79–006 

115TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 115–575 

ENERGY SAVINGS THROUGH PUBLIC-PRIVATE 

PARTNERSHIPS ACT OF 2017 

FEBRUARY 23, 2018.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. WALDEN, from the Committee on Energy and Commerce, 

submitted the following 

R E P O R T 

[To accompany H.R. 723] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Energy and Commerce, to whom was referred 

the bill (H.R. 723) to amend the National Energy Conservation Policy Act to encourage the increased use of performance contracting 

in Federal facilities, and for other purposes, having considered the 

same, report favorably thereon with an amendment and recommend that the bill as amended do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 3 

Background and Need for Legislation .................................................................... 3 

Committee Action .................................................................................................... 4 

Committee Votes ...................................................................................................... 4 

Oversight Findings and Recommendations ........................................................... 4 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 4 

Congressional Budget Office Estimate ................................................................... 4 

Federal Mandates Statement ................................................................................. 10 

Statement of General Performance Goals and Objectives .................................... 10 

Duplication of Federal Programs ............................................................................ 11 

Committee Cost Estimate ....................................................................................... 11 

Earmark, Limited Tax Benefits, and Limited Tariff Benefits ............................. 11 

Disclosure of Directed Rule Makings ..................................................................... 11 

Advisory Committee Statement .............................................................................. 11 

Applicability to Legislative Branch ........................................................................ 11 

Section-by-Section Analysis of the Legislation ...................................................... 11 

Changes in Existing Law Made by the Bill, as Reported ..................................... 12 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

2 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Energy Savings Through Public-Private Partnerships Act of 2017’’. 

SEC. 2. USE OF ENERGY AND WATER EFFICIENCY MEASURES IN FEDERAL BUILDINGS. 

(a) ENERGY MANAGEMENT REQUIREMENTS.—Section 543(f)(4) of the National Energy Conservation Policy Act (42 U.S.C. 8253(f)(4)) is amended by striking ‘‘may’’ 

and inserting ‘‘shall’’. 

(b) REPORTS.—Section 548(b) of the National Energy Conservation Policy Act (42 

U.S.C. 8258(b)) is amended— 

(1) in paragraph (3), by striking ‘‘and’’ at the end; 

(2) in paragraph (4), by striking the period at the end and inserting ‘‘; and’’; 

and 

(3) by adding at the end the following: 

‘‘(5)(A) the status of the energy savings performance contracts and utility energy service contracts of each agency; 

‘‘(B) the investment value of the contracts; 

‘‘(C) the guaranteed energy savings for the previous year as compared to the 

actual energy savings for the previous year; 

‘‘(D) the plan for entering into the contracts in the coming year; and 

‘‘(E) information explaining why any previously submitted plans for the contracts were not implemented.’’. 

(c) DEFINITION OF ENERGY CONSERVATION MEASURES.—Section 551(4) of the National Energy Conservation Policy Act (42 U.S.C. 8259(4)) is amended by striking 

‘‘or retrofit activities’’ and inserting ‘‘retrofit activities, or energy consuming devices 

and required support structures’’. 

(d) AUTHORITY TO ENTER INTO CONTRACTS.—Section 801(a)(2)(F) of the National 

Energy Conservation Policy Act (42 U.S.C. 8287(a)(2)(F)) is amended— 

(1) in clause (i), by striking ‘‘or’’ at the end; 

(2) in clause (ii), by striking the period at the end and inserting ‘‘; or’’; and 

(3) by adding at the end the following: 

‘‘(iii) limit the recognition of operation and maintenance savings associated with systems modernized or replaced with the implementation of 

energy conservation measures, water conservation measures, or any 

combination of energy conservation measures and water conservation 

measures.’’. 

(e) MISCELLANEOUS AUTHORITY.—Section 801(a)(2) of the National Energy Conservation Policy Act (42 U.S.C. 8287(a)(2)) is amended by adding at the end the following: 

‘‘(H) MISCELLANEOUS AUTHORITY.—Notwithstanding any other provision 

of law, a Federal agency may sell or transfer energy savings and apply the 

proceeds of the sale or transfer to fund a contract under this title.’’. 

(f) PAYMENT OF COSTS.—Section 802 of the National Energy Conservation Policy 

Act (42 U.S.C. 8287a) is amended by striking ‘‘(and related operation and maintenance expenses)’’ and inserting ‘‘, including related operations and maintenance expenses’’. 

(g) DEFINITION OF FEDERAL BUILDING.—Section 551(6) of the National Energy 

Conservation Policy Act (42 U.S.C. 8259(6)) is amended by striking the semicolon 

at the end and inserting ‘‘; the term does not include a dam, reservoir, or hydropower facility owned or operated by a Federal agency;’’. 

(h) DEFINITION OF ENERGY SAVINGS.—Section 804(2) of the National Energy Conservation Policy Act (42 U.S.C. 8287c(2)) is amended— 

(1) in subparagraph (A), by striking ‘‘federally owned building or buildings or 

other federally owned facilities’’ and inserting ‘‘Federal building (as defined in 

section 551)’’ each place it appears; 

(2) in subparagraph (C), by striking ‘‘; and’’ and inserting a semicolon; 

(3) in subparagraph (D), by striking the period at the end and inserting a 

semicolon; and 

(4) by adding at the end the following: 

‘‘(E) the use, sale, or transfer of energy incentives, rebates, or credits (including renewable energy credits) from Federal, State, or local governments 

or utilities; and 

‘‘(F) any revenue generated from a reduction in energy or water use, more 

efficient waste recycling, or additional energy generated from more efficient 

equipment.’’. 

3 

PURPOSE AND SUMMARY

H.R. 723 facilitates the use of energy savings performance contracts (ESPCs) and utility energy service contracts (UESCs) to utilize private sector investment to upgrade the energy and water efficiency of Federal facilities without any up-front cost to taxpayers. 

The bill helps to reduce Federal energy costs, while saving money, 

creating jobs, and reducing waste. 

BACKGROUND AND NEED FOR LEGISLATION

The Committee on Energy and Commerce has recognized the significant benefits of energy efficiency efforts in conserving domestic 

resources, saving American consumers money, strengthening economic competitiveness, and reducing environmental impacts. The 

energy efficiency ‘‘resource’’ plays an increasingly important role in 

the nation’s energy strategy. The advancement of cost-effective efficiency programs and technologies can contribute to the nation’s 

goal of energy independence by reducing demand and using supplies in a more effective manner. H.R. 723 seeks to increase energy 

efficiency and water conservation measures in the Federal Government. 

According to the Energy Information Administration, the Federal 

Government is the single largest energy consumer in the nation. 

Congress therefore expects the government to pursue its own energy efficiency efforts vigorously—not only to conserve energy resources and taxpayer dollars, but to lead by example. To that end, 

H.R. 723 further encourages the federal agencies to enter into energy savings performance contracts (ESPCs) and utility energy 

service contracts (UESCs). 

ESPCs and UESCs are proven methods by which Federal agencies can increase efficiency, thereby reducing energy costs. In both 

cases, an approved contractor designs and installs systems and 

equipment to reduce the energy consumption of a Federal facility 

and gets paid back through savings on utility bills that result from 

the project over a stipulated period of time. By law, and on a negotiated basis, the government never pays more than it would have 

paid for utilities if it had not entered into the contract. Using an 

ESPC or UESC in the Federal Government eliminates the need for 

appropriated dollars for equipment replacement and for operations 

and maintenance of such energy consuming equipment. 

For over 20 years, performance-based contracts for energy savings have provided upgrades to Federal buildings, including the 

House and Senate Office Buildings and the U.S. Capitol. According 

to the Federal Energy Management Program, approximately 650 

performance contracts worth $8 billion have been awarded 

throughout 25 Federal agencies and in all 50 States. These projects 

have resulted in energy savings valued at nearly $15 billion, of 

which approximately $11 billion went to repay project investments, 

accruing a net savings of $4 billion to the Federal Government. 

Greater use of ESPCs has been impaired by administrative delay 

and process issues within Federal agencies, some of which are the 

result of ambiguity in the underlying law. H.R. 723 seeks to eliminate administrative roadblocks by clarifying certain provisions of 

the law to reduce confusion resulting from statutory ambiguities. 

4 

In addition, the legislation requires additional reporting requirements, thus ensuring improved transparency. 

COMMITTEE ACTION

The Committee on Energy and Commerce has not held hearings 

on the legislation. 

