[Congressional Record Volume 143, Number 153 (Wednesday, November 5, 1997)]
[Senate]
[Pages S11769-S11771]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KOHL (for himself, Mr. Feingold, Mr. Bumpers, Mr. Johnson, 
        Mr. Bingaman, and Mr. Jeffords):
  S. 1375. A bill to promote energy conservation investments in Federal 
facilities, and for other purposes; to the Committee on Energy and 
Natural Resources.


                  the federal energy bank act of 1997

  Mr. KOHL.
  Mr. President, I rise today to introduce legislation entitled ``the 
Federal Energy Bank Act.'' The purpose of this legislation is to 
provide a stable long-term source of funding for energy efficiency 
projects throughout the Federal Government. If we are to start the 
Nation on the road toward increased energy conservation we must begin 
with the Federal Government. This bill will help provide the necessary 
investments to make this first step toward long-term energy 
conservation possible.
  I have long believed that our Nation must implement a sensible 
national energy policy which emphasizes greater energy conservation and 
efficiency, as well as the development of renewable resources. This 
bill is just one step of many that need to be taken to reduce our 
energy consumption problems. The events in the Middle East, coupled 
with the environmental problems associated with the use of fossil 
fuels, have only increased the need for improved energy conservation. 
Simply put, we cannot continue to rely on imported oil to meet such a 
large part of our Nation's energy needs. This dependence places our 
economic security at great risk. At present, petroleum imports account 
for fully one-half of our trade deficit. In addition, the use of oil 
and other fossil fuels contributes to global climate change, air 
pollution, and acid rain.
  Mr. President our attempts to remedy this situation are nothing new. 
In fact, the laws requiring significant energy use reductions are 
already in place. The Energy Policy Act of 1992 mandated that Federal 
agencies use cost-effective measures, with less than a 10-year payback, 
to reduce energy consumption in their facilities by 20 percent by the 
year 2000 compared to 1985 levels. President Clinton, with Executive 
Order 12902, extended the mandate by requiring Federal agencies to 
reduce energy consumption by 30 percent by the year 2005 compared to 
1985 energy uses. If accomplished, this would save the American 
taxpayer millions in annual energy costs and in turn put us on the road 
to future energy savings. This would also improve our environment, our 
balance of trade, and our national security.
  But the road toward energy efficiency or even self-sufficiency is not 
an easy one and requires capital investment. The administration and 
Congress must back their policies with real dollars for investment in 
energy efficiency projects. According to the recent Federal energy 
efficiency and water conservation study, drafted by the Department of 
Energy, an investment of $5.7 billion is required through 1996 to 2005 
to meet National Energy Policy and Conservation Act and Executive order 
goals. The best estimate of the total funding available has resulted in 
a shortfall of $2 billion. Without significant funding the goals as set 
forth by the President will not be met. Laws and mandates alone will 
not solve our energy problems. It requires long-term capital 
investment.
  Mr. President, my business background has taught me that most large 
paybacks come from positive long-term investments. Unfortunately, the 
Federal Government does not traditionally take this approach. More 
often that not, it seeks short-term savings and cuts which do not 
address the problem of energy consumption or encourage future energy 
conservation.
  Mr. President, my bill will help address this funding shortfall. The 
bill creates a bank to fund the purchase of energy efficiency projects 
by Federal agencies and in the long run will reduce the overall amount 
of money spent on energy consumption by the Federal Government. For 
each of the fiscal years 1999, 2000, 2001, each Federal agency will 
contribute an amount equal to 5 percent of its previous year's utility 
costs into a fund or bank managed by the Secretary of the Treasury.
  The Secretary of Energy will authorize loans from the bank to any 
Federal agency for use toward investment in energy efficiency projects. 
The agency will then repay the loan, making the bank self-supporting 
after a few years. The Secretary of Energy will also establish 
selection criteria for each energy efficiency project, determining the 
project is cost-effective and produces a payback in 3 years or less. 
Agencies will be required to report the progress of each project with a 
cost of more than $1 million to the Secretary 1 year after 
installation. The Secretary will then report to Congress each year on 
all the operations of the bank.
  Mr. President, this bill will provide the real dollars required to 
make the Executive order goals a reality. The Congressional Budget 
Office has projected a 5-year savings for the bill at $3 million. Our 
energy savings will be even greater over the long term.
  Mr. President, in closing I would like to thank Johnson Controls, the 
largest public company in Wisconsin, for their continued leadership and 
input on this bill. As a maker of energy conservation systems, Johnson 
has provided me with the real world insights that have helped me draft 
a bill that attempts to address our energy conservation needs.
  Mr. President, I ask unanimous consent the full text of the bill be 
printed in full in the Record. I urge my colleagues to support this 
bill and will push for its early enactment.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1375

