LEGISLATION INTRODUCED TO CHANGE HOW AGENCIES ENTER ENERGY SERVICES CONTRACTS

January 2011
Number 1

In the first weeks of the 2011 legislative session, State Senator Leland Yee (D-San Francisco) introduced Senate Bill (“SB”) No. 118 which would require all state public agencies, including school districts, to seek competitive bids before entering into energy service contracts. Government Code section 4217.12 currently allows a public agency to enter into energy service contracts without public bidding “on terms that its governing body determines are in the best interests of the public agency.” Citing potential abuses and unfair advantages given to large solar companies at the expense of smaller ones, SB 118 proponents state that it is intended to save tax dollars by requiring public agencies to consider more than one bid for its energy saving projects. Critics contend that SB 118 will make it increasingly difficult for public agencies to move quickly on energy saving projects and that these delays could stifle technological innovation and creativity.

With many public agencies currently pressing forward with solar energy projects, the effect of this bill could be widespread. Agencies currently contemplating such projects may need to consider this bill when scheduling the timing of their projects and the selection of vendors. We will closely monitor SB 118 for new developments as it makes it way through committee. Please visit our website regularly for updates. Watch for our new link to green news and other information. Should you have any questions, please do not hesitate to contact one of our eight offices located statewide or consult our website.

Written By:
Ruth Mendyk
Shareholder and Facilities & Business Practice Group Co-Chair
Fresno Office
rmendyk@lozanosmith.com

Kevin C. Angstenberger
Associate
Walnut Creek Office
kangstenberger@lozanosmith.com

© 2011 Lozano Smith

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