Audit Report: OAS-L-11-02

The Energy Independence and Security Act of 2007 (EISA) requires Federal agencies to apply
energy efficiency measures to Federal buildings so that by Fiscal Year (FY) 2015, each agency's
energy intensity is reduced by 30 percent from the baseline established in FY 2003. Energy
intensity is calculated as the energy consumption in British Thermal Units (BTUs) per gross
square foot of the Federal buildings. The Department of Energy's (Department) FY 2003 energy
consumption baseline for its sites around the Nation was 23 trillion BTUs, supplied by energy
acquired at an annual cost of around $229 million. If the Department achieves the 30 percent
energy conservation requirement in FY 2015, its energy consumption would be reduced by
nearly 7 trillion BTUs, resulting in a savings of nearly $80 million annually. This equates to the
power necessary to operate nearly 180,000 housing units.
The Department's approach to meeting its EISA requirement has been to rely, to the maximum
extent possible, on its individual sites obtaining third-party financing agreements, known as
Energy Savings Performance Contracts (ESPCs), to fund energy conservation projects. An
ESPC is a financing mechanism in which a private sector energy services company develops and
installs multiple energy efficiency projects in exchange for a share of the future savings over the
contract period.
The Department has emphasized the need for its actions to set the example for energy
conservation in the Federal Government, the Nation's largest energy consumer. Because of the
Department's commitment to reduce energy consumption and greenhouse gas emissions, we
initiated this audit to determine whether the Department had developed an effective approach for
meeting EISA's energy intensity reduction requirement.