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Federal Energy Bank Act''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) energy conservation is a cornerstone of national energy 
     security policy;
       (2) the Federal Government is the largest consumer of 
     energy in the economy of the United States;
       (3) many opportunities exist for significant energy cost 
     savings within the Federal Government; and
       (4) to achieve the energy savings required by Executive 
     Order, the Federal Government must make significant 
     investments in energy savings systems and products, including 
     energy management control systems.
       (b) Purpose.--The purpose of this Act is to promote energy 
     conservation investments in Federal facilities.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Agency.--The term ``agency'' means--
       (A) an Executive agency (as defined in section 105 of title 
     5, United States Code, except that the term also includes the 
     United States Postal Service);
       (B) Congress and any other entity in the legislative 
     branch; and
       (C) a court and any other entity in the judicial branch.
       (2) Bank.--The term ``Bank'' means the Federal Energy Bank 
     established by section 4.
       (3) Energy efficiency project.--The term ``energy 
     efficiency project'' means a project that assists an agency 
     in meeting or exceeding the energy efficiency goals stated 
     in--

[[Page S11770]]

       (A) part 3 of title V of the National Energy Conservation 
     Policy Act (42 U.S.C. 8251 et seq.);
       (B) subtitle F of title I of the Energy Policy Act of 1992; 
     and
       (C) applicable Executive orders, including Executive Order 
     Nos. 12759 and 12902.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (5) Total utility payments.--The term ``total utility 
     payments'' means payments made to supply electricity, natural 
     gas, and any other form of energy to provide the heating, 
     ventilation, and air conditioning, lighting, and other energy 
     needs of an agency facility.

     SEC. 4. ESTABLISHMENT OF BANK.

       (a) In General.--There is established in the Treasury of 
     the United States a trust fund to be known as the ``Federal 
     Energy Bank'', consisting of--
       (1) such amounts as are appropriated to the Bank under 
     section 8;
       (2) such amounts as are transferred to the Bank under 
     subsection (b);
       (3) such amounts as are repaid to the Bank under section 
     5(b)(4); and
       (4) any interest earned on investment of amounts in the 
     Bank under subsection (c).
       (b) Transfers to Bank.--
       (1) In general.--At the beginning of each of fiscal years 
     1999, 2000, and 2001, each agency shall transfer to the 
     Secretary of the Treasury, for deposit in the Bank, an amount 
     equal to 5 percent of the total utility payments paid by the 
     agency in the preceding fiscal year.
       (2) Utilities paid for as part of rental payments.--The 
     Secretary shall by regulation establish a formula by which 
     the appropriate portion of a rental payment that covers the 
     cost of utilities shall be considered to be a utility payment 
     for the purposes of paragraph (1).
       (c) Investment of Funds.--The Secretary of the Treasury 
     shall invest such portion of funds in the Bank as is not, in 
     the Secretary's judgment, required to meet current 
     withdrawals. Investments may be made only in interest-bearing 
     obligations of the United States.

     SEC. 5. LOANS FROM THE BANK.

