U.S. Department of Energy 

Office of Inspector General 

Office of Audit Services 

Audit Report 

The Department of Energy's 

Opportunity for Energy Savings 

Through the Use of Setbacks in its 

Facilities

DOE/IG-0817 July 2009 
Department of Energy 

Washington, DC 20585 

July 20, 2009 

MEMORANDUM FOR THE SECRETARY 

FROM: Gregory H. Friedman 

 Inspector General 

SUBJECT: INFORMATION: Audit Report on "The Department of 

 Energy's Opportunity for Energy Savings Through the Use of 

 Setbacks in its Facilities" 

BACKGROUND

During 2008, the Department of Energy expended about $300 million to provide energy 

to over 9,000 Federal buildings at its facilities. A significant portion of those costs, up to 

40 percent, were expended for heating, ventilation and air conditioning (HVAC). 

Because of its size and scope, operating the Department's existing HVAC systems as 

efficiently as possible offers the promise of immediate and substantial energy and cost 

savings. In addition to the "common sense" reasons for efficient and economic energy 

use, Federal agencies are specifically required to conserve energy by reducing heat or 

eliminating air conditioning during non-working hours. One of the primary means of 

achieving these savings is through the use of "setback" controls, both mechanical and 

software, that decrease the temperature difference between the inside of the building and 

the outside of the building during non-working hours. 

The Department is the Federal agency designated to lead the country to energy efficiency

and it has both an opportunity and responsibility to provide direction for smart, efficient 

energy management. However, as we noted in our recent report on Department of 

Energy Efforts to Manage Information Technology Resources in an Energy-Efficient and 

Environmentally Responsible Manner (OAS-RA-09-03, May 27, 2009), both Federal and 

contractor officials had not always taken all necessary steps to advance the Department's 

energy leadership role. 

Recently, the American Recovery and Reinvestment Act of 2009 (Recovery Act) 

reemphasized the importance of reducing the country's dependence on foreign oil and, 

more generally, on fossil fuels, and of conserving the Nation's scarce energy resources. 

Because of the importance of these objectives, we initiated this audit to determine 

whether the Department was taking maximum advantage of setbacks as an energy 

savings/management technique. 

RESULTS OF AUDIT

Our testing at Office of Science and National Nuclear Security Administration facilities 

revealed that the Department either did not use or failed to properly maintain setback 

systems and equipment in a number of instances. At just the four sites we visited, the 
2

Department had not ensured that setback conservation methods were used for 35 of the 

55 (approximately 64 percent) owned or leased buildings included in our review. The 

buildings that did not use setbacks capabilities to control energy consumption comprised 

over one million square feet of space. Specifically: 

• Although in place or capable of being deployed, officials did not utilize setbacks 

in 20 separate buildings; and, 

• Equipment in 15 other buildings had either never been enabled or had deteriorated 

and was no longer functional, thus making setbacks impossible. 

Typical of the problems we noted, the Y-12 National Security Complex recently leased 

two buildings that were constructed with setback capability. The property manager for 

these buildings told us that the setback equipment was not used because the owner of the 

properties had not purchased the software necessary to enable the capability. In another 

case, we learned that Los Alamos National Laboratory was not using the setback 

capability in two buildings because facility operators and tenants had not been trained on 

operating the setback control system. Finally, the Oak Ridge National Laboratory lost 

the ability to operate the setback equipment in two buildings when the electronic control 

system failed in 2008. Laboratory officials told us that they elected not to replace it 

because they planned to implement campus-wide energy conservation measures in the 

future. 

