2004 Legislation
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SENATE BILL NO. 1222 – Public entity/bldgs/energy savings


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Bill Status

S1222......................................by LOCAL GOVERNMENT AND TAXATION
PUBLIC ENTITY - BUILDINGS - Amends existing law to define the term "public
entity"; to provide that a public entity may utilize the procedure for
bidding performance contracts for the installation or purchase of
cost-savings energy measures in buildings occupied by and for public
entities; and to provide a limitation on such performance contracts entered
into by the state or public entities.
01/22    Senate intro - 1st rdg - to printing
01/23    Rpt prt - to Loc Gov
01/27    Rpt out - rec d/p - to 2nd rdg
01/28    2nd rdg - to 3rd rdg
01/30    3rd rdg - PASSED - 30-0-5
      AYES -- Andreason, Bailey, Bunderson, Burkett, Calabretta, Cameron,
      Compton, Darrington, Davis, Gannon, Geddes, Goedde, Hill, Ingram,
      Kennedy, Keough, Little(Bilbao), Lodge, Malepeai, Marley, McKenzie,
      McWilliams, Noble, Pearce, Richardson, Sorensen, Stegner, Sweet,
      Werk(Spindler), Williams
      NAYS -- None
      Absent and excused -- Brandt, Burtenshaw, Noh, Schroeder, Stennett
    Floor Sponsor - Bunderson
    Title apvd - to House
02/02    House intro - 1st rdg - to Loc Gov
02/11    Rpt out - rec d/p - to 2nd rdg
02/12    2nd rdg - to 3rd rdg
02/18    3rd rdg - PASSED - 64-1-5
      AYES -- Andersen, Barraclough, Barrett, Bauer, Bayer, Bedke, Bell,
      Black, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins, Crow,
      Deal, Denney, Douglas, Eberle, Ellsworth, Eskridge, Field(18),
      Field(23), Gagner, Garrett, Harwood, Henbest, Jaquet, Jones,
      Kellogg(Nonini), Kulczyk, Lake, Langford, Langhorst, Martinez,
      McGeachin, Meyer, Miller, Mitchell, Moyle, Naccarato, Pasley-Stuart,
      Raybould, Ridinger, Ring, Ringo, Roberts, Robison, Rydalch, Sali,
      Sayler, Schaefer, Shepherd, Shirley, Skippen, Smith(30), Smith(24),
      Smylie, Snodgrass, Stevenson, Trail, Wood, Mr. Speaker
      NAYS -- McKague
      Absent and excused -- Block, Cuddy, Edmunson, Nielsen, Wills
    Floor Sponsor - Eskridge
    Title apvd - to Senate
02/19    To enrol
02/20    Rpt enrol - Pres signed
02/23    Sp signed
02/24    To Governor
02/26    Governor signed
         Session Law Chapter 15
         Effective: 07/01/04

