Florida Senate - 2013                        COMMITTEE AMENDMENT
       Bill No. SB 1594
       
       
       
       
       
       
                                Barcode 650484                          
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  04/02/2013           .                                
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       The Committee on Communications, Energy, and Public Utilities
       (Hukill) recommended the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Paragraphs (a) through (c) of subsection (3),
    6  paragraphs (c) and (j) of subsection (4), and subsections (5)
    7  through (7) of section 489.145, Florida Statutes, are amended to
    8  read:
    9         489.145 Guaranteed energy, water, and wastewater
   10  performance savings contracting.—
   11         (3) DEFINITIONS.—As used in this section, the term:
   12         (a) “Agency” means the state, a municipality, or a
   13  political subdivision, a county or city school district, or an
   14  institution of higher education, including all state
   15  universities, colleges, and technical colleges.
   16         (b) “Energy, water, and wastewater efficiency and
   17  conservation measure” means a training program incidental to the
   18  contract, facility alteration, or equipment purchase to be used
   19  in a building retrofit, addition, or renovation or in new
   20  construction, including an addition to existing facilities or
   21  infrastructure, which reduces energy or water consumption,
   22  wastewater production, or energy-related operating costs and
   23  includes, but is not limited to, any of the following:
   24         1. Installing or modifying any of the following:
   25         a. Insulation of the facility structure and systems within
   26  the facility.
   27         b.2.Window and door systems that reduce energy consumption
   28  or operating costs, such as storm windows and doors, caulking or
   29  weatherstripping, multiglazed windows and doors, heat-absorbing,
   30  or heat-reflective, glazed and coated window and door systems,
   31  additional glazing, and reductions in glass area, and other
   32  window and door system modifications that reduce energy
   33  consumption.
   34         c.3. Automatic energy control systems.
   35         4. Heating, ventilating, or air-conditioning system
   36  modifications or replacements.
   37         5. Replacement or modifications of lighting fixtures to
   38  increase the energy efficiency of the lighting system, which, at
   39  a minimum, must conform to the applicable state or local
   40  building code.
   41         d.6. Energy recovery systems.
   42         e.7. Cogeneration systems that produce steam or forms of
   43  energy such as heat, as well as electricity, for use primarily
   44  within a facility or complex of facilities.
   45         8. Energy conservation measures that reduce British thermal
   46  units (Btu), kilowatts (kW), or kilowatt hours (kWh) consumed or
   47  provide long-term operating cost reductions.
   48         f.9. Renewable energy systems, such as solar, biomass, or
   49  wind systems.
   50         g.10. Devices that reduce water consumption or sewer
   51  charges.
   52         h.11. Energy storage systems, such as fuel cells and
   53  thermal storage.
   54         i.12. Energy-generating technologies, such as
   55  microturbines.
   56         j. Automated, electronic, or remotely controlled
   57  technologies, systems, or measures that reduce utility or
   58  operating costs.
   59         k. Software-based systems that reduce facility management
   60  or other facility operating costs.
   61         l. Energy information and control systems that monitor
   62  consumption, redirect systems to optimal energy sources, and
   63  manage energy-using equipment.
   64         2. Installing, replacing, or modifying any of the
   65  following:
   66         a. Heating, ventilating, or air-conditioning systems.
   67         b. Lighting fixtures.
   68         3. Implementing a program to reduce energy costs through
   69  rate adjustments, load shifting to reduce peak demand, or the
   70  use of alternative energy suppliers, including, but not limited
   71  to, demand response programs, changes to more favorable rate
   72  schedules, negotiation of lower rates using new suppliers, or
   73  auditing utility billing and metering.
   74         4. An improvement that reduces solid waste and associated
   75  removal costs.
   76         5. Meter replacement, installation, or modification;
   77  installation of an automated meter reading system; or other
   78  construction, modification, installation, or remodeling of
   79  water, electric, gas, fuel, communication, or other supplied
   80  utility system.
   81         6. Any other energy conservation measure that reduces
   82  British thermal units (Btu), kilowatts (kW), or kilowatt hours
   83  (kWh); that reduces fuel or water consumption in the building or
   84  waste water production; or that reduces operating costs or
   85  provides long-term cost reductions.
   86         7.13. Any other repair, replacement, or upgrade of existing
   87  equipment that produces measurable savings, or any other
   88  construction, modification, installation, or remodeling that is
   89  approved by an agency and that is within the legislative
   90  authority granted the agency, such as an energy conservation
   91  measure.
   92         8. Any other measure not otherwise defined in this chapter
   93  which is designed to reduce utility consumption, revenue
   94  enhancements, wastewater cost savings, avoided capital costs, or
   95  similar efficiency gains to an agency or other governmental
   96  unit.
