Senate Bill sb0278
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Florida Senate - 2006 (Corrected Copy) SB 278
By Senator Wise
5-372-06
1 A bill to be entitled
2 An act relating to contracting for efficiency
3 or conservation measures by state agencies;
4 amending s. 489.145, F.S.; including water and
5 wastewater efficiency and conservation in the
6 measures encouraged by the Legislature;
7 revising definitions; providing for inclusion
8 of water and wastewater efficiency and
9 conservation measures in guaranteed performance
10 savings contracts entered into by a state
11 agency, municipality, or political subdivision;
12 amending s. 287.064, F.S., relating to
13 consolidated financing of deferred-payment
14 purchases, to conform; providing an effective
15 date.
16
17 Be It Enacted by the Legislature of the State of Florida:
18
19 Section 1. Section 489.145, Florida Statutes, is
20 amended to read:
21 489.145 Guaranteed energy performance savings
22 contracting.--
23 (1) SHORT TITLE.--This section may be cited as the
24 "Guaranteed Energy Performance Savings Contracting Act."
25 (2) LEGISLATIVE FINDINGS.--The Legislature finds that
26 investment in energy, water, and wastewater efficiency or
27 conservation measures in agency facilities can reduce the
28 amount of energy and water consumed and wastewater to be
29 treated and produce immediate and long-term savings. It is the
30 policy of this state to encourage each agency agencies to
31 invest in energy, water, and wastewater efficiency or
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1 conservation measures that provide such reductions reduce
2 energy consumption, produce a cost savings for the agency,
3 and, for energy measures, improve the quality of indoor air in
4 public facilities and to operate, maintain, and, when
5 economically feasible, build or renovate existing agency
6 facilities in such a manner as to minimize energy and water
7 consumption or wastewater production and maximize energy,
8 water, and wastewater savings. It is further the policy of
9 this state to encourage agencies to reinvest any energy
10 savings resulting from energy, water, and wastewater
11 efficiency or conservation measures in additional energy,
12 water, and wastewater efficiency or conservation measures
13 efforts.
14 (3) DEFINITIONS.--As used in this section, the term:
15 (a) "Agency" means the state, a municipality, or a
16 political subdivision.
17 (b) "Energy, water, and wastewater efficiency or
18 conservation measure" means a training program, facility
19 alteration, or equipment purchase to be used in new facilities
20 or in retrofitting or adding to existing facilities or
21 infrastructure new construction, including an addition to an
22 existing facility, which reduces energy, water, wastewater, or
23 operating costs and includes, but is not limited to:
24 1. Insulation of the facility structure and systems
25 within the facility.
26 2. Storm windows and doors, caulking or
27 weatherstripping, multiglazed windows and doors,
28 heat-absorbing, or heat-reflective, glazed and coated window
29 and door systems, additional glazing, reductions in glass
30 area, and other window and door system modifications that
31 reduce energy consumption.
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Florida Senate - 2006 (Corrected Copy) SB 278
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1 3. Automatic energy control systems.
2 4. Heating, ventilating, or air-conditioning system
3 modifications or replacements.
4 5. Replacement or modifications of lighting fixtures
5 to increase the energy efficiency of the lighting system,
6 which, at a minimum, must conform to the applicable state or
7 local building code.
8 6. Energy recovery systems.
9 7. Cogeneration systems that produce steam or forms of
10 energy such as heat, as well as electricity, for use primarily
11 within a facility or complex of facilities.
12 8. Energy conservation measures that provide long-term
13 operating cost reductions or significantly reduce Btu
14 consumed.
15 9. Renewable energy systems, such as solar, biomass,
16 or wind systems.
17 10. Devices that reduce water consumption or
18 wastewater sewer charges.
19 11. Equipment upgrades that improve the accuracy of
20 billable revenue generating systems.
21 12. Automated electronic or remotely controlled
22 systems or measures that reduce direct personnel costs.
23 13. Such other energy, water, or wastewater efficiency
24 or conservation measures as may provide measurable operating
25 cost reductions or billable revenue increases.
26 14.11. Energy storage systems, such as fuel cells and
27 thermal storage.
28 15.12. Energy generating technologies, such as
29 microturbines.
30 16.13. Any other repair, replacement, or upgrade of
31 existing equipment.
