A bill to extend the authority for Energy Savings Performance Contracts and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Energy Savings Performance Contracts 
Amendments Act of 2003''.

SEC. 2. PERMANENT EXTENSION.

    Section 801(c) of the National Energy Conservation Policy Act (42 
U.S.C. 8287(c)) is repealed.

SEC. 3. COST SAVINGS FROM REPLACEMENT FACILITIES.

    Section 801(a) of the National Energy Conservation Policy Act (42 
U.S.C. 8287(a)) is amended by adding at the end the following new 
paragraph:
    ``(3)(A) In the case of an energy savings contract or energy 
savings performance contract providing for energy savings through the 
construction and operation of one or more buildings or facilities to 
replace one or more existing buildings or facilities, benefits 
ancillary to the purpose of such contract under paragraph (1) may 
include savings resulting from reduced costs of operation and 
maintenance at such replacement buildings or facilities when compared 
with costs of operation and maintenance at the buildings or facilities 
being replaced.
    ``(B) Notwithstanding paragraph (2)(B), aggregate annual payments 
by an agency under an energy savings contract or energy savings 
performance contract referred to in subparagraph (A) may take into 
account (through the procedures developed pursuant to this section) 
savings resulting from reduced costs of operation and maintenance as 
described in subparagraph (A).''.

SEC. 4. ENERGY SAVINGS.

    Section 804(2) of the National Energy Conservation Policy Act (42 
U.S.C. 8287c(2)) is amended to read as follows:
            ``(2) The term `energy savings' means--
                    ``(A) a reduction in the cost of energy or water, 
                from a base cost established through a methodology set 
                forth in the contract, used in an existing federally 
                owned building or buildings or other federally owned 
                facilities 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 federally owned building or 
                        buildings or other federally owned facilities; 
                        or
                            ``(iii) the increased efficient use of 
                        existing water sources; or
                    ``(B) in the case of a replacement building or 
                facility described in section 801(a)(3), a reduction in 
                the cost of energy, from a base cost established 
                through a methodology set forth in the contract, that 
                would otherwise be utilized in one or more existing 
                federally owned buildings or other federally owned 
                buildings by reason of the construction and operation 
                of the replacement building or facility.''.

SEC. 5. ENERGY SAVINGS CONTRACT.

    Section 804(3) of the National Energy Conservation Policy Act (42 
U.S.C. 8287c(3)) is amended to read as follows:
            ``(3) The terms `energy savings contract' and `energy 
        savings performance contract' mean a contract which provides 
        for--
                    ``(A) the performance of services for the design, 
                acquisition, installation, testing, operation, and, 
                where appropriate, maintenance and repair, of an 
                identified energy or water conservation measure or 
                series of measures at one or more locations; or
                    ``(B) energy savings through the construction and 
                operation of one or more buildings or facilities to 
                replace one or more existing buildings or 
                facilities.''.

SEC. 6. ENERGY OR WATER CONSERVATION MEASURE.

    Section 804(4) of the National Energy Conservation Policy Act (42 
U.S.C. 8287c(4)) is amended to read as follows:
            ``(4) The term `energy or water conservation measure' 
        means--
                    ``(A) an energy conservation measure, as defined in 
                section 551(4) (42 U.S.C. 8259(4)); or
                    ``(B) a water conservation measure that improves 
                water efficiency, is life cycle cost effective, and 
                involves water conservation, water recycling or reuse, 
                improvements in operation or maintenance efficiencies, 
                retrofit activities or other related activities, not at 
                a Federal hydroelectric facility.''.

SEC. 7. REVIEW.

