PRINTER'S NO. 2619
No. 1996 Session of 2003
INTRODUCED BY ADOLPH, BAKER, BARRAR, CAPPELLI, BARD, CIVERA,
CRAHALLA, DAILEY, DENLINGER, GEORGE, GRUCELA, HARPER,
HENNESSEY, HERSHEY, HORSEY, JOSEPHS, KELLER, KENNEY,
LAUGHLIN, LEACH, LEH, MICOZZIE, R. MILLER, PAYNE, PETRI,
READSHAW, RUBLEY, SAYLOR, SCAVELLO, SHANER, SOLOBAY,
E. Z. TAYLOR, TIGUE, WASHINGTON, WATSON, WEBER, YOUNGBLOOD
AND GEIST, SEPTEMBER 18, 2003
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,
SEPTEMBER 18, 2003
AN ACT
1 Amending Title 62 (Procurement) of the Pennsylvania Consolidated
2 Statutes, further providing for guaranteed energy savings and
3 contracts.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Sections 3752, 3753 and 3754 of Title 62 of the
7 Pennsylvania Consolidated Statutes are amended to read:
8 § 3752. Definitions.
9 The following words and phrases when used in this subchapter
10 shall have the meanings given to them in this section unless the
11 context clearly indicates otherwise:
12 "Allowable capital costs." Capital costs that:
13 (1) the governmental unit reasonably believes will be
14 incurred during the term of the guaranteed energy savings
15 contract; and
1 (2) are documented by industry engineering standards.
2 "Energy conservation measure." A [training] program or
3 facility alteration designed to reduce energy consumption or
4 operating costs. The term may include, without limitation:
5 (1) Insulation of the building structure or systems
6 within the building.
7 (2) Storm windows or doors, caulking or weather
8 stripping, multiglazed windows or doors, heat-absorbing or
9 heat-reflective glazed and coated window or door systems,
10 additional glazing, reductions in glass area or other window
11 and door system modifications that reduce energy consumption.
12 (3) Automated or computerized energy control systems.
13 (4) Heating, ventilating or air conditioning system
14 modifications or replacements.
15 (5) Replacement or modification of lighting fixtures to
16 increase the energy efficiency of the lighting system without
17 increasing the overall illumination of a facility, unless an
18 increase in illumination is necessary to conform to
19 applicable State or local building codes for the lighting
20 system after the proposed modifications are made.
21 (6) Energy recovery systems.
22 (7) Systems that produce steam or forms of energy such
23 as heat as well as electricity for use within a building or
24 complex of buildings.
25 (8) Energy conservation measures that provide operating
26 cost reductions based on life cycle cost analysis.
27 (9) A training program or facility alteration that
28 reduces energy consumption or reduces operating costs,
29 including allowable capital costs, based on future reductions
30 in labor costs or costs for contracted services.
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1 (10) A facility alteration which includes capital
2 expenditures that are required to properly implement other
3 energy conservation measures.
4 (11) A program to reduce energy costs through rate
5 adjustments, load shifting to reduce peak demand, and/or use
6 of alternative energy suppliers, such as, but not limited to:
7 (i) changes to more favorable rate schedules;
8 (ii) negotiation of lower rates, same supplier or
9 new suppliers, where applicable; and
10 (iii) auditing of energy service billing and meters.
11 (12) The installation of energy information and control
12 systems that monitor consumption, redirect systems to optimal
13 energy sources, and manage energy-using equipment.
14 (13) Indoor air quality improvements.
15 (14) Daylighting systems.
16 (15) Renewable and/or on-site distributed power
17 generation systems.
18 "Guaranteed energy savings contract." A contract for the
19 evaluation and recommendation of energy conservation measures
20 and for implementation of one or more such measures.
21 "Governmental unit." Any officer, employee, authority,
22 board, bureau, commission, department, agency or institution of
23 a government agency, including, but not limited to, any
24 Commonwealth agency, State-aided institution or any county,
25 city, district, municipal corporation, municipality, municipal
26 authority, political subdivision, school district, educational
27 institution, borough, incorporated town, township, poor
28 district, county institution district, other incorporated
29 district or other public instrumentality which has the authority
30 to contract for the construction, reconstruction, alteration or
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1 repair of any public building or other public work or public
2 improvement, including, but not limited to, highway work.
3 "Industry engineering standards." Industry engineering
4 standards may include the following:
5 (1) Life cycle costing.
6 (2) The R.S. Means estimated method developed by the
7 R.S. Means Company.
8 (3) Historical data.
9 (4) Manufacturer's data.
10 (5) American Standard Heating Refrigeration Air
11 Conditioning Engineers (ASHRAE) standards.
12 "Qualified provider." A person or business which is
13 responsible and capable of evaluating, recommending, designing,
14 implementing and installing energy conservation measures as
15 determined by the governmental unit.
16 § 3753. Contracting procedures.
17 (a) General rule.--Notwithstanding any other contrary or
18 inconsistent provision of law, a governmental unit may enter
19 into a guaranteed energy savings contract with a qualified
20 provider in accordance with the provisions of this subchapter or
21 in accordance with another statutorily authorized procurement
22 process.
