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General Assembly Raised Bill No. 6444
January Session, 2025
LCO No. 3567
Referred to Committee on HIGHER EDUCATION AND
EMPLOYMENT ADVANCEMENT
Introduced by:
(HED)
AN ACT ALLOWING THE CONSTITUENT UNITS OF THE STATE
SYSTEM OF HIGHER EDUCATION TO ENTER INTO ENERGY -
SAVINGS PERFORMANCE CONTRACTS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 16a-37x of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective July 1, 2025): 2
(a) As used in this section: 3
(1) "Energy-savings measure" means any improvement to facilities or 4
other energy-consuming systems designed to reduce energy or water 5
consumption and operating costs and increase the operating efficiency 6
of facilities or systems for their appointed functions. "Energy-savings 7
measure" includes, but is not limited to, one or more of the following: 8
(A) Replacement or modification of lighting and electrical 9
components, fixtures or systems, including daylighting systems, 10
improvements in street lighting efficiency or computer power 11
management software; 12 Raised Bill No. 6444
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(B) Class I renewable energy or solar thermal systems; 13
(C) Cogeneration systems that produce steam or forms of energy, 14
such as heat or electricity, for use primarily within a building or complex 15
of buildings; 16
(D) Automated or computerized energy control systems; 17
(E) Heating, ventilation or air conditioning system modifications or 18
replacements; 19
(F) Indoor air quality improvements that conform to applicable 20
building code requirements; 21
(G) Water-conserving fixtures, appliances and equipment or the 22
substitution of non-water-using fixtures, appliances and equipment, or 23
water-conserving landscape irrigation equipment; 24
(H) Changes in operation and maintenance practices; 25
(I) Replacement or modification of windows or doors; and 26
(J) Installation or addition of insulation. 27
(2) "Cost effective" means the savings resulting from energy-savings 28
measures outweigh the costs of such measures, including, but not 29
limited to, any financing costs, provided the payback period for any 30
financing provided pursuant to this section is less than the functional 31
life of the proposed energy-savings measure and the payback period for 32
the comprehensive package of measures does not exceed [twenty] thirty 33
years. 34
(3) "Operation and maintenance cost savings" means a measurable 35
decrease in operation and maintenance costs and future replacement 36
expenditures that is a direct result of the implementation of one or more 37
utility cost savings measures. Such savings shall be calculated in 38
comparison with an established baseline of operation and maintenance 39
costs. 40 Raised Bill No. 6444
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(4) "Qualified energy service provider" means a corporation 41
approved by the Department of Administrative Services with a record 42
of successful energy performance contract projects experienced in the 43
design, implementation and installation of energy efficiency and facility 44
improvement measures, the technical capabilities to ensure such 45
measures generate energy and operational cost savings, and the ability 46
to secure the financing necessary to support energy savings guarantees. 47
(5) "Utility cost savings" means any utility expenses eliminated or 48
avoided on a long-term basis as a result of equipment installed or 49
modified, or services performed by a qualified energy service provider; 50
"utility cost savings" does not include merely shifting personnel costs or 51
similar short-term cost savings. 52
(6) "State agency" has the same meaning as provided in section 1-79. 53
(7) "Municipality" has the same meaning as provided in section 4-230. 54
(8) "Participating municipality" means a municipality that voluntarily 55
takes part in the standardized energy-savings performance contract 56
process. 57
(9) "Standardized energy-savings performance contract process" 58
means standard procedures for entering into an energy-savings 59
performance contract and standard energy-savings performance 60
contract documents established by the Department of Energy and 61
Environmental Protection. 62
(10) "Investment-grade energy audit" means a study by the qualified 63
energy services provider selected for a particular energy-savings 64
performance contract project which includes detailed descriptions of the 65
improvements recommended for the project, the estimated costs of the 66
improvements, and the utility and operations and maintenance cost 67
savings projected to result from the recommended improvements. 68
(11) "Energy-savings performance contract" means a contract 69
between the state agency, [or] municipality or constituent unit and a 70 Raised Bill No. 6444
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qualified energy service provider for evaluation, recommendation and 71
implementation of one or more energy-savings measures. An energy-72
savings performance contract shall be a guaranteed energy-savings 73
performance contract, which shall include, but not be limited to, (A) the 74
design and installation of equipment and, if applicable, operation and 75
