[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]





    ENERGY EFFICIENCY IMPROVEMENTS IN FEDERAL BUILDINGS AND VEHICLES

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 12, 2003

                               __________

                            Serial No. 108-1

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform


                                 ______

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                            WASHINGTON : 2003
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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
JOHN SULLIVAN, Oklahoma              C.A. ``DUTCH'' RUPPERSBERGER, 
NATHAN DEAL, Georgia                     Maryland
CANDICE S. MILLER, Michigan          ELEANOR HOLMES NORTON, District of 
TIM MURPHY, Pennsylvania                 Columbia
MICHAEL R. TURNER, Ohio              JIM COOPER, Tennessee
JOHN R. CARTER, Texas                CHRIS BELL, Texas
WILLIAM J. JANKLOW, South Dakota                 ------
MARSHA BLACKBURN, Tennessee          BERNARD SANDERS, Vermont 
                                         (Independent)

                       Peter Sirh, Staff Director
                 Melissa Wojciak, Deputy Staff Director
              Randy Kaplan, Senior Counsel/Parliamentarian
                       Teresa Austin, Chief Clerk
              Philip M. Schiliro, Minority Staff Director
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 12, 2003...................................     1
Statement of:
    Garman, David, Assistant Secretary, Energy Efficiency and 
      Renewable Energy, U.S. Department of Energy................    11
    Lynch, Paul, Assistant Commissioner of Business Operations, 
      Public Buildings Service, General Services Administration..    16
    Rivers, William, Director of the Federal Vehicle Policy 
      Division, Office of Governmentwide Policy, General Services 
      Administration, accompanied by Barney Brasseaux, Federal 
      Supply Service.............................................    26
Letters, statements, etc., submitted for the record by:
    Davis, Chairman Tom, a Representative in Congress from the 
      State of Virginia, prepared statement of...................     4
    Garman, David, Assistant Secretary, Energy Efficiency and 
      Renewable Energy, U.S. Department of Energy, prepared 
      statement of...............................................    13
    Lynch, Paul, Assistant Commissioner of Business Operations, 
      Public Buildings Service, General Services Administration, 
      prepared statement of......................................    18
    Rivers, William, Director of the Federal Vehicle Policy 
      Division, Office of Governmentwide Policy, General Services 
      Administration, prepared statement of......................    28
    Waxman, Hon. Henry A., a Representative in Congress from the 
      State of California, prepared statement of.................     8

 
    ENERGY EFFICIENCY IMPROVEMENTS IN FEDERAL BUILDINGS AND VEHICLES

                              ----------                              


                       WEDNESDAY, MARCH 12, 2003

                          House of Representatives,
                            Committee on Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in room 
2154, Rayburn House Office Building, Hon. Tom Davis (chairman 
of the committee) presiding.
    Present: Representatives Tom Davis, Platts, Waxman, 
Kucinich, Tierney, Van Hollen, Ruppersberger, and Norton.
    Staff present: Peter Sirh, staff director; Melissa Wojciak, 
deputy staff director; Keith Ausbrook, chief counsel; Ellen 
Brown and Uyen Dinh, counsels; David Marin, director of 
communications; Scott Kopple, deputy director of 
communications; Mason Alinger, professional staff member; 
Teresa Austin, chief clerk; Joshua E. Gillespie, deputy chief 
clerk; Phil Schiliro, minority staff director; Phil Barnett, 
minority chief counsel; Alexandra Teitz, minority counsel; 
Earley Green, minority chief clerk; Jean Gosa, minority 
assistant clerk; and Cecelia Morton, minority office manager.
    Chairman Tom Davis. Good morning and thank you all for 
coming, and I apologize for being a couple minutes late.
    The purpose of today's hearing is to assess the Federal 
Government's progress in adopting policies and practices that 
improve the energy efficiency of Federal facilities. Every year 
the Federal Government spends approximately $4 billion to 
supply energy to Federal facilities, including lighting, air 
conditioning and heating to its 3.3 billion square feet of 
office space, and fuel for its fleet of more than 500,000 
vehicles.
    Over the past 10 to 15 years, a number of laws have been 
enacted and Executive orders issued to dictate energy standards 
and policies for the Federal Government. The intent of such 
mandates has been two-fold. First, the purpose has been to 
decrease the Federal Government's dependency on energy 
resources and to slow down the depletion of non-renewable 
resources; and the second purpose has been to utilize the 
Federal Government's leverage to set a new standard for energy 
production and consumption.
    For example, GSA, in purchasing new vehicles, is required 
to purchase cars and trucks that run on alternative fuels such 
as ethanol, methanol, natural gas, propane, or electricity. 
This policy is important in terms of getting the Federal 
Government to be a leader in energy efficiency. Unfortunately, 
my understanding is that, in reality, agencies have faced 
challenges in carrying out these mandates. I am interested to 
hear from the witnesses about their experiences with these 
issues.
    In addition, the Federal Government must meet certain 
energy efficiency standards in construction and renovation 
projects. I understand that the Government requires all new 
construction, as well as renovations to older buildings, to 
comply with environmental standards regarding building 
materials, construction waste management, energy efficiency, 
and water conservation.
    All of these requirements are important and set valuable 
standards for industry to follow. However, the testimony 
provided by the GAO outlines a number of challenges that face 
Federal construction managers. For example, architects and 
construction contractors are not often knowledgeable about 
energy efficient building practices, making it difficult to 
design and build such facilities. Also, the GAO notes the 
difficulties agencies face in convincing Congress and other 
players that the higher initial cost of energy efficient 
construction practices will end up saving the Government money 
in the long run through overall improved energy efficiency and 
reduced costs.
    Regarding funding for energy efficiency renovations to 
Federal buildings, I am interested in hearing more about your 
experience with Energy Savings Performance Contracts [ESPCs]. I 
am a strong proponent of share-and-savings contracts as a way 
to provide Federal agencies with a quick and cost-effective way 
to accomplish capital-intensive projects. My understanding is 
that under an ESPC, a private sector energy service company 
assumes the capital costs of retrofitting a building with 
energy efficient equipment, then works out an arrangement with 
the agency to share in the savings realized from the reduced 
energy costs over the long run. Given the tight fiscal 
restraints tying the hands of Congress for the foreseeable 
future, direct appropriations will be harder than ever. I 
applaud your efforts to utilize all available means of funding.
    GAO also reports that 44 buildings in GSA's inventory each 
had backlogs of more than $20 million in repairs, with the Old 
Executive Office Building downtown facing $187 million in 
repairs. In addition to the cost of the repairs alone, these 
backlogs usually include aging and inefficient plumbing, 
heating and air conditioning systems, meaning that the energy 
services used by the buildings are wasting taxpayers' money, 
adding significantly to the actual cost of delayed repairs. It 
seems to me that providing Federal managers the flexibility to 
optimize asset performance as the President has requested in 
his Freedom to Manage package would help to resolve some of 
these backlogs. I look forward to discussing this issue with 
the witnesses.
    As most of you know, the comprehensive energy legislation 
in the 107th Congress reached conference but was never enacted 
into law. As the Energy and Commerce Committee begins to 
advance comprehensive energy strategy in this Congress, this 
committee is going to weigh in on energy-related issues that 
fall within our jurisdiction, such as energy efficient Federal 
procurement requirements and standards for Federal buildings. I 
look forward to working with all of our members, particularly 
my ranking member, Mr. Waxman, as we craft this aspect of 
comprehensive energy legislation.
    I would like to introduce our panel of witnesses. We have 
David Garman, the Assistant Secretary of Energy Efficiency and 
Renewable Energy at the Department of Energy. Among other 
responsibilities, Mr. Garman oversees the Federal Energy 
Management Program, which works to reduce the cost and 
environmental impact of the Federal Government by promoting 
energy efficiency, water conservation, renewable energy, and 
green management practices.
    I also want to welcome the witnesses from the GSA. Paul 
Lynch, Assistant Commissioner of Business Operations in GSA's 
Public Building Service, will be discussing the Government's 
efforts to adopt energy efficient policies for construction and 
renovation. William Rivers from GSA's Office of Government-wide 
Policy will discuss progress in setting environmentally 
friendly standards for the acquisition and maintenance of 
Federal vehicles.
    Finally, I would like to thank the GAO for submitting 
testimony for the record for this hearing. For Members that are 
new to this issue, GAO's testimony provides an excellent 
overview of the progress being made, the challenges that 
remain, and thoughts to be considered as we move forward with 
energy policy regarding Federal buildings and vehicles.
    I welcome all of the witnesses to today's hearing and look 
forward to your testimony.
    I would now like to recognize Mr. Waxman, ranking 
Democratic member of the committee.
    [The prepared statement of Chairman Tom Davis follows:]

