THE WHITE HOUSE
Office of the Press Secretary
LEADING THE FIGHT AGAINST GLOBAL WARMING
June 3, 1999
Leading By Example. The Federal Government is the nation's largest energy consumer with an annual bill of over $8 billion - more than $4 billion to heat, cool, and power its 500,000 buildings. Federal agencies have already reduced energy consumption 17% per square foot relative to 1985 levels. Today's Order builds on that progress by:
Setting Aggressive Goals -- The Order requires Federal agencies to achieve by 2010:
Mobilizing Cutting-Edge Strategies -- The Order directs agencies to maximize the use of:
Strengthening Accountability -- The Order requires that annual scorecards evaluating agency progress be submitted to the President; gives OMB, in consultation with the Department of Energy (DOE), oversight authority; and directs agencies to appoint energy management teams to help meet the goals of the Order.
Concrete Steps, Concrete Savings. The partnership announced today between the Department of Defense and Viron/Pepco Energy Services -- the largest-ever Energy Saving Performance Contract -- will cut energy use in 837 buildings at Ft. Belvoir, Ft. A.P. Hill, Ft. Meyer, Ft. McNair, and Ft. Meade. Other examples of energy-saving actions of the kind today's Order is designed to promote include:
Incentives For Businesses and Consumers, Too. To help American businesses and consumers reap the same kinds of energy and cost savings, the President today also called on Congress to enact his proposed $3.6 billion package of tax incentives for the purchase of energy efficient homes, appliances, cars, and energy from renewable sources.
The President's New Energy Efficiency Executive Order June 3, 1999
The Executive Order to be issued by President Clinton today helps meet the challenge of global warming by significantly improving energy efficiency in Federal buildings. By 2010, the resulting energy savings will reduce annual greenhouse gas emissions by an amount equal to 2.4 million metric tons of carbon (MMTCE) - the equivalent of taking 1.7 million cars off the road - and save taxpayers over $750 million a year. The Order will also expand markets for renewable technologies, reduce air pollution, and serve as a powerful example to American businesses and consumers who can reap substantial benefits from energy improvements.
Aggressive New Goals
The Federal Government is the nation's largest energy consumer with an annual bill of over $8 billion - more than $4 billion to heat, cool, and power its 500,000 buildings. Federal agencies have already reduced energy consumption 17% per square foot relative to 1985 levels. Today's Order builds on that progress, extending current energy efficiency goals and setting new goals for greenhouse gas reductions, renewable energy use, and water conservation.
Fewer Exempt Facilities. Under current practice, a large number of facilities (accounting for 17% of building energy use) are exempt from meeting Federal energy goals. Under this Order, all facilities are subject to these goals and requirements unless they meet new exemption criteria to be developed by DOE. In addition, in their Annual Report to the President, each agency must report all exempt facilities and explain the rationale for excluding them from Federal energy goals.
Cutting-Edge Tools and Strategies
The Order calls for agencies to use a wide range of energy management tools and strategies to fulfill the new energy efficiency, renewable energy, and greenhouse gas reduction goals.
To date, DOE and the Department of Defense (DOD) have put into place over $8 billion in ESPC contract authority -- available for all Federal agencies to fund energy improvements. In addition, many of these contracts are "Super ESPCs" which rely on the same principles as regular ESPCs but offer an umbrella contract to allow expedited service. The Order calls for agencies to maximize their use of ESPCs and utility energy efficiency service contracts to realize energy and cost savings.
Electricity from Renewable Energy and Energy Efficient Sources. Given that over 70% of the Federal government's energy costs in buildings comes from electricity, the Order requires agencies to consider the source of their electricity and opt for cleaner, more efficient electricity generation. Specifically, the Order calls for agencies to minimize the greenhouse gas intensity of purchased electricity. In addition, agencies should adopt policies to increase the use of electricity from renewable energy sources.
Strengthening Agency Accountability
The Order provides a framework to hold agencies accountable for their progress in Federal energy management. The following new management strategies and reporting requirements will help ensure that all Federal agencies manage energy use wisely, reaping substantial fiscal and environmental benefits for years to come.
Concrete Steps, Concrete Savings
In conjunction with the signing of a new Executive Order to promote energy efficiency, President Clinton announced today the Pentagon's intent to award (by the end of June) the Federal government's largest-ever Energy Saving Performance Contract (ESPC), under which Viron Energy Services/Pepco Energy Services will upgrade the energy performance of 837 Federal buildings at no up-front cost to taxpayers. The 18-year service contract, covering five military installations in the Washington, DC area, will reduce annual energy consumption by 17%, saving DOD over $219 million in energy and related costs and reducing annual greenhouse gas emissions by 24,000 metric tons of carbon (MTC) - equivalent to taking over 19,000 cars off the road.
