CHAPTER 4

 

An Act authorizing public entities to implement energy savings improvement programs and amending and supplementing various parts of the statutory law

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

C.18A:18A-4.6  Implementation of energy savings improvement program by board of education; definitions.

     1. a. A board of education, as defined in N.J.S.18A:18A-2, may implement an energy savings improvement program in the manner provided by this section whenever it determines that the savings generated from reduced energy use from the program will be sufficient to cover the cost of the program’s energy conservation measures as set forth in an energy savings plan. Under such a program, a board of education may enter into an energy savings services contract with an energy services company to implement the program or the board may authorize separate contracts to implement the program.  The provisions of N.J.S.18A:18A-1 et seq. shall apply to any contracts awarded pursuant to this section to the extent that the provisions of such law are not inconsistent with any provision of this section.

     b. (1) To be eligible to enter into an energy savings services contract, an energy services company shall be a commercial entity that is qualified to provide energy savings services in accordance with the provisions of this section. A board of education may determine to enter into an energy savings services contract either through public advertising for bids and the receipt of bids therefor or through competitive contracting in lieu of public bidding in the manner provided by sections 45 through 49 of P.L.1999, c.440 (C.18A:18A-4.1 et seq.).

     (2) (a) Public works activities performed under an energy savings improvement program shall be subject to all requirements regarding public bidding, bid security, performance guarantees, insurance and other public contracting requirements that are applicable to public works contracts, to the extent not inconsistent with this section.  A general contractor, energy services company serving as general contractor, or any subcontractor hired for the furnishing of plumbing and gas fitting and all kindred work, and of steam and hot water heating and ventilating apparatus, steam power plants and kindred work, and electrical work, structural steel and ornamental iron work, shall be classified by the Division of Property Management and Construction in the Department of the Treasury in order to perform public works activities under an energy savings improvement program.

     (b)   Individuals or organizations performing energy audits, acting as commissioning agents, or conducting verification of energy savings plans, implementation of energy conservation measures, or verifying guarantees shall be prequalified by the Division of Property Management and Construction in the Department of the Treasury to perform their work under an energy savings improvement program.

     (3)   An energy services company may be designated as the general contractor for improvements to be made pursuant to an energy savings plan, provided that the hiring of subcontractors that are required to be classified pursuant to subparagraph (a) of paragraph (2) of this subsection shall be performed pursuant to the public bidding requirements of the board of education.  A contract with an energy savings company shall include, but not be limited to: preparation of an energy savings plan; the responsibilities of the parties for project schedules, installations, performance and quality, payment of subcontractors, project completion, commissioning, savings implementation; a requirement that the savings to be achieved by energy conservation measures be verified upon commissioning of the improvements; allocation of State and federal rebates and tax credits; and any other provisions deemed necessary by the parties.

     (4)   Except as provided in paragraph (5) of this subsection, a subsidiary or wholly-owned or partially-owned affiliate of the energy services company shall not be an eligible contractor or subcontractor under an energy savings services contract.

     (5)   When the energy services company is the manufacturer of direct digital control systems and contracts with the board of education to provide a guaranteed energy savings option pursuant to subsection f. of this section, the specification of such direct digital control systems may be treated as proprietary goods and if so treated, the bid specification shall set forth an allowance price for its supply by the energy services company which shall be used by all bidders in the public bidding process.  Direct digital controls shall be open protocol format and shall meet the interoperability guidelines established by the American Society of Heating, Refrigerating and Air-Conditioning Engineers.

     c.     An energy savings improvement program may be financed through a lease-purchase agreement or through the issuance of energy savings obligations pursuant to this subsection.

     (1)   An energy savings improvement program may be financed through a lease-purchase agreement between a board of education and an energy services company or other public or private entity.  Under a lease-purchase agreement, ownership of the energy savings equipment or improved facilities shall pass to the board of education when all lease payments have been made.  Notwithstanding the provisions of section 46 of P.L.1999, c.440 (C.18A:18A-4.2) or any other law to the contrary, the duration of such a lease-purchase agreement shall not exceed 15 years, except that the duration of a lease purchase agreement for a combined heat and power or cogeneration project shall not exceed 20 years.

     (2)   Any lease-purchase agreement entered into pursuant to this subsection may contain: a clause making it subject to the availability and appropriation annually of sufficient funds as may be required to meet the extended obligation; and a non-substitution clause maintaining that if the agreement is terminated for non-appropriation, the board of education may not replace the leased equipment or facilities with equipment or facilities that perform the same or similar functions.

     (3)   A board of education may arrange for incurring energy savings obligations to finance an energy savings improvement program.  Energy savings obligations may be funded through appropriations for utility services in the annual budget of the board and may be issued as refunding bonds pursuant to P.L.1969, c.130 (C.18A:24-61.1 et seq.), including the issuance of bond anticipation notes as may be necessary, provided that all such bonds and notes mature within the periods authorized for such energy savings obligations.  Energy savings obligations may be issued either through the board of education or another public agency authorized to undertake financing on behalf of the board.

     (4)   Lease-purchase agreements and energy savings obligations shall not be used to finance maintenance, guarantees, or verification of guarantees of energy conservation measures.  Lease-purchase agreements and energy savings obligations may be used to finance the cost of an energy audit or the cost of verification of energy savings as part of adopting an energy savings plan.  Notwithstanding any law to the contrary, lease-purchase agreements and energy savings certificates shall not be excepted from any budget or tax levy limitation otherwise provided by law.  Maturity schedules of lease-purchase agreements or energy savings obligations must exceed the estimated useful life of the individual energy conservation measures.

     d. (1) The energy audit component of an energy savings improvement program shall be conducted either by the board of education or by a qualified third party retained by the board for that purpose.  It shall not be conducted by an energy services company subsequently hired to develop an energy savings improvement program.  The energy audit shall identify the current energy use of any or all facilities and energy conservation measures that can be implemented in which the energy savings and energy efficiency could be realized and maximized.

     (2)   To implement an energy savings improvement program, a board of education shall develop an energy savings plan that consists of one or more energy conservation measures. The plan shall:

     (a)   contain the results of an energy audit;

     (b)   describe the energy conservation measures that will comprise the program;

     (c)   estimate greenhouse gas reductions resulting from those energy savings;

     (d) identify all design and compliance issues that require the professional services of an architect or engineer and identify who will provide these services;

     (e)   include an assessment of risks involved in the successful implementation of the plan;

     (f)    identify the eligibility for, and costs and revenues associated with the PJM Independent System Operator for demand response and curtailable service activities;

     (g)   include schedules showing calculations of all costs of implementing the proposed energy conservation measures and the projected energy savings;

     (h)   identify maintenance requirements necessary to ensure continued energy savings, and describe how they will be fulfilled; and

     (i)    if developed by an energy services company, a description of, and cost estimates of an energy savings guarantee.

     All professionals providing engineering services under the plan shall have errors and omissions insurance.

     (3)   Prior to the adoption of the plan by the governing body, the board of education shall contract with a qualified third party to verify the projected energy savings to be realized from the proposed program have been calculated as required by subsection e. of this section.

     (4)   Upon adoption, the plan shall be submitted to the Board of Public Utilities, which shall post it on the Internet on a public webpage maintained for such purpose.  If the board of education maintains its own website, it shall also post the plan on that site.  The Board of Public Utilities may require periodic reporting concerning the implementation of the plan.

     (5)   Verification by a qualified third party shall be required when energy conservation measures are placed in service or commissioned, to ensure the savings projected in the energy savings plan shall be achieved.

     (6)   Energy-related capital improvements that do not reduce energy usage may be included in an energy savings improvement program but the cost of such improvements shall not be financed as a lease-purchase or through energy savings obligations authorized by subsection c. of this section.  Nothing herein is intended to prevent financing of such capital improvements through otherwise authorized means.

     (7)   A qualified third party when required by this subsection may include an employee of the board of education who is properly trained and qualified to perform such work.

     e. (1) The calculation of energy savings for the purposes of determining that the energy savings resulting from the program will be sufficient to cover the cost of the program’s energy conservation measures, as provided in subsection a. of this section, shall involve determination of the dollar amount saved through implementation of an energy savings improvement program using the guidelines of the International Performance Measurement and Verification Protocol or other protocols approved by the Board of Public Utilities and standards adopted by the Board of Public Utilities pursuant to this section.  The calculation shall include all applicable State and federal rebates and tax credits, but shall not include the cost of an energy audit and the cost of verifying energy savings.  The calculation shall state which party has made application for rebates and credits and how these applications translate into energy savings.

     (2)   For the purposes of this section, the Board of Public Utilities shall adopt standards and uniform values for interest rates and escalation of labor, electricity, oil, and gas, as well as standards for presenting these costs in a life cycle and net present value format, standards for the presentation of obligations for carbon reductions, and other standards that the board may determine necessary.

     f. (1) When an energy services company is awarded an energy savings services contract, it shall offer the board of education the option to purchase, for an additional amount, an energy savings guarantee.  The guarantee, if accepted by a separate vote of the board of education, shall insure that the energy savings resulting from the energy savings improvement program, determined periodically over the duration of the guarantee, will be sufficient to defray all payments required to be made pursuant to the lease-purchase agreement or energy savings obligation, and if the savings are not sufficient, the energy services company will reimburse the board for any additional amounts.  Annual costs of a guarantee shall not be financed or included as costs in an energy savings plan but shall be fully disclosed in an energy savings plan. 

     (2)   When a guaranteed energy savings option is purchased, the contract shall require a qualified third party to verify the energy savings at intervals established by the parties. 

     g.     As used in this section:

     “direct digital control systems” means the devices and computerized control equipment that contain software and computer interfaces that perform the logic that control a building’s heating, ventilating, and air conditioning system.  Direct digital controls shall be open protocol format and shall meet the interoperability guidelines established by the American Society of Heating, Refrigerating and Air-Conditioning Engineers;

     “energy conservation measure” means an improvement that results in reduced energy use, including, but not limited to, installation of energy efficient equipment; demand response equipment; combined heat and power systems; facilities for the production of renewable energy; water conservation measures, fixtures or facilities; building envelope improvements that are part of an energy savings improvement program; and related control systems for each of the foregoing;

     “energy related capital improvement” means a capital improvement that uses energy but does not result in a reduction of energy use;

     “energy saving obligation” means a bond, note or other agreement evidencing the obligation to repay borrowed funds incurred in order to finance energy saving improvements;

     “energy savings” means a measured reduction in fuel, energy, operating or maintenance costs resulting from the implementation of one or more energy conservation measures services when compared with an established baseline of previous fuel, energy, operating or maintenance costs, including, but not limited to, future capital replacement expenditures avoided as a result of equipment installed or services performed as part of an energy savings plan;

     “energy savings improvement program” means an initiative of a board of education to implement energy conservation measures in existing facilities, provided that the value of the energy savings resulting from the program will be sufficient to cover the cost of the program’s energy conservation measures;

     “energy savings plan” means the document that describes the actions to be taken to implement the energy savings improvement program;

     “energy savings services contract” means a contract with an energy savings company to develop an energy savings plan, prepare bid specifications, manage the performance, provision, construction, and installation of energy conservation measures by subcontractors, to offer a guarantee of energy savings derived from the implementation of an energy savings plan, and may include a provision to manage the bidding process;

     “energy services company” means a commercial entity that is qualified to develop and implement an energy savings plan in accordance with the provisions of this section;

     “public works activities” means any work subject to the provisions of P.L.1963, c.150 (C.34:11-56.25 et seq.); and

     “water conservation measure” means an alteration to a facility or equipment that reduces water consumption, maximizes the efficiency of water use, or reduces water loss.

     h.     (1) The Director of the Division of Local Government Services in the Department of Community Affairs, the State Treasurer, and the Board of Public Utilities may take such action as is deemed necessary and consistent with the intent of this section to implement its provisions.

