CHAPTER 302. ENERGY SAVINGS PERFORMANCE CONTRACTS FOR LOCAL GOVERNMENTS

State Codes and Statutes

Statutes > Texas > Local-government-code > Title-9-public-buildings-and-grounds > Chapter-302-energy-savings-performance-contracts-for-local-governments

LOCAL GOVERNMENT CODE

TITLE 9. PUBLIC BUILDINGS AND GROUNDS

SUBTITLE C. PUBLIC BUILDING PROVISIONS APPLYING TO MORE THAN ONE

TYPE OF LOCAL GOVERNMENT

CHAPTER 302. ENERGY SAVINGS PERFORMANCE CONTRACTS FOR LOCAL

GOVERNMENTS

Sec. 302.001. DEFINITIONS. In this chapter:

(1) "Baseline" means a calculation or set of calculations in an

energy savings performance contract that may be based on

historical costs, revenues, accuracy, or related components and

used for determining:

(A) the costs for energy or water usage by a local government

and related net operating costs;

(B) the billable revenues from providing energy, water, or other

utilities to users; or

systems, or processes or procedures.

(2) "Energy or water conservation or usage measures" means:

(A) the installation or implementation of any of the items,

equipment, modifications, alterations, improvements, systems, and

other measures described by Subdivision (4) that are intended to

provide:

(i) estimated energy savings;

(ii) an estimated increase in billable revenues; or

(iii) an estimated increase in meter accuracy; or

(B) the training for, or services related to, the operation of

the items, equipment, modifications, alterations, improvements,

systems, or other measures described by Paragraph (A).

(3) "Energy savings" means an estimated reduction in net fuel

costs, energy costs, water costs, stormwater fees, other utility

costs, or related net operating costs from or as compared to an

established baseline of those costs. The term does not include

an estimated reduction due to a decrease in energy rates that is

not derived from increased conservation or reduced usage.

(4) "Energy savings performance contract" means a contract

between a local government and a provider for energy or water

conservation or usage measures in which the estimated energy

savings, increase in billable revenues, or increase in meter

accuracy resulting from the measures is subject to guarantee to

offset the cost of the energy or water conservation or usage

measures over a specified period. The term includes a contract

for the installation or implementation of the following,

including all causally connected work:

(A) insulation of a building structure and systems within the

building;

(B) storm windows or doors, caulking or weather stripping,

multiglazed windows or doors, heat-absorbing or heat-reflective

glazed and coated window or door systems, or other window or door

system modifications that reduce energy consumption;

software and technical data licenses;

(D) heating, ventilating, or air-conditioning system

modifications or replacements that reduce energy or water

consumption;

(E) lighting fixtures that increase energy efficiency;

(F) energy recovery systems;

(G) electric systems improvements;

(H) water-conserving fixtures, appliances, and equipment or the

substitution of non-water-using fixtures, appliances, and

equipment;

(I) water-conserving landscape irrigation equipment;

(J) landscaping measures that reduce watering demands and

capture and hold applied water and rainfall, including:

(i) landscape contouring, including the use of berms, swales,

and terraces; and

(ii) the use of soil amendments that increase the water-holding

capacity of the soil, including compost;

(K) rainwater harvesting equipment and equipment to make use of

water collected as part of a storm-water system installed for

water quality control;

(L) equipment for recycling or reuse of water originating on the

premises or from other sources, including treated municipal

effluent;

(M) equipment needed to capture water from nonconventional,

alternate sources, including air-conditioning condensate or

graywater, for nonpotable uses;

(N) metering or related equipment or systems that improve the

accuracy of billable-revenue-generation systems; or

(O) other energy or water conservation-related improvements or

equipment, including improvements or equipment relating to

renewable energy or nonconventional water sources or water reuse.

(5) "Guarantee" means a written guarantee of a provider that the

energy savings, increase in billable revenues, or increase in

meter accuracy from the energy or water conservation or usage

measures will at least equal the cost of the energy or water

conservation or usage measures, all causally connected work, and

ancillary improvements provided for in an energy savings

performance contract.

(6) "Increase in billable revenues" means an estimated increase

in billable revenues as compared to an established baseline of

billable revenues.

