House Bill hb0453c1

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    Florida House of Representatives - 2001              CS/HB 453

        By the Committee on Utilities & Telecommunications and
    Representatives Prieguez, Diaz de la Portilla, Paul and
    Littlefield




  1                      A bill to be entitled

  2         An act relating to guaranteed energy

  3         performance savings contracting; amending s.

  4         489.145, F.S.; changing provisions relating to

  5         energy efficiency contracting to provisions

  6         relating to guaranteed energy performance

  7         savings contracting; providing a short title;

  8         providing legislative intent; revising

  9         definitions, procedures, and contract

10         provisions; providing criteria, requirements,

11         procedures, and limitations for energy

12         performance contracts; providing for program

13         administration and contract review by the

14         Department of Management Services and the

15         Office of the Comptroller; providing an

16         effective date.

17

18  Be It Enacted by the Legislature of the State of Florida:

19

20         Section 1.  Section 489.145, Florida Statutes, is

21  amended to read:

22         489.145  Guaranteed energy performance savings

23  efficiency contracting.--

24         (1)  SHORT TITLE.--This section may be cited as the

25  "Guaranteed Energy Performance Savings Contracting Act."

26         (2)  LEGISLATIVE FINDINGS.--The Legislature finds that

27  investment in energy conservation measures in agency

28  facilities can reduce the amount of energy consumed and

29  produce immediate and long-term savings. It is the policy of

30  this state to encourage agencies to invest in energy

31  conservation measures that reduce energy consumption, produce

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  1  a cost savings for the agency, and improve the quality of

  2  indoor air in public facilities and to operate, maintain, and,

  3  when economically feasible, build or renovate existing agency

  4  facilities in such a manner as to minimize energy consumption

  5  and maximize energy savings. It is further the policy of this

  6  state to encourage agencies to reinvest any energy savings

  7  resulting from energy conservation measures in additional

  8  energy conservation efforts.

  9         (3)(1)  DEFINITIONS.--As used in this section, the

10  term:

11         (a)  "Agency" means the state, a municipality, a school

12  district or school board, or a another political subdivision.

13         (b)  "Energy conservation measure" means a training

14  program, or facility alteration, or equipment purchase to be

15  used in new construction, including an addition to an existing

16  facility, which that reduces energy consumption or operating

17  costs and includes, but is not limited to:

18         1.  Insulation of the facility building structure and

19  systems within the facility building.

20         2.  Storm windows and doors, caulking or

21  weatherstripping, multiglazed windows and doors,

22  heat-absorbing, or heat-reflective, glazed and coated window

23  and door systems, additional glazing, reductions in glass

24  area, and other window and door system modifications that

25  reduce energy consumption.

26         3.  Automatic energy control systems.

27         4.  Heating, ventilating, or air-conditioning system

28  modifications or replacements.

29         5.  Replacement or modifications of lighting fixtures

30  to increase the energy efficiency of the lighting system,

31  which, at a minimum, must without increasing the overall

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  1  illumination of a facility, unless an increase in illumination

  2  is necessary to conform to the applicable state or local

  3  building code for the lighting system after the proposed

  4  modifications are made.

  5         6.  Energy recovery systems.

  6         7.  Cogeneration systems that produce steam or forms of

  7  energy such as heat, as well as electricity, for use primarily

  8  within a facility building or complex of facilities buildings.

  9         8.  Energy conservation measures that provide long-term

10  operating cost reductions or and significantly reduce Btu

11  consumed.

12         9.  Renewable energy systems, such as solar, biomass,

13  or wind systems.

14         10.  Devices that reduce water consumption or sewer

15  charges.

16         11.  Storage systems, such as fuel cells and thermal

17  storage.

18         12.  Generating technologies, such as microturbines.

19         13.  Any other repair, replacement, or upgrade of

20  existing equipment.

