Florida Senate - 2013 SB 1594
By Senator Bradley
7-00569A-13 20131594__
1 A bill to be entitled
2 An act relating to the Guaranteed Energy, Water, and
3 Wastewater Performance Savings Contracting Act;
4 amending s. 489.145, F.S.; revising the terms
5 “agency,” “energy, water, and wastewater efficiency
6 and conservation measure,” and “energy, water, or
7 wastewater cost savings”; deleting a reference to life
8 cycle cost calculations; providing that a contract may
9 provide for repayments to a lender of an installation
10 construction loan in installments for a period not to
11 exceed 20 years; requiring a contract to provide that
12 repayments to a lender of an installation construction
13 loan may be made over time, not to exceed 20 years
14 from a certain date; requiring a contract to provide
15 for a certain amount of repayment to the lender of the
16 installation construction loan within 2 years of a
17 specified date; providing that certain improvements
18 may be included in a performance contract if certain
19 conditions are satisfied; authorizing certain facility
20 alterations to be included in a performance contract
21 and to be supervised by the performance savings
22 contractor; limiting the time allotted to the Office
23 of the Chief Financial Officer to review and approve
24 an agency’s guaranteed energy, water, and wastewater
25 performance savings contract; conforming language;
26 providing an effective date.
27
28 Be It Enacted by the Legislature of the State of Florida:
29
30 Section 1. Paragraphs (a) through (c) of subsection (3),
31 paragraphs (c) and (j) of subsection (4), and subsections (5)
32 and (6) of section 489.145, Florida Statutes, are amended to
33 read:
34 489.145 Guaranteed energy, water, and wastewater
35 performance savings contracting.—
36 (3) DEFINITIONS.—As used in this section, the term:
37 (a) “Agency” means the state, a municipality, or a
38 political subdivision, a county or city school district, or an
39 institution of higher education, including all state
40 universities, colleges, and technical colleges.
41 (b) “Energy, water, and wastewater efficiency and
42 conservation measure” means a training program incidental to the
43 contract, facility alteration, or equipment purchase to be used
44 in a building retrofit, addition, or renovation, or in new
45 construction, including an addition to existing facilities or
46 infrastructure, which reduces energy or water consumption,
47 wastewater production, or energy-related operating costs and
48 includes, but is not limited to:
49 1. Installing or modifying:
50 a. Insulation of the facility structure and systems within
51 the facility.
52 b.2. Window and door systems that reduce energy consumption
53 or operating costs, such as storm windows and doors, caulking or
54 weatherstripping, multiglazed windows and doors, heat-absorbing,
55 or heat-reflective, glazed and coated window and door systems,
56 additional glazing, and reductions in glass area, and other
57 window and door system modifications that reduce energy
58 consumption.
59 c.3. Automatic energy control systems.
60 4. Heating, ventilating, or air-conditioning system
61 modifications or replacements.
62 5. Replacement or modifications of lighting fixtures to
63 increase the energy efficiency of the lighting system, which, at
64 a minimum, must conform to the applicable state or local
65 building code.
66 d.6. Energy recovery systems.
67 e.7. Cogeneration systems that produce steam or forms of
68 energy such as heat, as well as electricity, for use primarily
69 within a facility or complex of facilities.
70 8. Energy conservation measures that reduce British thermal
71 units (Btu), kilowatts (kW), or kilowatt hours (kWh) consumed or
72 provide long-term operating cost reductions.
73 f.9. Renewable energy systems, such as solar, biomass, or
74 wind systems.
75 g.10. Devices that reduce water consumption or sewer
76 charges.
77 h.11. Energy storage systems, such as fuel cells and
78 thermal storage.
79 i.12. Energy-generating technologies, such as
80 microturbines.
81 j. Automated, electronic, or remotely controlled
82 technologies, systems, or measures that reduce utility or
83 operating costs.
84 k. Software-based systems that reduce facility management
85 or other facility operating costs.
86 l. Energy information and control systems that monitor
87 consumption, redirect systems to optimal energy sources, and
88 manage energy-using equipment.
89 2. Replacing or modifying:
90 a. Heating, ventilating, or air-conditioning systems.
91 b. Lighting fixtures to increase the energy efficiency of
92 the lighting system without increasing the overall illumination
93 of a building, unless the increase in illumination is necessary
94 to conform to the applicable state or local building code.
