[Weekly Compilation of Presidential Documents Volume 35, Number 22 (Monday, June 7, 1999)]
[Pages 1021-1029]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Executive Order 13123--Greening the Government Through Efficient Energy 
Management

June 3, 1999

    By the authority vested in me as President by the Constitution and 
the laws of the United States of America, including the National Energy 
Conservation Policy Act (Public Law 95-619, 92 Stat. 3206, 42 U.S.C. 
8252 et seq.), as amended by the Energy Policy Act of 1992 (EPACT) 
(Public Law 102-486, 106 Stat. 2776), and section 301 of title 3, United 
States Code, it is hereby ordered as follows:

Part 1--Preamble

    Section 101. Federal Leadership. The Federal Government, as the 
Nation's largest energy consumer, shall significantly improve its energy 
management in order to save taxpayer dollars and reduce emissions that 
contribute to air pollution and global climate change. With more than 
500,000 buildings, the Federal Government can lead the Nation in energy 
efficient building design, construction, and operation. As a major 
consumer that spends $200 billion annually on products and services, the 
Federal Government can promote energy efficiency, water conservation, 
and the use of renewable energy products, and help foster markets for 
emerging technologies. In encouraging effective energy management in the 
Federal Government, this order builds on work begun under EPACT and 
previous Executive orders.

Part 2--Goals

    Sec. 201. Greenhouse Gases Reduction Goal. Through life-cycle cost-
effective energy measures, each agency shall reduce its greenhouse gas 
emissions attributed to facility energy use by 30 percent by 2010 
compared to such emissions levels in 1990. In order to encourage optimal 
investment in energy improvements, agencies can count greenhouse gas 
reductions from improvements in nonfacility energy use toward this goal 
to the extent that these reductions are approved by the Office of 
Management and Budget (OMB).
    Sec. 202. Energy Efficiency Improvement Goals. Through life-cycle 
cost-effective measures, each agency shall reduce energy consumption per 
gross square foot of its facilities, excluding facilities covered in 
section 203 of this order, by 30 percent by 2005 and 35 percent by 2010 
relative to 1985. No facilities will be exempt from these goals unless 
they meet new criteria for exemptions, to be issued by the Department of 
Energy (DOE).
    Sec. 203. Industrial and Laboratory Facilities. Through life-cycle 
cost-effective measures, each agency shall reduce energy consumption per 
square foot, per unit of production, or per other unit as applicable by 
20 percent by 2005 and 25 percent by 2010 relative to 1990. No 
facilities will be exempt from these goals unless they meet new criteria 
for exemptions, as issued by DOE.
    Sec. 204. Renewable Energy. Each agency shall strive to expand the 
use of renewable energy within its facilities and in its activities by 
implementing renewable energy projects and by purchasing electricity 
from renewable energy sources. In support of the Million Solar Roofs 
initiative, the Federal Government shall strive to install 2,000 solar 
energy systems at Federal facilities by the end of 2000, and 20,000 
solar energy systems at Federal facilities by 2010.
    Sec. 205. Petroleum. Through life-cycle cost-effective measures, 
each agency shall reduce the use of petroleum within its facilities. 
Agencies may accomplish this reduction by switching to a less greenhouse 
gas-intensive, nonpetroleum energy source, such as natural gas or 
renewable energy sources; by eliminating unnecessary fuel use; or by 
other appropriate methods. Where alternative fuels are not practical or 
life-cycle cost-effective, agencies shall strive to improve the 
efficiency of their facilities.
    Sec. 206. Source Energy. The Federal Government shall strive to 
reduce total energy use and associated greenhouse gas and other air 
emissions, as measured at the source. To that end, agencies shall 
undertake life-cycle cost-effective projects in which source energy 
decreases, even if site energy use increases. In such cases, agencies 
will receive credit toward energy reduction goals through guidelines 
developed by DOE.
    Sec. 207. Water Conservation. Through life-cycle cost-effective 
measures, agencies

[[Page 1022]]

shall reduce water consumption and associated energy use in their 
facilities to reach the goals set under section 503(f) of this order. 
Where possible, water cost savings and associated energy cost savings 
shall be included in Energy-Savings Performance Contracts and other 
financing mechanisms.

