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    EXECUTIVE DIRECTIVE NO. 2005-4

    ENERGY EFFICIENCY IN STATE FACILITIES AND OPERATIONS

    WHEREAS, Section 1 of Article V of the Michigan Constitution of 1963 vests the executive power of the State of Michigan in the Governor;

    WHEREAS, under Section 8 of Article V of the Michigan Constitution of 1963 each principal department of state government is under the supervision of the Governor unless otherwise provided by the Constitution;

    WHEREAS, under Section 8 of Article V of the Michigan Constitution of 1963, the Governor is responsible to take care that the laws be faithfully executed;

    WHEREAS, under Executive Order 2002-20, MCL 18.321, all of the authority, powers, functions, duties, and responsibilities pertaining to the planning, management and operation, capital renewal, and acquisition of buildings and facilities of Executive Branch agencies, excluding the Department of Transportation, the Department of Military and Veterans Affairs and the Department of Natural Resources, were transferred to the Department of Management and Budget;

    WHEREAS, under Section 551 of The Management and Budget Act, 1984 PA 431, MCL 18.1551, the Governor shall inquire into the administration of The Management and Budget Act;

    WHEREAS, under Section 261 of The Management and Budget Act, 1984 PA 431, MCL 18.1261, the Department of Management and Budget must provide for the purchase of, the contracting for, and the providing of supplies, materials, services, insurance, utilities, third party financing, equipment, printing, and all other items as needed by state agencies for which the Legislature has not otherwise expressly provided;

    WHEREAS, under Section 241b of The Management and Budget Act, 1984 PA 431, MCL 18.1241b, the Department of Management and Budget must consider the energy efficiency of all materials used in the construction, alteration, repair, or rebuilding of a building or facility owned or operated by this state;

    WHEREAS, under Section 253 of The Management and Budget Act, 1984 PA 431, MCL 18.1253, a state agency may enter into a multi-year contract for energy conservation improvements to state facilities to be paid for from the avoided operating costs for utility service or fuel produced by the improvements;

    WHEREAS, under Section 213 of The Management and Budget Act, 1984 PA 431, MCL 18.1213, the Department of Management and Budget may issue directives relative to motor vehicles used by all state agencies, except for motor vehicles under the jurisdiction of the Department of Transportation;

    WHEREAS, under Section 131 of The Management and Budget Act, 1984 PA 431, MCL 18.1131, the Director of the Department of Management and Budget may issue, alter, or rescind administrative and procedural directives as determined to be necessary for the effective administration of the Act;

    WHEREAS the State of Michigan, in the operation of state facilities and use of state motor vehicles, consumes significant amounts of electricity, natural gas, petroleum, fuel oil, chilled water, steam, gasoline, and other natural resources;

    WHEREAS, the cost of energy continues to rise and traditional sources of non-renewable energy continue to be depleted at a rapid pace;
    WHEREAS, the State of Michigan is a leading consumer of energy throughout Michigan;

    WHEREAS, products or processes that use less energy provide both an environmental and a fiscal benefit;

    WHEREAS, state departments and agencies will benefit from interagency communication and joint problem solving to reduce energy consumption and achieve new energy efficiencies;

    WHEREAS, dramatic increases in energy prices have increased the importance of reducing energy costs incurred by state government and protecting Michigan’s economy through increased energy efficiency;

    WHEREAS, Michigan taxpayers will benefit from the cost savings delivered and an improved environment with less pollution through greater energy efficiency;

    NOW, THEREFORE, I, Jennifer M. Granholm, Governor of the State of Michigan, by virtue of the  power vested in the Governor by the Michigan Constitution of 1963 and Michigan law direct the following:

    I. DEFINITIONS

    As used in this Directive:

    A. “Alternative Fuel” includes a “clean fuel” as defined under Section 2 of the Michigan Next Energy Authority Act, 2002 PA 593, MCL 207.822.

    B. “Department” means the Department of Management and Budget, a principal department of state government established under Section 121 of The Management and Budget Act, 1984 PA 431, MCL 18.1121.

