STATE AGENCY ENERGY SAVINGS PROGRAM
OAR 330-118-0000 through 330-118-0090 allows state agencies to retain and spend 50 percent of the net savings from energy projects pursuant to ORS 469.752 to 469.756.
As used in Chapter 487, Oregon Laws 1991 and in these rules, the following terms shall have the following definitions, unless the context clearly indicates otherwise:
(1) "Baseline Energy Budget" means the expenditure limitation amount budgeted for energy costs by the agency immediately prior to installation of the project.
(2) "Budget and Management Division" means the Department of Administrative Services Budget and Management Division.
(3) "Cogeneration" has the meaning given that term in ORS 758.505(2).
(4) "Department" means the Oregon Department of Energy.
(5) "Efficiency of Energy Use" means the ratio of output (work done) to input (energy used).
(6) "Electric Utility" means a utility which is regulated by the state or the Federal Energy Regulatory Commission that provides retail electric power to consumers.
(7) "Energy Cost savings" means the dollar savings based on the annual monitored savings from the project calculated as follows:
(a) For projects which do not sell energy or power to an electric utility or the Bonneville Power Administration, energy savings times the last rate in effect or fuel cost during the monitored savings period;
(b) For projects which sell energy or power, the amount of energy or power delivered to one or more electric utilities or the Bonneville Power Administration as a result of the project times the rates(s) stated in the energy or power sales agreement(s);
(c) For projects which do not either sell or use all of their energy or power savings or production, the energy cost savings shall be the sum of amounts proportionally calculated as in subsection (a) and (b) of this section.
(8) "Energy Savings" means the amount of energy not used as a result of the project as compared to a prior period. Prior period energy use may be adjusted for changes in building use or occupancy. Energy savings result from the efficiency of energy use. Energy savings shall be measured in millions of Btus (MMBtus), and may be the result of vehicle, aircraft or vessel miles not travelled.
(9) "Gas Utility" means a public utility as defined in ORS 757.005(1)(a)(A) which provides natural gas service to consumers.
(10) "Infrastructure Improvements" means improvements to facilities, buildings, equipment and other components which make up and support the physical structure of the agency.
(11) "Monitored Savings" means measurements of actual energy savings or the miles reduced per vehicle, and may include, but not be limited to, energy accounting systems, energy bill com-parisons, and metering. Subject to the approval of the Department, engineering estimates may be used in cases where measurement of actual savings is not practical.
(12) "Net Savings" means the operating savings and the energy cost savings, after debt service, leases, operations and maintenance costs, service contracts insurance, fuels and their transport and storage, transmission, and other recurring direct costs, resulting from a project. Net savings shall accrue only during the savings period.
(13) "Operating Savings" means reduction or elimination of: labor or service contracts; demand charges; chemicals; maintenance of energy consuming conversion and distribution equipment; replacement equipment; and lubricants and maintenance expenses in the case of vehicles, aircrafts, and vessels; providing each item is $1,000 or more annually.
(14) "Performance Measures" means performance measures, as required by Executive Department, that address energy use in buildings, facilities, and transportation. Wherever possible the performance measures should be based on monitored savings, or metered power and energy production.
(15) "Project" means a state agency's improvement of the efficiency of energy use, development of cogeneration facilities or use of renewable resources by or at state facilities. For the purposes of these rules, a project includes only those agency activities which the agency is pursuing under the authority of ORS 469.754.
(16) "Renewable Resources" has the meaning given that term in ORS 758.505(9)(a).
(17) "Revolving Fund" means a fund in the State Treasury, or a separate account or fund in the General Fund in the State Treasury, that by law is dedicated, appropriated or set aside for the purposes listed in ORS 469.754(3). "Revolving fund" does not have the meaning used in ORS 291.002 or the State Accounting Manual, Section 21 05 01(4) self-sustaining accounts.
