N.Y. State Finance Law § 127-a: Energy conservation in state-aided programs

§ 127-a. Energy conservation in state-aided programs. 1. As used in

this section:

(a) "annual pro-rated project cost" shall mean the amount of

reimbursement per year which is sufficient to reimburse an eligible

facility, in accordance with its state aid rate, for the cost of an

energy conservation project by the final year of the payback period for

such project.

(b) "eligible facility" shall mean a facility, other than a hospital

or a residential health care facility as defined in article twenty-eight

of the public health law, which has a current operating certificate from

a state agency and which receives full or partial state reimbursement

for energy costs.

(c) "energy conservation measure" shall mean any construction,

alteration, repair or improvement of the capital assets of an eligible

facility for the purpose of reducing the consumption of energy, but

shall not include operating and maintenance measures.

(d) "energy conservation project" shall mean one or more energy

conservation measures selected for implementation by an eligible

facility.

(e) "operating and maintenance measures" shall mean cost-free or

low-cost procedures, or improvements or repairs to an eligible facility,

which are intended to reduce energy consumption and which do not impose

any costs on an eligible facility which are not reimbursable as

operating costs of the facility.

(f) "payback period" shall mean an estimated period of time, within

which the costs of an energy conservation measure or project will be

recovered from the savings generated by the reduced energy consumption

resulting therefrom.

(g) "state aid rate" shall mean the percentage of an eligible

facility's energy costs which are reimbursed by the state.

2. Notwithstanding any other provision of law, an eligible facility

shall be reimbursed for the costs of implementing energy conservation

projects in accordance with the provisions of this section.

3. (a) Prior to implementing any energy conservation project for which

reimbursement is sought pursuant to this section, an eligible facility

shall obtain an analysis of its energy usage and available opportunities

for energy conservation. Such analysis shall be conducted by an

architect or engineer licensed by the state of New York who has no

financial interest in the facility or in the production, promotion or

sale of any energy resource or any energy conservation product or

device.

(b) The required analysis shall be prepared after an on-site

examination of the facility by the architect or engineer. The analysis

shall include recommendations for energy conservation measures and

operating and maintenance measures appropriate for the facility, and

estimated payback periods for each recommended energy conservation

measure. For the purposes of this section, payback period calculations

shall take into account implementation of all recommended operating and

maintenance measures, shall be based on current energy prices, without

any adjustment for anticipated changes in such prices, and shall be

based on the average annual energy usage of the facility. The average

annual energy usage shall be based on the energy usage for the preceding

three years, provided, however, that if the facility has not been in

operation for the preceding three years, or if changes in the capacity

or usage of the facility in the preceding three years have substantially

altered the energy usage of the facility, the architect or engineer

shall make and document reasonable assumptions concerning the average

annual energy usage of the facility.

(c) The architect or engineer shall prepare a final report presenting

a single payback period for the energy conservation project for which

reimbursement is sought. The payback period shall be computed as

provided in paragraph (b) of this subdivision, and shall take into

account the interaction between conservation measures. The cost of such

project shall include:

(1) the actual costs of all energy conservation measures selected for

implementation by the eligible facility from among those recommended by

the architect or engineer;

(2) the fee, if any, charged by the architect or engineer; and

(3) if the facility intends to finance any energy conservation

measures by loan or other financing arrangement, the cost of securing

such loan or other financing arrangement, provided that no costs shall

be included in the cost of the project which are attributable to:

(i) a financing rate in excess of three percentage points above the

overpayment rate set by the commissioner of taxation and finance

pursuant to section one thousand ninety-six of the tax law; or

(ii) any term of a loan or financing arrangement which exceeds by more

than one year the payback period for the energy conservation project

being financed.

4. (a) In addition to any information which is ordinarily required for

purposes of reimbursement, an application for reimbursement pursuant to

this section shall include the analysis and final report of the

architect or engineer, along with any supporting documentation which the

agency may require to review such analysis and report, and a

certification by the facility director that all operating and

maintenance measures recommended by the architect or engineer have been

and will continue to be implemented, or that the failure to implement

any specific operating and maintenance measure will be justified to the

satisfaction of the agency.

(b) An eligible facility which complies with the provisions of this

section shall be reimbursed for not less than the annual pro-rated

project cost for an energy conservation project; provided, however, that

reimbursement in the final year of the payback period for an energy

conservation project may be in such lesser amount as is required to

fully reimburse an eligible facility for the cost of such project. Such

reimbursement may be made in such form and at such time as an agency may

require, in conformance with applicable law and regulations but not less

frequently than once annually.

(c) Notwithstanding any provision of this section, no reimbursement

shall be made to an eligible facility for any part of a payback period

in excess of ten years.

(d) An eligible facility which has received an approval for

reimbursement of a final report prepared pursuant to this section shall

not apply for any further energy conservation measures, not recommended

in such final report, for a period of two years from the date of such

approval.

5. (a) Notwithstanding the provisions of this section, an agency shall

only be required to reimburse eligible facilities for energy

conservation projects pursuant to this section to the extent that the

total amount of such reimbursement in any year, when combined with the

total amount of energy costs actually reimbursed in such year, does not

exceed the total amount budgeted for energy costs in such year;

provided, however, that nothing in this subdivision shall be construed

to preclude an agency from reimbursing energy conservation projects from

any funds, not originally budgeted for energy costs, which are made

available for such purpose, or from approving with a facility's consent

energy conservation projects, for which funds for reimbursement are not

immediately available, for the purpose of assigning priority to

reimbursement of such projects when funds become available.

6. All state agencies which reimburse eligible facilities for energy

costs shall encourage all such facilities to implement measures to

reduce energy consumption, and may make available information on energy

conservation. A state agency may provide each eligible facility under

its jurisdiction with a list of appropriate operating and maintenance

measures, and may require each such facility to certify that it will

implement appropriate operating and maintenance measures.