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
(C) the efficiency or accuracy of metering or related equipment,
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;
(C) automatic energy control systems, including computer
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.
(c) In conducting the review, the engineer shall focus primarily
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.
(c) A meter guarantee applies if the engineer reports to the
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.