On June 7, 2017, the full Committee on Energy and Commerce 

met in open markup session and ordered H.R. 723, without amendment, favorably reported to the House by unanimous consent. 

COMMITTEE VOTES

Clause 3(b) of rule XIII requires the Committee to list the record 

votes on the motion to report legislation and amendments thereto. 

There were no record votes taken in connection with ordering H.R. 

723 reported. 

OVERSIGHT FINDINGS AND RECOMMENDATIONS

Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of rule 

XIII, the Committee has not held hearings on this legislation. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

Pursuant to clause 3(c)(2) of rule XIII, the Committee finds that 

H.R. 723 would result in no new or increased budget authority, entitlement authority, or tax expenditures or revenues. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII, the following is the cost 

estimate provided by the Congressional Budget Office pursuant to 

section 402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, February 16, 2018. 

Hon. GREG WALDEN, 

Chairman, Committee on Energy and Commerce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 723, the Energy Savings 

Through Public-Private Partnerships Act of 2017. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Megan Carroll. 

Sincerely, 

KEITH HALL, 

Director. 

Enclosure. 

H.R. 723—Energy Savings Through Public-Private Partnerships Act 

of 2017 

Summary: H.R. 723 would modify agencies’ authority to enter 

into energy savings performance contracts (ESPCs), a specific type 

of long-term contract used to procure equipment and services to 

5 

conserve energy in federal buildings. The bill also would specify 

new reporting requirements for federal agencies. 

In CBO’s view, commitments under ESPCs create direct spending because agencies enter into such contracts without appropriations in advance to cover their full costs. On the basis of that view, 

CBO estimates that enacting H.R. 723 would increase direct spending by $441 million over the 2019–2027 period. CBO also estimates 

that reductions in federal agencies’ energy costs attributable to investments in energy-related services and equipment procured 

through contracts authorized under the bill would total $166 million over the 2019–2027 period (and additional amounts after 

2027). Over that period, CBO also estimates that discretionary 

spending for certain services related to those contracts would total 

$36 million. 

Because H.R. 723 would affect direct spending, pay-as-you-go 

procedures apply. Enacting the bill would not affect revenues. 

CBO estimates that enacting H.R. 723 would not increase net di- rect spending or on-budget deficits by more than $2.5 billion in any 

of the four consecutive 10-year periods beginning in 2028. 

For purposes of determining budget-related points of order for 

legislation considered by the House, section 5109 of H. Con. Res. 

71, the Concurrent Resolution on the Budget for Fiscal Year 2018, 

specifies how CBO should prepare cost estimates for ESPCs. Specifically, that resolution requires CBO to estimate, on a net-present 

value basis, the lifetime net cost or savings attributable to projects 

financed by such contracts and to record that amount as an upfront 

change in direct spending. Using those procedures, CBO estimates 

that H.R. 723 would reduce direct spending by $27 million over the 

2019–2027 period. However, H. Con. Res. 71 also specifies that, in 

the House of Representatives, any estimated savings calculated on 

that basis may not be used as an offset for purposes of budget enforcement. 

H.R. 723 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would impose no costs on state, local, or tribal governments. 

Estimated cost to the federal government: The estimated budgetary effects of this legislation are shown in the following table. Because the bill would affect energy-related spending by agencies 

throughout the federal government, the costs of this legislation 

would be spread across most budget functions. 

Background: Under current law, a variety of statutory provisions 

and executive orders direct federal agencies to meet certain goals 

to reduce the amount of energy used, increase the consumption of 

electricity that is generated from renewable sources, reduce emissions of greenhouse gases, and ensure that federal facilities meet 

certain standards related to the use of sustainable resources. To 

support investments in energy-efficient and renewable technologies 

necessary to achieve those goals, federal agencies sometimes use 

ESPCs—specific types of long-term contracts that enable nonfederal vendors to finance energy-related investments on behalf of 

the government. 

Under such contracts, agencies agree to pay vendors for energy 

conservation measures and related financing costs over time on the 

basis of anticipated and realized reductions in energy costs. Typically, an ESPC vendor develops a baseline estimate of energy conVerDate Sep 11 2014 06:54 Feb 24, 2018 Jkt 079006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\HR575.XXX HR575
6 

sumption that would occur in the absence of energy conservation 

measures and estimates the reductions in energy consumption and 

energy costs that would result from an ESPC-funded project. Those 

estimated reductions are used to set the annual payments to the 

vendor for the services and equipment provided under the ESPC. 

According to the Department of Energy, the typical term of those 

payments under an ESPC is at least 17 years—that is, it takes at 

least 17 years, on average, for the government to realize sufficient 

savings to cover the contractual payments due to the vendor. After 

the contract is fully repaid, additional savings generated by energy 

conservation measures accrue to the government. 

ESTIMATED BUDGETARY EFFECTS OF H.R. 723 AS REPORTED BY THE SENATE COMMITTEE ON 

ENERGY AND NATURAL RESOURCES ON MAY 24, 2017 

By fiscal year, in millions of dollars— 

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018– 

2022 

2018– 

2027 

INCREASES IN DIRECT SPENDING a

Federal Obligations Under 

ESPCs b

Estimated Budget Authority ..................... 0 55 55 55 55 55 55 55 55 55 220 495 

Estimated Outlays ...... 0 17 39 55 55 55 55 55 55 55 166 441 

INCREASES OR DECREASES (¥) IN SPENDING SUBJECT TO APPROPRIATION a

Reductions in Energy and 

Energy-Related Costs 

Attributable to ESPCs 

Estimated Authorization Level ................ 0 ¥1 ¥4 ¥8 ¥13 ¥18 ¥23 ¥28 ¥33 ¥38 ¥26 ¥166 

Estimated Outlays ...... 0 ¥1 ¥4 ¥8 ¥13 ¥18 ¥23 ¥28 ¥33 ¥38 ¥26 ¥166 

Appropriations for ESPCRelated Services 

Estimated Authorization Level ................ 0 * 1 2 3 4 5 6 7 8 6 36 

Estimated Outlays ...... 0 * 1 2 3 4 5 6 7 8 6 36 

Total Changes in Spending 

Subject to Appropriation 

Estimated Authorization Level ................ 0 ¥1 ¥3 ¥6 ¥10 ¥14 ¥18 ¥22 ¥26 ¥30 ¥20 ¥130 

Estimated Outlays ...... 0 ¥1 ¥3 ¥6 ¥10 ¥14 ¥18 ¥22 ¥26 ¥30 ¥20 ¥130 

Memorandum: Estimated Net Present Value of All Budgetary Effects related to ESPCs under H.R. 723, Following Procedures 

Specified in Section 5109 of H. Con. Res. 71, as passed by the House of Representatives on October 25, 2017. 

DECREASES IN DIRECT SPENDING AS ESTIMATED ON A NET-PRESENT-VALUE BASIS c

Decreases in Direct Spending 

Estimated Budget Authority ..................... 0 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥12 ¥27 

Estimated Outlays ...... 0 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥12 ¥27 

ESPCs = energy savings performance contracts. * = between zero and $500,000. 

a The estimates reflect CBO’s view of how cash flows related to ESPCs should be recorded in the federal budget. Since ESPCs were first implemented in 1998, however, the Administration has not recorded the full extent of federal obligations under ESPCs upfront when contracts were signed. Instead, the Administration records ongoing contract payments to vendors on a year-by-year basis as appropriations for such payments are provided. If the Administration was to continue following that practice for executing ESPCs under H.R. 723, agencies’ total en- ergy-related costs would be largely unchanged during the contract period, when estimated savings from reduced energy use would be paid to 

vendors under ESPC contracts. As a result, CBO estimates that there would be no significant reduction in appropriations from implementing 

H.R. 723 over the 10-year period covered by this estimate. If expected reductions in energy use continued beyond the contract period, budgetary savings would accrue to the federal government if annual appropriations for agencies’ energy-related spending were reduced accordingly. b Estimated budget authority reflects the value of energy conservation measures as installed plus the net present value of the portion of vendors’ borrowing costs attributable to contract interest rates that would exceed U.S. Treasury interest rates. Estimated outlays stemming 

from such commitments are spread across the period during which the vendor is expected to construct, manufacture, or purchase energy con- servation assets on behalf of the federal government. 

