Title of Rule: Chapter 236-70 WAC. A rule to facilitate private investment in energy conservation for state-owned facilities.

Purpose: To incorporate editorial changes which reflect current industry terminology and eliminate redundancy of information already provided within other subsections of the WAC.

Other Identifying Information: WAC 236-70-040, subsections (4), (7), (9)(e), (10), (10)(d), (11) and (12); WAC 236-70-050, subsections (2), (6) and (8); WAC 236-70-060, subsections (4) and (7); and WAC 236-70-080(3) are changed. WAC 236-70-070 is repealed.

Statutory Authority for Adoption: RCW 43.19.680(4).

Summary: Editorial changes.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Clint Lougheed, Mailstop 41012, General Administration Division of Engineering and Architectural Services, 902-7262.

Name of Proponent: Facilities Engineering Services, General Administration Division of Engineering and Architectural Services, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: The purpose of this chapter is to establish rules which can be used to facilitate private investment in energy conservation measures and services for state-owned facilities.

Proposal does not change existing rules. The changes to chapter 236-70 WAC are editorial in nature and do not change the intent of the RCW.

September 16, 1999

John M. Lynch

Acting Assistant Director

General Administration Engineering

and Architectural Services

OTS-3144.2

AMENDATORY SECTION(Amending Order 84-03, filed 11/30/84)

WAC 236-70-040
Definitions.

The following words and terms have the following meanings for the purposes of this chapter:

(((1))) "Base period" means a preceding twelve-month period, or longer, selected as the standard for measurement of energy consumption and energy savings due to implementation of energy conservation measures or services.

(((2))) "Energy conservation maintenance and operating procedure" means modification or modifications in maintenance and operations of a facility, and any installations within the facility, which are designed to reduce energy consumption in the facility and which require no significant expenditure of funds.

(((3))) "Energy conservation measure" means an installation or modification of an installation in a facility which is primarily intended to reduce energy consumption or allow use of an alternative energy source.

(((4))) "Energy consumption" means the amount of electrical energy and demand, natural gas, oil, propane or other fuel consumed in a facility in any billing period. It also applies to utility services, such as water and sewer, which require energy to be consumed to supply the services to the facility.

"Energy conservation service" means a service which provides preestablished levels of heating, cooling, lighting, and equipment use at reduced energy consumption levels.  The services may include, but are not limited to, providing financing, design, installation, repair, maintenance, management, technical advice, and/or training.

(((5))) "Energy cost savings" means energy savings converted into dollar savings.

(((6))) "Energy savings" means the amount of energy expressed in standard units (e.g., therms, gallons, kilowatt hours) of energy saved by an energy conservation measure or service.

(((7))) "Energy service company" means a company that provides energy conservation services.

"Facility" means a building, a group of buildings served by a central energy distribution system, components of a central energy distribution system, related structures and/or energy consuming appurtenances.

(((8))) "Net benefit" means the energy cost savings less the cost of the energy conservation measure or service provided.

(((9))) "Private investment or private financing" of energy projects means obtaining project funds by other than capital appropriation or governmental grants, and includes, but is not limited to, the following:

(((a))) • "Guaranteed savings" means a program in which a company guarantees a user a predetermined reduction in energy costs.  The company guarantees that energy costs plus all costs of the energy conservation measures or services provided will be less than the user's normal energy costs.

(((b))) • "Leasing" means using a piece of property without transferring ownership.  Leasing is an alternative to direct ownership of energy saving equipment.  This is also known as an operating lease.

(((c))) • "Municipal or capital leasing" means a tax exempt lease where the cost of equipment is amortized over the lease term.  At the end of the lease period ownership passes to the lessee.  This is also known as a lease purchase.

(((d))) • "Shared savings" means a program in which the sole source of payment for energy conservation measures or services provided by a company is a predetermined percentage of the energy cost savings of the user resulting from the energy conservation measure or service.

(((e))) • "Utility financing" means grants, loans, and resource acquisition payments provided by utilities for energy conservation.

(((f))) • "Vendor financing" means financing provided by an equipment supplier, equipment manufacturer, company or contractor.

