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States and Cities Follow Federal Lead in Energy-Efficient Purchasing

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The Federal Energy Management Program (FEMP) helps federal agencies reduce energy bills and improve energy efficiency. FEMP criteria and the federal ENERGYSTAR® energy-efficiency labeling program identify efficient products, helping agencies make energy-efficient choices. State and local governments are among those now following the federal example. A growing number of jurisdictions have adopted energy-efficient purchasing policies, often using the same ENERGYSTAR and FEMP criteria that federal agencies are required to use.

The state of Arizona and the city and state of New York are among the most recent additions to a growing list of states, cities, universities, and school districts that are choosing to "buy efficient," often as part of a broader policy to "buy green" (i.e., choose environmentally preferable and recyclable products). According to the Consortium for Energy Efficiency (CEE), the 50 state governments and approximately 3,043 county, 19,279 city, and 16,656 town governments in the U.S. spend an estimated total $12 billion per year on energy bills and another $50 to 70 billion per year on energy-related products.

The magnitude of this buying power combined with that of the federal government could help jump-start a market transformation, increasing the demand for and availability of energy-efficient products. When major buyers at all levels of government use the same criteria to specify energy-efficient products, this sends a powerful market signal to manufacturers and vendors that some of their largest and most important customers are committed to buying high-efficiency products and are looking for sellers who can offer the best prices and best overall value for these products. In other words, aggregating buyer demand for energy-efficient products will stimulate a competitive market response that helps to lower prices and improve choices for all buyers of energy-efficient products, government and non-government alike.

A recent report prepared for FEMP by the Environmental Energy Technologies Division (EETD) at Lawrence Berkeley National Laboratory (Berkeley Lab) suggests that combined federal, state, and local purchasing could save U.S. taxpayers about $1 billion per year in lower energy bills if standard, minimal-efficiency products were replaced with more efficient (ENERGYSTAR or FEMP-recommended) models over a 10-year period. These savings would be obtained for the most part using funds that would be spent anyway, to replace equipment at the end of its useful life.

Both Executive Order 13123 and Federal Acquisition Regulation (FAR) Part 23 direct federal agencies to buy ENERGYSTAR-labeled products or, for categories where there is no ENERGYSTAR label, to choose FEMP-designated products that are among the 25 percent most energy-efficient on the market. A separate executive order (EO 13221), signed in 2001 by President Bush, calls on federal agencies to buy products that use less than one watt in standby (off) mode or that meet other low-standby-use criteria set by FEMP. Both executive orders allow exceptions if there is no efficient product available to meet the agency's functional requirements or if an efficient product would not be cost effective for a specific application.

Seal of Arizona

Arizona

In Arizona, Governor Janet Napolitano signed a new law (HB 2324), sponsored by State Representative Randy Graf, that sets goals for reducing overall energy use in state government and university buildings. This new law, enacted last April, is similar to the federal building goals in the 1992 U.S. Energy Policy Act and subsequent executive orders. The Arizona law also requires new construction to be more energy efficient and mandates that:

All state agencies shall procure energy efficient products that are...ENERGYSTAR [labeled] or that are certified under the Federal Energy Management Program...unless the products are shown not to be cost-effective on a life-cycle cost basis. (Arizona Statutes, HB 2324)

According to Jim Westberg of the Arizona Department of Commerce Energy Office, "This new purchasing policy is really a great benefit to our state agencies, since we also have a goal of reducing energy use 10 percent by 2008. When the agencies start buying efficient models as part of their normal equipment replacement cycle, it will help them reach that goal."

Taken together, these initiatives will save Arizona taxpayers about $90 million over a 12-year period (2003-2015), according to estimates by the Southwest Energy Efficiency Project.

Seal of New York State

New York State

New York state is also implementing both an executive order and a state law requiring state agencies to buy energy-efficient products. Executive Order #111, signed by Governor Pataki in June 2001, calls for:

  • a 35-percent reduction in energy use by state buildings as of 2010 (compared to usage in 1990),
  • new buildings to meet Leadership in Energy and Environmental Design (LEED) rating criteria and to be least 20 percent more efficient than New York State Building Code requirements, and
  • purchase of ENERGYSTAR or other efficient products as designated by the New York State Energy Research and Development Authority (NYSERDA).

In carrying out this purchasing mandate, NYSERDA has drawn heavily on FEMP's federal procurement criteria.

Matt Brown, who oversees NYSERDA's implementation of the executive order, observes that the order has been welcomed: "Many of the purchasing officials I've spoken to have always wanted to purchase equipment with higher standards; now the executive order gives them the guidance and the go-ahead to do it."

Seal of New York City

New York City

New York City also recently enacted legislation that codifies its practice of energy-efficient purchasing, which began in 1994. Local Law No. 30, signed by Mayor Michael R. Bloomberg on April 11, 2003, requires that energy-using products procured by the city be ENERGYSTAR labeled, provided that there are at least six manufacturers that produce such Energy Star products.