     (2)   The Director of the Division of Local Government Services in the Department of Community Affairs, the State Treasurer and the Board of Public Utilities may adopt implementation guidelines or directives, and adopt such administrative rules, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), as are necessary for the implementation of those agencies’ respective responsibilities under this section, except that notwithstanding any provision of P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the Director of the Division of Local Government Services in the Department of Community Affairs, the State Treasurer, and the Board of Public Utilities may adopt, immediately upon filing with the Office of Administrative Law, such rules and regulations as deemed necessary to implement the provisions of this act which shall be effective for a period not to exceed 12 months and shall thereafter be amended, adopted or re-adopted in accordance with the provisions of P.L.1968, c.410 (C.52:14B-1 et seq.).

 

     2.    Section 45 of P.L.1999, c.440 (C.18A:18A-4.1) is amended to read as follows:

 

C.18A:18A-4.1  Use of competitive contracting by boards of education; purposes.

     45.  Notwithstanding the provisions of any law, rule or regulation to the contrary, competitive contracting may be used by boards of education in lieu of public bidding for procurement of specialized goods and services the price of which exceeds the bid threshold, for the following purposes:

     a.     The purchase or licensing of proprietary computer software designed for board of education purposes, which may include hardware intended for use with the proprietary software.  This subsection shall not be utilized for the purpose of acquiring general purpose computer hardware or software;

     b.    The hiring of a for-profit entity or a not-for-profit entity incorporated under Title 15A of the New Jersey Statutes for the purpose of:

     (1)   the operation, management or administration of recreation or social service facilities or programs; or

     (2)   the operation, management or administration of data processing services;

     c.     Services performed by an organization engaged in providing energy conservation education and training services to train employees of a board of education to reduce consumption of energy;

     d.    Telecommunications transmission or switching services that are not part of a tariff or schedule of charges filed with the Board of Public Utilities;

     e.     The purchase of specialized machinery or equipment of a technical nature, or servicing thereof, which will not reasonably permit the drawing of specifications;

     f.     Food services provided by food service management companies when not part of programs administered by the New Jersey Department of Agriculture, Bureau of Child Nutrition Programs;

     g.     Driver education courses provided by licensed driver education schools;

     h.     At the option of the board of education, any good or service that is exempt from bidding pursuant to N.J.S.18A:18A-5;

     i.      Laboratory testing services;

     j.     Concessions;

     k.    The operation, management or administration of other services, with the approval of the Division of Local Government Services in the Department of Community Affairs.

     Any purpose included herein shall not be considered by a board of education as an extraordinary unspecifiable service pursuant to paragraph (2) of subsection a. of N.J.S.18A:18A-5.

 

     3.    N.J.S.18A:18A-42 is amended to read as follows:

 

Multiyear contracts.

     18A:18A-42.  All contracts for the provision or performance of goods or services shall be awarded for a period not to exceed 24 consecutive months, except that contracts for professional services pursuant to paragraph (1) of subsection a. of N.J.S.18A:18A-5 shall be awarded for a period not to exceed 12 consecutive months.  Any board of education may award a contract for longer periods of time as follows:

     a.     Supplying of:

     (1)   Fuel for heating purposes, for any term not exceeding in the aggregate, three years;

     (2)   Fuel or oil for use of automobiles, autobuses, motor vehicles or equipment, for any term not exceeding in the aggregate, three years;

     (3)   Thermal energy produced by a cogeneration facility, for use for heating or air conditioning or both, for any term not exceeding 40 years, when the contract is approved by the Board of Public Utilities.  For the purposes of this paragraph, "cogeneration" means the simultaneous production in one facility of electric power and other forms of useful energy such as heating or process steam; or

     b.    Plowing and removal of snow and ice, for any term not exceeding in the aggregate, three years; or

     c.     Collection and disposal of garbage and refuse, for any term not exceeding in the aggregate, three years; or

     d.    Data processing service, for any term of not more than seven years; or

     e.     Insurance, including the purchase of insurance coverages, insurance consultant or administrative services, and including participation in a joint self-insurance fund, risk management program or related services provided by a school board insurance group, or participation in an insurance fund established by a county pursuant to N.J.S.40A:10-6, or a joint insurance fund established pursuant to P.L.1983, c.372 (C.40A:10-36 et seq.), for any term of not more than three years; or

     f.     Leasing or servicing of automobiles, motor vehicles, electronic communications equipment, machinery and equipment of every nature and kind and textbooks and non-consumable instructional materials, for any term not exceeding in the aggregate, five years; except that contracts for the leasing of school buses may be awarded for any term not exceeding in the aggregate ten years.  Contracts awarded pursuant to this subsection shall be awarded only subject to and in accordance with rules and regulations promulgated by the State Board of Education; or

     g.     Supplying of any product or the rendering of any service by a company providing voice, data, transmission or switching services, for a term not exceeding five years; or

     h.     (Deleted by amendment, P.L.1999, c.440.)

     i.      Driver education instruction conducted by private, licensed driver education schools, for any term not exceeding in the aggregate, three years; or

     j.     (Deleted by amendment, P.L.2009, c.4).

     k.    Any single project for the construction, reconstruction or rehabilitation of any public building, structure or facility, or any public works project, including the retention of the services of any architect or engineer in connection therewith, for the length of time authorized and necessary for the completion of the actual construction; or

     l.      Laundry service and the rental, supply and cleaning of uniforms for any term of not more than three years; or

     m.    Food supplies and food services for any term of not more than three years; or

     n.     Purchases made under a contract awarded by the Director of the Division of Purchase and Property in the Department of the Treasury for use by counties, municipalities or other contracting units pursuant to section 3 of P.L.1969, c.104 (C.52:25-16.1), for a term not to exceed the term of that contract; or

     o.    The provision or performance of goods or services for the purpose of producing class I renewable energy, as that term is defined in section 3 of P.L.1999, c.23 (C.48:3-51), at, or adjacent to, buildings owned by any local board of education, the entire price of which is to be established as a percentage of the resultant savings in energy costs, for a term not to exceed 15 years; provided, however, that these contracts shall be entered into only subject to and in accordance with guidelines promulgated by the Board of Public Utilities establishing a methodology for computing energy cost savings and energy generation costs.

     Any contract for services other than professional services, the statutory length of which contract is for three years or less, may include provisions for no more than one two-year, or two one-year, extensions, subject to the following limitations: a. the contract shall be awarded by resolution of the board of education upon a finding by the board of education that the services are being performed in an effective and efficient manner; b. no such contract shall be extended so that it runs for more than a total of five consecutive years; c. any price change included as part of an extension shall be based upon the price of the original contract as cumulatively adjusted pursuant to any previous adjustment or extension and shall not exceed the change in the index rate for the 12 months preceding the most recent quarterly calculation available at the time the contract is renewed; and d. the terms and conditions of the contract remain substantially the same.

     All multiyear leases and contracts entered into pursuant to this section, including any two-year or one-year extensions, except contracts for insurance coverages, insurance consultant or administrative services, participation or membership in a joint self-insurance fund, risk management programs or related services of a school board insurance group, participation in an insurance fund established by a county pursuant to N.J.S.40A:10-6 or contracts for thermal energy authorized pursuant to subsection a. above, and contracts for the provision or performance of goods or services to promote energy conservation through the production of class I renewable energy, authorized pursuant to subsection o. of this section, shall contain a clause making them subject to the availability and appropriation annually of sufficient funds as may be required to meet the extended obligation, or contain an annual cancellation clause.  All contracts shall cease to have effect at the end of the contracted period and shall not be extended by any mechanism or provision, unless in conformance with the "Public School Contracts Law," N.J.S.18A:18A-1 et seq., except that a contract may be extended by mutual agreement of the parties to the contract when a board of education has commenced rebidding prior to the time the contract expires or when the awarding of a contract is pending at the time the contract expires.

 

C.18A:65A-1  Implementation of energy savings improvement program by public institution of higher education; definitions.

     4. a. The board of trustees of a public institution of higher education may implement an energy savings improvement program in the manner provided by this section whenever it determines that the savings generated from reduced energy use from the program will be sufficient to cover the cost of the program’s energy conservation measures as set forth in an energy savings plan. Under such a program, a board of trustees may enter into an energy savings services contract with an energy services company to implement the program or the board may authorize separate contracts to implement the program.  The provisions of: N.J.S.18A:64-1 et seq., in the case of any State college; P.L.1995, c.400 (C.18A:64E-12 et seq.), in the case of the New Jersey Institute of Technology; N.J.S.18A:65-1 et seq., in the case of Rutgers, the State University; P.L.1970, c.102 (C.18A:64G-1 et al.), in the case of the University of Medicine and Dentistry of New Jersey; and N.J.S.18A:64A-1 et seq., in the case of the county colleges; shall apply to any contracts awarded pursuant to this section to the extent that the provisions of such law are not inconsistent with any provision of this section.

     In the case of Rutgers, the State University, references in this section to the board of trustees shall mean the Rutgers board of governors.

     b. (1) To be eligible to enter into an energy savings services contract, an energy services company shall be a commercial entity that is qualified to provide energy savings services in accordance with the provisions of this section. A public institution of higher education may enter into an energy savings services contract through public advertising for bids and the receipt of bids therefor.

     (2) (a) Public works activities performed under an energy savings improvement program shall be subject to all requirements regarding public bidding, bid security, performance guarantees, insurance and other public contracting requirements that are applicable to public works contracts, to the extent not inconsistent with this section.  A general contractor, energy services company serving as general contractor, or any subcontractor hired for the furnishing of plumbing and gas fitting and all kindred work, and of steam and hot water heating and ventilating apparatus, steam power plants and kindred work, and electrical work, structural steel and ornamental iron work, shall be classified by the Division of Property Management and Construction in the Department of the Treasury in order to perform public works activities under an energy savings improvement program.

     (b)   Individuals or organizations performing energy audits, acting as commissioning agents, or conducting verification of energy savings plans, implementation of energy conservation measures, or verifying guarantees shall be prequalified by the Division of Property Management and Construction in the Department of the Treasury to perform their work under an energy savings improvement program.

     (c)   Where there is a need for compatibility of a direct digital control system with previously installed control systems and equipment, the bid specifications may include a requirement for proprietary goods, and if so included, the bid specification shall set forth an allowance price for its supply which shall be used by all bidders in the public bidding process.

     (3)   An energy services company may be designated as the general contractor for improvements to be made pursuant to an energy savings plan, provided that the hiring of subcontractors that are required to be classified pursuant to subparagraph (a) of paragraph (2) of this subsection shall be performed pursuant to the public bidding requirements of the board of trustees.  A contract with an energy savings company shall include, but not be limited to: preparation of an energy savings plan, the responsibilities of the parties for project schedules, installations, performance and quality, payment of subcontractors, project completion, commissioning, savings implementation; a requirement that the savings to be achieved by energy conservation measures be verified upon commissioning of the improvements; allocation of State and federal rebates and tax credits; and any other provisions deemed necessary by the parties.

     (4)   Except as provided in paragraph (5) of this subsection, a subsidiary or wholly-owned or partially-owned affiliate of the energy services company shall not be an eligible contractor or subcontractor under an energy savings services contract.