7 

1See Congressional Budget Office, Using ESPCs to Finance Federal Investments in EnergyEfficient Equipment, (February 2015), www.cbo.gov/publication/49869. 2 Renewable energy certificates represent the rights to the nonpower renewable and environmental attributes of electricity generated from renewable resources. Such certificates, and other 

similar incentives and rebates, can be sold separately from the underlying units of physical electricity. 

c Section 5109 of H. Con. Res. 71, as passed by the House of Representatives on October 25, 2017, specifies an alternative method for estimating the budgetary effects of ESPCs and similar contracts. That methodology requires CBO to calculate, on a net-present-value basis, the 

lifetime net cost or savings attributable to projects financed by ESPCs and to record that amount as an upfront change in direct spending in 

the year when commitments are expected to be made. However, H. Con. Res. 71 also specifies that any estimating savings calculated on that 

basis may not be used as an offset for purposes of budget enforcement. 

CBO generally expects that implementing ESPCs will affect both 

direct spending and spending subject to appropriation. The rationale for CBO’s longstanding budgetary treatment of ESPCs, and differences between CBO’s view and the Administration’s, are discussed in depth in a CBO report on that topic.1 In brief, upon entering into an ESPC, the government effectively commits to making 

payments to a vendor in future years before having appropriations 

to cover all of the resulting costs; in CBO’s view, the authority to 

enter into such contractually binding agreements without appropriations is a form of direct spending. ESPCs permit agencies to 

pay vendors for energy conservation measures and related financing costs over time on the basis of anticipated and realized reductions in energy costs, which are generally paid from discretionary 

annual appropriations. 

Basis of estimate: For this estimate, CBO assumes that the bill 

will be enacted by the start of fiscal year 2019. 

H.R. 723 would make a variety of changes to the ESPC statute. 

In particular, the bill would: 

• Require agencies to implement energy conservation measures identified as being cost-effective; 

• Expand the definition of an energy conservation measure 

to include the acquisition of energy-consuming devices and support structures (such as appliances located within federal 

buildings); 

• Expand the definition of energy savings that may be included in an ESPC to include the use, sale, or transfer of energy incentives, rebates, or credits (such as renewable energy 

certificates) as well as savings from reductions in water or energy use, more efficient waste recycling, or additional energy 

generated from energy conservation measures; 2

• Authorize agencies to use, sell, or transfer energy incentives, rebates, or credits as a means of making payments to 

vendors under ESPCs; 

• Require agencies to include anticipated reductions in operation and maintenance (O&M) costs when estimating the savings attributable to energy conservation measures acquired 

through an ESPC; and 

• Specify that ESPCs could not be used to install energy 

conservation measures at dams, reservoirs, or hydropower facilities that are owned or operated by a federal agency. 

Taken as a whole, CBO expects that those changes would allow 

agencies to use ESPCs to pay for new energy-related projects that 

otherwise would not be undertaken under current law. In general, 

we expect that broadening the scope of effects that could be counted as energy savings in particular, by allowing agencies to include 

the full extent of anticipated reductions in O&M costs stemming 

8 

3The methodology that CBO follows in preparing cost estimates for proposals involving ESPCs 

is consistent with scorekeeping guidelines set forth in the joint statement of managers that accompanied the conference reports on the Balanced Budget Act of 1997. See House Committee 

on the Budget, Conference Report to Accompany H.R. 2015, House Report 105–217 (July 30, 

1997), pp. 1007–1014, http://go.usa.gov/hb8Q (PDF, 3.1 MB). In particular, Rule 11 specifies 

scoring treatments for legislation that authorizes agencies to enter into capital leases and other 

third-party financing arrangements. 

from ESPC-financed investments would enable agencies to make 

investments that might not otherwise be justifiable within existing 

requirements. We also expect that permitting agencies to count incentives such as renewable energy credits as savings and use them 

to pay vendors would lead to greater investments in renewable 

technologies. 

CBO estimates that, under H.R. 723, agencies would use ESPCs 

to implement additional energy conservation measures with an underlying cost of about $40 million annually. That estimate represents a relatively modest incremental increase in anticipated 

spending for energy-related investments. By comparison, since 

2012 overall spending by federal agencies for energy-related investments has averaged nearly $1.7 billion annually, with more than 

40 percent of energy conservation measures or about $700 million 

annually acquired through ESPCs or similar contracts. 

CBO estimates that enacting H.R. 723 would increase direct 

spending for contractual obligations to pay for energy-related investments and, on net, reduce the need for discretionary spending 

to cover agencies’ annual energy costs. 

Direct spending: Under H.R. 723, CBO estimates that direct 

spending for the upfront cost of contractual commitments to acquire additional energy conservation measures through ESPCs 

would total $55 million annually. CBO’s estimate of direct spending 

reflects an amount equal to the annual cost of energy conservation 

measures as installed (about $40 million), plus the net present 

value of the portion of the contractor’s borrowing costs that are attributable to interest rates that would exceed U.S. Treasury interest rates (about $15 million).3 The portion of the borrowing costs 

that are equivalent to the amount of interest the Treasury would 

pay if projects were financed with appropriated funds are not included in our estimate because, for the enforcement of Congressional budget rules, changes in the amount of interest the Treasury 

pays are not reflected in cost estimates. CBO’s estimate of spending 

reflects its judgment as to when equipment or services would be 

provided typically over a three-year period for equipment. On that 

basis, CBO estimates that direct spending under H.R. 723 would 

total $441 million over the 2019–2027 period. 

Spending subject to appropriation: ESPCs permit federal agencies to pay vendors for energy conservation measures and related 

financing costs over time on the basis of anticipated and realized 

reductions in energy costs, which are generally paid from annual 

appropriations. CBO estimates that reductions in energy and related costs attributable to ESPCs entered into under H.R. 723 

would occur gradually over the period of time covered by such contracts—up to 25 years. As a result, most anticipated savings attributable to projects financed by such contracts would occur beyond 

the period covered by this estimate. 

CBO anticipates that ESPC-funded projects under H.R. 723 

would, on average, have payback periods averaging about 19 years. 

9 

Based on an analysis of data related to existing ESPCs, CBO also 

estimates that annual reductions in energy and energy-related 

costs would equal roughly 11 percent of the underlying cost of energy conservation measures. On that basis, CBO estimates that reductions in energy-related federal costs attributable to ESPCs entered into pursuant to H.R. 723 would total $166 million over the 

2019–2027 period, with additional savings occurring in later years. 

Those estimated savings would be partially offset by increased 

spending for certain services related to ESPCs entered into under 

the bill. Typically, when using such a contract, an agency agrees 

to make payments for services related to the operation and maintenance of newly installed equipment. Such agreements include 

measurement and verification activities to confirm that projects reduce energy consumption as guaranteed by the contract. Because 

the government can opt out of those services at any time, such contract-related costs are considered discretionary. For this estimate, 

CBO projects that the cost of such services would total about 2.5 

percent of the value of energy conservation measures acquired 

through ESPCs. Assuming appropriation of the necessary amounts, 

CBO estimates that discretionary spending for optional contract-related services would total $36 million over the 2019–2027 period 

and gradually increase as new contracts are entered into each year 

and payments on older contracts continue. Netting those costs 

against the projected savings in energy and related costs, CBO estimates discretionary savings of $130 million over the 2019–2027 period. 

Estimated budgetary effects attributable to ESPCs under H. Con. 

Res. 71: As previously mentioned, in preparing estimates for legislation related to ESPCs, section 5109 of H. Con. Res. 71 requires 

CBO to estimate the net present value of all budgetary effects attributable to ESPC contracts as a change in direct spending. Specifically, that methodology requires CBO to calculate, on a netpresent-value basis, the lifetime net cost or savings attributable to 

projects financed by ESPCs and to record that amount as an upfront change in direct spending in the year when commitments are 

expected to be made. 

Following that methodology, CBO estimates that one year’s 

worth of projects pursued through ESPCs under H.R. 723 would involve payments to contractors totaling, on a nominal basis $89 million over nearly 20 years. Such payments include $40 million for 

repayments of principal amounts borrowed by the contractors to finance projects, $28 million in interest costs, and $21 million in 

payments for optional contract-related services. We also estimate 

that nominal energy savings attributable to one year’s worth of 

projects would total $101 million over the anticipated useful life of 

equipment. Adjusting the discount rate for the market risk associated with the various cash flows, CBO estimates that one year’s 

worth of projects would generate net savings, on a net-presentvalue basis, of $3 million—or $27 million for ESPCs entered into 

during the 2019–2027 period covered by this estimate. 