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    Mr. Waxman. Thank you very much, Mr. Chairman. I want to 
commend you for holding today's hearing. Issues regarding the 
Federal Government's use and management of energy in government 
operations are squarely within the jurisdiction of this 
committee. I look forward to working with the majority in 
considering legislation on these issues on a bipartisan basis.
    As the single largest energy consumer in this country, when 
the Federal Government makes efficiency improvements or relies 
on renewable energy, it can have a tremendous impact. Increased 
energy efficiency saves the Government money on its energy 
bills, and it has other critically important benefits as well.
    When the Government uses energy more efficiently, air 
pollution from power plants is reduced. This is important 
because air pollution from electric power plant emissions is 
estimated to kill over 30,000 Americans per year, because 
hundreds of thousands of people suffer from asthma attacks and 
cardiac and respiratory illnesses due to power plant emissions 
and because power plants contribute one-third of the mercury 
emissions in this country, which causes neurological damage, 
particularly to fetuses and infants.
    And when the Government reduces its consumption of 
gasoline, this directly enhances our national security. Today 
we are contemplating going to war against a dictator who has 
funded his weapons programs with oil revenues. We are watching 
gas prices rise in anticipation of the disruptions such a war 
will likely cause. Everyone in the country, and especially the 
Federal Government, has an obligation to do all we can to 
reduce our dependence on foreign oil by increasing the 
efficiency of our vehicles.
    Yesterday it was reported that the House took a bold step 
in our Nation's efforts to disarm Iraq: we banned the use of 
the name ``French fries'' and ``French toast'' in the Rayburn 
Cafeteria. Henceforth, they will be called ``Freedom fries'' 
and ``Freedom toast.''
    Well, it is time to stop joking and get serious. We are not 
at war with France, a NATO ally, and renaming our cafeteria 
menu won't contribute one iota to enhancing our national 
security. But today we can make a real contribution to ensuring 
our energy security and protecting our environment by exploring 
how the Federal Government can reduce its huge energy 
consumption.
    In the testimony presented today, we will hear how the 
Federal Government has increased its energy efficiency since 
energy management requirements were adopted in the 1980's, and 
I commend the agencies for their progress, but it is important 
to recognize that we can do much more.
    Our entire economy continues to grow more energy-efficient. 
Over the past 30 years, the amount of energy used to generate a 
unit of GDP has fallen by 42 percent. Just as computers keep 
getting more powerful and more compact, our technologies for 
using energy and generating renewable energy have also 
continued to improve dramatically.
    California's experience during the energy crisis 
demonstrates the untapped potential of efficiency improvements. 
In just 6 months, the State reduced its energy consumption by 
10 percent. The State achieved these reductions even though 
California was already one of the two most energy-efficient 
States in the Nation.
    We can achieve tremendous benefits from using energy 
efficiency and renewable energy resources, but Federal agencies 
face disincentives to taking full advantage of these 
opportunities. There are a number of measures that this 
committee might consider in this area, and I look forward to 
working with the chairman on developing such measures.
    Thank you, Mr. Chairman.
    [The prepared statement of Hon. Henry A. Waxman follows:]

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    Chairman Tom Davis. Mr. Waxman, thank you very much.
    As you know, it is the policy of this committee that all 
witnesses be sworn before they testify, so if you would rise 
with me and raise your right hands.
    Oh, I am sorry, Mr. Ruppersberger, did you want to make a 
comment?
    Mr. Ruppersberger. No.
    Chairman Tom Davis. OK, thank you.
    [Witnesses sworn.]
    Chairman Tom Davis. Be seated.
    To afford sufficient time for questions, I would appreciate 
it if witnesses would limit their testimony to no more than 5 
minutes. All written statements will be made part of the 
permanent record. You have a light on in front of you. When it 
turns orange, that means you have a minute to try to finish up. 
We have read the testimony and have questions, so your entire 
testimony is entered into the record. And any Members' 
statements will be submitted into the record. Thank you.
    Why don't we start with you, Mr. Garman, and we will move 
straight down?

