81R10811 YDB-F
By: Ellis S.B. No. 1973
A BILL TO BE ENTITLED
AN ACT
relating to the creation and duties of the state energy savings
performance contract advisory council.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle D, Title 10, Government Code, is
amended by adding Chapter 2178 to read as follows:
CHAPTER 2178. STATE ENERGY SAVINGS PERFORMANCE CONTRACT ADVISORY
COUNCIL
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2178.001. DEFINITIONS. In this chapter:
(1) "Advisory council" means the state energy savings
performance contract advisory council.
(2) "Energy savings" means an estimated reduction in
net fuel costs, energy costs, water costs, storm-water fees, other
utility costs, or related net operating costs from, or as compared
to, an established baseline of those costs. The term does not
include an estimated reduction due to a decrease in energy rates
that is not derived from increased conservation or reduced usage.
(3) "Energy savings performance contract" means a
contract between a state agency and a provider for energy or water
conservation or usage measures in which the estimated energy
savings, increase in billable revenues, or increase in meter
accuracy resulting from the measures is subject to guarantee to
offset the cost of the energy or water conservation or usage
measures over a specified period. The term includes a contract for
the installation or implementation of the following, including all
causally connected work:
(A) insulation of a building structure and
systems within the building;
(B) storm windows or doors, caulking or weather
stripping, multiglazed windows or doors, heat-absorbing or
heat-reflective glazed and coated window or door systems, or other
window or door system modifications that reduce energy consumption;
(C) automatic energy control systems, including
computer software and technical data licenses;
(D) heating, ventilating, or air-conditioning
system modifications or replacements that reduce energy or water
consumption;
(E) lighting fixtures that increase energy
efficiency;
(F) energy recovery systems;
(G) electric systems improvements;
(H) water-conserving fixtures, appliances, and
equipment or the substitution of non-water-using fixtures,
appliances, and equipment;
(I) water-conserving landscape irrigation
equipment;
(J) landscaping measures that reduce watering
demands and capture and hold applied water and rainfall, including:
(i) landscape contouring, including the use
of berms, swales, and terraces; and
(ii) the use of soil amendments that
increase the water-holding capacity of the soil, including compost;
(K) rainwater harvesting equipment and equipment
to make use of water collected as part of a storm-water system
installed for water quality control;
(L) equipment for recycling or reuse of water
originating on the premises or from other sources, including
treated municipal effluent;
(M) equipment needed to capture water from
nonconventional, alternate sources, including air-conditioning
condensate or graywater, for nonpotable uses;
(N) metering or related equipment or systems that
improve the accuracy of billable-revenue-generation systems; or
(O) other energy or water conservation related
improvements or equipment, including improvements or equipment
relating to renewable energy or nonconventional water sources or
water reuse.
(4) "Institution of higher education" has the meaning
assigned by Section 61.003, Education Code.
(5) "State agency" means an office, department,
commission, or board of any branch of state government.
Sec. 2178.002. ADMINISTRATIVELY ATTACHED TO COMPTROLLER'S
OFFICE. The advisory council is administratively attached to the
comptroller's office. The comptroller shall provide the staff and
facilities necessary to assist the advisory council in performing
its duties.
[Sections 2178.003-2178.050 reserved for expansion]
SUBCHAPTER B. ADVISORY COUNCIL
Sec. 2178.051. ESTABLISHMENT OF ADVISORY COUNCIL. (a) The
comptroller shall establish the state energy savings performance
contract advisory council as an independent council separate from
the State Energy Conservation Office.
(b) Chapter 2110 does not apply to the advisory council.
Sec. 2178.052. APPOINTMENT OF ADVISORY COUNCIL MEMBERS.
(a) The comptroller shall appoint the members of the advisory
council. The advisory council must include:
(1) at least one representative from each of the
following:
(A) an institution of higher education;
(B) a state agency, other than an agency already
represented on the advisory council;
(C) the State Energy Conservation Office;
(D) the Texas Higher Education Coordinating
Board;
(E) the Bond Review Board;
(F) the Texas Public Finance Authority;
(G) the attorney general's office; and
(H) the Texas Engineering Experiment Station;
(2) a licensed professional mechanical engineer, who
is licensed in this state and is proficient in monitoring and
verification techniques; and
(3) a representative from the energy savings
performance contract industry.
(b) The advisory council members serve four-year terms. An
advisory council member may be reappointed for a second term.
(c) Not later than the 90th day after the date the
comptroller receives notice of a member's resignation, the
comptroller shall fill the vacancy on the advisory council.
Sec. 2178.053. PRESIDING OFFICER. The members of the
advisory council by majority vote shall appoint a presiding
officer.
