy consumption per
gross square foot of its facilities, excluding facilities covered in
section 203 of this order, by 30 percent by 2005 and 35 percent by 2010
relative to 1985. No facilities will be exempt from these goals unless
they meet new criteria for exemptions, to be issued by the Department of
Energy (DOE).

Sec. 203. Industrial and Laboratory Facilities. Through life-cycle
cost-effective measures, each agency shall reduce energy consumption per
square foot, per unit of production, or per other unit as applicable by
20 percent by 2005 and 25 percent by 2010 relative to 1990. No
facilities will be exempt from these goals unless they meet new criteria
for exemptions, as issued by DOE.

Section 402: Facility Energy Audits. Agencies shall continue to conduct
energy and water audits for approximately 10 percent of their facilities
each year, either independently or through Energy-Savings Performance
Contracts or utility energy-efficiency service contracts.

Sec. 403. Energy Management Strategies and Tools. Agencies shall use a
variety of energy management strategies and tools, where life-cycle
cost-effective, to meet the goals of this order. An agency\'s use of
these strategies and tools shall be taken into account in assessing the
agency\'s progress and formulating its score card.

> a\) Financing Mechanisms. Agencies shall maximize their use of
> available alternative financing contracting mechanisms, including
> Energy-Savings Performance Contracts and utility energy-efficiency
> service contracts, when life-cycle cost-effective, to reduce energy
> use and cost in their facilities and operations. Energy-Savings
> Performance Contracts, which are authorized under the National Energy
> Conservation Policy Act, as modified by the Energy Policy Act of 1992,
> and utility energy-efficiency service contracts provide significant
> opportunities for making Federal facilities more energy efficient at
> no net cost to taxpayers.

Section 703: ''Energy-Savings Performance Contract'' means a contract
that provides for the performance of services for the design,
acquisition, financing, installation, testing, operation, and where
appropriate, maintenance and repair, of an identified energy or water
conservation measure or series of measures at one or more locations.
Such contracts shall provide that the contractor must 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 predetermined share
of the value of the energy savings directly resulting from
implementation of such measures during the term of the contract. Payment
to the contractor is contingent upon realizing a guaranteed stream of
future energy and cost savings. All additional savings will accrue to
the Federal Government.

**Executive Order 13123**

THE WHITE HOUSE

Office of the Press Secretary

  ----------------------------------- -----------------------------------
  For Immediate Release               June 3, 1999

  ----------------------------------- -----------------------------------

EXECUTIVE ORDER 13123

\- - - - - - -

GREENING THE GOVERNMENT THROUGH EFFICIENT ENERGY MANAGEMENT

By the authority vested in me as President by the Constitution and the
laws of the United States of America, including the National Energy
Conservation Policy Act (Public Law 95-619, 92 Stat. 3206, 42 U.S.C.
8252 et seq.), as amended by the Energy Policy Act of 1992 (EPACT)
(Public Law 102-486, 106 Stat. 2776), and section 301 of title 3, United
States Code, it is hereby ordered as follows:

PART 1 - PREAMBLE

Section 101. Federal Leadership. The Federal Government, as the
Nation\'s largest energy consumer, shall significantly improve its
energy management in order to save taxpayer dollars and reduce emissions
that contribute to air pollution and global climate change. With more
than 500,000 buildings, the Federal Government can lead the Nation in
energy efficient building design, construction, and operation. As a
major consumer that spends \$200 billion annually on products and
services, the Federal Government can promote energy efficiency, water
conservation, and the use of renewable energy products, and help foster
markets for emerging technologies. In encouraging effective energy
management in the Federal Government, this order builds on work begun
under EPACT and previous Executive orders.

PART 2 - GOALS

Sec. 201. Greenhouse Gases Reduction Goal. Through life-cycle
cost-effective energy measures, each agency shall reduce its greenhouse
gas emissions attributed to facility energy use by 30 percent by 2010
compared to such emissions levels in 1990. In order to encourage optimal
investment in energy improvements, agencies can count greenhouse gas
reductions from improvements in nonfacility energy use toward this goal
to the extent that these reductions are approved by the Office of
Management and Budget (OMB).