    STATEMENT OF DAVID GARMAN, ASSISTANT SECRETARY, ENERGY 
   EFFICIENCY AND RENEWABLE ENERGY, U.S. DEPARTMENT OF ENERGY

    Mr. Garman. Thank you, Mr. Chairman and members of the 
committee. I appreciate the opportunity to appear on this 
important topic of Federal energy management in buildings and 
vehicles. As the Nation's largest single energy consumer, the 
Federal Government has an opportunity and the responsibility to 
lead by example with smart energy management. The Federal 
Government uses almost one-quadrillion BTUs of energy annually, 
or a little over 1 percent of the Nation's energy consumption. 
In fiscal year 2000, we spent approximately $4 billion on 
energy to heat, cool, light, and conduct operations in a half 
million Federal office buildings. While we have achieved 
significant success in energy management, we need to do even 
better.
    Executive Order 13123 calls for Federal agencies to improve 
the energy efficiency of their buildings, promote the use of 
renewable energy, and reduce greenhouse gas emissions. Since 
1985, the Federal Government as a whole reduced energy use in 
its buildings by more than 23 percent, measured in 2001. The 
Government also saved more than $1.3 billion in 2001, relative 
to 1985, and reduced energy bills, much of which can be 
attributed to energy improvements.
    Executive Order 13123 also requires greater use of 
renewable energy by implementing renewable energy projects and 
by purchasing electricity from renewable sources. The goal for 
new renewable energy use in the Federal Government is currently 
1,384 gigawatt hours by 2005, and Federal agencies are 
reporting that they are producing or purchasing over 600 
gigawatt hours of new renewable energy or 40 percent of their 
goal.
    We are also working to meet the goal in the Executive order 
to reduce greenhouse gas emissions attributed to Federal 
facilities by 30 percent in 2010, compared to a 1990 baseline. 
Carbon emissions from energy used in non-exempt Federal 
facilities declined 19.4 percent in fiscal year 2001, compared 
to the 1990 base year.
    Let me highlight a few areas of opportunity and describe 
how the Department of Energy's Federal Energy Management 
Program [FEMP], is helping agencies to seize these 
opportunities.
    First, the Federal Government designs and constructs new 
buildings each year, investing at least $11 billion in 2002 for 
new construction and renovation projects for buildings and 
facilities. FEMP offers design assistance to Federal agencies 
for new construction projects and helps ensure that 
architectural designs, engineering, and building construction 
practices incorporate energy efficiency and cost-effective 
strategies. Second, we work to improve the Federal Government's 
existing building stock. We provide Federal agencies with 
access to private sector financing through energy savings 
performance contracts and utility contracts to pay for these 
upgrades. To date, Federal agencies have already leveraged more 
than $2.1 billion in private sector investments for these 
projects. Third, we promote the purchase of energy efficient 
equipment. FEMP provides product recommendations that, in 
concert with Energy Star, help direct Federal and other 
purchases to the most efficient products.
    Turning now to the issue of Federal vehicle fleets and 
alternative fuels. The Energy Policy Act of 1992 requires 
Federal agencies to purchase alternative fuel vehicles. Over 
the last 10 years, Federal agencies have purchased over 100,000 
alternative fuel vehicles, a large fraction of all alternative 
fuel vehicles sold in the United States. Over 65,000 of those 
vehicles are in operation today, an increase of over 10,000 in 
just 2 years. Alternative fuel vehicles now account for about 
14 percent of the Federal Government's total light duty fleet 
of over 450,000 vehicles.
    We are also pursuing significant efforts to increase the 
energy efficiency of Federal fleet operations. One driver for 
this is Executive Order 13149, which directs Federal agencies 
to reduce overall petroleum consumption in fleets by 20 percent 
by the year 2005. To meet this goal, we are working with other 
agencies to improve the efficiency of fleet operations, 
increase the use of alternative fuel, and encourage the 
purchase of energy-efficient vehicles. We are also working to 
reduce the overall size of the Federal fleet.
    So, Mr. Chairman and members of the committee, we welcome 
the opportunity to work with all Federal agencies in 
demonstrating leadership and reducing energy consumption in our 
buildings and vehicles, and I would be happy to answer any 
questions the committee has either now or in the future. Thank 
you, Mr. Chairman.
    [The prepared statement of Mr. Garman follows:]

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    Chairman Tom Davis. Thank you very much.
    Mr. Lynch, thanks for being with us.

  STATEMENT OF PAUL LYNCH, ASSISTANT COMMISSIONER OF BUSINESS 
    OPERATIONS, PUBLIC BUILDINGS SERVICE, GENERAL SERVICES 
                         ADMINISTRATION

    Mr. Lynch. Good morning, Mr. Chairman. Thank you for the 
opportunity to present testimony regarding Federal programs for 
energy efficiency and conservation.
    The General Services Administration has a long history of 
supporting Federal energy efficiency in our facilities. We also 
recognize the importance of our unique leadership roles as the 
Government's landlord in demonstrating energy efficiency. GSA's 
actions in the area of energy efficiency closely follow 
mandates set forth in Public Law and Executive order. On an 
annual basis, GSA develops an implementation plan to ensure all 
energy management strategies are identified and are being 
pursued. Results are reported to GSA senior management on a 
quarter basis. Senior management and regional senior management 
executives have energy performance included as part of their 
performance evaluation as well.
    Since 1985, GSA has reduced energy usage in our facilities 
classified as standard by approximately 21 percent from the 
1985 base year. This was achieved by directly investing in 
energy conservation opportunities with paybacks of 10 years or 
less. From 1990 through 2002, GSA invested approximately $316 
million in energy projects. Since 1990, GSA has also reduced 
energy usage in our Energy Intensive, those kinds of buildings 
identified as industrial and laboratories, by about 37.2 
percent from the baseline year of 1990.
    GSA also benchmarks performance with comparable Federal 
facilities. The utility benchmark, established by the Building 
Owners and Management Association, indicates PBS is operating 
approximately 34 percent below comparable commercial facilities 
for the period ending September 30, 2002.
    GSA is also proud of its efforts to earn the Energy Star 
Building Label for our portfolio. To date, GSA has earned the 
Energy Star Label for 93 of our own facilities and 1 leased 
facility, with a total square footage of approximately 28 
million. This represents approximately 19 percent of our 
eligible square footage and 15 percent of our facilities.
    Our actions can be divided into two broad categories: 
leadership and management, and energy efficiency performance 
and implementation strategies. Under management and 
administration, we created a management infrastructure that 
focused our time and attention on implementing the goals of 
Executive orders and law. We have also formed a technical 
support team consisting of appropriate personnel to help in 
that process. We also utilize a wide variety of management 
tools, including award programs, performance evaluations, 
training and education workshops, and designation of our 
buildings as showcase energy facilities.
    GSA activities in energy efficiency are implemented and 
managed by our national Energy Center of Expertise. The Center 
monitors and coordinates energy usage; they develop and 
implement energy saving projects; they leverage our purchasing 
power through national contracts; they establish and manage 
energy saving performance contracts; and they develop annual 
implementation plans and strategies to achieve our goals.
    I would like to take a minute to introduce Mark Ewing. Mark 
is the director of the National Energy Center.
    Chairman Tom Davis. Welcome. Thanks for being with us.
    Mr. Ewing. Thank you.
    Mr. Lynch. The second broad category is performance and 
implementation strategies. On an annual basis, we maintain a 
10-year audit plan. Every year we are actually auditing 10 
percent of our portfolio. These audits identify energy 
conservation measures that may lead to future energy 
conservation proposals or viable alternatives.
    GSA is also maximizing the use of available alternative 
financing mechanisms as a strategy. In fiscal year 2002, GSA 
awarded a total of seven alternatively financed projects. All 
seven were ESPCs. This brings the total to 23 ESPCs and 19 
Utility Energy Savings Contracts currently active and in place. 
We have also an additional 13 projects that are in various 
stages of development, anticipating fiscal year 2003 award. The 
dollars associated with this effort are approximately $179 
million.
    GSA also considers opportunities for solar and other 
renewable energy in building design and retrofits. In fiscal 
year 2002, GSA purchased a total of 24,306 megawatt hours of 
electricity from renewable energy through competitive power 
contracts and the use of green power.
    Looking toward the future in our capital program, we rely 
very heavily on the LEED, Leadership in Energy and 
Environmental Design Silver requirements. Our goal is to bring 
new buildings into our inventory that are energy efficient, 
while optimizing the energy performance of our building 
inventory.
    Mr. Chairman, I would be pleased to answer any questions 
you or other members of the committee may have on this matter.
    [The prepared statement of Mr. Lynch follows:]

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    Chairman Tom Davis. Thank you, and thank you for being with 
us.
    Mr. Rivers.