Part 3--Organization and Accountability

    Sec. 301. Annual Budget Submission. Each agency's budget submission 
to OMB shall specifically request funding necessary to achieve the goals 
of this order. Budget submissions shall include the costs associated 
with: encouraging the use of, administering, and fulfilling agency 
responsibilities under Energy-Savings Performance Contracts, utility 
energy-efficiency service contracts, and other contractual platforms for 
achieving conservation goals; implementing life-cycle cost-effective 
measures; procuring life-cycle cost-effective products; and constructing 
sustainably designed new buildings, among other energy costs. OMB shall 
issue guidelines to assist agencies in developing appropriate requests 
that support sound investments in energy improvements and energy-using 
products. OMB shall explore the feasibility of establishing a fund that 
agencies could draw on to finance exemplary energy management activities 
and investments with higher initial costs but lower life-cycle costs. 
Budget requests to OMB is support of this order must be within each 
agency's planning guidance level.
    Sec. 302. Annual Implementation Plan. Each agency shall develop an 
annual implementation plan for fulfilling the requirements of this 
order. Such plans shall be included in the annual reports to the 
President under section 303 of this order.
    Sec. 303. Annual Reports to the President. (a) Each agency shall 
measure and report its progress in meeting the goals and requirements of 
this order on an annual basis. Agencies shall follow reporting 
guidelines as developed under section 306(b) of this order. In order to 
minimize additional reporting requirements, the guidelines will clarify 
how the annual report to the President should build on each agency's 
annual Federal energy reports submitted to DOE and the Congress. Annual 
reports to the President are due on January 1 of each year beginning in 
the year 2000.
    (b) Each agency's annual report to the President shall describe how 
the agency is using each of the strategies described in Part 4 of this 
order to help meet energy and greenhouse gas reduction goals. The annual 
report to the President shall explain why certain strategies, if any, 
have not been used. It shall also include a listing and explanation of 
exempt facilities.
    Sec. 304. Designation of Senior Agency Official. Each agency shall 
designate a senior official, at the Assistant Secretary level or above, 
to be responsible for meeting the goals and requirements of this order, 
including preparing the annual report to the President. Such designation 
shall be reported by each Cabinet Secretary or agency head to the Deputy 
Director for Management of OMB within 30 days of the date of this order. 
Designated officials shall participate in the Interagency Energy Policy 
Committee, described in section 306(d) of this order. The Committee 
shall communicate its activities to all designated officials to assure 
proper coordination and achievement of the goals and requirements of 
this order.
    Sec. 305. Designation of Agency Energy Teams. Within 90 days of the 
date of this order, each agency shall form a technical support team 
consisting of appropriate procurement, legal, budget, management, and 
technical representatives to expedite and encourage the agency's use of 
appropriations, Energy-Savings Performance Contracts, and other 
alternative financing mechanisms necessary to meet the goals and 
requirements of this order. Agency energy team activities shall be 
undertaken in collaboration with each agency's representative to the 
Interagency Energy Management Task Force, as described in section 306(e) 
of this order.
    Sec. 306. Interagency Coordination. (a) Office of Management and 
Budget. The Deputy Director for Management of OMB, in consultation with 
DOE, shall be responsible for evaluating each agency's progress in 
improving energy management and for submitting agency energy scorecards 
to the President to report progress.

[[Page 1023]]

