HF 1492

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to utilities; modifying the term of
guaranteed savings lease purchase contracts; amending
Minnesota Statutes 2004, section 16C.144, subdivisions
1, 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 16C.144,
subdivision 1, is amended to read:

Subdivision 1.

Definitions.

The following definitions
apply to this section.

(a) "Utility" means electricity, natural gas, or other
energy resource, water, and wastewater.

(b) "Utility cost savings" means the difference between the
utility costs under the precontract conditions and the utility
costs after the changes have been made under the contract. Such
savings shall be calculated in comparison to an established
baseline of utility costs.

(c) "Established baseline" means the precontract utilities,
operations, and maintenance costs.

(d) "Utility cost-savings measure" means a measure that
produces utility cost savings and/or operation and maintenance
cost savings.

(e) "Operation and maintenance cost savings" means a
measurable decrease in operation and maintenance costs that is a
direct result of the implementation of one or more utility
cost-savings measures but does not include savings from in-house
staff labor. Such savings shall be calculated in comparison to
an established baseline of operation and maintenance costs.

(f) "Guaranteed savings contract" means a contract for the
evaluation, recommendation, and installation of one or more
utility cost-savings measures. The contract must provide that
all payments are to be made over time but not to exceed deleted text begin ten deleted text end new text begin 15
new text end years from the date of final installation, and the savings are
guaranteed to the extent necessary to make payments for the
utility cost-savings measures.

(g) "Baseline adjustments" means adjusting the established
baselines in paragraphs (b) and (d) for changes in the following
variables:

(1) utility rates;

(2) number of days in the utility billing cycle;

(3) square footage of the facility;

(4) operational schedule of the facility;

(5) facility temperature set points;

(6) weather; and

(7) amount of equipment or lighting utilized in the
facility.

(h) "Lease purchase contract" means a contract obligating
the state to make regular lease payments to satisfy the lease
costs of the utility cost-savings measures until the final
payment, after which time the utility cost-savings measures
become the sole property of the state of Minnesota.

(i) "Qualified provider" means a person or business
experienced in the design, implementation, and installation of
utility cost-savings measures.

(j) "Engineering report" means a report prepared by a
professional engineer licensed by the state of Minnesota
summarizing estimates of all costs of installations,
modifications, or remodeling, including costs of design,
engineering, installation, maintenance, repairs, and estimates
of the amounts by which utility and operation and maintenance
costs will be reduced.

(k) "Capital cost avoidance" means money expended by a
state agency to pay for utility cost-savings measures with a
guaranteed savings contract so long as the measures that are
being implemented to achieve the cost savings are a significant
portion of an overall project.

(l) "Guaranteed savings contracting guidelines" means
policies, procedures, and requirements of guaranteed savings
contracts established by the Department of Administration upon
enacting this legislation.

Sec. 2.

Minnesota Statutes 2004, section 16C.144,
subdivision 3, is amended to read:

Subd. 3.

Lease purchase contract.

The commissioner may
enter into a lease purchase agreement with any party for the
implementation of utility cost-savings measures in accordance
with an engineering report. The implementation costs of the
utility cost-savings measures recommended in the engineering
report shall not exceed the amount to be saved in utility and
operation and maintenance costs over the term of the lease
purchase agreement. The term of the lease purchase agreement
shall not exceed deleted text begin ten deleted text end new text begin 15 new text end years. The lease is assignable in
accordance with terms approved by the commissioner of finance.

Sec. 3. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 and 2 are effective the day following final
enactment.
new text end