     (5)   When the energy services company is the manufacturer of direct digital control systems and contracts with the board of trustees to provide a guaranteed energy savings option pursuant to subsection f. of this section, the specification of such direct digital control systems may be treated as proprietary goods and if so treated, the bid specification shall set forth an allowance price for its supply by the energy services company which shall be used by all bidders in the public bidding process.  Direct digital controls shall be open protocol format and shall meet the interoperability guidelines established by the American Society of Heating, Refrigerating and Air-Conditioning Engineers.

     c.     An energy savings improvement program may be financed through a lease-purchase agreement or through the issuance of energy savings obligations pursuant to this subsection.

     (1)   An energy savings improvement program may be financed through a lease-purchase agreement between a board of trustees and an energy services company or other public or private entity.  Under a lease-purchase agreement, ownership of the energy savings equipment or improved facilities shall pass to the board of trustees when all lease payments have been made.  Notwithstanding the provisions of any other law to the contrary, the duration of such a lease-purchase agreement shall not exceed 15 years, except that the duration of a lease purchase agreement for a combined heat and power or cogeneration project shall not exceed 20 years.

     (2)   Any lease-purchase or other agreement entered into in connection with an energy savings improvement program may be a general obligation of the public institution of higher education pursuant to this subsection, and may contain: a clause making it subject to the availability and appropriation annually of sufficient funds as may be required to meet the extended obligation; and a non-substitution clause maintaining that if the agreement is terminated for non-appropriation, the board of trustees may not replace the leased equipment or facilities with equipment or facilities that perform the same or similar functions.

     (3)   A board of trustees may arrange for incurring energy savings obligations to finance an energy savings improvement program and may enter into any agreement with the New Jersey Educational Facilities Authority or other persons in connection with the issuance by the authority of its obligations on behalf of the public institution of higher education in order to finance the institution’s energy savings improvement program.  Energy savings obligations may be funded through appropriations for utility services in the annual budget of the board, or incurred as a general obligation of the public institution of higher education in connection with the issuance by the New Jersey Educational Facilities Authority of bonds or notes pursuant to N.J.S.18A:72A-2 et seq., or, in the case of a county college, by a sponsoring county as a refunding bond pursuant to N.J.S.40A:2-52 et seq., including the issuance of bond anticipation notes as may be necessary, provided that all such bonds and notes mature within the periods authorized for such energy savings obligations.

     (4)   Lease-purchase agreements and energy savings obligations shall not be used to finance maintenance, guarantees, or verification of guarantees of energy conservation measures.  Lease-purchase agreements and energy savings obligations may be used to finance the cost of an energy audit or the cost of verification of energy savings as part of adopting an energy savings plan.  Maturity schedules of lease-purchase agreements or energy savings obligations must exceed the estimated useful life of the individual energy conservation measures.

     d. (1) The energy audit component of an energy savings improvement program shall be conducted either by the board of trustees or by a qualified third party retained by the board for that purpose.  It shall not be conducted by an energy services company subsequently hired to develop an energy savings improvement program.  The energy audit shall identify the current energy use of any or all facilities and energy conservation measures that can be implemented in which the energy savings and energy efficiency could be realized and maximized.

     (2)   To implement an energy savings improvement program, a board of trustees shall develop an energy savings plan that consists of one or more energy conservation measures.  The plan shall:

     (a)   contain the results of an energy audit;

     (b)   describe the energy conservation measures that will comprise the program;

     (c)   estimate greenhouse gas reductions resulting from those energy savings;

     (d)   identify all design and compliance issues that require the professional services of an architect or engineer and identify who will provide these services;

     (e)   include an assessment of risks involved in the successful implementation of the plan;

     (f)    identify the eligibility for, and costs and revenues associated with the PJM Independent System Operator for demand response and curtailable service activities;

     (g)   include schedules showing calculations of all costs of implementing the proposed energy conservation measures and the projected energy savings;

     (h)   identify maintenance requirements necessary to ensure continued energy savings, and describe how they will be fulfilled; and

     (i)    if developed by an energy services company, a description of, and cost estimates of an energy savings guarantee.

     All professionals providing engineering services under the plan shall have errors and omissions insurance.

     (3)   Prior to the adoption of the plan, the board of trustees shall contract with a qualified third party to verify the projected energy savings to be realized from the proposed program have been calculated as required by subsection e. of this section.

     (4)   Upon adoption, the plan shall be submitted to the Board of Public Utilities, which shall post it on the Internet on a public webpage maintained for such purpose.  If the board of trustees maintains its own website, it shall also post the plan on that site.  The Board of Public Utilities may require periodic reporting concerning the implementation of the plan.

     (5)   Verification by a qualified third party shall be required when energy conservation measures are placed in service or commissioned, to ensure the savings projected in the energy savings plan shall be achieved.

     (6)   Energy-related capital improvements that do not reduce energy usage may be included in an energy savings improvement program but the cost of such improvements shall not be financed as a lease-purchase or through energy savings obligations authorized by subsection c. of this section.  Nothing herein is intended to prevent the financing of such capital improvements through otherwise authorized means.

     (7)   A qualified third party when required by this subsection may include an employee of the public institution of higher education who is properly trained and qualified to perform such work.

     e. (1) The calculation of energy savings for the purposes of determining that the energy savings resulting from the program will be sufficient to cover the cost of the program’s energy conservation measures, as provided in subsection a. of this section, shall involve determination of the dollar amount saved through implementation of an energy savings improvement program using the guidelines of the International Performance Measurement and Verification Protocol or other protocols approved by the Board of Public Utilities and standards adopted by the Board of Public Utilities pursuant to this section.  The calculation shall include all applicable State and federal rebates and tax credits, but shall not include the cost of an energy audit and the cost of verifying energy savings.  The calculation shall state which party has made application for rebates and credits and how these applications translate into energy savings.

     (2)   For the purposes of this section, the Board of Public Utilities shall adopt standards and uniform values for interest rates and escalation of labor, electricity, oil, and gas, as well as standards for presenting these costs in a life cycle and net present value format, standards for the presentation of obligations for carbon reductions, and other standards that the board may determine necessary.

     f. (1) When an energy services company is awarded an energy savings services contract, it shall offer the board of trustees the option to purchase, for an additional amount, an energy savings guarantee.  The guarantee, if accepted by a separate vote of the board of trustees, shall insure that the energy savings resulting from the energy savings improvement program, determined periodically over the duration of the guarantee, will be sufficient to defray all payments required to be made pursuant to the lease-purchase agreement or energy savings obligation, and if the savings are not sufficient, the energy services company will reimburse the board of trustees for any additional amounts.  Annual costs of a guarantee shall not be financed or included as costs in an energy savings plan but shall be fully disclosed in an energy savings plan. 

     (2)   When a guaranteed energy savings option is purchased, the contract shall require a qualified third party to verify the energy savings at intervals established by the parties.

     g.     As used in this section:

     “direct digital control systems” means the devices and computerized control equipment that contain software and computer interfaces that perform the logic that control a building’s heating, ventilating, and air conditioning system.  Direct digital controls shall be open protocol format and shall meet the interoperability guidelines established by the American Society of Heating, Refrigerating and Air-Conditioning Engineers;

     “educational facility” means a structure suitable for use as a dormitory, dining hall, student union, administrative building, academic building, library, laboratory, research facility, classroom, athletic facility, health care facility, teaching hospital, and parking, maintenance, storage or utility facility or energy conservation measures and other structures or facilities related thereto or required or useful for the instruction of students or the conducting of research or the operation of an institution for higher education, and public libraries, and the necessary and usual attendant and related facilities and equipment, but shall not include any facility used or to be used for sectarian instruction or as a place for religious worship;

     “energy conservation measure” means an improvement that results in reduced energy use, including, but not limited to, installation of energy efficient equipment; demand response equipment; combined heat and power systems; facilities for the production of renewable energy; water conservation measures, fixtures or facilities; building envelope improvements that are part of an energy savings improvement program; and related control systems for each of the foregoing;

     “energy related capital improvement” means a capital improvement that uses energy but does not result in a reduction of energy use;

     “energy saving obligation” means a bond, note or other agreement evidencing the obligation to repay borrowed funds incurred in order to finance energy saving improvements;

     “energy savings” means a measured reduction in fuel, energy, operating or maintenance costs resulting from the implementation of one or more energy conservation measures services when compared with an established baseline of previous fuel, energy, operating or maintenance costs, including, but not limited to, future capital replacement expenditures avoided as a result of equipment installed or services performed as part of an energy savings plan;

     “energy savings improvement program” means an initiative of a public institution of higher education to implement energy conservation measures in existing facilities, provided that the value of the energy savings resulting from the program will be sufficient to cover the cost of the program’s energy conservation measures;

     “energy savings plan” means the document that describes the actions to be taken to implement the energy savings improvement program;

     “energy savings services contract” means a contract with an energy savings company to develop an energy savings plan, prepare bid specifications, manage the performance, provision, construction, and installation of energy conservation measures by subcontractors, to offer a guarantee of energy savings derived from the implementation of an energy savings plan, and may include a provision to manage the bidding process;

     “energy services company” means a commercial entity that is qualified to develop and implement an energy savings plan in accordance with the provisions of this section;

     “public works activities” means any work subject to the provisions of P.L.1963, c.150 (C.34:11-56.25 et seq.); and

     “water conservation measure” means an alteration to a facility or equipment that reduces water consumption, maximizes the efficiency of water use, or reduces water loss.

     h. (1) The State Treasurer and the Board of Public Utilities may take such action as is deemed necessary and consistent with the intent of this section to implement its provisions.

     (2)   The State Treasurer and the Board of Public Utilities may adopt implementation guidelines or directives, and adopt such administrative rules, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), as are necessary for the implementation of those agencies’ respective responsibilities under this section, except that notwithstanding any provision of P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the State Treasurer and the Board of Public Utilities may adopt, immediately upon filing with the Office of Administrative Law, such rules and regulations as deemed necessary to implement the provisions of this act which shall be effective for a period not to exceed 12 months and shall thereafter be amended, adopted or re-adopted in accordance with the provisions of P.L.1968, c.410 (C.52:14B-1 et seq.).

 

     5.    Section 28 of P.L.1982, c.189 (C.18A:64A-25.28) is amended to read as follows:

 

C.18A:64A-25.28  Duration of certain contracts.

