Bill Text: AZ SB1296 | 2010 | Forty-ninth Legislature 2nd Regular | Introduced
Bill Title: Energy and water savings accounts
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2010-02-02 - Referred to Senate NRIPD Committee [SB1296 Detail]
Download: Arizona-2010-SB1296-Introduced.html
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REFERENCE TITLE: energy and water savings accounts |
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State of Arizona Senate Forty-ninth Legislature Second Regular Session 2010
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SB 1296 |
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Introduced by Senator Waring
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AN ACT
amending title 9, chapter 4, article 8, Arizona Revised Statutes, by adding section 9‑499.15; amending title 11, chapter 2, article 4, Arizona Revised Statutes, by adding section 11‑254.08; amending title 15, chapter 12, article 3, Arizona Revised Statutes, by adding section 15‑1453; amending title 34, chapter 1, article 1, Arizona Revised Statutes, by adding section 34‑105; repealing sections 34‑455 and 34‑456, Arizona Revised Statutes; relating to energy and water savings accounts.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 9, chapter 4, article 8, Arizona Revised Statutes, is amended by adding section 9-499.15, to read:
9-499.15. Energy and water savings accounts
A. The governing body of a city or town may establish an energy and water savings account that consists of a designated pool of capital investment monies to fund energy or water savings projects in public facilities. A city or town may deposit in the account monies from one or more companies that provide utility, energy or water services to the city or town pursuant to contracts that are executed between the companies and the city or town and that are designed to save energy or water in public facilities. A city or town may use monies in the energy and water savings account for payments under a contract entered into pursuant to section 34‑105.
B. A city or town shall use monies deposited in an energy and water savings account as a designated pool of capital investment monies to pay for the incremental cost of energy or water savings measures in facilities that are owned or operated by the city or town. Any contract that is entered into pursuant to this section shall contain an agreement between the qualified provider or utility, energy or water services company and the city or town that each party has performed a reasonable investigation to determine that the measures contemplated by the contract will result in stated energy or water savings. Contract terms may extend the period of the capital investment repayment schedule prescribed in subsection E of this section up to the expected life of the energy or water savings measures, or twenty-five years, whichever is shorter.
C. A city or town shall use expenditures from an energy and water savings account only for the following:
1. Projects or measures pursuant to a contract pursuant to this section or section 34-105 that save energy or water in facilities that are owned or operated by the city or town. Monies may be used pursuant to this paragraph to provide technical assistance regarding energy or water savings to cities or towns by a qualified provider or a utility, energy or water services company.
2. Repayment to the qualified provider or utility, energy or water services company of capital investment monies deposited in the account plus reasonable carrying charges pursuant to the terms of the contract. Reasonable carrying charges for investor owned utilities are the most recent authorized rate of return approved by the Arizona corporation commission.
D. Before the implementation of the energy or water savings measures or services, the qualified provider or utility, energy or water services company shall compute, and the city or town shall review and approve, the estimated amount of the energy or water savings and the associated impact on energy or water costs to be achieved by the city or town on an annual and monthly basis over the expected life of the measures and shall include these estimates in the contract. The qualified provider or utility, energy or water services company and the city or town shall update the annual and monthly energy or water savings and associated cost impact estimates annually based on actual experience.
E. Before the implementation of the energy or water savings measures or services, the qualified provider or utility, energy or water services company and the city or town shall jointly develop a schedule of monthly payments for repayment of the capital investment monies to the qualified provider or utility, energy or water services company. The repayment schedule must result in lower energy or water costs, which shall include the cost of the installed energy or water savings measures for the city or town over the life of the installed measures that the city or town would have experienced without the installation of the measures. The repayment schedule shall be included in the contract.
F. The city or town shall transfer on a monthly basis the amount of the monthly payment prescribed pursuant to subsection E of this section to the energy and water savings account from the maintenance and operation portion of the city's or town's budget to repay any unpaid balance of the capital investment previously deposited in the energy and water savings account from the qualified provider or utility, energy or water services company plus a reasonable carrying charge. For the period of time that the company's capital investment monies and reasonable carrying charge remain unpaid, the qualified provider or utility, energy or water services company shall provide a separate billing or billing component to repay the capital investment on a monthly basis, pursuant to the repayment schedule prescribed pursuant to subsection e of this section, which shall be paid by the city or town from the energy and water savings account.
G. After the balance of the qualified provider or utility, energy or water services company's capital investment monies deposited in the energy and water savings account plus a reasonable carrying charge are repaid in full by the city or town, the city or town may discontinue the deposit in the energy and water savings account of amounts that are prescribed in subsection e of this section.