    C. “Energy Conservation Measure” means improvement of a building structurally or the installation of equipment or materials in a building for the purpose of reducing energy consumption or cost, increasing energy efficiency, or allowing the use of a renewable resource for fuel.

    D. “Energy Star” means the voluntary partnership among the United States Department of Energy, the United States Environmental Protection Agency, product manufacturers, local utilities, and retailers to help promote energy efficient products by labeling with the Energy Star® logo, educate consumers about the benefits of energy efficiency, and help promote energy efficiency in buildings by benchmarking and rating energy performance.

    E. “Hybrid Vehicle” includes a “hybrid vehicle” or a “hybrid electric vehicle” as defined under Section 2 of the Michigan Next Energy Authority Act, 2002 PA 593, MCL 207.822.

    F. “LEED” means the Leadership in Energy and Environmental Design Green Building Rating System developed by the United States Green Building Council.  LEED is recognized as the nation’s leading green building rating system and promotes high-performance building practices; energy, water, and materials conservation; environmentally preferred products and practices; improvements in employee health, comfort, and productivity; and reductions in facility operation costs and environmental impacts.

    II. REDUCING ENERGY USE IN STATE BUILDINGS

    A. The Department of Management and Budget shall establish an energy efficiency savings target for all state buildings managed by the Department or another department or agency within the Executive Branch of state government.  The goal shall be to attain a 10% reduction in energy use by December 31, 2008 and a 20% reduction in grid-based energy purchases by December 31, 2015, when compared to energy use and energy purchases for the state fiscal year ending September 30, 2002.

    B. On or before December 31, 2006, the Department shall implement Energy Conservation Measures and the following best management practices to improve energy efficiency:

    1. Establish a program for an energy analysis of each state building identifying opportunities for reduced energy use, the cost, and associated savings for each, including a completion schedule for the energy analysis program.  Under the program, the Energy Star assessment and rating program shall be extended to all state buildings occupied by state employees.

    2. Establish a program to perform regular maintenance on all lighting, heating, ventilation, and air conditioning systems, including, but not limited to, lubricating, balancing, aligning, vacuuming, cleaning, and checking seals, to ensure optimum efficiency.

    3. Establish a program to evaluate the feasibility of converting to more energy-efficient lighting systems, including goals for making cost-effective lighting efficiency improvements that reduce electricity costs and maintain illumination quality.

    4. Establish policies and procedures to identify and eliminate air infiltration and improve thermal insulation in building exteriors, such as walls, windows, doors, ceilings and floors.

    5. Establish policies and procedures to reduce unnecessary use of lighting, heating, ventilation, and air conditioning systems, and to control thermostats to maximize energy savings while also providing occupant comfort.

    6. Establish policies and procedures to maintain, monitor, and control systems that use water to reduce waste.

    7. Establish policies and procedures to ensure the energy-saving feature in all Energy Star compliant electronic office equipment is activated, unless enabling the feature will hinder the performance or security of the equipment.

    C. The Department shall explore and identify options for funding these energy initiatives, including, but not limited to, federal funds and grants and the use of energy conservation work orders or work projects as authorized under Section 254 of The Management and Budget Act, 1984 PA 431, MCL 18.1254.

    III. ENERGY EFFICIENCY AND THE STATE MOTOR VEHICLE FLEET

    A. In managing the State of Michigan’s reduced fleet of motor vehicles, the Department shall do all of the following:

    1. Comply with the requirements of the federal Energy Policy Act of 1992, as amended, (EPAct) which is intended to reduce the United States’ dependence on foreign oil by requiring certain fleets, including motor vehicle fleets operated by state governments, to acquire Alternative Fuel vehicles capable of operating on non-petroleum fuels or on blended fuels with lower petroleum content.

    2. Include Hybrid Vehicles within the state’s fleet, if analysis by the department determines the Hybrid Vehicles to be cost effective and capable of meeting the state’s transportation needs.