21         (c)  "Energy cost savings" means a measured reduction

22  in the cost of fuel, and energy consumption, and stipulated

23  operation and maintenance costs created from the

24  implementation of one or more energy conservation measures

25  when compared with an established baseline for the previous

26  cost of fuel, and energy consumption, and stipulated operation

27  and maintenance costs.

28         (d)  "Guaranteed energy performance savings contract"

29  means a contract for the evaluation, and recommendation, and

30  implementation of energy conservation measures, which, at a

31  minimum, shall include: including

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  1         1.  The design and installation of equipment to

  2  implement one or more of such measures and, if applicable,

  3  operation and maintenance of such measures.

  4         2.  The amount of any actual annual savings that meet

  5  or exceed total annual contract payments made by the agency

  6  for the contract.

  7         3.  The finance charges incurred by the agency over the

  8  life of the contract. The contract may cover repair or

  9  replacement of existing equipment in a state-owned building or

10  a state-owned hospital, professional fees, and financing

11  charges to be paid from the energy savings less agreed-upon

12  inflation factors, and maintenance services if applicable.

13         (e)  "Guaranteed energy performance savings contractor

14  Qualified provider" means a person or business that is

15  licensed under chapter 471, chapter 481, or this chapter, and

16  is experienced in the analysis, design, implementation, or

17  installation of energy conservation measures through

18  guaranteed energy performance savings contracts.

19         (4)(2)  PROCEDURES.--

20         (a)  An agency may enter into a guaranteed energy

21  performance savings contract with a guaranteed energy

22  performance savings contractor qualified provider or providers

23  to significantly reduce energy or operating costs of an agency

24  facility agency-owned building or an agency-owned hospital

25  through one or more energy conservation measures.

26         (b)  Before design and installation of energy

27  conservation measures entering into the contract, the agency

28  must obtain from a guaranteed energy performance savings

29  contractor qualified provider or providers a report that

30  summarizes the costs associated with of the energy

31  conservation measures and provides an estimate of the amount

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  1  of the energy and or operating cost savings costs will be

  2  reduced. The agency and the guaranteed energy performance

  3  savings contractor may enter into a separate agreement to pay

  4  for costs associated with the preparation and delivery of the

  5  report; however, payment to the contractor shall be contingent

  6  upon the report's projection of energy cost savings being

  7  equal to or greater than the total projected costs of the

  8  design and installation of the report's energy conservation

  9  measures.

10         (c)  After a review of the report, The agency may enter

11  into a guaranteed energy performance savings contract with a

12  guaranteed energy performance savings contractor if the agency

13  it finds that the amount the agency it would spend on the

14  energy conservation measures will is not likely to exceed the

15  amount of the to be saved in energy cost savings and operating

16  cost savings costs for up to 20 10 years from the date of

17  installation, based on life cycle cost calculations, if the

18  recommendations in the report were followed and if the

19  qualified provider or providers give a written guarantee that

20  the energy or operating cost savings will meet or exceed the

21  costs of the system. The contract may provide for installment

22  payments for a period not to exceed 20 10 years.

23         (d)  A guaranteed energy performance savings contractor

24  qualified provider or providers must be selected in compliance

25  with s. 287.055; except that if fewer than three firms are

26  qualified to perform the required services, the requirement

27  for agency selection of three firms, as provided in s.

28  287.055(4)(b), and the bid requirements of s. 287.057 do not

29  apply.

30         (e)  Before entering into a guaranteed energy

31  performance savings contract under this section, an agency

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  1  must provide published notice of the meeting in which it

  2  proposes to award the contract, the names of the parties to

  3  the proposed contract, and the contract's purpose.

  4         (f)  A guaranteed energy performance savings contract

  5  may provide for financing, including tax exempt financing, by

  6  a third party. The contract for third party financing may be

  7  separate from the energy performance contract.  A separate

  8  contract for third party financing must include a provision

  9  that the third party financier must not be granted rights or

10  privileges that exceed the rights and privileges available to

11  the guaranteed energy performance savings contractor.