 

In spite of its energy conservation leadership role, we found that the Department and its 

facility contractors did not place adequate emphasis on reducing energy consumption 

through the application of setbacks. Of particular significance, we found that the 

Department had not always required the operation of setback capabilities in building 

lease agreements. This was especially troubling given the expanded use of leased space 

to house Departmental operations. Despite discussions with several Federal and 

contractor officials, we could not obtain what we considered to be a satisfactory 

explanation as to why the Department failed to take advantage of this conservation 

practice, one that is generally low cost and has limited, if any, adverse impact on 

operations or building occupants. Consistent with the lack of emphasis in this area, we 

noted that the Department had not required the four contractors included in our review to 

develop training requirements or energy policies and procedures governing the use of 

setback capabilities. Energy consumption reduction goals related to setbacks had also not 

been established to help incentivize contractor performance in this important area. 

With nearly $300 million in annual utility costs, the Department could realize significant 

savings by using setbacks in its buildings. We estimate that the Department could save 

over $11.5 million in annual utility costs. We developed the estimate based on the 

observation that approximately 64 percent of the facilities included in our review had not 

used setbacks. We then conservatively applied a 15 percent energy consumption savings 

estimate observed by Sandia National Laboratory and savings estimates contained in a 

study conducted by Pacific Northwest National Laboratory to the 40 percent of utility 

costs generally recognized as resulting from HVAC operation. Such savings could be 
3 

used to fund high priority programs and install additional energy saving features. The 

consumption savings would be, at today's average residential electricity cost, sufficient to 

power over 9,800 homes each year. 

We recognize that while setbacks can be used in many situations, they are not appropriate 

for facilities that are continuously operated or those that house delicate equipment that 

depend on constant temperatures. However, during the course of our audit officials at 

four of the sites included in our review told us that they recognized the utility of using 

setbacks for most facilities. At two sites, implementation efforts began almost 

immediately after we briefed officials on our findings. We also noted that Department 

Headquarters facilities used setbacks in offices and many common areas. 

With over 9,000 buildings in its inventory, the consistent use of setbacks can help the 

Department significantly reduce its energy consumption and, as noted above, achieve 

substantial cost savings. Actions related to setbacks that officials began after we initiated 

our audit are noteworthy and should, if fully implemented, help further reduce energy 

consumption. However, additional action at sites across the complex is necessary to 

maximize energy efficient operations and to establish the Department as the leader in this 

effort in all of the Federal sector. We made several recommendations designed to aid the 

Department in its effort to increase operational efficiency, save energy and reduce costs. 

This is the third in a recent series of energy conservation-related audits. The first of these 

efforts, Management of the Department's Data Centers at Contractor Sites (DOE/IG0803, October 2008), found that facility contractors had not always taken advantages of 

opportunities to improve the energy and operational efficiency of data centers. During 

our second audit in this series, Department of Energy Efforts to Manage Information 

Technology Resources in an Energy-Efficient and Environmentally Responsible Manner

(OAS-RA-09-03, May 27, 2009), we found circumstances similar to those we discovered 

during this review. 

MANAGEMENT COMMENTS

Department management generally agreed with our findings and recommendations. 

Management agreed to take needed corrective actions, including emphasizing the 

importance of using setbacks as an energy conservation measure to all programs and 

sites. In separate comments, the National Nuclear Security Administration indicated that 

it would take a series of actions to enforce the use of setbacks. The Office of Science 

noted that the Oak Ridge National Laboratory had consistently met its energy 

conservation goals and that the Laboratory is implementing a broad system of energy 

conservation measures. Management's comments are included in Appendix 3. 

Attachment 

cc: Deputy Secretary 

 Administrator, National Nuclear Security Administration 

 Under Secretary of Energy 

 Under Secretary for Science 

 Chief of Staff 
AUDIT REPORT ON THE DEPARTMENT OF ENERGY'S 

OPPORTUNITY FOR ENERGY SAVINGS THROUGH THE USE OF 

SETBACKS IN ITS FACILITIES 

TABLE OF 

CONTENTS 

Energy Conservation Through the Use of Setbacks

Details of Finding.....................................................................1 

Recommendations ....................................................................5 

Comments..............................................................................6 

Appendices 

1. Objective, Scope, and Methodology.............................................7 

2. Prior Audit Reports ................................................................9 

3. Management Comments .........................................................10 
ENERGY CONSERVATION THROUGH THE USE OF SETBACKS 