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1 (c) "Energy, water, and wastewater cost savings" means
2 a measured reduction in the cost of fuel, energy or water
3 consumption, or wastewater production, and stipulated
4 improvement in the operation and maintenance created from the
5 implementation of one or more energy, water, and wastewater
6 efficiency or conservation measures when compared with an
7 established baseline for the previous cost of fuel, energy, or
8 water consumption, or wastewater production, and stipulated
9 operation and maintenance.
10 (d) "Guaranteed energy performance savings contract"
11 means a contract for the evaluation, recommendation, and
12 implementation of energy, water, and wastewater efficiency or
13 conservation measures, which, at a minimum, shall include:
14 1. The design and installation of equipment to
15 implement one or more of such measures and, if applicable,
16 operation and maintenance of such measures.
17 2. The amount of any actual annual savings that meet
18 or exceed total annual contract payments made by the agency
19 for the contract.
20 3. The finance charges incurred by the agency over the
21 life of the contract.
22 (e) "Guaranteed energy performance savings contractor"
23 means a person or business that is licensed under chapter 471,
24 chapter 481, or this chapter, and is experienced in the
25 analysis, design, implementation, or installation of energy,
26 water, or wastewater efficiency or conservation measures
27 through energy performance contracts.
28 (4) PROCEDURES.--
29 (a) An agency may enter into a guaranteed energy
30 performance savings contract with a guaranteed energy
31 performance savings contractor to significantly reduce energy,
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1 water, or wastewater or operating costs of an agency facility
2 through one or more energy, water, and wastewater efficiency
3 or conservation measures.
4 (b) Before design and installation of energy, water,
5 and wastewater efficiency and conservation measures, the
6 agency must obtain from a guaranteed energy performance
7 savings contractor a report that summarizes the costs
8 associated with the energy conservation measures and provides
9 an estimate of the amount of the associated energy cost
10 savings or operational improvements. The agency and the
11 guaranteed energy performance savings contractor may enter
12 into a separate agreement to pay for costs associated with the
13 preparation and delivery of the report; however, payment to
14 the contractor shall be contingent upon the report's
15 projection of energy cost savings being equal to or greater
16 than the total projected costs of the design and installation
17 of the report's energy conservation or efficiency measures.
18 (c) The agency may enter into a guaranteed energy
19 performance savings contract with a guaranteed energy
20 performance savings contractor if the agency finds that the
21 amount the agency would spend on the energy conservation or
22 efficiency measures will not likely exceed the amount of the
23 associated energy cost savings for up to 20 years from the
24 date of installation, based on the life cycle cost
25 calculations provided in s. 255.255, if the recommendations in
26 the report were followed and if the qualified provider or
27 providers give a written guarantee that such the energy cost
28 savings will meet or exceed the costs of the system. The
29 contract may provide for installment payments for a period not
30 to exceed 20 years.
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1 (d) A guaranteed energy performance savings contractor
2 must be selected in compliance with s. 287.055; except that if
3 fewer than three firms are qualified to perform the required
4 services, the requirement for agency selection of three firms,
5 as provided in s. 287.055(4)(b), and the bid requirements of
6 s. 287.057 do not apply.
7 (e) Before entering into a guaranteed energy
8 performance savings contract, an agency must provide published
9 notice of the meeting in which it proposes to award the
10 contract, the names of the parties to the proposed contract,
11 and the contract's purpose.
12 (f) A guaranteed energy performance savings contract
13 may provide for financing, including tax exempt financing, by
14 a third party. The contract for third party financing may be
15 separate from the energy performance savings contract. A
16 separate contract for third party financing must include a
17 provision that the third party financier must not be granted
18 rights or privileges that exceed the rights and privileges
19 available to the guaranteed energy performance savings
20 contractor.
21 (g) In determining the amount the agency will finance
22 to acquire the efficiency or energy conservation measures, the
23 agency may reduce such amount by the application of any grant
24 moneys, rebates, or capital funding available to the agency
25 for the purpose of buying down the cost of the guaranteed
26 energy performance savings contract. However, in calculating
27 the life cycle cost as required in paragraph (c), the agency
28 shall not apply any grants, rebates, or capital funding.
