Current through Register Vol. 46, No. 39, September 25, 2024
(a) The following procedures consistent with
Energy Law, section 9-103(8), and Education Law, sections 305(27) and
3602(6)(i)(5)(i)(b) and (c) shall apply to energy performance contracts entered
into by a school district or a board of cooperative educational services
(BOCES) on or after July 1, 1998, provided that this section shall not apply to
energy performance contracts for which a request for proposals was entered into
prior to July 1, 1998.
(b)
Definitions. For the purposes of this section:
(1) Energy performance contract shall mean an
agreement for the provision of energy services, including but not limited to
electricity, heating, ventilation, cooling, steam or hot water, in which a
person agrees to install, maintain or manage energy systems or equipment to
improve the energy efficiency of, or produce energy in connection with, a
building or facility in exchange for a portion of the energy savings or
revenues.
(2) Simple payback period
shall mean a measure of the length of time required for the cumulative cost
savings, net of cumulative future costs, from an investment in an energy
conservation project to pay back the investment cost, without taking into
account the time value of money, or the differential energy price escalation
rate, or the State building aid payable for the project.
(3) Energy savings shall mean the positive
difference between the energy and associated cost before the retrofit and its
estimated cost after the retrofit of a proposed alternative building system,
taking into account all types of energy effected.
(4) Cost savings shall mean the positive
difference between the operation and maintenance cost before the retrofit and
its established operation and maintenance cost after the retrofit.
(5) Co-generation shall mean the simultaneous
production of electricity and thermal energy. Typical systems utilize natural
gas engines to turn electric generators thereby producing electricity, which
reduces utility costs. Waste heat captured from the natural gas combustion
process can be used to produce domestic hot water, provide space heat in winter
or air conditioning in summer when used in conjunction with absorption
chillers.
(c) The
appropriate type of projects that qualify to be completed under an energy
performance contract may include, but are not limited to:
(1) replacement of lighting
fixtures;
(2) installation of
energy efficient boiler/furnace, heating, ventilating, air conditioning (HVAC)
equipment;
(3) installation of
vestibules;
(4) installation of
automatic setback thermostat;
(5)
energy management system;
(6)
upgrade domestic hot water system;
(7) roof insulation;
(8) installation of energy efficient
window/doors;
(9) co-generation;
or
(10) the installation,
maintenance or management of other energy systems or equipment to improve the
energy efficiency of, or produce energy in connection with, a building or
facility.
(d) Every
energy performance contract entered into by a school district or BOCES to which
this section applies and every amendment to an energy performance contract
entered into on or after July 1, 1998 by a board of education or a BOCES shall
be subject to approval by the Commissioner of Education and shall contain a
provision that such contract shall not be executory until approval of the
commissioner is obtained. In order to obtain approval by the Commissioner of
Education to enter into an energy performance contract, the school district or
BOCES shall:
(1) demonstrate that the project
complies with all applicable provisions of section
155.2 of this Part;
(2) describe the scope and nature of the work
to be performed;
(3) demonstrate
that the types of projects included in the energy performance contract are
appropriate in accordance with subdivision (c) of this section;
(4) provide a detailed breakdown of the
energy performance savings to be derived each year and for the duration of the
energy performance contract in the project summary form, which shall include:
(i) a description of each energy conservation
measure included in the energy performance contract;
(ii) the cost of each energy conservation
measure;
(iii) the project energy
savings and cost savings;
(iv) the
useful life of each energy conservation measure; and
(v) the simple payback period;
(5) state any maintenance and
monitoring charges that are part of the energy performance contract in a clear
and conspicuous manner separately in the contract;
(6) provide the interest rate applicable to
the energy performance contract and length of borrowing. The interest rate will
be compared to the U.S. Treasury rate for like terms as published in the Wall
Street Journal and must be comparable;
(7) provide the following certifications:
(i) the sole trustee, the president of the
board of trustees or board of education, or the president of the BOCES shall
certify that in lieu of competitive bidding, the energy performance contract
was procured pursuant to a request for proposal (RFP) process in accordance
with the school district's or BOCES' procurement policies and procedures
adopted pursuant to applicable provisions of General Municipal Law, section
104-b;
(ii) the energy performance
contractor shall certify that such energy performance contractor has guaranteed
recovery of contract costs from energy savings realized by the school district
during the term of the energy performance contract, which shall not exceed 18
years, or the useful life of the equipment being installed, whichever is less.
This certification shall be based on an analysis of energy costs and savings,
which shall not include any cost savings attributable to State building aid. If
a simple payback calculation is used to demonstrate compliance with the 18 year
payback limitation, it shall be calculated by dividing the initial contract
cost by the first year cost savings. If another analysis is used to support the
certification, it should be submitted with the certification;
(iii) the energy performance contractor shall
certify that measurement and verification techniques for determining cost
savings will be performed in accordance with the North American Energy
Measurement and Verification Protocol, March 1996 (U.S. Department of Energy,
Washington, DC 20585: available at the Office of Facilities Planning, Room
1060, State Education Building Annex, Albany, NY 12234);
(iv) the energy performance contractor shall
certify that any State building aid attributable to such project has been
excluded in determining the cost savings and payback period under the energy
performance contract; and
(v) the
architect and/or engineer of record shall certify that he or she is free from
financial interest in the energy performance contractor which conflicts with
the proper completion of the audit and any design work associated with the
energy performance contract and that full disclosure has been made to the
school district and/or BOCES detailing all financial compensation received from
the energy performance contractor.
(e) The administrative and technical review
by the State Education Department shall include:
(1) review of project scope and its
appropriateness to be done under an energy performance contract and its
eligibility for building aid;
(2)
review of the project's compliance with applicable provisions of section
155.2 of this Part;
(3) review of detailed breakdown of the
energy savings to ensure compliance with Education Law, section
3602(6)(i)(5)(i);
(4) review of
certifications by the president of the board of education, energy performance
contractor and architect/engineer as specified in regulations;
(5) review of interest rate and comparison to
the U.S. Treasury rate for like terms; and
(6) review of technical specifications for
compliance with the Uniform Fire Prevention and Building Code, State Education
Department standards and other applicable standards.
(f) Capital construction costs and associated
incidental costs such as architect/engineer fees, administrative costs and
feasibility costs may be eligible for building aid. Costs associated with
operation and maintenance, repairs, extended warranties and service agreements
are not eligible for building aid and should be separated in a clear and
conspicuous manner from those eligible expenses.