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                                       IN THE SENATE
                                    SENATE BILL NO. 1222
  1                                        AN ACT
  9    Be It Enacted by the Legislature of the State of Idaho:
 10        SECTION 1.  That Section 67-5711D, Idaho Code, be, and the same is  hereby
 11    amended to read as follows:
 12        67-5711D.  ENERGY  SAVINGS PERFORMANCE CONTRACTS. (1) Definitions. As used
 13    in this section:
 14        (a)  "Cost-savings measure" means  any  facility  improvement,  repair  or
 15        alteration, or any equipment, fixture or furnishing to be added or used in
 16        any  facility  that  is  designed  to reduce energy consumption and energy
 17        operating costs or increase the energy efficiency of facilities for  their
 18        appointed  functions  that  are  cost  effective.  "Cost-savings  measure"
 19        includes, but is not limited to, one (1) or more of the following:
 20             (i)    Procurement  of low-cost energy supplies of all types, includ-
 21             ing electricity, natural gas and water;
 22             (ii)   Insulating the building structure or systems in the building;
 23             (iii)  Storm  windows  or  doors,  caulking  or  weather   stripping,
 24             multiglazed   windows   or  door  systems,  heat-absorbing  or  heat-
 25             reflective glazed and coated  window  and  door  systems,  additional
 26             glazing,  reductions  in  glass  area or other window and door system
 27             modifications that reduce energy consumption;
 28             (iv)   Automated or computerized energy control systems;
 29             (v)    Heating, ventilation or air conditioning system  modifications
 30             or replacements;
 31             (vi)   Replacing  or  modifying  lighting  fixtures  to  increase the
 32             energy efficiency of the lighting system;
 33             (vii)  Energy recovery systems;
 34             (viii) Cogeneration systems that produce steam  or  forms  of  energy
 35             such  as  heat,  as  well  as electricity, for use primarily within a
 36             building or complex of buildings;
 37             (ix)   Installing new or modifying existing day lighting systems;
 38             (x)    Installing or modifying renewable energy and alternate  energy
 39             technologies;
 40             (xi)   Building  operation  programs that reduce energy costs includ-
 41             ing, but not limited to, computerized programs,  training  and  other
 42             similar activities;
 43             (xii)  Steam trap improvement programs that reduce energy costs;
  1             (xiii) Devices that reduce water consumption; and
  2             (xiv)  Any  additional building infrastructure improvements that pro-
  3             duce energy cost savings, significantly reduce energy consumption  or
  4             increase  the energy efficiency of the facilities for their appointed
  5             functions and are in compliance with all  applicable  state  building
  6             codes.
  7        (b)  "Director"  means the director of the department of administration or
  8        the director's designee.
  9        (c)  "Energy cost savings" means  any  expenses  that  are  eliminated  or
 10        avoided  on  a long-term basis as a result of equipment installed or modi-
 11        fied, or services performed by a qualified energy  service  company  or  a
 12        qualified  provider,  but does not include merely shifting personnel costs
 13        or similar short-term cost savings.
 14        (d)  "Financial grade energy audit" means a comprehensive building  energy
 15        systems  audit  performed by a professional engineer licensed in the state
 16        of Idaho for the purpose of identifying and  documenting  feasible  energy
 17        and resource conservation measures and cost-savings factors.
 18        (e)  "Performance  contract"  means a contract between the director or the
 19        public entity and a qualified provider or a qualified energy service  com-
 20        pany  for evaluation, recommendation and implementation of one (1) or more
 21        cost-savings measures. A performance contract may be structured as either:
 22             (i)   A guaranteed energy savings performance contract,  which  shall
 23             include,  at a minimum, the design and installation of equipment and,
 24             if applicable, operation and  maintenance  of  any  of  the  measures
 25             implemented.  Guaranteed annual savings must meet or exceed the total
 26             annual contract payments made by the director or the user  agency  or
 27             the  public  entity for such contract, including financing charges to
 28             be incurred over the life of the contract; or
 29             (ii)  A shared savings contract, which shall include provisions mutu-
 30             ally agreed upon by the director and the qualified provider or quali-
 31             fied energy service company as to the rate  of  payments  based  upon
 32             energy cost savings and a stipulated maximum energy consumption level
 33             over the life of the contract;.
 34        (f)  "Person" means an individual, corporation, partnership, firm, associ-
 35        ation,  limited  liability company, limited liability partnership or other
 36        such entity as recognized by the state of Idaho.
 37        (g)  "Public entity" means the cities, counties and  school  districts  or
 38        any political subdivision within the state of Idaho.
 39        (h)  "Qualified  energy  service  company" means a person with a record of
 40        established projects or with demonstrated technical,  operational,  finan-
 41        cial  and  managerial  capabilities to implement performance contracts and
 42        who currently holds an Idaho public works contractor license.
 43        (hi)  "Qualified provider" means  a  person  who  is  experienced  in  the
 44        design,  implementation and installation of energy efficiency and facility
 45        improvement measures, who has the ability to  secure  necessary  financial
 46        measures  to support energy savings guarantees and the technical capabili-
 47        ties to ensure such measures generate energy cost savings,  and  who  cur-
 48        rently holds an Idaho public works contractor license.
 49        (2)  Performance  contracts. The director of the department of administra-
 50    tion, subject to the approval of the permanent building fund advisory council,
 51    or any Idaho public entity may enter into a performance contract with a quali-
 52    fied provider or qualified energy service company to reduce energy consumption
 53    or energy operating costs. Cost-savings measures implemented under  such  con-
 54    tracts shall comply with all applicable state and local building codes.
 55        (3)  Requests for qualifications. The director of the department of admin-
  1    istration  or  the  public  entity shall request qualifications from qualified
  2    providers and qualified energy  service  companies  inviting  them  to  submit
  3    information describing their capabilities in the areas of:
  4        (a)  Design, engineering, installation, maintenance and repairs associated