     28.  Duration of certain contracts.  A county college may only enter into a contract exceeding 24 consecutive months for the:

     a.     Supplying of:

     (1)   Fuel for heating purposes for any term not exceeding in the aggregate three years; or

     (2)   Fuel or oil for use in automobiles, autobuses, motor vehicles or equipment for any term not exceeding in the aggregate three years; or

     b.    Plowing and removal of snow and ice for any term not exceeding in the aggregate three years; or

     c.     Collection and disposal of garbage and refuse for any term not exceeding in the aggregate three years; or

     d.    Providing goods or services for the use, support or maintenance of proprietary computer hardware, software peripherals and system development for the hardware for any term of not more than five years; or

     e.     Insurance, including the purchase of insurance coverages, insurance consultant or administrative services, and including participation in a joint self-insurance fund, risk management programs or related services provided by a county college insurance group, or participation in an insurance fund established by a county pursuant to N.J.S.40A:10-6, for any term of not more than three years; or

     f.     Leasing or service of automobiles, motor vehicles, electronic communications equipment, machinery and equipment of every nature and kind for any term not exceeding in the aggregate five years; or

     g.     Supplying of any product or rendering of any service by a company providing voice, data, transmission or switching services, for a term not exceeding five years; or

     h.     The providing of food supplies and services, including food supplies and management contracts for student centers, dining rooms and cafeterias, for a term not exceeding three years; or

     i.      (Deleted by amendment, P.L.2009, c.4).

     j.     Any single project for the construction, reconstruction or rehabilitation of a public building, structure or facility, or a public works project including the retention of the services of an architect or engineer in connection with the project, for the length of time necessary for the completion of the actual construction; or

     k.    The management and operation of bookstores for a term not exceeding five years; or

     l.      Custodial or janitorial services for any term not exceeding in the aggregate three years; or

     m. Child care services for a term not exceeding three years; or

     n.     Security services for a term not exceeding three years; or

     o.    Ground maintenance services for a term not exceeding three years; or

     p.    Laundering, dry-cleaning or rental of uniforms for a term not exceeding three years; or

     q.   The performance of work or services or the furnishing of materials and supplies for the purpose of producing class I renewable energy, as that term is defined in section 3 of P.L.1999, c.23 (C.48:3-51), at, or adjacent to, buildings owned by, or operations conducted by, the contracting unit, the entire price of which is to be established as a percentage of the resultant savings in energy costs, for a term not to exceed 15 years; provided, however, that these contracts shall be entered into only subject to and in accordance with guidelines promulgated by the Board of Public Utilities establishing a methodology for computing energy cost savings and energy generation costs.

     All multi-year leases and contracts entered into pursuant to this section, except contracts and agreements for the provision of work or the supplying of equipment to promote energy conservation through the production of class I renewable energy and authorized pursuant to subsection q. of this section, and except contracts for insurance coverages, insurance consultant or administrative services, participation or membership in a joint self-insurance fund, risk management programs or related services of a county college insurance group, and participation in an insurance fund established by a county pursuant to N.J.S.40A:10-6 or a joint insurance fund established pursuant to P.L.1983, c.372 (C.40A:10-36 et seq.), shall contain a clause making them subject to the availability and appropriation annually of sufficient funds to meet the extended obligation or contain an annual cancellation clause.

 

C.40A:11-4.6  Implementation of energy savings improvement program by contracting unit; definitions.

     6. a. A contracting unit, as defined in P.L.1971, c.198 (C.40A:11-1 et seq.), may implement an energy savings improvement program in the manner provided by this section whenever it determines that the savings generated from reduced energy use from the program will be sufficient to cover the cost of the program’s energy conservation measures as set forth in an energy savings plan. Under such a program, a contracting unit may enter into an energy savings services contract with an energy services company to implement the program or the contracting unit may authorize separate contracts to implement the program.  The provisions of P.L.1971, c.198 (C.40A:11-1 et seq.) shall apply to any contracts awarded pursuant to this section to the extent that the provisions of such law are not inconsistent with any provision of this section.

     b. (1) To be eligible to enter into an energy savings services contract, an energy services company shall be a commercial entity that is qualified to provide energy savings services in accordance with the provisions of this section. A contracting unit may determine to enter into an energy savings services contract either through public advertising for bids and the receipt of bids therefor or through competitive contracting in lieu of public bidding in the manner provided by sections 1 through 5 of P.L.1999, c.440 (C.40A:11-4.1 et seq.).

     (2) (a) Public works activities performed under an energy savings improvement program shall be subject to all requirements regarding public bidding, bid security, performance guarantees, insurance and other public contracting requirements that are applicable to public works contracts, to the extent not inconsistent with this section.  A general contractor, energy services company serving as general contractor, or any subcontractor hired for the furnishing of plumbing and gas fitting and all kindred work, and of steam and hot water heating and ventilating apparatus, steam power plants and kindred work, and electrical work, structural steel and ornamental iron work, shall be classified by the Division of Property Management and Construction in the Department of the Treasury in order to perform public works  activities under an energy savings improvement program.

     (b)   Individuals or organizations performing energy audits, acting as commissioning agents, or conducting verification of energy savings plans, implementation of energy conservation measures, or verifying guarantees shall be prequalified by the Division of Property Management and Construction in the Department of the Treasury to perform their work under an energy savings improvement program.

     (3)   An energy services company may be designated as the general contractor for improvements to be made pursuant to an energy savings plan, provided that the hiring of subcontractors that are required to be classified pursuant to subparagraph (a) of paragraph (2) of this subsection shall be performed pursuant to the public bidding requirements of the contracting unit.  A contract with an energy savings company shall include, but not be limited to: preparation of an energy savings plan; the responsibilities of the parties for project schedules, installations, performance and quality, payment of subcontractors, project completion, commissioning, savings implementation; a requirement that the savings to be achieved by energy conservation measures be verified upon commissioning of the improvements; allocation of State and federal rebates and tax credits; and any other provisions deemed necessary by the parties.

     (4)   Except as provided in paragraph (5) of this subsection, a subsidiary or wholly-owned or partially-owned affiliate of the energy services company shall not be an eligible contractor or subcontractor under an energy savings services contract.

     (5)   When the energy services company is the manufacturer of direct digital control systems and contracts with the contracting unit to provide a guaranteed energy savings option pursuant to subsection f. of this section, the specification of such direct digital control systems may be treated as proprietary goods and if so treated, the bid specification shall set forth an allowance price for its supply by the energy services company which shall be used by all bidders in the public bidding process.  Direct digital controls shall be open protocol format and shall meet the interoperability guidelines established by the American Society of Heating, Refrigerating and Air-Conditioning Engineers.

     c.     An energy savings improvement program may be financed through a lease-purchase agreement or through the issuance of energy savings obligations pursuant to this subsection.

     (1)   An energy savings improvement program may be financed through a lease-purchase agreement between a contracting unit and an energy services company or other public or private entity.  Under a lease-purchase agreement, ownership of the energy savings equipment or improved facilities shall pass to the contracting unit when all lease payments have been made.  Notwithstanding the provisions of any other law to the contrary, the duration of such a lease-purchase agreement shall not exceed 15 years, except that the duration of a lease purchase agreement for a combined heat and power or cogeneration project shall not exceed 20 years.

     (2)   Any lease-purchase agreement entered into pursuant to this subsection, may contain: a clause making it subject to the availability and appropriation annually of sufficient funds as may be required to meet the extended obligation; and a non-substitution clause maintaining that if the agreement is terminated for non-appropriation, the contracting unit may not replace the leased equipment or facilities with equipment or facilities that perform the same or similar functions.

     (3)   A contracting unit may arrange for incurring energy savings obligations to finance an energy savings improvement program.  Energy savings obligations may be funded through appropriations for utility services in the annual budget of the contracting unit and may be issued as refunding bonds pursuant to N.J.S.40A:2-52 et seq., including the issuance of bond anticipation notes as may be necessary, provided that all such bonds and notes mature within the periods authorized for such energy savings obligations.  Energy savings obligations may be issued either through the contracting unit or another public agency authorized to undertake financing on behalf of the unit. 

     (4)   Lease-purchase agreements and energy savings obligations shall not be used to finance maintenance, guarantees, or verification of guarantees of energy conservation measures.  Lease-purchase agreements and energy savings obligations may be used to finance the cost of an energy audit or the cost of verification of energy savings as part of adopting an energy savings plan.  Notwithstanding any law to the contrary, lease-purchase agreements and energy savings certificates shall not be excepted from any budget or tax levy limitation otherwise provided by law.  Maturity schedules of lease-purchase agreements or energy savings obligations must exceed the estimated useful life of the individual energy conservation measures.

     d. (1) The energy audit component of an energy savings improvement program shall be conducted either by the contracting unit or by a qualified independent third party retained by the governing body for that purpose.  It shall not be conducted by an energy services company subsequently hired to develop an energy savings improvement program.  The energy audit shall identify the current energy use of any or all facilities and energy conservation measures that can be implemented in which the energy savings and energy efficiency could be realized and maximized.

     (2)   To implement an energy savings improvement program, a contracting unit shall develop a plan that consists of one or more energy conservation measures.  The plan shall:

     (a)   contain the results of an energy audit;

     (b)   describe the energy conservation measures that will comprise the program;

     (c)   estimate greenhouse gas reductions resulting from those energy savings;

     (d)   identify all design and compliance issues that require the professional services of an architect or engineer and identify who will provide these services;

     (e)   include an assessment of risks involved in the successful implementation of the plan;

     (f)    identify the eligibility for, and costs and revenues associated with the PJM Independent System Operator for demand response and curtailable service activities;

     (g)   include schedules showing calculations of all costs of implementing the proposed energy conservation measures and the projected energy savings;

     (h)   identify maintenance requirements necessary to ensure continued energy savings, and describe how they will be fulfilled; and

     (i)    if developed by an energy services company, a description of, and cost estimates of an energy savings guarantee.

     All professionals providing engineering services under the plan shall have errors and omissions insurance.

     (3)   Prior to the adoption of the plan, the contracting unit shall contract with a qualified third party to verify the projected energy savings to be realized from the proposed program have been calculated as required by subsection e. of this section.

     (4)   Upon adoption, the plan shall be submitted to the Board of Public Utilities, which shall post it on the Internet on a public webpage maintained for such purpose.  If the contracting unit maintains its own website, it shall also post the plan on that site.  The board may require periodic reporting concerning the implementation of the plan.

     (5)   Verification by a qualified third party shall be required when energy conservation measures are placed in service or commissioned, to ensure the savings projected in the energy savings plan shall be achieved.

     (6)   Energy-related capital improvements that do not reduce energy usage may be included in an energy savings improvement program but the cost of such improvements shall not be financed as a lease-purchase or through energy savings obligations authorized by subsection c. of this section.  Nothing herein is intended to prevent financing of such capital improvements through otherwise authorized means.

     (7)   A qualified third party when required by this subsection may include an employee of the contracting unit who is properly trained and qualified to perform such work.

     e. (1) The calculation of energy savings for the purposes of determining that the energy savings resulting from the program will be sufficient to cover the cost of the program’s energy conservation measures, as provided in subsection a. of this section, shall involve determination of the dollar amount saved through implementation of an energy savings improvement program using the guidelines of the International Performance Measurement and Verification Protocol or other protocols approved by the Board of Public Utilities and standards adopted by the Board of Public Utilities pursuant to this section.  The calculation shall include all applicable State and federal rebates and tax credits, but shall not include the cost of an energy audit and the cost of verifying energy savings.  The calculation shall state which party has made application for rebates and credits and how these applications translate into energy savings.

     (2)   For the purposes of this section, the Board of Public Utilities shall adopt standards and uniform values for interest rates and escalation of labor, electricity, oil, and gas, as well as standards for presenting these costs in a life cycle and net present value format, standards for the presentation of obligations for carbon reductions, and other standards that the board may determine necessary.

     f. (1) When an energy services company is awarded an energy savings services contract, it shall offer the contracting unit the option to purchase, for an additional amount, an energy savings guarantee.  The guarantee, if accepted by a separate vote of the governing body of the contracting unit, shall insure that the energy savings resulting from the energy savings improvement program, determined periodically over the duration of the guarantee, will be sufficient to defray all payments required to be made pursuant to the lease-purchase agreement or energy savings obligation, and if the savings are not sufficient, the energy service company will reimburse the contracting unit for any additional amounts.  Annual costs of a guarantee shall not be financed or included as costs in an energy savings plan but shall be fully disclosed in an energy savings plan.

