Florida Senate - 2013                      CS for CS for SB 1594
       
       
       
       By the Committees on Environmental Preservation and
       Conservation; and Communications, Energy, and Public Utilities;
       and Senator Bradley
       
       
       592-04035A-13                                         20131594c2
    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”; providing that a contract
    8         may provide for repayments to a lender of an
    9         installation construction loan in installments for a
   10         period not to exceed 20 years; requiring a contract to
   11         provide that repayments to a lender of an installation
   12         construction loan may be made over time, not to exceed
   13         20 years from a certain date; requiring a contract to
   14         provide for a certain amount of repayment to the
   15         lender of the installation construction loan within 2
   16         years of a specified date; authorizing certain
   17         facility alterations to be included in a performance
   18         contract and to be supervised by the performance
   19         savings contractor; limiting the time allotted to the
   20         Office of the Chief Financial Officer to review and
   21         approve an agency’s guaranteed energy, water, and
   22         wastewater performance savings contract; requiring
   23         that a proposed contract include an investment-grade
   24         audit certified by the Department of Management
   25         Services which states that the cost savings are
   26         appropriate and sufficient for the term of the
   27         contract; clarifying that, for funding purposes of
   28         consolidated financing of deferred payment commodity
   29         contracts, an agency means a state agency; conforming
   30         language; providing an effective date.
   31  
   32  Be It Enacted by the Legislature of the State of Florida:
   33  
   34         Section 1. Paragraphs (a) through (c) of subsection (3),
   35  paragraphs (c) and (j) of subsection (4), and subsections (5)
   36  through (7) of section 489.145, Florida Statutes, are amended to
   37  read:
   38         489.145 Guaranteed energy, water, and wastewater
   39  performance savings contracting.—
   40         (3) DEFINITIONS.—As used in this section, the term:
   41         (a) “Agency” means the state, a municipality, or a
   42  political subdivision, a county or city school district, or an
   43  institution of higher education, including all state
   44  universities, colleges, and technical colleges.
   45         (b) “Energy, water, and wastewater efficiency and
   46  conservation measure” means a training program incidental to the
   47  contract, facility alteration, or equipment purchase to be used
   48  in a building retrofit, addition, or renovation or in new
   49  construction, including an addition to existing facilities or
   50  infrastructure, which reduces energy or water consumption,
   51  wastewater production, or energy-related operating costs and
   52  includes, but is not limited to, any of the following:
   53         1. Installing or modifying any of the following:
   54         a. Insulation of the facility structure and systems within
   55  the facility.
   56         b.2.Window and door systems that reduce energy consumption
   57  or operating costs, such as storm windows and doors, caulking or
   58  weatherstripping, multiglazed windows and doors, heat-absorbing,
   59  or heat-reflective, glazed and coated window and door systems,
   60  additional glazing, and reductions in glass area, and other
   61  window and door system modifications that reduce energy
   62  consumption.
   63         c.3. Automatic energy control systems.
   64         4. Heating, ventilating, or air-conditioning system
   65  modifications or replacements.
   66         5. Replacement or modifications of lighting fixtures to
   67  increase the energy efficiency of the lighting system, which, at
   68  a minimum, must conform to the applicable state or local
   69  building code.
   70         d.6. Energy recovery systems.
   71         e.7. Cogeneration systems that produce steam or forms of
   72  energy such as heat, as well as electricity, for use primarily
   73  within a facility or complex of facilities.
   74         8. Energy conservation measures that reduce British thermal
   75  units (Btu), kilowatts (kW), or kilowatt hours (kWh) consumed or
   76  provide long-term operating cost reductions.
   77         f.9. Renewable energy systems, such as solar, biomass, or
   78  wind systems.
   79         g.10. Devices that reduce water consumption or sewer
   80  charges.
   81         h.11. Energy storage systems, such as fuel cells and
   82  thermal storage.
   83         i.12. Energy-generating technologies, such as
   84  microturbines.
   85         j. Automated, electronic, or remotely controlled
   86  technologies, systems, or measures that reduce utility or
   87  operating costs.
   88         k. Software-based systems that reduce facility management
   89  or other facility operating costs.
   90         l. Energy information and control systems that monitor
   91  consumption, redirect systems to optimal energy sources, and
   92  manage energy-using equipment.
   93         2. Installing, replacing, or modifying any of the
   94  following:
   95         a. Heating, ventilating, or air-conditioning systems.
   96         b. Lighting fixtures.
   97         3. Implementing a program to reduce energy costs through
   98  rate adjustments, load shifting to reduce peak demand, demand
   99  response programs, changes to more favorable rate schedules, 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, or modification;
  104  installation of an automated meter reading system; or other
  105  construction, modification, installation, or remodeling of
  106  water, electric, gas, fuel, communication, or other supplied
  107  utility system.
