Casten Calls on Biden Administration to Cut Red Tape Slowing Federal Procurement of Clean Energy, Crucial to Combating Climate Change, Saving Taxpayer Money
Washington, DC (July 28th, 2022) – Today, US Congressman Sean Casten (IL-06), who spent two decades as a clean energy entrepreneur and CEO before coming to Congress, and Rep. Peter Welch (VT-AL) led 24 Members of Congress in calling on the Biden Administration to empower the federal government to leverage all available tools to procure clean energy and cut down on its contribution to fossil fuel pollution causing climate devastation.
The letter calls for OMB to change its guidance on utility contracts by eliminating its termination clause requirements,provisions which require upfront scoring as a sort of insurance against default on contracts . These requirements are often a significant portion of the contract value which subsequently reduces the carbon free electricity that can be attained by federal agencies at an even greater percentage. Eliminating these termination clauses will help put carbon free electricity on a more level playing field with more carbon-intensive resources.
Casten has led the charge to decarbonize the procurement by the federal government since his first term. Last December, President Biden signed into law Casten’s clean energy provisions as part of the National Defense Reauthorization Act requiring 10% of existing and future military installations to reach net zero emissions by 2035 and a report on the status of the current DoD energy security goal which aims to have the agency produce or procure not less than 25% renewable energy by 2025. Casten’s leadership in the push for the federal government to lower emissions also helped prompt President Biden to issue an executive order further advancing this initiative during the same month.
Text of the letter can be found here and pasted below:
Dear Director Young,
On December 8, 2021, President Biden signed Executive Order 14057 which calls on the federal government to achieve 100 percent carbon free electricity (CFE) by 2030. To meet this goal, we call on the Office of Management and Budget (OMB) to change its guidance on utility contracts.
The inclusion of termination clauses, provisions which require upfront scoring as a sort of insurance against default on contracts, are often a significant portion of the contract value and reduce the CFE that can be attained by an even greater percentage. To our knowledge, federal agencies have never defaulted on renewable electricity contracts, making excessive termination clauses unnecessary. Eliminating these termination clauses will help put carbon free electricity on a more level playing field with more carbon-intensive resources.
Additionally, OMB's guidance to score the termination of multi-year contracts in the year of execution is overly risk-averse, counter to how the federal government operates, and a burden to agencies. At a time when we need climate action more than ever, we urge you to change OMB's contracting practices and support the federal government’s leadership in the clean energy transition.
Some of the constraints on federal clean energy procurement are statutory. Every agency besides the Department of Defense is currently restricted to 10-year clean electricity contracts. Congress is exploring solutions to this issue, including the Renewable Energy Certainty Act. In the meantime, OMB can advance our progress by eliminating termination clauses and changing how these contracts are scored.
We look forward to working with you to achieve President Biden’s sustainability targets and hope you will consider these changes.
Thank you,
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