However, H. Con. Res. 71 also specifies that, in the House of 

Representatives, any savings estimated by CBO using those procedures shall not be counted as an offset for purposes of budget enforcement. 

10 

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act 

of 2010 establishes budget-reporting and enforcement procedures 

for legislation affecting direct spending or revenues. The net 

changes in outlays that are subject to those pay-as-you-go procedures are shown in the following table. Section 5109 of H. Con. 

Res. 71 does not apply to estimates for the Statutory Pay-As-YouGo Act; thus, the amounts shown here reflect CBO’s estimates of 

direct spending effects. 

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 723, AS ORDERED REPORTED BY THE 

HOUSE COMMITTEE ON ENERGY AND COMMERCE ON JUNE 7, 2017 

By fiscal year, in millions of dollars— 

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018– 

2022 

2018– 

2027 

NET INCREASE IN THE DEFICIT 

Statutory Pay-As-You-Go 

Impact ....................... 0 17 39 55 55 55 55 55 55 55 166 441 

Increase in long-term deficit and net direct spending: CBO estimates that enacting the legislation would not increase net on-budget deficits or net direct spending by $2.5 billion or more in any of 

the four consecutive 10-year periods beginning in 2027. 

Intergovernmental and private-sector impact: H.R. 723 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA and would impose no costs on state, local, or tribal governments. 

Previous CBO estimate: On February 16, 2018, CBO transmitted 

a revised cost estimate for S. 239, the Energy Savings Through 

Public-Private Partnerships Act of 2017, as reported by the Senate 

Committee on Energy and Natural Resources on May 24, 2017. 

H.R. 723 and S. 239 are virtually identical and CBO’s estimates 

of the budgetary effects under the two bills are the same. However, 

under H. Con. Res. 71, our revised estimate of S. 239 would reflect 

one further difference. Specifically, the provision that prohibits any 

savings estimated by CBO to be considered as an offset for purposes of budget enforcement applies only to legislation considered 

by the House of Representatives, not the Senate. Thus, while H.R. 

723 would have no effect on direct spending for purposes of budget 

enforcement in the House, S. 239 would be considered as reducing 

net direct spending in the Senate. 

Estimate prepared by: Federal Costs: Megan Carroll; Impact on 

State, Local, and Tribal Governments: Jon Sperl; Impact on the 

Private Sector: Amy Petz. 

Estimate approved by: H. Samuel Papenfuss, Assistant Director 

for Budget Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII, the general performance 

goal or objective of this legislation is to facilitate the use of ESPCs 

11 

and UESCs to utilize private sector investment to upgrade the energy and water efficiency of Federal facilities without any up-front 

cost to taxpayers. The bill helps to reduce Federal energy costs 

while saving money, creating jobs, and reducing waste. 

DUPLICATION OF FEDERAL PROGRAMS

Pursuant to clause 3(c)(5) of rule XIII, no provision of H.R. 723 

is known to be duplicative of another Federal program, including 

any program that was included in a report to Congress pursuant 

to section 21 of Public Law 111–139 or the most recent Catalog of 

Federal Domestic Assistance. 

COMMITTEE COST ESTIMATE

Pursuant to clause 3(d)(1) of rule XIII, the Committee adopts as 

its own the cost estimate prepared by the Director of the Congressional Budget Office pursuant to section 402 of the Congressional 

Budget Act of 1974. 

EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the Committee 

finds that H.R. 723 contains no earmarks, limited tax benefits, or 

limited tariff benefits. 

DISCLOSURE OF DIRECTED RULE MAKINGS

Pursuant to section 3(i) of H. Res. 5, the Committee finds that 

H.R. 723 contains no directed rule makings. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

Section 1 provides that the Act may be cited as the ‘‘Energy Savings Through Public-Private Partnerships Act of 2017.’’ 

Section 2. Use of energy and water efficiency measures in Federal 

buildings 

Section 2 amends the National Energy Conservation Policy Act 

to encourage the increased use of performance contracting in Federal facilities and other purposes. Specifically, this section modifies 

language regarding energy management requirements, reports, the 

definition of energy conservation measures, the authority to enter 

into contracts, payment of costs, the definition of federal building, 

the definition of energy savings, and miscellaneous authorities. 

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CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

and existing law in which no change is proposed is shown in 

roman): 

NATIONAL ENERGY CONSERVATION POLICY ACT 

* * * * * * * 

TITLE V—FEDERAL ENERGY INITIATIVE 

* * * * * * * 

PART 3—FEDERAL ENERGY MANAGEMENT 

* * * * * * * 

SEC. 543. ENERGY MANAGEMENT REQUIREMENTS. 

(a) ENERGY PERFORMANCE REQUIREMENT FOR FEDERAL BUILDINGS.—(1) Subject to paragraph (2), each agency shall apply energy 

conservation measures to, and shall improve the design for the construction of, the Federal buildings of the agency (including each industrial or laboratory facility) so that the energy consumption per 

gross square foot of the Federal buildings of the agency in fiscal 

years 2006 through 2015 is reduced, as compared with the energy 

consumption per gross square foot of the Federal buildings of the 

agency in fiscal year 2003, by the percentage specified in the following table: 

Fiscal Year Percentage Reduction 

2006 ................................................................................................... 2

2007 ................................................................................................... 4

2008 ................................................................................................... 9

2009 ................................................................................................... 12

2010 ................................................................................................... 15

2011 ................................................................................................... 18

2012 ................................................................................................... 21

2013 ................................................................................................... 24

2014 ................................................................................................... 27

2015 ................................................................................................... 30. 

(2) An agency may exclude from the requirements of paragraph 

(1) any building, and the associated energy consumption and gross 

square footage, in which energy intensive activities are carried out. 

Each agency shall identify and list in each report made under section 548(a) the buildings designated by it for such exclusion. 

(3) Not later than December 31, 2014, the Secretary shall review 

the results of the implementation of the energy performance requirement established under paragraph (1) and submit to Congress 

recommendations concerning energy performance requirements for 

fiscal years 2016 through 2025. 

(b) ENERGY MANAGEMENT REQUIREMENT FOR FEDERAL AGENCIES.—(1) Not later than January 1, 2005, each agency shall, to the 

maximum extent practicable, install in Federal buildings owned by 

the United States all energy and water conservation measures with 

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payback periods of less than 10 years, as determined by using the 

methods and procedures developed pursuant to section 544. 

(2) The Secretary may waive the requirements of this subsection 

for any agency for such periods as the Secretary may determine if 

the Secretary finds that the agency is taking all practicable steps 

to meet the requirements and that the requirements of this subsection will pose an unacceptable burden upon the agency. If the 

Secretary waives the requirements of this subsection, the Secretary 

shall, as part of the report required under section 548(b), notify the 

Congress in writing with an explanation and a justification of the 

reasons for such waiver. 

(3) This subsection shall not apply to an agency’s facilities that 

generate or transmit electric energy or to the uranium enrichment 

facilities operated by the Department of Energy. 

(4) An agency may participate in the Environmental Protection 

Agency’s ‘‘Green Lights’’ program for purposes of receiving technical assistance in complying with the requirements of this section. 

(c) EXCLUSIONS.—(1)(A) An agency may exclude, from the energy 

performance requirement for a fiscal year established under subsection (a) and the energy management requirement established 

under subsection (b), any Federal building or collection of Federal 

buildings, if the head of the agency finds that— 

(i) compliance with those requirements would be impracticable; 

(ii) the agency has completed and submitted all federally required energy management reports; 

(iii) the agency has achieved compliance with the energy efficiency requirements of this Act, the Energy Policy Act of 1992, 

Executive orders, and other Federal law; and 

(iv) the agency has implemented all practicable, life cycle 

cost-effective projects with respect to the Federal building or 

collection of Federal buildings to be excluded. 

(B) A finding of impracticability under subparagraph (A)(i) shall 

be based on— 

(i) the energy intensiveness of activities carried out in the 

Federal building or collection of Federal buildings; or 

(ii) the fact that the Federal building or collection of Federal 

buildings is used in the performance of a national security 

function. 

(2) Each agency shall identify and list, in each report made 

under section 548(a), the Federal buildings designated by it for 

such exclusion. The Secretary shall review such findings for consistency with the standards for exclusion set forth in paragraph (1), 

and may within 90 days after receipt of the findings, reverse the 

exclusion. In the case of any such reversal, the agency shall comply 

with the requirements of subsections (a) and (b)(1) for the building 

concerned. 

