Defense Infrastructure:

Improvement Needed in Energy Reporting and Security Funding at Installations with Limited Connectivity

GAO-16-164: Published: Jan 27, 2016. Publicly Released: Jan 27, 2016.

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Brian J. Lepore
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Franklin W. Rusco
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What GAO Found

The Department of Defense's (DOD) fiscal year 2013 Annual Energy Management Report (Energy Report) addressed some of the required reporting elements and correctly incorporated data from the military services and defense agencies. However, the report is not fully reliable because the data were captured and reported using different methods, hindering comparability across the department. Specifically, the Energy Report addressed six, partially addressed four, and did not address two reporting requirements. For example, the Energy Report addressed the requirement to describe actions taken to implement DOD's energy performance master plan, partially addressed the requirement to describe progress to meet various energy goals (it described progress for three of five required goals), and did not address the requirement to describe the types and amount of financial incentives received. The Energy Report correctly reflected data provided by the military services and defense agencies. However, the military services and defense agencies used different methods for capturing and reporting on data in the Energy Report such as on energy consumption and projects. These inconsistencies resulted from guidance that was either unclear or lacking. For example, DOD did not provide guidance on reporting end-of-fiscal-year energy data; thus, the military services and defense agencies used different reporting methods. Without clear guidance for reporting data consistently, it will be difficult for DOD to have reliable data to plan effectively to reach energy goals, and Congress will have limited oversight of DOD's energy consumption and difficulty in comparing energy projects.

The military services generally help ensure energy security (the ability to continue missions in the event of a power outage) at their energy-remote military installations in Alaska and Hawaii by providing access to multiple power sources. However, GAO identified areas of risk to energy security regarding installation electricity systems, high energy costs, and funding. GAO found that the military services addressed some risks by conducting studies on integrating renewable energy into electricity systems and identifying alternative energy solutions to lower costs. However, military service efforts to incorporate energy security into funding decisions have been limited. The processes to evaluate projects for funding generally do not consider energy security in prioritizing those to receive funding, and officials from all four military services stated that there is no military service or DOD guidance related to evaluating projects for funding that focuses on energy security. As a result, six of the nine locations GAO visited in Alaska and Hawaii cited difficulty obtaining funding for energy security projects. For example, officials at the Air Force's Alaska Radar System said they have sought funding since 2002 to build a networked system of multiple fuel tanks at three off-grid locations that each have only one fuel tank, but they said energy security projects do not compete well against other projects, such as those for new facilities. Navy officials similarly stated that energy security projects—which have significant infrastructure costs—do not compete well for funding against energy conservation efforts based on return on investment. Without clarification of the processes used to compare and prioritize projects for funding to include consideration of energy security, it will be difficult for decision makers to have sufficient information to adequately prioritize energy security projects for funding when appropriate and thus address energy security issues.

Why GAO Did This Study

DOD is the largest energy consumer in the federal government, spending about $4.1 billion on facilities' energy at more than 500 permanent military installations throughout the world in fiscal year 2013. To help ensure oversight of DOD's fulfillment of energy performance goals, Congress requires that DOD track energy savings, investments, and projects in its annual Energy Report. The Energy Report also details DOD's activities to enhance energy security.

Congress included a provision for GAO to review DOD's fiscal year 2013 Energy Report and energy security at energy-remote military installations—that is, those installations located in areas with limited connectivity and without significant infrastructure of power plants, transmission lines, or distribution lines.

GAO assessed the extent to which (1) DOD addressed the 12 required reporting elements and reliably reported data in its fiscal year 2013 Energy Report and (2) the military services help ensure energy security at energy-remote military installations in the United States. GAO analyzed DOD's Energy Report and interviewed officials from the Office of the Secretary of Defense, military services, defense agencies, and all installations in Alaska and Hawaii because they were identified as energy remote.

What GAO Recommends

GAO recommends, among other things, that DOD revise its guidance for producing the Energy Report and clarify funding processes to include consideration of energy security. DOD concurred with all recommendations.