H. Any monies associated with an energy or water savings project remaining in the energy and water savings account after the capital investment monies of the qualified provider or utility, energy or water services company plus a reasonable carrying charge are repaid in full may be transferred to the maintenance and operation portion of the city's or town's budget.
I. A city or town may deposit energy‑related rebate or grant monies in the energy and water savings account to assist in funding energy or water savings projects. A city or town shall use these rebate or grant monies to reduce the total cost of energy or water savings projects and to reduce the amount of capital investment monies received from and repaid to utility, energy or water services companies. A city or town is not required to repay the rebate or grant monies in the manner described in subsection e of this section pursuant to the agreements with the providers of rebate or grant funds.
J. A city or town may deposit monies from other funding sources, including clean renewable energy bonds and the American recovery and reinvestment act of 2009 (P.L. 111-5) funding, in the energy and water savings account to fund energy or water saving projects in public facilities. These monies shall be repaid in a manner consistent with this section and pursuant to the contract between the city or town and the provider of the funding.
K. This section does not impose an obligation on any energy utility, water utility, public service corporation or agricultural improvement district to invest monies or contract with any city or town.
L. For all projects carried out under this section, a city or town shall report to the department of commerce energy office:
1. The name of the project.
2. The qualified provider.
3. The total cost of the project.
4. The expected energy and cost savings.
Sec. 2. Title 11, chapter 2, article 4, Arizona Revised Statutes, is amended by adding section 11-254.08, to read:
11-254.08. Energy and water savings accounts
A. The board of supervisors may establish an energy and water savings account that consists of a designated pool of capital investment monies to fund energy or water savings projects in county facilities. The county may deposit in the account monies from one or more companies that provide utility, energy or water services to the county pursuant to contracts that are executed between the companies and the county and that are designed to save energy or water in public facilities. The county may use monies in the energy and water savings account for payments under a contract entered into pursuant to section 34-105.
B. The auditor general shall prescribe the appropriate designation of the energy and water savings accounts in the uniform system of financial records and shall prescribe reporting requirements on the appropriate budget forms and annual financial report forms.
C. A county shall use monies deposited in an energy and water savings account as a designated pool of capital investment monies to pay for the incremental cost of energy or water savings measures in facilities that are owned or operated by the county. Any contract that is entered into pursuant to this section shall contain an agreement between the qualified provider or utility, energy or water services company and the county that each party has performed a reasonable investigation to determine that the measures contemplated by the contract will result in stated energy or water savings. Contract terms may extend the period of the capital investment repayment schedule prescribed in subsection F of this section up to the expected life of the energy or water savings measures, or twenty-five years, whichever is shorter.
D. A county shall use expenditures from an energy and water savings account only for the following:
1. Projects or measures pursuant to a contract pursuant to this section or section 34-105 that save energy or water in facilities that are owned or operated by the county. Monies may be used pursuant to this paragraph to provide technical assistance regarding energy or water savings to counties by a qualified provider or a utility, energy or water services company.
2. Repayment to the qualified provider or utility, energy or water services company of capital investment monies deposited in the account plus reasonable carrying charges pursuant to the terms of the contract. Reasonable carrying charges for investor owned utilities are the most recent authorized rate of return approved by the Arizona corporation commission.
E. Before the implementation of the energy or water savings measures or services, the qualified provider or utility, energy or water services company shall compute, and the county shall review and approve, the estimated amount of the energy or water savings and the associated impact on energy or water costs to be achieved by the county on an annual and monthly basis over the expected life of the measures and shall include these estimates in the contract. The qualified provider or utility, energy or water services company and the county shall update the annual and monthly energy or water savings and associated cost impact estimates annually based on actual experience.
F. Before the implementation of the energy or water savings measures or services, the qualified provider or utility, energy or water services company and the county shall jointly develop a schedule of monthly payments for repayment of the capital investment monies to the qualified provider or utility, energy or water services company. The repayment schedule must result in lower energy or water costs, which shall include the cost of the installed energy or water savings measures for the county over the life of the installed measures that the county would have experienced without the installation of the measures. The repayment schedule shall be included in the contract.
G. The county shall transfer on a monthly basis the amount of the monthly payment prescribed pursuant to subsection f of this section to the energy and water savings account from the maintenance and operation portion of the county's budget to repay any unpaid balance of the capital investment previously deposited in the energy and water savings account from the qualified provider or utility, energy or water services company plus a reasonable carrying charge. For the period of time that the company's capital investment monies and reasonable carrying charge remain unpaid, the qualified provider or utility, energy or water services company shall provide a separate billing or billing component to repay the capital investment on a monthly basis, pursuant to the repayment schedule prescribed pursuant to subsection F of this section, which shall be paid by the county from the energy and water savings account.