(3) Not later than 180 days after the date of enactment of this 

paragraph, the Secretary shall issue guidelines that establish criteria for exclusions under paragraph (1). 

(d) IMPLEMENTATION STEPS.—The Secretary shall consult with 

the Secretary of Defense and the Administrator of General Services 

in developing guidelines for the implementation of this part. To 

meet the requirements of this section, each agency shall— 

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(1) prepare and submit to the Secretary, not later than December 31, 1993, a plan describing how the agency intends to 

meet such requirements, including how it will— 

(A) designate personnel primarily responsible for achieving such requirements; 

(B) identify high priority projects through calculation of 

payback periods; 

(C) take maximum advantage of contracts authorized 

under title VIII of this Act, of financial incentives and 

other services provided by utilities for efficiency investment, and of other forms of financing to reduce the direct 

costs to the Government; and 

(D) otherwise implement this part; 

(2) perform energy surveys of its Federal buildings to the extent necessary and update such surveys as needed, incorporating any relevant information obtained from the survey 

conducted pursuant to section 550; 

(3) using such surveys, determine the cost and payback period of energy and water conservation measures likely to 

achieve the requirements of this section; 

(4) install energy and water conservation measures that will 

achieve the requirements of this section through the methods 

and procedures established pursuant to section 544; and 

(5) ensure that the operation and maintenance procedures 

applied under this section are continued. 

(e) METERING OF ENERGY USE.— 

(1) DEADLINE.—By October 1, 2012, in accordance with 

guidelines established by the Secretary under paragraph (2), 

all Federal buildings shall, for the purposes of efficient use of 

energy and reduction in the cost of electricity used in such 

buildings, be metered. Each agency shall use, to the maximum 

extent practicable, advanced meters or advanced metering devices that provide data at least daily and that measure at least 

hourly consumption of electricity in the Federal buildings of 

the agency. Not later than October 1, 2016, each agency shall 

provide for equivalent metering of natural gas and steam, in 

accordance with guidelines established by the Secretary under 

paragraph (2). Such data shall be incorporated into existing 

Federal energy tracking systems and made available to Federal facility managers. 

(2) GUIDELINES.— 

(A) IN GENERAL.—Not later than 180 days after the date 

of enactment of this subsection, the Secretary, in consultation with the Department of Defense, the General Services 

Administration, representatives from the metering industry, utility industry, energy services industry, energy efficiency industry, energy efficiency advocacy organizations, 

national laboratories, universities, and Federal facility 

managers, shall establish guidelines for agencies to carry 

out paragraph (1). 

(B) REQUIREMENTS FOR GUIDELINES.—The guidelines 

shall— 

(i) take into consideration— 

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(I) the cost of metering and the reduced cost of 

operation and maintenance expected to result 

from metering; 

(II) the extent to which metering is expected to 

result in increased potential for energy management, increased potential for energy savings and 

energy efficiency improvement, and cost and energy savings due to utility contract aggregation; 

and 

(III) the measurement and verification protocols 

of the Department of Energy; 

(ii) include recommendations concerning the amount 

of funds and the number of trained personnel necessary to gather and use the metering information to 

track and reduce energy use; 

(iii) establish priorities for types and locations of 

buildings to be metered based on cost-effectiveness 

and a schedule of one or more dates, not later than 1 

year after the date of issuance of the guidelines, on 

which the requirements specified in paragraph (1) 

shall take effect; and 

(iv) establish exclusions from the requirements specified in paragraph (1) based on the de minimis quantity of energy use of a Federal building, industrial 

process, or structure. 

(3) PLAN.—Not later than 180 days after the date on which 

guidelines are established under paragraph (2), in a report 

submitted by the agency under section 548(a), each agency 

shall submit to the Secretary a plan describing the manner in 

which the agency will implement the requirements of paragraph (1), including— 

(A) how the agency will designate personnel primarily 

responsible for achieving the requirements; and 

(B) a demonstration by the agency, complete with documentation, of any finding that advanced meters or advanced metering devices (as those terms are used in paragraph (1)), are not practicable. 

(4) BEST PRACTICES REPORT.— 

(A) IN GENERAL.—Not later than 180 days after the date 

of enactment of this paragraph, the Secretary of Energy, 

in consultation with the Secretary of Defense and the Administrator of General Services, shall develop, and issue a 

report on, best practices for the use of advanced metering 

of energy use in Federal facilities, buildings, and equipment by Federal agencies. 

(B) COMPONENTS.—The report shall include, at a minimum— 

(i) summaries and analysis of the reports by agencies under paragraph (3); 

(ii) recommendations on standard requirements or 

guidelines for automated energy management systems, 

including— 

(I) potential common communications standards 

to allow data sharing and reporting; 

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(II) means of facilitating continuous commissioning of buildings and evidence-based maintenance of buildings and building systems; and 

(III) standards for sufficient levels of security 

and protection against cyber threats to ensure systems cannot be controlled by unauthorized persons; and 

(iii) an analysis of— 

(I) the types of advanced metering and monitoring systems being piloted, tested, or installed in 

Federal buildings; and 

(II) existing techniques used within the private 

sector or other non-Federal government buildings. 

(f) USE OF ENERGY AND WATER EFFICIENCY MEASURES IN FEDERAL BUILDINGS.— 

(1) DEFINITIONS.—In this subsection: 

(A) COMMISSIONING.—The term ‘‘commissioning’’, with 

respect to a facility, means a systematic process— 

(i) of ensuring, using appropriate verification and 

documentation, during the period beginning on the initial day of the design phase of the facility and ending 

not earlier than 1 year after the date of completion of 

construction of the facility, that all facility systems 

perform interactively in accordance with— 

(I) the design documentation and intent of the 

facility; and 

(II) the operational needs of the owner of the facility, including preparation of operation personnel; and 

(ii) the primary goal of which is to ensure fully functional systems that can be properly operated and 

maintained during the useful life of the facility. 

(B) ENERGY MANAGER.— (i) IN GENERAL.—The term ‘‘energy manager’’, with 

respect to a facility, means the individual who is responsible for— 

(I) ensuring compliance with this subsection by 

the facility; and 

(II) reducing energy use at the facility. 

(ii) INCLUSIONS.—The term ‘‘energy manager’’ may 

include— 

(I) a contractor of a facility; 

(II) a part-time employee of a facility; and 

(III) an individual who is responsible for multiple facilities. 

(C) FACILITY.— 

(i) IN GENERAL.—The term ‘‘facility’’ means any 

building, installation, structure, or other property (including any applicable fixtures) owned or operated by, 

or constructed or manufactured and leased to, the 

Federal Government. 

(ii) INCLUSIONS.—The term ‘‘facility’’ includes— 

(I) a group of facilities at a single location or 

multiple locations managed as an integrated operation; and 

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(II) contractor-operated facilities owned by the 

Federal Government. 

(iii) EXCLUSIONS.—The term ‘‘facility’’ does not include any land or site for which the cost of utilities is 

not paid by the Federal Government. 

(D) LIFE CYCLE COST-EFFECTIVE.—The term ‘‘life cycle 

cost-effective’’, with respect to a measure, means a measure, the estimated savings of which exceed the estimated 

costs over the lifespan of the measure, as determined in 

accordance with section 544. 

(E) PAYBACK PERIOD.— 

(i) IN GENERAL.—Subject to clause (ii), the term 

‘‘payback period’’, with respect to a measure, means a 

value equal to the quotient obtained by dividing— 

(I) the estimated initial implementation cost of 

the measure (other than financing costs); by 

(II) the annual cost savings resulting from the 

measure, including— 

(aa) net savings in estimated energy and 

water costs; and 

(bb) operations, maintenance, repair, replacement, and other direct costs. 

(ii) MODIFICATIONS AND EXCEPTIONS.—The Secretary, in guidelines issued pursuant to paragraph (6), 

may make such modifications and provide such exceptions to the calculation of the payback period of a 

measure as the Secretary determines to be appropriate 

to achieve the purposes of this Act. 

(F) RECOMMISSIONING.—The term ‘‘recommissioning’’ 

means a process— 

(i) of commissioning a facility or system beyond the 

project development and warranty phases of the facility or system; and 

(ii) the primary goal of which is to ensure optimum 

performance of a facility, in accordance with design or 

current operating needs, over the useful life of the facility, while meeting building occupancy requirements. 