12         (g)  In determining the amount the agency will finance

13  to acquire the energy conservation measures, the agency may

14  reduce such amount by the application of any grant moneys,

15  rebates, or capital funding available to the agency for the

16  purpose of buying down the cost of the guaranteed energy

17  performance savings contract. However, in calculating the life

18  cycle cost, the agency shall not apply any grants, rebates, or

19  capital funding.

20         (5)(3)  CONTRACT PROVISIONS.--

21         (a)  A guaranteed energy performance savings contract

22  must include a written energy guarantee that may include, but

23  is not limited to the form of, a letter of credit, insurance

24  policy, or corporate guarantee by the guaranteed energy

25  performance savings contractor qualified provider or providers

26  that annual energy and operational cost savings will meet or

27  exceed the amortized cost of energy conservation measures.

28         (b)  The guaranteed energy performance savings contract

29  must provide that all payments, except obligations on

30  termination of the contract before its expiration, may be made

31  over time, but not to exceed 20 10 years from the date of

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  1  complete installation and acceptance by the agency state, and

  2  that the annual savings are guaranteed to the extent necessary

  3  to make annual payments to satisfy the guaranteed energy

  4  performance savings contract for the systems.

  5         (c)  The guaranteed energy performance savings contract

  6  must require that the guaranteed energy performance savings

  7  contractor a qualified provider or providers to whom the

  8  contract is awarded provide a 100-percent public construction

  9  project value bond to the agency state for its faithful

10  performance, as required by s. 255.05 chapter 287.

11         (d)  The guaranteed energy performance savings contract

12  may contain a provision allocating to the parties to the

13  contract any annual energy cost savings that exceed the amount

14  of the energy cost savings guaranteed in the contract.

15         (e)  The guaranteed energy performance savings contract

16  shall require the guaranteed energy performance savings

17  contractor to provide to the agency an annual reconciliation

18  of the guaranteed energy cost savings. If the reconciliation

19  reveals a shortfall in annual energy cost savings, the

20  guaranteed energy performance savings contractor is liable for

21  such shortfall. If the reconciliation reveals an excess in

22  annual energy cost savings, the excess savings may be

23  allocated under paragraph (d) but may not be used to cover

24  potential energy cost savings shortages in subsequent contract

25  years.

26         (f)(d)  The guaranteed energy performance savings

27  contract must provide for payments of not less than

28  one-twentieth one-tenth of the price to be paid within 2 years

29  from the date of the complete installation and acceptance by

30  the agency state, and the remaining costs to be paid at least

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  1  quarterly, not to exceed a 20-year 10-year term, based on life

  2  cycle cost calculations.

  3         (g)(e)  The guaranteed energy performance savings

  4  contract may extend beyond the fiscal year in which it becomes

  5  effective; however, the term of any contract expires at the

  6  end of each fiscal year and may be automatically renewed

  7  annually for up to 20 10 years, subject to the agency making

  8  sufficient annual appropriations based upon continued realized

  9  energy savings.

10         (h)(f)  The guaranteed energy performance savings

11  contract must stipulate that it does not constitute a debt,

12  liability, or obligation of the state.

13         (6)  PROGRAM ADMINISTRATION AND CONTRACT REVIEW.--The

14  Department of Management Services, with the assistance of the

15  Office of the Comptroller, may, within available resources,

16  provide technical assistance to state agencies contracting for

17  energy conservation measures and engage in other activities

18  considered appropriate by the department for promoting and

19  facilitating guaranteed energy performance contracting by

20  state agencies. The Office of the Comptroller, with the

21  assistance of the Department of Management Services, may,

22  within available resources, develop model contractual and

23  related documents for use by state agencies.  Prior to

24  entering into a guaranteed energy performance savings

25  contract, any contract or lease for third-party financing, or

26  any combination of such contracts, a state agency shall submit

27  such proposed contract or lease to the Office of the

28  Comptroller for review and approval.

29         Section 2.  This act shall take effect October 1, 2001.

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