2014 Kentucky Revised Statutes CHAPTER 45A - KENTUCKY MODEL PROCUREMENT CODE 45A.352 Guaranteed energy savings contracts involving local public agencies.
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45A.352 Guaranteed energy savings contracts involving local public
agencies.
(1)
(2)
A local public agency may enter into a guaranteed energy savings contract for
innovative solutions for energy conservation measures. The local public
agency shall submit a request for proposals. The request for proposals for
competitive procurement of guaranteed energy savings contracts shall include
the following:
(a) The name and address of the governmental unit;
(b) The name, address, title, and phone number of a contact person;
(c) Notice indicating that the local public agency is requesting qualified
providers to propose energy conservation measures through a
guaranteed energy savings contract;
(d) The following evaluation criteria for assessing the proposals:
1.
Construction management capabilities;
2.
Technical approach to facilities included;
3.
Financial attributes, as defined by total cost of contract and
guaranteed savings and provider's financial strength demonstrating
ability to fulfill the guarantee term; and
4.
Provider's capability, personnel, track record, and demonstrated
ability to accomplish the contract;
(e) The date, time, and place where proposals must be received;
(f) Any other stipulations and clarifications the local public agency may
require; and
(g) An overview prepared by the local public agency stating goals or
objectives specific to facility needs to be considered by the qualified
providers who are responding to the request. Detailed scope of
construction is not required.
Respondents to the request for proposal shall provide the following:
(a) A detailed list of the proposed energy conservation measures and the
guaranteed savings which shall be supported with calculations. Any
guaranteed energy and operational savings shall be determined by using
one of the measurement and verification methodologies listed in the
United States Department of Energy's "Measurement and Verification
Guideline for Federal Energy Projects" or in the "North American Energy
Measurement and Verification Protocol." If due to existing data limitations
or the nonconformance of specific project characteristics, none of the
methods listed in either the United States Department of Energy's
"Measurement and Verification Guideline for Federal Energy Projects" or
in the "North American Energy Measurement and Verification Protocol" is
sufficient for measuring guaranteed savings, the qualified provider shall
develop an alternate method that is compatible with one (1) of the two (2);
(b) The estimated cost of the proposed energy conservation measures
including engineering, construction, commissioning, measurement and
verification, annual reconciliation statements, and required on-going
services; and
(3)
(4)
(5)
(6)
(7)
(c) Proposed method and costs of financing.
The value for total cost of the contract minus the calculated savings from the
energy conservation measures listed in the qualified provider's proposal, shall
be within fifteen percent (15%) of the value for the total cost of the contract
minus the calculated savings after the final contract has been negotiated. If the
difference between the proposed and the final contract is not within fifteen
percent (15%) and the local public agency and the qualified provider are
unable to renegotiate the final contract to reconcile the difference between the
proposed and final contract values, then the local public agency may:
(a) Stop negotiations with the current qualified provider; and
(b) Select an alternate provider.
The local public agency may, as a component of the request for proposal,
solicit and negotiate additional maintenance services for the affected proposed
energy conservation measures. Additional services shall be subject to budget
appropriations on an annual basis and may be discontinued at any time over
the guarantee period with no negative impact to the guaranteed savings
contract.
The local public agency shall utilize the request for proposal process to enter
into a guaranteed energy savings contract. The local public agency may, at its
discretion, utilize a request for qualifications, provided that the local public
agency solicits qualification statements from multiple potentially qualified
providers. The local public agency shall use the qualification statements to
select no fewer than two (2) providers and each provider shall then be subject
to the request-for-proposal requirement provided in subsections (1) to (4) of
this section.
The local public agency shall select the provider best qualified to meet its
needs. The local public agency shall provide public notice of the meeting at
which it proposes to award a guaranteed energy savings contract, the name of
the parties to the proposed contract, and the purpose of the contract. The
public notice shall be made at least ten (10) days prior to the meeting. After
reviewing the proposals, a local public agency may enter into a guaranteed
energy savings contract with a qualified provider if it finds that the amount it
would spend on the energy conservation measures recommended in the
proposal would not exceed the amount to be saved in either energy or
operational costs plus capital cost avoidance within the term of the contract
from the date of installation, if the recommendations in the proposal are
followed.
