Page 190 - Sustainable Cities and Communities Design Handbook

164 Sustainable Cities and Communities Design Handbook

Utilizing the 4217 Contract statutory scheme may be advantageous where a
public agency desires to implement an energy conservation project involving
conservation measures where the cost of design, construction, and operation is
projected to be recovered from energy savings over the life expectancy of the
conservation measures. Conversely, if (1) new energy conservation measures
are being considered, (2) the cost of design, construction, and operation of
energy conservation measures is not projected to be recovered over the life
expectancy of the energy conservation measures, or (c) the public agency
either does not have the funds or does not desire to finance the new energy
conservation measures, the agency may want to consider entering into a Power
Purchase Agreement as discussed in the following section.

Power Purchase Agreement by Governmental Agency

To assist local governmental agencies in infrastructure financing of energy or
power production projects, Assembly Bill 2660 was passed in 1996, which
added Government Code sections 5956 through 5956.10 (referred to herein as
the “Power Purchase Provisions”). The Power Purchase Provisions grant the
authority to a city, county, school district, community college district, public
district, county board of education, joint powers authority, transportation
commission or authority, or any other public or municipal corporation
(collectively, “governmental agency”), “to utilize private investment capital to
study, plan, design, construct, develop, finance, maintain, rebuild, improve,
repair, or operate, or any combination thereof, fee-producing infrastructure
facilities.” (Gov. Code Section 5956.1.) The term “fee-producing infrastructure
project” is defined as the “operation of the infrastructure project or facility .
paid for by the persons or entities benefited by or utilizing the project or
facility.” (Gov. Code Section 5956.3(c).) Any combination of private infra-
structure financing, federal or local funds may be utilized under this statutory
scheme. (Gov. Code Section 5956.9.) State Agencies are specifically pro-
hibited from utilizing the Power Purchase Provisions. (Gov. Code Section
5956.10.)
The Power Purchase Provisions provide that an agency may solicit pro-
posals as part of a competitive negotiation process when selecting a contractor
for the studying, planning, design, developing, financing, construction, main-
tenance, rebuilding, improvement, repair, or operation, or any combination
thereof, for fee-producing infrastructure projects. Neither competitive bidding
nor compliance with any other provision of the Public Contract Code or
Government Code relating to public procurements is required. Notwith-
standing, should the governmental agency intend to use Proposition 39 funds, a
competitive selection process similar to that discussed earlier for 4217
Contracts must be utilized. Projects may be proposed by a private entity
and selected by the governmental agency in its discretion, subject to the
following selection criteria being considered: (1) demonstrated competence and