 STATEMENT OF WILLIAM RIVERS, DIRECTOR OF THE FEDERAL VEHICLE 
   POLICY DIVISION, OFFICE OF GOVERNMENTWIDE POLICY, GENERAL 
   SERVICES ADMINISTRATION, ACCOMPANIED BY BARNEY BRASSEAUX, 
                     FEDERAL SUPPLY SERVICE

    Mr. Rivers. Mr. Chairman and members of the committee, 
thank you for inviting us here this morning to discuss the 
experience of Federal agencies with the laws and Executive 
orders mandating energy efficiency in Federal motor vehicles.
    My name is William Rivers, from the General Services 
Administration's [GSA's] Office of Governmentwide Policy, where 
I am the Director of the Federal Vehicle Policy Division. Also 
here from GSA is Mr. Barney Brasseux of the Federal Supply 
Service, where he is the Assistant Commissioner for the Office 
of Vehicle Acquisition and Leasing Services.
    GSA offices share several areas of responsibility in the 
area of fuel efficiency in Federal vehicles. The Federal Supply 
Service includes GSA Automotive, which is the mandatory source 
of supply for all Federal agencies purchasing commercial-
design, non-tactical vehicles. GSA Automotive buys about 60,000 
vehicles annually on behalf of Federal agencies. Since 1991, we 
have purchased over 65,000 Alternative Fuel Vehicles [AFV's] 
for our Federal customers. The Federal Supply Service also 
includes GSA Fleet, which is a non-mandatory source for Federal 
agencies that wish to lease vehicles rather than purchase them. 
GSA Fleet leases about 190,000 vehicles to Federal agencies, 
which is about one-third of the total Federal fleet; the Postal 
Service also has about a third, and the remaining third are 
owned by various agencies.
    GSA's Office of Governmentwide Policy is responsible for 
establishing the regulations under which all Federal fleets 
must operate. We also serve as an information clearinghouse and 
spokesperson for the Federal fleet community, and we collect 
data on Federal agencies' vehicle inventories and fleet 
characteristics. We also coordinate the responsive of Federal 
Fleet Managers to issues of common concern. We work with the 
Department of Energy and the Federal fleet community to enhance 
and approve the use of AFVs.
    Finally, GSA operates a small fleet of approximately 2,000 
vehicles for its own internal use, most of which are leased 
from GSA Fleet.
    The requirements of statutes and Executive orders in the 
area of vehicle fuel efficiency apply to all Federal executive 
departments. As both a policy and operational function, GSA is 
a supplier of vehicles to Federal agencies and a coordinator of 
agencies' efforts to manage those vehicles effectively. 
However, on matters of governmentwide compliance with energy 
efficiency, we defer to our colleagues at DOE, which has the 
statutory authority to monitor compliance of executive agencies 
with energy efficiency requirements.
    GSA has purchased more AFVs produced by the automotive 
manufacturers than any single organization in this country. In 
fact, of the 65,000 AFVs purchased by GSA Automotive, GSA Fleet 
has acquired 58,000 AFVs at a cost of $900 million. Today we 
have 30,000 AFVs operating in our fleet. We are very proud of 
our AFV accomplishments.
    Many of the issues that we all face today concerning AFVs 
have changed little since the Federal Government's program 
started in 1988. Issues such as vehicle type, fuel type, 
purchase price, resale value, limited driving range, limited 
infrastructure, incremental cost, and the impact of these 
issues on agencies' budgets and missions have changed little 
over the years. For example, dedicated AFVs continue to have 
limited range and limited refueling and maintenance 
infrastructure, while bi-fuel and flexible fuel vehicles are 
often using gasoline because the alternative fuel is either not 
available or is not economical to use.
    Manufacturers have not always offered suitable AFVs. It has 
taken many years to get the full range of AFVs available today. 
Federal fleets, for the first time, were able to acquire E85 
compact AFV sedans in 2003. For nearly a decade, agencies had 
to acquire larger, more expensive sedans in significant numbers 
to meet AFV mandates because cost-effective compact AFV sedans 
were not available. However, DaimlerChrylser recently announced 
that they will not offer the E85 flexible fuel minivan for 
model year 2004 and beyond. The decision to discontinue this 
model is a major disappointment, since we buy thousands of 
those vehicles annually.
    Federal Government purchases alone are not enough for 
manufacturers to realize the economies of scale that they enjoy 
for conventionally fueled vehicles. The 60,000 vehicles 
purchased annually by GSA account for less than 0.36 percent of 
the over 16 million vehicles sold in the United States each 
year.
    Many of our Federal partners have made significant strides 
to comply with AFV minimum fleet requirements, but problems 
persist. For example, the private sector has not developed a 
mechanism to adequately capture alternative fuel use data to 
support AFV fleets. Most of the successful AFVs have been 
flexible fuel and, to a smaller extent, the bi-fuel vehicles. 
This is because these vehicles can operate on gasoline when the 
infrastructure is not available. The dedicated vehicles are 
more suited for base-type operations, where they do not leave 
the facility and AFV refueling is provided at the site.
    As new technologies come to the market, AFV acquisition 
goals may become more difficult to reach. For example, agencies 
do not receive credit for their purchase and use of hybrids 
under the AFV mandates.
    In his State of the Union address, the President has 
announced an exciting new program, the Hydrogen Fuel 
Initiative, to complement work ongoing under the Department of 
Energy's FreedomCAR partnership with the U.S. auto industry. 
Federal Fleet managers are excited about the possibilities and 
eager to participate. We look forward to working with you and 
other interested parties to review the applicable AFV 
authorities to develop a comprehensive, cohesive AFV policy.
    Thank you for the opportunity to testify today, Mr. 
Chairman. I look forward to answering any questions you may 
have.
    [The prepared statement of Mr. Rivers follows:]

