§ 143-64.17B. Guaranteed energy savings contracts. - North Carolina Statutes

§ 143‑64.17B. Guaranteed energy savings contracts.

(a)        A governmental unitmay enter into a guaranteed energy savings contract with a qualified providerif all of the following apply:

(1)        The term of thecontract does not exceed 20 years from the date of the installation andacceptance by the governmental unit of the energy conservation measuresprovided for under the contract.

(2)        The governmentalunit finds that the energy savings resulting from the performance of thecontract will equal or exceed the total cost of the contract.

(3)        The energyconservation measures to be installed under the contract are for an existingbuilding or utility system.

(b)        Before enteringinto a guaranteed energy savings contract, the governmental unit shall providepublished notice of the time and place or of the meeting at which it proposesto award the contract, the names of the parties to the proposed contract, andthe contract's purpose. The notice must be published at least 15 days beforethe date of the proposed award or meeting.

(c)        A qualifiedprovider entering into a guaranteed energy savings contract under this Partshall provide security to the governmental unit in the form acceptable to theOffice of the State Treasurer and in an amount equal to one hundred percent (100%)of the total cost of the guaranteed energy savings contract to assure theprovider's faithful performance. Any bonds required by this subsection shall besubject to the provisions of Article 3 of Chapter 44A of the General Statutes.If the savings resulting from a guaranteed energy savings contract are not asgreat as projected under the contract and all required shortfall payments tothe governmental unit have not been made, the governmental unit may terminatethe contract without incurring any additional obligation to the qualifiedprovider.

(d)        As used in thissection, "total cost" shall include, but not be limited to, costs ofconstruction, costs of financing, and costs of maintenance and training duringthe term of the contract. "Total cost" does not include anyobligations on termination of the contract before its expiration, provided thatthose obligations are disclosed when the contract is executed.

(e)        A guaranteed energysavings contract may not require the governmental unit to purchase a maintenancecontract or other maintenance agreement from the qualified provider whoinstalls energy conservation measures under the contract if the unit ofgovernment takes appropriate action to budget for its own forces or anotherprovider to maintain new systems installed and existing systems affected by theguaranteed energy savings contract.

(f)         In the case of aState governmental unit, a qualified provider shall, when feasible, after theacceptance of the proposal of the qualified provider by the State governmentalunit, conduct an investment grade audit. During this investment grade audit,the qualified provider shall perform in accordance with Part 1 of this Articlea life cycle cost analysis of each energy conservation measure in the finalproposal. If the results of the audit are not within ten percent (10%) of boththe guaranteed savings contained in the proposal and the total proposal amount,either the State governmental unit or the qualified provider may terminate theproject without incurring any additional obligation to the other party.However, if the State governmental unit terminates the project after the auditis conducted and the results of the audit are within ten percent (10%) of boththe guaranteed savings contained in the proposal and the total proposal amount,the State governmental unit shall reimburse the qualified provider thereasonable cost incurred in conducting the audit, and the results of the auditshall become the property of the State governmental unit.

(g)        In the case of aState governmental unit, a qualified provider shall provide an annualreconciliation statement based upon the results of the measurement andverification review. The statement shall disclose any shortfalls or surplusbetween guaranteed energy and operational savings specified in the guaranteedenergy savings contract and actual, not stipulated, energy and operationalsavings incurred during a given guarantee year. The guarantee year shallconsist of a 12‑month term commencing from the time that the energyconservation measures become fully operational. A qualified provider shall paythe State governmental unit any shortfall in the guaranteed energy andoperational savings after the total year savings have been determined. Asurplus in any one year shall not be carried forward or applied to a shortfallin any other year.  (1993(Reg. Sess., 1994), c. 775, s. 3; 1995, c. 295, s. 2; 1999‑235, s. 3;2002‑161, s. 4; 2003‑138, s. 1; 2006‑190, s. 3; 2009‑375,s. 2.)