       (a) In General.--The Secretary of the Treasury shall 
     transfer from the Bank to the Secretary such amounts as are 
     appropriated to carry out the loan program under subsection 
     (b).
       (b) Loan Program.--
       (1) In general.--In accordance with section 6, the 
     Secretary shall establish a program to loan amounts from the 
     Bank to any agency that submits an application satisfactory 
     to the Secretary in order to finance an energy efficiency 
     project.
       (2) Performance contracting funding.--To the extent 
     practicable, an agency shall not submit a project for which 
     performance contracting funding is available.
       (3) Purposes of loan.--
       (A) In general.--A loan under this section may be made to 
     pay the costs of--
       (i) an energy efficiency project; or
       (ii) development and administration of a performance 
     contract.
       (B) Limitation.--An agency may use not more than 15 percent 
     of the amount of a loan under subparagraph (A)(i) to pay the 
     costs of administration and proposal development (including 
     data collection and energy surveys).
       (4) Repayments.--
       (A) In general.--An agency shall repay to the Bank the 
     principal amount of the energy efficiency project loan plus 
     interest at a rate determined by the President, in 
     consultation with the Secretary and the Secretary of the 
     Treasury.
       (B) Waiver.--The Secretary may waive the requirement of 
     subparagraph (A) if the Secretary determines that payment of 
     interest by an agency is not required to sustain the needs of 
     the Bank in making energy efficiency project loans.
       (5) Agency energy budgets.--Until a loan is repaid, an 
     agency budget submitted to Congress for a fiscal year shall 
     not be reduced by the value of energy savings accrued as a 
     result of the energy conservation measure implemented with 
     funds from the Bank.
       (6) Availability of funds.--An agency shall not rescind or 
     reprogram funds made available by this Act. Funds loaned to 
     an agency shall be retained by the agency until expended, 
     without regard to fiscal year limitation.

     SEC. 6. SELECTION CRITERIA.

       (a) In General.--The Secretary shall establish criteria for 
     the selection of energy efficiency projects to be awarded 
     loans in accordance with subsection (b).
       (b) Selection Criteria.--The Secretary may make loans only 
     for energy efficiency projects that--
       (1) are technically feasible;
       (2) are determined to be cost-effective using life cycle 
     cost methods established by the Secretary by regulation;
       (3) include a measurement and management component to--
       (A) commission energy savings for new Federal facilities; 
     and
       (B) monitor and improve energy efficiency management at 
     existing Federal facilities; and
       (4) have a project payback period of 3 years or less.

     SEC. 7. REPORTS AND AUDITS.

       (a) Reports to the Secretary.--Not later than 1 year after 
     the installation of an energy efficiency project that has a 
     total cost of more than $1,000,000, and each year thereafter, 
     an agency shall submit to the Secretary a report that--
       (1) states whether the project meets or fails to meet the 
     energy savings projections for the project; and
       (2) for each project that fails to meet the savings 
     projections, states the reasons for the failure and describes 
     proposed remedies.
       (b) Audits.--The Secretary may audit any energy efficiency 
     project financed with funding from the Bank to assess the 
     project's performance.
       (c) Reports to Congress.--At the end of each fiscal year, 
     the Secretary shall submit to Congress a report on the 
     operations of the Bank, including a statement of the total 
     receipts into the Bank, and the total expenditures from the 
     Bank to each agency.

     SEC. 8. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out this Act.