(18) "Savings Period" means:
(a) For energy efficiency projects without an energy or power sales contract with an electric utility or the Bonneville Power Administration, the expected useful life of the project;
(b) For energy efficiency, cogeneration or renewable resource projects which provide energy or power pursuant to a contract with an electric utility or the Bonneville Power Administration, the term of the contract or the expected useful life of the project whichever is greater; or
(c) For cogeneration and renewable resource projects without an energy or power sales contract with an electric utility or the Bonneville Power Administration, the expected useful life of the project;
(d) For projects which provide energy or power to any combination of the state agency, an electric utility or the Bonneville Power Administration, the longest term of any energy or power sales contract or the expected useful life of the project, whichever is greater.
(19) "Service" has the meaning given that term in ORS 856.010.
(20) "State Agency" has the meaning given that term in ORS 278.005
(21) "State Facility" means the land and all buildings, structures, improvements, machinery, equipment or fixtures, and tangible personal property including, but not limited to vehicles, aircraft, vessels as defined by ORS 278 .005, moveable machinery and equipment, and moveable fixtures, which are erected or operated on, above or under the land, which is owned, leased, controlled or possessed by a state agency.
[Publications: The publication(s) referred to or incorporated by reference in this rule are available from the agency.]
(1) Eligible projects include, but are not limited to, the following:
(a) Projects which improve efficiency or attain high efficiency of energy use through energy system or process changes, equipment replacement, or waste heat recovery;
(b) Projects consisting of measures meeting energy efficiency criteria encouraged or approved by the electric or gas utilities providing service to the state facility or the Department;
(c) Employee awareness campaigns and on-going training; and
(d) Projects that meet these eligibility requirements, that began construction or installation after September 30, 1991, and that were not completed prior to final adoption of rules. These projects are not subject to the provisions of the Offering the Right of First Refusal.
(2) The following projects are not eligible:
(a) A project that saves dedicated funds, which are not transferable to the General Fund; and
(b) A plan of a state agency to improve the efficiency of energy use in a state-rented facility if the payback period for the project exceeds the term of the current state lease for that facility.
(3) In the event eligibility is unknown or disputed, the party(ies) may petition the Director of the Department for a decision. The Director's decision shall be final.
(1) Whenever an agency proposes to undertake a project under ORS 469.754 the state agency shall provide a notice to the Department and to the gas and electric utilities which serve the state facility where the project is domiciled and to a mailing list of interested persons developed by the state agency for this purpose. The notice shall be provided to any requesting person and include a statement of whether the agency intends to rely on the authority in ORS 469.754 and these rules, or whether the agency intends to rely on its own authority to proceed with the project.
(2) When a state agency intends to proceed with a project other than listed in section (3) of this rule, the notice shall, in addition to the information above, include:
(a) The physical location of the project(s);
(b) The anticipated size or size range of the project(s) stated in annual energy (in kWh or Btu) or capacity (in kW, horsepower or pressure), and its anticipated seasonal disposition;
(c) Whether the project(s) may provide steam or useful heat, and its anticipated seasonal disposition;
(d) A description of how the project(s) could be developed, financed and operated;
(e) An intended schedule for completion and operation of the project(s); and
(f) The anticipated fuel source(s).
(3) If a state agency plans a project costing less than $50,000, an energy efficiency project encompassing under 50,0000 square feet, a project affecting the efficiency of energy use in transportation, a renewable resources project which does not generate electricity, and employee awareness campaign, or project with a useful life of less than 5 years, then they are exempt from OARs 330-118-0030, 330-118-0040, 330-118-0050 and 330-118-0055. Also exempt from these rules are other projects as predesignated by the utilities which serve the state agency. ODOE will maintain a list of such predesignated exempt projects.
Right of First Refusal
(1) To exercise their right to first negotiate and right of first refusal the electric and gas utilities which serve the project's domicile must submit a proposal in response to an agency's procurement solicitation.
(2) A state agency shall provide the electric and gas utilities which serve the project's domicile, and any other potential suppliers, timely access to the project site for the audit and planning purposes.
(3) An electric or gas utility which serves the project's domicile that wants to negotiate for or to match any sales of a project's electrical or steam output which may be sold must state such interest in their proposal in response to the agency's procurement solicitation.
(4) A state agency is not obligated by these rules to commit to utility proposals to buy electricity, develop, finance, operate or otherwise act together in energy conservation or cogeneration and renewable resource projects which generate electricity or sell energy or power to electric utilities or the Bonneville Power Administration. These rules do not alter the agency's or utility's rights and obligations under ORS 758.505 - 758.555 and 18 CFR 292.et seq..
