STATE OF OKLAHOMA

2nd Session of the 53rd Legislature (2012)

SENATE BILL 1237	By:	Stanislawski

AS INTRODUCED

An Act relating to public contracts; amending 62 O.S. 2011, Section 318, which relates to performance-based efficiency contracts; modifying definitions; modifying requirements relating to certain efficiency gains; and declaring an emergency.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     AMENDATORY     62 O.S. 2011, Section 318, is amended to read as follows:
Section 318.  A.  For purposes of this section:
1.  "Public entity" means any political subdivision of this state, or a public trust which has as a beneficiary a political subdivision of this state, or any institution of higher education which is part of The Oklahoma State System of Higher Education;
2.  "Performance-based efficiency contract" means a contract between a public entity and a provider of energy or water conservation or usage measures for the design, development, financing, installation and service of any improvement, repair, alteration or betterment of any building or, facility or public utility system, which is owned, operated or planned by a public entity; or any equipment, fixture or furnishing to be added to or used in any such building or, facility or utility system; or any maintenance or operational strategy that is designed and implemented that will to reduce utility consumption or, lower operating costs, increase meter accuracy and associated billable revenue or avoid capital costs or capital outlay, in which such estimated efficiency gains resulting from the measures are designed to offset the cost of the energy or water conservation or usage measures over a term not to exceed twenty (20) years or the useful life of the measures, and may include, but is not limited to, one or more of the following:
a.	utility services,
b.	heating, ventilating or air conditioning system modifications or replacements and automated control systems,
c.	replacement or modifications of lighting fixtures,
d.	indoor air quality improvements to increase air quality that conform to the applicable state or local building code requirements when done in conjunction with other cost-saving measures,
e.	any additional building infrastructure improvement, cost saving, life safety or any other improvement that provides long-term operating cost reductions and is in compliance with state and local codes, or
f.	any facility operation and support programs that reduce operating cost,
g.	metering or related equipment or systems that improve the accuracy of billable revenue generation systems, or
h.	automated, electronic or remotely controlled systems or measures that reduce operating costs; and
3.  "Qualified provider" means a person or business experienced or trained in the design, analysis and installation of energy conservation and facility management measures.  A qualified provider must employ a professional engineer registered in the State of Oklahoma; and
4.  "Guarantee" means a written guarantee of a provider that the energy savings, operational savings, avoided capital costs, or capital outlay or increase in meter accuracy and associated billable revenues from the energy or water conservation or usage measures, will at least equal the cost of the energy or water conservation or usage measures all causally connected work and ancillary improvements provided for in a performance-based efficiency contract.
B.  In addition to any other legally permissible alternatives of entering into contracts, any public entity may enter into performance-based efficiency contracts with a qualified provider pursuant to the provisions of this section.  Further, any public entity may enter into an installment contract, lease purchase agreement or other contractual obligation for the purpose of financing performance-based efficiency projects for a term not to exceed twenty (20) years or the useful life of the project.  A qualified provider to whom the contract is awarded shall be required to give a sufficient bond to the public entity for its faithful performance of the contract.  In addition, the public entity may require performance bonds covering the annual amount of guaranteed savings over the contract term.
C.  The performance based efficiency contract's cost savings efficiency gains to the public entity must be guaranteed each year during the term of the agreement.  The savings must be sufficient to offset the annual costs of the contract and may be utilized to meet the annual debt service.  The contract shall provide for reimbursement to the public entity annually for any shortfall of guaranteed savings.  Savings must be measured, verified and documented during each year of the term and may be utilized to meet the annual debt service efficiency gains in accordance with the performance-based efficiency contract.   Efficiency gains must be measured, verified and documented, at a minimum, during each of the first three (3) years of the term, after which time the public entity may choose to discontinue the measurement, verification, and documentation services and associated guarantee.  Performance-based efficiency contracts that include metering or related equipment or systems that improve the accuracy of billable revenue generation systems are required to test a statistically relevant sample of the meters installed no later than the fifth anniversary of the effective date on a performance-based efficiency contract.  This section shall constitute the sole authority necessary to enter into performance-based efficiency contracts, without regard to compliance with other laws which may specify additional procedural requirements for execution of contracts.
SECTION 2.  It being immediately necessary for the preservation of the public peace, health and safety, an emergency is hereby declared to exist, by reason whereof this act shall take effect and be in full force from and after its passage and approval.

53-2-2371	MJM	1/17/2012 11:05:41 AM