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    Chairman Tom Davis. Thank you all very much. Let me start 
the questioning over on our side with Mr. Platts.
    Mr. Platts. Thank you, Mr. Chairman. I will be brief, and, 
as always, we are trying to be in four different places at one 
time.
    But I appreciate the testimony that has been provided, and 
I apologize if my couple of questions here were addressed in 
your statements; I was trying to touch base or look at it real 
quickly here.
    Specifically for GSA, when you make decisions like building 
leases for space or automobile purchases or leases, in what way 
do you, if at all, factor in the energy efficiency of building 
A versus building B; is it just square footage and location, or 
do you actually take in things like energy cost in the lease 
decisions, starting with buildings?
    Mr. Lynch. We actually just don't look at the energy cost, 
what we do is when we go out and lease space, we do include 
sustainability requirements in our leases. And I think we have 
more leverage when we actually go out with build-to-suit type 
leases, where we are actually going to live in that building 
for 20 years and it is just going to be a Federal tenant. Some 
good examples of that approach are the EPA in Kansas City, and 
the EPA lab up in Chelmsford, MA. Those were build-to-suits. We 
had a whole bunch of green sustainable energy conservation 
measures in those leases, and we got what we asked for.
    On the Federal side, when we go out with new construction 
now for courthouses or major repair and alterations, we are 
actually telling our designers and we are also telling our 
constructors that they have to build and construct to the LEED 
rating, which is an industry-wide standard established by the 
Green Building Council. The LEED rating gives them some idea 
and some parameters as to what we are looking for from a 
sustainability perspective.
    Mr. Platts. On the lease side, though, when you are making 
a decision on dollars, is there additional credit given to a 
building that you want to lease that is more energy efficient 
because of not just the cost savings, but the environmental 
impacts as well, or is that a factor but it is not an absolute 
benefit?
    Mr. Lynch. It is a factor, but it is not an absolute. I 
mean, we look at the rental rate compared to the marketplace. 
We do specify that we are looking for sustainability. We do 
have some things that we look at in those leases and, again, it 
all depends on if it is a build-to-suit where we are going to 
be in that facility versus a 2,000 square foot lease, it is all 
about leverage and opportunity.
    Mr. Platts. OK. And how about I guess, Mr. Rivers, on 
automobiles. When you make decisions and they require X number 
of four-door sedans, is fuel efficiency of the vehicles 
factored into that decision?
    Mr. Rivers. Yes, sir. The decision essentially is made by 
the using agency. GSA provides, in effect, a menu for them 
either on the purchase side; we have contracts that make a 
number of vehicles readily available, where we highlight both 
fuel efficiency and then, if they are alternative fuel, what 
options are available there. On the GSA Fleet side, we provide 
a range of vehicles if they actually want the vehicle itself.
    But it comes back down to the using agency having to take 
into account what are the characteristics of the vehicle use 
and the availability of alternative fuels in an area. Base-type 
operations probably lend themselves more to use of like a 
natural gas configured vehicle. Where you are more into the 
commercial marketplace, it tends to be a flexible fuel vehicle. 
But those are the decisions agencies have to make; can I get a 
vehicle of the right type with the right fuel supply being 
available in that area.
    Mr. Platts. But many vehicles are just basic gasoline, not 
alternative fuel.
    Mr. Rivers. Yes.
    Mr. Platts. Of those that you say you can make available as 
a fleet for them to choose from?
    Mr. Rivers. That is correct. Agencies have to adhere to the 
Federal average fleet economy, similar to the CAFE for the 
commercial sector.
    Mr. Platts. Right.
    Mr. Rivers. And they have to go through and acquire their 
vehicles. We are under a requirement to increase mile per 
gallon average by at least 1 mpg for 2002. Those numbers I 
think are just coming in.
    Mr. Platts. So that fleet average fuel efficiency is part 
of that decision.
    Mr. Rivers. Absolutely, sir. Yes, sir.
    Mr. Platts. OK.
    If I can squeeze one more question in here. GAO is 
identifying a lot of upgrades, lighting and air conditioning, 
including, I believe, our congressional printing office. I 
guess that Congress could do better. How much is out there, is 
it pretty extensive, the benefits that could be gained, whether 
it would be upgrading lighting or air conditioning systems? Is 
that pretty pervasive and we have a long way to go, and we have 
started a few projects, or have we made a lot of progress from 
a percentage standpoint of where we are?
    Mr. Lynch. I think there are probably a couple answers to 
that. I think if you look at what we have accomplished over the 
last 15 years, I think we have made good progress. That is not 
to say that there aren't additional projects out there. And the 
way we are approaching that, we do have an energy strategy. We 
have looked at our buildings, we audit our buildings; every 
year we look at 10 percent of our buildings and we identify 
opportunities. Those opportunities could be a host of things; 
it could be an energy saving project, it could be us going out 
and buying green power. There is a whole host of things that we 
look at. There are definitely opportunities out there. We are 
taking advantage of a number of tools that we can use; the 
Energy Saving Performance Contracts, our ability to go out and 
leverage green power, things like that.
    Mr. Platts. OK.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you very much.
    We will start the questioning over here. Mr. Van Hollen.
    Mr. Van Hollen. Thank you, Mr. Chairman.
    Mr. Rivers, in your testimony you said that agencies do not 
receive the AFV credits for the purchase and use of hybrids 
under the mandates.
    Mr. Rivers. That is correct.
    Mr. Van Hollen. And then you go on to say nor should they 
because they can contribute to these other fleet goals. I guess 
my question is why shouldn't they and should we revisit this 
question. You raise it very briefly in your testimony. Should 
we revisit it? Because it seems to me if hybrids result in a 
greater fuel efficiency overall, result in energy savings, why 
shouldn't we revisit this so that we allow them to be counted.
    Mr. Rivers. I think you bring up an excellent point, sir. 
When we were giving it as part of the testimony, it was a very 
narrow view of the increase of alternative fuel usage. Usage of 
a hybrid would not increase alternative fuel usage, so we can't 
count it in that alternative fuel legislative area. We do think 
that they play a very significant role, though, in the 
reduction of petroleum usage, and we would strongly encourage 
and certainly be willing to work with Congress in how we can 
formulate both of those policies working together.
    We do think that there are concerns where maybe some of the 
policies may point us in a little bit different direction. We 
would like to see one comprehensive, cohesive policy. But right 
now we address it only because of the alternative fuel arena. 
Use of hybrids doesn't do that. We do support the use of 
hybrids, though, because of petroleum reduction, and we would 
like to see a more comprehensive policy that gets us there.
    Mr. Van Hollen. Right. I mean, if we revisited this, do you 
think that we could structure it in a way where we would 
actually increase our fuel efficiency of the fleet? In other 
words, could we revisit this, create the incentive so that you 
allow the hybrid fuel vehicles to count somehow, and would that 
not provide us greater energy savings as a Federal Government?
    Mr. Rivers. I think that would be, you know, an excellent 
approach in terms of what can we do to encourage more use of 
hybrids. I think that there is a very definite savings. There 
is also an easier acceptance and use of hybrids than maybe 
alternative fuels because you have more convenient refueling 
stations; the infrastructure is certainly there. So, yes, some 
way that could marry up the use of those two would be something 
we would certainly support.
    Mr. Van Hollen. Thank you.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you.
    And thank you very much.
    Mr. Ruppersberger. Just one question on that same subject 
matter. Do we know how many hybrid vehicles we do have in use 
in the Federal Government?
    Mr. Rivers. I would have to defer to the Department of 
Energy; they collect the overall data. But I am not sure if you 
have hybrids.
    Mr. Garman. I do, Congressman. Right now there are only 
eight hybrid vehicles that we know of in the Federal fleet; and 
there are a couple of reasons for this. No. 1, hybrids are not 
yet on the GSA schedule. The manufacturers are not getting 