      (1) OMB, in consultation with DOE and other agencies, shall 
develop the agency energy scorecards and scoring system to evaluate each 
agency's progress in meeting the goals of this order. The scoring 
criteria shall include the extent to which agencies are taking advantage 
of key tools to save energy and reduce greenhouse gas emissions, such as 
Energy-Savings Performance Contracts, utility energy-efficiency service 
contracts, ENERGY STAR<Register> and other energy efficient products, 
renewable energy technologies, electricity from renewable energy 
sources, and other strategies and requirements listed in Part 4 of this 
order, as well as overall efficiency and greenhouse gas metrics and use 
of other innovative energy efficiency practices. The scorecards shall be 
based on the annual energy reports submitted to the President under 
section 303 of this order.
      (2) The Deputy Director for Management of OMB shall also select 
outstanding agency energy management team(s), from among candidates 
nominated by DOE, for a new annual Presidential award for energy 
efficiency.
    (b) Federal Energy Management Program. The DOE's Federal Energy 
Management Program (FEMP) shall be responsible for working with the 
agencies to ensure that they meet the goals of this order and report 
their progress. FEMP, in consultation with OMB, shall develop and issue 
guidelines for agencies' preparation of their annual reports to the 
President on energy management, as required in section 303 of this 
order. FEMP shall also have primary responsibility for collecting and 
analyzing the data, and shall assist OMB in ensuring that agency reports 
are received in a timely manner.
    (c) President's Management Council. The President's Management 
Council (PMC), chaired by the Deputy Director for Management of OMB and 
consisting of the Chief Operating Officers (usually the Deputy 
Secretary) of the largest Federal departments and agencies, will 
periodically discuss agencies' progress in improving Federal energy 
management.
    (d) Interagency Energy Policy Committee. This Committee was 
established by the Department of Energy Organization Act. It consists of 
senior agency officials designated in accordance with section 304 of 
this order. The Committee is responsible for encouraging implementation 
of energy efficiency policies and practices. The major energy-consuming 
agencies designated by DOE are required to participate in the Committee. 
The Committee shall communicate its activities to all designated senior 
agency officials to promote coordination and achievement of the goals of 
this order.
    (e) Interagency Energy Management Task Force. The Task Force was 
established by the National Energy Conservation Policy Act. It consists 
of each agency's chief energy manager. The Committee shall continue to 
work toward improving agencies' use of energy management tools and 
sharing information on Federal energy management across agencies.
    Sec. 307. Public/Private Advisory Committee. The Secretary of Energy 
will appoint an advisory committee consisting of representatives from 
Federal agencies, State governments, energy service companies, utility 
companies, equipment manufacturers, construction and architectural 
companies, environmental, energy and consumer groups, and other energy-
related organizations. The committee will provide input on Federal 
energy management, including how to improve use of Energy-Savings 
Performance Contracts and utility energy-efficiency service contracts, 
improve procurement of ENERGY STAR<Register> and other energy efficient 
products, improve building design, reduce process energy use, and 
enhance applications of efficient and renewable energy technologies at 
Federal facilities.
    Sec. 308. Applicability. This order applies to all Federal 
departments and agencies. General Services Administration (GSA) is 
responsible for working with agencies to meet the requirements of this 
order for those facilities for which GSA has delegated operations and 
maintenance authority. The Department of Defense (DOD) is subject to 
this order to the extent that it does not impair or adversely affect 
military operations and training (including tactical aircraft, ships, 
weapons systems, combat training, and border security).

[[Page 1024]]

