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Facilities Planning

Energy Performance Contracts


Energy Performance Contracts by Public School Districts and BOCES

There is a need for all public agencies, including public school districts and boards of cooperative educational services to continually search for, and implement energy-saving procedures. Energy performance contracting is a relatively new means available for energy savings.

Article 9 of the Energy Law, as amended by Chapter 368 of the Laws of 1994, establishes procedures to be used by school districts and BOCES in initiating and administering energy performance contracts. Section 9-101 of that law defines an energy performance contract as an agreement for the provision of energy services, including but not limited to electricity, heating, ventilation, cooling, steam, or hot water, in which a person agrees to install, maintain or manage energy systems or equipment to improve the energy efficiency of or produce energy in connection with a building or facility in exchange for a portion of the energy savings or revenues.

Section 9-103 of the Energy Law sets forth the requirements for such contracts, as discussed in the paragraphs that follow.

  1. The term of the contract may not exceed 35 years or the reasonably expected life of the energy facilities or equipment subject to the contract, whichever is shorter.
  2. Each energy performance contract must include an executory clause using the language contained in subdivision 2 section 9-103 which limits the responsibility of the public entity to make appropriations in support of the contract.
  3. Such contracts are considered ordinary contingent expenses and, as such, are not subject to voter approval.
  4. Energy performance contracts may not be used for the lease or lease-purchase of buildings or facilities.
  5. In order to convey the interest in property necessary for the construction of facilities or the operation of equipment provided for in the energy performance contract, the school district or BOCES may lease real property to which it holds title to energy performance contractor for the same length of time as the term of the contract.
  6. In lieu of competitive bidding in accordance with the provisions of the General Municipal Law, districts and BOCES may procure an energy performance contract by advertising and issuing a written Request For Proposals (RFP) in accordance with the procurement policies and procedures, as adopted by the school districts or BOCES Board of Education pursuant to Section 104-b of the General Municipal Law.
  7. The provisions of Sections 109-b and 103 of the General Municipal Law relating to installment purchase contracts and competitive bidding respectively do not apply to energy performance contracts procured using an RFP.
  8. There is no provision in Section 9-103 for third-party financing nor is there any provision for the issuance of obligations in connection with an energy performance contract except as currently provided by the Local Finance Law.

Energy performance contracts that involve capital construction work are required to be submitted to the Commissioner of Education for the review and approval of final plans and specifications for the issuance of a building permit. Energy performance contracts entered into for a capital purpose, whether partially or totally aidable, must be recorded in the Capital Projects Fund and may be used to claim regular Building Aid pursuant to Section 3602(6) of the Education Law. Questions regarding the accounting requirements should be referred to the Office of the State Comptroller, Division of Local Government and School Accountability, at (518) 474-5404.

In addition to staff at the Education Department, the New York State Energy Research and Development Authority (NYSERDA) can provide technical assistance to school districts. Staff are available to provide technical assistance in developing a Request for Proposals (RFP) as a means to select an energy services company, as well as guidelines for evaluating proposals, technical review and verification of the proposed measures, and assistance in soliciting and securing project financing. A list of energy service companies, a model RFP with evaluation criteria, and a model Agreement to Proceed are available.

NYSERDA also provides Flexible Technical Assistance Services. Flex Tech's main focus is to identify and encourage the implementation of cost-effective energy-efficiency measures. NYSERDA has contracted with highly qualified firms to provide a variety of technical assistance services to NYS organizations, custom-tailored to meet their energy-related needs.  These services are provided on a case-by-case, negotiated, cost-shared basis, and include:

  • Engineering feasibility and technical assistance studies
  • Detailed analyses of specific energy-efficiency projects
  • Technical training and seminars on energy-efficiency topics and technologies
  • Engineering in support of project-financing proposals
  • Commissioning of energy-efficiency measures from pre-design through post-installation

Questions regarding services provided by NYSERDA should be directed to 518/465-6251, ext. 330. Questions regarding capital construction should be directed to Facilities Planning at 518/474-3906.