________________________________________________________________ 

Page 1 Details of Finding

Implementation at Our review revealed that the Department of Energy 

Federal and (Department) had not ensured that energy setback 

Contractor Sites capabilities were fully utilized at its facilities. This despite 

the requirements established in 41 CFR 102-74.185, which 

require Federal agencies that occupy government-owned 

and leased buildings to operate heating, ventilation and air 

conditioning (HVAC) systems in the most energy efficient 

and economical manner. Agencies must reduce heating 

temperatures to no higher than 55 degrees Fahrenheit 

during non-working hours and eliminate air-conditioning 

during non-working hours, except as necessary to return 

temperatures to a suitable level for the beginning of 

working hours. 

During our visits to four major Department facilities, we 

reviewed a sample of 55 separate buildings and determined 

that they were either now or had originally been capable of 

using setbacks to conserve energy. Building managers told 

us that 40 of the 55 buildings we evaluated had functioning 

systems that could have permitted the use of setbacks. 

These same officials indicated, however, that they had only 

adopted programs to take advantage of the savings 

available through the use of setbacks for half of those 40 

buildings. The remaining 15 buildings had originally had 

the capability to utilize setbacks, but had subsequently lost 

that functionality because they had not been adequately 

maintained. Accordingly, 35 of the 55 (approximately 64 

percent) buildings included in our review were either not 

using or had lost their setback capabilities. The following 

examples discuss buildings where setback capabilities were 

not being used to control energy consumption to heat and 

cool over one million square feet of space. 

National Nuclear Security Administration Facilities

Data provided by contractor officials and our testing 

revealed that the Y-12 National Security Complex (Y-12) 

had not taken action to improve energy efficiency through 

the use of setbacks. As part of a modernization effort, 

Y-12 recently occupied the Jack Case Center and New 

Hope Center under a lease arrangement. The lessor of 

these facilities provides Y-12 with almost 550,000 square 

feet of administrative and public space. The cost of the 

utilities for these two facilities is reimbursed by the 

Department through a portion of its lease payments. 
 

________________________________________________________________ 

Page 2 Details of Finding

Although both facilities were built with HVAC systems 

capable of accommodating setbacks, the property manager 

reported that setbacks were not being used. 

We also identified a number of other facilities where 

conservation efforts were not complete. Contractor 

officials at Y-12 told us that there were other facilities at 

the site where setbacks were not being used even though 

the HVAC systems had the requisite capability. As a result 

of our audit, officials told us that they planned to begin 

implementation of setbacks in four buildings and pursue 

setbacks in another. Additionally, we identified seven 

other buildings owned by the Department at Y-12 that had 

been capable of using setbacks but had lost this 

functionality. Two large buildings, for example, had been 

constructed with the ability to use a setback mode. Over 

the years, however, the mechanical systems had 

deteriorated and were not repaired. As a result, electronic 

setback controls were no longer functional. 

At the Los Alamos National Laboratory, two facilities we 

visited had setback capabilities but they had not been 

activated. Building managers for two major facilities at the 

site, the National Security Sciences Building and the 

Nonproliferation and International Security Center, had not 

taken action to ensure that setbacks were used as required. 

The potential energy savings for these two buildings could 

be significant given that they comprise over 450,000 square 

feet. According to building managers, the setback 

capabilities had not been used because facility operators 

and tenants had not been trained on the use of setbacks. 

Office of Science Laboratories

Similar to the national security sites, we found that there 

were opportunities for energy savings through the use of 

setbacks at the Oak Ridge National Laboratory (ORNL). 