Sec. 2178.054. COMPENSATION AND REIMBURSEMENT. An advisory
council member is not entitled to compensation but is entitled to
reimbursement for actual travel expenses incurred by the member
while conducting the business of the advisory council, as provided
in the General Appropriations Act.
Sec. 2178.055. MEETINGS. The advisory council shall meet at
the call of the presiding officer or comptroller.
[Sections 2178.056-2178.100 reserved for expansion]
SUBCHAPTER C. DUTIES OF ADVISORY COUNCIL
Sec. 2178.101. GENERAL DUTIES. The advisory council shall
advise the comptroller and assist state agencies and institutions
of higher education with:
(1) optimizing energy savings;
(2) complying with the requirements for energy savings
performance contracts;
(3) verifying energy savings; and
(4) overseeing contracts for energy services and
energy conservation measures under performance contracts that
guarantee savings.
Sec. 2178.102. BEST PRACTICES AND GUIDELINES. (a) The
advisory council shall identify strategies for state agencies to
use in measuring and verifying savings from energy, water, improved
operations and maintenance, retro-commissioning, renewable energy,
and cogeneration projects implemented through energy savings
performance contracts.
(b) The advisory council shall base the strategies
identified under Subsection (a) on best practices identified by
other entities, including:
(1) ASHRAE Guideline 14: Measurement of Energy and
Demand Savings;
(2) the International Performance Measurement and
Verification Protocol; and
(3) the Federal Energy Management Program Guidelines
for Measurement and Verification.
(c) The advisory council, with the approval of the
comptroller, shall develop and publish uniform contracts,
guidelines, and procedures to be used by state agencies,
institutions of higher education, the State Energy Conservation
Office, the Bond Review Board, and the Texas Public Finance
Authority for monitoring and verifying savings derived from the use
of energy savings performance contracts. The guidelines and
procedures must:
(1) require each contract to contain provisions that
require the contractor to undertake measurement and verification
activities and provide documentation adequate to demonstrate that
the savings guarantee will be met over the contract period and will
minimize financial risk for all parties;
(2) require uniform monitoring and verification plans
to be approved by the comptroller with the advice of the advisory
council;
(3) establish guidelines that require all costs
associated with an energy savings performance contract, including
actual equipment costs, interest, management fees, monitoring and
verification fees, and commissioning and default obligations, to be
fully disclosed before the contract is executed;
(4) require that savings must exceed payments in every
year of an energy savings performance contract;
(5) require all monitoring and verification plans to
contain a statement issued by a provider attesting that the project
savings will meet or exceed all costs of the projects implemented by
an energy savings performance contract; and
(6) establish procedures to ensure that life-cycle
cost analysis be conducted and that replacement costs for equipment
with a useful life expectancy that is less than the term of the
contract be accounted for and that the contract addresses ongoing
maintenance and commissioning.
(d) The advisory council, with the approval of the
comptroller, shall annually update the terminology, guidelines,
and procedures developed under Subsection (c) to harmonize with the
latest techniques and technologies for monitoring and verification
of energy and water savings.
(e) The advisory council, with the approval of the
comptroller, shall establish cost guidelines for efficient
monitoring and verification of savings by energy savings
performance contract contractors and require that any proposed
contractor costs for measurement and verification that exceed the
guidelines must be preapproved by the comptroller with the advice
of the advisory council.
(f) The advisory council may provide special contract
provisions for institutions of higher education if required by
statute.
Sec. 2178.103. OPTIMIZATION OF SAVINGS AND REDUCTION OF
RISK; TRAINING. (a) The advisory council may enlist a state agency
or institution of higher education with expertise in monitoring and
verification to provide services and expertise to optimize savings
and reduce risk from inadequate savings, including short-course
training, testing, and certification to increase the proficiency of
independent, third-party providers and their employees related to
energy savings performance contracts for monitoring and
verification services under this chapter.
(b) The advisory council may collect reasonable fees to
conduct the training described by Subsection (a).
Sec. 2178.104. ADVISORY COUNCIL DUTIES RELATED TO RULES.
The advisory council shall advise the comptroller on the
development of rules and guidelines relating to energy savings
performance contracts under Section 2166.406 and Section 44.901,
Education Code.
Sec. 2178.105. CONTRACT WITH STATE AGENCY OR INSTITUTION OF
HIGHER EDUCATION. The advisory council may contract with a state
agency or institution of higher education with expertise in
monitoring and verifying energy savings to oversee energy savings
performance contract plans and reporting under this chapter.
Sec. 2178.106. REPORTS. (a) Not later than January 1 of
each odd-numbered year, the advisory council shall submit a report
to the governor and both houses of the legislature on:
(1) the savings or lack of savings of all energy
savings performance contracts entered into by a state agency during
the preceding two years and on the performance of contractors under
the contracts; and
(2) the fulfillment of state agency energy savings
reduction goals under Section 2166.406 and of institutions of
higher education under Section 44.901, Education Code.
