BILL NUMBER: S6307

SPONSOR: HARCKHAM
 
TITLE OF BILL:

An act to amend the education law, in relation to extending the time
period for guaranteed recovery of energy performance contract costs from
energy savings incurred by school districts

 
PURPOSE:

This would extend the time period for energy performance contracts from
18 years to 25 years.

 
SUMMARY OF PROVISIONS:

Section 1. Amend the statutory limit of energy performance contracts
from 13 years to 25 years.

Section 2. Effective Date

 
              

JUSTIFICATION:

Energy performance contracts have been a successful way for munici-
palities and school districts to lower their costs while improving effi-
ciency. Energy performance contracts use the projected savings from the
performance contract to pay for the project, which is often significant-
ly cheaper than the previous energy costs.

Current state law requires that energy performance contracts must guar-
antee the recovery of contract costs from recovery savings during the
term of the contract, which shall not exceed 18 years. This legislation
would allow contracts to not exceed more than 25 years.

Federal government allows for contracts up to 25 years. This would
provide parity for school districts to take advantage of energy perform-
ance contracts up to 25 years.

Such a change would have numerous benefits such as energy efficiency and
reducing operating costs. These contracts help schools avoid significant
up front costs and allow for reinvestments over time.  Furthermore,
contracts usually result in reduced maintenance costs and reduce the
number of emergency repairs.

 
PRIOR LEGISLATIVE HISTORY:

2020 - A.7771/S.5099 - Education Committee

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
Immediately.