around to asking the Government to put these vehicles on the 
schedule. And the reason that they are doing that, 
manufacturers aren't really making money on hybrids, and they 
are not very interested in selling that many more of them at 
this point, until they get unit costs down a bit.
    And if I could just make a comment on a prior question. I 
think if Congress is thinking about maybe getting proscriptive 
about mandating hybrid purchases, Congress should take great 
care in making sure that it is looking at hybrid vehicles that 
will actually deliver fuel savings. There are hybrids that we 
expect to be entering the marketplace that have been hybridized 
not really so much for the purpose of providing fuel savings, 
but providing other consumer benefits. For example, there is a 
pickup truck that General Motors will soon be offering. It is a 
hybrid technically, but what they are really trying to achieve 
is putting a power invertor and a large battery in there so 
that a contractor, for instance, you can plug in a Skill saw at 
110 volts and drive that off of the truck.
    Now, I offer that saying that would be a hybrid, but it 
might not be the kind of hybrid that would actually deliver 
fuel savings. So Congress should take great care, if it 
specifies the purchase of hybrid vehicles, to do so in such a 
way that it would actually deliver petroleum products.
    Mr. Ruppersberger. I think that is an excellent point, 
because sometimes we get caught up on something that is new, 
and we have to make sure that we think it out and we research 
it. The convenience of refueling is an example of that.
    In your opinion, where do you think the future is with 
respect to hybrid vehicles, as the Federal Government needs 
vehicles to deliver the services in different arenas?
    Mr. Garman. Well, at the Detroit auto show just this last 
January, several automakers announced that they would be 
delivering no less than 12 hybrid models over the next 4 model 
years or so. You know, I am a hybrid vehicle owner myself, and 
so I am a great fan of the technology, but there are a couple 
of things to keep in mind. No. 1, they are more expensive; here 
is a price differential to be dealt with.
    Chairman Tom Davis. How much of a price differential are we 
talking about?
    Mr. Garman. Estimates are as much as $4,000. I think as the 
manufacturers get more and more hybrid vehicles into the 
marketplace, that unit cost differential will come down. I know 
in the trade press General Motors was talking about a price 
differential down to $1,500 in the 2005 timeframe. And that is 
one of the reasons why the President and the National Energy 
Plan proposed a tax credit, to equalize that cost between 
hybrid vehicles and convenient vehicles.
    Mr. Ruppersberger. Do you use a hybrid vehicle. Where do 
you refuel?
    Mr. Garman. It is a gasoline/electric hybrid, so I refuel 
at the gas station. It generates the electricity it needs on 
board the vehicle through a combination of regenerative 
braking; when you brake the vehicle it is actually generating 
some electricity for the nickel metal hybrid battery on board, 
and also there is a kind of integrated generator/alternator or 
electric motor alternator in the drive train that also uses the 
gasoline power of the engine to recharge the battery, it lets 
the gasoline engine shut down at stoplights and shut down when 
you are creeping along in city traffic.
    Mr. Rivers. If I could also add to that. Hopefully the 
availability of hybrids will become more prevalent for the 
Federal community. We have been able to just make some awards 
to both Toyota and Honda so that their hybrids are going to be 
available to the Federal agencies to purchase off GSA 
automotive contracts.
    Chairman Tom Davis. OK. Thank you.
    Let me ask a few questions. First of all, we have 165,000 
alternative fuel vehicles in the fleet, is that right?
    Mr. Rivers. I think 65,000 are currently in the fleet.
    Chairman Tom Davis. 65,000. Isn't that what I said?
    Mr. Rivers. It was 100,000 that had been purchased.
    Chairman Tom Davis. 65,000 currently in the fleet, 100,000 
purchased. How much more did those vehicles cost, on average, 
than a normal gasoline-powered vehicle?
    Mr. Rivers. Mr. Brasseux, would you like to?
    Mr. Brasseux. It varies specifically, Mr. Chairman, 
regarding the particular vehicle.
    Chairman Tom Davis. Why don't you move up to the microphone 
so we get it all recorded and everything?
    Mr. Brasseux. A dedicated CNG vehicle or a hybrid vehicle 
would have a substantial incremental cost, it could go all the 
way up to $7,500 to $8,000. Some of the E85 vehicles that are 
out there on the market today have very little incremental cost 
at all, which is why the vast majority of what we have in our 
fleet are E85 vehicles, because their incremental cost is low.
    I could get back to you for the record on an average.
    Chairman Tom Davis. I am not trying to upset the program.
    Mr. Brasseux. I understand.
    Chairman Tom Davis. I guess my point is simply every time 
we use the procurement system to get other societal goals, 
there is a cost, and I think it is important. This is a great 
hearing to understand what it is costing; and probably not that 
much in the scheme of a budget that runs into the hundreds of 
billions. And what are we accomplishing in terms of our greater 
goals of trying to get these vehicles into wider use? I think 
we would all like to wean ourselves from gasoline and oil. I 
always note that the stone age didn't end because they ran out 
of stones; the stone age ended because there were new 
technologies developed. And I think that will eventually happen 
here, and we want to encourage that to happen; that is the 
purpose behind the Government setting an example, but there is 
a cost to it. And as we take a look at tight budgets and 
everything else going on, I think we need to have an honest 
discussion over what is happening not just with the additional 
costs we pay, but what is happening out in greater society to 
encourage the private sector individuals to use these vehicles 
and Detroit to do it. So that is kind of my point.
    Now, the vehicles we are buying now, there is not much 
incremental cost?
    Mr. Brasseux. Well, again, it depends on the vehicle type. 
Since we have been buying these vehicles, since 1991, I think 
GSA Fleet has purchased approximately 57,000 alternative fuel 
vehicles. The total incremental cost for those vehicles is 
about $90 million over that timeframe, to give you a general 
idea.
    Chairman Tom Davis. OK. But today it is a much smaller 
increment now.
    Mr. Brasseux. Again, depending on the vehicle type. A 
hybrid vehicle has a substantial incremental cost.
    Chairman Tom Davis. Right.
    Mr. Brasseux. I have indicated CNG has a substantial 
incremental cost.
    Chairman Tom Davis. Which ones don't?
    Mr. Brasseux. E85's, the ethanol vehicles do not.
    Chairman Tom Davis. Oh, the ethanols do not. The Speaker 
will be happy to hear that.
    How much do you save on fuel with the ethanol?
    Mr. Rivers. Actually, there has not been a fuel savings by 
using ethanol.
    Chairman Tom Davis. In fact, it is more, isn't it?
    Mr. Rivers. That is correct.
    Chairman Tom Davis. Is that because of economy of scale, 
you think, more than anything else?
    Mr. Rivers. It certainly comes into play on that. I think 
part of it also then becomes the energy content of a gallon of 
E85 is not the same as a gallon of unleaded gasoline, so in 
effect you are going to have to buy more fuel to go the same 
distance; you know, you may take a 10 or 20 percent hit in 
terms of fuel efficiency. But a relative scale for 2002, and 
again, obviously, this is data given current gasoline prices, 
but the Government paid an average of $1.23 a gallon for 
unleaded gasoline, a combination of unleaded gasoline and 
diesel; and our alternative fuel reported payments were about 
$1.50 a gallon, and the overwhelming majority of that was 
ethanol.
    Chairman Tom Davis. And ethanol does not have the same mpg?
    Mr. Rivers. That is correct. There is somewhat of a hit.
    Chairman Tom Davis. So when you factor that in, what is it, 
a 10 percent hit, 20 percent hit? Can you ballpark it?
    Mr. Garman. Mr. Chairman, we estimate that use of E85, 85 
percent ethanol in a vehicle, is 30 percent more expensive per 
mile; and that factors in both the additional cost of the 
ethanol and the lower energy content on an equivalent Btu 
basis.
    Chairman Tom Davis. Now, let me ask this. If ethanol were 
more widely distributed, if we had more cars that contained it, 
would the costs come down significantly, do you think?
    Mr. Garman. We can't legislate the laws of physics that 
change the energy content in the ethanol, so on a per mile 
basis ethanol would still be more expensive.
    Chairman Tom Davis. But the production cost of ethanol, 
particularly with gas prices going up, could all of a sudden 
look better.
    Mr. Garman. There are opportunities for cost savings in 
economy of scale in ethanol.
    Chairman Tom Davis. More difficulty is where do you fill up 
