As ordered reported by the House Committee on Energy and Commerce on April 30, 2014
H.R. 2689 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 energy-related reporting requirements for federal agencies.
CBO estimates that enacting H.R. 2689 would increase direct spending; therefore, pay-as-you-go procedures apply. Over the 2015-2024 period, we estimate that direct spending for contractual commitments to pay nonfederal vendors for energy conservation measures implemented pursuant to this bill would amount to $450 million. CBO also estimates that reductions in federal agencies’ energy costs attributable to investments in energy-related services and equipment procured through contracts authorized under H.R. 2689 would total $210 million over the next 10 years (and additional amounts in subsequent years). In addition, CBO estimates that discretionary spending for certain services related to those contracts would total $10 million over the next five years. Enacting H.R. 2689 would not affect revenues.
CBO believes that allowing agencies to enter into ESPCs without appropriations in advance to cover the costs of the acquired equipment or services creates direct spending authority. However, the Administration does not treat ESPCs that way in the budget. Rather, agencies record payments to the vendors as coming from annual appropriations, usually spread out over many years. In the budget, those costs are offset, at least in part, by whatever reductions in annual energy costs are generated by the investments. Under that budgetary treatment, because it usually takes many years before the annual costs of the equipment or services fall below the annual savings, the federal government generally does not realize significant amounts of net savings in appropriations until after the 10-year period covered by CBO’s cost estimates.
H.R. 2689 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.