Federal Advocacy Update

Federal Issues

Federal Issues

NAESCO serves as the national voice of the ESCO industry through its national and regional advocacy efforts that support the strategic interests of its members. We are proud that our industry and our members serve as a vanguard in leading the economy by providing the investment, the jobs, and the infrastructure improvements needed to rebuild America.

NAESCO’s advocacy work has been built around growing market opportunities for ESCOS and their key providers and partners and we continue to build on this effort in 2017.  

NAESCO continues to work on several major programs and legislative issues that are important to the growth of the ESCO industry.

Performance Contracting Challenge

In late December, FEMP announced that federal agencies had exceeded President Obama’s $4 billion goal with $4.2 billion of booked projects. NAESCO is now working to ensure that the Trump Administration will reinforce this ongoing federal waste reduction program by issuing a new Executive Order for a minimum of another $2 billion  of projects that focuses on both water and energy efficiency.

Policy Agenda for the Presidential Transition

NAESCO is making a focused effort to get the Trump transition team to adopt a public buildings “Retrofit for Resiliency” program as part of its infrastructure initiative. Our proposal will emphasize performance-based tax and interest rate incentives for EPC projects, rather than direct grants, in order to leverage federal dollars. We will propose that the Retrofit for Resiliency program include a comprehensive suite of measures, including EE, RE, CHP and DG, energy storage, and advanced controls and microgrids.

NAESCO is working with member ESCOs and the Federal Performance Contracting Coalition (FPCC) to ensure that retrofitting public buildings is part of the Trump program to rebuild our infrastructure.                                  

NAESCO is also working with the EE Strategy Group coalition to promote a broader list EE programs that can produce tens of thousands of new jobs to the new administration.

179D Deduction

NAESCO has worked successfully for four years with a group of interested NAESCO members and the lobbying firms of Van Ness Feldman and Prime Policy Group to secure the extension of the Section 179D deductions for energy efficiency work in commercial buildings. We were able to obtain extensions that covered the 2014 through 2016 tax years.

The outlook for comprehensive tax reform legislation, including energy related tax incentives, has changed dramatically and the Section 179D Building Deduction, which expired on December 31, 2016, is an example of the type of deduction that Congress may try to permanently eliminate. We will be working with the energy efficiency community to continue efforts to educate Senators, Representatives, and new members of the Trump administration on the importance of providing a tax incentive for increasing the energy efficiency of commercial buildings, including those owned by governments and other not-taxable entities. 

HUD Programs and Procedures

  • NAESCO ESCOs and HUD are continuing their bi-monthly conference calls to discuss issues and challenges with the PHA EPC programs.

      Clean Power Plan (CPP)

  • NAESCO has worked for three years with a group of ten ESCOs that developed a substantial White Paper and a number of formal comment documents that have been submitted to the EPA.  We expect that President Trump will move to cancel the CPP in the early days of his administration, since this was one of his major campaign pledges, and so we will stop working on it unless and until there is an indication that it will continue.

PACENation

  • NAESCO now has a seat on the board of PACENation, a national organization formerly called PACENow, which is promoting the adoption of high-quality PACE programs across the country. We will work with the Trump Administration to identify opportunities to promote commercial PACE nationally as a way to stimulate EE and RE investments in commercial, non-profit and public facilities.

U.S. Energy Service Company Industry Study Updates Market Trends

  • Lawrence Berkeley National Laboratory and NAESCO released an updated study in late fall 2016 analyzing  the market size, growth projections and industry trends of the U.S. Energy Service Company industry, drawing on information provided by ESCO executives in late 2015. A key finding was that after more than two decades of year‐over‐year growth, ESCO industry revenues appeared to flatten between 2011 and 2014. ESCOs reported 2014 industry revenue of approximately $5.3 billion, which represents no increase over the 2011 ESCO industry revenue of $5.3 billion (nominal $) reported by Stuart et al. (2013).
  • In that earlier Lawrence Berkeley National Laboratory study, ESCOs projected annual revenues of ~$7.5 billion in 2014, which was about 44% ($2.3billion) higher than actual ESCO‐reported revenues. ESCOs expect total annual industry revenues to be approximately $7.6 billion in 2017, which equates to an average annual growth rate of ~13% from 2015‐2017.
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