maintenance of any of the measures implemented; and (B) guaranteed 76
annual savings that meet or exceed the total annual contract payments 77
made by the state agency, [or] municipality or constituent unit for such 78
contract, including financing charges to be incurred by the state agency, 79
[or] municipality or constituent unit over the life of the contract. 80
(12) "Constituent unit" has the same meaning as provided in section 81
10a-1. 82
(13) "Participating constituent unit" means a constituent unit that 83
voluntarily takes part in the standardized energy-savings performance 84
contract process. 85
(b) [On or before July 1, 2012, the] The Commissioner of Energy and 86
Environmental Protection, in coordination with the Energy 87
Conservation Management Board and in consultation with the Office of 88
Policy and Management and the Department of Administrative 89
Services, shall, within available appropriations, establish a standardized 90
energy-savings performance contract process for state agencies, [and] 91
municipalities and constituent units. The standardized process shall 92
include standard procedures for entering into an energy-savings 93
performance contract and standard energy-savings performance 94
contract documents, including, but not limited to, requests for 95
qualifications, requests for proposals, investment-grade audit contracts, 96
energy-savings performance contracts, including the form of the project 97
savings guarantee, and project financing agreements. A municipality or 98
constituent unit may use the established state standardized energy-99
savings performance contract process or establish its own energy-100
savings performance contract process. 101
(c) The Commissioner of Energy and Environmental Protection, in 102 Raised Bill No. 6444
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consultation with the Office of Policy and Management and the Energy 103
Conservation Management Board, shall manage the established 104
standardized energy-savings performance contract process and apprise 105
state agencies, [and] participating municipalities and participating 106
constituent units of opportunities to develop and finance energy-107
savings performance contract projects and provide technical and 108
analytical support, including, but not limited to, (1) procurement of 109
energy-savings performance contract services; (2) reviewing verification 110
procedures for energy savings; and (3) assisting in the structuring and 111
arranging of financing for energy-savings performance contract 112
projects. The Energy Conservation Management Board, in consultation 113
with the Office of Policy and Management, shall create promotional 114
materials to explain the energy-savings performance contract program. 115
(d) The Department of Energy and Environmental Protection may fix, 116
charge and collect fees to cover costs incurred for any administrative 117
support and resources or services provided under this section from the 118
state agencies, [and] participating municipalities and participating 119
constituent units that use its technical support services. State agencies, 120
[and] participating municipalities and participating constituent units 121
may add the costs of these fees to the total cost of the energy-savings 122
performance contract. All such fees shall be disclosed prior to services 123
being rendered. Any participating municipality or participating 124
constituent unit may opt out of the state energy-savings performance 125
contract process rather than incur such fees. Initial administrative 126
funding to establish and manage the energy-savings performance 127
contracting process for state agencies, [and] participating municipalities 128
and participating constituent units shall be recovered from the Energy 129
Conservation Management Board. 130
(e) The standardized energy-savings performance contract process 131
for state agencies, [and] participating municipalities and participating 132
constituent units shall include requests for qualifications or requests for 133
proposals. 134
(1) The Department of Administrative Services, in consultation with 135 Raised Bill No. 6444
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the Department of Energy and Environmental Protection, shall issue a 136
request for qualifications from companies that can offer energy-savings 137
performance contract services to create a list of qualified energy service 138
providers. A state agency shall use the qualified list. A municipality or 139
constituent unit may use the qualified list or establish its own 140
qualification process. 141
(2) When reviewing requests for qualifications, the department shall 142
consider a company's experience with (A) design, engineering, 143
installation, maintenance and repairs associated with energy-savings 144
performance contracts; (B) conversions to a different energy or fuel 145
source, associated with a comprehensive energy efficiency retrofit; (C) 146
post-installation project monitoring, data collection and reporting of 147
savings; (D) overall project management and qualifications; (E) 148
accessing long-term financing; (F) financial stability; (G) projects of 149