Sec. 202. Energy Efficiency Improvement Goals. Through life-cycle
cost-effective measures, each agency shall reduce energy consumption per
gross square foot of its facilities, excluding facilities covered in
section 203 of this order, by 30 percent by 2005 and 35 percent by 2010
relative to 1985. No facilities will be exempt from these goals unless
they meet new criteria for exemptions, to be issued by the Department of
Energy (DOE).

Sec. 203. Industrial and Laboratory Facilities. Through life-cycle
cost-effective measures, each agency shall reduce energy consumption per
square foot, per unit of production, or per other unit as applicable by
20 percent by 2005 and 25 percent by 2010 relative to 1990. No
facilities will be exempt from these goals unless they meet new criteria
for exemptions, as issued by DOE.

Sec. 204. Renewable Energy. Each agency shall strive to expand the use
of renewable energy within its facilities and in its activities by
implementing renewable energy projects and by purchasing electricity
from renewable energy sources. In support of the Million Solar Roofs
initiative, the Federal Government shall strive to install 2,000 solar
energy systems at Federal facilities by the end of 2000, and 20,000
solar energy systems at Federal facilities by 2010.

Sec. 205. Petroleum. Through life-cycle cost-effective measures, each
agency shall reduce the use of petroleum within its facilities. Agencies
may accomplish this reduction by switching to a less greenhouse
gas-intensive, nonpetroleum energy source, such as natural gas or
renewable energy sources; by eliminating unnecessary fuel use; or by
other appropriate methods. Where alternative fuels are not practical or
life- cycle cost-effective, agencies shall strive to improve the
efficiency of their facilities.

Sec. 206. Source Energy. The Federal Government shall strive to reduce
total energy use and associated greenhouse gas and other air emissions,
as measured at the source. To that end, agencies shall undertake
life-cycle cost-effective projects in which source energy decreases,
even if site energy use increases. In such cases, agencies will receive
credit toward energy reduction goals through guidelines developed by
DOE.

Sec. 207. Water Conservation. Through life-cycle cost-effective
measures, agencies shall reduce water consumption and associated energy
use in their facilities to reach the goals set under section 503(f) of
this order. Where possible, water cost savings and associated energy
cost savings shall be included in Energy Savings-Performance Contracts
and other financing mechanisms.

PART 3 - ORGANIZATION AND ACCOUNTABILITY

Sec. 301. Annual Budget Submission. Each agency\'s budget submission to
OMB shall specifically request funding necessary to achieve the goals of
this order. Budget submissions shall include the costs associated with:
encouraging the use of, administering, and fulfilling agency
responsibilities under Energy-Savings Performance Contracts, utility
energy-efficiency service contracts, and other contractual platforms for
achieving conservation goals; implementing life-cycle cost-effective
measures; procuring life-cycle cost-effective products; and constructing
sustainably designed new buildings, among other energy costs. OMB shall
issue guidelines to assist agencies in developing appropriate requests
that support sound investments in energy improvements and energy-using
products. OMB shall explore the feasibility of establishing a fund that
agencies could draw on to finance exemplary energy management activities
and investments with higher initial costs but lower life-cycle costs.
Budget requests to OMB in support of this order must be within each
agency\'s planning guidance level.

Sec. 302. Annual Implementation Plan. Each agency shall develop an
annual implementation plan for fulfilling the requirements of this
order. Such plans shall be included in the annual reports to the
President under section 303 of this order.

Sec. 303. Annual Reports to the President.

a.  Each agency shall measure and report its progress in meeting the
    goals and requirements of this order on an annual basis. Agencies
    shall follow reporting guidelines as developed under section 306(b)
    of this order. In order to minimize additional reporting
    requirements, the guidelines will clarify how the annual report to
    the President should build on each agency\'s annual Federal energy
    reports submitted to DOE and the Congress. Annual reports to the
    President are due on January 1 of each year beginning in the year
    2000.

b.  Each agency\'s annual report to the President shall describe how the
    agency is using each of the strategies described in Part 4 of this
    order to help meet energy and greenhouse gas reduction goals. The
    annual report to the President shall explain why certain strategies,
    if any, have not been used. It shall also include a listing and
    explanation of exempt facilities.