     (2)   When a guaranteed energy savings option is purchased, the contract shall require a qualified third party to verify the energy savings at intervals established by the parties. 

     g.     As used in this section:

     “direct digital control systems” means the devices and computerized control equipment that contain software and computer interfaces that perform the logic that control a building’s heating, ventilating, and air conditioning system.  Direct digital controls shall be open protocol format and shall meet the interoperability guidelines established by the American Society of Heating, Refrigerating and Air-Conditioning Engineers;

     “energy conservation measure” means an improvement that results in reduced energy use, including, but not limited to, installation of energy efficient equipment; demand response equipment; combined heat and power systems; facilities for the production of renewable energy; water conservation measures, fixtures or facilities; building envelope improvements that are part of an energy savings improvement program; and related control systems for each of the foregoing;

     “energy related capital improvement” means a capital improvement that uses energy but does not result in a reduction of energy use;

     “energy saving obligation” means a bond, note or other agreement evidencing the obligation to repay borrowed funds incurred in order to finance energy saving improvements;

     “energy savings” means a measured reduction in fuel, energy, operating or maintenance costs resulting from the implementation of one or more energy conservation measures services when compared with an established baseline of previous fuel, energy, operating or maintenance costs, including, but not limited to, future capital replacement expenditures avoided as a result of equipment installed or services performed as part of an energy savings plan;

     “energy savings improvement program” means an initiative of a contracting unit to implement energy conservation measures in existing facilities, provided that the value of the energy savings resulting from the program will be sufficient to cover the cost of the program’s energy conservation measures;

     “energy savings plan” means the document that describes the actions to be taken to implement the energy savings improvement program;

     “energy savings services contract” means a contract with an energy savings company to develop an energy savings plan, prepare bid specifications, manage the performance, provision, construction, and installation of energy conservation measures by subcontractors, to offer a guarantee of energy savings derived from the implementation of an energy savings plan, and may include a provision to manage the bidding process;

     “energy services company” means a commercial entity that is qualified to develop and implement an energy savings plan in accordance with the provisions of this section;

     “public works activities” means any work subject to the provisions of P.L.1963, c.150 (C.34:11-56.25 et seq.); and

     “water conservation measure” means an alteration to a facility or equipment that reduces water consumption, maximizes the efficiency of water use, or reduces water loss.

     h. (1) The Director of the Division of Local Government Services in the Department of Community Affairs, the State Treasurer, and the Board of Public Utilities may take such action as is deemed necessary and consistent with the intent of this section to implement its provisions.

     (2)   The Director of the Division of Local Government Services in the Department of Community Affairs, the State Treasurer, and the Board of Public Utilities may adopt implementation guidelines or directives, and adopt such administrative rules, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), as are necessary for the implementation of those agencies’ respective responsibilities under this section, except that notwithstanding any provision of P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the Director of the Division of Local Government Services in the Department of Community Affairs, the State Treasurer, and the Board of Public Utilities may adopt, immediately upon filing with the Office of Administrative Law, such rules and regulations as deemed necessary to implement the provisions of this act which shall be effective for a period not to exceed 12 months and shall thereafter be amended, adopted or re-adopted in accordance with the provisions of P.L.1968, c.410 (C.52:14B-1 et seq.).

 

     7.    Section 1 of P.L.1999, c.440 (C.40A:11-4.1) is amended to read as follows:

 

C.40A:11-4.1  Purposes for which competitive contracting may be used by local units.

     1.    Notwithstanding the provisions of any law, rule or regulation to the contrary, competitive contracting may be used by local contracting units in lieu of public bidding for procurement of specialized goods and services the price of which exceeds the bid threshold, for the following purposes:

     a.     The purchase or licensing of proprietary computer software designed for contracting unit purposes, which may include hardware intended for use with the proprietary software.  This subsection shall not be utilized for the purpose of acquiring general purpose computer hardware or software;

     b.    The hiring of a for-profit entity or a not-for-profit entity incorporated under Title 15A of the New Jersey Statutes for the purpose of:

     (1)   the operation and management of a wastewater treatment system or a water supply or distribution facility of the type described in subsection (37) of section 15 of P.L.1971, c.198 (C.40A:11-15), provided that competitive contracting shall not be used as a means of awarding contracts pursuant to P.L.1985, c.37 (C.58:26-1 et al.) and P.L.1985, c.72 (C.58:27-1 et al.);

     (2)   the operation, management or administration of recreation or social service facilities or programs, which shall not include the administration of benefits under the Work First New Jersey program established pursuant to P.L.1997, c.38 (C.44:10-55 et seq.), or under General Assistance; or

     (3)   the operation, management or administration of data processing services;

     c.     (Deleted by amendment, P.L.2009, c.4).

     d.    Homemaker--home health services;

     e.     Laboratory testing services;

     f.     Emergency medical services;

     g.     Contracted food services;

     h.     Performance of patient care services by contracted medical staff at county hospitals, correctional facilities and long-term care facilities;

     i.      At the option of the governing body of the contracting unit, any good or service that is exempt from bidding pursuant to section 5 of P.L.1971, c.198 (C.40A:11-5);

     j.     Concessions;

     k.    The operation, management or administration of other services, with the approval of the Director of the Division of Local Government Services.

     Any purpose included herein shall not be considered by a contracting unit as an extraordinary unspecifiable service pursuant to paragraph (a)(ii) of subsection (1) of section 5 of P.L.1971, c.198 (C.40A:11-5).

 

     8.    Section 15 of P.L.1971, c.198 (C.40A:11-15) is amended to read as follows:

 

C.40A:11-15  Duration of certain contracts.

     15.  All contracts for the provision or performance of goods or services shall be awarded for a period not to exceed 24 consecutive months, except that contracts for professional services pursuant to subparagraph (i) of paragraph (a) of subsection (1) of section 5 of P.L.1971, c.198 (C.40A:11-5) shall be awarded for a period not to exceed 12 consecutive months.  Contracts may be awarded for longer periods of time as follows:

     (1)   Supplying of:

     (a)   (Deleted by amendment, P.L.1996, c.113.)

     (b)   (Deleted by amendment, P.L.1996, c.113.)

     (c)   Thermal energy produced by a cogeneration facility, for use for heating or air conditioning or both, for any term not exceeding 40 years, when the contract is approved by the Board of Public Utilities. For the purposes of this paragraph, "cogeneration" means the simultaneous production in one facility of electric power and other forms of useful energy such as heating or process steam;

     (2)   (Deleted by amendment, P.L.1977, c.53.)

     (3)   The collection and disposal of municipal solid waste, the collection and disposition of recyclable material, or the disposal of sewage sludge, for any term not exceeding in the aggregate, five years;

     (4)   The collection and recycling of methane gas from a sanitary landfill facility, for any term not exceeding 25 years, when such contract is in conformance with a district solid waste management plan approved pursuant to P.L.1970, c.39 (C.13:1E-1 et seq.), and with the approval of the Division of Local Government Services in the Department of Community Affairs and the Department of Environmental Protection.  The contracting unit shall award the contract to the highest responsible bidder, notwithstanding that the contract price may be in excess of the amount of any necessarily related administrative expenses; except that if the contract requires the contracting unit to expend funds only, the contracting unit shall award the contract to the lowest responsible bidder.  The approval by the Division of Local Government Services of public bidding requirements shall not be required for those contracts exempted therefrom pursuant to section 5 of P.L.1971, c.198 (C.40A:11-5);

     (5) Data processing service, for any term of not more than seven years;

     (6) Insurance, including the purchase of insurance coverages, insurance consulting or administrative services, claims administration services and including participation in a joint self-insurance fund, risk management program or related services provided by a contracting unit insurance group, or participation in an insurance fund established by a local unit pursuant to N.J.S.40A:10-6, or a joint insurance fund established pursuant to P.L.1983, c.372 (C.40A:10-36 et seq.), for any term of not more than three years;

     (7)   Leasing or servicing of automobiles, motor vehicles, machinery and equipment of every nature and kind, for a period not to exceed five years; provided, however, such contracts shall be awarded only subject to and in accordance with the rules and regulations promulgated by the Director of the Division of Local Government Services in the Department of Community Affairs;

     (8)   The supplying of any product or the rendering of any service by a company providing voice, data, transmission or switching services for a term not exceeding five years;

     (9)   Any single project for the construction, reconstruction or rehabilitation of any public building, structure or facility, or any public works project, including the retention of the services of any architect or engineer in connection therewith, for the length of time authorized and necessary for the completion of the actual construction;

     (10) The providing of food services for any term not exceeding three years;

     (11) On-site inspections and plan review services undertaken by private agencies pursuant to the "State Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119 et seq.) for any term of not more than three years;

     (12) (Deleted by amendment, P.L.2009, c.4).

     (13) (Deleted by amendment, P.L.1999, c.440.)

     (14) (Deleted by amendment, P.L.1999, c.440.)

     (15) Leasing of motor vehicles, machinery and other equipment primarily used to fight fires, for a term not to exceed ten years, when the contract includes an option to purchase, subject to and in accordance with rules and regulations promulgated by the Director of the Division of Local Government Services in the Department of Community Affairs;

     (16) The provision of water supply services or the designing, financing, construction, operation, or maintenance, or any combination thereof, of a water supply facility, or any component part or parts thereof, including a water filtration system, for a period not to exceed 40 years, when the contract for these services is approved by the Division of Local Government Services in the Department of Community Affairs, the Board of Public Utilities, and the Department of Environmental Protection pursuant to P.L.1985, c.37 (C.58:26-1 et al.), except that no such approvals shall be required for those contracts otherwise exempted pursuant to subsection (30), (31), (34), (35) or (43) of this section. For the purposes of this subsection, "water supply services" means any service provided by a water supply facility; "water filtration system" means any equipment, plants, structures, machinery, apparatus, or land, or any combination thereof, acquired, used, constructed, rehabilitated, or operated for the collection, impoundment, storage, improvement, filtration, or other treatment of drinking water for the purposes of purifying and enhancing water quality and insuring its portability prior to the distribution of the drinking water to the general public for human consumption, including plants and works, and other personal property and appurtenances necessary for their use or operation; and "water supply facility" means and refers to the real property and the plants, structures, interconnections between existing water supply facilities, machinery and equipment and other property, real, personal and mixed, acquired, constructed or operated, or to be acquired, constructed or operated, in whole or in part by or on behalf of a political subdivision of the State or any agency thereof, for the purpose of augmenting the natural water resources of the State and making available an increased supply of water for all uses, or of conserving existing water resources, and any and all appurtenances necessary, useful or convenient for the collecting, impounding, storing, improving, treating, filtering, conserving or transmitting of water and for the preservation and protection of these resources and facilities and providing for the conservation and development of future water supply resources;

     (17) The provision of resource recovery services by a qualified vendor, the disposal of the solid waste delivered for disposal which cannot be processed by a resource recovery facility or the residual ash generated at a resource recovery facility, including hazardous waste and recovered metals and other materials for reuse, or the design, financing, construction, operation or maintenance of a resource recovery facility for a period not to exceed 40 years when the contract is approved by the Division of Local Government Services in the Department of Community Affairs, and the Department of Environmental Protection pursuant to P.L.1985, c.38 (C.13:1E-136 et al.); and when the resource recovery facility is in conformance with a district solid waste management plan approved pursuant to P.L.1970, c.39 (C.13:1E-1 et seq.).  For the purposes of this subsection, "resource recovery facility" means a solid waste facility constructed and operated for the incineration of solid waste for energy production and the recovery of metals and other materials for reuse; or a mechanized composting facility, or any other facility constructed or operated for the collection, separation, recycling, and recovery of metals, glass, paper, and other materials for reuse or for energy production; and "residual ash" means the bottom ash, fly ash, or any combination thereof, resulting from the combustion of solid waste at a resource recovery facility;