23 (b) Guaranteed energy savings contract.--If in accordance
24 with applicable law the award of a contract by a governmental
25 unit requires action at a public meeting, a governmental unit
26 may award a guaranteed energy savings contract at a public
27 meeting if it has provided public notice in the manner
28 prescribed [by the act of July 3, 1986 (P.L.388, No.84), known
29 as the Sunshine Act,] under 65 Pa.C.S. Ch. 7 (relating to open
30 meetings) the notice including the names of the parties to the
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1 contract and the purpose of the contract. For governmental units
2 that are not required to take actions on contracts at public
3 meetings, the governmental unit may award a guaranteed energy
4 savings contract in accordance with the procedures adopted by
5 the governmental unit and the requirements of all applicable
6 laws.
7 (c) Competitive sealed proposals.--For the purpose of
8 entering into a guaranteed energy savings contract, all
9 governmental units are authorized to utilize the competitive
10 sealed proposal method of procurement. The governmental unit
11 shall evaluate any proposal that meets the requirements of the
12 governmental unit and is timely submitted by a qualified
13 provider. The request for proposals shall be announced through a
14 public notice from the governmental unit which will administer
15 the program. The request for proposals shall provide all
16 interested parties with sufficient information necessary to
17 submit a timely and responsive proposal.
18 (d) Selection and notice.--The governmental unit shall
19 select the qualified provider that best meets the needs of the
20 governmental unit in accordance with criteria established by the
21 governmental unit. For governmental units that are not required
22 to take actions on contracts at public meetings, the
23 governmental unit shall provide public notice of the award of
24 the guaranteed energy savings contract within 30 days in the
25 Pennsylvania Bulletin. The notice shall include the names of the
26 parties to the contract and the purpose of the contract. For
27 governmental units that are required to take actions on
28 contracts at public meetings, the public notice shall be made at
29 least ten days prior to the meeting. After reviewing the
30 proposals pursuant to subsection (e), a governmental unit may
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1 enter into a guaranteed energy savings contract with a qualified
2 provider if it finds that the amount it would spend on the
3 energy conservation measures recommended in the proposal would
4 not exceed the amount to be saved in both energy and operational
5 costs within a [ten-year] 15-year period from the date of
6 installation if the recommendations in the proposal were
7 followed and the qualified provider provides a written guarantee
8 that the energy or operating cost savings will meet or exceed
9 the cost of the contract.
10 (e) Report.--
11 (1) Before the award of a guaranteed energy savings
12 contract, the qualified provider shall provide a report as
13 part of its proposal which shall be available for public
14 inspection, summarizing estimates of all costs of
15 installation, maintenance, repairs and debt service and
16 estimates of the amounts by which energy or operating costs
17 will be reduced.
18 (2) The report shall contain a listing of contractors
19 and subcontractors to be used by the qualified provider with
20 respect to the energy conservation measures.
21 (f) Bond.--A qualified provider to whom a contract is
22 awarded shall give a sufficient bond to the governmental unit
23 for its faithful performance. Commonwealth agencies shall obtain
24 such bonds in accordance with the provisions of section 533
25 (relating to security and performance bonds). All other
26 governmental units shall obtain such bonds in accordance with
27 the act of December 20, 1967 (P.L.869, No.385), known as the
28 Public Works Contractors' Bond Law of 1967.
29 (g) Award of contract.--Notwithstanding any other provision
30 of law governing the letting of public contracts, a governmental
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1 unit may enter into a single guaranteed energy savings contract
2 with each responsible provider selected in accordance with the
3 provisions of this subchapter.
4 § 3754. Contract provisions.
5 (a) General rule.--A guaranteed energy savings contract may
6 provide that all payments, except obligations on termination of
7 the contract before its scheduled expiration, shall be made over
8 a period of time. Every guaranteed energy savings contract shall
9 provide that the savings in any year are guaranteed to the
10 extent necessary to make payments under the contract during that
11 year.
12 (b) Written guarantee.--A guaranteed energy savings contract
13 shall include a written guarantee that savings will meet or
14 exceed the cost of the energy conservation measures to be
15 evaluated, recommended, designed, implemented or installed under
16 the contract.
17 (c) Payments.--A guaranteed energy savings contract may
18 provide for payments over a period of time not to exceed [ten]
19 15 years and for the evaluation, recommendation, design,
20 implementation and installation of energy conservation measures
21 on an installment payment or lease purchase basis.
22 (d) Improvements not causally connected to an energy
23 conservation measure.--An improvement that is not causally
24 connected to an energy conservation measure may be included in a
25 guaranteed energy savings contract if:
26 (1) the total value of the improvement does not exceed
27 15% of the total value of the guaranteed energy savings
28 contract; and
29 (2) either:
30 (i) the improvement is necessary to conform to a
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1 law, a rule or an ordinance; or
2 (B) an analysis within the guaranteed energy savings
3 contract demonstrates that there is an economic advantage
4 to the governmental unit implementing an improvement as
5 part of the guaranteed energy savings contract;
6 and the savings justification for the improvement is documented
7 by industry engineering standards.
8 (e) Other capital expenditures.--A facility alteration which
9 includes capital expenditures that are required to properly
10 implement other energy conservation measures may be included as
11 part of a guaranteed energy savings contract. In such case,
12 notwithstanding any other provision of law, the installation of
13 these additional measures may be supervised by the contractor
14 performing the guaranteed energy savings contract.
15 Section 2. Title 62 is amended by adding a section to read:
16 § 3758. Review of proposed capital improvement projects.
17 Prior to entering into a guaranteed energy savings contract
18 every governmental unit shall review all proposed capital
19 improvement projects for potential applicability of this
20 subchapter, and shall consider proceeding with a guaranteed
21 energy savings contract under this subchapter where appropriate.
22 Section 3. This act shall take effect in 60 days.
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