    Within 180 days after the date of the enactment of this Act, the 
Secretary of Energy shall complete a review of the Energy Savings 
Performance Contract program to identify statutory, regulatory, and 
administration obstacles that prevent Federal agencies from fully 
utilizing the program. In addition, this review shall identify all 
areas for increasing program flexibility and effectiveness, including 
audit and measurement verification requirements, accounting for energy 
use in determining savings, contracting requirements, and energy 
efficiency services covered. The Secretary shall report these findings 
to the Committee on Energy and Commerce of the House of Representatives 
and the Committee on Energy and Natural Resources of the Senate, and 
shall implement identified administrative and regulatory changes to 
increase program flexibility and effectiveness to the extent that such 
changes are consistent with statutory authority.

SEC. 8. PILOT PROGRAM TO EXPAND ENERGY SAVINGS PERFORMANCE CONTRACTS TO 
              NON-BUILDING PROJECTS.

    Title VIII of the National Energy Conservation Policy Act (42 
U.S.C. 8287-8287c) is amended by adding at the end the following:

``SEC. 805. PILOT PROGRAM FOR ENERGY SAVINGS PERFORMANCE CONTRACT 
              INVESTMENTS IN NON-BUILDING ENERGY SAVINGS PROJECTS.

    ``(a) Authorization.--The Secretary of Defense and the heads of 
other interested Federal agencies are authorized, on a pilot basis, to 
enter into up to ten energy savings performance contracts under this 
Title for the purpose of achieving savings, secondary savings, and 
benefits incidental to those purposes, in non-building energy 
efficiency improvement projects.
    ``(b) Selection of Projects.--The Secretary of Energy, in 
consultation with the Secretary of Defense and the heads of other 
interested Federal agencies, shall select up to ten contract projects 
for this pilot program. The projects shall be selected to demonstrate 
the applicability and benefit of energy savings performance contracting 
to a range of non-building energy efficiency improvement projects.
    ``(c) Definitions.--For the purposes of this section:
            ``(1) The term `non-building' means any vehicle, device, or 
        equipment that is transportable under its own power by land, 
        sea, or air and consumes energy from any fuel source for the 
        purpose of such transportability, or to maintain a controlled 
        environment within such vehicle, device or equipment; or any 
        Federally owned equipment used to generate electricity or 
        transport water.
            ``(2) The term `secondary savings', means additional energy 
        or cost savings that are a direct consequence of the energy 
        savings that result from the energy efficiency improvements 
        that were financed and implemented pursuant to the energy 
        savings performance contract. Such `secondary savings' may 
        include, but are not limited to, energy and cost savings that 
        result from a reduction in the need for fuel delivery and 
        logistical support. In the case of electric generation 
        equipment, secondary savings may include the benefits of 
        increased efficiency in the production of electricity.
    ``(d) Report.--No later than three years after the enactment of 
this section, the Secretary of Energy shall report to the Congress on 
the progress and results of this program. Such report shall include: a 
description of all projects undertaken; the energy and cost savings, 
secondary savings, other benefits and problems resulting from such 
projects; and the overall cost-benefit of such projects. The report 
shall also include recommendations, developed in consultation with 
those agencies that undertook projects under the program, as to whether 
the authorization to enter into energy savings performance contract for 
non-building projects should be extended, expanded, or otherwise 
modified.''.

SEC. 9. UTILITY INCENTIVE PROGRAMS.

    Section 546(c)(3) of the National Energy Conservation Policy Act 
(42 U.S.C. 8256(c)(3)) is amended by striking ``facilities'' and 
inserting ``facilities, equipment and vehicles''.

Summary: Energy Savings Performance Contracts Amendments Act of 2003 - Amends the National Energy Conservation Policy Act (NECPA) to: (1) repeal the termination dates governing the authority to enter into energy savings performance contracts (thus extending such authority indefinitely); (2) allow as an approved benefit ancillary to an energy savings contract or energy savings performance contract providing for energy savings through construction of replacement facilities those savings resulting from reduced operation and maintenance costs at such facilities; and (3) authorize the Secretary of Defense and the heads of other interested Federal agencies to enter into a pilot program for energy savings performance contract investments in non-building energy efficiency improvement projects.