     (18) The sale of electricity or thermal energy, or both, produced by a resource recovery facility for a period not to exceed 40 years when the contract is approved by the Board of Public Utilities, and when the resource recovery facility is in conformance with a district solid waste management plan approved pursuant to P.L.1970, c.39 (C.13:1E-1 et seq.).  For the purposes of this subsection, "resource recovery facility" means a solid waste facility constructed and operated for the incineration of solid waste for energy production and the recovery of metals and other materials for reuse; or a mechanized composting facility, or any other facility constructed or operated for the collection, separation, recycling, and recovery of metals, glass, paper, and other materials for reuse or for energy production;

     (19) The provision of wastewater treatment services or the designing, financing, construction, operation, or maintenance, or any combination thereof, of a wastewater treatment system, or any component part or parts thereof, for a period not to exceed 40 years, when the contract for these services is approved by the Division of Local Government Services in the Department of Community Affairs and the Department of Environmental Protection pursuant to P.L.1985, c.72 (C.58:27-1 et al.), except that no such approvals shall be required for those contracts otherwise exempted pursuant to subsection (36) or (43) of this section.  For the purposes of this subsection, "wastewater treatment services" means any services provided by a wastewater treatment system, and "wastewater treatment system" means equipment, plants, structures, machinery, apparatus, or land, or any combination thereof, acquired, used, constructed, or operated for the storage, collection, reduction, recycling, reclamation, disposal, separation, or other treatment of wastewater or sewage sludge, or for the final disposal of residues resulting from the treatment of wastewater, including, but not limited to, pumping and ventilating stations, facilities, plants and works, connections, outfall sewers, interceptors, trunk lines, and other personal property and appurtenances necessary for their operation;

     (20) The supplying of goods or services for the purpose of lighting public streets, for a term not to exceed five years;

     (21) The provision of emergency medical services for a term not to exceed five years;

     (22) Towing and storage contracts, awarded pursuant to paragraph u. of subsection (1) of section 5 of P.L.1971, c.198 (C.40A:11-5) for any term not exceeding three years;

     (23) Fuel for the purpose of generating electricity for a term not to exceed eight years;

     (24) The purchase of electricity or administrative or dispatching services related to the transmission of such electricity, from a supplier of electricity subject to the jurisdiction of a federal regulatory agency, from a qualifying small power producing facility or qualifying cogeneration facility, as defined by 16 U.S.C.s.796, or from any supplier of electricity within any regional transmission organization or independent system operator or from such organization or operator or their successors, by a contracting unit engaged in the generation of electricity for retail sale, as of May 24, 1991, for a term not to exceed 40 years, or by a contracting unit engaged solely in the distribution of electricity for retail sale for a term not to exceed ten years, except that a contract with a contracting unit, engaged solely in the distribution of electricity for retail sale, in excess of ten years, shall require the written approval of the Director of the Division of Local Government Services.  If the director fails to respond in writing to the contracting unit within 10 business days, the contract shall be deemed approved;

     (25) Basic life support services, for a period not to exceed five years.  For the purposes of this subsection, "basic life support" means a basic level of prehospital care, which includes but need not be limited to patient stabilization, airway clearance, cardiopulmonary resuscitation, hemorrhage control, initial wound care and fracture stabilization;

     (26) (Deleted by amendment, P.L.1999, c.440.)

     (27) The provision of transportation services to elderly, disabled or indigent persons for any term of not more than three years.  For the purposes of this subsection, "elderly persons" means persons who are 60 years of age or older.  "Disabled persons" means persons of any age who, by reason of illness, injury, age, congenital malfunction, or other permanent or temporary incapacity or disability, are unable, without special facilities or special planning or design to utilize mass transportation facilities and services as effectively as persons who are not so affected. "Indigent persons" means persons of any age whose income does not exceed 100 percent of the poverty level, adjusted for family size, established and adjusted under section 673(2) of subtitle B, the "Community Services Block Grant Act," Pub.L.97-35 (42 U.S.C.s.9902 (2));

     (28) The supplying of liquid oxygen or other chemicals, for a term not to exceed five years, when the contract includes the installation of tanks or other storage facilities by the supplier, on or near the premises of the contracting unit;

     (29) The performance of patient care services by contracted medical staff at county hospitals, correction facilities and long term care facilities, for any term of not more than three years;

     (30) The acquisition of an equitable interest in a water supply facility pursuant to section 2 of P.L.1993, c.381 (C.58:28-2), or a contract entered into pursuant to the "County and Municipal Water Supply Act," N.J.S.40A:31-1 et seq., if the contract is entered into no later than January 7, 1995, for any term of not more than forty years;

     (31) The provision of water supply services or the financing, construction, operation or maintenance or any combination thereof, of a water supply facility or any component part or parts thereof, by a partnership or copartnership established pursuant to a contract authorized under section 2 of P.L.1993, c.381 (C.58:28-2), for a period not to exceed 40 years;

     (32) Laundry service and the rental, supply and cleaning of uniforms for any term of not more than three years;

     (33) The supplying of any product or the rendering of any service, including consulting services, by a cemetery management company for the maintenance and preservation of a municipal cemetery operating pursuant to the "New Jersey Cemetery Act," N.J.S.8A:1-1 et seq., for a term not exceeding 15 years;

     (34) A contract between a public entity and a private firm pursuant to P.L.1995, c.101 (C.58:26-19 et al.) for the provision of water supply services may be entered into for any term which, when all optional extension periods are added, may not exceed 40 years;

     (35) A contract for the purchase of a supply of water from a public utility company subject to the jurisdiction of the Board of Public Utilities in accordance with tariffs and schedules of charges made, charged or exacted or contracts filed with the Board of Public Utilities, for any term of not more than 40 years;

     (36) A contract between a public entity and a private firm or public authority pursuant to P.L.1995, c.216 (C.58:27-19 et al.) for the provision of wastewater treatment services may be entered into for any term of not more than 40 years, including all optional extension periods;

     (37) The operation and management of a facility under a license issued or permit approved by the Department of Environmental Protection, including a wastewater treatment system or a water supply or distribution facility, as the case may be, for any term of not more than ten years. For the purposes of this subsection, "wastewater treatment system" refers to facilities operated or maintained for the storage, collection, reduction, disposal, or other treatment of wastewater or sewage sludge, remediation of groundwater contamination, stormwater runoff, or the final disposal of residues resulting from the treatment of wastewater; and "water supply or distribution facility" refers to facilities operated or maintained for augmenting the natural water resources of the State, increasing the supply of water, conserving existing water resources, or distributing water to users;

     (38) Municipal solid waste collection from facilities owned by a contracting unit, for any term of not more than three years;

     (39) Fuel for heating purposes, for any term of not more than three years;

     (40) Fuel or oil for use in motor vehicles for any term of not more than three years;

     (41) Plowing and removal of snow and ice for any term of not more than three years;

     (42) Purchases made under a contract awarded by the Director of the Division of Purchase and Property in the Department of the Treasury for use by counties, municipalities or other contracting units pursuant to section 3 of P.L.1969, c.104 (C.52:25-16.1), for a term not to exceed the term of that contract;

     (43) A contract between the governing body of a city of the first class and a duly incorporated nonprofit association for the provision of water supply services as defined in subsection (16) of this section, or wastewater treatment services as defined in subsection (19) of this section, may be entered into for a period not to exceed 40 years;

     (44) The purchase of electricity generated through class I renewable energy or from a power production facility that is fueled by methane gas extracted from a landfill in the county of the contacting unit for any term not exceeding 25 years;

     (45) The provision or performance of goods or services for the purpose of producing class I renewable energy or class II renewable energy, as those terms are defined in section 3 of P.L.1999, c.23 (C.48:3-51), at, or adjacent to, buildings owned by, or operations conducted by, the contracting unit, the entire price of which is to be established as a percentage of the resultant savings in energy costs, for a term not to exceed 15 years; provided, however, that such contracts shall be entered into only subject to and in accordance with guidelines promulgated by the Board of Public Utilities establishing a methodology for computing energy cost savings and energy generation costs.

     Any contract for services other than professional services, the statutory length of which contract is for three years or less, may include provisions for no more than one two-year, or two one-year, extensions, subject to the following limitations: a. The contract shall be awarded by resolution of the governing body upon a finding by the governing body that the services are being performed in an effective and efficient manner; b. No such contract shall be extended so that it runs for more than a total of five consecutive years; c. Any price change included as part of an extension shall be based upon the price of the original contract as cumulatively adjusted pursuant to any previous adjustment or extension and shall not exceed the change in the index rate for the 12 months preceding the most recent quarterly calculation available at the time the contract is renewed; and d.  The terms and conditions of the contract remain substantially the same.

     All multiyear leases and contracts entered into pursuant to this section, including any two-year or one-year extensions, except contracts involving the supplying of electricity for the purpose of lighting public streets and contracts for thermal energy authorized pursuant to subsection (1) above, construction contracts authorized pursuant to subsection (9) above, contracts for the provision or performance of goods or services or the supplying of equipment to promote energy conservation through the production of class I renewable energy or class II renewable energy authorized pursuant to subsection (45) above, contracts for water supply services or for a water supply facility, or any component part or parts thereof authorized pursuant to subsection (16), (30), (31), (34), (35), (37) or (43) above, contracts for resource recovery services or a resource recovery facility authorized pursuant to subsection (17) above, contracts for the sale of energy produced by a resource recovery facility authorized pursuant to subsection (18) above, contracts for wastewater treatment services or for a wastewater treatment system or any component part or parts thereof authorized pursuant to subsection (19), (36), (37) or (43) above, and contracts for the purchase of electricity or administrative or dispatching services related to the transmission of such electricity authorized pursuant to subsection (24) above and contracts for the purchase of electricity generated from a power production facility that is fueled by methane gas authorized pursuant to subsection (44) above, shall contain a clause making them subject to the availability and appropriation annually of sufficient funds as may be required to meet the extended obligation, or contain an annual cancellation clause.

     The Division of Local Government Services in the Department of Community Affairs shall adopt and promulgate rules and regulations concerning the methods of accounting for all contracts that do not coincide with the fiscal year.

     All contracts shall cease to have effect at the end of the contracted period and shall not be extended by any mechanism or provision, unless in conformance with the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.), except that a contract may be extended by mutual agreement of the parties to the contract when a contracting unit has commenced rebidding prior to the time the contract expires or when the awarding of a contract is pending at the time the contract expires.

 

C.52:34-25  Implementation of energy savings improvement program by State contracting agency; definitions.

     9. a. A State contracting agency, as defined in this section, may implement an energy savings improvement program in the manner provided by this section whenever it determines that the savings generated from reduced energy use from the program will be sufficient to cover the cost of the program’s energy conservation measures as set forth in an energy savings plan. Under such a program, a contracting agency may enter into an energy savings services contract with an energy services company to implement the program or the contracting agency may authorize separate contracts to implement the program.  The provisions of Title 52 of the Revised Statutes shall apply to any contracts awarded pursuant to this section to the extent that the provisions of such law are not inconsistent with any provision of this section.

     b. (1) To be eligible to enter into an energy savings services contract, an energy services company shall be a commercial entity that is qualified to provide energy savings services in accordance with the provisions of this section. A State contracting agency may determine to enter into an energy savings services contract through public advertising for bids and the receipt of bids therefor.