Sec. 304. Designation of Senior Agency Official. Each agency shall
designate a senior official, at the Assistant Secretary level or above,
to be responsible for meeting the goals and requirements of this order,
including preparing the annual report to the President. Such designation
shall be reported by each Cabinet Secretary or agency head to the Deputy
Director for Management of OMB within 30 days of the date of this order.
Designated officials shall participate in the Interagency Energy Policy
Committee, described in section 306(d) of this order. The Committee
shall communicate its activities to all designated officials to assure
proper coordination and achievement of the goals and requirements of
this order.

Sec. 305. Designation of Agency Energy Teams. Within 90 days of the date
of this order, each agency shall form a technical support team
consisting of appropriate procurement, legal, budget, management, and
technical representatives to expedite and encourage the agency\'s use of
appropriations, Energy-Savings Performance Contracts, and other
alternative financing mechanisms necessary to meet the goals and
requirements of this order. Agency energy team activities shall be
undertaken in collaboration with each agency\'s representative to the
Interagency Energy Management Task Force, as described in section 306(e)
of this order.

Sec. 306. Interagency Coordination.

a.  Office of Management and Budget. The Deputy Director for Management
    of OMB, in consultation with DOE, shall be responsible for
    evaluating each agency\'s progress in improving energy management
    and for submitting agency energy scorecards to the President to
    report progress.

    1.  OMB, in consultation with DOE and other agencies, shall develop
        the agency energy scorecards and scoring system to evaluate each
        agency\'s progress in meeting the goals of this order. The
        scoring criteria shall include the extent to which agencies are
        taking advantage of key tools to save energy and reduce
        greenhouse gas emissions, such as Energy Savings Performance
        Contracts, utility energy-efficiency service contracts, ENERGY
        STAR (Registered Trademark) and other energy efficient products,
        renewable energy technologies, electricity from renewable energy
        sources, and other strategies and requirements listed in Part 4
        of this order, as well as overall efficiency and greenhouse gas
        metrics and use of other innovative energy efficiency practices.
        The scorecards shall be based on the annual energy reports
        submitted to the President under section 303 of this order.

    2.  The Deputy Director for Management of OMB shall also select
        outstanding agency energy management team(s), from among
        candidates nominated by DOE, for a new annual Presidential award
        for energy efficiency.

b.  Federal Energy Management Program. The DOE\'s Federal Energy
    Management Program (FEMP) shall be responsible for working with the
    agencies to ensure that they meet the goals of this order and report
    their progress. FEMP, in consultation with OMB, shall develop and
    issue guidelines for agencies\' preparation of their annual reports
    to the President on energy management, as required in section 303 of
    this order. FEMP shall also have primary responsibility for
    collecting and analyzing the data, and shall assist OMB in ensuring
    that agency reports are received in a timely manner.

c.  President\'s Management Council. The President\'s Management Council
    (PMC), chaired by the Deputy Director for Management of OMB and
    consisting of the Chief Operating Officers (usually the Deputy
    Secretary) of the largest Federal departments and agencies, will
    periodically discuss agencies\' progress in improving Federal energy
    management.

d.  Interagency Energy Policy Committee. This Committee was established
    by the Department of Energy Organization Act. It consists of senior
    agency officials designated in accordance with section 304 of this
    order. The Committee is responsible for encouraging implementation
    of energy efficiency policies and practices. The major
    energy-consuming agencies designated by DOE are required to
    participate in the Committee. The Committee shall communicate its
    activities to all designated senior agency officials to promote
    coordination and achievement of the goals of this order.

e.  Interagency Energy Management Task Force. The Task Force was
    established by the National Energy Conservation Policy Act. It
    consists of each agency\'s chief energy manager. The Committee shall
    continue to work toward improving agencies\' use of energy
    management tools and sharing information on Federal energy
    management across agencies.

Sec. 307. Public/Private Advisory Committee. The Secretary of Energy
will appoint an advisory committee consisting of representatives from
Federal agencies, State governments, energy service companies, utility
companies, equipment manufacturers, construction and architectural
companies, environmental, energy and consumer groups, and other
energy-related organizations. The committee will provide input on
Federal energy management, including how to improve use of
Energy-Savings Performance Contracts and utility energy-efficiency
service contracts, improve procurement of ENERGY STAR (Registered
Trademark) and other energy efficient products, improve building design,
reduce process energy use, and enhance applications of efficient and
renewable energy technologies at Federal facilities.

