# Presentation: 761791

## Reporting Challenges and Opportunities in E.O. 13423

- Brad Gustafson
- Federal Energy Management Program

**Fleet and Facilities Reporting**

## New Requirements

**E.O. 13423**
- Replaces E.O. 13149
- Similar objective of petroleum reduction in Federal fleet
**EPAct 2005 Section 701**
- Requires Federal agencies to use alternative fuel in all dual-fuel AFVs acquired in compliance with EPAct
- Includes provision for waivers

## E.O. 13423 is similar to E.O. 13149

| ` | E.O. 13423 | E.O. 13149 |
| --- | --- | --- |
| Applies to: | Agencies with 20+  motor vehicles in U.S.; LD, MD & HD | Agencies with 20+ motor vehicles in U.S.; LD, MD & HD |
| Petroleum reduction:
 | 2% per year relative to 2005 baseline through FY 2015
 | 20% by 2005 relative to 1999 baseline |
| Alternative fuel use: | Increase 10 % per year relative to previous year | >50% fuel use in AFVs |
| Fuel economy: | NA | Increase 3 mpg by 2005 |
| Plug-in hybrids: | Use PHEVs when commercially available | NA |
| EPAct credits: | One for each AFV and additional credits for dedicated LD (+1), MD (+2) and HD (+3) AFVs | One for each AFV and additional credits for dedicated LD (+1), MD (+2) and HD (+3) AFVs
 |

## Additional provisions of E.O. 13423

- Agency data (FAST) due to DOE December 31st
- GSA monthly reports – to each agency on fuel use data (AF and petroleum) in GSA-leased vehicles by tag number
- Requires agencies to strive to increase efficiency
- Agencies required to submit recommendations to DOE concerning reducing petroleum use in non-covered vehicles and mobility assets*:
- petroleum reduction goals, methods and incentives
- Identification of older, inefficient engines and related systems to replace or upgrade

- *(aircraft, ships, other ground vehicles)

## Implementation of Order

- Two Baselines
- Covered Petroleum
- Alternative Fuel
- Deadline for changes 08/31/2007
- Covered Petroleum Baseline
- 2005
- Does not include emergency and other exempt vehicles
- Alternative Fuel Baseline
- 2005
- Baseline is total AF use, not individual AFs

## Issues in E.O. Implementation

**Equity**
- Some agencies have already made enormous strides
- 2005 baseline cannot be higher than 1999 without DOE approval
**Data Quality**
- Data quality varies
- DOE will provide assistance identify and correct data problems

## Section 701 EPAct 2005

- Requires federal agencies to use alternative fuel in all dual-fuel AFVs (LD, MD, HD and located anywhere in U.S.)
- Includes provision for waivers where:
- Alternative fuel is not reasonably available (15-minute drive or 5 miles), or
- Alternative fuel is unreasonably expensive (15% more than gasoline on GGE basis)
- One waiver per agency
- Waivers valid for one year

## Waiver Process

- Waiver requests include three parts:
- FAST report (new module)
- Agency plan for addressing AF availability and/or cost issues
- Cover letter signed by Senior Transportation Official
- Submit to DOE by June 30th prior to fiscal year; determinations sent to agencies in Sept.

## Overall approach to meeting requirements of E.O. 13423 & EPAct Sec. 701

**Implement low-cost options to immediately reduce petroleum consumption **
**Distribute existing vehicle inventory to maximize alternative fuel use**
**Expand alternative fueling infrastructure**

## Major Facility Energy Goals

- Reduce energy intensity (Btu/square foot) from 2003 base year
- EPACT goal reductions: 2% per year, 20% in 2015
- E.O. 13423 reductions:  3% per year, 30% in 2015
- Expand use of renewable energy (as a percentage of electricity use)
- EPACT goal: 3% in 2007 – 2009, 5% in 2010 – 2012, and 7.5% in 2013 and thereafter
- E.O. 13423 goal:  at least half of the renewable energy must come from new renewable sources (in service after January 1, 1999)
- Reduce water consumption intensity (gallon/square foot), from 2007 base year, by 2% annually, 16% in 2015
- E.O. 13423 goal only (no EPACT requirement)

## Energy Intensity Reduction Goals

- EPACT reporting changes in FY 2006:
- New performance measure begins (2% reduction from 2003)
- Standard Buildings and Energy-Intensive Facilities combined into one reporting category subject to goals
- Base year changed from 1985 to 2003
- Criteria for excluding buildings from goals is now more stringent
- http://www1.eere.energy.gov/femp/pdfs/exclusion_criteria.pdf
- E.O. 13423 reporting changes for FY 2007:
- None for energy intensity reduction goals
- (E.O. goal follows same reporting structure begun by EPACT in 2006)
- Steeper E.O. performance measure begins (6% reduction from 2003)

## Greenhouse Gas Reduction

- Reduction of GHG emissions is an intention of E.O. 13423’s energy reduction goal, however, there is no longer a quantitative GHG reduction goal as there was in E.O. 13123
- DOE has revised its method for estimating GHG emissions from agency energy use (Draft in review).

