Federal Energy Management: Facility and Vehicle Energy Efficiency Issues
Published: 2003-03-12T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: GAO testified that constructing and operating buildings requires enormous amounts of energy, water, and materials and creates large amounts of waste. How agencies manage their facilities, along with the vehicles they use to accomplish their missions, has significant cost implications and greatly affects the environment. According to the Department of Energy, energy management is one of the most challenging tasks facing today's federal facilities manager, and sound energy management includes using energy efficiently, ensuring reliable supplies, and reducing costs whenever possible. The federal role in energy conservation was also highlighted in the President's National Energy Policy, in which the President directed heads of executive departments and agencies to "take appropriate actions to conserve energy use at their facilities to the maximum extent consistent with the effective discharge of public responsibilities."
section_title: What GAO Found
paragraphs: With approximately 3.3 billion feet of facility space and over one-half million automobiles, the federal government is the largest single energy consumer in the nation. Various laws, regulations, and executive memorandums direct federal facility managers to reduce energy consumption and environmental impacts of the buildings they manage. Agencies also must follow other requirements for the acquisition and use of alternative fuel vehicles, which use fuels like methanol, propane, and natural gas, to name a few. In constructing and renovating facilities, agencies have begun using "green" design approaches, which are intended to result in energy efficiency and minimal impact on the environment. Such approaches have been used at the White House, Pentagon, and the Zion National Park Visitor Center. Despite the possible benefits, some agencies believe they face obstacles in employing green practices in construction and renovation projects. These include key stakeholders--architects, engineers, agency staff--who are not familiar with green approaches, higher initial costs of green projects, difficulty getting agency management buy-in, and difficulty quantifying the benefits of green facility designs. In addition to efforts to make federal facilities more energy efficient, the federal government has also attempted to reduce the nation's consumption of petroleum fuels in transportation through the use of alternative fuel vehicles in the federal vehicle fleet.

section_title: Letter
paragraphs: We welcome the opportunity to provide testimony on energy conservation  efforts in federal facilities and agencies’ use of alternative fuel vehicles.  According to the Department of Energy (DOE), the federal government’s  energy bills total approximately $4 billion annually. Our testimony  provides an overview of the vast federal facilities inventory, describes  laws and other authorities that pertain to energy conservation in facilities  and use of alternative fuel vehicles, highlights some of the key federal  efforts to promote energy efficient practices and building designs,  describes some things that can be done to improve energy efficiency in  facilities and related cost implications, and identifies some of the  obstacles agencies face in improving energy efficiency in federal facilities.  Our testimony also provides an update on agencies’ use of alternative fuel  vehicles and is based on prior reports and ongoing work.
Constructing and operating buildings requires enormous amounts of  energy, water, and materials and creates large amounts of waste. How  agencies manage their facilities, along with the vehicles they use to  accomplish their missions, has significant cost implications and greatly  affects the environment. According to DOE, energy management is one of  the most challenging tasks facing today’s federal facilities manager, and  sound energy management includes using energy efficiently, ensuring  reliable supplies, and reducing costs whenever possible. The federal role  in energy conservation was also highlighted in the President’s National  Energy Policy, in which the President directed heads of executive  departments and agencies to “take appropriate actions to conserve energy  use at their facilities to the maximum extent consistent with the effective  discharge of public responsibilities.”
subsections: section_title: Overview of Federal Facilities, Vehicles, and Related Energy Efficiency Requirements
paragraphs: The federal facilities inventory contains a diverse portfolio of assets that  are used for a wide variety of missions. According to the fiscal year 2001  financial statements of the U.S. government, the federal government’s real  property assets—including land— are worth about $328 billion. In terms of  facilities, the latest available governmentwide data from GSA indicated  that as of September 30, 2000, the federal government owned and leased  approximately 3.3 billion square feet of building floor area worldwide. As  shown in figure 1, the Department of Defense (DOD), U.S. Postal Service  (USPS), General Services Administration (GSA), and Department of  Veterans Affairs (VA) hold the majority of the owned facility space. Figure  1 also shows that DOD, the Department of State (State), GSA, and USPS  lease the most space.
