BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 467 (Pavley)
Hearing Date: 5/16/2011 Amended: 5/3/2011
Consultant: Bob Franzoia Policy Vote: G O 11-1
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BILL SUMMARY: SB 467 would require the Department of General
Services (department) to deem a contract for an energy
efficiency product or service to be a no cost or net neutral
cost contract when specified conditions are met. This bill
would require the department to issue a non-mandatory master
services agreement permitting owners, operators, and tenants of
state facilities to procure energy efficiency products or
services according to specified criteria.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
New energy efficiency
contract bidding procedure
- issuance of master Minimum $250 one time; up to $125
Special*
services agreement ongoing
- pilot or demonstration $125 or more annually Special*
contracts
* Service Revolving Fund (a cost recovery fund operated by the
department)
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
No later than July 31, 2012, the department shall issue a master
services agreement which would enable owners, operators and
tenants of stat facilities to procure energy efficiency products
or services from approved companies included in the agreement.
Requiring the department to issue a master services agreement
that involves guidance from university centers determining that
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the included companies have a record of providing those products
or services to governmental entities or private sector companies
for at least two years prior to January 1, 2012, and developing
product and service specifications within six months of the
effective date of the bill is labor intensive and depends in
large part on the amount of work already completed by university
centers (generally at UC Berkeley and UC Davis).
For example, for the master services agreement to include an
energy efficiency product or service, the department must
determine the cost savings to the state are projected to exceed
the compensation the state pays for the technology or service
within 12 months of the initial deployment of the product or
service. Such a determination would likely require ongoing
review and revision. Recognizing that providing more time to
complete the agreement may delay energy savings that may result
from the provision of this bill, in the interest of reducing
implementation costs, staff recommends amending the bill to
require the master service agreement be issued by January 1,
2013.
It appears the provisions may favor short term contracts for
smaller, less capital intensive, projects. Restricting the
determination of energy cost savings to a period of 12 months
from the initial deployment of the product or service may favor
some products or services and may preclude the master services
agreement from including energy retrofit programs where the cost
benefit is not realized for several years. Staff recommends the
bill be amended to allow the department to consider longer
periods of time when determining energy cost savings.
This bill adds Government Code 15814.37 which states, among
other things, that nothing in the section shall be construed to
require the creation of a General Fund obligation in
contravention of Section 1 of Article XVI of the Constitution.
This section of the Constitution relates to the creation of debt
in excess of $300,000 without voter approval. It is unclear why
this provision is necessary in this bill.
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