90-4-1102. Definitions. As used in this part, the following definitions apply:

(1) "Cost-effective" or "cost-effectiveness" means that the sum of guaranteed cost savings and unguaranteed energy cost savings attributable to utility unit price escalation is equal to or greater than:

(a) the energy performance contract financing repayment obligation, if any, each year of a finance term;

(b) the total project cost of the cost-saving measures implemented divided by 20; or

(c) the total project cost of the cost-saving measures implemented divided by the cost-weighted average useful life of the cost-saving measures.

(2) "Cost-saving measure" means a facility improvement, repair, or alteration or equipment, fixtures, or furnishings added to or used in a facility and designed to reduce energy or water consumption or operation and maintenance costs. The term also includes vehicle acquisitions, changes to utility rate or tariff schedules, or fuel source changes that result in cost savings.

(3) "Department" means the department of environmental quality provided for in 2-15-3501.

(4) "Energy performance contract" means a cost-effective contract between a governmental entity and a qualified energy service provider for implementation of one or more cost-saving measures and guaranteed cost savings.

(5) "Finance term" means the length of time for repayment of funds borrowed for an energy performance contract.

(6) "Governmental entity" means:

(a) a department, board, commission, institution, or branch of state government;

(b) a county, consolidated city-county government, city, town, or school district;

(c) a special district, as defined in 2-2-102;

(d) the university system or a unit of the university system; or

(e) a community college district.

(7) "Guarantee period" means the period of time from the effective date of the contract until guaranteed cost savings are achieved in accordance with 90-4-1114(5).

(8) "Guaranteed cost savings" means a guaranteed annual measurable monetary reduction in utility and operating and maintenance costs for each year of a guarantee period resulting from cost-saving measures. Guaranteed cost savings for utility cost savings must be calculated using mutually agreed on baseline utility rates in use at the time of an investment-grade energy audit. Guaranteed cost savings for operation and maintenance cost savings must be calculated using mutually agreed on baseline operation and maintenance costs at the time of an investment-grade energy audit.

(9) "Investment-grade energy audit" means a study of energy or water usage of a public building performed by a qualified energy service provider utilizing a professional engineer licensed in the state of Montana. It includes detailed descriptions of the improvements recommended for the project, the estimated costs of the improvements, and the operation and maintenance cost savings and utility cost savings projected to result from the recommended improvements. The study must contain all information required pursuant to 90-4-1113(2).

(10) "Measurement and verification" means the methodology, measurements, inspections, and mathematical calculations to determine utility consumption before and after an energy performance contract is implemented. The measurement and verification report may be for an individual cost-saving measure or an entire project.

(11) "Operation and maintenance cost savings" means a measurable decrease in operation and maintenance costs as a direct result of cost-saving measures calculated using baseline operation and maintenance costs. The term does not include the shifting of personnel costs or similar short-term cost savings that cannot be definitively measured.

(12) "Person" means an individual, corporation, partnership, firm, association, cooperative, limited liability company, limited liability partnership, or any other similar entity.

(13) "Qualified energy service provider" means a person included on the department's list of qualified energy service providers.

(14) "Total project cost" means the total cost of the project, including costs of the investment-grade energy audit, energy performance contract, measurement and verification, and financing.

(15) "Utility cost savings" means expenses for utilities that are eliminated or avoided on a long-term basis as a result of equipment installed or modified or services performed by a qualified energy service provider. Utility cost savings include expenses for natural gas, propane or similar fuels, electricity, water, wastewater, and waste disposal.