The guaranteed energy savings contract shall include a written guarantee of
the qualified provider that either the energy or operational costs savings plus
capital cost avoidance will meet or exceed the costs of the energy conservation
measures within the term of the contract. The qualified provider shall, on an
annual basis, reimburse the local public agency for any shortfall in guaranteed
energy savings projected in the contract. A qualified provider shall provide a
sufficient bond to the local public agency for the installation and the faithful
performance of all the measures included in the contract. The guaranteed
energy savings contract may provide for payments over a period of time, not to
exceed the term of the contract.
(8)
The qualified provider shall provide the local public agency with an annual
reconciliation statement. The statement shall disclose any shortfalls or surplus
between guaranteed energy and operational savings specified in the
guaranteed energy savings contract and actual energy and operational savings
incurred during a given guarantee year. The guarantee year shall consist of a
twelve (12) month term commencing from the time that the energy
conservation measures became fully operational. The qualified provider shall
pay the local public agency any short fall in the guaranteed energy and
operation savings within thirty (30) days after the total year savings have been
determined. If there is a surplus in the actual guaranteed energy and
operational savings in a given year, that surplus savings may be carried
forward and applied against any possible savings shortfall in the following
guarantee year, except that the surplus carried forward is limited to a period
not to exceed one (1) year. If the qualified provider pays the local public
agency for a short fall in energy or operational savings incurred during a given
guarantee year and there is a surplus in energy or operational savings in future
guarantee years, the qualified provider shall bill the local public agency for an
amount not to exceed the amount of the short fall in the given guarantee year.
(9) The use of capital cost avoidance shall be subject to the following restrictions:
(a) The amount expended shall not exceed fifty percent (50%) of the project
cost; and
(b) Capital cost avoidance shall be restricted to payment for permanent
equipment replacement as follows:
1.
Storm windows or doors, multiglazed windows or doors, additional
glazing, and reduction in glass area;
2.
Replacement of heating, ventilating, or air conditioning major
components or systems;
3.
New lighting fixtures where required to achieve Illuminating
Engineering Society of North America (IES) standards, provided the
existing light fixtures shall have been determined to be obsolete and
incapable of achieving IES standards; and
4.
Life safety system replacements or upgrades which shall have been
determined to be necessary to conform with existing state and local
codes and standards.
(10) The commissioner of education shall review, and approve or disapprove
projects from local school districts relating to energy conservation measures
under a guaranteed energy savings contract, on the basis of the following
guidelines:
(a) The project design's compliance with technical, health, and safety
standards as required by administrative regulation;
(b) The availability of general funds, capital outlay allotments under KRS
157.420 or local and state funds from the Facilities Support Program of
Kentucky as provided by KRS 157.440, for projects that will use capital
cost avoidance;
(c) The appropriate use of capital outlay allotments under KRS 157.420,
local and state funds from the Facilities Support Program of Kentucky as
provided by KRS 157.440, for projects using capital cost avoidance,
based on the project's compliance with the district's approved facility plan;
(d) The funding capability of the school district; and
(e) The financing mechanism and proper financing documentation.
(11) The request for proposal as provided in subsections (1) to (4) of this section
shall be deemed to satisfy the requirements set out in KRS 162.070, and shall
not be subject to an award determination based on the lowest competitive bid
or a separate bidding process for each energy conservation measure listed in
the proposal.
(12) A guaranteed energy savings contract that does not involve construction or the
installation of physical improvements shall not require the approval of the
commissioner of education and shall not be subject to other requirements of
this section.
Effective:June 26, 2007
History: Amended 2007 Ky. Acts ch. 122, sec. 3, effective June 26, 2007. -Amended 1998 Ky. Acts ch. 375, sec. 3, effective July 15, 1998. -- Created 1996
Ky. Acts ch. 203, sec. 3, effective July 15, 1996.
Legislative Research Commission Note (6/26/2007). A manifest clerical or
typographical error in this section has been corrected by the Reviser of Statutes
under the authority of KRS 7.136.
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