   97         (c) “Energy, water, or wastewater cost savings” means a
   98  measured reduction in the cost of fuel, energy or water
   99  consumption, or wastewater production;, and stipulated operation
  100  and maintenance savings; improvements in supplied utility
  101  systems, including, without limitation, revenue enhancements or
  102  reduction in net operating costs resulting from increased meter
  103  accuracy or performance; and identified avoided capital savings,
  104  created from the implementation of one or more energy, water, or
  105  wastewater efficiency or conservation measures when compared
  106  with an established baseline for the previous cost of fuel,
  107  energy or water consumption, wastewater production, and
  108  stipulated operation and maintenance, meter accuracy or
  109  performance, and identified capital costs.
  110         (4) PROCEDURES.—
  111         (c) An The agency may enter into a guaranteed energy,
  112  water, and wastewater performance savings contract with a
  113  guaranteed energy, water, and wastewater performance savings
  114  contractor if the agency finds that the amount the agency would
  115  spend on the energy, water, and wastewater efficiency and
  116  conservation measure is unlikely to measures will not likely
  117  exceed the amount of the cost savings for up to 20 years after
  118  from the date of installation, based on the life cycle cost
  119  calculations provided in s. 255.255, if the recommendations in
  120  the report were followed and if the qualified provider or
  121  providers give a written guarantee that the cost savings will
  122  meet or exceed the costs of the system. However, actual computed
  123  cost savings must meet or exceed the estimated cost savings
  124  provided in each agency’s program approval. Baseline adjustments
  125  used in calculations must be specified in the contract. The
  126  contract may provide for repayment to the lender of the
  127  installation construction loan through installment payments for
  128  a period not to exceed 20 years.
  129         (j) In determining the amount the agency will finance to
  130  acquire the energy, water, and wastewater efficiency and
  131  conservation measures, the agency may reduce such amount by the
  132  application of any grant moneys, rebates, or capital funding
  133  available to the agency for the purpose of buying down the cost
  134  of the guaranteed energy, water, and wastewater performance
  135  savings contract. However, in calculating the life cycle cost as
  136  required in paragraph (c), the agency shall not apply any
  137  grants, rebates, or capital funding.
  138         (5) CONTRACT PROVISIONS.—
  139         (a) A guaranteed energy, water, and wastewater performance
  140  savings contract must include a written guarantee that may
  141  include, but is not limited to the form of, a letter of credit,
  142  insurance policy, or corporate guarantee by the guaranteed
  143  energy, water, and wastewater performance savings contractor
  144  that annual cost savings will meet or exceed the amortized cost
  145  of energy, water, and wastewater efficiency and conservation
  146  measures.
  147         (b) The guaranteed energy, water, and wastewater
  148  performance savings contract or the loan agreement related
  149  thereto must provide that all repayments to the lender of the
  150  installation construction loan payments, except obligations on
  151  termination of the contract before its expiration, may be made
  152  over time, but may not to exceed 20 years from the date of
  153  complete installation and acceptance by the agency, and that the
  154  annual cost savings are guaranteed to the extent necessary to
  155  make annual payments to satisfy the guaranteed energy, water,
  156  and wastewater performance savings contract.
  157         (c) The guaranteed energy, water, and wastewater
  158  performance savings contract must require that the guaranteed
  159  energy, water, and wastewater performance savings contractor to
  160  whom the contract is awarded provide a 100-percent public
  161  construction bond to the agency for its faithful performance, as
  162  required by s. 255.05.
  163         (d) The guaranteed energy, water, and wastewater
  164  performance savings contract may contain a provision allocating
  165  to the parties to the contract any annual cost savings that
  166  exceed the amount of the cost savings guaranteed in the
  167  contract.
  168         (e) The guaranteed energy, water, and wastewater
  169  performance savings contract must shall require the guaranteed
  170  energy, water, and wastewater performance savings contractor to
  171  provide to the agency an annual reconciliation of the guaranteed
  172  energy or associated cost savings. If the reconciliation reveals
  173  a shortfall in annual energy or associated cost savings, the
  174  guaranteed energy, water, and wastewater performance savings
  175  contractor is liable for such shortfall. If the reconciliation
  176  reveals an excess in annual cost savings, the excess savings may
  177  be allocated under paragraph (d) but may not be used to cover
  178  potential energy or associated cost savings shortages in
  179  subsequent contract years.
  180         (f) The guaranteed energy, water, and wastewater
  181  performance savings contract or the loan agreement related
  182  thereto must provide for repayment to the lender of the
  183  installation construction loan payments of not less than one
  184  twentieth of the price to be paid within 2 years from the date
  185  of the complete installation and acceptance by the agency using
  186  straight-line amortization for the term of the loan, and the
  187  remaining costs to be paid at least quarterly, not to exceed a
  188  20-year term, based on life cycle cost calculations.
  189         (g) The guaranteed energy, water, and wastewater
  190  performance savings contract may extend beyond the fiscal year
  191  in which it becomes effective; however, the term of a any
  192  contract expires at the end of each fiscal year and may be
  193  automatically renewed annually for up to 20 years, subject to
  194  the agency making sufficient annual appropriations based upon
  195  continued realized energy, water, and wastewater savings.