(G) RETROCOMMISSIONING.—The term 

‘‘retrocommissioning’’ means a process of commissioning a 

facility or system that was not commissioned at the time 

of construction of the facility or system. 

(2) FACILITY ENERGY MANAGERS.— 

(A) IN GENERAL.—Each Federal agency shall designate 

an energy manager responsible for implementing this subsection and reducing energy use at each facility that meets 

criteria under subparagraph (B). 

(B) COVERED FACILITIES.—The Secretary shall develop 

criteria, after consultation with affected agencies, energy 

efficiency advocates, and energy and utility service providers, that cover, at a minimum, Federal facilities, including central utility plants and distribution systems and 

other energy intensive operations, that constitute at least 

75 percent of facility energy use at each agency. 

(3) ENERGY AND WATER EVALUATIONS.— 

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(A) EVALUATIONS.—Effective beginning on the date that 

is 180 days after the date of enactment of this subsection 

and annually thereafter, energy managers shall complete, 

for each calendar year, a comprehensive energy and water 

evaluation for approximately 25 percent of the facilities of 

each agency that meet the criteria under paragraph (2)(B) 

in a manner that ensures that an evaluation of each such 

facility is completed at least once every 4 years. 

(B) RECOMMISSIONING AND RETROCOMMISSIONING.—As 

part of the evaluation under subparagraph (A), the energy 

manager shall identify and assess recommissioning measures (or, if the facility has never been commissioned, 

retrocommissioning measures) for each such facility. 

(4) IMPLEMENTATION OF IDENTIFIED ENERGY AND WATER EFFICIENCY MEASURES.—Not later than 2 years after the completion of each evaluation under paragraph (3), each energy manager ømay¿ shall— 

(A) implement any energy- or water-saving measure that 

the Federal agency identified in the evaluation conducted 

under paragraph (3) that is life cycle cost-effective; and 

(B) bundle individual measures of varying paybacks together into combined projects. 

(5) FOLLOW-UP ON IMPLEMENTED MEASURES.—For each measure implemented under paragraph (4), each energy manager 

shall ensure that— 

(A) equipment, including building and equipment controls, is fully commissioned at acceptance to be operating 

at design specifications; 

(B) a plan for appropriate operations, maintenance, and 

repair of the equipment is in place at acceptance and is followed; 

(C) equipment and system performance is measured during its entire life to ensure proper operations, maintenance, and repair; and 

(D) energy and water savings are measured and verified. 

(6) GUIDELINES.— (A) IN GENERAL.—The Secretary shall issue guidelines 

and necessary criteria that each Federal agency shall follow for implementation of— 

(i) paragraphs (2) and (3) not later than 180 days 

after the date of enactment of this subsection; and 

(ii) paragraphs (4) and (5) not later than 1 year after 

the date of enactment of this subsection. 

(B) RELATIONSHIP TO FUNDING SOURCE.—The guidelines 

issued by the Secretary under subparagraph (A) shall be 

appropriate and uniform for measures funded with each 

type of funding made available under paragraph (10), but 

may distinguish between different types of measures 

project size, and other criteria the Secretary determines 

are relevant. 

(7) WEB-BASED CERTIFICATION.— (A) IN GENERAL.—For each facility that meets the criteria established by the Secretary under paragraph (2)(B), 

the energy manager shall use the web-based tracking system under subparagraph (B)— 

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(i) to certify compliance with the requirements for— 

(I) energy and water evaluations under paragraph (3); 

(II) implementation of identified energy and 

water measures under paragraph (4); and 

(III) follow-up on implemented measures under 

paragraph (5); and 

(ii) to publish energy and water consumption data 

on an individual facility basis. 

(B) DEPLOYMENT.— (i) IN GENERAL.—Not later than 1 year after the 

date of enactment of this subsection, the Secretary 

shall develop and deploy a web-based tracking system 

required under this paragraph in a manner that 

tracks, at a minimum— 

(I) the covered facilities; 

(II) the status of meeting the requirements specified in subparagraph (A); 

(III) the estimated cost and savings for measures required to be implemented in a facility; 

(IV) the measured savings and persistence of 

savings for implemented measures; and 

(V) the benchmarking information disclosed 

under paragraph (8)(C). 

(ii) EASE OF COMPLIANCE.—The Secretary shall ensure that energy manager compliance with the requirements in this paragraph, to the maximum extent 

practicable— 

(I) can be accomplished with the use of streamlined procedures and templates that minimize the 

time demands on Federal employees; and 

(II) is coordinated with other applicable energy 

reporting requirements. 

(C) AVAILABILITY.— 

(i) IN GENERAL.—Subject to clause (ii), the Secretary 

shall make the web-based tracking system required 

under this paragraph available to Congress, other 

Federal agencies, and the public through the Internet. 

(ii) EXEMPTIONS.—At the request of a Federal agency, the Secretary may exempt specific data for specific 

facilities from disclosure under clause (i) for national 

security purposes. 

(8) BENCHMARKING OF FEDERAL FACILITIES.— 

(A) IN GENERAL.—The energy manager shall enter energy use data for each metered building that is (or is a 

part of) a facility that meets the criteria established by the 

Secretary under paragraph (2)(B) into a building energy 

use benchmarking system, such as the Energy Star Portfolio Manager. 

(B) SYSTEM AND GUIDANCE.—Not later than 1 year after 

the date of enactment of this subsection, the Secretary 

shall— 

(i) select or develop the building energy use 

benchmarking system required under this paragraph 

for each type of building; and 

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(ii) issue guidance for use of the system. 

(C) PUBLIC DISCLOSURE.—Each energy manager shall 

post the information entered into, or generated by, a 

benchmarking system under this subsection, on the webbased tracking system under paragraph (7)(B). The energy 

manager shall update such information each year, and 

shall include in such reporting previous years’ information 

to allow changes in building performance to be tracked 

over time. 

(9) FEDERAL AGENCY SCORECARDS.— (A) IN GENERAL.—The Director of the Office of Management and Budget shall issue semiannual scorecards for energy management activities carried out by each Federal 

agency that includes— 

(i) summaries of the status of implementing the various requirements of the agency and its energy managers under this subsection; and 

(ii) any other means of measuring performance that 

the Director considers appropriate. 

(B) AVAILABILITY.—The Director shall make the scorecards required under this paragraph available to Congress, 

other Federal agencies, and the public through the Internet. 

(10) FUNDING AND IMPLEMENTATION.— (A) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as are necessary to 

carry out this subsection. 

(B) FUNDING OPTIONS.— (i) IN GENERAL.—To carry out this subsection, a Federal agency may use any combination of— 

(I) appropriated funds made available under 

subparagraph (A); and 

(II) private financing otherwise authorized 

under Federal law, including financing available 

through energy savings performance contracts or 

utility energy service contracts. 

(ii) COMBINED FUNDING FOR SAME MEASURE.—A Federal agency may use any combination of appropriated 

funds and private financing described in clause (i) to 

carry out the same measure under this subsection. 

(C) IMPLEMENTATION.—Each Federal agency may implement the requirements under this subsection itself or may 

contract out performance of some or all of the requirements. 

(11) RULE OF CONSTRUCTION.—This subsection shall not be 

construed to require or to obviate any contractor savings guarantees. 

(g) LARGE CAPITAL ENERGY INVESTMENTS.— 

(1) IN GENERAL.—Each Federal agency shall ensure that any 

large capital energy investment in an existing building that is 

not a major renovation but involves replacement of installed 

equipment (such as heating and cooling systems), or involves 

renovation, rehabilitation, expansion, or remodeling of existing 

space, employs the most energy efficient designs, systems, 

equipment, and controls that are life-cycle cost effective. 

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(2) PROCESS FOR REVIEW OF INVESTMENT DECISIONS.—Not 

later than 180 days after the date of enactment of this subsection, each Federal agency shall— 

(A) develop a process for reviewing each decision made 

on a large capital energy investment described in paragraph (1) to ensure that the requirements of this subsection are met; and 

(B) report to the Director of the Office of Management 

and Budget on the process established. 

(3) COMPLIANCE REPORT.—Not later than 1 year after the 

date of enactment of this subsection, the Director of the Office 

of Management and Budget shall evaluate and report to Congress on the compliance of each agency with this subsection. 

* * * * * * * 

SEC. 548. REPORTS. 