similar size and scope; (H) in-state projects and Connecticut-based 150
subcontractors; (I) United States Department of Energy programs; (J) 151
professional certifications; and (K) other factors determined by the 152
department to be relevant and appropriate. 153
(3) Before entering into an energy-savings performance contract 154
pursuant to this section, a state agency, [or] participating municipality 155
or participating constituent unit shall issue a request for proposals from 156
three or more qualified energy service providers. A state agency, [or] 157
participating municipality or participating constituent unit may award 158
the energy-savings performance contract to the qualified energy service 159
provider that best meets the needs of the state agency, [or] participating 160
municipality or participating constituent unit, which need not be the 161
lowest cost provided. A cost-effective feasibility analysis shall be 162
prepared in response to the request for proposals. 163
(4) The cost-effective feasibility analysis included in the response to 164
the request for proposals shall serve as the selection document for 165
purposes of selecting a qualified energy service provider to engage in 166
final contract negotiations. Factors to be included in selecting among the 167
qualified energy service providers shall include, but need not be limited 168 Raised Bill No. 6444
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to, (A) contract terms, (B) comprehensiveness of the proposal, (C) 169
financial stability of the provider, (D) comprehensiveness of cost 170
savings measures, (E) experience and quality of technical approach, and 171
(F) overall benefits to the state agency, [or] municipality or constituent 172
unit. 173
(f) One qualified energy service provider selected as a result of the 174
request for proposals set forth in subsection (e) of this section shall 175
prepare an investment-grade audit, which, upon acceptance, shall be 176
part of the final energy-savings performance contract entered into by 177
the state agency, [or] participating municipality or participating 178
constituent unit. Such investment-grade energy audit shall include 179
estimates of the amounts by which utility cost savings and operation 180
and maintenance cost savings would increase and estimates of all costs 181
of such utility cost savings measures or energy-savings measures, 182
including, but not limited to, (1) itemized costs of design, (2) 183
engineering, (3) equipment, (4) materials, (5) installation, (6) 184
maintenance, (7) repairs, and (8) debt service. The qualified energy 185
service provider and the state agency, [or] participating municipality or 186
participating constituent unit shall agree on the cost of the investment-187
grade audit before it is conducted. If, after preparation of the 188
investment-grade audit, the state agency, [or] participating municipality 189
or participating constituent unit decides not to execute an energy-190
savings performance contract and the costs and benefits described in the 191
investment-grade audit are not materially different from those 192
described in the cost-effective feasibility analysis submitted in response 193
to the request for proposals, the state agency, [or] participating 194
municipality or participating constituent unit shall pay the costs 195
incurred in preparing such investment-grade audit. In all other 196
instances, the costs of the investment-grade audit shall be deemed part 197
of the costs of the energy-savings performance contract. 198
(g) The guidelines adopted pursuant to this section may require that 199
the cost savings projected by the qualified provider be reviewed by a 200
professional engineer licensed in this state who has a minimum of three 201
years experience in energy calculation and review, is not an officer or 202 Raised Bill No. 6444
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employee of a qualified provider for the contract under review, and is 203
not otherwise associated with the contract. In conducting the review, the 204
engineer shall focus primarily on the proposed improvements from an 205
engineering perspective, the methodology and calculations related to 206
cost savings, increases in revenue, and, if applicable, efficiency or 207
accuracy of metering equipment. An engineer who reviews a contract 208
shall maintain the confidentiality of any proprietary information the 209
engineer acquires while reviewing the contract. 210
(h) A municipality or constituent unit may use funds designated for 211
operating and capital expenditures or utilities for any energy-savings 212
performance contract, including, but not limited to, contracts entered 213
into pursuant to this section. 214
(i) A guaranteed energy-savings performance contract may provide 215
for financing, including tax exempt financing, by a third party. The 216
contract for third-party financing may be separate from the energy-217
savings performance contract. A state agency, [or] participating 218
municipality or participating constituent unit may use designated 219
funds, bonds, lease purchase agreements or master lease for any energy-220
savings performance contracts, provided its use is consistent with the 221
