CHAPTER 12.5. GUARANTEED SAVINGS CONTRACTS; ENERGY EFFICIENCY PROGRAMS USED BY SCHOOL CORPORATIONS
IC 36-1-12.5
Chapter 12.5. Guaranteed Savings Contracts; Energy EfficiencyPrograms Used by School Corporations
IC 36-1-12.5-0.5
"Actual savings" defined
Sec. 0.5. As used in this chapter, "actual savings" includesstipulated savings.
As added by P.L.98-2002, SEC.1.
IC 36-1-12.5-0.6
"Billable revenues" defined; "billable revenue increases" defined;"revenues" defined
Sec. 0.6. As used in this chapter, "billable revenues", "billablerevenue increases", and "revenues" include only revenues of amunicipal water or wastewater utility operated by a politicalsubdivision.
As added by P.L.168-2006, SEC.3.
IC 36-1-12.5-0.7
"Causally connected work" defined
Sec. 0.7. As used in this chapter, "causally connected work"means work that is required to properly implement a conservationmeasure.
As added by P.L.98-2002, SEC.2. Amended by P.L.168-2006, SEC.4.
IC 36-1-12.5-1
"Conservation measure" defined
Sec. 1. (a) As used in this chapter, "conservation measure":
(1) means:
(A) a facility alteration;
(B) an alteration of a structure (as defined in IC 36-1-10-2);
(C) a technology upgrade; or
(D) with respect to an installation described in subdivision(2)(G) or (2)(H), an alteration of a structure or system;
designed to provide billable revenue increases or reduce energyor water consumption costs, wastewater costs, or otheroperating costs; and
(2) includes the following:
(A) Providing insulation of the facility or structure andsystems in the facility or structure.
(B) Installing or providing for window and door systems,including:
(i) storm windows and storm doors;
(ii) caulking or weatherstripping;
(iii) multi-glazed windows and doors;
(iv) heat absorbing or heat reflective glazed and coatedwindows and doors;
(v) additional glazing;
(vi) the reduction in glass area; and (vii) other modifications that reduce energy consumption.
(C) Installing automatic energy control systems.
(D) Modifying or replacing heating, ventilating, or airconditioning systems.
(E) Unless an increase in illumination is necessary toconform to Indiana laws or rules or local ordinances,modifying or replacing lighting fixtures to increase theenergy efficiency of the lighting system without increasingthe overall illumination of a facility or structure.
(F) Providing for other conservation measures that providebillable revenue increases or reduce energy or waterconsumption, reduce operating costs, or reduce wastewatercosts, including future:
(i) labor costs;
(ii) costs or revenues for contracted services; and
(iii) related capital expenditures.
(G) Installing equipment upgrades that improve accuracy ofbillable revenue generating systems.
(H) Installing automated, electronic, or remotely controlledsystems or measures that reduce direct personnel costs.
(b) The term does not include an alteration of a water orwastewater structure or system that increases the capacity of thestructure or system.
As added by P.L.24-1993, SEC.6. Amended by P.L.208-1995, SEC.3;P.L.98-2002, SEC.3; P.L.168-2006, SEC.5; P.L.71-2009, SEC.5;P.L.99-2009, SEC.4.
IC 36-1-12.5-1.5
"Governing body" defined
Sec. 1.5. As used in this chapter, "governing body" means thefollowing:
(1) With respect to school corporations, the governing body (asdefined in IC 20-18-2-5).
(2) With respect to a public library, the library board (as definedin IC 36-12-1-3).
(3) With respect to a library described in IC 36-12-7-8, thetrustees of the library.
(4) With respect to a political subdivision that operates amunicipal water or wastewater utility and in connection withthe installation of a conservation measure to a water orwastewater structure or system under this chapter, the board orofficer that has the power to award contracts.
(5) With respect to other political subdivisions for any otherproject or program under this chapter, the legislative body (asdefined in IC 36-1-2-9).
As added by P.L.208-1995, SEC.4. Amended by P.L.227-1999,SEC.12; P.L.1-2005, SEC.235; P.L.168-2006, SEC.6.