(7) "Increase in meter accuracy" means an estimated increase in

efficiency or accuracy of metering or related equipment, systems,

or processes or procedures that is calculated or determined by

using applicable industry engineering standards.

(8) "Local government" means a county, municipality, or other

political subdivision of this state. The term does not include a

school district authorized to enter into an energy savings

performance contract under Section 44.901, Education Code.

(9) "Meter guarantee" means a guarantee of a stipulated or

agreed upon increase in billable revenues to result from the

estimated increase in meter accuracy, based on stipulated or

agreed upon components of a billable revenue calculation in an

energy savings performance contract.

(10) "Provider" means an entity in the business of designing,

implementing, and installing of energy or water conservation or

usage measures or an affiliate of such an entity.

Added by Acts 1997, 75th Leg., ch. 635, Sec. 1, eff. June 11,

1997. Amended by Acts 2001, 77th Leg., ch. 573, Sec. 6, eff.

Sept. 1, 2001; Acts 2003, 78th Leg., ch. 1310, Sec. 78, eff. June

20, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

527, Sec. 4, eff. June 16, 2007.

Sec. 302.002. ENERGY SAVINGS PERFORMANCE CONTRACTS. (a) The

governing body of a local government may enter into an energy

savings performance contract in accordance with this chapter.

(b) Each energy or water conservation or usage measure must

comply with current local, state, and federal construction,

plumbing, and environmental codes and regulations.

Notwithstanding Section 302.001, an energy savings performance

contract may not include improvements or equipment that allow or

cause water from any condensing, cooling, or industrial process

or any system of nonpotable usage over which public water supply

system officials do not have sanitary control to be returned to

the potable water supply.

Added by Acts 1997, 75th Leg., ch. 635, Sec. 1, eff. June 11,

1997. Amended by Acts 2001, 77th Leg., ch. 573, Sec. 6, eff.

Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1319, Sec. 4, eff. Sept.

1, 2001; Acts 2003, 78th Leg., ch. 1310, Sec. 79, eff. June 20,

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

527, Sec. 5, eff. June 16, 2007.

Sec. 302.003. PAYMENT AND PERFORMANCE BOND. Notwithstanding any

other law, before entering into an energy savings performance

contract, the governing body of the local government shall

require the provider of the energy or water conservation or usage

measures to file with the governing body a payment and

performance bond relating to the installation of the measures in

accordance with Chapter 2253, Government Code. The governing

body may also require a separate bond to cover the value of the

guarantee.

Added by Acts 1997, 75th Leg., ch. 635, Sec. 1, eff. June 11,

1997. Amended by Acts 2001, 77th Leg., ch. 573, Sec. 6, eff.

Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1319, Sec. 5, eff. Sept.

1, 2001; Acts 2003, 78th Leg., ch. 1310, Sec. 80, 121(23), eff.

June 20, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

527, Sec. 6, eff. June 16, 2007.

Sec. 302.004. METHOD OF FINANCING; TERMS OF CONTRACT. (a) An

energy savings performance contract may be financed:

(1) under a lease-purchase contract that has a term not to

exceed 20 years from the final date of installation and that

meets federal tax requirements for tax-free municipal leasing or

long-term financing;

(2) with the proceeds of bonds; or

(3) under a contract with the provider of the energy or water

conservation or usage measures that has a term not to exceed the

lesser of 20 years from the final date of installation or the

average useful life of the energy or water conservation or usage

measures.

(b) An energy savings performance contract shall contain

provisions requiring the provider of the energy or water

conservation or usage measures to provide a guarantee. If the

term of the contract exceeds one year, the local government's

contractual obligations in any one year during the term of the

contract beginning after the final date of installation may not

exceed the total energy and water savings, the net operating cost

savings, and the stipulated or agreed upon increase in billable

revenues resulting from the estimated increase in meter accuracy,

divided by the number of years in the contract term.

Added by Acts 1997, 75th Leg., ch. 635, Sec. 1, eff. June 11,

1997. Amended by Acts 1999, 76th Leg., ch. 361, Sec. 4, eff.

Sept. 1, 1999; Acts 2001, 77th Leg., ch. 573, Sec. 6, eff. Sept.