Other examples of energy-saving actions of the kind the President's Order is designed to promote include:
Last year, the DLA supplied 1.5 million bulbs to Federal purchasers. If they had all been compact florescents savings would have totaled $7.5 million. Just last week DOE added compact florescents to the ENERGY STAR (Registered Trademark) product rating program providing consumers with specifications for the purchase of such bulbs. A compact florescent bulb can last up to five years, saving $67 over the its lifetime.
Prior Federal Energy Efficiency Efforts
Today's Order builds upon previous efforts to improve Federal energy efficiency. The Energy Policy Act of 1992 established a goal of improving energy efficiency in Federal office buildings by 20% on an energy-per-square-foot basis by the year 2000, compared to a baseline year of 1985. In March of 1994, President Clinton issued Executive Order 12902, which extended the energy-efficiency goal to 30% below 1985 by 2005. Today's Order extends these goals still further, while also tightening provisions on exempted facilities and setting forth the first-ever Federal goal tied specifically to greenhouse gas reductions.
DOD-Viron/Pepco Energy Saving Performance Contract June 3, 1999
In conjunction with the signing of a new Executive Order to promote energy efficiency, President Clinton will announce today the Pentagon's intent to award (by the end of June) the Federal government's largest-ever Energy Saving Performance Contract (ESPC), under which Viron Energy Services/Pepco Energy Services (Viron/Pepco) will upgrade the energy performance of 837 Federal buildings at no up-front cost to taxpayers. The 18-year service contract, covering five military installations in the Washington, DC area, will reduce annual energy consumption by 17%, saving the Department of Defense (DOD) over $219 million in energy and related costs and reducing annual greenhouse gas emissions by 24,000 metric tons of carbon (MTC) - equivalent of taking over 19,000 cars off the road.
Energy Saving Performance Contracts -- Energy Savings at No Up-front Cost to Taxpayers
The new Executive Order directs Federal agencies to maximize their use of ESPCs -- innovative financing mechanisms that mobilize private sector investment and expertise to save energy and save money in Federal facilities. Under ESPC authority, Federal agencies hire private energy service companies to conduct energy audits of facilities, propose energy saving retrofits, and privately finance, install, and maintain retrofits. There are no up-front payments by the government and contractors are paid from a share of the savings, with the remaining savings accruing to the agency.
The DOD-Viron/Pepco ESPC is the largest by far of any ever awarded by the Federal government and serves as a model for other agencies to replicate in implementing the President's new Executive Order.
Real Savings and Real Environmental Benefits
Under the new contract, some $70 million in private investment will fund energy upgrades at five installations in the Army's Military District of Washington -- Ft. Belvoir, Ft. A.P. Hill, Ft. Meyer, Ft. McNair, and Ft. Meade. These measures will save money and improve the environment. In particular, they will:
These improvements to buildings and equipment will support Army operations well into the next century, without the need for additional funding, and will provide more comfortable living conditions and improved quality of life for those who live and work at the five installations.
Energy Efficiency Measures to be Taken
Expected energy efficiency measures include:
DOD's Partnership With Viron/Pepco
With the assistance of the Department of Energy's (DOE's) National Renewable Energy Lab, DOD sought bids from private sector experts to provide solutions to the energy needs of the Military District of Washington. After a competitive bid process, DOD's Defense Energy Support Center has decided to award a contract to Viron/Pepco to provide a range of services including energy engineering, equipment installation, construction supervision, and measurement and verification. Under the contract, all capital investments will be made within the first three years of the contract and Viron/Pepco will be paid from a share of the verified energy savings resulting directly from its conservation measures.
More than 2,100 buildings on the five installations were surveyed for possible energy improvements. Under the contract, almost 40% of the buildings currently in use will benefit from one or more of the slated improvements and upgrades in the initial task order. The contract is also structured so that either the government or Viron/Pepco can suggest additional conservation measures for the remaining buildings.
Administration Efforts to Expand ESPC Use
While ESPC authority has existed since 1992, President Clinton has taken significant steps to streamline and promote greater use of this tool. Streamlined contracts -- known as "Super ESPCs" -- put in place by DOE and DOD have accelerated large investments in energy projects at hundreds of Federal facilities. Super ESPCs allow all agencies and facilities to place delivery orders under umbrella contracts, substantially reducing the lead time to contract with an energy services company. There are two types of Super ESPCs: regional and technology specific. Regional specific contracts cover a designated geographic area; technology specific contracts are in effect nationwide for a particular emerging technology, such as solar collectors.
In the last year, DOE has provided over $5 billion in ESPC contracting authority to 44 private contractors to perform energy and cost saving work. Projects have been designed and awarded that will mobilize $28.7 million of private investment to perform energy saving work in Federal agencies. The contractors will be paid from the $62.5 million projected savings. Well over a hundred agreements are currently under negotiation as this alternative financing tool for energy and taxpayer savings becomes more commonly used by Federal agencies. Other agreements are also under negotiation with utility contractors and under the DOD contracts (worth over $3 billion) which are also available for use by the rest of the Federal government.
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