95 3. Implementing a program to reduce energy costs through
96 rate adjustments, load shifting to reduce peak demand, or the
97 use of alternative energy suppliers, including, but not limited
98 to, demand response programs, changes to more favorable rate
99 schedules, negotiation of lower rates using new suppliers, or
100 auditing utility billing and metering.
101 4. An improvement that reduces solid waste and associated
102 removal costs.
103 5. Meter replacement, installation of an automated meter
104 reading system, or other construction, modification,
105 installation, or remodeling of water, electric, gas, fuel,
106 communication, or other supplied utility system.
107 6. Any other energy conservation measure that reduces
108 British thermal units (Btu), kilowatts (kW), or kilowatt hours
109 (kWh); reduces fuel or water consumption in the building or
110 waste water production; or reduces an operating cost or provides
111 long-term cost reductions.
112 7.13. Any other repair, replacement, or upgrade of existing
113 equipment that produces measurable savings, or any other
114 construction, modification, installation, or remodeling that is
115 approved by an agency and that is within the legislative
116 authority granted the agency, such as an energy conservation
117 measure.
118 8. Any other measure not otherwise defined in this chapter
119 which is designed to reduce utility consumption, revenue
120 enhancements, wastewater cost savings, avoided capital costs, or
121 similar efficiency gains to a governmental unit.
122 (c) “Energy, water, or wastewater cost savings” means a
123 measured reduction in the cost of fuel, energy or water
124 consumption, wastewater production, and stipulated operation and
125 maintenance, and identified avoided capital savings created from
126 the implementation of one or more energy, water, or wastewater
127 efficiency or conservation measures when compared with an
128 established baseline for the previous cost of fuel, energy or
129 water consumption, wastewater production, and stipulated
130 operation and maintenance, and identified avoided capital costs.
131 (4) PROCEDURES.—
132 (c) An The agency may enter into a guaranteed energy,
133 water, and wastewater performance savings contract with a
134 guaranteed energy, water, and wastewater performance savings
135 contractor if the agency finds that the amount the agency would
136 spend on an the energy, water, and wastewater efficiency and
137 conservation measure is unlikely to measures will not likely
138 exceed the amount of the cost savings for up to 20 years after
139 from the date of installation, based on the life cycle cost
140 calculations provided in s. 255.255, if the recommendations in
141 the report were followed and if the qualified provider or
142 providers give a written guarantee that the cost savings will
143 meet or exceed the costs of the system. However, actual computed
144 cost savings must meet or exceed the estimated cost savings
145 provided in each agency’s program approval. Baseline adjustments
146 used in calculations must be specified in the contract. The
147 contract may provide for repayment to the lender of the
148 installation construction loan through installment payments for
149 a period not to exceed 20 years.
150 (j) In determining the amount the agency will finance to
151 acquire the energy, water, and wastewater efficiency and
152 conservation measures, the agency may reduce such amount by the
153 application of any grant moneys, rebates, or capital funding
154 available to the agency for the purpose of buying down the cost
155 of the guaranteed energy, water, and wastewater performance
156 savings contract. However, in calculating the life cycle cost as
157 required in paragraph (c), the agency shall not apply any
158 grants, rebates, or capital funding.
159 (5) CONTRACT PROVISIONS.—
160 (a) A guaranteed energy, water, and wastewater performance
161 savings contract must include a written guarantee that may
162 include, but is not limited to the form of, a letter of credit,
163 insurance policy, or corporate guarantee by the guaranteed
164 energy, water, and wastewater performance savings contractor
165 that annual cost savings will meet or exceed the amortized cost
166 of energy, water, and wastewater efficiency and conservation
167 measures.
168 (b) The guaranteed energy, water, and wastewater
169 performance savings contract must provide that all repayments
170 payments to the lender of the installation construction loan,
171 except obligations on termination of the contract before its
172 expiration, may be made over time, but may not to exceed 20
173 years from the date of complete installation and acceptance by
174 the agency, and that the annual savings are guaranteed to the
175 extent necessary to make annual payments to satisfy the
176 guaranteed energy, water, and wastewater performance savings
177 contract.
178 (c) The guaranteed energy, water, and wastewater
179 performance savings contract must require that the guaranteed
180 energy, water, and wastewater performance savings contractor to
181 whom the contract is awarded provide a 100-percent public
182 construction bond to the agency for its faithful performance, as
183 required by s. 255.05.