(b) The report required under Subsection (a) may also
contain recommendations for increased savings by state agencies and
institutions of higher education, including the use of energy
savings performance contracts and other forms of financing.
(c) Each state agency and institution of higher education
shall provide to the advisory council adequate, timely information
necessary to prepare the report.
(d) Each state agency and institution of higher education
shall provide a list of all energy savings performance contracts to
the governor, both houses of the legislature, and the Legislative
Budget Board that includes:
(1) a summary of the savings and operational
performance under the contract;
(2) a statement that the savings guarantee is or is not
being met annually; and
(3) a statement on the impact of the contract:
(A) for a state agency, on the agency's request
to the legislature for utility funding; or
(B) for institutions of higher education, on
student fees and tuition.
Sec. 2178.107. FUNDING. The advisory council may use funds
from interest collected by the loanstar program established under
Section 2305.032 to perform the functions assigned under this
chapter and for training.
SECTION 2. Section 2166.406, Government Code, is amended by
amending Subsection (i) and adding Subsection (k) to read as
follows:
(i) An energy savings performance contract shall be let
according to the procedures established for procuring certain
professional services by Section 2254.004. Notice of the request
for qualifications shall be given in the manner provided by Section
2156.002. The State Energy Conservation Office shall establish
guidelines and an approval process for awarding energy savings
performance contracts. The guidelines adopted under this
subsection must require that the cost savings projected by an
offeror be reviewed by a licensed professional engineer who has a
minimum of three years of experience in energy calculation and
review, has successfully completed the monitoring and verification
training required under Chapter 2178, is not an officer or employee
of an offeror for the contract under review, and is not otherwise
associated with the contract. In conducting the review, the
engineer shall focus primarily on the proposed improvements from an
engineering perspective, the methodology and calculations related
to cost savings, increases in revenue, and, if applicable,
efficiency or accuracy of metering equipment. An engineer who
reviews a contract shall maintain the confidentiality of any
proprietary information the engineer acquires while reviewing the
contract. An energy savings performance contract may not be
entered into unless the contract has been approved by the State
Energy Conservation Office. Sections 1001.053 and 1001.407,
Occupations Code, apply to work performed under the contract.
(k) An energy savings performance contract must comply with
the requirements and guidelines established under Chapter 2178.
SECTION 3. Section 2305.032, Government Code, is amended by
adding Subsections (g) and (h) to read as follows:
(g) All loans, including energy savings performance
contract loans, made under this section for state agencies,
institutions of higher education, local governments, and school
districts must comply with the uniform measurement and verification
plans and mandatory monitoring and verification guidelines
established under Chapter 2178.
(h) A portion of the interest earned on a loan made under
this section shall be used to fund the state energy savings
performance contract advisory council established under Chapter
2178.
SECTION 4. Section 44.901, Education Code, is amended by
amending Subsection (i) and adding Subsection (j) to read as
follows:
(i) Before entering into an energy savings performance
contract, the board must require that the cost savings projected by
an offeror be reviewed by a licensed professional engineer who has a
minimum of three years of experience in energy calculation and
review, has successfully completed the monitoring and verification
training required under Chapter 2178, Government Code, is not an
officer or employee of an offeror for the contract under review, and
is not otherwise associated with the contract. In conducting the
review, the engineer shall focus primarily on the proposed
improvements from an engineering perspective, the methodology and
calculations related to cost savings, increases in revenue, and, if
applicable, efficiency or accuracy of metering equipment. An
engineer who reviews a contract shall maintain the confidentiality
of any proprietary information the engineer acquires while
reviewing the contract. Sections 1001.053 and 1001.407,
Occupations Code, apply to work performed under the contract.
(j) An energy savings performance contract must comply with
the requirements and guidelines established under Chapter 2178,
Government Code.
SECTION 5. (a) As soon as practicable after the effective
date of this Act, the comptroller shall appoint members to the state
energy savings performance contract advisory council.
(b) Not later than September 1, 2010, the state energy
savings performance contract advisory council, with the approval of
the comptroller, shall develop and publish the uniform contracts,
guidelines, and procedures as required under Chapter 2178,
Government Code, as added by this Act.
(c) All existing regulations, policies, and guidelines
established by the State Energy Conservation Office on the
effective date of this Act remain in force until the date any
conflicting guidelines are adopted under Subsection (b) of this
section.
(d) An existing energy savings performance contract must
conform to the guidelines developed under Chapter 2178, Government
Code, as added by this Act, if the contract is materially amended or
extended on or after the date any conflicting guidelines are
adopted under Subsection (b) of this section.
SECTION 6. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.