  5        with performance contracts;
  6        (b)  Experience  in  conversions  to a different energy or fuel source, so
  7        long as it is associated with a comprehensive energy efficiency retrofit;
  8        (c)  Postinstallation project monitoring, data collection and reporting of
  9        savings;
 10        (d)  Overall project experience and qualifications;
 11        (e)  Management capability;
 12        (f)  Ability to assess the availability of  long-term financing;
 13        (g)  Experience with projects of similar size and scope; and
 14        (h)  Other factors determined by the director or the public entity  to  be
 15        relevant and appropriate relating to the ability of the qualified provider
 16        or qualified energy service company to perform the project.
 17        (4)  Notice.  Adequate  public  notice  of  the request for qualifications
 18    shall be given at least fourteen (14) days prior to the date set forth therein
 19    for the opening of the responses  to  the  request  for  qualifications.  Such
 20    notice may be provided electronically or by publication in a newspaper of gen-
 21    eral circulation in the area where the work is located.
 22        (5)  Public  inspection. All records of the department or an agency or the
 23    public entity relating to the award of a performance contract shall be open to
 24    public inspection in accordance with the provisions of sections 9-337  through
 25    9-347 and 67-5725, Idaho Code.
 26        (6)  Award of performance contract.
 27        (a)  The  director or public entity shall select up to three (3) qualified
 28        providers or qualified energy service companies who have responded to  the
 29        request for qualifications. Factors to be considered in selecting the suc-
 30        cessful  qualified  provider  or  qualified  energy  service company shall
 31        include, but not be limited to:
 32             (i)   Fee structure;
 33             (ii)  Contract terms;
 34             (iii) Comprehensiveness of the proposal and cost-savings measures;
 35             (iv)  Experience of the qualified provider or qualified  energy  ser-
 36             vice company;
 37             (v)   Quality  of the technical approach of the qualified provider or
 38             qualified energy service company; and
 39             (vi)  Overall benefits to the state or the public entity.
 40        (b)  Notwithstanding the provisions of section 67-5711C, Idaho  Code,  the
 41        director  or  the  public entity may, following the request for qualifica-
 42        tions and the expiration of the specified notice period, award the perfor-
 43        mance contract to the qualified provider or qualified energy service  com-
 44        pany  which  best meets the needs of the project and whose proposal may or
 45        may not represent the lowest cost among the proposals  submitted  pursuant
 46        to this section.
 47        (c)  Upon award of the performance contract, the successful qualified pro-
 48        vider  or qualified energy service company shall prepare a financial grade
 49        energy audit which, upon acceptance by the director or the public  entity,
 50        shall become a part of the final performance contract.
 51        (7)  Installment  payment  and lease-purchase agreements. Pursuant to this
 52    section, the director or the public entity may enter into a  performance  con-
 53    tract,  payments  for which shall be made by the user agency or public entity.
 54    Such performance contracts may be financed as installment payment contracts or
 55    lease-purchase agreements for the purchase and  installation  of  cost-savings
  1    measures.  Financing implemented through another person other than  the quali-
  2    fied provider or qualified energy service company is authorized.
  3        (8)  Terms of performance contract.
  4        (a)  Each performance contract shall provide  that  all  payments  between
  5        parties,  except  obligations  upon termination of the contract before its
  6        expiration, shall be made over time and that the objective of such perfor-
  7        mance contract is the implementation of cost-savings measures  and  energy
  8        cost savings.
  9        (b)  A  performance contract, and payments provided thereunder, may extend
 10        beyond the fiscal year in which the performance  contract  becomes  effec-
 11        tive, subject to appropriation by the legislature or by the public entity,
 12        for  costs  incurred  in future fiscal years. The performance contract may
 13        extend for a term not to exceed twenty-five (25)  years.  The  permissible
 14        length  of  the  contract  may  also  reflect the useful life of the cost-
 15        savings measures.
 16        (c)  Performance contracts may provide for payments over a period of  time
 17        not  to  exceed  deadlines  specified in the performance contract from the
 18        date of the final installation of the cost-savings measures.
 19        (d)  Performance contracts entered pursuant to this section may be amended
 20        or modified, upon agreement by the director or the public entity  and  the
 21        qualified  provider  or  qualified  energy  service  company, on an annual
 22        basis.
 23        (9)  Monitoring and reports. During the term of each performance contract,
 24    the qualified provider or qualified energy service company shall  monitor  the
 25    reductions  in  energy  consumption and cost savings attributable to the cost-
 26    savings measures installed pursuant to  the  performance  contract  and  shall
 27    annually  prepare  and  provide  a report to the director or the public entity
 28    documenting the performance of the cost-savings measures.

Statement of Purpose / Fiscal Impact

                STATEMENT OF PURPOSE
During the 2001 session of the Idaho Legislature, Section
67 5711D of the Idaho Code was amended to provide state
agencies a bidding procedure for procurement of low-cost
energy saving services. The new bidding process entitled
"Energy Saving Performance Contracting" specified a way to
finance and implement capital energy improvements and
services offered by a qualified energy service company
(ESCO). The code amendment specified that energy and cost
savings produced by a project need to be sufficient to cover
all project costs (including financing and ongoing
maintenance and monitoring services) over the contract term.
Over the past three years many Idaho cities, counties and
public school districts have successfully entered into
performance contracting agreements. However, unnecessary
costs have been incurred and projects delayed.
This amendment extends to Idaho public entities the same
rights and process for performance contracting bidding that
is current law for state agencies and facilities.
                    FISCAL NOTES
There will be no negative fiscal impact on the State or any
public entity. No costs or fees will be incurred or
initiated as a result of this legislation. A positive fiscal
impact will be realized by each public entity that enters
into the bidding process for energy saving performance
contracts due to the enabling language of the Idaho Code.
Sen. Hal Bunderson
Sen. George Eskridge
                                                S 1222