**Notes:**
Greenhouse Gas Emissions.  Although GHG reduction is mentioned as an intention of the E.O. 13423 Section 2(a) goal, there is no longer an actual quantitative goal for GHG reduction.  However, FEMP will continue to estimate emissions based on agency-reported energy consumption.  
FEMP’s draft Estimating the Carbon-Equivalent Emissions of Carbon Dioxide, Methane, and Nitrous Oxide from Federal Facility Energy Use will be finalized and referenced as an appendix to this guidance.
Not all of the gases mentioned in the E.O. definition can be estimated solely on the energy data provided by the agencies, but FEMP has drafted a method for estimating emissions of carbon dioxide, methane, and nitrous oxide from agency energy use.  
Carbon dioxide is overwhelmingly the largest component of GHG emissions from energy use.  Even considering the higher global warming potential (GWP) of methane and nitrous oxide, they still make up less than a half of a percent of the GWP of carbon dioxide emissions for any facility fuel.
Since agencies do not report electricity use disaggregated by region, FEMP will use a nationally-derived factor for estimating GHG emissions from electricity use.
Purchases of all forms of renewable energy used in facilities will be factored out of GHG emission estimates.
When reporting GHG estimates in annual reports to Congress and the President, emissions will be reported on a square foot basis (metric tons of carbon equivalent per gross square foot (MTCE/GSF)) as well as in absolute terms (MTCE).
Estimated GHG emissions from facilities excluded from the energy intensity reduction goals of E.O. 13423 and EPACT will not be included in the totals.
Agencies have the option of estimating GHG emissions from their energy use independently based on disaggregated or more detailed data provided that:
Estimates are provided to FEMP for inclusion in Federal Government totals, and
Agencies provide a detailed description of their estimation methodology.

## Impact of RE Purchases on Energy Intensity Reduction Goals

- The credit for renewable energy purchases toward energy reduction goal performance will be phased out (under pending Renewable Energy guidance)

- All RE purchases will count toward the energy reduction goal in 2007
- Short-term incentive for long-term purchases (10 Years +) from 2008 to 2011
- By 2012 RE purchase credit is phased out completely

**Allowed Contribution of RE Purchases Toward Energy Reduction Goal**

**Notes:**
Counting Renewable Energy Purchases Toward Energy Intensity and Greenhouse Gas Emission Reductions
During FY 2007, agencies will continue to receive credit toward their energy reduction goal from renewable energy purchases.
From FY 2008 through FY 2011, the credit will gradually be reduced to zero as shown in the table below.  
Purchases of renewable energy or Renewable Energy Credits (RECs) may only contribute up to 60 percent of the annual energy reduction goal for FY 2008, and gradually be reduced by 20% per year to zero in 2012, as shown on the third column of the table below:
Long-term REC purchases of 10 years or more of renewable energy that contribute to the development of new renewable energy resources may only contribute up to 80 percent of the annual energy reduction goal for FY 2008 and gradually be reduced by 20% per year to zero in 2012, as shown in the fourth column below:
The combined total of both regular and long-term renewable purchases may not contribute more than the percentages shown in column 4 above. 

## Renewable Energy Goals

- Renewable Energy Working Group is currently developing guidance addressing the renewable energy goal of EPACT and associated requirements from E.O. 13423
- Issues being examined include:
- Treatment of Renewable Energy Certificates (RECs)
- REC Retention Requirements
- REC Trading
- Limiting contribution of RECs toward the goal
- Double credit for renewable energy generated on-site

**Notes:**
REC Retention Requirements: Renewable energy from projects built on-site can be counted toward the renewable energy goal where the renewable energy is produced and used on-site and the renewable energy and non-energy attributes are not sold or otherwise allowed to be transferred from the site.  Retention of a REC that explicitly states that the Federal agency retains or precludes transfer to other parties of all renewable energy and non-energy attributes of the project is the best evidence of meeting this standard. 
REC Trading: The requirement to retain RECs does not preclude trading or swapping RECs. Agencies may sell RECs from their on-site renewable projects and use the proceeds to purchase RECs generated from other locations or from other renewable resources. Agencies may also arrange for direct swaps of RECs with other renewable energy projects. This “REC Swap” option is designed to encourage innovative projects and to improve project cost-effectiveness, while retaining the concept that a specific REC is not double counted, except as specified in EPACT 2005 Section 203 subsection (c).
By the end of FY 2009, no more than 50 percent of the renewable energy purchases of any agency may be obtained through the purchase of RECs for purposes of achieving the agencies annual goal. 
For purposes of determining compliance with the requirement of the EO, calculation of the amount of renewable energy consumed and RECs are retained (as described below), may include crediting provisions of Section 203 (c) of EPAct 2005.  However, double credits will only be granted to production and consumption of renewable energy from new renewable resources and single credits granted to production and consumption from other renewable resources.

## Water Intensity Reduction Goal

- This is the first time agencies will be subject to a quantitative water consumption goal.
- Agencies will develop baselines based on FY 2007 consumption
- Water Goal Working Group is currently developing guidance for water intensity reduction goal
- Issues being examined include:
- Definition of water intensity, facility square footage
- Applicable water use (potable vs. all water use)
- Unmetered facilities and facilities with flat-use water rates
- Exemptions, if applicable, for certain facilities and process uses
- Guidance is due by September 30, 2007, but is expected to be released earlier to aid in agency baseline development

## Planning Activities

- The previous E.O. 13123 required submittal of an annual implementation plan.
- Submittal of annual plan each year no longer required under E.O. 13423
- DOE will provide agencies with a general framework for developing a strategy and plan with a 2015 planning horizon.
- Supplemental long-term planning guidance due end of June

## Pending Guidance

- Goals and reporting issues clarification/guidance
- Long-term planning and strategies for achieving energy goals
- The renewable energy goal and use of renewable energy credits/Use of and investment in renewable energy generation
- Use of alternatively financed projects such as ESPCs and UESCs
- Calculating and validating funds available for retention in accordance with Section 102(f) of EPAct 2005
- Water conservation goal guidance

## FAST
kathleen_nawaz@nrel.gov

Facilities
ctremper@mcneiltech.com

**kathleen_nawaz@nrel.gov**
**Facilities**
**ctremper@mcneiltech.com**

**HELP**

## Thank You

**http://www1.eere.energy.gov/femp**

**Thank You**