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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    Florida Senate - 2006        (Corrected Copy)           SB 278
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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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    Florida Senate - 2006        (Corrected Copy)           SB 278
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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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    Florida Senate - 2006        (Corrected Copy)           SB 278
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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.

31  

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    Florida Senate - 2006        (Corrected Copy)           SB 278
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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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    Florida Senate - 2006        (Corrected Copy)           SB 278
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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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    Florida Senate - 2006        (Corrected Copy)           SB 278
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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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    Florida Senate - 2006        (Corrected Copy)           SB 278
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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.

20  

21            *****************************************

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.

26  

27  

28  

29  

30  

31  

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