Lights Out

As of Oct. 1, the most successful program in U.S. history for improving energy efficiency in federal buildings is toast. The demise of the Energy Savings Performance Contracting program is no insignificant matter, seeing as how the federal government is the single biggest energy-user in the nation. Taxpayers spend $4 billion per year to power 500,000 federal buildings nationwide, from science labs to military bases.

The ESPC program grew out of the Energy Conservation Policy Act, which was enacted in 1992 by President Bush the First, whose intent was to allay problems that seem to run in the family: rising post-war budget deficits and vertiginous energy demands at a time of crisis in the Middle East. The program was slow to take off, but President Clinton recognized its merits and issued an executive order in 1999 exhorting all federal agencies to participate, spurring dramatic energy cuts across the board -- and in particular at the Defense Department, which accounts for 80 percent of the federal government's energy use.

Since its inception, the program has drawn a whopping $1.5 billion in private-sector investments in efficiency measures in federal buildings. The government itself doesn't put the money down for energy efficiency; private companies finance and maintain the improvements. Energy consultant Jennifer Schafer, who represents Honeywell, Johnson Controls, Sempra, and other companies that implement efficiency measures at federal facilities, called the program "about as win-win as you can get."

Payback on the $1.5 billion in corporate investments is estimated to take about five years, with savings on federal energy bills amounting to roughly $300 million per year. And since the efficiency measures last for about 20 years, the long-term savings could eventually total some $6 billion, according to Mark Hopkins, acting co-president of the Alliance to Save Energy. That's four times the original investment -- quite enough to make any bottom-liner salivate. The private companies split the savings with the feds, thereby saving taxpayers money while making a profit for themselves -- not to mention cutting down on the pollution and resource consumption associated with producing electricity.

"Letting this program lapse makes no sense at all. It is simply a tragedy," said Schafer. "There's not a soul we have talked to on the Hill or anywhere who says, 'God, that ESPC program really sucks. What a drag it is to guarantee savings for the federal government.' Everybody says, 'Wow! What a great program.'"

So what happened? It's not that the Bush administration is opposed to the ESPC program; it's just that the administration didn't fight for its survival before its expiration date. As a pilot project, the original ESPC proposal included a sunset date one decade out from its start -- Oct. 1, 2003. The Cheney energy plan does include a measure that would make the program permanent, but that plan has not passed Congress.

"If the White House had told Sen. [Pete] Domenici [R-N.M., chair of the Energy Committee] to move the ESPC provision forward on its own, it would have passed in a matter of hours," said Hopkins. "But they're refusing to separate anything from the rest of the energy plan. That way they can keep the pressure on to pass the whole enchilada." In other words, those who support controversial provisions such as opening Alaska's Arctic National Wildlife Refuge to oil drilling don't want to section off the more popular measures in the Bush energy plan, like the ESPC program, because they can be used as incentives to fast-track the plan as a whole.

Bush's willingness to let this unequivocally triumphant program languish for the sake of a political gambit is particularly discouraging given that the very circumstances that led his father to institute ESPC are again intensifying. We may be seeing repeat crises during Bush 41 and Bush 43, but we're not seeing repeat solutions.