[Publications: The publication(s) referred to or incorporated by reference in this rule are available from the agency.]
Selection of Project Vendors and Participants
(1) Agencies shall undertake competitive procurements for projects. The agency's applicable rules and regulations for competitive procurement and confidentiality shall apply along with additional authorities vested in he agency by ORS 469.752 - 469.756. Nothing in these rules requires an agency to use a competitive procurement for exempt projects per OAR 330-118-0020(2). A copy of the procurement solicitation shall be sent to the electric and gas utilities which serve the project's domicile and to a list of all interested persons developed by the state agency for this purpose.
(2) Agency procurement solicitations must include:
(a) A description of the preferred state facility(ies) to domicile the project(s);
(b) As applicable, the preferred size or size range of the project(s) stated in annual energy (in kWh or Bts) or capacity (in kW, horsepower or pressure), and its preferred seasonal disposition;
(c) Whether the project(s) must provide steam or useful heat and its preferred seasonal disposition;
(d) A description of any specific problems, needs or issues the project should address;
(e) A preferred schedule for completion and operation of the project(s);
(f) Any limitations or preferences for fuel source(s);
(g) Notification of the agency's rights cited in OAR 330-118-0030(4) and 330-118-0055; and
(h) A complete description of the criteria used for evaluation of proposals.
(3) The criteria used for evaluation shall include but need not be limited to:
(b) Estimated costs and financing impacts;
(d) Risks retained by the agency;
(e) Environmental impacts;
(f) Design feasibility;
(g) Estimated net savings over the life of the project; and
(h) Technical merit.
(4) Proposals in response to agency procurement solicitations must include the following:
(a) A statement of how the applicant proposes to jointly or solely develop, finance, operate or otherwise act together to develop or operate the project;
(b) A technical plan, as appropriate, with a timeline;
(c) A statement of capabilities, experience and operational track record for projects of a similar nature;
(d) A budget with a description of all applicable fees and costs, and proposed payment schedule;
(e) A description of what project-related risks the applicant and other suppliers propose to assume;
(f) The results of a completed technical audit, as appropriate;
(g) A list of benefits the applicant proposes to bring to the project and agency;
(h) A written commitment to participate in the proposed manner according to the proposed terms; and
(i) A description of any limitations that may impair the applicant's ability to fulfill its proposed commitments.
(5) The deadline for accepting proposals after issuance of the procurement solicitation shall not be any sooner than:
(a) Two months for energy efficiency and renewable resource projects which do not generate electricity; or
(b) Three months for cogeneration and electricity generating renewable resource projects.
(6) Proposals received in response to the procurement solicitation shall, in consultation with the Department, be evaluated according to published criteria.
(7) Upon evaluation, the agency may select project vendors or participants for contract negotiations. The agency reserves the right to reject all proposals. If an agency determines that negotiations are at an impasse, it may terminate negotiations and select another proposal. If an agency judges a proposal from an electric or gas utility which serves the project's domicile to be of equal merit to the highest ranking proposal, the utility's proposal shall be deemed a match and be selected for contract negotiations, all else equal. Upon written notice from the agency the electric and gas utilities which serve the state facility where the project is domiciled shall have the right to match the best offer available to the agency for a period of 30 days. The agency may use competitive negotiations to select the best offer. The utility will have the right to match the best offer whether or not competitive negotiations are use. Should two utilities which serve the project's domicile be judged to have the highest ranking proposals, the agency may select either one.
(8) The agency will notify all persons who submitted proposals the reasons for rejection.
The agency is authorized to enter into such contractual and other arrangements as may be necessary or convenient to design, develop, operate and finance a project at state-owned or state-rented facilities. Utilities may be vendors. The procedure shall be:
(1) Upon entering into a commitment with a vendor, the agency appoints representative(s) to work with the vendor to develop the project. Within three months the agency representative(s) and the vendor complete a project plan, including commissioning and training; develop a detailed budget; decide the allocation of risks and responsibilities of each party from project development through operation; determine costs to be assumed by the agency and by the vendor; determine length of agreement; set timelines.