IC 36-1-12.5-2
"Guaranteed savings contract" defined Sec. 2. As used in this chapter, "guaranteed savings contract"refers to a contract entered into under this chapter, in which aqualified provider enters into an agreement with the governing bodyto:
(1) evaluate and recommend to the governing body conservationmeasures; and
(2) provide for the implementation of at least one (1)conservation measure.
As added by P.L.24-1993, SEC.6. Amended by P.L.208-1995, SEC.5;P.L.168-2006, SEC.7.
IC 36-1-12.5-2.5
"Industry engineering standards" defined
Sec. 2.5. As used in this chapter, "industry engineering standards"includes the following:
(1) Lifecycle costing.
(2) The R. S. Means estimating method developed by the R. S.Means Company.
(3) Historical data.
(4) Manufacturer's data.
(5) American Society of Heating, Refrigeration, and AirConditioning Engineers (ASHRAE) standards.
As added by P.L.98-2002, SEC.4. Amended by P.L.1-2010, SEC.146.
IC 36-1-12.5-3
"Qualified provider" defined
Sec. 3. (a) As used in this chapter, "qualified provider" means thefollowing:
(1) Before July 1, 1999, the term means a person that satisfiesboth of the following:
(A) The person is experienced in the design, implementation,and installation of energy conservation measures.
(B) The person submits to the school corporation or politicalsubdivision a performance bond to ensure the qualifiedprovider's faithful performance of the qualified provider'sobligations over the term of the guaranteed energy savingscontract.
(2) After June 30, 1999, the term means a person that satisfiesall of the following:
(A) Subject to subdivision (3), the person is experienced inthe design, implementation, and installation of energyconservation measures.
(B) The person is certified and meets the requirements ofIC 4-13.6-4. The person's response to the request forproposals must include a copy of the person's certificate ofqualification issued under IC 4-13.6-4.
(C) Subject to subdivision (3), the person provides energyconservation engineering services by a professional engineerlicensed under IC 25-31 who is under the person's directemployment and supervision. The person's response to the
request for proposals must include the license number ofeach professional engineer employed by the person to satisfythe requirement of this clause.
(D) The person provides:
(i) monitoring for the facility performance guarantee; and
(ii) service personnel under the person's directemployment and supervision;
for the duration of the contract's guarantee.
(E) The person performs at least twenty percent (20%) of thework (measured in dollars of the total contract price) with itsown workforce.
(F) The person submits to the school corporation or politicalsubdivision a performance bond to ensure the qualifiedprovider's faithful performance of the qualified provider'sobligations over the term of:
(i) the guaranteed energy savings contract; or
(ii) the guaranteed savings contract.
(3) With respect to conservation measures for which a contractis executed after June 30, 2006, the term includes a person thatsatisfies the following:
(A) The person is experienced in the design, implementation,and installation of conservation measures.
(B) The person provides engineering services with respect toconservation measures by a professional engineer licensedunder IC 25-31 who is under the person's direct employmentand supervision. The person's response to the request forproposals must include the license number of eachprofessional engineer employed by the person to satisfy therequirement of this clause.
(b) For purposes of a guaranteed energy savings contract enteredinto before July 1, 1999, a person who was a qualified provider undersubsection (a)(1) at the time the contract was entered into remains aqualified provider for that contract after June 30, 1999. If the personenters into:
(1) a guaranteed energy savings contract after June 30, 1999,and before July 1, 2006, the person must satisfy therequirements of subsection (a)(2); or
(2) a guaranteed savings contract after June 30, 2006, theperson must satisfy the requirements of subsection (a)(2) and(a)(3);
to be considered a qualified provider.
As added by P.L.24-1993, SEC.6. Amended by P.L.208-1995, SEC.6;P.L.58-1999, SEC.10; P.L.168-2006, SEC.8.
IC 36-1-12.5-3.5
"Related capital expenditures" defined
Sec. 3.5. As used in this chapter, "related capital expenditures"includes capital costs that:
(1) the governing body reasonably believes will be incurredduring the contract term; (2) are part of or are causally connected to the conservationmeasures being implemented; and
(3) are documented by industry engineering standards.
