Senate cuts energy savings program

The Energy Savings Performance Contracting program, which helped fund energy-efficient equipment in newly constructed buildings, was cut last month when the Senate tried to conform to a smaller budget.

The Senate was trying to pass a stalled energy bill, but was forced to cut the bill’s costs from $31 billion to $14 billion. The Congressional Budget Office estimated that the ESPC program could put taxpayers $3 billion in debt over the next decade. But supporters of the program contend it saves millions in energy costs.

The way the ESPC program worked was that private companies met with building managers of federal agencies, such as the Department of Defense, to look at energy costs and discuss how to lower them. Then, when new buildings were built, energy-saving equipment was installed that turned lights off if someone left the room or set air conditioners to run during specific times. The companies were then paid from the savings generated by their energy-efficient systems. Since its inception nearly 10 years ago, the program was used to cut energy costs in new government buildings and military facilities.

Although there are some management costs, program advocates say federal agencies actually saved money through the program, which generated more than $4 billion in accumulated energy savings and at least $36 million in net savings to taxpayers after the companies were reimbursed.

According to CBO Director Douglas Holtz-Eakin, the program was a financial liability for the government, and it was the Senate’s responsibility to trim spending.