1, 2001; Acts 2001, 77th Leg., ch. 1319, Sec. 6, eff. Sept. 1,

2001; Acts 2003, 78th Leg., ch. 1310, Sec. 81, eff. June 20,

2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

527, Sec. 7, eff. June 16, 2007.

Sec. 302.005. BIDDING PROCEDURES; AWARD OF CONTRACT. (a) An

energy savings performance contract under this chapter may be let

in accordance with the procedures established for procuring

certain professional services by Section 2254.004, Government

Code. Notice of the request for qualifications shall be published

in the manner provided for competitive bidding.

(b) Before entering into an energy savings performance contract,

the governing body must require that the energy savings, increase

in billable revenues, or increase in meter accuracy estimated or

projected by a provider be reviewed by a licensed professional

engineer who:

(1) has a minimum of three years of experience in energy

calculation and review;

(2) is not an officer or employee of a provider for the contract

under review; and

(3) is not otherwise associated with the contract.

on the proposed improvements from an engineering perspective, the

methodology and calculations related to cost savings, increases

in revenue, and, if applicable, efficiency or accuracy of

metering equipment. An engineer who reviews a contract shall

maintain the confidentiality of any proprietary information the

engineer acquires while reviewing the contract. Sections

1001.053 and 1001.407, Occupations Code, apply to work performed

under the contract.

Added by Acts 1997, 75th Leg., ch. 635, Sec. 1, eff. June 11,

1997. Amended by Acts 2001, 77th Leg., ch. 573, Sec. 12, eff.

Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1319, Sec. 7; Acts 2003,

78th Leg., ch. 1276, Sec. 12.005, eff. Sept. 1, 2003; Acts 2003,

78th Leg., ch. 1310, Sec. 82, eff. June 20, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

527, Sec. 8, eff. June 16, 2007.

Sec. 302.006. METER GUARANTEES. (a) This section applies to

any energy savings performance contract that:

(1) provides for any metering or related equipment, system, or

process or procedure; and

(2) includes a meter guarantee by the provider, regardless of

whether the meter guarantee is a part of a broader guarantee

applicable to other energy or water conservation or usage

measures or causally connected work.

(b) Not later than the fifth anniversary of the effective date

of an energy savings performance contract, an engineer shall test

a statistically relevant sample of the meters installed or

implemented under the contract to determine or calculate the

actual average accuracy and shall compare the actual average

accuracy to the baseline average accuracy of those tested meters.

local government and the provider that the average accuracy of

the tested meters as of the testing date is less than the

baseline average accuracy of the tested meters as of the testing

date.

(d) The amount payable under the meter guarantee must be

determined for each year subject to the engineer's report and is

equal to the difference between:

(1) the agreed increase in billable revenues based on the

estimated accuracy of all of the meters for each year, according

to the energy savings performance contract; and

(2) the revenues for the same year that would result from

applying the engineer's reported actual average accuracy of the

tested meters to all of the meters subject to the energy savings

performance contract, using the same contract components that

were used to calculate the agreed increase in billable revenues

for that year, assuming the annual decrease in actual average

accuracy of all the meters was a pro rata percentage of the

reported total decrease in actual average accuracy.

(e) Notwithstanding Subsection (d), if the meter guarantee in

the contract is part of a broader guarantee applicable to other

energy or water conservation or usage measures or causally

connected work under the contract, the amount payable under the

meter guarantee for any year during the measurement period is

reduced or offset by the difference between:

(1) the sum of the energy savings and the increase in billable

revenues resulting from the other energy or water conservation or

usage measures or causally connected work for that year during

the measurement period; and

(2) the guaranteed amount of the energy savings and the increase

in billable revenues from the other energy or water conservation

or usage measures or causally connected work for that year during

the measurement period.

(f) A test conducted under this section must be performed in

accordance with the procedures established by the International

Performance Measurement and Verification Protocol or succeeding

standards of the United States Department of Energy.

(g) An engineer conducting a test under this section shall:

(1) verify that the tested meters have been properly maintained

and are operating properly; and

(2) comply with Section 302.005(c).

Added by Acts 2007, 80th Leg., R.S., Ch.

527, Sec. 9, eff. June 16, 2007.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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