H.R. 723 would modify agencies’ authority to enter into energy savings performance contracts (ESPCs), a specific type of long-term contract used to procure equipment and services to conserve energy in federal buildings. The bill also would specify new reporting requirements for federal agencies.
In CBO’s view, commitments under ESPCs create direct spending because agencies enter into such contracts without appropriations in advance to cover their full costs. On the basis of that view, CBO estimates that enacting H.R. 723 would increase direct spending by $441 million over the 2019-2027 period. CBO also estimates that reductions in federal agencies’ energy costs attributable to investments in energy-related services and equipment procured through contracts authorized under the bill would total $166 million over the 2019-2027 period (and additional amounts after 2027). Over that period, CBO also estimates that discretionary spending for certain services related to those contracts would total $36 million.
Because H.R. 723 would affect direct spending, pay-as-you-go procedures apply. Enacting the bill would not affect revenues.
CBO estimates that enacting H.R. 723 would not increase net direct spending or on-budget deficits by more than $2.5 billion in any of the four consecutive 10-year periods beginning in 2028.
For purposes of determining budget-related points of order for legislation considered by the House, section 5109 of H. Con. Res. 71, the Concurrent Resolution on the Budget for Fiscal Year 2018, specifies how CBO should prepare cost estimates for ESPCs. Specifically, that resolution requires CBO to estimate, on a net-present value basis, the lifetime net cost or savings attributable to projects financed by such contracts and to record that amount as an upfront change in direct spending. Using those procedures, CBO estimates that H.R. 723 would reduce direct spending by $27 million over the 2019-2027 period. However, H. Con. Res 71 also specifies that, in the House of Representatives, any estimated savings calculated on that basis may not be used as an offset for purposes of budget enforcement.
H.R. 723 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would impose no costs on state, local, or tribal governments.
