Public Building Energy Retrofit

Requires all state agencies to retrofit buildings to save energy.
Provides that all cost savings from retrofits shall be returned
to the retrofitting agency.  (SD1)

HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 2000                                S.D. 1
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Section 36-41, Hawaii Revised Statutes, is
 2 amended to read as follows:
 3      "36-41  Energy retrofit and performance contracting for
 4 public facilities.  (a)  All agencies shall evaluate and identify
 5 for implementation energy efficiency retrofitting through
 6 performance contracting.  Agencies that perform energy efficiency
 7 retrofitting may continue to receive budget appropriations for
 8 energy expenditures at an amount that will not fall below the
 9 pre-retrofitting energy budget but will rise in proportion to any
10 increase in the agency's overall budget for the duration of the
11 performance contract or project payment term.
12      [(a)] (b)  Any agency may enter into a multi-year energy
13 performance contract for the purpose of undertaking or
14 implementing energy conservation or alternate energy measures in
15 a facility or facilities.  An energy performance contract may
16 include[,] but shall not be limited to[,] options such as
17 leasing, joint ventures, shared-savings plans, or energy service
18 contracts, or any combination thereof; provided that in due
19 course the agency may receive title to the energy system being

Page 2                                                     1946
                                     H.B. NO.           H.D. 2
                                                        S.D. 1

 1 financed.  Except as otherwise provided by law, the agency that
 2 is responsible for a particular facility shall review and approve
 3 energy performance contract arrangements for the facility.
 4      [(b)] (c)  Notwithstanding any law to the contrary relating
 5 to the award of public contracts, any agency desiring to enter
 6 into an energy performance contract shall do so in accordance
 7 with the following provisions:
 8      (1)  The agency shall issue a public request for proposals,
 9           advertised in the same manner as provided in chapter
10           103D, concerning the provision of energy efficiency
11           services or the design, installation, operation, and
12           maintenance of energy equipment or both.  The request
13           for proposals shall contain terms and conditions
14           relating to submission of proposals, evaluation and
15           selection of proposals, financial terms, legal
16           responsibilities, and other matters as may be required
17           by law and as the agency determines appropriate;
18      (2)  Upon receiving responses to the request for proposals,
19           the agency may select the most qualified proposal or
20           proposals on the basis of the experience and
21           qualifications of the proposers, the technical
22           approach, the financial arrangements, the overall
23           benefits to the agency, and other factors determined by

Page 3                                                     1946
                                     H.B. NO.           H.D. 2
                                                        S.D. 1

 1           the agency to be relevant and appropriate;
 2      (3)  The agency thereafter may negotiate and enter into an
 3           energy performance contract with the person or company
 4           whose proposal is selected as the most qualified based
 5           on the criteria established by the agency;
 6      (4)  The term of any energy performance contract entered
 7           into pursuant to this section shall not exceed fifteen
 8           years;
 9      (5)  Any contract entered into shall contain the following
10           annual allocation dependency clause:
11                "The continuation of this contract is contingent
12                upon the appropriation of funds to fulfill the
13                requirements of the contract by the applicable
14                funding authority.  If that authority fails to
15                appropriate sufficient funds to provide for the
16                continuation of the contract, the contract shall
17                terminate on the last day of the fiscal year for
18                which allocations were made";
19      (6)  Any energy performance contract may provide that the
20           agency ultimately shall receive title to the energy
21           system being financed under the contract; and
22      (7)  Any energy performance contract shall provide that
23           total payments shall not exceed total savings.

Page 4                                                     1946
                                     H.B. NO.           H.D. 2
                                                        S.D. 1

 1      [(c)] (d)  Any agency may enter into an energy performance
 2 contract pursuant to this section for a period not to exceed
 3 fifteen years.
 4      [(d)] (e)  For purposes of this section:
 5      "Agency" means any executive department, independent
 6 commission, board, bureau, office, or other establishment of the
 7 State or any county government, the judiciary, the University of
 8 Hawaii, or any quasi-public institution that is supported in
 9 whole or in part by state or county funds.
10      "Energy performance contract" means an agreement for the
11 provision of energy services and equipment, including but not
12 limited to building energy conservation enhancing retrofits and
13 alternate energy technologies, in which a private sector person
14 or company agrees to finance, design, construct, install,
15 maintain, operate, or manage energy systems or equipment to
16 improve the energy efficiency of, or produce energy in connection
17 with, a facility in exchange for a portion of the cost savings,
18 lease payments, or specified revenues, and the level of payments
19 is made contingent upon the [measured] verified energy [cost]
20 savings, energy production, avoided maintenance, avoided energy
21 equipment replacement, or any combination of the foregoing bases.
22      "Facility" means a building or buildings or similar
23 structure owned or leased by, or otherwise under the jurisdiction

Page 5                                                     1946
                                     H.B. NO.           H.D. 2
                                                        S.D. 1

 1 of, the agency.
 2      "Shared-savings plan" means an agreement under which the
 3 private sector person or company undertakes to design, install,
 4 operate, and maintain improvements to the agency's facility or
 5 facilities and the agency agrees to pay a contractually specified
 6 amount of [measured] verified energy cost savings.
 7      "Verified" means the technique used in the determination of
 8 baseline energy use, post-installation energy use, and energy and
 9 cost savings by the following measurement and verification
10 techniques: engineering calculations, metering and monitoring,
11 utility meter billing analysis, computer simulations,
12 mathematical models, and agreed-upon stipulations by the customer
13 and the energy service company."
14      SECTION 2.  Statutory material to be repealed is bracketed.
15 New statutory material is underscored.
16      SECTION 3.  This Act shall take effect upon its approval.