Part 4--Promoting Federal Leadership in Energy Management

    Sec. 401. Life-Cycle Cost Analysis. Agencies shall use life-cycle 
cost analysis in making decisions about their investments in products, 
services, construction, and other projects to lower the Federal 
Government's costs and to reduce energy and water consumption. Where 
appropriate, agencies shall consider the life-cycle costs of 
combinations of projects, particularly to encourage bundling of energy 
efficiency projects with renewable energy projects. Agencies shall also 
retire inefficient equipment on an accelerated basis where replacement 
results in lower life-cycle costs. Agencies that minimize life- cycle 
costs with efficiency measures will be recognized in their scorecard 
evaluations.
    Sec. 402. Facility Energy Audits. Agencies shall continue to conduct 
energy and water audits for approximately 10 percent of their facilities 
each year, either independently or through Energy-Savings Performance 
Contracts or utility energy-efficiency service contracts.
    Sec. 403. Emergency Management Strategies and Tools. Agencies shall 
use a variety of energy management strategies and tools, where life-
cycle cost-effective, to meet the goals of this order. An agency's use 
of these strategies and tools shall be taken into account in assessing 
the agency's progress and formulating its score card.
    (a) Financing Mechanisms. Agencies shall maximize their use of 
available alternative financing contracting mechanisms, including 
Energy-Saving Performance Contracts and utility energy-efficiency 
service contracts, when life-cycle cost-effective, to reduce energy use 
and cost in their facilities and operations. Energy-Savings Performance 
Contracts, which are authorized under the National Energy Conservation 
Policy Act, as modified by the Energy Policy Act of 1992, and utility 
energy-efficiency service contracts provide significant opportunities 
for making Federal facilities more energy efficient at no net cost to 
taxpayers.
    (b) ENERGY STAR<Register> and Other Energy Efficient Products.
      (1) Agencies shall select, where life-cycle cost-effective, ENERGY 
STAR<Register> and other energy efficient products when acquiring 
energy-using products. For product groups where ENERGY STAR<Register> 
labels are not yet available, agencies shall select products that are in 
the upper 25 percent of energy efficiency as designated by FEMP. The 
Environmental Protection Agency (EPA) and DOE shall expedite the process 
of designating products as ENERGY STAR<Register> and will merge their 
current efficiency rating procedures.
      (2) GSA and the Defense Logistics Agency (DLA), with assistance 
from EPA and DOE, shall create clear catalogue listings that designate 
these products in both print and electronic formats. In addition, GSA 
and DLA shall undertake pilot products from selected energy-using 
products to show a ``second price tag'', which means an accounting of 
the operating and purchase costs of the item, in both printed and 
electronic catalogues and assess the impact of providing this 
information on Federal purchasing decisions.
      (3) Agencies shall incorporate energy efficient criteria 
consistent with ENERGY STAR<Register> and other FEMP-designated energy 
efficiency levels into all guide specifications and project 
specifications developed for new construction and renovation, as well as 
into product specification language developed for Basic Ordering 
Agreements, Blanket Purchasing Agreements, Government Wide Acquisition 
Contracts, and all other purchasing procedures.
      (4) DOE and OMB shall also explore the creation of financing 
agreements with private sector suppliers to provide private funding to 
offset higher up-front costs of efficient products. Within 9 months of 
the date of this order, DOE shall report back to the President's 
Management Council on the viability of such alternative financing 
options.
    (c) ENERGY STAR<Register> Buildings. Agencies shall strive to meet 
the ENERGY STAR<Register> Building criteria for energy performance and 
indoor environmental quality in their eligible facilities to the maximum 
extent practicable by the end of 2002. Agencies may use Energy-Savings 
Performance Contracts, utility energy-efficiency service contracts, or 
other means to conduct evaluations and make improvements to buildings in 
order to meet the

[[Page 1025]]

