As reported by the Senate Committee on Energy and Natural Resources on September 9, 2015
S. 2012 would amend current law and authorize appropriations for a variety of activities and programs administered primarily by the Department of Energy (DOE). The legislation also would:
- Expand and extend federal agencies’ authority to use certain types of long-term contracts to invest in energy conservation measures and related services;
- Specify various energy-related goals and requirements for federal agencies;
- Modify DOE’s authority to guarantee loans under Title 17 of the Energy Policy Act of 2005; and
- Establish a pilot program to streamline the review and approval of applications for permits to drill for oil and gas on federal lands.
Assuming appropriation of amounts specifically authorized and estimated to be necessary under S. 2012—roughly $40 billion over the 2016-2020 period (and an additional $3 billion in later years)—CBO estimates that implementing this legislation would result in outlays totaling $32 billion over the 2016-2020 period from those appropriations, with additional spending of about $11 billion occurring after 2020.
CBO also estimates that the bill would result in additional direct spending. The estimated amount of direct spending depends on the budgetary treatment of federal commitments through certain types of long-term energy-related contracts, which CBO expects would increase under the bill. In CBO’s view, commitments under such contracts are a form of 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 S. 2012 would increase direct spending by $659 million over the 2016-2025 period.
However, for purposes of determining budget-related points of order for legislation considered by the Senate, section 3207 of the Concurrent Resolution on the Budget for Fiscal Year 2016 specifies a scoring rule for provisions related to such contracts (referred to in this document as the scoring rule for energy contracts). Specifically, that rule requires CBO to calculate, 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 spending subject to appropriation. Under that rule, CBO estimates that S. 2012 would increase direct spending by $29 million over the 2016-2025 period.
Enacting S. 2012 could affect revenues, but CBO estimates any such effects would be insignificant in any year. Because the bill would affect direct spending and revenues, pay-as-you-go procedures apply.
CBO estimates that enacting S. 2012 would not increase net direct spending or on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2026.
S. 2012 would impose an intergovernmental and private-sector mandate, as defined in the Unfunded Mandates Reform Act (UMRA), on public and private entities regulated by FERC, such as electric utilities, by requiring them to pay fees in some circumstances. The bill would impose two additional mandates on public entities. One would require state and tribal governments to certify to DOE whether or not they have updated residential and commercial building codes to meet the latest standards developed by building efficiency organizations. The other would preempt state and local environmental and liability laws if they conflict with emergency orders issued by the Federal Energy Regulatory Commission (FERC). The bill also would impose private-sector mandates on electric transmission organizations and traders of oil contracts and on individuals seeking compensation for damages caused by utilities operating under certain emergency orders. Based on information from DOE and analyses of similar requirements, CBO estimates that the aggregate cost of complying with mandates in the bill would fall below the annual thresholds established in UMRA for intergovernmental and private-sector mandates ($77 million and $154 million in 2015, respectively, adjusted annually for inflation).
CBO has not reviewed some provisions of section 2001 and section 4303 for intergovernmental or private-sector mandates. Those provisions would provide the Secretary of Energy with emergency authority to protect the electric transmission grid from cybersecurity threats and would protect entities subject to that authority from liability. Section 4 of the Unfunded Mandates Reform Act excludes from the application of that act any legislative provisions that are necessary for national security. CBO has determined that those provisions fall within that exclusion.