Sec. 308. Applicability. This order applies to all Federal departments
and agencies. General Services Administration (GSA) is responsible for
working with agencies to meet the requirements of this order for those
facilities for which GSA has delegated operations and maintenance
authority. The Department of Defense (DOD) is subject to this order to
the extent that it does not impair or adversely affect military
operations and training (including tactical aircraft, ships, weapons
systems, combat training, and border security).

PART 4 - PROMOTING FEDERAL LEADERSHIP IN ENERGY MANAGEMENT

Sec. 401. Life-Cycle Cost Analysis. Agencies shall use life-cycle cost
analysis in making decisions about their investments in products,
services, construction, and other projects to lower the Federal
Government\'s costs and to reduce energy and water consumption. Where
appropriate, agencies shall consider the life-cycle costs of
combinations of projects, particularly to encourage bundling of energy
efficiency projects with renewable energy projects. Agencies shall also
retire inefficient equipment on an accelerated basis where replacement
results in lower life-cycle costs. Agencies that minimize life- cycle
costs with efficiency measures will be recognized in their scorecard
evaluations.

Sec. 402. Facility Energy Audits. Agencies shall continue to conduct
energy and water audits for approximately 10 percent of their facilities
each year, either independently or through Energy-Savings Performance
Contracts or utility energy-efficiency service contracts.

Sec. 403. Energy Management Strategies and Tools. Agencies shall use a
variety of energy management strategies and tools, where life-cycle
cost-effective, to meet the goals of this order. An agency\'s use of
these strategies and tools shall be taken into account in assessing the
agency\'s progress and formulating its score card.

a.  Financing Mechanisms. Agencies shall maximize their use of available
    alternative financing contracting mechanisms, including
    Energy-Savings Performance Contracts and utility energy-efficiency
    service contracts, when life-cycle cost-effective, to reduce energy
    use and cost in their facilities and operations. Energy-Savings
    Performance Contracts, which are authorized under the National
    Energy Conservation Policy Act, as modified by the Energy Policy Act
    of 1992, and utility energy-efficiency service contracts provide
    significant opportunities for making Federal facilities more energy
    efficient at no net cost to taxpayers.

b.  ENERGY STAR (Registered Trademark)and Other Energy Efficient
    Products.

    1.  Agencies shall select, where life-cycle cost-effective, ENERGY
        STAR? and other energy efficient products when acquiring
        energy-using products. For product groups where ENERGY STAR
        (Registered Trademark) labels are not yet available, agencies
        shall select products that are in the upper 25 percent of energy
        efficiency as designated by FEMP. The Environmental Protection
        Agency (EPA) and DOE shall expedite the process of designating
        products as ENERGY STAR (Registered Trademark) and will merge
        their current efficiency rating procedures.

    2.  GSA and the Defense Logistics Agency (DLA), with assistance from
        EPA and DOE, shall create clear catalogue listings that
        designate these products in both print and electronic formats.
        In addition, GSA and DLA shall undertake pilot projects from
        selected energy-using products to show a \"second price tag\",
        which means an accounting of the operating and purchase costs of
        the item, in both printed and electronic catalogues and assess
        the impact of providing this information on Federal purchasing
        decisions.

    3.  Agencies shall incorporate energy efficient criteria consistent
        with ENERGY STAR (Registered Trademark)and other FEMP-
        designated energy efficiency levels into all guide
        specifications and project specifications developed for new
        construction and renovation, as well as into product
        specification language developed for Basic Ordering Agreements,
        Blanket Purchasing Agreements, Government Wide Acquisition
        Contracts, and all other purchasing procedures.

    4.  DOE and OMB shall also explore the creation of financing
        agreements with private sector suppliers to provide private
        funding to offset higher up-front costs of efficient products.
        Within 9 months of the date of this order, DOE shall report back
        to the President\'s Management Council on the viability of such
        alternative financing options.

c.  ENERGY STAR (Registered Trademark) Buildings. Agencies shall strive
    to meet the ENERGY STAR (Registered Trademark) Building criteria for
    energy performance and indoor environmental quality in their
    eligible facilities to the maximum extent practicable by the end
    of 2002. Agencies may use Energy-Savings Performance Contracts,
    utility energy-efficiency service contracts, or other means to
    conduct evaluations and make improvements to buildings in order to
    meet the criteria. Buildings that rank in the top 25 percent in
    energy efficiency relative to comparable commercial and Federal
    buildings will receive the ENERGY STAR (Registered Trademark)
    building label. Agencies shall integrate this building rating tool
    into their general facility audits.

