Bill Text: NJ A2978 | 2010-2011 | Regular Session | Introduced
Bill Title: Establishes procedures for guaranteed energy savings contracts by governmental entities.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2010-06-21 - Introduced, Referred to Assembly Telecommunications and Utilities Committee [A2978 Detail]
Download: New_Jersey-2010-A2978-Introduced.html
Sponsored by:
Assemblywoman SHEILA Y. OLIVER
District 34 (Essex and Passaic)
Assemblyman WAYNE P. DEANGELO
District 14 (Mercer and Middlesex)
Assemblywoman ANNETTE QUIJANO
District 20 (Union)
SYNOPSIS
Establishes procedures for guaranteed energy savings contracts by governmental entities.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning guaranteed energy savings contracts and supplementing Title 52 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. The Legislature finds and declares:
a. It is the policy of the State for governmental entities to undertake energy and water conservation measures in all aspects of their operations whenever practical and feasible;
b. Because of the upfront cost of undertaking projects that promote energy and water conservation, many governmental entities have foregone needed or desirable facility upgrades that would increase energy and water efficiencies and improve the working environment of facilities;
c. Efforts to improve the energy and water efficiencies of governmental entities in many instances have not been pursued because of the high cost of property taxes and competing demands for funds needed for other essential activities, programs, and projects undertaken by governmental entities;
d. Guaranteed energy savings contracts provide a mechanism to initiate projects to improve energy and water efficiencies that are needed or desirable but not currently funded;
e. Guaranteed energy savings contracts do not readily lend themselves to award pursuant to the sealed bid process, which awards a contract to the lowest cost bidder based on upfront construction and labor costs, and without regard to long term savings or reduced life cycle costs that the governmental entity may reasonably expect to achieve as a result of the contract work;
f. Competitive contracting is an open and fair procurement method that provides governmental entities the opportunity to evaluate competing proposals based on all relevant cost factors including long term savings and reduced life cycle costs and to enter into guaranteed energy savings contracts while providing taxpayers the highest level of protection;
g. The need to evaluate differing proposals as to the nature of the energy and water conservation measures to be implemented and the savings realized therefrom, and the funding mechanisms to be employed, as well as the guaranteed nature of the savings to be realized by governmental entities that enter into guaranteed energy savings contracts supports the use of competitive contracting techniques in lieu of sealed bidding techniques; and
h. Nothing in this act shall be interpreted to indicate any change in the Legislature's support of current procurement laws for other matters that require award to the lowest responsive bidder.
2. For the purposes of this act:
"Allowable costs" means the equipment and project costs associated with an energy conservation measure or a water conservation measure that a governmental entity reasonably believes will be incurred during the term of a guaranteed energy savings contract and are documented by industry engineering standards.
"Competitive contracting" means the method of contracting for specialized goods and services in which formal proposals are solicited from vendors; formal proposals are evaluated by the governmental entity; and the governmental entity awards a contract to a vendor or vendors from among the formal proposals received.
"Energy conservation measure" means a program or facility alteration intended to reduce a governmental entity's energy consumption or operating costs, and includes but is not limited to:
(1) insulation of the building structure or systems within the building;
(2) storm windows or doors, caulking or weather stripping, multi-glazed windows or doors, heat-absorbing or heat-reflective glazed and coated window or door systems, additional glazing, reductions in glass area or other window and door system modifications that reduce energy consumption;
(3) automated or computerized energy control systems;
(4) heating, ventilating or air conditioning system modifications or replacements;
(5) replacement or modification of 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 applicable State or local building codes for the lighting system after the proposed modifications are made;
(6) energy recovery systems;
(7) systems that produce steam or forms of energy such as heat as well as electricity for use within a building or complex of buildings;
(8) energy conservation measures that provide operating cost reductions based on life cycle cost analysis;
(9) a training program or facility alteration that reduces energy consumption or reduces operating costs, including allowable costs, based on future reductions in labor costs or costs for contracted services;
(10 a facility alteration that includes expenditures required to properly implement other energy conservation measures;
(11) a program to reduce energy costs through rate adjustments, load shifting to reduce peak demand, load shedding, or use of alternative energy suppliers;
(12) installation of energy information and control systems that monitor consumption, redirect systems to optimal energy sources and manage energy-using equipment;
(13) indoor air quality improvements;
(14) daylighting systems; and
(15) renewable or on-site distributed power generation systems.