A set of federal laws, regulations, executive orders, and executive  memorandums direct federal facility managers to reduce the energy and  environmental impacts of the buildings they manage. In enacting the  Federal Energy Management Improvement Act of 1988 (FEMIA),  Congress recognized, among other things, that the federal government is  the largest single energy consumer in the nation, and that the cost of  meeting the federal government’s energy requirements is substantial. The  purpose of FEMIA, as amended, is “to promote the conservation and the  efficient use of energy and water and the use of renewable energy sources  by the federal government.” FEMIA, as amended, sets forth energy  performance requirements for federal buildings, establishes the use of life  cycle methods and procedures for application of energy conservation  measures, and establishes an interagency energy management task force  to coordinate the activities of the federal government in promoting energy  conservation.
The Energy Policy Act of 1992 (EPACT) was intended to further enhance  federal energy management practices. In this regard, it requires the GSA  Administrator to hold biennial conference workshops in each of the  federal regions on energy management, conservation, efficiency, and  planning strategy; requires agencies to conduct energy management  training; requires the establishment of energy audit teams to perform  energy audits of federal facilities; and requires agencies to identify energy  efficient products in carrying out their procurement and supply functions.  Several executive orders direct agencies to employ green practices in  facility and fleet management, and executive memorandums encourage  agencies to use energy saving performance contracts and environmentally  friendly landscaping practices.
In addition to facilities-related initiatives, EPACT establishes a minimum  number of alternative fuel vehicles for federal agencies beginning in fiscal  year 1993 and requires the Secretary of Energy to carry out an alterative  fuel vehicle program. According to the most recently available data from  GSA, the federal government operated 596,114 vehicles in fiscal year 2001.  Alternative fuels include ethanol, methanol, natural gas, propane, and  electricity. Alternative fuel vehicles operate on these fuels, although some  of them can operate on gasoline. In total, the Energy Information  Administration estimated that the federal government operated 68,890  alternative fuel vehicles in 2002.
section_title: Federal Efforts to Promote Energy Conservation and Green Design Practices
paragraphs: The primary program for promoting energy efficiency in the federal  government is DOE’s Federal Energy Management Program (FEMP).  Established in 1973, FEMP works to reduce the energy cost and  environmental impact of federal government practices by advancing  energy efficiency and water conservation, promoting the use of distributed  and renewable energy, and improving utility management decisions at  federal sites. FEMP provides a range of services to federal agencies aimed  at helping facility managers achieve greater energy efficiency and cost- effectiveness in areas such as new construction, building retrofits,  equipment procurement, and utility management. FEMP also advises  agencies on establishing partnerships with the private sector to improve  energy efficiency, using innovative technologies, and addressing energy- related policy matters as they pertain to federal facilities. For example,  one way that FEMP helps agencies become more energy efficient is  through utility energy services contracts. In these contracts, the utility  company typically arranges financing and constructs the necessary capital  improvements to the agencies’ building systems. In return, the utility is  repaid over the term of the contract from the cost savings generated by the  newly installed, energy-efficient improvements. This allows agencies to  become more energy efficient while minimizing the up-front costs of the  capital improvements. According to DOE, since 1995 more than 45 electric  and gas utilities have provided project financing for energy and water  efficiency upgrades at federal facilities, investing more than $600 million  through these contracts.
As part of its central management responsibilities in federal real property,  GSA encourages agencies to use green or sustainable design approaches in  federal construction and renovation projects. The objectives of  sustainability are to reduce consumption of nonrenewable resources,  minimize waste and impact on the environment, optimize site potential,  minimize nonrenewable energy consumption, use environmentally  preferable products, protect and conserve water, enhance indoor  environmental quality, and optimize operational and maintenance  practices. The end result of a sustainable design is a healthier working  environment that costs less to maintain over time than traditional methods  and is better for the environment. To measure sustainability efforts, GSA  and other agencies have begun using the Leadership in Energy and  Environmental Design (LEED) rating system. The U.S. Green Building  Council—a coalition of leaders from across the building industry working  to promote buildings that are environmentally responsible, profitable and  healthy places to live and work—developed LEED to help apply principles  of sustainable design and development to facilities projects. According to  information from GSA, by using LEED, agencies can gauge the impact of  design decisions on energy efficiency and other sustainability factors.
section_title: Examples of Agency Efforts to Apply Green Principles
paragraphs: By using the principles of sustainable, green design, agencies are trying to  improve energy efficiency, reduce life-cycle costs, and reduce  environmental impacts in the design, construction, and operation of  federal facilities. Some examples of facilities where these approaches have  been applied are the White House, the Pentagon, and the Zion Canyon  National Park Visitor Center.