your tank with ethanol.
    Mr. Garman. Right. And most of our ethanol today is made 
from corn, and there is pretty much an upper limit. You know, 
to put it in perspective, we can probably produce about 5 
billion gallons a year of ethanol from corn, and right now I 
think we are around 3.7. And that may sound like a lot until 
you realize we use something on the order of 133 billion 
gallons of gasoline each year and around 33 billion gallons of 
diesel each year. So there is a limit to how much ethanol that 
we can produce from corn.
    Chairman Tom Davis. What else could you produce it from?
    Mr. Garman. We are working on technologies to produce it 
from cellulosic materials such as the wheat straw, the corn 
stover, things that are currently left in the field. We want to 
be able to take that cellulosic material and, through the 
application of some enzymes and other technology, break that 
down and have a great new source of alcohol type fuels.
    Chairman Tom Davis. These are all good policies, but you 
have just totaled up probably in the hundreds of millions the 
additional amounts we are paying for these programs, and if we 
can reach wider societal goals and governmental goals and try 
to get wider usage of this and the like, then it is clearly 
worthwhile. But if we are not going anywhere, then it is just 
an added structure. I mean, do you have any sense of that?
    Mr. Garman. I do. I mean, you are right. Alternative fuel 
vehicles have not really taken off in the consumer market. 
People are not clambering to buy compressed natural gas 
vehicles.
    Chairman Tom Davis. It is just hard to fill it up.
    Mr. Garman. Right. Now, there are excellent niche markets. 
Urban buses are excellent places; in airports, both the tugs 
and the passenger buses that shuttle between. These are 
excellent niche markets, and this is where we are really seeing 
natural gas vehicles, for instance, come into play in a pretty 
large way.
    To get consumers to change, you have to offer them 
something that is dramatic and that is exciting in an 
alternative fuel vehicle. We drove here to the hearing this 
morning in an alternative fuel van and, you know, it drives and 
it feels and it looks like a regular van except you will pay a 
little bit more up-front, you will have a lower resale value, 
and you will have a harder time filling it up. That is not 
exactly inspiring consumers.
    Chairman Tom Davis. It is patriotic, though.
    Mr. Garman. And believe me, we do advertise. We have a big 
sign on the side that says ``Clean Air Van.'' But you are 
right. And I think that is part of what the President's 
Hydrogen Fuel Initiative and FreedomCAR program is all about; 
and, granted, it is a long-term play, but that is pointed 
toward a totally different kind of vehicle that could really 
excite consumers, and that would be a mechanism of making 
environmentally sustainable technologies economically 
sustainable.
    Chairman Tom Davis. When I headed the county government in 
Fairfax, we bought electric and gas vehicles because you fill 
it all up at the same place and that kind of thing, but it 
ended up costing us money.
    Mr. Garman. Fairfax County was the classic example of the 
early technology adopter, and Fairfax County was among the very 
first of entities to have natural gas trucks for the trash 
fleet; and they got rid of them, I think, just about a year and 
a half ago.
    Chairman Tom Davis. After I left.
    Mr. Garman. They were very expensive.
    Chairman Tom Davis. Well, we try to do the right thing.
    Mr. Tierney.
    Mr. Tierney. Thank you. You should have stayed.
    Chairman Tom Davis. I will take that as a compliment.
    Mr. Tierney. It was very much a compliment.
    Just following up on that a little bit, because I was 
making notes. You were talking earlier about the cost of the 
E85s being not too expensive and everything like that, but 
obviously as the chairman was getting into, the problem is, of 
course, making use of them. You buy them and then it turns out 
you never use the ethanol aspect of it, you just use the 
gasoline, and off we go. What have we really accomplished other 
than, you know, a little bit of a CAFE gimmick to try and meet 
that?
    Why don't we concentrate more on the hybrids and why, Mr. 
Chairman, I wonder, too, why don't we think of as a policy here 
of steering it toward the hybrid? I think the investment that 
we could make in the Federal Government looking in that 
direction will eventually help in bringing the cost down 
overall for consumers generally and move us in a direction that 
we need to be going.
    Mr. Garman. I think that is an excellent point. Right now 
you have a choice of exactly three hybrids on the market that 
you could buy: a Honda Insight, which is a two-seater, not 
really appropriate for most Government activities; and then two 
compacts, a Honda Civic and a Toyota Prius. In fact, I saw a 
Prius parked right out front of the Rayburn Building this 
morning.
    Mr. Tierney. Senator Boxer's.
    Mr. Garman. Yes. But, you know, those are, as I think was 
indicated, just now getting onto the GSA lists. There is, 
again, lore that Toyota has not really pushed the vehicles very 
hard because they are not making money on them; in fact, they 
may be losing money on every copy.
    Mr. Tierney. But, I mean, if we decided we were going to 
make the investment on this, maybe we would wake up Detroit, 
God forbid, you know, that both the unions and the management 
people over there, to realize that there is a future in this 
stuff and that there is a market for them and they might have a 
very good customer in the Federal Government; and if they 
don't, then we are going to be looking at the Prius and models 
like that and telling them that there is a market for them. But 
unless we are willing to put the Federal Government's money in 
that direction, we are not going to get the private capital to 
follow, we are not going to get that investment to follow. So I 
am wondering why we don't just bite the bullet and say, all 
right, we are going to start telling people that at a given 
point in time this is all we are going to order; you know, we 
are just going to order this type of a hybrid vehicle and this 
is the dimensions that we need, specifications that we need for 
it, and let's go.
    Mr. Garman. I think I pointed out before you were able to 
join the meeting that Detroit has actually announced at the 
recent Detroit auto show that they will be offering, I think 
General Motors alone, 12 new models of hybrid vehicles 
beginning in 2005 through 2008 timeframe.
    Mr. Tierney. Better late than never, right?
    Mr. Garman. You know, I think the automakers are trying to 
do precisely the same thing. I mean, they want to understand 
where the market is.
    Mr. Tierney. But I think we create the market.
    Mr. Garman. I understand.
    Mr. Tierney. And that is why I think it is important that 
we set the policy out there; and if we think that there is a 
reasonable timeframe that we can move them forward a little bit 
without making it impossible or whatever, then maybe perhaps we 
ought to look at a policy that says given 2006 or whatever we 
are going to purchase the following cars with these 
specifications in hybrid and just go with and let people bid on 
that, and either they are going to get it as an American-made 
product and be in the bidding process or they are not going to 
get it and they are going to be out. But I think if we put 
enough of those cars on the road and give that sort of an order 
in there, then we bring the price down relatively for all 
consumers and we help them create the market and move on.
    Sound reasonable, Mr. Rivers?
    Mr. Rivers. Well, if I could add just a couple of things. 
First, I think there would have to be a couple of steps taken. 
The current law in the books under the Energy Policy Act 
requires that 75 percent of the Federal Government's light duty 
vehicle acquisitions have to be alternative fuel, and it goes 
back to what Mr. Van Hollen was saying about hybrid versus 
alternative fuel. So we would have to have a clarification on 
that.
    Mr. Tierney. I am sorry, I got interrupted by this beeper, 
and I would like you to repeat that, if you would for us.
    Mr. Rivers. I am sorry, sir, I didn't hear you.
    Mr. Tierney. I got interrupted by this beeper that is in my 
pocket here, and I didn't hear all that I wanted to hear of 
your answer. I apologize.
    Mr. Rivers. Yes. I do think that one of the things that we 
have to take into consideration, right now the Federal 
Government is under the Energy Policy Act on the vehicle side 
that 75 percent of the new light duty vehicles have to be 
alternative fuel, and hybrids do not quality as alternative 
fuel.
    Mr. Tierney. I guess my point was that we probably ought to 
change that policy. And I think that is why the chairman is 
having this meeting, is that hopefully you can direct us, and 
you just have, into one area we should be looking at.
    Mr. Rivers. One of the other things that we would need to 
do, and, again, this would be a coordination issue with 