"Energy savings" means a measured reduction in fuel, energy, water, or operating or maintenance costs resulting from the implementation of one or more energy conservation measures or water conservation measures when compared with an established baseline of previous fuel, energy, water, or operating or maintenance costs, including, but not limited to, future capital replacement expenditures avoided as a result of equipment installed or services performed pursuant to a guaranteed energy savings contract.
"Governmental entity" means the State, its agencies, authorities and instrumentalities, a county or municipality, or any agency, authority or instrumentality thereof, a school district, or any other similar public entity or agency including a public housing authority.
"Guaranteed energy savings contract" means a contract for the evaluation and recommendation of energy savings, energy conservation measures, water conservation measures, or a combination thereof, and for implementation of one or more such measures entered into pursuant to this act.
"Industry engineering standards" means recognized industry standards including life cycle costing, the R.S. Means-estimated method developed by the R.S. Means Company, historical data, manufacturer's data, and the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) standards.
"Qualified provider" means a person or business responsible and capable of evaluating, recommending, designing, implementing, and installing energy conservation measures or water conservation measures, or both, as determined by the governmental entity and approved by the State Treasurer.
"Water conservation measure" means a program, equipment, or facility alteration designed to reduce water consumption, ensure maximum water use efficiency, or reduce water loss, including the installation and use of state-of-the-art equipment and techniques.
3. Notwithstanding the provision of any law, or rule or regulation adopted pursuant thereto, to the contrary, a governmental entity may use competitive contracting to enter into a guaranteed energy savings contract with a qualified provider for a period of 15 years in accordance with this act and in accordance with any guidelines or regulations adopted by the Director of Energy Savings established pursuant to Executive Order No.11 of 2006.
a. For the purpose of entering into a guaranteed energy savings contract, a governmental entity may use the competitive contracting method of procurement. The governmental entity may evaluate any proposal that meets the requirements of the governmental entity and is timely submitted by a qualified provider. The request for proposals shall be announced through a public notice from the governmental entity that will administer the program. The request for proposals shall provide all interested parties with sufficient information necessary to submit a timely and responsive proposal.
b. The governmental entity shall select the qualified provider that best meets the needs of that governmental entity in accordance with criteria established by that governmental entity. A governmental entity:
(1) after reviewing the reports required to be provided pursuant to subsection c. of this section, may enter into a guaranteed energy savings contract with a qualified provider if (a) the governmental entity finds that the amount it would spend on the energy conservation measures or water conservation measures, or both, recommended in the proposal would not exceed the amount to be saved in energy savings within a 15-year period from the date of installation if the recommendations in the proposal were followed, and (b) the qualified provider provides in its proposal a written guarantee in favor of the governmental entity that the energy savings will meet or exceed the cost of the guaranteed energy savings contract; and
(2) shall include specifications requiring the qualified provider to demonstrate the qualifications, experience and training of the qualified provider's employees, contractors and subcontractors, including job training, education, and experience in successfully completing projects similar in size and scope. These specifications shall also include other criteria to assure a reliable source of skilled and experienced labor to guarantee efficient and cost-effective completion of the work and safety by standardizing the terms and conditions of employment of labor on any project undertaken pursuant to this act. In order to ensure these labor goals are met, specifications shall include requirements to ensure labor stability and the payment of prevailing wages pursuant to P.L.1963, c. 150 (C.34:11-56.25 et seq.), and require that labor contractors and subcontractors provide and maintain formal training and apprenticeship programs and approved healthcare and pension benefit plans in accordance with P.L.1948, c.446 (C.34:1A-34 et seq.).