According to information from DOE, in 1993 a team of experts from  several federal agencies and private organizations helped create a  “greening plan” for the White House to be implemented as part of ongoing  facility maintenance and operation. Measures taken included changes to  the building envelope to reduce energy loss through the roof, windows,  and walls; and modifications to the lighting systems to increase efficiency  and maximize natural lighting. In 1999, DOE estimated that these and  other efforts resulted in cost savings of approximately $300,000 annually  through reductions in energy, water, landscaping, and waste removal  costs. More recently, according to information from the Office of the  Federal Environmental Executive, the White House installed its first-ever  solar electric system in late 2002. This included putting solar panels on the  roof of the complex’s primary maintenance building and installing two  solar thermal systems to heat the pool and spa and provide domestic hot  water.
According to information from DOE, DOD developed and implemented  plans to reduce building energy use and incorporate environmentally  sensitive materials, including materials that require the least energy to  produce and that can be recycled after use, as part of an extensive $1.1  billion renovation of the Pentagon. As part of these efforts, DOD  constructed a new state-of-the-art heating and ventilation plant, modified  and insulated the building envelope to increase energy efficiency, and built  irrigation systems that use water from the nearby Potomac River to  irrigate areas around the building. DOD also built two solar electric  systems to demonstrate the reliability and feasibility of using solar energy.
One of the goals of the renovation project is to cut energy costs by up to 30  percent by fiscal year 2005, which according to DOD officials could save  between $4 million and $5 million each year.
Energy efficient design was used, according to information from DOE, in  constructing the new Zion National Park Visitor Center and Transportation  Center at Zion National Park in Utah that opened in May 2000. According  to DOE, the National Park Service worked with DOE to create a design  that preserves the natural beauty of the park while saving energy and  money. Innovative features included systems that work to naturally cool  or heat the facility, electricity producing solar panels, and efficient  landscaping that complements the building and reduces the need for  irrigation. Overall, DOE predicts that these features will save about  $14,000 a year. Figure 2 shows the new Zion National Park Center.
In addition to these examples, our work at the Government Printing Office  (GPO) and GSA in recent years illustrated the potential cost benefits of  investing in energy efficiency. For example:    At GPO, the Potomac Electric Power Company (PEPCO) estimated that  GPO could save over $400,000 a year on energy and maintenance costs by  replacing its outdated air conditioning chillers with new, more energy  efficient chillers. We also reported that PEPCO had recommended that  GPO consider upgrading its energy inefficient lighting at an estimated cost  of $1.6 million to achieve an estimated $800,000 in annual energy savings.  According to GPO, it plans to have the chiller project completed in April  2003 and the lighting upgrade completed by May 2003.  In our work on the backlog of repair and alteration needs in GSA- controlled federal buildings, we found that 44 buildings in GSA’s inventory  each had $20 million or more in repair and alteration backlogs. Many of  the repair and alteration needs in these buildings had a direct impact on  the energy efficiency of the buildings, including aging and inefficient  plumbing, heating, ventilation, and air conditioning systems. For example,  the Dwight D. Eisenhower Building in Washington, D.C., had a repair and  alteration backlog of $216 million, which included the need to address the  building’s antiquated air conditioning system. GSA officials said that this  system, which uses about 250 individual window units, is outdated and not  efficient in cooling the building or conserving energy. Figure 3 shows an  individual air-conditioning unit in a window in the Eisenhower building.
section_title: Some Agencies Have Identified Obstacles to Using Energy Efficient, Green Approaches
paragraphs: Despite the possible benefits of using energy efficient, green approaches in  federal construction and renovation projects, available data indicate that  some agencies believe they face significant obstacles in implementing  these approaches. In April 2001, the U.S. Green Building Council surveyed  11 federal real-property-holding agencies about their green building  activities. Among other things, the survey asked the agencies to identify  any obstacles they face in achieving green building goals and objectives.  The obstacles identified by the agencies generally fell into the following  areas:    Many architects, engineers, agency stakeholders, contractors, and  customers are not knowledgeable about green building practices and  technology. The survey respondents generally said that this lack of  knowledge and expertise made it difficult to design, build, and promote  green buildings.
