A. As used in this section, "energy conservation measures" means one or more of the following items:

1. Insulation of the building structure or systems within the building;

2. Storm windows or doors, caulking or weather-stripping, multiglazed windows or doors, heat-absorbing or heat-reflective, glazed, and coated window or door systems, additional glazing, reductions in glass area, or other window and door system modifications that reduce energy consumption;

3. Automatic or computerized energy control systems;

4. Heating, ventilating or air conditioning system modifications or replacements;

5. Replacement or modification of lighting fixtures to increase the energy efficiency of the lighting system, but not for the sole purpose of increasing the overall illumination of a facility, unless an increase in illumination is necessary to conform to the applicable state or local building codes for the lighting system after the proposed modifications are made;

6. Indoor air quality improvements;

7. Energy recovery systems;

8. Energy awareness education programs; and

9. Water-metering devices that increase efficiency or accuracy of water measurement and reduce energy consumption.

B. The board of education of any school district in compliance with the provisions of this section, may enter into an energy conservation contract for the purpose of implementing energy conservation measures designed to reduce the energy consumption of school facilities.

C. 1. The board of education shall require the provider of the energy conservation measures to file with the board of education a performance bond that is in an amount the board finds reasonable and necessary to protect the interests of the board and that covers the value of the guaranteed savings on the contract and is conditioned on the faithful execution of the terms of the contract.

2. If bonding industry limitations prevent execution of a performance bond which covers guaranteed savings for the entire term of the lease-purchase agreement the contract may allow an option for:

a.a performance bond which covers guaranteed savings for a shorter term. At the completion of the bond term, a new bond may be executed which covers guaranteed savings for an additional period of years. This process may be continued in like manner for the duration of the lease-purchase agreement as specified by subsection D of this section, or

b.a performance bond which covers guaranteed savings for a shorter term. At the completion of the bond term, if the bond cannot be renewed as provided in subparagraph a of this paragraph and if there has been a guaranteed savings shortfall during the last twelve (12) months, the board of education may assume a continued annual shortfall of the same amount and request repayment from the contractor of the net present value of the shortfall through the end of the lease repayment period. The discount factor to calculate the net present value shall be the annual percentage rate of the lease-purchase agreement.

D. 1. The board of education may enter into an energy conservation contract for a period of more than one (1) year for the implementation of energy conservation measures with a person or business entity if the board of education finds that the amount the school district would spend on the energy conservation measures, excluding any initial partial payment, will not exceed the total savings over the repayment period of the energy conservation contract from the date of installation.

2. The term of the energy conservation contract and the lease-purchase agreement shall include the installation period and the lease repayment period.

3. If the term of an energy conservation contract exceeds one (1) year, the contractual obligation of the school district, excluding any initial partial payment, in any year during the term of the energy conservation contract may not exceed the total savings including, but not limited to, electrical, gas, or other utility cost savings and savings from lowered maintenance, as determined by the board of education. Savings shall be guaranteed by the entity providing the energy conservation measures.

4. Energy conservation contracts shall not permit the carry-forward of savings above the guaranteed amount from one year to a future year shortfall.

5. Maintenance for energy conservation measures may be a part of the energy conservation contract.

6. The board of education shall consider all costs of the energy conservation measures, including costs of design, engineering, installation, maintenance, maintenance tools and equipment, spare parts, repairs, and debt service.

E. In addition to any other provisions, the energy conservation contract shall:

1. Provide that all savings should be tracked and audited by the contractor with an annual report provided to the board of education along with a payment by the provider for reimbursement of savings not realized;

2. Be for a term of years that is not less than the term of years of any associated lease-purchase agreement;

3. Provide that the board of education may terminate the agreement for nonperformance by the contractor;

4. Contain a nonappropriation clause; and

5. Contain a baseline calculation and an energy savings calculation. The calculations shall be performed in accordance with the procedures used by the International Protocol for Measurement and Verification Procedures (IPMVP) or succeeding standard of the United States Department of Energy.

F. 1. An energy conservation contract, with respect to existing buildings or facilities, may be funded through a lease-purchase agreement that meets federal tax requirements for tax-free municipal leasing or long-term financing.

2. The repayment period of the lease-purchase agreement shall not exceed the greater of twenty (20) years or the weighted average equipment life of any equipment to be installed under the energy conservation contract.

3. Lease-purchase agreements for energy conservation measures shall be considered separate from the energy conservation contract and shall contain a nonappropriation clause.

G. 1. Prior to entering into an energy conservation contract, the board of education shall solicit a request for qualification from one or more energy service company providers. Requests for qualification must solicit quotations and must specify the relative importance of guaranteed savings, price, financial performance and stability, quality, technical ability, experience and other evaluation factors.

2. In order to determine the energy savings measures to be considered by proposers, the board of education may hire an independent energy consultant.

3. Fees assessed by the consultant will be paid from proceeds of any financing associated with the energy conservation contract.

H. Proposals shall be opened in a manner that avoids disclosure of the contents to competing offerors and keeps the proposals confidential during negotiations.

I. The board of education and the offeror selected through the request for qualification procedures shall enter into a memorandum of understanding which shall require the provider to perform preliminary analysis regarding the physical features and operating history of the facilities under consideration. There shall be no financial obligation to the school district for this analysis.

J. After completion of the preliminary analysis, the energy service provider shall perform a detailed energy performance audit on the specific buildings or facilities as agreed to by the political subdivision. This audit shall provide a cost basis for operating the existing building or facilities and the detailed information necessary to make a financial decision regarding a long-term performance-based efficiency contract. The cost of this audit may be rolled into the terms of a performance-based efficiency contract. If the school district decides not to enter into a long-term performance-based efficiency contract with the provider, the school district must pay the sum stipulated in the performance audit contract.

K. Trade secrets and proprietary information clearly identified in the proposals shall not be open for public inspection.

Added by Laws 1996, c. 140, § 1, eff. July 1, 1996. Amended by Laws 1996, c. 276, § 15, emerg. eff. May 30, 1996; Laws 2000, c. 164, § 4, emerg. eff. April 28, 2000; Laws 2018, c. 296, § 4, eff. Nov. 1, 2018.