In energy-efficient purchasing, New York city clearly leads by example. During FY 2002, the city spent $90.8 million for ENERGYSTAR-labeled products. Of this amount, more than three-fourths was for computers, monitors, and printers; the rest was spent on photocopiers, fax machines, televisions, videocassette recorders, air conditioners, and lamps. (This total does not include energy-efficient equipment installed as part of construction and renovation projects.)

According to Jennifer Blum at the Department of Citywide Administrative Services (DCAS), New York city's primary purchasing agency for goods, "New York city firmly believes that in our role as a market participant we should promote the purchase of energy-efficient products." For several years, DCAS has provided training to other New York city agencies on energy-efficient and environmentally preferable purchasing. New York city procurement staff note that the on-line listing of ENERGYSTAR-qualified products (http://www.ENERGYSTAR.gov/products) is a valuable source of information for meeting the requirements of the local law.

Seal of California

California

The state of California Department of General Services (DGS) issued a Management Memo on "Procurement of Energy Efficient Products" (Memo #01-14, 7/20/01) listing FEMP product categories and directing that: "Where FEMP-recommended standards are available, all state agencies shall purchase only those products that meet the recommended standards. All products displaying the ENERGYSTAR label meet the FEMP standards. A purchase of an ENERGYSTAR-labeled product automatically complies with this directive."

DGS guidelines for major capital construction projects also require that equipment, appliances, and roofing systems purchased as part of new construction or renovation be ENERGYSTAR compliant. "California state government invests over $3.8 billion annually in design and construction," observes Dan Burgoyne, Sustainability Manager at the California Department of General Services. "California already has some of the most stringent energy codes in the country (Title 24), and the use of ENERGYSTAR products has helped state projects meet and sometimes exceed these stringent energy codes by up to 30 percent."

Meanwhile, the statewide University of California system already specifies ENERGYSTAR Office equipment and is considering ways to extend its energy-efficient purchasing into one of the fastest-growing areas of procurement: energy-using equipment in the university system's many new and existing laboratory facilities.

Seal of Wisconsin

Wisconsin

In Wisconsin, the Department of Administration, Division of Energy works closely with other state agencies, the University of Wisconsin (UW), city governments, and local public housing authorities to encourage widespread use of ENERGYSTAR and FEMP efficiency criteria in government purchasing. Last summer, Division of Energy staff noticed that the UW system was about to issue a major solicitation for compact refrigerators for dormitories. According to Barbara Smith of the Division of Energy, "Several of the manufacturers made ENERGYSTAR compact refrigerator/freezers in the size needed, so the UW buying agent agreed with my suggestion to amend the bid specs to require ENERGYSTAR."

Similarly, the Wisconsin Department of Revenue was so intrigued with the possibility of specifying high-efficiency light-emitting diodes (LED) in lighted state "LOTTERY" signs for use in small retail stores that the department decided to revamp its bid specifications to mandate LEDs. Smith notes that "When the bids came in, the department was very pleased with the price and performance." Local governments in Wisconsin have also made effective use of the statewide contract for high-efficiency LED traffic signals to negotiate attractive prices from local dealers.

Among the next targets in Wisconsin are ENERGYSTAR refrigerators, clothes washers, and room air conditioners. Air conditioners are purchased in volume (about 400 per year by one branch of the university, UW at Madison, alone) to put in dorm rooms used by summer conference attendees. Smith thinks that the new FEMP and ENERGYSTAR criteria for efficient food-service equipment will also be very popular with universities and school districts alike.

Other Cities and States

A number of other states and municipalities have energy-efficient purchasing policies, including the following:

  • The city of Seattle's "Lean and Green City" Copernicus Project calls for purchasing office equipment that meets ENERGYSTAR requirements (http://www.cityofseattle.net/environment/Purchasing.htm).
  • King County in Washington State has purchased 32 hybrid electric vehicles for the county government fleet under a master contract issued by Washington state. The county reports that the purchase price for these hybrids, which have twice the fuel economy of an average new car, was about the same as for conventional sedans.
  • Massachusetts has an Environmentally Preferable Products Procurement Program (EPP) that features ENERGYSTAR-labeled appliances, air conditioners, and office equipment and includes links to the FEMP and ENERGYSTAR websites.
  • The CEE website for State and Local Government Purchasing, which was last updated in 2000, lists numerous case studies of energy-efficient purchasing in cities and states, including: Portland OR; San Antonio TX; San Francisco CA; St. Paul MN; Hennepin and Ramsey Counties MN; Bexar County and Harlandale School District TX; Montgomery County MD; University of California, San Francisco; University of Washington-Seattle; and state governments in Idaho, Massachusetts, and Tennessee.

— Jeff Harris

For more information, contact:

  • Jeffrey Harris
  • (202) 646-7960; fax (202) 646-7800

Selected on-line references:

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