Bill Text: FL S1594 | 2013 | Regular Session | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Guaranteed Energy, Water, and Wastewater Performance Savings Contracting Act

Spectrum: Slight Partisan Bill (? 3-1)

Status: (Passed) 2013-06-10 - Chapter No. 2013-135 [S1594 Detail]

Download: Florida-2013-S1594-Comm_Sub.html

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       Florida Senate - 2013                             CS for SB 1594
       
       
       
       By the Committee on Communications, Energy, and Public
       Utilities; and Senator Bradley
       
       
       
       579-03336-13                                          20131594c1
    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, or the
   99  use of alternative energy suppliers, including, but not limited
  100  to, demand response programs, changes to more favorable rate
  101  schedules, negotiation of lower rates using new suppliers, or
  102  auditing utility billing and metering.
  103         4. An improvement that reduces solid waste and associated
  104  removal costs.
  105         5. Meter replacement, installation, or modification;
  106  installation of an automated meter reading system; or other
  107  construction, modification, installation, or remodeling of
  108  water, electric, gas, fuel, communication, or other supplied
  109  utility system.
  110         6. Any other energy conservation measure that reduces
  111  British thermal units (Btu), kilowatts (kW), or kilowatt hours
  112  (kWh); that reduces fuel or water consumption in the building or
  113  waste water production; or that reduces operating costs or
  114  provides long-term cost reductions.
  115         7.13. Any other repair, replacement, or upgrade of existing
  116  equipment that produces measurable savings, or any other
  117  construction, modification, installation, or remodeling that is
  118  approved by an agency and that is within the legislative
  119  authority granted the agency, such as an energy conservation
  120  measure.
  121         8. Any other measure not otherwise defined in this chapter
  122  which is designed to reduce utility consumption, revenue
  123  enhancements, wastewater cost savings, avoided capital costs, or
  124  similar efficiency gains to an agency or other governmental
  125  unit.
  126         (c) “Energy, water, or wastewater cost savings” means a
  127  measured reduction in the cost of fuel, energy or water
  128  consumption, or wastewater production;, and stipulated operation
  129  and maintenance savings; improvements in supplied utility
  130  systems, including, without limitation, revenue enhancements or
  131  reduction in net operating costs resulting from increased meter
  132  accuracy or performance; and identified avoided capital savings,
  133  created from the implementation of one or more energy, water, or
  134  wastewater efficiency or conservation measures when compared
  135  with an established baseline for the previous cost of fuel,
  136  energy or water consumption, wastewater production, and
  137  stipulated operation and maintenance, meter accuracy or
  138  performance, and identified capital costs.
  139         (4) PROCEDURES.—
  140         (c) An The agency may enter into a guaranteed energy,
  141  water, and wastewater performance savings contract with a
  142  guaranteed energy, water, and wastewater performance savings
  143  contractor if the agency finds that the amount the agency would
  144  spend on the energy, water, and wastewater efficiency and
  145  conservation measure is unlikely to measures will not likely
  146  exceed the amount of the cost savings for up to 20 years after
  147  from the date of installation, based on the life cycle cost
  148  calculations provided in s. 255.255, if the recommendations in
  149  the report were followed and if the qualified provider or
  150  providers give a written guarantee that the cost savings will
  151  meet or exceed the costs of the system. However, actual computed
  152  cost savings must meet or exceed the estimated cost savings
  153  provided in each agency’s program approval. Baseline adjustments
  154  used in calculations must be specified in the contract. The
  155  contract may provide for repayment to the lender of the
  156  installation construction loan through installment payments for
  157  a period not to exceed 20 years.
  158         (j) In determining the amount the agency will finance to
  159  acquire the energy, water, and wastewater efficiency and
  160  conservation measures, the agency may reduce such amount by the
  161  application of any grant moneys, rebates, or capital funding
  162  available to the agency for the purpose of buying down the cost
  163  of the guaranteed energy, water, and wastewater performance
  164  savings contract. However, in calculating the life cycle cost as
  165  required in paragraph (c), the agency shall not apply any
  166  grants, rebates, or capital funding.
  167         (5) CONTRACT PROVISIONS.—
  168         (a) A guaranteed energy, water, and wastewater performance
  169  savings contract must include a written guarantee that may
  170  include, but is not limited to the form of, a letter of credit,
  171  insurance policy, or corporate guarantee by the guaranteed
  172  energy, water, and wastewater performance savings contractor
  173  that annual cost savings will meet or exceed the amortized cost
  174  of energy, water, and wastewater efficiency and conservation
  175  measures.
  176         (b) The guaranteed energy, water, and wastewater
  177  performance savings contract or the loan agreement related
  178  thereto must provide that all repayments to the lender of the
  179  installation construction loan payments, except obligations on
  180  termination of the contract before its expiration, may be made
  181  over time, but may not to exceed 20 years from the date of
  182  complete installation and acceptance by the agency, and that the
  183  annual cost savings are guaranteed to the extent necessary to
  184  make annual payments to satisfy the guaranteed energy, water,
  185  and wastewater performance savings contract.
  186         (c) The guaranteed energy, water, and wastewater
