123B.65 ENERGY EFFICIENCY PROJECTS.
Subdivision 1. Definitions.
The definitions in this subdivision apply to this section.
(a) "Energy conservation measure" means a training program or facility alteration designed
to reduce energy consumption or operating costs and includes:
(1) insulation of the building structure and systems within the building;
(2) storm windows and doors, caulking or weatherstripping, multiglazed windows and
doors, heat absorbing or heat reflective glazed and coated window and door systems, additional
glazing, reductions in glass area, and other window and door system modifications that reduce
(3) automatic energy control systems;
(4) heating, ventilating, or air conditioning system modifications or replacements;
(5) replacement or modifications of lighting fixtures to increase the energy efficiency of the
lighting system without increasing the overall illumination of a facility, unless such increase in
illumination is necessary to conform to the applicable state or local building code for the lighting
system after the proposed modifications are made;
(6) energy recovery systems;
(7) cogeneration systems that produce steam or forms of energy such as heat, as well as
electricity, for use primarily within a building or complex of buildings;
(8) energy conservation measures that provide long-term operating cost reductions.
(b) "Guaranteed energy savings contract" means a contract for the evaluation and
recommendations of energy conservation measures, and for one or more energy conservation
measures. The contract must provide that all payments, except obligations on termination of the
contract before its expiration, are to be made over time, but not to exceed 15 years from the date
of final installation, and the savings are guaranteed to the extent necessary to make payments
for the systems.
(c) "Qualified provider" means a person or business experienced in the design,
implementation, and installation of energy conservation measures. A qualified provider to
whom the contract is awarded shall give a sufficient bond to the school district for its faithful
(d) "Commissioner" means the commissioner of commerce through the state energy office.
Subd. 2. Energy efficiency contract.
(a) Notwithstanding any law to the contrary, a
school district may enter into a guaranteed energy savings contract with a qualified provider to
significantly reduce energy or operating costs.
(b) Before entering into a contract under this subdivision, the board shall comply with
clauses (1) to (5).
(1) The board must seek proposals from multiple qualified providers by publishing notice of
the proposed guaranteed energy savings contract in the board's official newspaper and in other
publications if the board determines that additional publication is necessary to notify multiple
(2) The school board must select the qualified provider that best meets the needs of the board.
The board must provide public notice of the meeting at which it will select the qualified provider.
(3) The contract between the board and the qualified provider must describe the methods
that will be used to calculate the costs of the contract and the operational and energy savings
attributable to the contract.
(4) The qualified provider shall issue a report to the board giving a description of all costs of
installations, modifications, or remodeling, including costs of design, engineering, installation,
maintenance, repairs, or debt service, and giving detailed calculations of the amounts by which
energy or operating costs will be reduced and the projected payback schedule in years.
(5) The board must provide published notice of the meeting in which it proposes to award
the contract, the names of the parties to the proposed contract, and the contract's purpose.
(c) The board must provide a copy of any contract entered into under paragraph (a) and the
report provided under paragraph (b), clause (4), to the commissioner of commerce within 30 days
of the effective date of the contract.
Subd. 3. Evaluation by commissioner.
Upon request of the board, the commissioner shall
review the report required in subdivision 2 and provide an evaluation to the board on the proposed
contract within 15 working days of receiving the report. In evaluating the proposed contract, the
commissioner shall determine whether the detailed calculations of the costs and of the energy
and operating savings are accurate and reasonable. The commissioner may request additional
information about a proposed contract as the commissioner deems necessary. If the commissioner
requests additional information, the commissioner shall not be required to submit an evaluation to
the board within fewer than ten working days of receiving the requested information.
Subd. 4. Review of savings under contract.
Upon request of the board, the commissioner
shall conduct a review of the energy and operating cost savings realized under a guaranteed energy
savings contract every three years during the period a contract is in effect. The commissioner
shall compare the savings realized under the contract during the period under review with
the calculations of savings included in the report required under subdivision 2 and provide
an evaluation to the board concerning the performance of the system and the accuracy and
reasonableness of the claimed energy and operating cost savings.
Subd. 5. Payment of review expenses.
The commissioner may charge a district requesting
services under subdivisions 3 and 4 actual costs incurred by the Department of Commerce while
conducting the review, or one-half percent of the total identified project cost, whichever is
less. Before conducting the review, the commissioner shall notify a district requesting review
services that expenses will be charged to the district. The commissioner shall bill the district
upon completion of the contract review. Money collected by the commissioner under this
subdivision must be deposited in the general fund. A district may include the cost of a review by
the commissioner under subdivision 3 in a contract made pursuant to this section.
Subd. 6. Contract provisions.
Guaranteed energy savings contracts that include a written
guarantee that savings will meet or exceed the cost of energy conservation measures is not subject
to competitive bidding requirements. The contract is not subject to section
Subd. 7. District action.
A district may enter into a guaranteed energy savings contract
with a qualified provider if, after review of the report and the commissioner's evaluation if
requested, the board finds that the amount it would spend on the energy conservation measures
recommended in the report is not likely to exceed the amount to be saved in energy and operation
costs over 15 years from the date of installation if the recommendations in the report were
followed, and the qualified provider provides a written guarantee that the energy or operating
cost savings will meet or exceed the costs of the system. The guaranteed energy savings contract
may provide for payments over a period of time, not to exceed 15 years. Notwithstanding section
, a district annually may transfer from the general fund to the reserve for operating
capital account an amount up to the amount saved in energy and operation costs as a result of
guaranteed energy savings contracts.
Subd. 8. Installation contracts.
A district may enter into an installment payment contract
for the purchase and installation of energy conservation measures. The contract must provide
for payments of not less than 1/15 of the price to be paid within two years from the date of the
first operation, and the remaining costs to be paid monthly, not to exceed a 15-year term from the
date of the first operation.
Subd. 9. Contract continuance.
Guaranteed energy savings contracts may extend beyond the
fiscal year in which they become effective. The district must include in its annual appropriations
measure for each later fiscal year any amounts payable under guaranteed energy savings contracts
during the year. Failure of a board to make such an appropriation does not affect the validity of
the guaranteed energy savings contract or the district's obligations under the contracts.
Subd. 10. Public information.
A guaranteed energy savings contract must provide that all
work plans and other information prepared by the qualified provider in relation to the project,
including a detailed description of the project, are public data after the contract is entered into.
Information defined as trade secret information under section
13.37, subdivision 1
, shall remain
History: 1989 c 263 s 1; 1992 c 499 art 7 s 3; 1993 c 224 art 5 s 27-29; 1994 c 647 art
5 s 6-12; 1995 c 224 s 67; 1998 c 397 art 7 s 101-107,164; art 11 s 3; 1998 c 398 art 1 s 23;
1Sp2001 c 4 art 6 s 19-21; 2007 c 136 art 3 s 1