§1622. Performance-based energy efficiency contracts

            A. Any state agency as defined in R.S. 39:2 may enter into a performance-based energy efficiency contract for services and equipment as provided in this Section. The commissioner of administration shall adopt and promulgate rules and regulations necessary to implement the provisions of this Section, which rules shall be consistent with the Energy Management Act of 2001. Any such rules and regulations shall be adopted and promulgated only after the review and approval of the Joint Legislative Committee on the Budget. The commissioner of administration shall submit the proposed rules and regulations to the Joint Legislative Committee on the Budget thirty days prior to the review and approval of such rules and regulations by the committee.

            B. The contract shall be considered a consulting services contract under the provisions of this Chapter. Performance-based energy efficiency contracts shall be awarded through a request for proposal process under the provisions of this Chapter and specifically the provisions of Subsection E of this Section.

            C.(1) Notwithstanding the requirements of R.S. 39:1615(G), any performance-based energy efficiency contract entered into shall be for a period equal to the lesser of twenty years or the average life of the equipment installed by the performance contractor and shall contain a guarantee of energy savings. The guarantee of energy savings shall, at a minimum, ensure a total annual savings sufficient to fully fund any financing arrangement entered into to fund the contract. In addition, any performance-based energy efficiency contract shall contain the following clause:

            "The continuation of this contract is contingent upon the appropriation of funds by the legislature to fulfill the requirements of the contract. If the legislature fails to appropriate sufficient monies to provide for the continuation of the contract, the contract shall terminate on the last day of the fiscal year for which funds have been appropriated. Such termination shall be without penalty or expense to the agency, board, or commission except for payments which have been earned prior to the termination date."

            (2) Any contract entered into pursuant to this Section shall include the total units of energy saved, the method, device or financial arrangement to establish a firm amount for the savings, the cost per unit of energy, and, if applicable, the basis for any adjustment in the stated cost for the term of the contract, and for each energy saving measure included in the contract, provide the following:

            (a) Detailed scope of work.

            (b) Price to be paid by the state agency as the initial cost.

            (c) Annual energy cost savings.

            (d) Annual maintenance savings including any maintenance and operational savings associated with installation; including but not limited to, services, parts, materials, labor, and equipment.

            (e) Annual new maintenance cost including operating expenses added as a result of new equipment installed or services performed by the contractor.

            (f) Total annual savings by adding annual energy cost savings to annual maintenance savings minus any annual new maintenance costs.

            (3) No payment shall be made by a state agency pursuant to a contract entered into in accordance with this Section, until there is compliance with Paragraph (2) of this Subsection. However, Paragraph (2) of this Subsection and this Paragraph shall not invalidate nor require the reissuance of a request for proposal for which notice was given pursuant to this Chapter prior to June 17, 2004.

            D. When calculating "annual energy cost savings attributable to the services or equipment" installed pursuant to a performance-based energy efficiency contract as defined in R.S. 39:1556, maintenance savings shall be included. "Maintenance savings" means operating expenses eliminated and future capital replacement expenditures avoided as a result of new equipment installed or services performed by the performance contractor.

            E.(1) Prior to award of any performance-based energy efficiency contract, the response to the requests for proposals shall be evaluated as follows:

            (a) A state agency that seeks to enter into a contract pursuant to this Section shall conduct an initial evaluation of proposals submitted to it. Such evaluation shall be consistent with the provisions of this Chapter, except that a state agency shall not make a final selection from among submitted proposals.

            (b) A state agency shall forward the results of its evaluation of each such proposal to the commissioner of administration. The commissioner of administration may select an independent third-party evaluation consultant to review and evaluate the submitted proposals. The consultant shall submit the result of his evaluation to the energy efficiency procurement support team and to the commissioner of administration. The energy efficiency procurement support team shall review the evaluation of the independent third-party evaluation consultant. Upon completion of such review, the energy efficiency procurement support team shall submit its recommendation to the commissioner of administration. The commissioner of administration shall review the evaluation of the independent third-party evaluation consultant and the recommendation of the energy efficiency procurement support team and shall notify the agency as to whether it may proceed with negotiation of the contract in accordance with the provisions of this Chapter. The commissioner of administration may require that the consultant selected pursuant to this Section participate on behalf of the agency in the negotiation of the contract. Upon the completion of the negotiation of the contract by the agency, the commissioner of administration shall review the negotiated contract. If the commissioner of administration approves the contract then the contract shall be submitted by the commissioner of administration to the Joint Legislative Committee on the Budget for review and approval.

