Page 189 - Sustainable Cities and Communities Design Handbook

Solar Power and Energy Conservation as Solutions Chapter j 9 163

Public Utilities Code section 388 referenced earlier, which is applicable to
State agencies, authorizes agencies to “enter into an energy savings contract
with a qualified energy service company for the purchase or exchange of
thermal or electrical energy or water, or to acquire energy efficiency or water
conservation services, or both energy efficiency and water conservation ser-
vices for a term not exceeding 35 years, at rates and upon those terms
approved by the agency.”
Paragraph (b) of Public Utilities Code section 388 provides the option for
State agencies and local agencies intending to enter into an energy savings
contract or a contract for an energy retrofit project to establish a pool of
qualified energy service companies, which are updated at least every 2 years
based on qualification, experience, pricing, or other pertinent factors. The
paragraph further provides that energy service contracts for individual pro-
jects may be awarded through a competitive selection process to individuals
or firms identified in the pool. As used in section 388, an “energy retrofit
project” does not include the erection or installation of a power generation
system, a power purchase agreement, or a project utilizing a site license or
site lease.
Government Code section 4217.18 concludes Chapter 3.2 on energy con-
servation contracts by emphasizing the intended flexibility of the aforemen-
tioned sections by stating:
The provisions of this chapter shall be construed to provide the greatest possible
flexibility to public agencies in structuring agreements entered into hereunder so
that economic benefits may be maximized and financing and projects may be
minimized. To this end, public agencies and the entities with whom they contract
under this chapter should have great latitude in characterizing components of
energy conservation facilities as personal or real property and in granting
security interests in leasehold interests and components of the alternate energy
facilities to project lenders.
As previously noted, should an LEA or community college district intend
to implement an energy conservation or generation project utilizing Proposi-
tion 39 funds, the public agency may not use a sole source process to award
funds. Proposition 39 requires that a competitive selection process be used,
which may utilize “best value criteria” (Public Resources Code Section
26235(c)).
To participate in the Proposition 39 program, an LEA or community col-
lege district must follow an eight-step process as outlined in the latest version
of the Program Implementation Guidelines adopted by the California Energy
Commission (“CEC”) from initially providing the CEC access to the utility
usage and billing data at the school site level to the submittal and approval by
the CEC of the agency’s Energy Expenditure Plan, including but not limited to
meeting the current savings to investment ratio of 1.01, and subsequent energy
project tracking and reporting requirements upon completion of the project.