purpose of the appropriation. 222
(j) Each energy-savings performance contract shall provide that all 223
payments between parties, except obligations on termination of the 224
contract before its expiration, shall be made over time and the objective 225
of such energy-savings performance contracts is implementation of cost 226
savings measures and energy and operational cost savings. 227
(k) An energy-savings performance contract, and payments provided 228
thereunder, may extend beyond the fiscal year in which the energy-229
savings performance contract became effective, subject to appropriation 230
of moneys, if required by law, for costs incurred in future fiscal years. 231
The energy-savings performance contract may extend for a term not to 232
exceed [twenty] thirty years. The allowable length of the contract may 233
also reflect the useful life of the cost savings measures. An energy-234 Raised Bill No. 6444
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savings performance contract may provide for payments over a period 235
not to exceed deadlines specified in the energy-savings performance 236
contract from the date of the final installation of the cost savings 237
measures. 238
(l) The energy-savings performance contract may provide that 239
reconciliation of the amounts owed under the energy -savings 240
performance contract shall occur in a period beyond one year with final 241
reconciliation occurring within the term of the energy-savings 242
performance contract. An energy-savings performance contract shall 243
include contingency provisions in the event that actual savings do not 244
meet predicted savings. 245
(m) The energy-savings performance contract shall require the 246
qualified energy service provider to provide to the state agency, [or] 247
participating municipality or participating constituent unit an annual 248
reconciliation of the guaranteed energy cost savings. If the reconciliation 249
reveals a shortfall in annual energy cost savings, the qualified energy 250
service provider shall make payment to the state agency, [or] 251
participating municipality or participating constituent unit in the 252
amount of the shortfall. If the reconciliation reveals an excess in annual 253
energy cost savings, the excess savings shall remain with the state 254
agency, [or] municipality or constituent unit, and shall not be used to 255
cover potential energy cost savings shortages in subsequent years or 256
actual energy cost savings shortages in previous contract years. 257
(n) During the term of each energy performance contract, the 258
qualified energy service provider shall monitor the reductions in energy 259
consumption and cost savings attributable to the cost savings measures 260
installed pursuant to the energy-savings performance contract and 261
shall, not less than annually, prepare and provide a report to the state 262
agency, [or] participating municipality or participating constituent unit 263
documenting the performance of the cost savings measures to the state 264
agency, [or] participating municipality or participating constituent unit. 265
The report shall adhere to the most current version of the International 266
Performance Measurement and Verification Protocol. 267 Raised Bill No. 6444
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(o) The qualified energy service provider and state agency, [or] 268
participating municipality or participating constituent unit may agree 269
to modify savings calculations based on any of the following: 270
(1) Subsequent material change to the baseline energy consumption 271
identified at the beginning of the energy-savings performance contract; 272
(2) Changes in the number of days in the utility billing cycle; 273
(3) Changes in the total square footage of the building; 274
(4) Changes in the operational schedule of the facility; 275
(5) Changes in facility temperature; 276
(6) Material change in the weather; 277
(7) Material changes in the amount of equipment or lighting used at 278
the facility; or 279
(8) Any other change which reasonably would be expected to modify 280
energy use or energy costs. 281
(p) Any state agency, [or] participating municipality or participating 282
constituent unit that enters into an energy-savings performance contract 283
pursuant to this section shall report the name of the project, the project 284
host, the investment on the project and the expected energy savings to 285
the Office of Policy and Management and the Department of Energy and 286
Environmental Protection. Such reporting shall be done at the same time 287
that the energy-savings performance contract is executed. 288
(q) A state agency, [or] participating municipality or participating 289
constituent unit may direct savings realized under the energy-savings 290
performance contract to contract payment and other required expenses 291
and may, when practicable, reinvest savings beyond that required for 292
contract payment and other required expenses into additional energy-293
savings measures. 294 Raised Bill No. 6444
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This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2025 16a-37x
HED Joint Favorable