The Multipurpose Research Facility and the Research 

Office Building, for example, were not using setbacks. The 

offices and laboratories within these facilities, comprising 

about 286,000 square feet, were built with HVAC setback 

capability. Facility engineers, for example, reported that 

setbacks were initially used at the Research Office 

Building; however, the use was discontinued when it was 

determined that setbacks adversely affected the pressure in 

the building. Building management reported that doors 

became difficult to open in the morning when the setback 
 

________________________________________________________________ 

Page 3 Details of Finding

capability was used. ORNL management officials told us 

that based on our audit they had worked on options to 

address the issues associated with maintaining proper 

pressure in the buildings that would permit the use of 

setbacks to be resumed. 

Certain systems at ORNL had deteriorated and were no 

longer capable of providing setbacks. For example, we 

identified eight facilities that previously were capable of 

using setbacks, but could no longer operate in this mode 

due to equipment deterioration. Until 2008, buildings 4501 

and 4505, for example, used a Direct Digital Control 

system that was capable of regulating temperatures during 

non-working hours. Since the system stopped working in 

2008, the buildings are no longer capable of using setbacks 

to control temperatures during non-working hours. ORNL 

is in the process of executing an Energy Savings 

Performance Contract that it hopes will improve the use of 

setbacks in its facilities. 

At the Department's Pacific Northwest National Laboratory 

(PNNL), four leased facilities were not, at the time of our 

site visit, operating in setback mode. These facilities 

account for about 145,000 square feet of office space. 

PNNL officials told us that, as a result of our audit, they 

had identified setback capabilities at these facilities and had 

begun working with the property owner to implement these 

energy saving techniques. After completion of our audit 

field work, management informed us that nine of ten PNNL 

leased buildings had begun to use setback capabilities (the 

one building not using setbacks did not have the capability 

to do so). 

Setback In our judgment, the Department and its facility management 

Implementation and operating contractors need to place greater emphasis on 

Issues reducing energy consumption through the application of 

setbacks. Although we found that facility contracts for the 

sites we visited had formal provisions which required the 

implementation of setbacks, the actual execution was 

spotty, suffering from a lack of specific policies or 

procedures establishing a regime using thermostat setbacks 

as an effective energy conservation tool. We noted, as 

well, that the Department had not required the contractors 

included in our review to maintain HVAC systems in a 

condition to fully utilize setbacks. Finally, we found that 

specific energy consumption reduction goals related to 
 

________________________________________________________________ 

Page 4 Details of Finding

setbacks had not been established to incentivize contractor 

performance in this area. Due to the recent emphasis on 

leased space for Federal operations, we evaluated the 

inclusion of setback capabilities in lease agreements. We 

found that this was not done in a number of such 

agreements entered into by the National Nuclear Security 

Administration (NNSA) and the Office of Science. For 

example, at Y-12, certain lease agreements did not include 

the use of setbacks even though the Department paid the 

utility costs. As a result of our audit, officials at Y-12 

informed us that they are working with the property 

manager to enable setback capability. The lease 

agreements at PNNL also did not require use of setbacks. 

To its credit, however, PNNL incorporated setback 

requirements into the service agreements for the Biological 

Sciences Facility and the Computational Science Facility, 

two new facilities under construction. 

At selected sites, we found that systems capable of using 

setbacks were not maintained. Several buildings at Y-12 

had not been maintained at the level required to support 

setback capability. Buildings 9113 and 9119, for example, 

were no longer capable of setback due to the condition of 

the mechanical equipment. Our findings were consistent 

with remarks in an Energy Savings Performance Contract 

proposal in which a bidder noted that most of the heating, 

ventilation and cooling control systems at these two 

buildings were inoperable. The majority of the fan controls 

in the buildings had failed, thereby preventing building 

controls systems from operating efficiently. 

Despite a number of interviews and significant document 

research at all four sites, we could find no plausible reason 

for the lack of interest in setbacks. Some officials 

suggested that there were funding implications which made 

implementation of setbacks problematic. A few officials 

suggested that it was logistically difficult to implement a 

setback program in a building where sensitive equipment is 

working on a 24-hour continuing basis and/or the work 

force maintains irregular hours. Others told us that the 

setback issue was simply not a priority given all of the 

other operational challenges. 