H. After the balance of the qualified provider or utility, energy or water services company's capital investment monies deposited in the energy and water savings account plus a reasonable carrying charge are repaid in full by the county, the county may discontinue the deposit in the energy and water savings account of amounts that are prescribed in subsection f of this section.
I. Any monies associated with an energy or water savings project remaining in the energy and water savings account after the capital investment monies of the qualified provider or utility, energy or water services company plus a reasonable carrying charge are repaid in full may be transferred to the maintenance and operation portion of the county's budget.
J. A county may deposit energy‑related rebate or grant monies in the energy and water savings account to assist in funding energy or water savings projects. A county shall use these rebate or grant monies to reduce the total cost of energy or water savings projects and to reduce the amount of capital investment monies received from and repaid to utility, energy or water services companies. A county is not required to repay the rebate or grant monies in the manner described in subsection f of this section, pursuant to the agreements with the providers of rebate or grant funds.
K. A county may deposit monies from other funding sources, including clean renewable energy bonds and the American recovery and reinvestment act of 2009 (P.L. 111-5) funding, in the energy and water savings account to fund energy or water saving projects in county facilities. These monies shall be repaid in a manner consistent with this section and pursuant to the contract between the county and the provider of the funding.
L. This section does not impose an obligation on any energy utility, water utility, public service corporation or agricultural improvement district to invest monies or contract with any county.
M. For all projects carried out under this section, the county shall report to the department of commerce energy office:
1. The name of the project.
2. The qualified provider.
3. The total cost of the project.
4. The expected energy and cost savings.
Sec. 3. Title 15, chapter 12, article 3, Arizona Revised Statutes, is amended by adding section 15-1453, to read:
15-1453. Energy and water savings accounts
A district board may establish an energy and water savings account in the same manner as a school district pursuant to section 15-910.02 and may fund and use monies for guaranteed energy savings contracts pursuant to section 34-105.
Sec. 4. Title 34, chapter 1, article 1, Arizona Revised Statutes, is amended by adding section 34-105, to read:
34-105. Guaranteed energy savings contracts; definitions
A. An agent may contract for the procurement of a guaranteed energy cost savings contract with a qualified provider.
B. An agent may enter into a guaranteed energy cost savings contract with a qualified provider if it determines that the amount it would spend on the energy cost savings measures recommended in the proposal would not exceed the amount to be saved in energy and operational costs over the expected life of the energy cost savings measures implemented or within twenty-five years, whichever is shorter, after the date that installation or implementation is complete, if the recommendations in the proposal are followed. An agent shall retain the cost savings achieved by a guaranteed energy cost saving contract, and these cost savings may be used to pay for the contract and project implementation. An agent shall not use excess utilities monies for the contract or for project implementation.
C. An agent shall use objective criteria in selecting the qualified provider, including the cost of the contract, the energy and operational cost savings, the net projected energy savings, the quality of the technical approach, the quality of the project management plan, the financial solvency of the qualified provider and the experience of the qualified provider with projects of similar size and scope. An agent shall set forth each criterion with its respective numerical weighting in the request for proposal.
D. In selecting a contractor to perform any construction work related to performing the guaranteed energy cost savings contract, the qualified provider may develop and use a prequalification process for contractors. These prequalifications may require the contractor to demonstrate that the contractor is adequately bonded to perform the work and that the contractor has not failed to perform on a prior job.
E. The selected qualified provider shall perform a study in order to establish the exact scope of the guaranteed energy cost savings contract, the fixed cost savings guarantee amount and the methodology for determining actual savings. The agent shall review and approve this report before the actual installation of any equipment. The qualified provider shall transmit a copy of the approved study to the department of commerce energy office.
F. The guaranteed energy cost savings contract shall require that in determining whether the projected energy savings calculations have been met, the energy or operational cost savings shall be computed by comparing the energy baseline before installation or implementation of the energy cost savings measures with the energy consumed and operational costs avoided after installation or implementation of the energy cost savings measures. The qualified provider and the agent may agree to make modifications to the energy baseline only for any of the following:
1. Changes in utility rates.
2. Changes in the number of days in the utility billing cycle.
3. Changes in the square footage of the facility.
4. Changes in the operational schedule of the facility.
5. Changes in facility temperature.
6. Significant changes in the weather.
7. Significant changes in the amount of equipment or lighting utilized in the facility.
8. Significant changes in the nature or intensity of energy use such as the change of classroom space to laboratory space.
G. The information to develop the energy baseline shall be derived from actual energy measurements or shall be calculated from energy measurements at the facility where energy cost savings measures are to be installed or implemented. The measurements shall be taken in the year preceding the installation or implementation of energy cost savings measures.
H. When submitting a proposal for the installation of equipment, the qualified provider shall include information on the projected energy savings associated with each proposed energy cost savings measure.
