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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

                            CHAPTER 260-S.F.No. 3115 
                  An act relating to state government; regulating state 
                  energy savings contracts; amending Minnesota Statutes 
                  2000, section 16C.14. 
           Section 1.  Minnesota Statutes 2000, section 16C.14, is 
        amended to read: 
           Subdivision 1.  [CONTRACT CONDITIONS.] The commissioner may 
        contract to purchase by installment payments capital or other 
        equipment or services intended to improve the energy 
        efficiency or reduce the energy costs of a state building or 
        facility if: 
           (1) the term of the contract does not exceed ten 15 years, 
        with not more than a ten-year 15-year payback beginning at the 
        completion of the project; 
           (2) the entire cost of the contract is a percentage of the 
        resultant savings in energy costs only and measurable 
        operational costs.  "Savings in energy cost" means a comparison 
        of energy cost and energy usage under the precontract 
        conditions, including reasonable projections of energy cost and 
        usage if no change is made to the precontract conditions, 
        against energy cost and usage with the changes made under the 
        contract.  If it is impractical not cost effective to directly 
        measure energy cost and/or energy usage, reasonable engineering 
        estimates may be substituted for measured results.  "Savings in 
        measurable operational costs" may include savings from inventory 
        reductions and outside maintenance expense, but do not include 
        savings from in-house staff labor; 
           (3) the contract for purchase must be completed using a 
           (4) the commissioner has determined that the contract 
        vendor is a responsible vendor; 
           (5) the contract vendor can finance or obtain financing for 
        the performance of the contract without state assistance or 
        guarantee; and 
           (6) the state may unilaterally cancel the agreement if the 
        legislature fails to appropriate funds to continue the contract 
        or if the contractor at any time during the term of the contract 
        fails to perform its contractual obligations, including failure 
        to deliver or install equipment or materials, failure to replace 
        faulty equipment or materials in a timely fashion, and failure 
        to maintain the equipment as agreed in the contract. 
           Subd. 2.  [ENERGY APPROPRIATION.] The commissioner may 
        spend money appropriated for energy costs in payment of a 
        contract under this section.  
           Subd. 3.  [ENERGY CONSERVATION INCENTIVES.] Notwithstanding 
        any other law to the contrary, fuel cost savings resulting from 
        energy conservation actions shall be available at the managerial 
        level at which the actions took place for expenditure for other 
        purposes within the biennium in which the actions occur or in 
        the case of a shared savings agreement for the contract period 
        of the shared savings agreement.  For purposes of this 
        subdivision "shared savings agreement" means a contract meeting 
        the terms and conditions of subdivision 1.  
           Subd. 4.  [ENERGY AND OPERATIONAL COSTS.] (a) The entire 
        cost of an energy efficiency installment purchase contract must 
        be a percentage of the resultant savings in energy and 
        operational costs.  Neither the state nor any agency is liable 
        to make payments on the contract except to the extent that there 
        are savings in energy and operational costs that must be shared 
        with other parties to the contract.  
           (b) The state and the contract vendor may agree to a 
        reasonable floor price for each type of energy used in the 
        savings calculations at the time of contract execution.  If the 
        state and the vendor agree to a floor price, that floor price 
        shall be used throughout the term of the contract. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Presented to the governor March 20, 2002 
           Signed by the governor March 22, 2002, 2:02 p.m.