As added by P.L.98-2002, SEC.5. Amended by P.L.168-2006, SEC.9.
IC 36-1-12.5-3.7
"Stipulated savings" defined
Sec. 3.7. As used in this chapter, "stipulated savings" are assumedsavings that are documented by industry engineering standards.
As added by P.L.98-2002, SEC.6.
IC 36-1-12.5-4
"Utility efficiency program" defined
Sec. 4. As used in this chapter, "utility efficiency program" refersto an energy, a water, or a wastewater efficiency program that:
(1) includes a conservation measure;
(2) is established by a public utility (as defined in IC 8-1-8.7-2);and
(3) is undertaken pursuant to this chapter.
As added by P.L.24-1993, SEC.6. Amended by P.L.168-2006,SEC.10.
IC 36-1-12.5-5
Agreements to participate in programs or enter into contracts;necessary findings, notice, and provisions
Sec. 5. (a) The governing body may enter into an agreement witha public utility to participate in a utility efficiency program or enterinto a guaranteed savings contract with a qualified provider toincrease the political subdivision's billable revenues or reduce theschool corporation's or the political subdivision's energy or waterconsumption, wastewater usage costs, or operating costs if, afterreview of the report described in section 6 of this chapter, thegoverning body finds:
(1) in the case of conservation measures other than those thatare part of a project related to the alteration of a water orwastewater structure or system, that the amount the governingbody would spend on the conservation measures under thecontract and that are recommended in the report is not likely toexceed the amount to be saved in energy consumption costs andother operating costs over twenty (20) years from the date ofinstallation if the recommendations in the report were followed;
(2) in the case of conservation measures that are part of aproject related to the alteration of a water or wastewaterstructure or system, that the amount the governing body wouldspend on the conservation measures under the contract and thatare recommended in the report is not likely to exceed theamount of increased billable revenues or the amount to be savedin energy and water consumption costs, wastewater usage costs,and other operating costs over twenty (20) years from the dateof installation if the recommendations in the report were
followed; and
(3) in the case of a guaranteed savings contract, the qualifiedprovider provides a written guarantee as described in subsection(d)(3).
(b) Before entering into an agreement to participate in a utilityefficiency program or a guaranteed savings contract under thissection, the governing body must publish notice under subsection (c)indicating:
(1) that the governing body is requesting public utilities orqualified providers to propose conservation measures through:
(A) a utility efficiency program; or
(B) a guaranteed savings contract; and
(2) the date, the time, and the place where proposals must bereceived.
(c) The notice required by subsection (b) must:
(1) be published in two (2) newspapers of general circulation inthe county where the school corporation or the politicalsubdivision is located;
(2) be published two (2) times with at least one (1) weekbetween publications and with the second publication made atleast thirty (30) days before the date by which proposals mustbe received; and
(3) meet the requirements of IC 5-3-1-1.
(d) An agreement to participate in a utility efficiency program orguaranteed savings contract under this section must provide that:
(1) in the case of conservation measures other than those thatare part of a project related to the alteration of a water orwastewater structure or system, all payments, except obligationsupon the termination of the agreement or contract before theagreement or contract expires, may be made to the public utilityor qualified provider (whichever applies) in installments, not toexceed the lesser of twenty (20) years or the average life of theconservation measures installed from the date of finalinstallation;
(2) in the case of conservation measures that are part of aproject related to the alteration of a water or wastewaterstructure or system, all payments, except obligations upon thetermination of the agreement or contract before the agreementor contract expires, may be made to the public utility orqualified provider (whichever applies) in installments, not toexceed the lesser of twenty (20) years or the average life of theconservation measures installed from the date of finalinstallation;
(3) in the case of the guaranteed savings contract:
(A) the:
(i) savings in energy and water consumption costs,wastewater usage costs, and other operating costs; and
(ii) increase in billable revenues;
due to the conservation measures are guaranteed to cover thecosts of the payments for the measures; and (B) the qualified provider will reimburse the schoolcorporation or political subdivision for the differencebetween the guaranteed savings and the actual savings; and
(4) payments are subject to annual appropriation by the fiscalbody of the school corporation or political subdivision and donot constitute an indebtedness of the school corporation orpolitical subdivision within the meaning of a constitutional orstatutory debt limitation.
