Montana Code 90-4-1114. Energy performance contracts
90-4-1114. Energy performance contracts. (1) A governmental entity may pay for an energy performance contract with:
Terms Used In Montana Code 90-4-1114
- Baseline: Projection of the receipts, outlays, and other budget amounts that would ensue in the future without any change in existing policy. Baseline projections are used to gauge the extent to which proposed legislation, if enacted into law, would alter current spending and revenue levels.
- Contract: A legal written agreement that becomes binding when signed.
- Cost-saving measure: means a facility improvement, repair, or alteration or equipment, fixtures, or furnishings added to or used in a facility and designed to reduce energy or water consumption or operation and maintenance costs. See Montana Code 90-4-1102
- Department: means the department of environmental quality provided for in 2-15-3501. See Montana Code 90-4-1102
- Energy performance contract: means a cost-effective contract between a governmental entity and a qualified energy service provider for implementation of one or more cost-saving measures and guaranteed cost savings. See Montana Code 90-4-1102
- Finance term: means the length of time for repayment of funds borrowed for an energy performance contract. See Montana Code 90-4-1102
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Governmental entity: means :
(a)a department, board, commission, institution, or branch of state government;
(b)a county, consolidated city-county government, city, town, or school district;
(c)a special district, as defined in 2-2-102;
(d)the university system or a unit of the university system; or
(e)a community college district. See Montana Code 90-4-1102
- Guarantee period: means the period of time from the effective date of the contract until guaranteed cost savings are achieved in accordance with 90-4-1114(5). See Montana Code 90-4-1102
- Guaranteed cost savings: means a guaranteed annual measurable monetary reduction in utility and operating and maintenance costs for each year of a guarantee period resulting from cost-saving measures. See Montana Code 90-4-1102
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Measurement and verification: means the methodology, measurements, inspections, and mathematical calculations to determine utility consumption before and after an energy performance contract is implemented. See Montana Code 90-4-1102
- Qualified energy service provider: means a person included on the department's list of qualified energy service providers. See Montana Code 90-4-1102
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
(a)funds designated for operating costs, capital expenditures, utility costs, or lease payments;
(b)installment payment contracts or lease purchase agreements;
(c)bonds issued in accordance with other bonding provisions as provided by law; or
(d)other financing through a third party, including tax-exempt financing.
(2)Utility incentives, grants, operating costs, capital budgets, or other permissible sources may be used to reduce the amount of financing.
(3)(a) An energy performance contract may extend beyond the fiscal year for which the contract is effective.
(b)An energy performance contract may not exceed 20 years, the cost-weighted average useful life of the cost-saving measure, or the term of financing, whichever is shortest.
(4)During the guarantee period, a qualified energy service provider shall:
(a)measure and verify reductions in energy consumption and costs attributable to cost-saving measures implemented pursuant to an energy performance contract; and
(b)not less than annually, prepare and provide a measurement and verification report to the governmental entity and to the department documenting the performance of cost-saving measures.
(5)(a) Costs for measurement and verification must be included in an energy performance contract and paid by the governmental entity during an initial monitoring period that is not less than 3 years.
(b)The energy performance contract must provide that, if guaranteed cost savings are not achieved during any year in the initial monitoring period, the qualified energy service provider shall pay the costs for measurement and verification reports until guaranteed cost savings are achieved for all years in a term of consecutive years equal to the initial monitoring period.
(6)(a) Except as provided in subsection (6)(b), the qualified energy service provider shall pay the governmental entity the amount of any verified annual guaranteed cost savings shortfall each year until guaranteed cost savings are achieved for all years in an initial monitoring period established in accordance with subsection (5). The amount of cost savings achieved during a year must be determined using the mutually agreed on baseline rates referenced in guaranteed cost savings and any unguaranteed energy cost savings attributable to utility unit price escalation rates.
(b)In the case of a shortfall, the governmental entity and qualified energy service provider may negotiate the terms of measurement and verification reports and the shortfall payment for the remainder of the energy performance contract finance term.
(c)If an excess in guaranteed cost savings in any year of the guarantee period is revealed in a measurement and verification report, the guaranteed cost savings remain with the governmental entity. Guaranteed cost savings may not be used to cover potential shortfalls in subsequent years or actual guaranteed cost savings shortages in previous years of a guarantee period.