HOUSE OF REPRESENTATIVES

H.B. NO.

2236

TWENTY-FIFTH LEGISLATURE, 2010

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to energy.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  Agencies are interested in utilizing energy savings performance contracting to improve the energy efficiency of their facilities, addressing deferred maintenance, and reduced facility life cycle operating costs.  However, the existing language in section 36-41, Hawaii Revised Statutes, that "[a]gencies that perform energy efficiency retrofitting may continue to receive budget appropriations for energy expenditures at an amount that shall not fall below the pre-retrofitting energy budget…" creates uncertainty and risk for agencies.  Under energy savings performance contracting, the energy savings from the energy savings performance contracting project frees up a portion of the "pre-retrofitting energy budget" that is commonly used to enable the agencies to obtain municipal lease financing for their projects.  This provides alternative financing that can allow projects to proceed expeditiously rather waiting for general obligation bond appropriations that may or may not come.

     Energy savings performance contracting is a method of paying for facility improvements using energy and operational savings through a contracting vehicle that provides an opportunity to turn wasted energy and operating cost into capital improvements.  Typically, the energy conservation measures and alternative energy measures are financed through a municipal lease agreement with annual payments funded by the guaranteed utility and energy-related operating and maintenance savings.  The change from "may" to "shall" in section 36-41(a), Hawaii Revised Statutes, will remove the uncertainty for agencies regarding the ability to direct the savings from an energy savings performance contracting project available to fund the municipal lease payment.  This will enable more energy savings performance contracting projects to be implemented, reduce Hawaii's dependency on foreign oil, lessen the utility pricing volatility due to increasing oil pricing, and provide the ability for agencies to address deferred maintenance issues without capital improvements project bond funding.

SECTION 2.  Section 36-41, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  All agencies shall evaluate and identify for implementation energy efficiency retrofitting through performance contracting.  Agencies that perform energy efficiency retrofitting [may] shall continue to receive budget appropriations for energy expenditures at an amount that shall not fall below the pre-retrofitting energy budget but shall rise in proportion to any increase in the agency's overall budget for the duration of the performance contract or project payment term."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.

 

INTRODUCED BY:

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Report Title:

Energy; Public Facilities

 

Description:

Ensures that agencies that enter into energy performance contracts shall continue to receive budget appropriations for energy expenditures in an amount that shall not fall below the pre-performance contract budget.

 

 

 

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