(a) REPORTS TO THE SECRETARY.—Each agency shall transmit a 

report to the Secretary, at times specified by the Secretary but at 

least annually, with complete information on its activities under 

this part, including information on— 

(1) the agency’s progress in achieving the goals established 

by section 543; and 

(2) the procedures being used by the agency pursuant to section 546(a)(2), the number of contracts entered into by such 

agency under title VIII of this Act, the energy and cost savings 

that have resulted from such contracts and any termination 

penalty exposure, the use of such cost savings under section 

546(c), and any problem encountered in entering into such contracts and otherwise implementing section 546. 

(b) REPORTS TO THE PRESIDENT AND CONGRESS.—The Secretary 

shall report, not later than April 2 of each year, with respect to 

each fiscal year beginning after the date of the enactment of this 

subsection, to the President and Congress— 

(1) on all activities carried out under this part and on the 

progress made toward achievement of the objectives of this 

part, including— 

(A) a copy of the list of the exclusions made under sections 543(a)(2) and 543(c)(3); 

(B) the information required under section 543(b)(2); and 

(C) a statement detailing the amount of funds awarded 

to each agency under section 546(b), the energy and water 

conservation measures installed with such funds, the projected energy and water savings to be realized from installed measures, and, for each installed measure for 

which the projected energy and water savings reported in 

the previous year were not realized, the percentage of such 

projected savings that was not realized, the reasons such 

savings were not realized, and proposals for, and projected 

costs of, achieving such projected savings in the future; 

(2) the number of contracts entered into by all agencies 

under title VIII of this Act, the difficulties (if any) encountered 

in attempting to enter into such contracts, and proposed solutions to those difficulties; 

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(3) the extent and nature of interagency exchange of information concerning the conservation and efficient utilization of 

energy; øand¿ 

(4) the information required under section 161(d) of the Energy Policy Act of 1992ø.¿; and 

(5)(A) the status of the energy savings performance contracts 

and utility energy service contracts of each agency; 

(B) the investment value of the contracts; 

(C) the guaranteed energy savings for the previous year as 

compared to the actual energy savings for the previous year; 

(D) the plan for entering into the contracts in the coming 

year; and 

(E) information explaining why any previously submitted 

plans for the contracts were not implemented. 

(c) OTHER REPORT.—The Secretary, in consultation with the Administrator of General Services, shall— 

(1) conduct a study and evaluate legal, institutional, and 

other constraints to connecting buildings owned or leased by 

the Federal Government to district heating and district cooling 

systems; and 

(2) not later than 18 months after the date of the enactment 

of this subsection, transmit to the Congress a report containing 

the findings and conclusions of such study, including recommendations for the development of streamlined processes for 

the consideration of connecting buildings owned or leased by 

the Federal Government to district heating and cooling systems. 

* * * * * * * 

SEC. 551. DEFINITIONS. 

For the purposes of this part— 

(1) the term ‘‘agency’’ has the meaning given it in section 

551(1) of title 5, United States Code; 

(2) the term ‘‘construction’’ means new construction or substantial rehabilitation of existing structures; 

(3) the term ‘‘cogeneration facilities’’ has the same meaning 

given such term in section 3(18)(A) of the Federal Power Act 

(16 U.S.C. 796(18)(A)); 

(4) the term ‘‘energy conservation measures’’ means measures that are applied to a Federal building that improve energy efficiency and are life cycle cost effective and that involve 

energy conservation, cogeneration facilities, renewable energy 

sources, improvements in operations and maintenance efficiencies, øor retrofit activities¿ retrofit activities, or energy consuming devices and required support structures; 

(5) the term ‘‘energy survey’’ means a procedure used to determine energy and cost savings likely to result from the use 

of appropriate energy related maintenance and operating procedures and modifications, including the purchase and installation of particular energy-related equipment and the use of renewable energy sources; 

(6) the term ‘‘Federal building’’ means any building, structure, or facility, or part thereof, including the associated energy 

consuming support systems, which is constructed, renovated, 

leased, or purchased in whole or in part for use by the Federal 

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Government and which consumes energy; such term also 

means a collection of such buildings, structures, or facilities 

and the energy consuming support systems for such 

collectionø;¿; the term does not include a dam, reservoir, or hydropower facility owned or operated by a Federal agency; 

(7) the term ‘‘life cycle cost’’ means the total costs of owning, 

operating, and maintaining a building over its useful life (including such costs as fuel, energy, labor, and replacement components) determined on the basis of a systematic evaluation 

and comparison of alternative building systems, except that in 

the case of leased buildings, the life cycle costs shall be calculated over the effective remaining term of the lease; 

(8) the term ‘‘renewable energy sources’’ includes, but is not 

limited to, sources such as agriculture and urban waste, geothermal energy, solar energy, and wind energy; and 

(9) the term ‘‘Secretary’’ means the Secretary of Energy. 

* * * * * * * 

TITLE VIII—ENERGY SAVINGS 

PERFORMANCE CONTRACTS 

SEC. 801. AUTHORITY TO ENTER INTO CONTRACTS. 

(a) IN GENERAL.—(1) The head of a Federal agency may enter 

into contracts under this title solely for the purpose of achieving 

energy savings and benefits ancillary to that purpose. Each such 

contract may, notwithstanding any other provision of law, be for a 

period not to exceed 25 years. Such contract shall provide that the 

contractor shall 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 share of any energy savings directly resulting 

from implementation of such measures during the term of the contract. 

(2)(A) Contracts under this title shall be energy savings performance contracts and shall require an annual energy audit and specify the terms and conditions of any Government payments and performance guarantees. Any such performance guarantee shall provide that the contractor is responsible for maintenance and repair 

services for any energy related equipment, including computer software systems. 

(B) Aggregate annual payments by an agency to both utilities 

and energy savings performance contractors, under an energy savings performance contract, may not exceed the amount that the 

agency would have paid for utilities without an energy savings performance contract (as estimated through the procedures developed 

pursuant to this section) during contract years. The contract shall 

provide for a guarantee of savings to the agency, and shall establish payment schedules reflecting such guarantee, taking into account any capital costs under the contract. 

(C) Federal agencies may incur obligations pursuant to such contracts to finance energy conservation measures provided guaranteed savings exceed the debt service requirements. 

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(D) A Federal agency may enter into a multiyear contract under 

this title for a period not to exceed 25 years beginning on the date 

of the delivery order, without funding of cancellation charges before 

cancellation, if— 

(i) such contract was awarded in a competitive manner pursuant to subsection (b)(2), using procedures and methods established under this title; 

(ii) funds are available and adequate for payment of the costs 

of such contract for the first fiscal year; and 

(iii) such contract is governed by part 17.1 of the Federal Acquisition Regulation promulgated under section 25 of the Office 

of Federal Procurement Policy Act (41 U.S.C. 421) or the applicable rules promulgated under this title. 

(E) FUNDING OPTIONS.—In carrying out a contract under this 

title, a Federal agency may use any combination of— 

(i) appropriated funds; and 

(ii) private financing under an energy savings performance contract. 

(F) PROMOTION OF CONTRACTS.—In carrying out this section, 

a Federal agency shall not— 

(i) establish a Federal agency policy that limits the maximum contract term under subparagraph (D) to a period 

shorter than 25 years; øor¿ 

(ii) limit the total amount of obligations under energy 

savings performance contracts or other private financing of 

energy savings measuresø.¿; or 

(iii) limit the recognition of operation and maintenance 

savings associated with systems modernized or replaced 

with the implementation of energy conservation measures, 

water conservation measures, or any combination of energy 

conservation measures and water conservation measures. 

(G) MEASUREMENT AND VERIFICATION REQUIREMENTS FOR

PRIVATE FINANCING.— 

(i) IN GENERAL.—In the case of energy savings performance contracts, the evaluations and savings measurement 

and verification required under paragraphs (2) and (4) of 

section 543(f) shall be used by a Federal agency to meet 

the requirements for the need for energy audits, calculation of energy savings, and any other evaluation of costs 

and savings needed to implement the guarantee of savings 

under this section. 

(ii) MODIFICATION OF EXISTING CONTRACTS.—Not later 

than 18 months after the date of enactment of this subparagraph, each Federal agency shall, to the maximum extent practicable, modify any indefinite delivery and indefinite quantity energy savings performance contracts, and 

other indefinite delivery and indefinite quantity contracts 

using private financing, to conform to the amendments 

made by subtitle B of title V of the Energy Independence 

and Security Act of 2007. 

