§ 127-a. Energy conservation in state-aided programs. 1. As used in this section:

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(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 28 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 facility.

(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 device.

(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 § 1096 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 approval.

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.