We recognize all of the challenges and other issues 

associated with an aggressive setback program. 

Nonetheless, we concluded that the importance of energy 

efficiency and conservation in the Department setting is so 
 

________________________________________________________________ 

Page 5 Recommendations

important that these challenges can be overcome and that 

the reward, in terms of energy savings, will be well worth 

the cost. 

Energy Savings With nearly $300 million spent on annual utility costs, the 

Department could save over $11.5 million in annual utility 

costs by aggressively using setbacks. We developed the 

estimate based on the observation that approximately 64 

percent of the facilities included in our review had not used 

setbacks, and by conservatively applying a 15 percent 

energy consumption savings estimate observed by Sandia 

National Laboratory (Sandia) and a study conducted by 

PNNL to the 40 percent of utility costs generally 

recognized as resulting from HVAC operation. The 

consumption savings, at today's average residential 

electricity cost, would be sufficient to power over 9,800 

homes per year. In addition to energy savings, the PNNL 

study concluded that the use of setbacks reduces 

unnecessary wear and tear on equipment and associated 

maintenance costs. Significant energy savings can be 

achieved if setbacks are incorporated into building 

operations. Sandia, through a recent building upgrade 

involving replacement of the operational control system 

and installation of equipment to regulate an air supply fan, 

reported savings ranging from 8,000 to 14,000 kWh per 

month (18 to 40 percent). 

It was quite clear to us that the Department would have 

been better served if there had been a more consistent 

commitment to temperature setbacks throughout the 

complex as a means of conserving energy and reducing 

operating costs. 

RECOMMENDATIONS We recommend that the Under Secretary for Science, and 

the Under Secretary for Nuclear Security, require Federal 

Site Managers to: 

1. Begin using setbacks at each of the Department's 

owned or leased facilities, to the maximum extent 

practicable; 

2. Ensure site contractors develop and implement 

policies and procedures requiring that setbacks be 

used at all Departmental facilities, as appropriate; 

3. Require future lease agreements to incorporate 

setback clauses; 
 

________________________________________________________________ 

Page 6 Comments

4. Train building operations personnel and occupants 

on the use and benefits of setbacks; and, 

5. Ensure that required maintenance is performed on 

HVAC systems capable of setbacks. 

We also recommend that the Under Secretary of Energy 

reemphasize the importance of using setbacks as an energy 

saving and conservation technique to all of the 

Department's programs and sites. 

MANAGEMENT Department management generally agreed with our 

REACTION finding and recommendations. Management agreed to 

take needed corrective actions, including emphasizing the 

importance of using setbacks as an energy conservation 

measure to its programs and sites. 

In separate comments, the NNSA indicated that it would 

take a series of actions to enforce the use of setbacks. In 

particular, NNSA indicated that it would take actions to 

validate the use of setbacks; require contractors to develop 

and implement policies and procedures requiring the use of 

setbacks; incorporate setback clauses in future lease 

agreements; perform energy awareness training; and 

continue to consider HVAC system maintenance as part of 

its overall priority system. 

The Office of Science noted that the ORNL had 

consistently met its energy conservation goals which are 

much broader than the use of setbacks. Science officials 

also noted that the Laboratory is implementing a broad 

system of energy conservation measures through an Energy 

Savings Performance Contract that will achieve energy 

consumption reductions exceeding those available from the 

use of setbacks alone. 

AUDIT RESPONSE Management's comments are responsive to our finding and 

recommendations. We are encouraged by the Office of 

Science's plans to implement an Energy Savings 

Performance Contract at the ORNL. The inclusion of 

energy conservation measures such as setbacks in such 

contract should, if properly implemented, help reduce 

energy use and costs at the Laboratory. 
Appendix 1 

________________________________________________________________ 

Page 7 Objective, Scope, and Methodology 

OBJECTIVE The objective of the audit was to determine whether the 

Department of Energy (Department) was taking maximum 

advantage of setbacks as an energy savings/management 

technique. 