     (2) (a) Public works activities performed under an energy savings improvement program shall be subject to all requirements regarding public bidding, bid security, performance guarantees, insurance and other public contracting requirements that are applicable to public works contracts, to the extent not inconsistent with this section.  A general contractor, energy services company serving as general contractor, or any subcontractor hired for the furnishing of plumbing and gas fitting and all kindred work, and of steam and hot water heating and ventilating apparatus, steam power plants and kindred work, and electrical work, structural steel and ornamental iron work, shall be classified by the Division of Property Management and Construction in the Department of the Treasury in order to perform public works activities under an energy savings improvement program.

     (b)   Individuals or organizations performing energy audits, acting as commissioning agents, or conducting verification of energy savings plans, implementation of energy conservation measures, or verifying guarantees shall be prequalified by the Division of Property Management and Construction in the Department of the Treasury to perform their work under an energy savings improvement program.

     (3)   An energy services company may be designated as the general contractor for improvements to be made pursuant to an energy savings plan, provided that the hiring of subcontractors that are required to be classified pursuant to subparagraph (a) of paragraph (2) of this subsection shall be performed pursuant to the public bidding requirements of the State contracting agency.  A contract with an energy savings company shall include, but not be limited to: preparation of an energy savings plan, the responsibilities of the parties for project schedules, installations, performance and quality, payment of subcontractors, project completion, commissioning, savings implementation; a requirement that the savings to be achieved by energy conservation measures be verified upon commissioning of the improvements; allocation of State and federal rebates and tax credits; and any other provisions deemed necessary by the parties.

     (4)   Except as provided in paragraph (5) of this subsection, a subsidiary or wholly-owned or partially-owned affiliate of the energy services company shall not be an eligible contractor or subcontractor under an energy savings services contract.

     (5)   When the energy services company is the manufacturer of direct digital control systems and contracts with the contracting agency to provide a guaranteed energy savings option pursuant to subsection f. of this section, the specification of such direct digital control systems may be treated as proprietary goods and if so treated, the bid specification shall set forth an allowance price for its supply by the energy services company which shall be used by all bidders in the public bidding process.  Direct digital controls shall be open protocol format and shall meet the interoperability guidelines established by the American Society of Heating, Refrigerating and Air-Conditioning Engineers.

     c.     In addition to existing authorization of a State agency to enter into lease-purchase agreements or to issue obligations to finance the costs of an energy savings improvement program, a contracting agency is hereby authorized to finance the costs of an energy savings improvement program by entering into a lease purchase agreement.  Any financing mechanism shall be administered in a manner consistent with this subsection insofar as it does not conflict with the provisions of other law that applies to the contracting agency.

     (1)   An energy savings improvement program may be financed through a lease-purchase agreement between a State contracting agency and an energy services company or other public or private entity.  Under a lease-purchase agreement, ownership of the energy savings equipment or improved facilities shall pass to the contracting agency or the client agency responsible for the facility when all lease payments have been made.  Notwithstanding the provisions of any other law to the contrary, the duration of such a lease-purchase agreement shall not exceed 15 years, except that the duration of a lease purchase agreement for a combined heat and power or cogeneration project shall not exceed 20 years.

     (2)   Lease-purchase agreements and energy savings obligations shall not be used to finance maintenance, guarantees, or verification of guarantees of energy conservation measures.  Lease-purchase agreements may be used to finance the cost of an energy audit or the cost of verification of energy savings as part of adopting an energy savings plan.  Maturity schedules of lease-purchase agreements must exceed the estimated useful life of the individual energy conservation measures.

     d.    (1) The energy audit component of an energy savings improvement program shall be conducted either by the contracting agency or by a qualified independent third party retained by the contracting agency for that purpose.  It shall not be conducted by an energy services company subsequently hired to develop an energy savings improvement program.  The energy audit shall identify the current energy use of any or all facilities and energy conservation measures that can be implemented in which the energy savings and energy efficiency could be realized and maximized.

     (2)   To implement an energy savings improvement program, a contracting agency shall develop an energy savings plan that consists of one or more energy conservation measures.  The plan shall: 

     (a)   contain the results of an energy audit;

     (b)   describe the energy conservation measures that will comprise the program;

     (c)   estimate greenhouse gas reductions resulting from those energy savings;

     (d)   identify all design and compliance issues that require the professional services of an architect or engineer and identify who will provide these services;

     (e)   include an assessment of risks involved in the successful implementation of the plan;

     (f)    identify the eligibility for, and costs and revenues associated with the PJM Independent System Operator for demand response and curtailable service activities;

     (g)   include schedules showing calculations of all costs of implementing the proposed energy conservation measures and the projected energy savings;

     (h)   identify maintenance requirements necessary to ensure continued energy savings, and describe how they will be fulfilled; and

     (i)    if developed by an energy services company, a description of, and cost estimates of an energy savings guarantee.

     All professionals providing engineering services under the plan shall have errors and omissions insurance.

     (3)   Prior to the adoption of the plan, the contracting agency shall contract with a qualified third party to verify the projected energy savings to be realized from the proposed program have been calculated as required by subsection e. of this section.

     (4)   Upon adoption, the plan shall be submitted to the Board of Public Utilities, which shall post it on the Internet on a public webpage maintained for such purpose.  If the contracting agency maintains its own website, it shall also post the plan on that site.  The Board of Public Utilities may require periodic reporting concerning the implementation of the plan.

     (5)   Verification by a qualified third party shall be required when energy conservation measures are placed in service or commissioned, to ensure the savings projected in the energy savings plan shall be achieved.

     (6)   Energy-related capital improvements that do not reduce energy usage may be included in an energy savings improvement program but the cost of such improvements shall not be financed as a lease-purchase or through energy savings obligations authorized by subsection c. of this section.  Nothing herein is intended to prevent financing of such capital improvements through otherwise authorized means.

     (7)   A qualified third party when required by this subsection may include an employee of the State contracting agency who is properly trained and qualified to perform such work.

     e. (1) The calculation of energy savings for the purposes of determining that the energy savings resulting from the program will be sufficient to cover the cost of the program’s energy conservation measures, as provided in subsection a. of this section, shall involve determination of the dollar amount saved through implementation of an energy savings improvement program using the guidelines of the International Performance Measurement and Verification Protocol or other protocols approved by the Board of Public Utilities and standards adopted by the Board of Public Utilities pursuant to this section.  The calculation shall include all applicable State and federal rebates and tax credits, but shall not include the cost of an energy audit and the cost of verifying energy savings.  The calculation shall state which party has made application for rebates and credits and how these applications translate into energy savings.

     (2)   For the purposes of this section, the Board of Public Utilities shall adopt standards and uniform values for interest rates and escalation of labor, electricity, oil, and gas, as well as standards for presenting these costs in a life cycle and net present value format, standards for the presentation of obligations for carbon reductions, and other standards that the board may determine necessary.

     f. (1) When an energy services company is awarded an energy savings services contract, it shall offer the contracting agency the option to purchase, for an additional amount, an energy savings guarantee.  The guarantee, if accepted by the contracting agency, shall insure that the energy savings resulting from the energy savings improvement program, determined periodically over the duration of the guarantee, will be sufficient to defray all payments required to be made pursuant to the lease-purchase agreement or energy savings obligation, and if the savings are not sufficient, the energy service company will reimburse the contracting agency for any additional amounts.  Annual costs of a guarantee shall not be financed or included as costs in an energy savings plan but shall be fully disclosed in an energy savings plan.

     (2)   When a guaranteed energy savings option is purchased, the contract shall require a qualified third party to verify the energy savings at intervals established by the parties. 

     g.     As used in this section:

     “direct digital control systems” means the devices and computerized control equipment that contain software and computer interfaces that perform the logic that control a building’s heating, ventilating, and air conditioning system.  Direct digital controls shall be open protocol format and shall meet the interoperability guidelines established by the American Society of Heating, Refrigerating and Air-Conditioning Engineers;

     “energy conservation measure” means an improvement that results in reduced energy use, including, but not limited to, installation of energy efficient equipment; demand response equipment; combined heat and power systems; facilities for the production of renewable energy; water conservation measures, fixtures or facilities; building envelope improvements that are part of an energy savings improvement program; and related control systems for each of the foregoing;

     “energy related capital improvement” means a capital improvement that uses energy but does not result in a reduction of energy use;

     “energy savings” means a measured reduction in fuel, energy, operating or maintenance costs resulting from the implementation of one or more energy conservation measures services when compared with an established baseline of previous fuel, energy, operating or maintenance costs, including, but not limited to, future capital replacement expenditures avoided as a result of equipment installed or services performed as part of an energy savings plan;

     “energy savings improvement program” means an initiative of a State contracting agency to implement energy conservation measures in existing facilities, provided that the value of the energy savings resulting from the program will be sufficient to cover the cost of the program’s energy conservation measures;

     “energy savings plan” means the document that describes the actions to be taken to implement the energy savings improvement program;

     “energy savings services contract” means a contract with an energy savings company to develop an energy savings plan, prepare bid specifications, manage the performance, provision, construction, and installation of energy conservation measures by subcontractors, to offer a guarantee of energy savings derived from the implementation of an energy savings plan, and may include a provision to manage the bidding process;

     “energy services company” means a commercial entity that is qualified to develop and implement an energy savings plan in accordance with the provisions of this section;

     “public works activities” means any work subject to the provisions of P.L.1963, c.150 (C.34:11-56.25 et seq.);

     “State contracting agency” or “contracting agency” means any of the principal departments in the Executive Branch of State Government, and any division, board, bureau, office, commission or other instrumentality created by a principal department; and

     “water conservation measure” means an alteration to a facility or equipment that reduces water consumption, maximizes the efficiency of water use, or reduces water loss.

     h. (1) The State Treasurer and the Board of Public Utilities may take such action as is deemed necessary and consistent with the intent of this section to implement its provisions.

     (2)   The State Treasurer and the Board of Public Utilities may adopt implementation guidelines or directives, and adopt such administrative rules, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), as are necessary for the implementation of those agencies’ respective responsibilities under this section, except that notwithstanding any provision of P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the State Treasurer, and the Board of Public Utilities may adopt, immediately upon filing with the Office of Administrative Law, such rules and regulations as deemed necessary to implement the provisions of this act which shall be effective for a period not to exceed 12 months and shall thereafter be amended, adopted or re-adopted in accordance with the provisions of P.L.1968, c.410 (C.52:14B-1 et seq.).

 

C.52:35A-1  Implementation of energy savings improvement program by public agency; definitions.

     10. a. A public agency, as defined in this section, may implement an energy savings improvement program in the manner provided by this section whenever it determines that the savings generated from reduced energy use from the program will be sufficient to cover the cost of the program’s energy conservation measures as set forth in an energy savings plan. Under such a program, a public agency may enter into an energy savings services contract with an energy services company to implement the program or the public agency may authorize separate contracts to implement the program.  The provisions of any other law applicable to a public agency shall apply to any contracts awarded pursuant to this section to the extent that the provisions of such law are not inconsistent with any provision of this section.

     b. (1) To be eligible to enter into an energy savings services contract, an energy services company shall be a commercial entity that is qualified to provide public agencies with energy savings services in accordance with the provisions of this section. A public agency may determine to enter into an energy savings services contract which shall be awarded through a procedure that results in the award of a contract to a vendor determined by the public agency to be the most advantageous, price and other factors considered.