(((10))) "Request for ((proposal)) qualifications" means the document which communicates information to prospective contractors and should include, but not be limited to:

(((a))) • A description of the problem;

(((b))) • Expected results from the project;

(((c))) • Extent and nature of anticipated contract services; and

(((d))) • Criteria for evaluating ((proposals)) statements of qualifications.

(((11) "State agency" means all departments, boards, commissions, colleges, community colleges, and universities who own and operate state facilities, related structures, and/or appurtenances.

(12) "State-owned facilities" means those facilities which are owned out right by the state and those facilities which are being purchased by the state.)) "State agency" means all departments, boards, commissions, colleges, community and technical colleges, and universities who own and operate or who have some responsibility for the ownership and operation of state facilities, related structures, and/or appurtenances.

"State-owned facilities" means those facilities which are owned outright by the state, those facilities which are being purchased by the state, and those facilities which the state has provided full or partial construction funding or provides full or partial operations funding.

[Statutory Authority: RCW 43.19.680(4).  84-24-030 (Order 84-03), § 236-70-040, filed 11/30/84.]

The department of general administration shall be responsible for:

(1) Providing technical assistance through inter-agency agreements.

(2) Developing ((standards)) procedures for ((requests for proposal for private financing)) requesting qualifications of energy service companies consistent with RCW 43.19.680.

(3) Developing standards for bid documents for private financing.

(4) Developing standards for contract documents for energy conservation measures and services using private financing including the means of establishing the base period consumption, the methodology for computing energy savings and the method of payment.

(5) Soliciting bids or quotations for the lease or purchase of energy conservation measures using private financing for those state agencies included in RCW 43.19.190.

(6) ((Advertising for bids or proposals for)) Publishing requirements to procure energy conservation measures or services using ((private financing)) energy service companies for those state agencies included in RCW 43.19.450.

(7) Developing procedures for evaluating financing proposals.

(8) Monitoring ((private financing contracts)) energy service company agreements, conducting annual reviews and providing technical assistance as needed.

[Statutory Authority: RCW 43.19.680(4).  84-24-030 (Order 84-03), § 236-70-050, filed 11/30/84.]

State agencies seeking private financing of energy conservation measures or services will be responsible for:

(1) Notifying the department of general administration of their intent, and providing justification for project implementation.

(2) Completing all applicable maintenance and operational items as required by RCW 43.19.670.  This does not preclude seeking energy conservation services to facilitate implementation of maintenance and operating procedures.

(3) Providing the department of general administration with substantive data, information, calculations, contracts, or other material which are necessary in determining the cost effectiveness of the project and the financial alternatives.

(4) Preparing, or acquiring services for the preparation of, requests for ((proposal)) qualifications for energy conservation measures and services using ((private financing)) energy service companies.

(5) Providing building space and/or land for installation of energy conservation equipment.

(6) Providing maintenance and monitoring of installed energy conservation equipment unless otherwise specified.

(7) Reporting fuel and utility consumption survey information required by RCW 43.19.670 to the ((Washington state energy office)) department of general administration.

(8) Providing for staff training on the function, operation and maintenance of energy conservation equipment.

(9) Reporting contract status on an annual basis to the department of general administration.

[Statutory Authority: RCW 43.19.680(4).  84-24-030 (Order 84-03), § 236-70-060, filed 11/30/84.]

The following procedures are set forth for monitoring ((private financing contracts)) energy service company agreements and for reporting contract status to the department of general administration:

(1) The monitoring of installed energy equipment will be the responsibility of the state agency, unless otherwise specified, and will include reporting contractor response to maintenance and emergency situations to the department of general administration.

(2) The state agency will report facility operating changes, physical changes, equipment changes, equipment modifications or other changes which may affect energy consumption or base period figures to the department of general administration.

(3) The state agency, in cooperation with the department of general administration, will develop a schedule for annual review of ((private financing contracts)) energy service company agreements for the purpose of: Evaluating projected "vs" actual energy savings; adjusting base period and energy savings formula; evaluating purchase options; evaluating contractor performance; and negotiating contract disagreements and other contract changes which may provide the state with a greater net benefit.

[Statutory Authority: RCW 43.19.680(4).  84-24-030 (Order 84-03), § 236-70-080, filed 11/30/84.]

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