In recent years, concepts such as “green construction” and “renewable energy” seem to have become almost commonplace. In what is perhaps an effort to lead the world by example in these areas, President Barack Obama recently issued a Presidential Memorandum that calls upon federal agencies to increase drastically their use of renewable energy sources.
The Memo and Its Goals
The Memo outlines ambitious goals that seek to more than double the federal government’s current use. The Memo targets the use of renewable energy sources for 20% of the government’s energy needs by 2020. To achieve this goal, federal agencies must ensure that their renewable energy usage exceeds 10% of all energy usage by 2015, 15% in 2016 and 2017, and 17.5% in 2018.
Since the federal government occupies nearly 500,000 buildings across the country, the Memorandum zeroes in on building performance and energy efficiency. It prioritizes the installation of renewable energy sources directly on federal property as an ideal way to realize the targets set forth in the Memo.
Implementation and Measures
To measure the performance of federal buildings, energy and water meters are to be installed in all federal buildings where installation is cost-effective and appropriate. To promote and ensure compliance, transparency, and benchmarking, data collected from the meters is to be reported to the Environmental Protection Agency and Green Button.
Notably, the Memo is to be implemented in a manner consistent with Executive Order 13514, which was issued in October 5, 2009. This Executive Order requires new construction and major renovation on federal buildings to be considered “high performance” or “sustainable.”
What Does It Mean for the Construction Industry?
With these new goals and priorities in place, the sustainability and construction industries should expect to see an increase in the installation of renewable energy infrastructures across the country. In fact, a Presidential Memorandum dated December 2, 2011 authorizes and encourages federal agencies to enter into energy savings performance contracts for up to 25 years.
However, agency funding for energy projects remains a concern. Although many trade organizations and other industry activists have applauded the goals set by the Memorandum, the procurement processes, which have allowed large private companies to install renewable energy infrastructures through long-term power purchase agreements, are still unavailable to the federal agencies. With regard to new construction, it will be interesting to see whether and to what extent the federal government incorporates renewable energy sources into those projects.
All told, President Obama’s Memorandum gives reason for optimism within the industry, but that optimism should be guarded while funding and other implementation issues remain up in the air.
Lane F. Kelman is a Partner with the Firm and a member of the Construction Group and chair of the Green Building and Sustainability practice group. He represents developers, general contractors, construction managers and the different trades in complex matters ranging from bid protests, contract negotiations and claim prevention & management.
Lori Wisniewski Azzara is an Associate at Cohen Seglias Pallas Greenhall & Furman PC. Lori practices in the areas of construction and commercial litigation and has experience in contract negotiation, claims for delay and inefficiency, mechanics’ liens, and all types of contractual disputes.