I. An agent, or two or more agents, may enter into an installment payment contract or lease‑purchase agreement with a qualified provider for the purchase and installation or implementation of energy cost savings measures. The guaranteed energy cost savings contract may provide for payments over a period of not more than the expected life of the energy cost savings measures implemented or twenty‑five years, whichever is shorter. The contract shall provide that all payments, except obligations on termination of the contract before its expiration, shall be made over time.
J. The guaranteed energy cost savings contract shall include a written guarantee of the qualified provider that either the energy or operational costs savings, or both, will meet or exceed the costs of the energy cost savings measures over the expected life of the energy cost savings measures implemented or within twenty-five years, whichever is shorter. The qualified provider shall:
1. For the first three years of savings, prepare a measurement and verification report on an annual basis in addition to an annual reconciliation of savings.
2. Reimburse the agent for any shortfall of guaranteed energy cost savings on an annual basis.
K. The agent may obtain any required financing as part of the original competitive sealed proposal process from the qualified provider or a third‑party financing institution.
L. A qualified provider that is awarded the contract shall give a sufficient bond to the agent for its faithful performance of the equipment installment.
M. The qualified provider is required to make public information in the subcontractor's bids only if the qualified provider is awarded the guaranteed energy cost savings contract by the agent.
N. For all projects carried out under this section, the agent shall report to the department of commerce energy office:
1. The name of the project.
2. The qualified provider.
3. The total cost of the project.
4. The expected energy and cost savings.
O. This section does not apply to the construction of new buildings.
P. An agent may use simplified energy performance contract for projects less than five hundred thousand dollars. Simplified energy performance contracts are not required to include an energy savings guarantee and shall comply with all requirements in this section except for the requirements that are specifically related to the energy savings guarantee and the measurement and verification of the guaranteed savings.
Q. For the purposes of this section:
1. "Agent" has the same meaning as prescribed in section 34-101 but also includes a community college district organized under title 15, chapter 12.
2. "Construction" means the process of building, altering, repairing, improving or demolishing any structure or building, or other public improvements of any kind to any real property. Construction does not include the routine operation, routine repair or routine maintenance of existing structures, buildings or real property.
3. "Energy baseline" means a calculation of the amount of energy used in an existing facility before the installation or implementation of the energy cost savings measures.
4. "Energy cost savings measure" means a training program or facility alteration designed to reduce energy consumption or operating costs and may include one or more of the following, and any related meters or other measuring devices:
(a) Insulating the building structure or systems in the building.
(b) Storm windows or doors, caulking or weather stripping, multiglazed windows or door systems, additional glazing, reductions in glass area, or other window and door system modifications that reduce energy consumption.
(c) Automated or computerized energy control systems.
(d) Heating, ventilating or air conditioning system modifications or replacements.
(e) Replacing or modifying lighting fixtures to increase the energy efficiency of the lighting system without increasing the overall illumination of a facility unless an increase in illumination is necessary to conform to the applicable state or local building code for the lighting system after the proposed modifications are made.
(f) Indoor air quality improvements to increase air quality that conform to the applicable state or local building code requirements.
(g) Energy recovery systems.
(h) Installing a new or retrofitting an existing day lighting system.
(i) Any life safety measures that provide long‑term operating cost reductions and that comply with state and local codes.
(j) Implementing operation programs through education, training and software that reduce the operating costs.
(k) Procurement of low-cost utility supplies of all types, including electricity, natural gas, propane and water.
(l) Devices that reduce water consumption and water costs or that reduce sewer charges.
(m) Rainwater harvesting systems.
(n) Combined heat and power systems.
(o) Renewable and alternative energy projects and renewable energy power service agreements.
(p) Self-generation systems.
(q) Any additional building systems and infrastructure that produce energy, or that provide utility or operational cost savings not specifically mentioned in this paragraph, if the improvements meet the life cycle cost requirement and enhance building system performance or occupant comfort and safety.
5. "Guaranteed energy cost savings contract" means a contract for implementing one or more energy cost savings measures.
6. "Life cycle cost" means the sum of present values of investment costs, capital costs, installation costs, energy costs, operating costs, maintenance costs and disposal costs over the life of the project, product or measure as provided by federal life cycle cost rules, regulations and criteria contained in the United States department of energy federal energy management program "guidance on life-cycle cost analysis" required by executive order 13123, January 2007.
7. "Operational savings" means reductions in actual budget line items currently being expended or savings realized from the implementation or installation of energy cost savings measures.
8. "Qualified provider" means a person or a business experienced in designing, implementing or installing energy cost savings measures.
Sec. 5. Repeal
Sections 34‑455 and 34‑456, Arizona Revised Statutes, are repealed.
