KRS 58.605: Energy conservation revenue bonds for energy conservation measures --

Procedure.

(1) Subject to the reporting and approval requirements in KRS 45A.352, 45A.353, and

58.610, any local public agency may issue energy conservation revenue bonds to

pay for the cost of energy conservation measures under guaranteed energy savings

contracts for the purpose of reducing the cost of energy to buildings owned or

operated by the local public agency by making energy-saving improvements to these

buildings.

(2) A local public agency, or an agency acting on its behalf, may issue energy

conservation revenue bonds to finance the energy conservation measures under

guaranteed energy savings contracts, with the following limitations:

(a) Any energy conservation measure, financed through bonds, shall comply with

the provisions set forth in KRS 45A.345, 45A.352, and 45A.353;

(b) The term of the bonds shall run coterminous with the term of guaranteed

energy savings contract;

(c) A local public agency shall not enter into a guaranteed energy savings contract

where the total cost of the energy conservation measures exceeds the cost of

the energy savings plus the operational costs plus the capital cost avoidance

that is estimated for the term of the guaranteed energy savings contract

commencing from the date of the energy conservation measure's installation;

and

(d) The use of capital cost avoidance shall be subject to the following restrictions:

1. The amount expended shall not exceed fifty percent (50%) of the project

cost; and

2. Capital cost avoidance shall be restricted to payment for permanent

equipment replacement as follows:

a. Storm windows or doors, multiglazed windows or doors,

additional glazing, and reduction in glass area;

b. Replacement of heating, ventilating, or air co nditioning major

components or systems;

c. New lighting fixtures where required to achieve Illuminating

Engineering Society of North America (IES) standards, provided

the existing light fixtures shall have been determined to be

obsolete and incapable of achieving IES standards; and

d. Life safety system replacements or upgrades which shall have been

determined to be necessary to conform with existing state and local

codes and standards.

(3) Energy conservation revenue bonds shall be issued in accordance with the

provisions of KRS 58.010 to 58.140 and shall be sold at a competitive sale preceded

by adequate public notice and shall bear interest at an interest rate or rates

determined by the local public agency at the time of the sale.