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This entry was published on 2014-09-22
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Energy conservation in state-aided programs
State Finance (STF) CHAPTER 56, ARTICLE 8
§ 127-a. Energy conservation in state-aided programs. 1. As used in
this section:

(a) "annual pro-rated project cost" shall mean the amount of
reimbursement per year which is sufficient to reimburse an eligible
facility, in accordance with its state aid rate, for the cost of an
energy conservation project by the final year of the payback period for
such project.

(b) "eligible facility" shall mean a facility, other than a hospital
or a residential health care facility as defined in article twenty-eight
of the public health law, which has a current operating certificate from
a state agency and which receives full or partial state reimbursement
for energy costs.

(c) "energy conservation measure" shall mean any construction,
alteration, repair or improvement of the capital assets of an eligible
facility for the purpose of reducing the consumption of energy, but
shall not include operating and maintenance measures.

(d) "energy conservation project" shall mean one or more energy
conservation measures selected for implementation by an eligible

(e) "operating and maintenance measures" shall mean cost-free or
low-cost procedures, or improvements or repairs to an eligible facility,
which are intended to reduce energy consumption and which do not impose
any costs on an eligible facility which are not reimbursable as
operating costs of the facility.

(f) "payback period" shall mean an estimated period of time, within
which the costs of an energy conservation measure or project will be
recovered from the savings generated by the reduced energy consumption
resulting therefrom.

(g) "state aid rate" shall mean the percentage of an eligible
facility's energy costs which are reimbursed by the state.

2. Notwithstanding any other provision of law, an eligible facility
shall be reimbursed for the costs of implementing energy conservation
projects in accordance with the provisions of this section.

3. (a) Prior to implementing any energy conservation project for which
reimbursement is sought pursuant to this section, an eligible facility
shall obtain an analysis of its energy usage and available opportunities
for energy conservation. Such analysis shall be conducted by an
architect or engineer licensed by the state of New York who has no
financial interest in the facility or in the production, promotion or
sale of any energy resource or any energy conservation product or

(b) The required analysis shall be prepared after an on-site
examination of the facility by the architect or engineer. The analysis
shall include recommendations for energy conservation measures and
operating and maintenance measures appropriate for the facility, and
estimated payback periods for each recommended energy conservation
measure. For the purposes of this section, payback period calculations
shall take into account implementation of all recommended operating and
maintenance measures, shall be based on current energy prices, without
any adjustment for anticipated changes in such prices, and shall be
based on the average annual energy usage of the facility. The average
annual energy usage shall be based on the energy usage for the preceding
three years, provided, however, that if the facility has not been in
operation for the preceding three years, or if changes in the capacity
or usage of the facility in the preceding three years have substantially
altered the energy usage of the facility, the architect or engineer
shall make and document reasonable assumptions concerning the average
annual energy usage of the facility.

(c) The architect or engineer shall prepare a final report presenting
a single payback period for the energy conservation project for which
reimbursement is sought. The payback period shall be computed as
provided in paragraph (b) of this subdivision, and shall take into
account the interaction between conservation measures. The cost of such
project shall include:

(1) the actual costs of all energy conservation measures selected for
implementation by the eligible facility from among those recommended by
the architect or engineer;

(2) the fee, if any, charged by the architect or engineer; and

(3) if the facility intends to finance any energy conservation
measures by loan or other financing arrangement, the cost of securing
such loan or other financing arrangement, provided that no costs shall
be included in the cost of the project which are attributable to:

(i) a financing rate in excess of three percentage points above the
overpayment rate set by the commissioner of taxation and finance
pursuant to section one thousand ninety-six of the tax law; or

(ii) any term of a loan or financing arrangement which exceeds by more
than one year the payback period for the energy conservation project
being financed.

4. (a) In addition to any information which is ordinarily required for
purposes of reimbursement, an application for reimbursement pursuant to
this section shall include the analysis and final report of the
architect or engineer, along with any supporting documentation which the
agency may require to review such analysis and report, and a
certification by the facility director that all operating and
maintenance measures recommended by the architect or engineer have been
and will continue to be implemented, or that the failure to implement
any specific operating and maintenance measure will be justified to the
satisfaction of the agency.

(b) An eligible facility which complies with the provisions of this
section shall be reimbursed for not less than the annual pro-rated
project cost for an energy conservation project; provided, however, that
reimbursement in the final year of the payback period for an energy
conservation project may be in such lesser amount as is required to
fully reimburse an eligible facility for the cost of such project. Such
reimbursement may be made in such form and at such time as an agency may
require, in conformance with applicable law and regulations but not less
frequently than once annually.

(c) Notwithstanding any provision of this section, no reimbursement
shall be made to an eligible facility for any part of a payback period
in excess of ten years.

(d) An eligible facility which has received an approval for
reimbursement of a final report prepared pursuant to this section shall
not apply for any further energy conservation measures, not recommended
in such final report, for a period of two years from the date of such

5. (a) Notwithstanding the provisions of this section, an agency shall
only be required to reimburse eligible facilities for energy
conservation projects pursuant to this section to the extent that the
total amount of such reimbursement in any year, when combined with the
total amount of energy costs actually reimbursed in such year, does not
exceed the total amount budgeted for energy costs in such year;
provided, however, that nothing in this subdivision shall be construed
to preclude an agency from reimbursing energy conservation projects from
any funds, not originally budgeted for energy costs, which are made
available for such purpose, or from approving with a facility's consent
energy conservation projects, for which funds for reimbursement are not
immediately available, for the purpose of assigning priority to
reimbursement of such projects when funds become available.

6. All state agencies which reimburse eligible facilities for energy
costs shall encourage all such facilities to implement measures to
reduce energy consumption, and may make available information on energy
conservation. A state agency may provide each eligible facility under
its jurisdiction with a list of appropriate operating and maintenance
measures, and may require each such facility to certify that it will
implement appropriate operating and maintenance measures.