  196         (h) The guaranteed energy, water, and wastewater
  197  performance savings contract must stipulate that it does not
  198  constitute a debt, liability, or obligation of the state.
  199         (i) A facility alteration that includes expenditures that
  200  are required to properly implement other energy conservation
  201  measures may be included as part of a performance contract. In
  202  such case, notwithstanding any provision of law, the
  203  installation of these additional measures may be supervised by
  204  the performance savings contractor.
  205         (6) PROGRAM ADMINISTRATION AND CONTRACT REVIEW.—The
  206  Department of Management Services, with the assistance of the
  207  Office of the Chief Financial Officer, shall, within available
  208  resources, provide technical content assistance to state
  209  agencies contracting for energy, water, and wastewater
  210  efficiency and conservation measures and engage in other
  211  activities considered appropriate by the department for
  212  promoting and facilitating guaranteed energy, water, and
  213  wastewater performance contracting by state agencies. The
  214  Department of Management Services shall review the investment
  215  grade audit for each proposed project and certify that the cost
  216  savings are appropriate and sufficient for the term of the
  217  contract. The Office of the Chief Financial Officer, with the
  218  assistance of the Department of Management Services, shall,
  219  within available resources, develop model contractual and
  220  related documents for use by state agencies. Before Prior to
  221  entering into a guaranteed energy, water, and wastewater
  222  performance savings contract, a any contract or lease for third
  223  party financing, or any combination of such contracts, a state
  224  agency shall submit such proposed contract or lease to the
  225  Office of the Chief Financial Officer for review and approval.
  226  The Office of the Chief Financial Officer shall complete its
  227  review and approval within 10 business days after receiving the
  228  proposed contract or lease. A proposed contract or lease with a
  229  state agency must shall include the following:
  230         (a) Supporting information required by s. 216.023(4)(a)9.
  231  in ss. 287.063(5) and 287.064(11). For contracts approved under
  232  this section, the criteria may, at a minimum, include the
  233  specification of a benchmark cost of capital and minimum real
  234  rate of return on energy, water, or wastewater savings against
  235  which proposals shall be evaluated.
  236         (b) Documentation supporting recurring funds requirements
  237  in ss. 287.063(5) and 287.064(11).
  238         (c) Approval by the head of the agency or his or her
  239  designee.
  240         (d) An agency measurement and verification plan to monitor
  241  cost savings.
  242         (e) An investment-grade audit, certified by the Department
  243  of Management Services, which states that the cost savings are
  244  appropriate and sufficient for the term of the contract.
  245         (7) FUNDING SUPPORT.—For purposes of consolidated financing
  246  of deferred payment commodity contracts under this section by a
  247  state an agency, any such contract must be supported from
  248  available funds appropriated to the state agency in an
  249  appropriation category, as defined in chapter 216, that the
  250  Chief Financial Officer has determined is appropriate or that
  251  the Legislature has designated for payment of the obligation
  252  incurred under this section.
  253  
  254  The Office of the Chief Financial Officer shall not approve any
  255  contract submitted under this section from a state agency that
  256  does not meet the requirements of this section.
  257         Section 2. This act shall take effect July 1, 2013.
  258  
  259  ================= T I T L E  A M E N D M E N T ================
  260         And the title is amended as follows:
  261         Delete everything before the enacting clause
  262  and insert:
  263                        A bill to be entitled                      
  264         An act relating to the Guaranteed Energy, Water, and
  265         Wastewater Performance Savings Contracting Act;
  266         amending s. 489.145, F.S.; revising the terms
  267         “agency,” “energy, water, and wastewater efficiency
  268         and conservation measure,” and “energy, water, or
  269         wastewater cost savings”; providing that a contract
  270         may provide for repayments to a lender of an
  271         installation construction loan in installments for a
  272         period not to exceed 20 years; requiring a contract to
  273         provide that repayments to a lender of an installation
  274         construction loan may be made over time, not to exceed
  275         20 years from a certain date; requiring a contract to
  276         provide for a certain amount of repayment to the
  277         lender of the installation construction loan within 2
  278         years of a specified date; authorizing certain
  279         facility alterations to be included in a performance
  280         contract and to be supervised by the performance
  281         savings contractor; limiting the time allotted to the
  282         Office of the Chief Financial Officer to review and
  283         approve an agency’s guaranteed energy, water, and
  284         wastewater performance savings contract; requiring
  285         that a proposed contract include an investment-grade
  286         audit certified by the Department of Management
  287         Services which states that the cost savings are
  288         appropriate and sufficient for the term of the
  289         contract; clarifying that, for funding purposes of
  290         consolidated financing of deferred payment commodity
  291         contracts, an agency means a state agency; conforming
  292         language; providing an effective date.