c. Before a guaranteed energy savings contract may be awarded by a governmental entity, the qualified provider shall provide a report as part of its proposal which report shall summarize estimates of all costs of installation, maintenance, repairs and debt service and estimates of the amounts by which energy, water, or operating costs will be reduced. This report shall:
(1) be available for public inspection;
(2) contain a listing of contractors and subcontractors to be used by the qualified provider with respect to the energy conservation measures or water conservation measures, or both; and
(3) comply with the guidelines adopted by the Director of Energy Savings establishing a methodology for computing and comparing energy savings.
d. A qualified provider to whom a guaranteed energy savings contract is awarded shall provide a sufficient bond to the governmental entity for its faithful performance.
e. Notwithstanding any other provision of law, or rule or regulation adopted pursuant thereto, governing the letting of public contracts to the contrary, a governmental entity may enter into a separate guaranteed energy savings contract with each qualified provider selected in accordance with this act.
4. a. A guaranteed energy savings contract may provide that all payments, except obligations on termination of the contract before its scheduled expiration, shall be made over a period of time. Each guaranteed energy savings contract shall provide that the savings in any year are guaranteed to the extent necessary to make payments under the contract during that year.
b. A guaranteed energy savings contract shall include a written guarantee that energy savings will meet or exceed the cost of the energy conservation measures or water conservation measures, or both, to be evaluated, recommended, designed, implemented, and installed under the contract.
c. The qualified provider performing a guaranteed energy savings contract shall submit annual reports to the governmental entity, for each guaranteed energy savings contract, to confirm the actual savings realized for the project, over the prior 12-month period. This report, and the measurement of the savings, shall comply with the United State Department of Energy's Federal Energy Management Program, which stipulates the means to measure and verify consumption based on metering, calculations, or short term testing. For contracts involving State agencies, a copy of this annual report shall also be submitted to the Director of Energy Savings established pursuant to Executive Order No.11 of 2006 and the State Treasurer. In the event that the actual, annual verified savings are less than the annual amount of savings guaranteed by the qualified provider, the qualified provider shall pay the governmental entity, or cause the governmental entity to be paid, the difference between the guaranteed savings amount and the actual, verified amount.
d. A guaranteed energy savings contract may provide for financing, including tax exempt financing, by a third party over a period of time not to exceed 15 years from final installation or, when applicable, by the issuance of energy savings bonds as a refunding bond, to fund all or part of the energy conservation measures or water conservation measures, or both. The contract for third party financing may be separate from the guaranteed energy savings contract.
e. An improvement that is not causally connected to an energy conservation measure or water conservation measure may be included in a guaranteed energy savings contract if:
(1) the total value of the improvement does not exceed 15% of the total value of the work to be performed under the guaranteed energy savings contract; and
(2) (a) the improvement is necessary to conform to a law, or a rule or regulation adopted pursuant thereto, or an ordinance or resolution, as appropriate; or
(b) an analysis within the successful proposal or by the governmental entity at the time of the award demonstrates that there is an economic advantage to the governmental entity implementing the improvement as part of the guaranteed energy savings contract, and the savings justification for the improvement is documented by industry engineering standards.
f. A facility alteration required to properly implement other energy conservation measures or water conservation measures, or both, may be included as part of a guaranteed energy savings contract. In that case, notwithstanding any other provision of law, or rule or regulation adopted pursuant thereto, to the contrary, the facility alteration may be undertaken or supervised by the qualified provider performing the guaranteed energy savings contract.
5. This act shall take effect immediately.
STATEMENT
This bill establishes procedures to allow the use of competitive contracting procedures by governmental entities to enter into guaranteed energy savings contracts. A "guaranteed energy savings contract" means a contract, entered into pursuant to the provisions of this bill upon enactment into law, for the evaluation and recommendation of energy savings, energy conservation measures, water conservation measures, or a combination thereof, and for implementation of one or more such measures.