     (2) (a) Public works activities performed under an energy savings improvement program shall be subject to all requirements regarding public bidding, bid security, performance guarantees, insurance and other public contracting requirements that are applicable to public works contracts, to the extent not inconsistent with this section.  A general contractor, energy services company serving as general contractor, or any subcontractor hired for the furnishing of plumbing and gas fitting and all kindred work, and of steam and hot water heating and ventilating apparatus, steam power plants and kindred work, and electrical work, structural steel and ornamental iron work shall be classified by the Division of Property Management and Construction in the Department of the Treasury in order to perform public works activities under an energy savings improvement program.

     (b)   Individuals or organizations performing energy audits, acting as commissioning agents, or conducting verification of energy savings plans, implementation of energy conservation measures, or verifying guarantees shall be prequalified by the Division of Property Management and Construction in the Department of the Treasury to perform their work under an energy savings improvement program.

     (3)   An energy services company may be designated as the general contractor for improvements to be made pursuant to an energy savings plan, provided that the hiring of subcontractors that are required to be classified pursuant to subparagraph (a) of paragraph (2) of this subsection shall be performed pursuant to the public bidding requirements of the public agency.  A contract with an energy savings company shall include, but not be limited to: preparation of an energy savings plan; the responsibilities of the parties for project schedules, installations, performance and quality, payment of subcontractors, project completion, commissioning, savings implementation; a requirement that the savings to be achieved by energy conservation measures be verified upon commissioning of the improvements; allocation of State and federal rebates and tax credits; and any other provisions deemed necessary by the parties.

     (4)   Except as provided in paragraph (5) of this subsection, a subsidiary or wholly-owned or partially-owned affiliate of the energy services company shall not be an eligible contractor or subcontractor under an energy savings services contract.

     (5)   When the energy services company is the manufacturer of direct digital control systems and contracts with the public agency to provide a guaranteed energy savings option pursuant to subsection f. of this section, the specification of such direct digital control systems may be treated as proprietary goods and if so treated, the bid specification shall set forth an allowance price for its supply by the energy services company which shall be used by all bidders in the public bidding process.  Direct digital controls shall be open protocol format and shall meet the interoperability guidelines established by the American Society of Heating, Refrigerating and Air-Conditioning Engineers. 

     c.     In addition to existing authorization of a public agency to enter into lease-purchase agreements or to issue obligations to finance the costs of an energy savings improvement program, a public agency is hereby authorized to finance the costs of an energy savings improvement program by entering into a lease purchase agreement or by issuing energy savings obligations pursuant to this subsection.  Any financing mechanism shall be administered in a manner consistent with this subsection insofar as it does not conflict with the provisions of other law that applies to the public agency.

     (1)   An energy savings improvement program may be financed through a lease-purchase agreement between a public agency and an energy services company or other public or private entity.  Under a lease-purchase agreement, ownership of the energy savings equipment or improved facilities shall pass to the public agency when all lease payments have been made.  Notwithstanding the provisions of any other law to the contrary, the duration of such a lease-purchase agreement shall not exceed 15 years, except that the duration of a lease purchase agreement for a combined heat and power or cogeneration project shall not exceed 20 years.

     (2)   A public agency may arrange for incurring energy savings obligations to finance an energy savings improvement program.  Energy savings obligations may be funded through appropriations for utility services in the annual budget of the public agency and may be issued as refunding bonds, including the issuance of bond anticipation notes as may be necessary, provided that all such bonds and notes mature within the periods authorized for such energy savings obligations.  Energy savings obligations may be issued either through the public agency or another public agency authorized to undertake financing on behalf of the public agency.

     (3)   Lease-purchase agreements and energy savings obligations shall not be used to finance maintenance, guarantees, or verification of guarantees of energy conservation measures.  Lease-purchase agreements and energy savings obligations may be used to finance the cost of an energy audit or the cost of verification of energy savings as part of adopting an energy savings plan.  Notwithstanding any law to the contrary, lease-purchase agreements and energy savings certificates shall not be excepted from any budget or tax levy limitation otherwise provided by law.  Maturity schedules of lease-purchase agreements or energy savings obligations must exceed the estimated useful life of the individual energy conservation measures.

     d. (1) The energy audit component of an energy savings improvement program shall be conducted either by the public agency or by a qualified independent third party retained by the board for that purpose.  It shall not be conducted by an energy services company subsequently hired to develop an energy savings improvement program.  The energy audit shall identify the current energy use of any or all facilities and energy conservation measures that can be implemented in which the energy savings and energy efficiency could be realized and maximized.

     (2)   To implement a program, a public agency shall develop an energy savings plan that consists of one or more energy conservation measures.  The plan shall:

     (a)   contain the results of an energy audit;

     (b)   describe the energy conservation measures that will comprise the program;

     (c)   estimate greenhouse gas reductions resulting from those energy savings;

     (d)   identify all design and compliance issues that require the professional services of an architect or engineer and identify who will provide these services;

     (e)   include an assessment of risks involved in the successful implementation of the plan;

     (f)    identify the eligibility for, and costs and revenues associated with the PJM Independent System Operator for demand response and curtailable service activities;

     (g)   include schedules showing calculations of all costs of implementing the proposed energy conservation measures and the projected energy savings;

     (h)   identify maintenance requirements necessary to ensure continued energy savings, and describe how they will be fulfilled; and

     (i)    if developed by an energy services company, a description of, and cost estimates of an energy savings guarantee.

     All professionals providing engineering services under the plan shall have errors and omissions insurance.

     (3)   Prior to the adoption of the plan, the public agency shall contract with a qualified third party to verify the projected energy savings to be realized from the proposed program have been calculated as required by subsection e. of this section.

     (4)   Upon adoption, the plan shall be submitted to the Board of Public Utilities, which shall post it on the Internet on a public webpage maintained for such purpose.  If the public agency maintains its own website, it shall also post the plan on that site.  The board may require periodic reporting concerning the implementation of the plan.

     (5)   Verification by a qualified third party shall be required when energy conservation measures are placed in service or commissioned, to ensure the savings projected in the energy savings plan shall be achieved.

     (6)   Energy-related capital improvements that do not reduce energy usage may be included in an energy savings improvement program but the cost of such improvements shall not be financed as a lease-purchase or through energy savings obligations authorized by subsection c. of this section.  Nothing herein is intended to prevent financing of such capital improvements through otherwise authorized means.

     (7)   A qualified third party when required by this subsection may include an employee of the public agency who is properly trained and qualified to perform such work.

     e. (1) The calculation of energy savings for the purposes of determining that the energy savings resulting from the program will be sufficient to cover the cost of the program’s energy conservation measures, as provided in subsection a. of this section, shall involve determination of the dollar amount saved through implementation of an energy savings improvement program using the guidelines of the International Performance Measurement and Verification Protocol or other protocols approved by the Board of Public Utilities and standards adopted by the Board of Public Utilities pursuant to this section.  The calculation shall include all applicable State and federal rebates and tax credits, but shall not include the cost of an energy audit and the cost of verifying energy savings.  The calculation shall state which party has made application for rebates and credits and how these applications translate into energy savings.

     (2)   For the purposes of this section, the Board of Public Utilities shall adopt standards and uniform values for interest rates and escalation of labor, electricity, oil, and gas, as well as standards for presenting these costs in a life cycle and net present value format, standards for the presentation of obligations for carbon reductions, and other standards that the board may determine necessary.

     f. (1) When an energy services company is awarded an energy savings services contract, it shall offer the public agency the option to purchase, for an additional amount, an energy savings guarantee.  The guarantee, if accepted by a separate vote of the governing body of the public agency, shall insure that the energy savings of the public agency resulting from the energy savings improvement program, determined periodically over the duration of the guarantee, will be sufficient to defray all payments required to be made pursuant to the lease-purchase agreement or energy savings obligation, and if the savings are not sufficient, the energy services company will reimburse the public agency for any additional amounts.  Annual costs of a guarantee shall not be financed or included as costs in an energy savings plan but shall be fully disclosed in an energy savings plan.    

     (2)   When a guaranteed energy savings option is purchased, the contract shall require a qualified third party to verify the energy savings at intervals established by the parties.

     (3)   When a guaranteed energy savings option is not purchased, the energy savings services contract shall not include maintenance services provided by the energy services company.

     g.     As used in this section:

     “direct digital control systems” means the devices and computerized control equipment that contain software and computer interfaces that perform the logic that control a building’s heating, ventilating, and air conditioning system.  Direct digital controls shall be open protocol format and shall meet the interoperability guidelines established by the American Society of Heating, Refrigerating and Air-Conditioning Engineers;

     “energy conservation measure” means an improvement that results in reduced energy use, including, but not limited to, installation of energy efficient equipment; demand response equipment; combined heat and power systems; facilities for the production of renewable energy; water conservation measures, fixtures or facilities; building envelope improvements that are part of an energy savings improvement program; and related control systems for each of the foregoing;

     “energy related capital improvement” means a capital improvement that uses energy but does not result in a reduction of energy use;

     “energy saving obligation” means a bond, note or other agreement evidencing the obligation to repay borrowed funds incurred in order to finance energy saving improvements;

     “energy savings” means a measured reduction in fuel, energy, operating or maintenance costs resulting from the implementation of one or more energy conservation measures services when compared with an established baseline of previous fuel, energy, operating or maintenance costs, including, but not limited to, future capital replacement expenditures avoided as a result of equipment installed or services performed as part of an energy savings plan;

     “energy savings improvement program” means an initiative of a public agency to implement energy conservation measures in existing facilities, provided that the value of the energy savings resulting from the program will be sufficient to cover the cost of the program’s energy conservation measures;

     “energy savings plan” means the document that describes the actions to be taken to implement the energy savings improvement program;

     “energy savings services contract” means a contract with an energy savings company to develop an energy savings plan, prepare bid specifications, manage the performance, provision, construction, and installation of energy conservation measures by subcontractors, to offer a guarantee of energy savings derived from the implementation of an energy savings plan, and may include a provision to manage the bidding process;

     “energy services company” means a commercial entity that is qualified to develop and implement an energy savings plan in accordance with the provisions of this section;

     “public agency” means any government entity that is authorized to expend public funds and enter into contracts which is not otherwise authorized to implement an energy savings improvement program pursuant to section 1, 4, 6, or 9 of P.L.2009, c.4 (C.18A:18A-4.6, C.18A:65A-1, C.40A:11-4.6, or C.52:34-25).

     “public works activities” means any work subject to the provisions of P.L.1963, c.150 (C.34:11-56.25 et seq.); and

     “water conservation measure” means an alteration to a facility or equipment that reduces water consumption, maximizes the efficiency of water use, or reduces water loss.

     h. (1) The State Treasurer and the Board of Public Utilities may take such action as is deemed necessary and consistent with the intent of this section to implement its provisions.

     (2)   The State Treasurer and the Board of Public Utilities may adopt implementation guidelines or directives, and adopt such administrative rules, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), as are necessary for the implementation of those agencies’ respective responsibilities under this section, except that notwithstanding any provision of P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the Director of the Division of Local Government Services in the Department of Community Affairs, the State Treasurer, and the Board of Public Utilities may adopt, immediately upon filing with the Office of Administrative Law, such rules and regulations as deemed necessary to implement the provisions of this act which shall be effective for a period not to exceed 12 months and shall thereafter be amended, adopted or re-adopted in accordance with the provisions of P.L.1968, c.410 (C.52:14B-1 et seq.).

 

     11.  This act shall take effect on the 60th day after the date of enactment, except that public agencies may take such anticipatory administrative action in advance thereof as may be necessary for the implementation of this act.

 

     Approved January 21, 2009.