29 (5) CONTRACT PROVISIONS.--
30 (a) A guaranteed energy performance savings contract
31 must include a written guarantee that may include, but is not
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1 limited to the form of, a letter of credit, insurance policy,
2 or corporate guarantee by the guaranteed energy performance
3 savings contractor that annual associated energy cost savings
4 will meet or exceed the amortized cost of the efficiency and
5 energy conservation measures.
6 (b) The guaranteed energy performance savings contract
7 must provide that all payments, except obligations on
8 termination of the contract before its expiration, may be made
9 over time, but not to exceed 20 years from the date of
10 complete installation and acceptance by the agency, and that
11 the annual savings are guaranteed to the extent necessary to
12 make annual payments to satisfy the guaranteed energy
13 performance savings contract.
14 (c) The guaranteed energy performance savings contract
15 must require that the guaranteed energy performance savings
16 contractor to whom the contract is awarded provide a
17 100-percent public construction bond to the agency for its
18 faithful performance, as required by s. 255.05.
19 (d) The guaranteed energy performance savings contract
20 may contain a provision allocating to the parties to the
21 contract any annual associated energy cost savings that exceed
22 the amount of the associated energy cost savings guaranteed in
23 the contract.
24 (e) The guaranteed energy performance savings contract
25 shall require the guaranteed energy performance savings
26 contractor to provide to the agency an annual reconciliation
27 of the guaranteed associated energy cost savings. If the
28 reconciliation reveals a shortfall in such annual energy cost
29 savings, the guaranteed energy performance savings contractor
30 is liable for such shortfall. If the reconciliation reveals an
31 excess in such annual energy cost savings, the excess savings
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1 may be allocated under paragraph (d) but may not be used to
2 cover potential energy cost savings shortages in subsequent
3 contract years.
4 (f) The guaranteed energy performance savings contract
5 must provide for payments of not less than one-twentieth of
6 the price to be paid within 2 years from the date of the
7 complete installation and acceptance by the agency, and the
8 remaining costs to be paid at least quarterly, not to exceed a
9 20-year term, based on life cycle cost calculations.
10 (g) The guaranteed energy performance savings contract
11 may extend beyond the fiscal year in which it becomes
12 effective; however, the term of any contract expires at the
13 end of each fiscal year and may be automatically renewed
14 annually for up to 20 years, subject to the agency making
15 sufficient annual appropriations based upon continued realized
16 energy, water, or wastewater savings.
17 (h) The guaranteed energy performance savings contract
18 must stipulate that it does not constitute a debt, liability,
19 or obligation of the state.
20 (6) PROGRAM ADMINISTRATION AND CONTRACT REVIEW.--The
21 Department of Management Services, with the assistance of the
22 Office of the Chief Financial Officer, may, within available
23 resources, provide technical assistance to state agencies
24 contracting for energy, water, and wastewater efficiency or
25 conservation measures and engage in other activities
26 considered appropriate by the department for promoting and
27 facilitating guaranteed energy performance contracting by
28 state agencies. The Office of the Chief Financial Officer,
29 with the assistance of the Department of Management Services,
30 may, within available resources, develop model contractual and
31 related documents for use by state agencies. Prior to entering
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1 into a guaranteed energy performance savings contract, any
2 contract or lease for third-party financing, or any
3 combination of such contracts, a state agency shall submit
4 such proposed contract or lease to the Office of the Chief
5 Financial Officer for review and approval.
6 Section 2. Subsection (10) of section 287.064, Florida
7 Statutes, is amended to read:
8 287.064 Consolidated financing of deferred-payment
9 purchases.--
10 (10) Costs incurred pursuant to a guaranteed energy
11 performance savings contract, including the cost of energy,
12 water, and wastewater efficiency and conservation measures,
13 each as defined in s. 489.145, may be financed pursuant to a
14 master equipment financing agreement; however, the costs of
15 training, operation, and maintenance may not be financed. The
16 period of time for repayment of the funds drawn pursuant to
17 the master equipment financing agreement under this subsection
18 may exceed 5 years but may not exceed 10 years.
19 Section 3. This act shall take effect July 1, 2006.
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22 SENATE SUMMARY
23 Includes water and wastewater efficiency and conservation
in the measures encouraged by the Legislature. Provides
24 for inclusion of water and wastewater efficiency and
conservation measures in guaranteed performance savings
25 contracting by a state agency.
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