  Mr. FEINGOLD. Mr. President, I am delighted to join with my 
colleague, the senior Senator from Wisconsin [Mr. Kohl] as an original 
co-sponsor of the Federal Energy Bank Act.
  The idea of the Federal Government leading by example in the area of 
energy efficiency has made sense to me for a long time, so much so, in 
fact, that in campaigning for the Senate in 1992, I included energy 
efficiency in my campaign platform. I proposed an 82-point plan to 
reduce the deficit, a series of specific spending reductions and 
revenue changes which, if enacted in sum total, would have eliminated 
the deficit.
  Among those items, as I was a candidate for office after the passage 
of the 1992 Energy Policy Act and after the United States' signing of 
the Framework Convention on Climate Change in Rio de Janeiro, Brazil, 
was one to encourage the Federal Government to implement a 
comprehensive energy savings program for the Federal Government through 
energy efficiency investments.
  After all, I believe that if Wisconsin consumers and business have 
been converted to the wisdom of compact fluorescent light bulbs, 
efficient heating and cooling systems, weatherization, and energy 
saving computers, among the wide range of potential efficiency 
improvements, that the Federal Government promoting those actions 
should also make the same investments to the taxpayers' benefit.
  Section 152 of the Energy Policy Act mandated that Federal agencies 
use all cost-effective measures that could be implemented with less 
than a 10-year payback to reduce energy consumption in their facilities 
by 20 percent by the year 2000 compared to 1985 consumption levels.
  On March 8, 1994, President Clinton signed Executive Order 12902. 
This order was an even more aggressive mandate to improve energy 
efficiency in Federal buildings nationwide by requiring agencies to use 
cost-effective measures to reduce energy use by fiscal year 2005 by 30 
percent compared with the agency's 1985 energy use.
  After taking office, I have learned that among the most significant 
constraints to implementing more energy efficient practices in the 
Federal Government is the lack of sufficient funds to invest in energy 
efficient equipment.
  Section 162 of the Energy Policy Act of 1992 directed the Secretary 
of Energy to conduct a detailed study of options for financing energy 
and water conservation measures in Federal facilities as required under 
the act and by subsequent Executive orders. On June 3, 1997, the 
Secretary of Energy, Mr. Pena released that study. It documents a need 
for a $5.7 billion financial investment between 1996 and 2005 to meet 
the Energy Policy Act and Executive order goals, a value which could 
vary from a low of $4.4 billion to a high of $7.1 billion given 
variability in both energy and water investment requirements.
  The best estimate, according to the same study of the total Federal 
funding available to spend on energy and water efficiency improvements 
from various sources, including direct agency appropriations, energy 
savings performance contracts, and utility demand-side management 
programs, and appropriations to the Federal energy efficiency fund, to 
the Federal Government to meet those needs over the same time period is 
$3.7 billion. Thus, under DOE's best estimate, at the Federal level we 
face a potential shortfall of funds necessary to achieve our Federal 
energy and water conservation objectives of $2 billion.

[[Page S11771]]

  In order to address this shortfall, I am pleased joining as a 
cosponsor of this legislation to create a Federal energy revolving fund 
or ``energy bank.''
  Some in this body may be concerned that the existence of the current 
Federal energy efficiency fund alleviates the need for additional 
Federal conservation investment. The problem with the current fund, 
which operates as a grant program for agencies to make efficiency 
improvements, is that it does not contribute to the replenishment of 
capital resources because it does not have to be paid back and is 
therefore dependent upon appropriations.
  Under the legislation, I join in co-sponsoring with my colleague from 
Wisconsin today, Federal agencies will be required, in fiscal years 
1998-2000, to deposit an amount equal to 5 percent of their total 
utility payments in the proceeding fiscal year to capitalize the fund. 
After 2000, the Secretary of Energy will determine an amount necessary 
to ensure that the fund meets its obligations.
  Agencies will then be able to get a loan from the fund to finance 
efficiency projects, which they will be responsible for repaying with 
interest. The projects must use off-the-shelf technologies and must be 
cost effective.
  The best part of this approach is that the technologies are required 
to have a 3-year pay back period, and, therefore, this legislation 
achieves some modest savings for the taxpayer. CBO scores this measure 
as saving $3 million over 5 years.
  In addition to savings for the taxpayer, I am also pleased to assist 
the Federal Government in advancing what I believe to be an important 
part of our overall strategy to combat greenhouse gas emissions. As 
many in the body are aware, President Clinton announced his plan for 
meeting the challenge of global climate change on October 22, 1997, in 
preparation for negotiating meetings in Bonn, Germany on a new protocol 
to the Climate Convention. Among the items the President cited was the 
need to do more in the area of federal energy management. Aggressive 
energy management can reduce carbon emissions from the activities of 
the Federal Government, which, the President indicated, has the 
Nation's largest energy bill at almost $8 billion per year. The 
President specifically stated that there is a need to improve federal 
procurement of energy efficient technologies, and this measure is a 
positive, proactive measure to ensure that federal agencies 
specifically set aside funds to achieve this goal. The senior Senator 
from Wisconsin [Mr. Kohl] and I look forward to working with the 
administration to advance this legislation as a piece of the country's 
overall greenhouse gas reductions strategy.
  In conclusion, I look forward to working with my senior Senator on 
this issue. I believe that this is a unique opportunity for Senate 
colleagues to support legislation that is both fiscally responsible and 
environmentally sound.
                                 ______