    3. As the public Alternative Fuel infrastructure continues to develop, require the users of motor vehicles within the state fleet to refuel with Alternative Fuels to the extent feasible.  Where Alternative Fuel is available and cost-effective, require users of motor vehicles within the state fleet to purchase Alternative Fuel.

    4. Develop procedures to encourage or require the use of diesel fuel with the highest percentage of biodiesel content available, when biodiesel fuel is available to a user of a diesel fuel vehicle in the state fleet.

    IV. ENERGY EFFICIENCY AND STATE PURCHASING

    A. The Department shall revise state purchasing policies and procedures to do all of the following:

    1. Include energy efficiency considerations and life-cycle costs when determining whether the purchase of or contracting for goods or supplies represents the best value for the State of Michigan, including, but not limited to, equipment purchased for state facilities such as lighting equipment, heating systems, ventilation systems, air conditioning systems, and water heating systems.  As used in this paragragh, “life-cycle costs” means the purchase price for goods or supplies plus the estimated operating costs for the goods or supplies over the useful life of the goods or supplies.

    2. Specify that any of the following purchased by state departments or agencies shall be Energy Star compliant:

    a. New electronic office equipment purchased by state departments or agencies shall be Energy Star compliant to the extent Energy Star certified equipment is available.

    b. Major appliances purchased for state-owned or operated facilities, including residential facilities, shall be Energy Star compliant to the extent Energy Star certified equipment is available.

    V. ENERGY EFFICIENCY AND STATE CAPITAL OUTLAY PROJECTS

    A. Currently all state-supported capital outlay projects over $1 million, whether for state departments or agencies, universities, or community colleges, must be designed and constructed in accordance with the Leadership in Energy and Environmental Design (LEED) Green Building Rating System developed by the United States Green Building Council.  LEED certification ensures that all new state facilities are energy efficient and environmentally sustainable.

    B. The Department shall adopt policies and procedures to ensure that all new construction and major renovation of state-owned facilities, including all capital outlay projects, shall be accomplished consistent with LEED guidelines and standards, and shall score a minimum of 26 points on the LEED scorecard established by the United States Green Building Council, which is the minimum score required for LEED-certified status.  The policies and procedures required under this paragraph shall apply to state-leased facilities to the extent feasible.

    VI. RECOGNITION OF EFFORTS TO IMPROVE STATE ENERGY EFFICIENCY

    A. The Department shall establish an annual award program to be known as the Governor’s Award for Excellence in Energy Efficiency to annually recognize and reward state department or agency progress in implementing cost-effective energy efficiency and Energy Conservation Measures and for achieving energy savings.

    VII. IMPLEMENTATION AND ENFORCEMENT

    A. The Department, the Department of Labor and Economic Growth, the Department of Environmental Quality, the Department of Agriculture, and the Michigan Public Service Commission shall provide technical assistance to state departments and agencies in implementing this Directive.

    B. On or before June 30, 2005, the Directors of the Department of Environmental Quality, the Department of Labor and Economic Growth, and the Department shall make recommendations to the Governor identifying additional opportunities to promote greater energy efficiency and expanded use of clean technology in Michigan.

    C. The Department shall adopt policies and procedures to require all state departments to prepare an annual report describing steps taken to incorporate energy efficiency into operations.  Beginning November 30, 2006, the Department shall prepare an annual report on the state’s progress in employing strategies to improve energy efficiency, implementation of Energy Conservation Measures and savings achieved.

    D. The Department shall enforce the requirements of this Directive and any policies, procedures, or department directives issued to implement this Directive pursuant to The Management and Budget Act, 1984 PA 431, MCL 18.1101 to 18.1594.

    E. Reports of violation of the requirements of this Directive shall be transmitted to the Director of the Department.
    All departments and agencies shall assist the Department, as necessary, in implementing this Directive

    This directive is effective April 22, 2005.

    Given under my hand this 21st day of April, in the year of our Lord, two thousand and five.

    _______________________________________
    JENNIFER M. GRANHOLM
    GOVERNOR

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