criteria. Buildings that rank in the top 25 percent in energy efficiency 
relative to comparable commercial and Federal buildings will receive the 
ENERGY STAR<Register> building label. Agencies shall integrate this 
building rating tool into their general facility audits.
    (d) Sustainable Building Design. DOD and GSA, in consultation with 
DOE and EPA, shall develop sustainable design principles. Agencies shall 
apply such principles to the siting, design, and construction of new 
facilities. Agencies shall optimize life-cycle costs, pollution, and 
other environmental and energy costs associated with the construction, 
life-cycle operation, and decommissioning of the facility. Agencies 
shall consider using Energy-Savings Performance Contracts or utility 
energy-efficiency service contracts to aid them in constructing 
sustainably designed buildings.
    (e) Model Lease Provisions. Agencies entering into leases, including 
the renegotiation or extension of existing leases, shall incorporate 
lease provisions that encourage energy and water efficiency wherever 
life-cycle cost-effective. Build-to-suit lease solicitations shall 
contain criteria encouraging sustainable design and development, energy 
efficiency, and verification of building performance. Agencies shall 
include a preference for buildings having the ENERGY STAR<Register> 
building label in their selection criteria for acquiring leased 
buildings. In addition, all agencies shall encourage lessors to apply 
for the ENERGY STAR<Register> building label and to explore and 
implement projects that would reduce costs to the Federal Government, 
including projects carried out through the lessors' Energy-Savings 
Performance Contracts or utility energy-efficiency service contracts.
    (f) Industrial Facility Efficiency Improvements. Agencies shall 
explore efficiency opportunities in industrial facilities for steam 
systems, boiler operation, air compressor systems, industrial processes, 
and fuel switching, including cogeneration and other efficiency and 
renewable energy technologies.
    (g) Highly Efficient Systems. Agencies shall implement district 
energy systems, and other highly efficient systems, in new construction 
or retrofit projects when life-cycle cost-effective. Agencies shall 
consider combined cooling, heat, and power when upgrading and assessing 
facility power needs and shall use combined cooling, heat, and power 
systems when life-cycle cost-effective. Agencies shall survey local 
natural resources to optimize use of available biomass, bioenergy, 
geothermal, or other naturally occurring energy sources.
    (h) Off-Grid Generation. Agencies shall use off-grid generation 
systems, including solar hot water, solar electric, solar outdoor 
lighting, small wind turbines, fuel cells, and other off-grid 
alternatives, where such systems are life-cycle cost-effective and offer 
benefits including energy efficiency, pollution prevention, source 
energy reductions, avoided infrastructure costs, or expedited service.
    Sec. 404. Electricity Use. To advance the greenhouse gas and 
renewable energy goals of this order, and reduce source energy use, each 
agency shall strive to use electricity from clean, efficient, and 
renewable energy sources. An agency's efforts in purchasing electricity 
from efficient and renewable energy sources shall be taken into account 
in assessing the agency's progress and formulating its score card.
    (a) Competitive Power. Agencies shall take advantage of competitive 
opportunities in the electricity and natural gas markets to reduce costs 
and enhance services. Agencies are encouraged to aggregate demand across 
facilities or agencies to maximize their economic advantage.
    (b) Reduced Greenhouse Gas Intensity of Electric Power. When 
selecting electricity providers, agencies shall purchase electricity 
from sources that use high efficiency electric generating technologies 
when life-cycle cost-effective. Agencies shall consider the greenhouse 
gas intensity of the source of the electricity and strive to minimize 
the greenhouse gas intensity of purchased electricity.
    (c) Purchasing Electricity from Renewable Energy Sources.
      (1) Each agency shall evaluate its current use of electricity from 
renewable energy sources and report this level in its annual report to 
the President. Based on this review, each agency should adopt policies 
and pursue projects that increase the use of such electricity. Agencies 
should include provisions for the purchase of electricity from renewable

[[Page 1026]]

energy sources as a component of their requests for bids whenever 
procuring electricity. Agencies may use savings from energy efficiency 
projects to pay additional incremental costs of electricity from 
renewable energy sources:
      (2) In evaluating opportunities to comply with this section, 
agencies should consider: my Administration's goal of tripling 
nonhydroelectric renewable energy capacity in the United States by 2010; 
the renewable portfolio standard specified in the restructuring 
guidelines for the State in which the facility is located; GSA's efforts 
to make electricity from renewable energy sources available to Federal 
electricity purchasers; and EPA's guidelines on crediting renewable 
energy power in implementation in Clean Air Act standards.
    Sec. 405. Mobile Equipment. Each agency shall seek to improve the 
design, construction, and operation of its mobile equipment, and shall 
implement all life-cycle cost-effective energy efficiency measures that 
result in cost savings while improving mission performance. To the 
extent that such measures are life-cycle cost-effective, agencies shall 
consider enhanced use of alternative or renewable-based fuels.
    Sec. 406. Management and Government Performance. Agencies shall use 
the following management strategies in meeting the goals of this order.
    (a) Awards. Agencies shall use employee incentive programs to reward 
exceptional performance in implementing this order.
    (b) Performance Evaluations. Agencies shall include successful 
implementation of provisions of this order in areas such as Energy-
Savings Performance Contracts, sustainable design, energy efficient 
procurement, energy efficiency, water conservation, and renewable energy 
projects in the position descriptions and performance evaluations of 
agency heads, members of the agency energy team, principal program 
managers, heads of field offices, facility managers, energy managers, 
and other appropriate employees.
    (c) Retention of Savings and Rebates. Agencies granted statutory 
authority to retain a portion of savings generated from efficient energy 
and water management are encouraged to permit the retention of the 
savings at the facility or site where the savings occur to provide 
greater incentive for that facility and its site managers to undertake 
more energy management initiatives, invest in renewable energy systems, 
and purchase electricity from renewable energy sources.
    (d) Training and Education. Agencies shall ensure that all 
appropriate personnel receive training for implementing this order.
      (1) DOE, DOD, and GSA shall provide relevant training or training 
materials for those programs that they make available to all Federal 
agencies relating to the energy management strategies contained in this 
order.
      (2) The Federal Acquisition Institute and the Defense Acquisition 
University shall incorporate into existing procurement courses 
information on Federal energy management tools, including Energy Savings 
Performance Contracts, utility energy-efficiency service contracts, 
ENERGY STAR<Register> and other energy efficient products, and life-
cycle cost analysis.
      (3) All agencies are encouraged to develop outreach programs that 
include education, training, and promotion of ENERGY STAR<Register> and 
other energy-efficient products for Federal purchase card users. These 
programs may include promotions with billing statements, user training, 
catalogue awareness, and exploration of vendor data collection of 
purchases.
    (e) Showcase Facilities. Agencies shall designate exemplary new and 
existing facilities with significant public access and exposure as 
showcase facilities to highlight energy or water efficiency and 
renewable energy improvements.

