S. 765

This bill provides directions to the Congressional Budget Office (CBO) for determining the budgetary effects of energy savings performance contracts and utility energy service contracts.

Under an energy savings performance contract, a private party agrees to fund energy-efficient upgrades for a federal facility, and the federal agency agrees to pay the private party from reductions in the agency's energy costs. Under a utility energy service contract, the services and equipment are provided by a utility.

In scoring legislation that modifies the authority to enter into the contracts or the scope, terms, or use of the contracts, CBO must: (1) record all budgetary effects during the first year in which the authority or modification becomes effective, (2) calculate the cost and savings on a net present value basis by adding market risk over the useful life of the services or product to the discount rate required by the Federal Credit Reform Act of 1990, and (3) classify the effects to be changes in spending subject to the availability of appropriations.

CBO currently scores the authority to enter into the contracts as a form of mandatory spending rather than discretionary spending that is subject to the appropriations process.