[Congressional Record Volume 150, Number 127 (Friday, October 8, 2004)]
[Senate]
[Pages S10824-S10825]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            SUPPORT OF ENERGY SAVINGS PERFORMANCE CONTRACTS

  Mr. DORGAN. Mr. President, I rise to thank members of the Defense 
Authorization Committee for addressing the Energy Savings Performance 
Contract, ESPC, program. Not only did the conference adopt the Senate 
position on the importance of this program, they went a step further 
and extended the program through 2006. Getting this reauthorization has 
been a long process and unfortunately one that will need to be 
revisited during the next Congress. We could have avoided this 
situation by simply providing a permanent authorization for the 
program, but since we didn't, I believe we should focus on this issue 
at the beginning of the next Congress instead of waiting until the 
contracting authority runs out in 2006.
  I want to take a moment of the Senate's time to explain to my 
colleagues the importance of energy savings performance contracts. 
Energy Savings Performance Contracts allow Federal agencies to enter 
into unique contracts through which private companies provide energy-
efficiency improvements in Federal buildings. What makes these 
contracts unique is that the private companies are reimbursed for these 
improvements only through the resulting stream of savings on that 
Federal agency's energy bill. Simply put, if there are no savings, then 
there are no payments. The Federal Government owns the energy 
efficiency improvements, but pays for these improvements through actual 
energy savings achieved. The Government retains the monetary value 
equivalent of any savings that exceed the payments to the private 
company during the duration of the contract and then retains all energy 
savings once the contract is complete. Importantly, the Federal agency 
pays no upfront capital costs for the upgrade.
  The authority to enter into these contracts expired last year. To 
ensure continuation of the program, several of us in the Senate worked 
to include renewal authority in the comprehensive energy bill. 
Unfortunately, that extension authority was removed from the modified 
version of the energy legislation introduced by the majority leader. 
One of the main reasons for this deletion was because the CBO has 
assigned a significant revenue impact to continuation of the program. 
This scoring occurred even though the private sector energy efficiency 
providers are required by law to guarantee the energy savings and thus 
provide no net cost to the Treasury. Let me say this again, unless 
there are savings, the Government owes nothing. CBO's interpretation of 
how to score these contracts may be in line with the literal meaning of 
the Budget Act, but it certainly is not in line with the spirit of the 
act. By allowing these private sector companies to work with the 
Federal Government on installing energy efficiency measures, an 
enormous service is being provided. We are saving energy; the 
Government is not required to pay up front costs; and at the end of the 
day, the Government and the American taxpayer gets the benefit of lower 
energy bills.
  With passage of this short-term extension, the Senate must now turn 
its attention to passing a permanent extension. The start-stop program 
we have now is not conducive to getting these efficiency measures 
installed. During debate on the fiscal year 2005 budget resolution over 
40 companies and associations signed a letter in support of the ESPC 
program. The signatures ranged from USPIRG to the Chamber of Commerce. 
There are not many instances when you have those two associations 
agreeing on a measure, so I believe the benefits of the program speak 
for itself.
  In closing, I want to again thank members of the conference committee

[[Page S10825]]

for their work and support for this program.

                          ____________________