  187  performance savings contract must require that the guaranteed
  188  energy, water, and wastewater performance savings contractor to
  189  whom the contract is awarded provide a 100-percent public
  190  construction bond to the agency for its faithful performance, as
  191  required by s. 255.05.
  192         (d) The guaranteed energy, water, and wastewater
  193  performance savings contract may contain a provision allocating
  194  to the parties to the contract any annual cost savings that
  195  exceed the amount of the cost savings guaranteed in the
  196  contract.
  197         (e) The guaranteed energy, water, and wastewater
  198  performance savings contract must shall require the guaranteed
  199  energy, water, and wastewater performance savings contractor to
  200  provide to the agency an annual reconciliation of the guaranteed
  201  energy or associated cost savings. If the reconciliation reveals
  202  a shortfall in annual energy or associated cost savings, the
  203  guaranteed energy, water, and wastewater performance savings
  204  contractor is liable for such shortfall. If the reconciliation
  205  reveals an excess in annual cost savings, the excess savings may
  206  be allocated under paragraph (d) but may not be used to cover
  207  potential energy or associated cost savings shortages in
  208  subsequent contract years.
  209         (f) The guaranteed energy, water, and wastewater
  210  performance savings contract or the loan agreement related
  211  thereto must provide for repayment to the lender of the
  212  installation construction loan payments of not less than one
  213  twentieth of the price to be paid within 2 years from the date
  214  of the complete installation and acceptance by the agency using
  215  straight-line amortization for the term of the loan, and the
  216  remaining costs to be paid at least quarterly, not to exceed a
  217  20-year term, based on life cycle cost calculations.
  218         (g) The guaranteed energy, water, and wastewater
  219  performance savings contract may extend beyond the fiscal year
  220  in which it becomes effective; however, the term of a any
  221  contract expires at the end of each fiscal year and may be
  222  automatically renewed annually for up to 20 years, subject to
  223  the agency making sufficient annual appropriations based upon
  224  continued realized energy, water, and wastewater savings.
  225         (h) The guaranteed energy, water, and wastewater
  226  performance savings contract must stipulate that it does not
  227  constitute a debt, liability, or obligation of the state.
  228         (i) A facility alteration that includes expenditures that
  229  are required to properly implement other energy conservation
  230  measures may be included as part of a performance contract. In
  231  such case, notwithstanding any provision of law, the
  232  installation of these additional measures may be supervised by
  233  the performance savings contractor.
  234         (6) PROGRAM ADMINISTRATION AND CONTRACT REVIEW.—The
  235  Department of Management Services, with the assistance of the
  236  Office of the Chief Financial Officer, shall, within available
  237  resources, provide technical content assistance to state
  238  agencies contracting for energy, water, and wastewater
  239  efficiency and conservation measures and engage in other
  240  activities considered appropriate by the department for
  241  promoting and facilitating guaranteed energy, water, and
  242  wastewater performance contracting by state agencies. The
  243  Department of Management Services shall review the investment
  244  grade audit for each proposed project and certify that the cost
  245  savings are appropriate and sufficient for the term of the
  246  contract. The Office of the Chief Financial Officer, with the
  247  assistance of the Department of Management Services, shall,
  248  within available resources, develop model contractual and
  249  related documents for use by state agencies. Before Prior to
  250  entering into a guaranteed energy, water, and wastewater
  251  performance savings contract, a any contract or lease for third
  252  party financing, or any combination of such contracts, a state
  253  agency shall submit such proposed contract or lease to the
  254  Office of the Chief Financial Officer for review and approval.
  255  The Office of the Chief Financial Officer shall complete its
  256  review and approval within 10 business days after receiving the
  257  proposed contract or lease. A proposed contract or lease with a
  258  state agency must shall include the following:
  259         (a) Supporting information required by s. 216.023(4)(a)9.
  260  in ss. 287.063(5) and 287.064(11). For contracts approved under
  261  this section, the criteria may, at a minimum, include the
  262  specification of a benchmark cost of capital and minimum real
  263  rate of return on energy, water, or wastewater savings against
  264  which proposals shall be evaluated.
  265         (b) Documentation supporting recurring funds requirements
  266  in ss. 287.063(5) and 287.064(11).
  267         (c) Approval by the head of the agency or his or her
  268  designee.
  269         (d) An agency measurement and verification plan to monitor
  270  cost savings.
  271         (e) An investment-grade audit, certified by the Department
  272  of Management Services, which states that the cost savings are
  273  appropriate and sufficient for the term of the contract.
  274         (7) FUNDING SUPPORT.—For purposes of consolidated financing
  275  of deferred payment commodity contracts under this section by a
  276  state an agency, any such contract must be supported from
  277  available funds appropriated to the state agency in an
  278  appropriation category, as defined in chapter 216, that the
  279  Chief Financial Officer has determined is appropriate or that
  280  the Legislature has designated for payment of the obligation
  281  incurred under this section.
  282  
  283  The Office of the Chief Financial Officer shall not approve any
  284  contract submitted under this section from a state agency that
  285  does not meet the requirements of this section.
  286         Section 2. This act shall take effect July 1, 2013.