d.  Sustainable Building Design. DOD and GSA, in consultation with DOE
    and EPA, shall develop sustainable design principles. Agencies shall
    apply such principles to the siting, design, and construction of new
    facilities. Agencies shall optimize life-cycle costs, pollution, and
    other environmental and energy costs associated with the
    construction, life-cycle operation, and decommissioning of the
    facility. Agencies shall consider using Energy-Savings Performance
    Contracts or utility energy-efficiency service contracts to aid them
    in constructing sustainably designed buildings.

e.  Model Lease Provisions. Agencies entering into leases, including the
    renegotiation or extension of existing leases, shall incorporate
    lease provisions that encourage energy and water efficiency wherever
    life-cycle cost-effective. Build-to-suit lease solicitations shall
    contain criteria encouraging sustainable design and development,
    energy efficiency, and verification of building performance.
    Agencies shall include a preference for buildings having the ENERGY
    STAR building label in their selection criteria for acquiring leased
    buildings. In addition, all agencies shall encourage lessors to
    apply for the ENERGY STAR (Registered Trademark) building label and
    to explore and implement projects that would reduce costs to the
    Federal Government, including projects carried out through the
    lessors\' Energy-Savings Performance Contracts or utility
    energy-efficiency service contracts.

f.  Industrial Facility Efficiency Improvements. Agencies shall explore
    efficiency opportunities in industrial facilities for steam systems,
    boiler operation, air compressor systems, industrial processes, and
    fuel switching, including cogeneration and other efficiency and
    renewable energy technologies.

g.  Highly Efficient Systems. Agencies shall implement district energy
    systems, and other highly efficient systems, in new construction or
    retrofit projects when life-cycle cost-effective. Agencies shall
    consider combined cooling, heat, and power when upgrading and
    assessing facility power needs and shall use combined cooling, heat,
    and power systems when life-cycle cost-effective. Agencies shall
    survey local natural resources to optimize use of available biomass,
    bioenergy, geothermal, or other naturally occurring energy sources.

h.  Off-Grid Generation. Agencies shall use off-grid generation systems,
    including solar hot water, solar electric, solar outdoor lighting,
    small wind turbines, fuel cells, and other off-grid alternatives,
    where such systems are life-cycle cost-effective and offer benefits
    including energy efficiency, pollution prevention, source energy
    reductions, avoided infrastructure costs, or expedited service.

Sec. 404. Electricity Use. To advance the greenhouse gas and renewable
energy goals of this order, and reduce source energy use, each agency
shall strive to use electricity from clean, efficient, and renewable
energy sources. An agency\'s efforts in purchasing electricity from
efficient and renewable energy sources shall be taken into account in
assessing the agency\'s progress and formulating its score card.

a.  Competitive Power. Agencies shall take advantage of competitive
    opportunities in the electricity and natural gas markets to reduce
    costs and enhance services. Agencies are encouraged to aggregate
    demand across facilities or agencies to maximize their economic
    advantage.

b.  Reduced Greenhouse Gas Intensity of Electric Power. When selecting
    electricity providers, agencies shall purchase electricity from
    sources that use high efficiency electric generating technologies
    when life-cycle cost-effective. Agencies shall consider the
    greenhouse gas intensity of the source of the electricity and strive
    to minimize the greenhouse gas intensity of purchased electricity.

c.  Purchasing Electricity from Renewable Energy Sources.

    1.  Each agency shall evaluate its current use of electricity from
        renewable energy sources and report this level in its annual
        report to the President. Based on this review, each agency
        should adopt policies and pursue projects that increase the use
        of such electricity. Agencies should include provisions for the
        purchase of electricity from renewable energy sources as a
        component of their requests for bids whenever procuring
        electricity. Agencies may use savings from energy efficiency
        projects to pay additional incremental costs of electricity from
        renewable energy sources:

    2.  In evaluating opportunities to comply with this section,
        agencies should consider: my Administration\'s goal of tripling
        nonhydroelectric renewable energy capacity in the United States
        by 2010; the renewable portfolio standard specified in the
        restructuring guidelines for the State in which the facility is
        located; GSA\'s efforts to make electricity from renewable
        energy sources available to Federal electricity purchasers; and
        EPA\'s guidelines on crediting renewable energy power in
        implementation of Clean Air Act standards.