For more information, contact Brian J. Lepore at (202) 512-4523 or leporeb@gao.gov or Frank Rusco at (202) 512-3841 or ruscof@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: DOD concurred with this recommendation and stated it was already taking action to ensure the next annual Energy Report complies with the requirements of the recently amended section 2925 of Title 10 of the United States Code. In a May 2016 follow up, DOD stated it is waiting to review congressional requirements for the fiscal year 2017 Energy Report, at which time DOD plans to implement our recommendation as appropriate. We will continue to follow up on the status of this recommendation.

    Recommendation: To better provide Congress with information needed to conduct oversight and make decisions on programs and funding, the Secretary of Defense should direct the Assistant Secretary of Defense for Energy, Installations and Environment to reexamine the process for producing the Energy Report to help ensure it complies with statutory requirements, and update it as appropriate. This includes reexamining the process to include required energy goals, descriptions of energy projects funded by appropriations and third parties, details of utility outages at military installations, and a description of the types and amount of financial incentives received.

    Agency Affected: Department of Defense

  2. Status: Open

    Comments: DOD concurred with our recommendation to provide more consistent guidance to the installations for the Energy Report. DOD stated that the Office of the Assistant Secretary of Defense for Energy, Installations, and Environment will work with the military services in fiscal year 2016 to provide more consistent guidance to military installations. In a May 2016 follow up, DOD stated that it is waiting to review congressional requirements for the fiscal year 2017 energy report before updating the guidance, at which time DOD plans to implement our recommendation. We will continue to follow up on the status of this recommendation.

    Recommendation: In order to improve the consistency of certain data submitted by the military services and defense agencies to the Office of the Secretary of Defense and reported in the Energy Report, the Secretary of Defense should direct the secretaries of the Army, Navy, and Air Force, the Commandant of the Marine Corps, the heads of the defense agencies, and the Assistant Secretary of Defense for Energy, Installations and Environment to work together to provide more consistent guidance to the installations, including clearly stating the energy reporting requirements for tenant and host facilities, energy projects, and end-of-fiscal-year data.

    Agency Affected: Department of Defense

  3. Status: Open

    Comments: DOD concurred with our recommendation to identify in the Energy Report instances in which data may not be comparable among the military services and defense agencies. DOD stated that the Office of the Assistant Secretary of Defense for Energy, Installations, and Environment will work with the military services in fiscal year 2016 to identify where data may not be compatible. In a May 2016 follow up, DOD stated that it is waiting to review congressional requirements for the fiscal year 2017 energy report before updating the report, at which time DOD plans to implement our recommendation. We will continue to follow up on the status of this recommendation.

    Recommendation: In order to improve the consistency of certain data submitted by the military services and defense agencies to the Office of the Secretary of Defense and reported in the Energy Report, the Secretary of Defense should direct the secretaries of the Army, Navy, and Air Force, the Commandant of the Marine Corps, the heads of the defense agencies, and the Assistant Secretary of Defense for Energy, Installations and Environment to work together to identify in the Energy Report instances in which data may not be comparable among the military services and defense agencies and the reasons why.

    Agency Affected: Department of Defense

  4. Status: Open

    Comments: DOD concurred with our recommendation that the military services clarify the processes used to compare and prioritize military construction projects for funding, including how and when to include consideration of energy security. DOD noted that it was pursuing an update to DOD Instruction 4170.11, Installation Energy Management, and planned to include guidance to prioritize funding decisions consistent with this recommendation. In a May 2016 follow up, DOD stated that it reissued DOD Instruction 4170.11 in March 2016. This instruction includes a new requirement that DOD components pursue energy projects when life cycle cost effective. The instruction also states that the Assistant Secretary of Defense for Energy, Installations, and Environment will work with DOD components to issue supporting implementing guidance on how to prioritize energy resilience decisions. According to DOD officials, the Assistant Secretary of Defense for Energy, Installations, and Environment will begin developing that implementing guidance soon. We will continue to follow up on the status of this recommendation.

    Recommendation: To better provide the military services with information needed to make decisions on the prioritization of funding, the Secretary of Defense should direct the secretaries of the Army, Navy, and Air Force and the Commandant of the Marine Corps to clarify the processes used to compare and prioritize military construction projects for funding, including how and when to include consideration of energy security.

    Agency Affected: Department of Defense

 

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