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Senate of Pennsylvania
Session of 2015 - 2016 Regular Session


Posted: May 31, 2016 03:48 PM
From: Senator Donald C. White
To: All Senate members
Subject: Guaranteed Energy Savings Act (GESA) - defiing operating costs
I plan to introduce legislation in the near future which will clarify language in the Pennsylvania law related to Guaranteed Energy Savings Act (GESA). GESA is a procurement tool that allows local governments, schools, and other state and local agencies to receive state funding to enter into guaranteed energy savings contracts to offset the cost of infrastructure improvements

Under the program, government entities contract with Energy Services Companies (ESCO’s) to analyze energy usage and provide technical, engineering and other expertise to make buildings more energy efficient. The costs savings gained from energy savings are then used to pay the debt on financing the construction or installation of the energy savings measures. The ESCO essentially guarantees performance in the form of energy savings, making the investment pay for itself.

The GESA program has been successfully utilized across the Commonwealth, including by school districts in the 41st Senatorial District. However, it has recently come to my attention the term “operating cost,” is not defined in the current law, and as a result, has caused some public entity solicitors to have concerns. While operation costs have been used for project financial justification since GESA’s implementation, the lack of a definition in the law makes it unclear what costs are actually qualified under the act. A number of solicitors believe this ambiguity in the law could cause the use of some energy savings to be challenged. As a result, a number of school districts—based on their solicitors’ advice—have chosen to forego the benefits of the GESA program.

My proposed bill would clarify the language and bring the definition of operating costs in line with the federal definition contained in the Federal Energy Management Guidelines under the Federal Department of Energy.

Please join me in cosponsoring this legislation so schools and other public agencies have the opportunity to participate in the GESA program with the assurance their savings can be utilized. If you have any questions concerning this proposal, please feel free to contact Anne Achenbach, of my staff at 7-4404 or at aachenbach@pasen.gov.

Introduced as SB1313