  108         6. Any other energy conservation measure that reduces
  109  British thermal units (Btu), kilowatts (kW), or kilowatt hours
  110  (kWh); that reduces fuel or water consumption in the building or
  111  waste water production; or that reduces operating costs or
  112  provides long-term cost reductions.
  113         7.13. Any other repair, replacement, or upgrade of existing
  114  equipment that produces measurable savings, or any other
  115  construction, modification, installation, or remodeling that is
  116  approved by an agency and that is within the legislative
  117  authority granted the agency, such as an energy conservation
  118  measure.
  119         8. Any other measure not otherwise defined in this chapter
  120  which is designed to reduce utility consumption, reduce
  121  wastewater costs, enhance revenue, avoid capital costs, or
  122  achieve similar efficiency gains at an agency or other
  123  governmental unit.
  124         (c) “Energy, water, or wastewater cost savings” means a
  125  measured reduction in the cost of fuel, energy or water
  126  consumption, or wastewater production;, and stipulated operation
  127  and maintenance savings; improvements in supplied utility
  128  systems, including, without limitation, revenue enhancements or
  129  reduction in net operating costs resulting from increased meter
  130  accuracy or performance; and identified avoided capital savings,
  131  created from the implementation of one or more energy, water, or
  132  wastewater efficiency or conservation measures when compared
  133  with an established baseline for the previous cost of fuel,
  134  energy or water consumption, wastewater production, and
  135  stipulated operation and maintenance, meter accuracy or
  136  performance, and identified capital costs.
  137         (4) PROCEDURES.—
  138         (c) An The agency may enter into a guaranteed energy,
  139  water, and wastewater performance savings contract with a
  140  guaranteed energy, water, and wastewater performance savings
  141  contractor if the agency finds that the amount the agency would
  142  spend on the energy, water, and wastewater efficiency and
  143  conservation measure is unlikely to measures will not likely
  144  exceed the amount of the cost savings for up to 20 years after
  145  from the date of installation, based on the life cycle cost
  146  calculations provided in s. 255.255, if the recommendations in
  147  the report were followed and if the qualified provider or
  148  providers give a written guarantee that the cost savings will
  149  meet or exceed the costs of the system. However, actual computed
  150  cost savings must meet or exceed the estimated cost savings
  151  provided in each agency’s program approval. Baseline adjustments
  152  used in calculations must be specified in the contract. The
  153  contract may provide for repayment to the lender of the
  154  installation construction loan through installment payments for
  155  a period not to exceed 20 years.
  156         (j) In determining the amount the agency will finance to
  157  acquire the energy, water, and wastewater efficiency and
  158  conservation measures, the agency may reduce such amount by the
  159  application of any grant moneys, rebates, or capital funding
  160  available to the agency for the purpose of buying down the cost
  161  of the guaranteed energy, water, and wastewater performance
  162  savings contract. However, in calculating the life cycle cost as
  163  required in paragraph (c), the agency shall not apply any
  164  grants, rebates, or capital funding.
  165         (5) CONTRACT PROVISIONS.—
  166         (a) A guaranteed energy, water, and wastewater performance
  167  savings contract must include a written guarantee that may
  168  include, but is not limited to the form of, a letter of credit,
  169  insurance policy, or corporate guarantee by the guaranteed
  170  energy, water, and wastewater performance savings contractor
  171  that annual cost savings will meet or exceed the amortized cost
  172  of energy, water, and wastewater efficiency and conservation
  173  measures.
  174         (b) The guaranteed energy, water, and wastewater
  175  performance savings contract or the loan agreement related
  176  thereto must provide that all repayments to the lender of the
  177  installation construction loan payments, except obligations on
  178  termination of the contract before its expiration, may be made
  179  over time, but may not to exceed 20 years from the date of
  180  complete installation and acceptance by the agency, and that the
  181  annual cost savings are guaranteed to the extent necessary to
  182  make annual payments to satisfy the guaranteed energy, water,
  183  and wastewater performance savings contract.
  184         (c) The guaranteed energy, water, and wastewater
  185  performance savings contract must require that the guaranteed
  186  energy, water, and wastewater performance savings contractor to
  187  whom the contract is awarded provide a 100-percent public
  188  construction bond to the agency for its faithful performance, as
  189  required by s. 255.05.
  190         (d) The guaranteed energy, water, and wastewater
  191  performance savings contract may contain a provision allocating
  192  to the parties to the contract any annual cost savings that
  193  exceed the amount of the cost savings guaranteed in the
  194  contract.