Part 5--Technical Assistance

    Sec. 501. Within 120 days of this order, the Director of OMB shall:
    (a) develop and issue guidance to agency budget officers on 
preparation of annual funding requests associated with the 
implementation of the order for the FY 2001
budget;
    (b) in collaboration with the Secretary of Energy, explain to 
agencies how to retain savings and reinvest in other energy and water 
management projects; and

[[Page 1027]]

    (c) in collaboration with the Secretary of Energy through the Office 
of Federal Procurement Policy, periodically brief agency procurement 
executives on the use of Federal energy management tools, including 
Energy-Savings Performance Contracts, utility energy-efficiency service 
contracts, and procurement of energy efficient products and electricity 
from renewable energy sources.
    Sec. 502. Within 180 days of this order, the Secretary of Energy, in 
collaboration with other agency heads, shall:
    (a) issue guidelines to assist agencies in measuring energy per 
square foot, per unit of production, or other applicable unit in 
industrial, laboratory, research, and other energy-intensive facilities;
    (b) establish criteria for determining which facilities are exempt 
from the order. In addition, DOE must provide guidance for agencies to 
report proposed exemptions;
    (c) develop guidance to assist agencies in calculating appropriate 
energy baselines for previously exempt facilities and facilities 
occupied after 1990 in order to measure progress toward goals;
    (d) issue guidance to clarify how agencies determine the life-cycle 
cost for investments required by the order, including how to compare 
different energy and fuel options and assess the current tools;
    (e) issue guidance for providing credit toward energy efficiency 
goals for cost-effective projects where source energy use declines but 
site energy use increases; and
    (f) provide guidance to assist each agency to determine a baseline 
of water consumption.
    Sec. 503. Within 1 year of this order, the Secretary of Energy, in 
collaboration with other agency heads, shall:
    (a) provide guidance for counting renewable and highly efficient 
energy projects and purchases of electricity from renewable and highly 
efficient energy sources toward agencies' progress in reaching 
greenhouse gas and energy reduction goals;
    (b) develop goals for the amount of energy generated at Federal 
facilities from renewable energy technologies;
    (c) support efforts to develop standards for the certification of 
low environmental impact hydropower facilities in order to facilitate 
the Federal purchase of such power;
    (d) work with GSA and DLA to develop a plan for purchasing advanced 
energy products in bulk quantities for use in by multiple agencies;

    (e) issue guidelines for agency use estimating the greenhouse gas 
emissions attributable to facility energy use. These guidelines shall 
include emissions associated with the production, transportation and use 
of energy consumed in Federal facilities; and

    (f) establish water conservation goals for Federal agencies.
    Sec. 504. Within 120 days of this order, the Secretary of Defense 
and the Administrator of GSA, in consultation with other agency heads, 
shall develop and issue sustainable design and development principles 
for the siting, design, and construction of new facilities.

