Senate Assists Energy-, Cost-Saving Efficiency Program, Advances Fix to Budgeting Quirk, Says Alliance to Save Energy

Release Date: Thursday, April 15, 2004

The Senate has taken a first step towards restoring an important program that improves the energy efficiency of our federal buildings, the Alliance to Save Energy said today. With its unanimous vote on an amendment to the Fiscal Year 2005 Budget Resolution, led by Alliance Vice-Chair Sen. Jeff Bingaman (D-NM) and Sen. James Inhofe (R-OK), the Senate clarified a budgeting quirk that had hampered reauthorization of Energy Savings Performance Contract (ESPC) authority.

Under an ESPC, an energy services company privately finances projects that increase the energy efficiency of a federal facility – with no up-front costs to the government agency. The company is paid back in the resulting energy savings – saving millions of tax dollars each year . While ESPCs do not increase costs for the federal government, in a departure from past practice, the Congressional Budget Office (CBO) “scored” the ESPC program for the first time last year – as a $300 million-a-year federal expenditure.

“The Senate's action is a crucial step toward renewing authority for the government to contract with private businesses for valuable energy- and money-saving projects,” said Alliance President Kateri Callahan. “Far from costing the federal government money, ESPCs have saved taxpayers millions in unnecessary energy costs, while creating thousands of private-sector jobs. Congress must now make this successful public-private program permanent.”

Authority for ESPCs expired September 30, 2003 , but both the House and Senate energy bills extended the program. However because of the CBO “score,” the program was removed from the latest version of the energy bill to reduce its apparent price tag. Since their inception in 1992, ESPCs have saved the federal government over a billion dollars in energy and water costs.

“The Alliance to Save Energy and the entire energy-efficiency community thank Sens. Bingaman and Inhofe for their work in getting ESPCs back on track,” Callahan added.