Energy Fund to be Introduced

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Two Senators are planning to introduce legislation to create a revolving fund for agencies to use to make their buildings more energy efficient.

Speaking at Johnson Controls' eighth annual Energy Efficiency Forum in Washington last week, Sen. Russell Feingold, D-Wis., announced he will co-sponsor a bill with Wisconsin's other Senator, Herb Kohl, to create a permanent revolving fund to finance agencies' energy efficiency projects.

Under the legislation, an amount equal to eight percent of agencies' total utility payments in each fiscal year would be appropriated to capitalize the fund in fiscal years 1998-2000. After that, the Secretary of Energy would determine an amount necessary to ensure that the fund met its obligations.

Agencies could apply for loans from the fund to finance energy efficiency projects, which would be required to use commercial, off-the-shelf technologies. Agencies would have to repay the loans with interest.

In 1994, President Clinton issued an executive order requiring agencies to reduce their energy use by 2005 by 30 percent compared with energy use in 1985. Agencies currently rely on the Federal Energy Efficiency Fund for funding for energy efficiency projects.

"The problem with the current fund, which operates as a grant program for agencies to make efficiency improvements, is that it does not contribute to the replenishment of capital resources because it does not have to be paid back and is therefore dependent upon appropriations," Feingold said.

A Kohl spokeswoman said the senators would introduce the legislation after the July 4 recess.

Meanwhile, the Energy Department is encouraging agencies to use performance contracting methods, under which the agencies ask energy service companies to cover the up-front costs of improving a federal building's energy efficiency. In return, the companies earn a portion of the savings agencies realize from the improvements.

Energy's Federal Energy Management Program has also launched an energy education campaign for agencies called "You Have the Power." The program's Web site offers energy efficiency success stories from across government.

Feingold said he believes the federal government should push for energy efficiency by "leading by example."

Joseph Romm, acting assistant secretary for energy efficiency and renewable energy, agreed.

"It is not our job to cross our fingers and hope that the best occurs," Romm said. "It's our job to identify credible threats to the future living standards of the American people and take cost-effective action, and obviously energy efficiency and renewable energy is at the top of the list."

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