    Sec. 505. Within 180 days of this order, the Administrator of GSA, 
in collaboration with the Secretary of Defense, the Secretary of Energy, 
and other agency heads, shall:

    (a) develop and issue guidance to assist agencies in ensuring that 
all project cost estimates, bids, and agency budget requests for design, 
construction, and renovation of facilities are based on life-cycle 
costs. Incentives for contractors involved in facility design and 
construction must be structured to encourage the contractors to design 
and build at the lowest life-cycle costs;

    (b) make information available on opportunities to purchase 
electricity from renewable energy sources as defined by this order. This 
information should accommodate relevant State regulations and be updated 
periodically based on technological advances and market changes, at 
least every 2 years;

    (c) develop Internet-based tools for both GSA and DLA customers to 
assist individual and agency purchasers in identifying and purchasing 
ENERGY STAR<Register> and other energy efficient products for 
acquisition; and

    (d) develop model lease provisions that incorporate energy 
efficiency and sustainable design.


[[Page 1028]]



Part 6--General Provisions

    Sec. 601. Compliance by Independent Agencies. Independent agencies 
are encouraged to comply with the provisions of this order.
    Sec. 602. Waivers. If an agency determines that a provision in this 
order is inconsistent with its mission, the agency may ask DOE for a 
waiver of the provision. DOE will include a list of any waivers it 
grants in its Federal Energy Management Programs annual report to the 
Congress.
    Sec. 603. Scope. (a) This order is intended only to improve the 
internal management of the executive branch and is not intended to 
create any right, benefit, or trust responsibility, substantive or 
procedural, enforceable by law by a party against the United States, its 
agencies, its officers, or any other person.
    (b) This order applies to agency facilities in any State of the 
United States, the District of Columbia, the Commonwealth of Puerto 
Rico, Guam, American Samoa, the United States Virgin Islands, the 
Northern Mariana Islands, and any other territory or possession over 
which the United States has jurisdiction. Agencies with facilities 
outside of these areas, however, are encouraged to make best efforts to 
comply with the goals of this order for those facilities. In addition, 
agencies can report energy improvements made outside the United States 
in their annual report to the President; these improvements may be 
considered in agency scorecard evaluations.
    Sec. 604. Revocations. Executive Order 12902 of March 9, 1994, 
Executive Order 12759 of April 17, 1991, and Executive Order 12845 of 
April 21, 1993, are revoked.
    Sec. 605. Amendments to Federal Regulations. The Federal Acquisition 
Regulation and other Federal regulations shall be amended to reflect 
changes made by this order, including an amendment to facilitate agency 
purchases of electricity from renewable energy sources.

Part 7--Definitions

For the purposes of this order:
    Sec. 701. ``Acquisition'' means acquiring by contract supplies or 
services (including construction) by and for the use of the Federal 
Government through purchase or lease, whether the supplies or services 
are already in existence or must be created, developed, demonstrated, 
and evaluated. Acquisition begins at the point when agency needs are 
established and includes the description of requirements to satisfy 
agency needs, solicitation and selection of sources, award of contracts, 
contract financing, contract performance, contract administration, and 
those technical and management functions directly related to the process 
of fulfilling agency needs by contract.
    Sec. 702. ``Agency'' means an Executive agency as defined in 5 
U.S.C. 105. For the purpose of this order, military departments, as 
defined in 5 U.S.C. 102, are covered under the auspices of DOD.
    Sec. 703. ``Energy-Savings Performance Contract'' means a contract 
that provides for the performance of services for the design, 
acquisition, financing, installation, testing, operation, and where 
appropriate, maintenance and repair, of an identified energy or water 
conservation measure or series of measures at one or more locations. 
Such contracts shall provide that the contractor must incur costs of 
implementing energy savings measures, including at least the cost (if 
any) incurred in making energy audits, acquiring and installing 
equipment, and training personnel in exchange for a predetermined share 
of the value of the energy savings directly resulting from 
implementation of such measures during the term of the contract. Payment 
to the contractor is contingent upon realizing a guaranteed stream of 
future energy and cost savings. All additional savings will accrue to 
the Federal Government.
    Sec. 704. ``Exempt facility'' or ``Exempt mobile equipment'' means a 
facility or a piece of mobile equipment for which an agency uses DOE-
established criteria to determine that compliance with the Energy Policy 
Act of 1992 or this order is not practical.
    Sec. 705. ``Facility'' means any individual building or collection 
of buildings, grounds, or structure, as well as any fixture or part 
thereof, including the associated energy or water-consuming support 
systems, which is constructed, renovated, or purchased in whole or in 
part for use by the Federal Government. It includes leased facilities 
where

