{"data":{"id":"us-ky/krs-45a.352","jurisdiction":"us-ky","citation":"KRS 45A.352","heading":"Guaranteed energy savings contracts involving local public agencies.","body":"(1) A local public agency may enter into a guaranteed energy savings contract for\ninnovative solutions for energy conservation measures. The local public agency\nshall submit a request for proposals. The request for proposals for competitive\nprocurement of guaranteed energy savings contracts shall include the following:\n(a) The name and address of the governmental unit;\n(b) The name, address, title, and phone number of a contact person;\n(c) Notice indicating that the local public agency is requesting qualified providers\nto propose energy conservation measures through a guaranteed energy savings\ncontract;\n(d) The following evaluation criteria for assessing the proposals:\n1. Construction management capabilities;\n2. Technical approach to facilities included;\n3. Financial attributes, as defined by total cost of contract and guaranteed\nsavings and provider's financial strength demonstrating ability to fulfill\nthe guarantee term; and\n4. Provider's capability, personnel, track record, and demonstrated ability\nto accomplish the contract;\n(e) The date, time, and place where proposals must be received;\n(f) Any other stipulations and clarifications the local public agency may require;\nand\n(g) An overview prepared by the local public agency stating goals or objectives\nspecific to facility needs to be considered by the qualified providers who are\nresponding to the request. Detailed scope of construction is not required.\n(2) Respondents to the request for proposal shall provide the following:\n(a) A detailed list of the proposed energy conservation measures and the\nguaranteed savings which shall be supported with calculations. Any\nguaranteed energy and operational savings shall be determined by using one of\nthe measurement and verification methodolo gies listed in the United States\nDepartment of Energy's \"Measurement and Verification Guideline for Federal\nEnergy Projects\" or in the \"North American Energy Measurement and\nVerification Protocol.\" If due to existing data limitations or the\nnonconformance of specific project characteristics, none of the methods listed\nin either the United States Department of Energy's \"Measurement and\nVerification Guideline for Federal Energy Projects\" or in the \"North American\nEnergy Measurement and Verification Protocol\" is sufficient for measuring\nguaranteed savings, the qualified provider shall develop an alternate method\nthat is compatible with one (1) of the two (2);\n(b) The estimated cost of the proposed energy conservation measures including\nengineering, construction , commissioning, measurement and verification,\nannual reconciliation statements, and required on-going services; and\n(c) Proposed method and costs of financing.\n(3) The value for total cost of the contract minus the calculated savings from the energy\nconservation measures listed in the qualified provider's proposal, shall be within\nfifteen percent (15%) of the value for the total cost of the contract minus the\ncalculated savings after the final contract has been negotiated. If the difference\nbetween the proposed and the final contract is not within fifteen percent (15%) and\nthe local public agency and the qualified provider are unable to renegotiate the final\ncontract to reconcile the difference between the proposed and final contract values,\nthen the local public agency may:\n(a) Stop negotiations with the current qualified provider; and\n(b) Select an alternate provider.\n(4) The local public agency may, as a component of the request for proposal, solicit and\nnegotiate additional maintenance services for the a ffected proposed energy\nconservation measures. Additional services shall be subject to budget appropriations\non an annual basis and may be discontinued at any time over the guarantee period\nwith no negative impact to the guaranteed savings contract.\n(5) The local public agency shall utilize the request for proposal process to enter into a\nguaranteed energy savings contract. The local public agency may, at its discretion,\nutilize a request for qualifications, provided that the local public agency solicits\nqualification statements from multiple potentially qualified providers. The local\npublic agency shall use the qualification statements to select no fewer than two (2)\nproviders and each provider shall then be subject to the request -for-proposal\nrequirement provided in subsections (1) to (4) of this section.\n(6) The local public agency shall select the provider best qualified to meet its needs.\nThe local public agency shall provide public notice of the meeting at which it\nproposes to award a guaranteed energy savings contract, the name of the parties to\nthe proposed contract, and the purpose of the contract. The public notice shall be\nmade at least ten (10) days prior to the meeting. After reviewing the proposals, a\nlocal public agency may enter into a guarante ed energy savings contract with a\nqualified provider if it finds that the amount it would spend on the energy\nconservation measures recommended in the proposal would not exceed the amount\nto be saved in either energy or operational costs plus capital cost avoidance within\nthe term of the contract from the date of installation, if the recommendations in the\nproposal are followed.