(2) The agency and the vendor execute a written agreement within two months of completing the above tasks.
(3) The Department resolves disputes between agency and vendor arising from the project. The director's decision is final.
(4) If changes to the project are made subsequent to the written agreement, the agreement may be amended.
Disposition of Steam and Electricity
(1) An agency is not obligated to sell any or all of a project's energy, power, steam, or any other energy form.
(2) If an electric or gas utility which serves the project's domicile has responded according to OAR 330-118-0030(3) the agency shall initiate an auction for the sales of the electric output or steam which the utility has expressed interest in acquiring. The auction shall be open to all potential buyers of the energy and solicit bids. Upon evaluation of bids, and with consultation with the Department, the agency may select buyer(s) for contract negotiations. The agency reserves the right to reject all proposals. If an agency determines that negotiations are at an impasse, it may terminate negotiations and select another buyer. If an agency judges an offer from an electric or gas utility which serves the project's domicile to be of equal merit to the highest ranking offer, the utility's offer shall be deemed a match and be selected for contract negotiations, all else equal. Upon written notice from the agency at the close of the auction the electric and gas utilities which serve the state facility where the project is domiciled shall have the right to match the best offer available to the agency for a period of 30 days. The agency may use competitive negotiations to select the best offer. The utility will have the right to match the best offer whether or not competitive negotiations are used. Should two utilities which serve the project's domicile be judged to have the highest ranking offers, the agency may select either one. Criteria for selecting buyers of steam and electricity shall include:
(a) Transaction costs;
(b) Risks retained by the agency;
(c) Term; and
(d) Impact on estimated net savings over the life of the project.
(3) Nothing in these rules impairs an agency's rights under any other provisions of law including rights to market energy from qualifying facilities according to ORS 758.505 - 758.555 and the implementing rules and orders of the Oregon Public Utility Commission, and 18 CFR 292 et. seq. Nothing in these rules affects any authority, including the authority of a state agency or a municipality to regulate utility service or the development and use of electricity, gas or steam.
Budget Not Cut
The net savings shall not be deducted from the agency's budget throughout the savings period, as long as the project produces savings. When preparing its biennial budget request the agency may use the baseline energy budget. This amount may be adjusted by an inflationary factor to cover increases in utility rates or fuel costs, increases in energy costs due to weather variations, or similar events causing changes in energy use.
Retaining Fifty Percent of Net Savings
A state agency that implements a project in accordance with this rule may retain 50 percent of the net savings and maintain its baseline energy budget by:
(1) Prior to implementation of the project, the agency shall submit to the Budget and Management Division:
(a) Notification in writing of their intent to exercise their 50 percent savings option, pursuant to ORS 469.754; and
(b) Performance measures pertaining to the project.
(2) The agency shall send annual reports of monitored savings and net savings for the project to the Budget and Management Division by September 1 of each year.
(3) Upon Budget and Management Division approval, the agency shall transfer from its operations account half the amount of the accrued net savings to the revolving fund. The balance shall be transferred to the State's General Fund.
Use of Savings
A state agency shall spend the 50 percent of net savings to increase productivity through: Energy efficiency projects; high-tech improvements, such as the purchase or installation of new desk-top or lap-top computers or the linkage of computers into systems or networks; or infrastructure improvements. The agency shall submit to Budget and Management Division a plan for use of the revolving fund through the biennial budget process.
Agreements with the Department for Technical Assistance
(1) The agency may request an assessment of energy and power marketing opportunities, energy audit and/or engineering study through the Department's Small Scale Energy Loan Program.
(2) The agency may submit written requests to the Department for specific assistance, including but not limited to marketing of energy and power, engineering, architectural, and energy analysis. At the discretion of the Department, an Interagency Agreement, in accordance with ORS Chapter 190, may be executed. The Department reserves the right to charge the agency fees for work not covered by Small Scale Energy Loan Program statutes, such as arbitration, technical review, etc.
(3) Any loans with the Small Scale Energy Loan Program must comply with OAR Chapter 330, Divisions 105 and 110.