(e) An agreement or a contract under this chapter is subject toIC 5-16-7.
As added by P.L.24-1993, SEC.6. Amended by P.L.212-1995, SEC.2;P.L.208-1995, SEC.7; P.L.168-2006, SEC.11; P.L.71-2009, SEC.6;P.L.99-2009, SEC.5.
IC 36-1-12.5-5.3
Certification of subcontractor required
Sec. 5.3. (a) This section applies only to a guaranteed energysavings contract or a guaranteed savings contract entered into afterJune 30, 1999.
(b) A qualified provider may enter into a subcontract:
(1) with a value of more than one hundred fifty thousand dollars($150,000); and
(2) for the performance of any part of a guaranteed energysavings contract or guaranteed savings contract;
only if the subcontractor is certified under IC 4-13.6-4.
As added by P.L.58-1999, SEC.11. Amended by P.L.168-2006,SEC.12.
IC 36-1-12.5-5.5
Procedures for issuance of bonds by political subdivisions notapplicable
Sec. 5.5. IC 6-1.1-20 does not apply to an agreement to participatein:
(1) a utility efficiency program; or
(2) a guaranteed savings contract;
entered into under this chapter.
As added by P.L.212-1995, SEC.3. Amended by P.L.168-2006,SEC.13.
IC 36-1-12.5-6
Report before installation or remodeling
Sec. 6. (a) Before the public utility or the qualified provider mayinstall equipment in, make modifications to, or remodel a building orcomplex of buildings under a utility efficiency program or aguaranteed savings contract, the public utility or the qualifiedprovider (whichever applies) must issue a report that includesestimates for the following:
(1) All costs attributable to the work stipulated in the agreementor the contract, including the costs of design, engineering,installation, maintenance, repairs, or debt service. (2) The amounts by which:
(A) energy or water consumption;
(B) wastewater costs; or
(C) operating costs;
will be reduced.
(3) The amounts by which billable revenues will be increased.
(b) The report must also contain a listing of contractors andsubcontractors to be used by the public utility or the qualifiedprovider with respect to the conservation measures.
As added by P.L.24-1993, SEC.6. Amended by P.L.168-2006,SEC.14.
IC 36-1-12.5-7
Installment payment contracts; maximum period
Sec. 7. (a) If the governing body enters into an installmentpayment contract for the purchase and installation of conservationmeasures under this chapter that are part of a project that is notrelated to the alteration of a water or wastewater structure or system,the balance of the payments must be paid in installments not toexceed the lesser of twenty (20) years or the average life of theconservation measure installed from the date of final installation.Payments under an installment payment contract are subject toannual appropriation by the fiscal body of the school corporation orpolitical subdivision and do not constitute an indebtedness of theschool corporation or political subdivision within the meaning of aconstitutional or statutory debt limitation.
(b) If the governing body enters into an installment paymentcontract for the purchase and installation of conservation measuresunder this chapter that are part of a project that is related to thealteration of a water or wastewater structure or system, the balanceof the payments must be paid in installments not to exceed the lesserof twenty (20) years or the average life of the conservation measureinstalled from the date of final installation. Payments under aninstallment payment contract are subject to annual appropriation bythe fiscal body of the school corporation or political subdivision anddo not constitute an indebtedness of the school corporation orpolitical subdivision within the meaning of a constitutional orstatutory debt limitation.
(c) With respect to a conservation measure described in section1(a)(2)(G) or 1(a)(2)(H) of this chapter, annual revenues or savingsfrom a guaranteed savings contract may be less than annual paymentson the contract if during the length of the contract total savings andincreased billable revenues occur as provided for by the contract.
(d) The financing of a guaranteed savings contract may beprovided by:
(1) the vendor under the guaranteed savings contract; or
(2) a third party financial institution or company.