\n(7) The guaranteed energy savings contract shall include a written guarantee of the\nqualified provider that either the energy or o perational costs savings plus capital\ncost avoidance will meet or exceed the costs of the energy conservation measures\nwithin the term of the contract. The qualified provider shall, on an annual basis,\nreimburse the local public agency for any shortfall in  guaranteed energy savings\nprojected in the contract. A qualified provider shall provide a sufficient bond to the\nlocal public agency for the installation and the faithful performance of all the\nmeasures included in the contract. The guaranteed energy savi ngs contract may\nprovide for payments over a period of time, not to exceed the term of the contract.\n(8) The qualified provider shall provide the local public agency with an annual\nreconciliation statement. The statement shall disclose any shortfalls or su rplus\nbetween guaranteed energy and operational savings specified in the guaranteed\nenergy savings contract and actual energy and operational savings incurred during a\ngiven guarantee year. The guarantee year shall consist of a twelve (12) month term\ncommencing from the time that the energy conservation measures became fully\noperational. The qualified provider shall pay the local public agency any short fall\nin the guaranteed energy and operation savings within thirty (30) days after the total\nyear savings have been determined. If there is a surplus in the actual guaranteed\nenergy and operational savings in a given year, that surplus savings may be carried\nforward and applied against any possible savings shortfall in the following\nguarantee year, except that  the surplus carried forward is limited to a period not to\nexceed one (1) year. If the qualified provider pays the local public agency for a short\nfall in energy or operational savings incurred during a given guarantee year and\nthere is a surplus in energy  or operational savings in future guarantee years, the\nqualified provider shall bill the local public agency for an amount not to exceed the\namount of the short fall in the given guarantee year.\n(9) The use of capital cost avoidance shall be subject to the following restrictions:\n(a) The amount expended shall not exceed fifty percent (50%) of the project cost;\nand\n(b) Capital cost avoidance shall be restricted to payment for permanent equipment\nreplacement as follows:\n1. Storm windows or doors, multiglazed windows or doors, additional\nglazing, and reduction in glass area;\n2. Replacement of heating, ventilating, or air conditioning major\ncomponents or systems;\n3. New lighting fixtures where required to achieve Illuminating\nEngineering Society of North America  (IES) standards, provided the\nexisting light fixtures shall have been determined to be obsolete and\nincapable of achieving IES standards; and\n4. Life safety system replacements or upgrades which shall have been\ndetermined to be necessary to conform with e xisting state and local\ncodes and standards.\n(10) The commissioner of education shall review, and approve or disapprove projects\nfrom local school districts relating to energy conservation measures under a\nguaranteed energy savings contract, on the basis of the following guidelines:\n(a) The project design's compliance with technical, health, and safety standards as\nrequired by administrative regulation;\n(b) The availability of general funds, capital outlay allotments under KRS\n157.420 or local and state fun ds from the Facilities Support Program of\nKentucky as provided by KRS 157.440, for projects that will use capital cost\navoidance;\n(c) The appropriate use of capital outlay allotments under KRS 157.420, local and\nstate funds from the Facilities Support Prog ram of Kentucky as provided by\nKRS 157.440, for projects using capital cost avoidance, based on the project's\ncompliance with the district's approved facility plan;\n(d) The funding capability of the school district; and\n(e) The financing mechanism and proper financing documentation.\n(11) The request for proposal as provided in subsections (1) to (4) of this section shall be\ndeemed to satisfy the requirements set out in KRS 162.070, and shall not be subject\nto an award determination based on the lowest competitive bid or a separate bidding\nprocess for each energy conservation measure listed in the proposal.\n(12) A guaranteed energy savings contract that does not involve construction or the\ninstallation of physical improvements shall not require the approval o f the\ncommissioner of education and shall not be subject to other requirements of this\nsection.","path":["KRS Chapter 45A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=22403","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:07Z","sha256":"d75d602ec5f04eecffca6bdc1b25c890097e2d065de8455e9b56201849602dea","source_id":"us-ky","stale":false,"prev":"us-ky/krs-45a.351","next":"us-ky/krs-45a.353"},"notice":"GroundRules: Original legal text. Not legal advice."}