SCOPE The audit was performed between July 2008 and May 2009. 

We performed our work at the Department of Energy's 

Headquarters in Washington, D.C.; the Y-12 National Security 

Complex located in Oak Ridge, Tennessee; Oak Ridge 

National Laboratory located in Oak Ridge, Tennessee; Los 

Alamos National Laboratory located in Los Alamos, New 

Mexico; and, the Pacific Northwest National Laboratory 

located in Richland, Washington. The scope of the audit 

included buildings that used systems capable of operating in 

setback mode. 

METHODOLOGY To accomplish our objective, we: 

• Reviewed laws and regulations applicable to 

requirements for operating buildings in a cost effective 

and energy efficient manner; 

• Reviewed 55 buildings and interviewed building 

operations personnel at four sites; 

• Analyzed Department Orders, Management and 

Operating Contracts, and leasing agreements for 

provisions requiring buildings to be operated in a cost 

effective and energy efficient manner; 

• Interviewed officials from the Department's Federal 

Energy Management Program; 

• Reviewed information included in building automation 

systems; 

• Interviewed representatives from the General Services 

Administration and personnel responsible for operating 

the Forrestal and Germantown facilities; and, 

• Observed the building automation system for the 

Forrestal and Germantown facilities. 

We conducted this performance audit in accordance with 

generally accepted Government auditing standards. Those 

standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis 
Appendix 1 

________________________________________________________________ 

Page 8 Objective, Scope, and Methodology 

for our finding and conclusion based on our audit objective. 

We believe that the evidence obtained provides a reasonable 

basis for our finding and conclusion based on our audit 

objective. The audit included tests of controls and compliance 

with laws and regulations related to the Department's use of 

setbacks as an energy savings technique. Because our review 

was limited, it would not necessarily have disclosed all internal 

control deficiencies that may have existed at the time of our 

audit. Also, we examined the establishment of performance 

measures in accordance with the Government Performance and 

Results Act of 1993, as it related to the audit objective. The 

Department sites included in our audit had not established 

specific performance measures regarding the use of setbacks in 

its buildings. We did not rely on computer processed data to 

satisfy our audit objective. 

Management waived an exit conference. 
Appendix 2 

______________________________________________________________ __ 

Page 9 Prior Audit Reports 

PRIOR AUDIT REPORTS

PRIOR OFFICE OF INSPECTOR GENERAL REPORTS

The Office of Inspector General (OIG) has previously reported on energy conservation at the 

Department of Energy (Department). 

• Management of the Department's Data Centers at Contractor Sites (DOE/IG-0803, 

October 2008). The audit found that facility contractors had not always taken 

advantage of opportunities to improve the energy and operational efficiency of data 

centers. In particular, as many as 140 data centers were found at the six sites 

reviewed that duplicated common services such as e-mail, data storage, and libraries. 

Furthermore, four of the six sites made only limited use of more efficient hardware 

technologies that conserve energy and reduce operational costs. The OIG estimated 

that $2.3 million per year for these six sites could be saved through the use of more 

efficient hardware technologies allowing for the consolidation of servers and be more 

energy-efficient. 

• Department of Energy Efforts to Manage Information Technology Resources in an 

Energy-Efficient and Environmentally Responsible Manner (OAS-RA-09-03, 

May 27, 2009). An audit was conducted to determine if the Department managed 

information technology resources in an energy-efficient and environmentally 

responsible manner. The audit found that the Department did not take advantage of 

existing, low or no cost built-in energy management features on a significant 

percentage of its computers and peripherals. 

 
Appendix 3 

________________________________________________________________ 

Page 10 Management Comments 
Appendix 3 (continued) 

________________________________________________________________ 

Page 11 Management Comments 
Appendix 3 (continued) 

_________________________________________________________________ 

Page 12 Management Comments 
Appendix 3 (continued) 

_________________________________________________________________ 

Page 13 Management Comments 
IG Report No. DOE/IG-0817__

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