            (c) Notwithstanding any other provision of this Chapter, no proposer shall be selected pursuant to this Section nor shall any contract be awarded pursuant to this Section, except by the approval of both the commissioner of administration and the Joint Legislative Committee on the Budget.

            (d) An independent third-party evaluation consultant shall have no direct conflict of interest as to the agency, the proposals which the consultant is to evaluate, or to any proposer. Prior to the selection of such consultant, the legislative auditor shall certify that the consultant has no direct conflict of interest as to the agency, the proposals which the consultant is to evaluate, or to any proposer.

            (e) The provisions of Subparagraphs (a) through (d) of this Paragraph shall not be applicable when the requests for proposals or the proposed contract was received by the division of administration prior to January 1, 2004.

            (2) The legislative auditor shall conduct performance audits of performance-based energy efficiency contracts. The legislative auditor shall establish a written schedule for execution of such performance audits, and the schedule shall be posted on the website of the legislative auditor no later than February first of each year. Such schedule shall provide for periodic audits during the term of such contracts and for an audit upon the completion of any such contract. The legislative auditor shall coordinate with the commissioner of administration to develop a description of information to be included as part of each performance audit. The results of any such performance audits shall be published no later than thirty days prior to the commencement of each Regular Session of the Legislature. Audits shall be conducted on each performance-based energy efficiency contract in effect on and after January 1, 2010.

            (3)(a)(i) In order to fund the cost of the evaluation, review, approval, oversight, and performance audits as provided in this Section, the request for proposal for the award of a performance-based energy efficiency contract shall require the proposer to pay a sum not to exceed two and one-half percent of the total value of the performance-based energy efficiency contract at the time that a contract is executed by that proposer.

            (ii) Notwithstanding the provisions of Item (i) of this Subparagraph, where a request for proposal or a proposed contract is exempt from the application of Subparagraphs (a) through (d) of Paragraph (1) of this Subsection, the proposer shall be required to pay a sum not to exceed one percent of the total value of the performance-based energy efficiency contract at the time that a contract is executed by that proposer.

            (b) The determination of the sum to be paid shall be made by the commissioner of administration according to the rules and regulations adopted pursuant to this Section.

            (c) The "Energy Performance Contract Fund", hereinafter referred to as the "fund", is hereby created in the state treasury. After compliance with the provisions of Article VII, Section 9(B) of the Constitution of Louisiana relative to the allocation of monies to the Bond Security and Redemption Fund, the treasury shall deposit into the fund an amount equal to the amount collected pursuant to Subparagraphs (a) and (b) of this Paragraph. The monies in the fund shall be used only to fund the requirements of this Section and the rules promulgated pursuant thereto. Monies in the fund shall be invested in the same manner as monies in the state general fund and any interest earned on the investment of monies in the fund shall be credited to the fund. Unexpended and unencumbered monies in the fund at the end of the fiscal year shall remain in the fund.

            F. For the purposes of this Section, any appropriation to an agency shall not be deemed an appropriation of funds by the legislature to fulfill the requirements of a performance-based energy efficiency contract awarded on or after January 1, 2010, unless and until such contract has been approved in accordance with the provisions of this Section.

            G. For the purposes of this Section, the energy efficiency procurement support team shall consist of an attorney chosen jointly by the speaker of the House of Representatives and the president of the Senate from the legislative services staff of the House of Representatives or the staff of the Senate and one or more representatives chosen by each of the following: the division of administration, facility planning and control; the using agency initiating the procurement action; and the legislative fiscal office. At least four members, one from each office or agency designated, must be present to constitute a quorum. The energy efficiency procurement support team shall evaluate the submitted proposal in accordance with guidelines to be published by the division of administration.

            H. Notwithstanding the requirements of Subsection C of this Section, if, at any time after the execution of a performance-based energy efficiency contract, a state agency makes a unilateral change or modification to the scope of work under the contract, the annual energy cost savings attributable to the services or equipment shall be adjusted to account for any expended costs and any projected savings that can no longer be measured or verified as a result of the change or modification. However, any adjustment that reduces the annual energy cost savings attributable to the services or equipment by twenty percent or more shall require approval of the Joint Legislative Committee on the Budget prior to the amendment of the contract. This Subsection shall apply to all performance-based energy efficiency contracts in effect on and after January 1, 2010, and all future contracts executed pursuant to this Section.

            Added by Acts 1979, No. 715, §1, eff. July 1, 1980; Acts 2014, No. 864, §2, eff. Jan. 1, 2015; Acts 2017, No. 51, §1.