**Request for Comment on Draft Guidance for Section 203 of EPACT 2005,
Federal Purchase Requirement of Renewable Energy**

Dear Renewable Working Group Member or Stakeholder,

FEMP is distributing this draft of DOE FEMP's Guidance under Section 203
of the Energy Policy Act of 2005 (EPACT 2005), Federal Purchase
Requirement of Renewable Energy for your review and comment.

This draft represents DOE FEMP's approach for the Guidance. FEMP has
developed this draft with Federal members of the Renewable Working
Group. Several issues have been identified as significant, with
differing opinions amongst the Federal sector. FEMP describes the issues
below and provides a brief summary of FEMP's rationale for the chosen
language. FEMP welcomes your comments.

**New Renewable Resources**: One issue is whether the guidance should
require that new renewable resources should be used to meet all or some
of the goal. DOE FEMP considers that some use of a new requirement is
needed to ensure that the goal helps to encourage the use and
development of new renewable energy resources. Some agencies disagree
due to difficulty determining which resources are new, concern about
cost, and other concerns if purchases of renewable energy or Renewable
Energy Certificates (RECs) include a new requirement. Some agencies
support an aggressive new requirement.

Two facts about existing Renewable Energy in the Federal Government, and
in the United States as a whole, help inform the discussion.

a\) Existing Federal Projects, including the large Coso Geothermal Plant
built in the late 1980's, currently provide enough renewable energy to
meet almost 150% of the 2007 goal, and more than 50% of the 2013 goal if
they are allowed to count (there are additional issues besides how new
they are).

b\) There are currently an estimated 104,400 GWh of non-hydro renewable
energy in the United States (EIA, Annual Energy Outlook, 2005, Table
16). This compares to an approximate 4368 GWh for the proposed 5%
federal renewable energy goal in 2010 -- only 4.2% of the existing
renewable resources.

Without explicit requirements for some new resources the renewable
energy goal is unlikely to encourage the use and development of new
renewable energy resources since most or all of the goal will be met
through the purchases or use of existing resources.

FEMP has proposed a new date in this draft Guidance. This approach
continues the approach developed under Executive Order (EO) 13123 to
require renewable energy from new projects. The EO guidance defined 1990
as new. Note that this date was established to provide credit to early
adopters of renewable on-site project technologies. The date was not
established with renewable energy purchases in mind. (RECs did not exist
at that time). FEMP has proposed June 3, 1999, the date EO 13123 was
signed, as the definition of new in the draft guidance. This date was
chosen since EO13123 was the first time that the Federal Government
clearly required the use of renewable energy. Other dates may be more
appropriate, including August 8, 2005 when EPACT was signed. All on-site
projects that meet the definition of "using' renewable energy will count
towards the goal.

**Projects that produce but do not use renewable energy**: Another issue
of concern to some agencies is whether to count toward the goal,
renewable energy from projects on federal facilities that produce power
but do not use that power. EPACT appears to have a more restrictive
focus on consumption or use of renewable energy than EO 13123 did. These
projects counted under EO 13123. Some agencies still want to count these
projects. FEMP has provided draft language requiring an agency to keep
the Renewable Energy Certificates (REC) associated with the renewable
and environmental attributes of the project if the agency wishes to
count the project against the Renewable Energy Goal. Some agencies may
not keep the RECs for a variety of reasons, but want to count the
project where significant investment or effort has developed new
renewable energy projects. These projects do support the development of
renewable energy. However, without the RECs, it is very difficult to
keep track of who can legally claim the use of the renewable attributes.
RECs have developed into an important element in the renewable energy
market, and FEMP considers it very important to support a clear
definition of them that does not allow double counting. Counting
projects where RECs are not retained could contribute to confusion and
double counting in the market.

**Thermal Energy:** Another issue is whether to allow counting of
thermal renewable energy. EPACT 2005 Section 203 uses renewable energy
and electric energy in a somewhat confusing manner. The initial section
says '...of the total amount of electric energy the Federal Government
consumes during any fiscal year, the following amounts shall be
renewable energy:'. This could be interpreted that the goal is set based
on electric energy, but can be met by other types of renewable energy
including thermal or mechanical energy. Guidance under EO 13123 allowed
a 'thermal equivalent' of electric energy, so that thermal renewable
energy, that is often more cost-effective than electricity from
renewable energy, could be used to help meet the goal. DOE FEMP has
included 'thermal equivalent' language in draft guidance and allowed
thermal renewable energy to count against the goal. Some agencies
support this approach, and some agencies find it confusing and illogical
since they believe that if thermal energy is allowed to count then the
goal should be based on total energy use rather than just electricity
use.

Please provide comments or suggested revised language via email to Jim
Hoelscher (<jhoelscher@antaresgroupinc.com>) who is collecting them for
DOE FEMP. Comments are due **December 7, 2005**. We recognize that the
time is short, but Federal agencies need the guidance to plan work to
meet the requirement.