[Congressional Record (Bound Edition), Volume 150 (2004), Part 16]
[Senate]
[Pages 22015-22016]
[From the U.S. 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

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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 
for their work and support for this program.

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