Sec. 405. Mobile Equipment. Each agency shall seek to improve the
design, construction, and operation of its mobile equipment, and shall
implement all life-cycle cost-effective energy efficiency measures that
result in cost savings while improving mission performance. To the
extent that such measures are life-cycle cost-effective, agencies shall
consider enhanced use of alternative or renewable-based fuels.

Sec. 406. Management and Government Performance. Agencies shall use the
following management strategies in meeting the goals of this order.

a.  Awards. Agencies shall use employee incentive programs to reward
    exceptional performance in implementing this order.

b.  Performance Evaluations. Agencies shall include successful
    implementation of provisions of this order in areas such as
    Energy-Savings Performance Contracts, sustainable design, energy
    efficient procurement, energy efficiency, water conservation, and
    renewable energy projects in the position descriptions and
    performance evaluations of agency heads, members of the agency
    energy team, principal program managers, heads of field offices,
    facility managers, energy managers, and other appropriate employees.

c.  Retention of Savings and Rebates. Agencies granted statutory
    authority to retain a portion of savings generated from efficient
    energy and water management are encouraged to permit the retention
    of the savings at the facility or site where the savings occur to
    provide greater incentive for that facility and its site managers to
    undertake more energy management initiatives, invest in renewable
    energy systems, and purchase electricity from renewable energy
    sources.

d.  Training and Education. Agencies shall ensure that all appropriate
    personnel receive training for implementing this order.

    1.  DOE, DOD, and GSA shall provide relevant training or training
        materials for those programs that they make available to all
        Federal agencies relating to the energy management strategies
        contained in this order.

    2.  The Federal Acquisition Institute and the Defense Acquisition
        University shall incorporate into existing procurement courses
        information on Federal energy management tools, including Energy
        Savings Performance Contracts, utility energy-efficiency service
        contracts, ENERGY STAR (Registered Trademark) and other energy
        efficient products, and life-cycle cost analysis.

    3.  All agencies are encouraged to develop outreach programs that
        include education, training, and promotion of ENERGY STAR
        (Registered Trademark) and other energy-efficient products for
        Federal purchase card users. These programs may include
        promotions with billing statements, user training, catalogue
        awareness, and exploration of vendor data collection of
        purchases.

e.  Showcase Facilities. Agencies shall designate exemplary new and
    existing facilities with significant public access and exposure as
    showcase facilities to highlight energy or water efficiency and
    renewable energy improvements.

PART 5 \-- TECHNICAL ASSISTANCE

Sec. 501. Within 120 days of this order, the Director of OMB shall:

a.  develop and issue guidance to agency budget officers on preparation
    of annual funding requests associated with the implementation of the
    order for the FY 2001 budget;

b.  in collaboration with the Secretary of Energy, explain to agencies
    how to retain savings and reinvest in other energy and water
    management projects; and

c.  in collaboration with the Secretary of Energy through the Office of
    Federal Procurement Policy, periodically brief agency procurement
    executives on the use of Federal energy management tools, including
    Energy-Savings Performance Contracts, utility energy-efficiency
    service contracts, and procurement of energy efficient products and
    electricity from renewable energy sources.

Sec. 502. Within 180 days of this order, the Secretary of Energy, in
collaboration with other agency heads, shall:

a.  issue guidelines to assist agencies in measuring energy per square
    foot, per unit of production, or other applicable unit in
    industrial, laboratory, research, and other energy-intensive
    facilities;

b.  establish criteria for determining which facilities are exempt from
    the order. In addition, DOE must provide guidance for agencies to
    report proposed exemptions;

c.  develop guidance to assist agencies in calculating appropriate
    energy baselines for previously exempt facilities and facilities
    occupied after 1990 in order to measure progress toward goals;

d.  issue guidance to clarify how agencies determine the life-cycle cost
    for investments required by the order, including how to compare
    different energy and fuel options and assess the current tools;

e.  issue guidance for providing credit toward energy efficiency goals
    for cost-effective projects where source energy use declines but
    site energy use increases; and

f.  provide guidance to assist each agency to determine a baseline of
    water consumption.

