Bill Text: HI SB189 | 2011 | Regular Session | Amended
Bill Title: Energy Efficiency Retrofitting; State Agencies; Budget
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2011-02-14 - (S) Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. [SB189 Detail]
Download: Hawaii-2011-SB189-Amended.html
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THE SENATE |
S.B. NO. |
189 |
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TWENTY-SIXTH LEGISLATURE, 2011 |
S.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO ENERGY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that state agencies are interested in utilizing energy savings performance contracting to improve the energy efficiency of their facilities, addressing deferred maintenance and reduced facility life cycle operating costs. Energy savings performance contracting is a method of paying for facility improvements using energy and operational savings through a contracting vehicle that provides an opportunity to turn wasted energy and operating cost into capital improvements. Typically, the energy conservation measures and alternative energy measures are financed through a municipal lease agreement with annual payments funded by the guaranteed utility and energy-related operating and maintenance savings.
Section 36-41(a), Hawaii Revised Statutes, states in pertinent part:
Agencies that perform energy efficiency retrofitting may continue to receive budget appropriations for energy expenditures at an amount that shall not fall below the pre-retrofitting energy budget but shall rise in proportion to any increase in the agency's overall budget for the duration of the performance contract or project payment term.
The legislature finds that the current language creates uncertainty and risk for agencies. Under energy savings performance contracting, the energy savings from the energy savings performance contracting project frees up a portion of the "pre-retrofitting energy budget" that is commonly used to enable the agencies to obtain municipal lease financing for their projects. This provides alternative financing that can allow projects to proceed expeditiously rather than waiting for general obligation bond appropriations that may or may not come.
A change in the statute's language from permissive to mandatory ("may" to "shall") in section 36-41(a), Hawaii Revised Statutes, will remove the uncertainty for agencies regarding the ability to direct the savings from an energy savings performance contracting project available to fund the municipal lease payment. This will enable more energy savings performance contracting projects to be implemented, reduce Hawaii's dependency on foreign oil, lessen utility pricing volatility due to increasing oil pricing, and provide the ability for agencies to address deferred maintenance issues without capital improvements project bond funding.
The purpose of this Act is to clarify that state agencies that perform energy efficiency retrofitting must continue to receive budget appropriations for energy expenditures at an amount that does not fall below the pre-retrofitting energy budget.
SECTION 2. Section 36-41, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (a) to read:
"(a) All agencies shall evaluate and
identify for implementation energy efficiency retrofitting through performance
contracting. Agencies that perform energy efficiency retrofitting [may]
shall continue to receive budget appropriations for energy expenditures
at an amount that shall not fall below the pre-retrofitting energy budget but
shall rise in proportion to any increase in the agency's overall budget for the
duration of the performance contract or project payment term."
2. By amending subsection (c) to read:
"(c) Notwithstanding any law to the contrary relating to the award of public contracts, any agency desiring to enter into an energy performance contract shall do so in accordance with the following provisions:
(1) The agency shall issue a public request for proposals, advertised in the same manner as provided in chapter 103D, concerning the provision of energy efficiency services or the design, installation, operation, and maintenance of energy equipment or both. The request for proposals shall contain terms and conditions relating to submission of proposals, evaluation and selection of proposals, financial terms, legal responsibilities, and other matters as may be required by law and as the agency determines appropriate;
(2) Upon receiving responses to the request for proposals, the agency may select the most qualified proposal or proposals on the basis of the experience and qualifications of the proposers, the technical approach, the financial arrangements, the overall benefits to the agency, and other factors determined by the agency to be relevant and appropriate;
(3) The agency thereafter may negotiate and enter into an energy performance contract with the person or company whose proposal is selected as the most qualified based on the criteria established by the agency;
(4) The term of any energy performance contract
entered into pursuant to this section shall not exceed twenty years[;] following
the completion of construction;
(5) Any contract entered into shall contain the following annual allocation dependency clause:
"The continuation of this contract is contingent upon the appropriation of funds to fulfill the requirements of the contract by the applicable funding authority. If that authority fails to appropriate sufficient funds to provide for the continuation of the contract, the contract shall terminate on the last day of the fiscal year for which allocations were made";
(6) Any energy performance contract may provide that the agency shall ultimately receive title to the energy system being financed under the contract;
(7) Any energy performance contract shall provide that total payments shall not exceed total savings; and
(8) For any guaranteed-savings plan:
(A) The payment obligation for each year of the contract, including the year of installation, shall be guaranteed by the private sector person or company to be less than the annual energy cost savings attributable under the contract to the energy equipment and services. Such guarantee, at the option of the agency, shall be a bond or insurance policy, or some other guarantee determined sufficient by the agency to provide a level of assurance similar to the level provided by a bond or insurance policy; and
(B) In the event that the actual annual verified savings are less than the annual amount guaranteed by the energy service company, the energy service company, within thirty days of being invoiced, shall pay the agency, or cause the agency to be paid, the difference between the guaranteed amount and the actual verified amount."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval.
Report Title:
Energy Efficiency Retrofitting; State Agencies; Budget
Description:
Ensures that agencies that enter into energy performance contracts shall continue to receive budget appropriations for energy expenditures in an amount that shall not fall below the pre-performance contract budget. Specifies that the duration of a performance contract begins upon completion of construction. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