Respondents noted that green projects might have higher initial costs, but  actually can be more cost-effective over the life of the facility and have  other benefits. The higher initial costs can be more difficult to justify to  decisionmakers.
Related to higher initial costs, respondents expressed concern that it can  be difficult to get top agency leaders to make green buildings a  management priority. Consequently, the respondents felt that funding  decisions are sometimes made without adequate input from design and  construction professionals.
Some of the benefits of green buildings are difficult to quantify. For  example, the respondents noted that good measures exist for energy and  cost savings, but that many green projects also improve employee  productivity and well-being. Further, they said that some higher-priced  building materials are better for the environment, which is a benefit  difficult to quantify.
At a time when budget constraints will be pervasive, the higher up-front  costs of energy efficient designs could prove to be an especially  challenging obstacle. As a result, less costly approaches that are less  energy efficient could “look cheaper” in a single year’s appropriation  because life cycle costs—including the savings that would result from  energy efficient designs—generally occur in later years.
section_title: Agencies’ Use of Alternative Fuel Vehicles
paragraphs: In addition to efforts to make federal facilities more energy efficient, other  initiatives have attempted to reduce the nation’s consumption of  petroleum fuels in transportation through the use of alternative fuels in the  federal vehicle fleet. In particular, EPACT set broad goals for replacing the  transportation sector’s use of petroleum fuels by at least 10 percent by the  year 2000 and at least 30 percent by the year 2010. To help meet these  goals, this act required that the federal government, as well as state  governments and certain other fleet operators, purchase vehicles that run  on alternative fuels, such as ethanol, methanol, natural gas, propane, and  electricity, among others. Further, the act specified that, in 1996, 25  percent of the new vehicles purchased by the federal government should  operate on alternative fuels, with the target percentage increasing to 33  percent in 1997, 50 percent in 1998, and 75 percent in 1999 and beyond.
Based on our assessment in 2000, the federal government as a whole has  made progress in acquiring alternative fuel vehicles, although it has not  always met the act’s annual targets, as shown in table 1 below. Further,  procurement of these vehicles has been inconsistent across federal  agencies: Some agencies have exceeded their purchase mandates in a year  when others acquired very few or no alternative fuel vehicles. For  example, in 1998, USPS acquired 10,000 ethanol alternative fuel vehicles to  deliver the mail. This purchase was the major reason why the federal  government collectively met the mandated acquisition target of 50 percent  (12,362 alternative fuel vehicles) for that year.
The federal fleet’s acquisition of alternative fuel vehicles has not reduced  gasoline consumption as much as hoped for several reasons. For example,  the act does not establish targets for use of alternative fuels—just the  acquisition of vehicles that can run on them. However, some of the  alternative fuel vehicles that federal agencies have purchased can also run  on gasoline, and fleet officials told us individuals driving the vehicles often  refuel with gasoline because it is much more convenient to find gasoline  refueling stations than refueling stations that supply alternative fuels. In  addition, some drivers have been reluctant to use alternative fuel vehicles  because of safety concerns or a lack of familiarity with the vehicles’  technology and so choose to use the agencies’ gasoline powered vehicles.
According to officials at DOE, the act’s mandates for purchases of  alternative fuel vehicles by federal and other fleets were designed to  demonstrate the use of the vehicles and stimulate purchases of them by  the general public. Some supporters of the mandates believed federal and  other fleets would demand enough alternative fuel vehicles to create a  general market for these vehicles. However, the vehicles in federal and  other fleets represent a small proportion of the vehicles on the road. As a  result, according to DOE, if all of these fleets met the act’s targets for  alternative fuel vehicles, the use of alternative fuels by these vehicles  would represent less than 1 percent of petroleum fuels used in 2010—far  below the act’s goals of 10 and 30 percent replacement in 2000 and 2010,  respectively. In addition, to reach the 10-percent goal, DOE estimates sales  of alternative fuel vehicles nationwide would have to grow by about 1.5 to  1.9 million vehicles per year. By comparison, the entire production of  Ford’s passenger cars in 1996 was slightly more than 1.4 million.