Sec. 503. Within 1 year of this order, the Secretary of Energy, in
collaboration with other agency heads, shall:

a.  provide guidance for counting renewable and highly efficient energy
    projects and purchases of electricity from renewable and highly
    efficient energy sources toward agencies\' progress in reaching
    greenhouse gas and energy reduction goals;

b.  develop goals for the amount of energy generated at Federal
    facilities from renewable energy technologies;

c.  support efforts to develop standards for the certification of low
    environmental impact hydropower facilities in order to facilitate
    the Federal purchase of such power;

d.  work with GSA and DLA to develop a plan for purchasing advanced
    energy products in bulk quantities for use in by multiple agencies;

e.  issue guidelines for agency use estimating the greenhouse gas
    emissions attributable to facility energy use. These guidelines
    shall include emissions associated with the production,
    transportation and use of energy consumed in Federal facilities; and

f.  establish water conservation goals for Federal agencies.

Sec. 504. Within 120 days of this order, the Secretary of Defense and
the Administrator of GSA, in consultation with other agency heads, shall
develop and issue sustainable design and development principles for the
siting, design, and construction of new facilities.

Sec. 505. Within 180 days of this order, the Administrator of GSA, in
collaboration with the Secretary of Defense, the Secretary of Energy,
and other agency heads, shall:

a.  develop and issue guidance to assist agencies in ensuring that all
    project cost estimates, bids, and agency budget requests for design,
    construction, and renovation of facilities are based on life-cycle
    costs. Incentives for contractors involved in facility design and
    construction must be structured to encourage the contractors to
    design and build at the lowest life-cycle cost;

b.  make information available on opportunities to purchase electricity
    from renewable energy sources as defined by this order. This
    information should accommodate relevant State regulations and be
    updated periodically based on technological advances and market
    changes, at least every 2 years;

c.  develop Internet-based tools for both GSA and DLA customers to
    assist individual and agency purchasers in identifying and
    purchasing ENERGY STAR? and other energy efficient products for
    acquisition; and

d.  develop model lease provisions that incorporate energy efficiency
    and sustainable design. PART 6 \-- GENERAL PROVISIONS

Sec. 601. Compliance by Independent Agencies. Independent agencies are
encouraged to comply with the provisions of this order.

Sec. 602. Waivers. If an agency determines that a provision in this
order is inconsistent with its mission, the agency may ask DOE for a
waiver of the provision. DOE will include a list of any waivers it
grants in its Federal Energy Management Programs annual report to the
Congress.

Sec. 603. Scope.

a.  This order is intended only to improve the internal management of
    the Executive branch and is not intended to create any right,
    benefit, or trust responsibility, substantive or procedural,
    enforceable by law by a party against the United States, its
    agencies, its officers, or any other person.

b.  This order applies to agency facilities in any State of the United
    States, the District of Columbia, the Commonwealth of Puerto Rico,
    Guam, American Samoa, the United States Virgin Islands, the Northern
    Mariana Islands, and any other territory or possession over which
    the United States has jurisdiction. Agencies with facilities outside
    of these areas, however, are encouraged to make best efforts to
    comply with the goals of this order for those facilities. In
    addition, agencies can report energy improvements made outside the
    United States in their annual report to the President; these
    improvements may be considered in agency scorecard evaluations.

Sec. 604. Revocations. Executive Order 12902 of March 9, 1994, Executive
Order 12759 of April 17, 1991, and Executive Order 12845 of April 21,
1993, are revoked.

Sec. 605. Amendments to Federal Regulations. The Federal Acquisition
Regulation and other Federal regulations shall be amended to reflect
changes made by this order, including an amendment to facilitate agency
purchases of electricity from renewable energy sources.

PART 7 \-- DEFINITIONS

For the purposes of this order:

Sec. 701. \"Acquisition\" means acquiring by contract supplies or
services (including construction) by and for the use of the Federal
Government through purchase or lease, whether the supplies or services
are already in existence or must be created, developed, demonstrated,
and evaluated. Acquisition begins at the point when agency needs are
established and includes the description of requirements to satisfy
agency needs, solicitation and selection of sources, award of contracts,
contract financing, contract performance, contract administration, and
those technical and management functions directly related to the process
of fulfilling agency needs by contract.