184 (d) The guaranteed energy, water, and wastewater
185 performance savings contract may contain a provision allocating
186 to the parties to the contract any annual cost savings that
187 exceed the amount of the cost savings guaranteed in the
188 contract.
189 (e) The guaranteed energy, water, and wastewater
190 performance savings contract must shall require the guaranteed
191 energy, water, and wastewater performance savings contractor to
192 provide to the agency an annual reconciliation of the guaranteed
193 energy or associated cost savings. If the reconciliation reveals
194 a shortfall in annual energy or associated cost savings, the
195 guaranteed energy, water, and wastewater performance savings
196 contractor is liable for such shortfall. If the reconciliation
197 reveals an excess in annual cost savings, the excess savings may
198 be allocated under paragraph (d) but may not be used to cover
199 potential energy or associated cost savings shortages in
200 subsequent contract years.
201 (f) The guaranteed energy, water, and wastewater
202 performance savings contract must provide for repayment payments
203 to the lender of the installation construction loan of not less
204 than one-twentieth of the price to be paid within 2 years from
205 the date of the complete installation and acceptance by the
206 agency using straight-line amortization for the term of the
207 loan, and the remaining costs to be paid at least quarterly, not
208 to exceed a 20-year term, based on life cycle cost calculations.
209 (g) The guaranteed energy, water, and wastewater
210 performance savings contract may extend beyond the fiscal year
211 in which it becomes effective; however, the term of a any
212 contract expires at the end of each fiscal year and may be
213 automatically renewed annually for up to 20 years, subject to
214 the agency making sufficient annual appropriations based upon
215 continued realized energy, water, and wastewater savings.
216 (h) The guaranteed energy, water, and wastewater
217 performance savings contract must stipulate that it does not
218 constitute a debt, liability, or obligation of the state.
219 (i) An improvement that is not causally connected to an
220 energy conservation measure may be included in a performance
221 contract if:
222 1. The total value of the improvement does not exceed 15
223 percent of the total value of the performance contract; and
224 2. The improvement is necessary to conform to a law, a
225 rule, or an ordinance, or an analysis within the performance
226 contract demonstrates that there is an economic advantage to the
227 governmental unit implementing an improvement as part of the
228 performance contract.
229 (j) A facility alteration that includes expenditures that
230 are required to properly implement other energy conservation
231 measures may be included as part of a performance contract. In
232 such case, notwithstanding any provision of law, the
233 installation of these additional measures may be supervised by
234 the performance savings contractor.
235 (6) PROGRAM ADMINISTRATION AND CONTRACT REVIEW.—The
236 Department of Management Services, with the assistance of the
237 Office of the Chief Financial Officer, shall, within available
238 resources, provide technical content assistance to state
239 agencies contracting for energy, water, and wastewater
240 efficiency and conservation measures and engage in other
241 activities considered appropriate by the department for
242 promoting and facilitating guaranteed energy, water, and
243 wastewater performance contracting by state agencies. The
244 Department of Management Services shall review the investment
245 grade audit for each proposed project and certify that the cost
246 savings are appropriate and sufficient for the term of the
247 contract. The Office of the Chief Financial Officer, with the
248 assistance of the Department of Management Services, shall,
249 within available resources, develop model contractual and
250 related documents for use by state agencies. Before Prior to
251 entering into a guaranteed energy, water, and wastewater
252 performance savings contract, a any contract or lease for third
253 party financing, or any combination of such contracts, a state
254 agency shall submit such proposed contract or lease to the
255 Office of the Chief Financial Officer for review and approval.
256 The Office of the Chief Financial Officer shall complete its
257 review and approval within 10 business days after receiving the
258 proposed contract or lease. A proposed contract or lease must
259 shall include:
260 (a) Supporting information required by s. 216.023(4)(a)9.
261 in ss. 287.063(5) and 287.064(11). For contracts approved under
262 this section, the criteria may, at a minimum, include the
263 specification of a benchmark cost of capital and minimum real
264 rate of return on energy, water, or wastewater savings against
265 which proposals shall be evaluated.
266 (b) Documentation supporting recurring funds requirements
267 in ss. 287.063(5) and 287.064(11).
268 (c) Approval by the head of the agency or his or her
269 designee.
270 (d) An agency measurement and verification plan to monitor
271 cost savings.
272
273 The Office of the Chief Financial Officer shall not approve any
274 contract submitted under this section from a state agency that
275 does not meet the requirements of this section.
276 Section 2. This act shall take effect July 1, 2013.