(a) Participation in Demand Response or Load Management Programs.—The Secretary of Defense, the Secretaries of the military departments, the heads of the Defense Agencies, and the heads of other instrumentalities of the Department of Defense are authorized to participate in demand response programs for the management of energy demand or the reduction of energy usage during peak periods conducted by any of the following parties:

(1) An electric utility.

(2) An independent system operator.

(3) A State agency.

(4) A third party entity (such as a demand response aggregator or curtailment service provider) implementing demand response programs on behalf of an electric utility, independent system operator, or State agency.

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(b) Treatment of Certain Financial Incentives.—Financial incentives received from an entity specified in subsection (a) shall be—

(1) received as a cost reduction in the utility bill for a facility; or

(2) deposited into the fund established under subsection (c) for use, to the extent provided for in an appropriations Act, by the military department, Defense Agency, or instrumentality receiving such financial incentive for energy management initiatives.

(c) Energy Savings Financial Incentives Fund.—There is established in the Treasury a fund to be known as the “Energy Savings Financial Incentives Fund”. The Fund shall consist of any amount deposited in the Fund pursuant to subsection (b)(2) and amounts appropriated or otherwise made available to the Fund by law.