(H) MISCELLANEOUS AUTHORITY.—Notwithstanding any other 

provision of law, a Federal agency may sell or transfer energy 

savings and apply the proceeds of the sale or transfer to fund 

a contract under this title. 

25 

(b) IMPLEMENTATION.—(1)(A) The Secretary, with the concurrence 

of the Federal Acquisition Regulatory Council established under 

section 25(a) of the Office of Federal Procurement Policy Act, not 

later than 180 days after the date of the enactment of the Energy 

Policy Act of 1992, shall, by rule, establish appropriate procedures 

and methods for use by Federal agencies to select, monitor, and 

terminate contracts with energy service contractors in accordance 

with laws governing Federal procurement that will achieve the intent of this section in a cost-effective manner. In developing such 

procedures and methods, the Secretary, with the concurrence of the 

Federal Acquisition Regulatory Council, shall determine which existing regulations are inconsistent with the intent of this section 

and shall formulate substitute regulations consistent with laws 

governing Federal procurement. 

(B) The procedures and methods established pursuant to subparagraph (A) shall be the procedures and contracting methods for 

selection, by an agency, of a contractor to provide energy savings 

performance services. Such procedures and methods shall provide 

for the calculation of energy savings based on sound engineering 

and financial practices. 

(2) The procedures and methods established pursuant to paragraph (1)(A) shall— 

(A) allow the Secretary to— 

(i) request statements of qualifications, which shall, at a 

minimum, include prior experience and capabilities of contractors to perform the proposed types of energy savings 

services and financial and performance information, from 

firms engaged in providing energy savings services; and 

(ii) from the statements received, designate and prepare 

a list, with an update at least annually, of those firms that 

are qualified to provide energy savings services; 

(B) require each agency to use the list prepared by the Secretary pursuant to subparagraph (A)(ii) unless the agency 

elects to develop an agency list of firms qualified to provide energy savings performance services using the same selection 

procedures and methods as are required of the Secretary in 

preparing such lists; and 

(C) allow the head of each agency to— 

(i) select firms from the list prepared pursuant to subparagraph (A)(ii) or the list prepared by the agency pursuant to subparagraph (B) to conduct discussions concerning 

a particular proposed energy savings project, including requesting a technical and price proposal from such selected 

firms for such project; 

(ii) select from such firms the most qualified firm to provide energy savings services based on technical and price 

proposals and any other relevant information; 

(iii) permit receipt of unsolicited proposals for energy 

savings performance contracting services from a firm that 

such agency has determined is qualified to provide such 

services under the procedures established pursuant to 

paragraph (1)(A), and require agency facility managers to 

place a notice in the Commerce Business Daily announcing 

they have received such a proposal and invite other similarly qualified firms to submit competing proposals; and 

26 

(iv) enter into an energy savings performance contract 

with a firm qualified under clause (iii), consistent with the 

procedures and methods established pursuant to paragraph (1)(A). 

(3) A firm not designated as qualified to provide energy savings 

services under paragraph (2)(A)(i) or paragraph (2)(B) may request 

a review of such decision to be conducted in accordance with procedures to be developed by the board of contract appeals of the General Services Administration. 

(c) TASK OR DELIVERY ORDERS.—(1) The head of a Federal agency 

may issue a task or delivery order under an energy savings performance contract by— 

(A) notifying all contractors that have received an award 

under such contract that the agency proposes to discuss energy 

savings performance services for some or all of its facilities 

and, following a reasonable period of time to provide a proposal 

in response to the notice, soliciting from such contractors the 

submission of expressions of interest in, and contractor qualifications for, performing site surveys or investigations and feasibility designs and studies, and including in the notice summary information concerning energy use for any facilities that 

the agency has specific interest in including in such task or delivery order; 

(B) reviewing all expressions of interest and qualifications 

submitted pursuant to the notice under subparagraph (A); 

(C) selecting two or more contractors (from among those reviewed under subparagraph (B)) to conduct discussions concerning the contractors’ respective qualifications to implement 

potential energy conservation measures, including— 

(i) requesting references and specific detailed examples 

with respect to similar efforts and the resulting energy 

savings of such similar efforts; and 

(ii) requesting an explanation of how such similar efforts 

relate to the scope and content of the task or delivery 

order concerned; 

(D) selecting and authorizing— 

(i) more than one contractor (from among those selected 

under subparagraph (C)) to conduct site surveys, investigations, feasibility designs and studies, or similar assessments for the energy savings performance contract services 

(or for discrete portions of such services), for the purpose 

of allowing each such contractor to submit a firm, fixedprice proposal to implement specific energy conservation 

measures; or 

(ii) one contractor (from among those selected under subparagraph (C)) to conduct a site survey, investigation, feasibility design and study, or similar assessment for the 

purpose of allowing the contractor to submit a firm, fixedprice proposal to implement specific energy conservation 

measures; 

(E) providing a debriefing to any contractor not selected 

under subparagraph (D); 

(F) negotiating a task or delivery order for energy savings 

performance contracting services with the contractor or conVerDate Sep 11 2014 06:54 Feb 24, 2018 Jkt 079006 PO 00000 Frm 00026 Fmt 6659 Sfmt 6601 E:\HR\OC\HR575.XXX HR575
27 

tractors selected under subparagraph (D) based on the energy 

conservation measures identified; and 

(G) issuing a task or delivery order for energy savings performance contracting services to such contractor or contractors. 

(2) The issuance of a task or delivery order for energy savings 

performance contracting services pursuant to paragraph (1) is 

deemed to satisfy the task and delivery order competition requirements in section 2304c(d) of title 10, United States Code, and section 303J(d) of the Federal Property and Administrative Services 

Act of 1949 (41 U.S.C. 253j(d)). 

(3) The Secretary may issue guidance as necessary to agencies 

issuing task or delivery orders pursuant to paragraph (1). 

SEC. 802. PAYMENT OF COSTS. 

Any amount paid by a Federal agency pursuant to any contract 

entered into under this title may be paid only from funds appropriated or otherwise made available to the agency for fiscal year 

1986 or any fiscal year thereafter for the payment of energy, water, 

or wastewater treatment expenses ø(and related operation and 

maintenance expenses)¿, including related operations and maintenance expenses. 

* * * * * * * 

SEC. 804. DEFINITIONS. 

For purposes of this title, the following definitions apply: 

(1) The term ‘‘Federal agency’’ means each authority of the 

Government of the United States, whether or not it is within 

or subject to review by another agency. 

(2) The term ‘‘energy savings’’ means— 

(A) 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 

øfederally owned building or buildings or other federally 

owned facilities¿ Federal building (as defined in section 

551) as a result of— 

(i) the lease or purchase of operating equipment, improvements, altered operation and maintenance, or 

technical services; 

(ii) the increased efficient use of existing energy 

sources by cogeneration or heat recovery, excluding 

any cogeneration process for other than a øfederally 

owned building or buildings or other federally owned 

facilities¿ Federal building (as defined in section 551); 

or 

(iii) the increased efficient use of existing water 

sources in either interior or exterior applications; 

(B) the increased efficient use of an existing energy 

source by cogeneration or heat recovery; 

(C) if otherwise authorized by Federal or State law (including regulations), the sale or transfer of electrical or 

thermal energy generated on-site from renewable energy 

sources or cogeneration, but in excess of Federal needs, to 

utilities or non-Federal energy usersø; and¿; 

(D) the increased efficient use of existing water sources 

in interior or exterior applicationsø.¿; 

28 

(E) the use, sale, or transfer of energy incentives, rebates, 

or credits (including renewable energy credits) from Federal, State, or local governments or utilities; and 

(F) any revenue generated from a reduction in energy or 

water use, more efficient waste recycling, or additional energy generated from more efficient equipment. 

(3) The terms ‘‘energy savings contract’’ and ‘‘energy savings 

performance contract’’ 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 1 or more locations. Such contracts 

shall, with respect to an agency facility that is a public building (as such term is defined in section 3301 of title 40, United 

States Code), be in compliance with the prospectus requirements and procedures of section 3307 of title 40, United States 

Code. 

(4) The term ‘‘energy or water conservation measure’’ 

means— 

(A) an energy conservation measure, as defined in section 551; 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 wastewater or stormwater, improvements in 

operation or maintenance efficiencies, retrofit activities, or 

other related activities, not at a Federal hydroelectric facility. 

Æ