  195         (e) The guaranteed energy, water, and wastewater
  196  performance savings contract must shall require the guaranteed
  197  energy, water, and wastewater performance savings contractor to
  198  provide to the agency an annual reconciliation of the guaranteed
  199  energy or associated cost savings. If the reconciliation reveals
  200  a shortfall in annual energy or associated cost savings, the
  201  guaranteed energy, water, and wastewater performance savings
  202  contractor is liable for such shortfall. If the reconciliation
  203  reveals an excess in annual cost savings, the excess savings may
  204  be allocated under paragraph (d) but may not be used to cover
  205  potential energy or associated cost savings shortages in
  206  subsequent contract years.
  207         (f) The guaranteed energy, water, and wastewater
  208  performance savings contract or the loan agreement related
  209  thereto must provide for repayment to the lender of the
  210  installation construction loan payments of not less than one
  211  twentieth of the price to be paid within 2 years from the date
  212  of the complete installation and acceptance by the agency using
  213  straight-line amortization for the term of the loan, and the
  214  remaining costs to be paid at least quarterly, not to exceed a
  215  20-year term, based on life cycle cost calculations.
  216         (g) The guaranteed energy, water, and wastewater
  217  performance savings contract may extend beyond the fiscal year
  218  in which it becomes effective; however, the term of a any
  219  contract expires at the end of each fiscal year and may be
  220  automatically renewed annually for up to 20 years, subject to
  221  the agency making sufficient annual appropriations based upon
  222  continued realized energy, water, and wastewater savings.
  223         (h) The guaranteed energy, water, and wastewater
  224  performance savings contract must stipulate that it does not
  225  constitute a debt, liability, or obligation of the state.
  226         (i) A facility alteration that includes expenditures that
  227  are required to properly implement other energy conservation
  228  measures may be included as part of a performance contract. In
  229  such case, notwithstanding any provision of law, the
  230  installation of these additional measures may be supervised by
  231  the performance savings contractor.
  232         (6) PROGRAM ADMINISTRATION AND CONTRACT REVIEW.—The
  233  Department of Management Services, with the assistance of the
  234  Office of the Chief Financial Officer, shall, within available
  235  resources, provide technical content assistance to state
  236  agencies contracting for energy, water, and wastewater
  237  efficiency and conservation measures and engage in other
  238  activities considered appropriate by the department for
  239  promoting and facilitating guaranteed energy, water, and
  240  wastewater performance contracting by state agencies. The
  241  Department of Management Services shall review the investment
  242  grade audit for each proposed project and certify that the cost
  243  savings are appropriate and sufficient for the term of the
  244  contract. The Office of the Chief Financial Officer, with the
  245  assistance of the Department of Management Services, shall,
  246  within available resources, develop model contractual and
  247  related documents for use by state agencies. Before Prior to
  248  entering into a guaranteed energy, water, and wastewater
  249  performance savings contract, a any contract or lease for third
  250  party financing, or any combination of such contracts, a state
  251  agency shall submit such proposed contract or lease to the
  252  Office of the Chief Financial Officer for review and approval.
  253  The Office of the Chief Financial Officer shall complete its
  254  review and approval within 10 business days after receiving the
  255  proposed contract or lease. A proposed contract or lease with a
  256  state agency must shall include the following:
  257         (a) Supporting information required by s. 216.023(4)(a)9.
  258  in ss. 287.063(5) and 287.064(11). For contracts approved under
  259  this section, the criteria may, at a minimum, include the
  260  specification of a benchmark cost of capital and minimum real
  261  rate of return on energy, water, or wastewater savings against
  262  which proposals shall be evaluated.
  263         (b) Documentation supporting recurring funds requirements
  264  in ss. 287.063(5) and 287.064(11).
  265         (c) Approval by the head of the agency or his or her
  266  designee.
  267         (d) An agency measurement and verification plan to monitor
  268  cost savings.
  269         (e) An investment-grade audit, certified by the Department
  270  of Management Services, which states that the cost savings are
  271  appropriate and sufficient for the term of the contract.
  272         (7) FUNDING SUPPORT.—For purposes of consolidated financing
  273  of deferred payment commodity contracts under this section by a
  274  state an agency, any such contract must be supported from
  275  available funds appropriated to the state agency in an
  276  appropriation category, as defined in chapter 216, that the
  277  Chief Financial Officer has determined is appropriate or that
  278  the Legislature has designated for payment of the obligation
  279  incurred under this section.
  280  
  281  The Office of the Chief Financial Officer shall not approve any
  282  contract submitted under this section from a state agency that
  283  does not meet the requirements of this section.
  284         Section 2. This act shall take effect July 1, 2013.