[[Page 1029]]

the Federal Government has a purchase option or facilities planned for 
purchase. In any provision of this order, the term ``facility'' also 
includes any building 100 percent leased for use by the Federal 
Government where the Federal Government pays directly or indirectly for 
the utility costs associated with its leased space. The term also 
includes Government-owned contractor-operated facilities.
    Sec. 706. ``Industrial facility'' means any fixed equipment, 
building, or complex for production, manufacturing, or other processes 
that uses large amounts of capital equipment in connection with, or as 
part of, any process or system, and within which the majority of energy 
use is not devoted to the heating, cooling, lighting, ventilation, or to 
service the water heating energy load requirements of the facility.
    Sec. 707. ``Life-cycle costs'' means the sum of the present values 
of investment costs, capital costs, installation costs, energy costs, 
operating costs, maintenance costs, and disposal costs, over the 
lifetime of the project, product, or measure. Additional guidance on 
measuring life-cycle costs is specified in 10 C.F.R. 436.19.
    Sec. 708. ``Life-cycle cost-effective'' means the life-cycle costs 
of a product, project, or measure are estimated to be equal to or less 
than the base case (i.e., current or standard practice or product). 
Additional guidance on measuring cost-effectiveness is specified in 10 
C.F.R. 436.18 (a), (b), and (c), 436.20, and 436.21.
    Sec. 709. ``Mobile equipment'' means all Federally owned ships, 
aircraft, and nonroad vehicles.
    Sec. 710. ``Renewable energy'' means energy produced by solar, wind, 
geothermal, and biomass power.
    Sec. 711. ``Renewable energy technology'' means technologies that 
use renewable energy to provide light, heat, cooling, or mechanical or 
electrical energy for use in facilities or other activities. The term 
also means the use of integrated whole-building designs that rely upon 
renewable energy resources, including passive solar design.
    Sec. 712. ``Source energy'' means the energy that is used at a site 
and consumed in producing and in delivering energy to a site, including, 
but not limited to, power generation, transmission, and distribution 
losses, and that is used to perform a specific function, such as space 
conditioning, lighting, or water heating.
    Sec. 713. ``Utility'' means public agencies and privately owned 
companies that market, generate, and/or distribute energy or water, 
including electricity, natural gas, manufactured gas, steam, hot water, 
and chilled water as commodities for public use and that provide the 
service under Federal, State, or local regulated authority to all 
authorized customers. Utilities include: Federally owned non-profit 
producers; municipal organizations; and investor or privately owned 
producers regulated by a state and/or the Federal Government; 
cooperatives owned by members and providing services mostly to their 
members; and other nonprofit State and local government agencies serving 
in this capacity.
    Sec. 714. ``Utility energy-efficiency service'' means demand side 
management services provided by a utility to improve the efficiency of 
use of the commodity (electricity, gas, etc.) being distributed. 
Services can include, but are not limited to, energy efficiency and 
renewable energy project auditing, financing, design, installation, 
operation, maintenance, and monitoring.
                                            William J. Clinton
The White House,
June 3, 1999.

[Filed with the Office of the Federal Register, 8:45 a.m., June 7, 1999]

Note: This Executive order will be published in the Federal Register on 
June 8.