§ 33:4547.1 — Authorization; performance-based energy efficiency contracts

Louisiana § 33:4547.1

• Jurisdiction: Louisiana
• Title 33: Municipalities and Parishes

Text

§4547.1. Authorization; performance-based energy efficiency contracts
A. Any political subdivision may enter into a performance-based energy efficiency
contract for services and equipment. Such a contract shall be considered a contract for
services and shall be exempt from the provisions of R.S. 38:2212 but shall be subject to the
provisions of this Chapter.
B.(1) For the purposes of this Chapter, a performance-based energy efficiency
contract shall be defined as a contract for energy efficiency services and equipment in which
the payment obligation for each year of the contract is:
(a) Set as a percentage of the annual energy cost savings attributable to the services
or equipment under the contract; or
(b) Guaranteed by the person under contract to be less than the annual energy cost
savings attributable to the services or equipment under the contract.
(2) Energy efficiency contracts shall be contracts that are utilized for purposes that
include but are not limited to the following:
(a) Insulation and reduced air infiltration of the building structure, including walls,
ceilings, and roofs or systems within the building.
(b) Storm windows or doors, caulking or weather-stripping, multi-glazed windows
or doors, heat absorbing or heat reflective glazed and coated window or door systems,
additional glazing, reductions in glass area, or other window and door system modifications
that reduce energy consumption.
(c) Automated or computerized energy control systems, including computer software
and technical data licenses.
(d) Heating, ventilating, or air conditioning system modifications or replacements.
(e) Replacement or modification of lighting fixtures to increase the energy efficiency
of the lighting system without increasing the overall illumination of a facility, unless an
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.
(f) Indoor air quality improvements.
(g) Energy recovery systems.
(h) Electric system improvements.
(i) Building operation programs that reduce operating costs.
(j) Other energy conservation-related improvements or equipment, including
improvements or equipment related to renewable energy.
(k) Water and other natural resource conservation, including accuracy and
measurement of water distribution and consumption.
(l) An alteration or measure identified through a comprehensive audit or assessment
of new or existing facilities.
(3) For the purposes of this Section, the following terms shall be defined as follows:
(a) "Energy efficiency" shall mean an alteration to an existing facility that is designed
for the reduction of the consumption of energy or natural resources or the reduction of
operating costs as a result of changes that meet the following criteria:
(i) They do not degrade the level of service or working conditions below recognized
acceptable standards.
(ii) They are measurable and verifiable under the International Performance
Measurement and Verification Protocol as it existed on January 1, 2006, or subsequently
amended verification protocols or alternative protocols and verification standards and
methodologies acceptable to political subdivisions.
(b) "Reduction of operating costs" shall mean the elimination of operating expenses
or the avoidance of future capital replacement expenditures as a result of new equipment
installed or services performed by the performance contractor. A contract which otherwise
satisfies the requirements of this Section shall satisfy the requirements allowing use of a
performance-based energy efficiency contract even if the sole cost being eliminated or
reduced is cost related to maintenance, or as otherwise defined as "Annual energy savings"
below.
C. "Annual energy savings" shall mean, 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. 39:1484(14), the savings in reductions in utility costs,
including electricity, gas, water, propane, oil, diesel, steam, or other fuels, and may include
capital cost avoidance, deferred maintenance, labor savings, and increased revenues from
utility infrastructure upgrades or optimization. All savings shall be supported by verifiable
methods under accepted measurement and verification protocols.
D. "Performance contracting" shall mean all programs designed to save energy that
are guaranteed by a company or contractor for the political subdivision. The company or
contractor guaranteeing such programs may include, but are not limited to, lighting, water
conservation, water management companies, or contractors that specialize in servicing such
energy savings equipment such as mechanical or electrical systems and energy services
companies (hereinafter referred to ESCO).
E.(1) Prior to award of any contract, a political subdivision shall engage an energy
efficiency independent third-party evaluation consultant.
(2) No person, entity, or ESCO which assists the political subdivision in the
development of the request for proposals shall be the respondent to the request for proposals.
(3) The energy efficiency independent third-party evaluation consultant shall submit
the results of his evaluation in an open meeting to the political subdivision for its review.
The political subdivision shall require that the consultant selected pursuant to this Subsection
participate on its behalf in the negotiation of the contract.
(4) An energy efficiency independent third-party evaluation consultant shall have no
conflict of interest as to the political subdivision, the proposals which the consultant is to
evaluate, or to any proposer. Prior to the selection of such consultant, the consultant shall
certify that there is no conflict of interest as to the political subdivision, the proposals which
the consultant is to evaluate, or to any proposer.
(5) In order to fund the cost of the evaluation, review, approval, oversight, and
performance audits as provided in this Section, the request for proposals 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.
(6) An energy efficiency independent third-party evaluation consultant shall, at a
minimum, be licensed by the state of Louisiana as a professional engineer or a professional
architect with experience in energy efficiency contracting. Each political subdivision shall
be responsible for verifying the credentials of the consultant to ensure that he possesses the
minimum qualifications and has no conflict of interest to the political subdivision or the
proposers.
F.(1) 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 political subdivision to fulfill the requirements of the contract. If the political subdivision
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 political
subdivision except for payments which have been earned prior to the termination date."
(2) Any contract entered into pursuant to this Chapter 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, shall also provide the following:
(a) Detailed scope of work.
(b) Price to be paid by the political subdivision 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, which shall be determined by adding annual energy cost
savings to annual maintenance savings and subtracting any annual new maintenance costs.
(g) All savings shall be guaranteed and measured on an annual basis, unless
otherwise approved by the energy efficiency independent third party evaluation consultant
based on the reasonableness of continued savings after measured and verified year one
performance.
(h) A schedule for submission of the annual savings audit reports.
(3) Except for proprietary company financial information, the responses to a request
for proposals shall be public records pursuant the Public Records Law, R.S. 44:1 et seq.
G.(1) A political subdivision may require the completion of an investment grade
audit by a qualified proposer prior to executing a performance-based energy efficiency
contract. The cost of such audit may:
(a) Be reimbursed as part of the executed contract if the proposer is selected; or
(b) Be included in the total project cost financed under the contract.
(2) Political subdivisions may also provide stipends or partial reimbursement for
investment grade audits submitted by nonselected proposers, at their discretion.
H. A political subdivision may enter into performance-based energy efficiency
contracts in a variety of structures, including but not limited to guaranteed-savings contracts
in which payments are contingent upon realized savings.
I.(1) A political subdivision may use a qualifications-based selection process to
identify the most qualified energy services provider prior to the development of a
comprehensive technical proposal or investment grade audit.
(2) Under this method, the subdivision shall issue a Request For Qualifications
(RFQ) that includes evaluation criteria based on provider experience, technical capacity, past
performance, financial strength, and project team qualifications and other criteria as
determined by the political subdivision.
(3) The political subdivision may then:
(a) Select the highest-ranked firm for contract negotiation; or
(b) Shortlist multiple firms and request technical proposals or investment grade
audits in a second phase.

Legislative History

Acts 1988, No. 592, §1; Acts 2006, No. 814, §1, eff. July 1, 2006; Acts 2008, No. 881, §1; Acts 2025, No. 451, §1.