industry, is ensure that the maintenance, repair, and fueling 
infrastructure, although fueling is not as significant, 
obviously, in the hybrids, but the maintenance and repair 
infrastructure is out there to support the new technology 
coming in.
    But one thing, we would also like to see other fleets 
involved. You know, the Federal fleet, while it is significant 
in size, we have had difficulty moving, you know, 
manufacturers. We buy 60,000 vehicles a year; it is 0.36 
percent of the total vehicles sold in the United States.
    Mr. Tierney. What would the impact be if we gave some sort 
of incentive to move States enjoining us?
    Mr. Rivers. Oh, I think the more people that we get 
involved in it, sir, I think that would be definitely the right 
direction, whether it is States, private sector fleets, you 
know, or local governments. There needs to be an economy of 
scale there that would play into; the Federal Government could 
certainly provide, you know, a base if others can build around 
it. I know that there is a lot of interest within the Federal 
community on hybrids. It is just a question of getting there 
now.
    Mr. Tierney. Just two things. One is I think if we 
incentivize States and local communities to join in the Federal 
package, we move in the right direction. And the other is that 
while we do have to make sure that we have the infrastructure 
for servicing the hybrids in place, it is probably a lot easier 
problem than trying to put in place the infrastructure to get 
ethanol and gas or whatever delivered, as well as the 
maintenance of those vehicles.
    Mr. Rivers. Yes, sir.
    Mr. Tierney. Thank you.
    Chairman Tom Davis. Thank you.
    We have about 6 or 7 more minutes. Let me ask a couple more 
questions, then if you have anymore; otherwise I think we can 
probably wrap this up and let you go, because we have some 
votes on the floor, and I don't want to hold you while we go 
over and come back; you have got other things to do.
    Mr. Lynch, let me ask you. GAO reports that there are 44 
buildings in the GSA inventory that face more than $20 million 
in expenses in order to update them with energy-efficient 
facilities. We are trying to put together a Federal property 
management reform bill that would enable agencies to retain a 
share of their profits from property disposal, rather than 
returning it all to the Treasury. These profits could be an 
excellent resource for addressing some of these funny 
challenges facing agencies. Would you agree this kind of 
flexibility would help agencies in dealing with some of these 
challenges?
    Mr. Lynch. Yes, sir, it would. It would definitely help us.
    Chairman Tom Davis. Mr. Rivers, could you walk me through 
the current status of the Government's efforts to meet Federal 
requirements in purchasing alternative fuel vehicles? Is it 
difficult to identify and track these alternative fuel 
vehicles, using AMV? What modifications would you recommend to 
the requirements that we might make?
    I think this goes along with what Mr. Tierney was talking 
about, because we are going to be rewriting some legislation 
from this committee as part of the energy bill.
    Mr. Rivers. There has been progress in the number and the 
quality of alternative fuel vehicles available, and that has 
been our prime experience, whether they are ethanol or 
compressed natural gas. Certainly from 1988, when the 
Alternative Motor Fuels Act went into place, we have seen a 
dramatic increase in the quality of the vehicles from the 
manufacturers.
    There still is difficulty in terms of matching up what the 
manufacturers produce with what the Government needs; are we 
getting exactly the right type vehicle. But I think even more 
so there has to be consideration if alternative fuel is going 
to be used, which is what we are under at the time being, there 
has to be a concerted effort to develop an infrastructure. 
Right now we have got, for example, 180,000 gasoline fueling 
stations in the country; there are between 200 and 300 E85 
fueling stations in the country, almost all concentrated in the 
Midwest, there are 2 in the Washington, DC, area. Progress, you 
know, has been made and there are certainly more of them, but 
there is that type of challenge that if we want to get the 
vehicles in use and out there, there has to be more of a 
convenience factor not only for the Federal community, but then 
also bringing in other players.
    I guess if I wanted to summarize it, you know, from the 
Federal community it is the dollars, the vehicle availability, 
and the infrastructure are the main issues that we would have 
to focus on. We would be happy to work with you on that.
    Chairman Tom Davis. OK. Thank you very much.
    Any other questions over on this side?
    Mr. Van Hollen.
    Mr. Van Hollen. Just very briefly.
    Following up on this discussion of hybrids versus 
alternative fuel vehicles and achieving the goals. Have you 
done a cost benefit analysis to see, with respect to the 
hybrids compared to a similar model of alternative fuel 
vehicle, which one is more cost-effective in terms of the fuel 
efficiency savings?
    Mr. Rivers. We haven't.
    I don't know, has the Department of Energy done that?
    Mr. Garman. I will check, and if we have we will provide 
that for the record.
    Generally said, I mean, just personal experience, the price 
difference in the Toyota Prius that I drive would not, at the 
energy prices when I bought it, say $1.50 a gallon, would not 
justify the purchase. And I don't know where the switch point 
happens, but I would like to answer that for the record.
    Mr. Van Hollen. Well, the way energy prices are going these 
days. And if you could give us the figures on how many miles 
you assume the vehicle has traveled.
    Mr. Garman. Right, a 10-year lifetime.
    Mr. Van Hollen. And how much the savings is and what the 
shortfall is.
    Mr. Garman. Right.
    Mr. Van Hollen. But also comparing that to the cost of the 
alternative fuel vehicles.
    Mr. Garman. Right.
    Mr. Van Hollen. Same model.
    Mr. Garman. If I could just make one more point.
    Chairman Tom Davis. The point of this, of course, if we 
were going to just do this for saving money to the Government, 
we might not ever have undertaken this endeavor. There is a 
higher societal goal, as the gentleman knows, trying to get at 
least some kind of mass production on this and move this out in 
the consumer markets and other government markets; and since we 
are the big purchaser, the 10,000 pound guerilla. So if we try 
to justify this on cost-savings, we will go nowhere, I am 
afraid.
    Mr. Garman. And I just wanted to make the point because 
there was talk of stimulating the market through Government 
purchases; and clearly there is a role to be played there, but 
I felt compelled to make the point that the President has put 
forth in his budget, as well as in the national energy policy 
document a proposal to provide tax credits for hybrid vehicles 
that they are estimating a revenue impact of $3.2 billion, up 
to $4,000 per vehicle. That could drive up to 800,000 hybrid 
vehicles over the time, so that is another very important 
incentive.
    Chairman Tom Davis. Well, who buys them?
    Mr. Garman. That would be a tax credit for consumers.
    Chairman Tom Davis. So consumers could be encouraged.
    Mr. Garman. So the general consumers in the broad market 
could see, you know, the Ford Escape that they will be able to 
see in a showroom, a Ford Escape hybrid at the end of the year, 
perhaps, cost them the same amount of money as a conventionally 
powered Ford Escape; and that could be a powerful inducement to 
get more of these vehicles on the road.
    Chairman Tom Davis. Thank you.
    Any other questions?
    Mr. Van Hollen. I know we have to go, but one.
    I noticed that right now the funds, you don't get the 
additional funds for the additional cost of the vehicle, which 
has got to be a disincentive for some people to look at it. 
Just as the President is offering a tax credit for, you know, 
hybrid fuel vehicles, why wouldn't we provide the same kind of 
incentive within the Government to pick up that additional 
cost?
    Mr. Garman. You make an excellent point; I can't argue with 
it.
    Chairman Tom Davis. Thank you very much. Let me just thank 
all of you for coming in. This is an important piece of laying 
a foundation for the energy bill, and we have jurisdiction over 
this particular site. We may get back to you, as we draft some 
language, to try to get your comments on it. Thank you, 
gentlemen, for participating in this. The briefing paper that 
was given to members will be included in this. If you would 
like to supplement your comments, think of anything else, you 
have 10 days to do that.
    Thank you very much to my staff for organizing this hearing 
and members for participating. I think it has been productive, 
and the meeting is adjourned.
    [Whereupon, at 11:35 a.m., the committee was adjourned, to 
reconvene at the call of the Chair.]
    [Additional information submitted for the hearing record 
follows:]

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