As added by P.L.24-1993, SEC.6. Amended by P.L.212-1995, SEC.4;P.L.208-1995, SEC.8; P.L.168-2006, SEC.15; P.L.71-2009, SEC.7;P.L.99-2009, SEC.6.
IC 36-1-12.5-8
Approval required
Sec. 8. Conservation measures installed under a utility efficiencyprogram or a guaranteed savings contract must be approved by thefollowing:
(1) The state department of health, division of fire and buildingsafety, and any other state agency designated by statute.
(2) An architect or engineer licensed under IC 25-4 or IC 25-31if the conservation measures have a cost of more than fiftythousand dollars ($50,000).
As added by P.L.24-1993, SEC.6. Amended by P.L.1-2006, SEC.555;P.L.168-2006, SEC.16.
IC 36-1-12.5-9
Payroll records required; inspection
Sec. 9. (a) The contractor and each subcontractor engaged ininstalling conservation measures under a guaranteed savings contractshall keep full and accurate records indicating the names,classifications, and work performed by each worker employed by therespective contractor and subcontractor in connection with the work,together with an accurate record of the number of hours worked byeach worker and the actual wages paid.
(b) The payroll records required to be kept under this section mustbe open to inspection by an authorized representative of thegoverning body or the department of labor.
As added by P.L.24-1993, SEC.6. Amended by P.L.208-1995, SEC.9;P.L.168-2006, SEC.17.
IC 36-1-12.5-10
Submission of contract and annual report to lieutenant governor
Sec. 10. The governing body shall:
(1) provide to the lieutenant governor not more than sixty (60)days after the date of execution of the guaranteed savingscontract:
(A) a copy of the executed guaranteed savings contract;
(B) the:
(i) energy or water consumption costs;
(ii) wastewater usage costs; and
(iii) billable revenues, if any;
before the date of execution of the guaranteed savingscontract; and
(C) the documentation using industry engineering standardsfor:
(i) stipulated savings; and
(ii) related capital expenditures; and
(2) annually report to the lieutenant governor, in accordancewith procedures established by the lieutenant governor, thesavings resulting in the previous year from the guaranteedsavings contract or utility efficiency program.
As added by P.L.24-1993, SEC.6. Amended by P.L.208-1995,
SEC.10; P.L.98-2002, SEC.7; P.L.1-2006, SEC.556; P.L.168-2006,SEC.18.
IC 36-1-12.5-11
Contracts that include stipulated savings
Sec. 11. (a) A guaranteed savings contract that includes stipulatedsavings must specify the methodology used to calculate the savingsusing industry engineering standards.
(b) Stipulated savings may be used for conservation measuresincluding the following:
(1) Heating.
(2) Air conditioning.
(3) Ventilating.
(4) Lighting.
(5) Roofing.
(6) Windows.
(7) Water conservation.
(8) Fuel and power improvements.
(9) Wastewater generation.
(10) Billable revenue increases.
(11) Any work that is causally connected to the conservationmeasures listed in subdivisions (1) through (10).
(c) The guaranteed savings contract shall:
(1) describe stipulated savings for:
(A) conservation measures; and
(B) work causally connected to the conservation measures;and
(2) document assumptions by industry engineering standards.
As added by P.L.98-2002, SEC.8. Amended by P.L.168-2006,SEC.19.
IC 36-1-12.5-12
Improvements not causally connected to conservation measure
Sec. 12. (a) An improvement that is not causally connected to aconservation measure may be included in a guaranteed savingscontract if:
(1) the total value of the improvement does not exceed fifteenpercent (15%) of the total value of the guaranteed savingscontract; and
(2) either:
(A) the improvement is necessary to conform to a law, arule, or an ordinance; or
(B) an analysis within the guaranteed savings contractdemonstrates that:
(i) there is an economic advantage to the politicalsubdivision in implementing an improvement as part of theguaranteed savings contract; and
(ii) the savings justification for the improvement isdocumented by industry engineering standards.
(b) The information required under subsection (a) must be
reported to the lieutenant governor.
As added by P.L.98-2002, SEC.9. Amended by P.L.1-2006, SEC.557;P.L.168-2006, SEC.20.