Sec. 702. \"Agency\" means an Executive agency as defined in 5 U.S.C.
105. For the purpose of this order, military departments, as defined in
5 U.S.C. 102, are covered under the auspices of DOD.

Sec. 703. \"Energy-Savings Performance Contract\" means a contract that
provides for the performance of services for the design, acquisition,
financing, installation, testing, operation, and where appropriate,
maintenance and repair, of an identified energy or water conservation
measure or series of measures at one or more locations. Such contracts
shall provide that the contractor must 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 predetermined share of the value of
the energy savings directly resulting from implementation of such
measures during the term of the contract. Payment to the contractor is
contingent upon realizing a guaranteed stream of future energy and cost
savings. All additional savings will accrue to the Federal Government.

Sec. 704. \"Exempt facility\" or \"Exempt mobile equipment\" means a
facility or a piece of mobile equipment for which an agency uses
DOE-established criteria to determine that compliance with the Energy
Policy Act of 1992 or this order is not practical.

Sec. 705. \"Facility\" means any individual building or collection of
buildings, grounds, or structure, as well as any fixture or part
thereof, including the associated energy or water-consuming support
systems, which is constructed, renovated, or purchased in whole or in
part for use by the Federal Government. It includes leased facilities
where the Federal Government has a purchase option or facilities planned
for purchase. In any provision of this order, the term \"facility\" also
includes any building 100 percent leased for use by the Federal
Government where the Federal Government pays directly or indirectly for
the utility costs associated with its leased space. The term also
includes Government-owned contractor-operated facilities.

Sec. 706. \"Industrial facility\" means any fixed equipment, building,
or complex for production, manufacturing, or other processes that uses
large amounts of capital equipment in connection with, or as part of,
any process or system, and within which the majority of energy use is
not devoted to the heating, cooling, lighting, ventilation, or to
service the water heating energy load requirements of the facility.

Sec. 707. \"Life-cycle costs\" means the sum of the present values of
investment costs, capital costs, installation costs, energy costs,
operating costs, maintenance costs, and disposal costs, over the
lifetime of the project, product, or measure. Additional guidance on
measuring life-cycle costs is specified in 10 C.F.R. 436.19.

Sec. 708. \"Life-cycle cost-effective\" means the life-cycle costs of a
product, project, or measure are estimated to be equal to or less than
the base case (i.e., current or standard practice or product).
Additional guidance on measuring cost-effectiveness is specified in 10
C.F.R. 436.18 (a), (b), and (c), 436.20, and 436.21.

Sec. 709. \"Mobile equipment\" means all Federally owned ships,
aircraft, and nonroad vehicles.

Sec. 710. \"Renewable energy\" means energy produced by solar, wind,
geothermal, and biomass power.

Sec. 711. \"Renewable energy technology\" means technologies that use
renewable energy to provide light, heat, cooling, or mechanical or
electrical energy for use in facilities or other activities. The term
also means the use of integrated whole-building designs that rely upon
renewable energy resources, including passive solar design.

Sec. 712. \"Source energy\" means the energy that is used at a site and
consumed in producing and in delivering energy to a site, including, but
not limited to, power generation, transmission, and distribution losses,
and that is used to perform a specific function, such as space
conditioning, lighting or water heating.

Sec. 713. \"Utility\" means public agencies and privately owned
companies that market, generate, and/or distribute energy or water,
including electricity, natural gas, manufactured gas, steam, hot water,
and chilled water as commodities for public use and that provide the
service under Federal, State, or local regulated authority to all
authorized customers. Utilities include: Federally owned non-profit
producers; municipal organizations; and investor or privately owned
producers regulated by a State and/or the Federal Government;
cooperatives owned by members and providing services mostly to their
members; and other nonprofit State and local government agencies serving
in this capacity.

Sec. 714. \"Utility energy-efficiency service\" means demand side
management services provided by a utility to improve the efficiency of
use of the commodity (electricity, gas, etc.) being distributed.
Services can include, but are not limited to, energy efficiency and
renewable energy project auditing, financing, design, installation,
operation, maintenance, and monitoring.

WILLIAM J. CLINTON

THE WHITE HOUSE,\
June 3, 1999.