                                ATTORNEY GENERAL OF TEXAS
                                              GREG        ABBOTT




                                               September     12,2003



The Honorable Jose R. Rodriguez                            Opinion No. GA-01 00
El Paso County Attorney
500 East San Antonio, Room 503                             Re: Whether a school district’s contract for “a
El Paso, Texas 79901                                       comprehensive energy management consultation”
                                                           is an energy savings performance contract under
                                                           Education Code section 44.901 (RQ-0030-GA)

Dear Mr. Rodriguez:

         At the request of the Ysleta Independent School District (the “YISD”), you ask whether a
particular proposed contract under which the district will purchase “a comprehensive       energy
management consultation” would be an energy savings performance contract subject to Education
Code section 44.901.’ See Act of June 2,2003, 78th Leg., R.S., H.B. 2425, 8 5 (to be codified at
TEX. EDUC. CODE ANN. 5 44.901).


         You inform us that the YISD “wishes to purchase certain energy conservation services” from
Energy Education, Inc., a private energy management consulting firm. Request Letter, supra
note 1; see YISD contract, supra note 1, at 1. Under the proposed contract, Energy Education would
agree to “conduct a comprehensive energy management consultation” for the district, and in so
doing, to undertake two tasks:

                           1. To provide [the YISD] board and administration with an
                  energy management program that will enable [the district] to monitor
                  [its] energy consumption and costs through computerization       and
                  thereby reduce the district’s energy consumption         and utility
                  expenditures.

                            2. To assist [the YISD] administration [to] account for energy
                  . . . consumption . . . throughout [the] district. This accounting will
                  result from [the] district’s [purchase and use ofl an energy accounting
                  software program which is acceptable to Energy Education . . . , at a


         ‘Letter from Honorable Jose R. Rodriguez, El Paso County Attorney, to Honorable Greg Abbott, Texas Attorney
Genera1 (Mar. 12,2003) (on file with the Opinion Committee) [hereinafter Request Letter]; Letter from John Bernard,
Chief Operating Officer, Energy Education, Inc., to Hector Aranda, Director of Purchasing Services, Ysleta Independent
School District, at 1 (Oct. 4,2002) (on file with the Opinion Committee) [hereinafter YISD contract].
The Honorable Jose R. Rodriguez       - Page 2       (GA-0100)




                cost not to exceed $15,000 and annual renewals thereafter at a cost
                not to exceed $1,500 per year. Energy Education will provide [the
                district] with the support and assistance necessary . . . to implement
                such a program of energy accountability.

YISD contract, supra note 1, at 1. Energy Education would further contract to select two “energy
educator/managers” from YISD’s staff, whom, although they will remain YISD employees, Energy
Education would train to adjust the district’s energy management system’s (“EMS”) programming
by, among other things, changing “the temperature settings and run times of the HVAC, boiler and
all other equipment . . . [that] is controlled by the district’s EMS as well as in each building’s
lighting, sewer and water usage, time clocks and thermostat settings [that] are not controlled by the
district’s EMS.” Id. at 2. The energy educator/managers would also, with Energy Education’s
assistance, collect and record “relevant data” and “use the computer software to create and maintain
the district’s energy . . . and utilities . . . consumption data . . . to provide an effective monitoring
system for the district’s utilities consumption and costs.” Id. at 3. The YISD would agree to pay a
monthly fee of $43,700 for forty-eight consecutive months, although Energy Education would
guarantee that the district’s total savings will exceed the cost of the monthly fees. See id. at 3, 5.
The contract would continue in effect after all payments are timely made

                without further payments to Energy Education for so long as the
                district . . . desires and continues to substantially implement Energy
                Education’s        energy management       program.       During  such
                continuation[,] the district may use all . . . confidential items and
                other materials furnished to it by Energy Education and may continue
                to implement and utilize the energy management program.

Id. at 6.

         You ask whether section 44.901 of the Education Code would apply to this proposed
contract. See Request Letter, supra note 1, at 1. Subsequent to the date of your request letter, the
legislature amended section’44.901, and the amended statute became effective on June 20, 2003.
See Act of June 2,2003,78th     Leg., R.S., H.B. 2425, 8 5 (to be codified at TEX. EDUC. CODE ANN.
5 44.901); http://www.govemor.state.tx.us/division/press/bills2003#hb     (listing signed bills); see also
Act of June 2, 2003, 78th Leg., R.S., H.B. 2425, 85 121(l), 123(a) (repealing Education Code
section 44.901, as amended in 2001, and providing that the bill is effective immediately).
Consequently, we consider whether the amended section 44.901 would apply.

        Section 44.901 authorizes a school district’s board of trustees to enter “an energy savings
performance contract in accordance with this section.” Act of June 2,2003,78th      Leg., R.S., H.B.
2425,§ 5 (to be codified at TEX. EDUC. CODE ANN. 5 44.901(b)). Subsection (a) defines an energy
savings performance contract as

                a contract for energy or water conservation measures to reduce energy
                or water consumption or operating costs of school facilities in which
The Honorable    Jose R. Rodriguez   - Page 3        (GA-0100)




                the estimated savings in utility costs resulting from the measures is
                guaranteed to offset the cost of the measures over a specified period.
                The term includes a contract for the installation or implementation of:

                         (1) insulation of a building structure and systems within the
                building;

                         (2) storm windows      or doors, caulking or weatherstripping,
                multiglazed windows or        doors, heat absorbing or heat reflective
                glazed and coated window       or door systems, or other window or door
                system modifications that     reduce energy consumption;

                        (3) automatic energy control systems, including          computer
                software and technical data licenses;

                        (4) heating,  ventilating,    or air-conditioning system
                modifications  or replacements     that reduce energy or water
                consumption;

                        (5) lighting fixtures that increase energy efficiency;

                        (6) energy recovery systems;

                       (7) electric systems improvements;

                       (8) water-conserving fixtures, appliances, and equipment or
                the substitution   of non-water-using    fixtures, appliances, and
                equipment;

                       (9) water-conserving     landscape irrigation equipment;

                        (10) landscaping measures that reduce watering demands and
                capture and hold applied water and rainfall . . . ;

                       (11) rainwater harvesting equipment and equipment to make
                use of water collected as part of a storm-water system installed for
                water quality control;

                        (12) equipment for recycling or reuse of water originating on
                the premises or from other sources . . . ;

                        (13)     equipment      needed   to   capture  water    from
                nonconventional,      alternate sources, including air conditioning
                condensate or graywater, for nonpotable uses;
The Honorable      Jose R. Rodriguez       - Page 4        (GA-0100)




                           (14) metering equipment needed to segregate water use in
                   order to identify water conservation opportunities or verify water
                   savings; or

                           (15) other energy or water conservation-related         improvements
                   or equipment . . . .

Id. (to be codified at TEX. EDUC. CODE ANN. 4 44.901 (a)). A school district may finance the contract
(1) under a lease-purchase contract; (2) with bond proceeds; or (3) under a contract with the provider,
although, in any arrangement, the provider must “guarantee the amount of savings to be realized by
the school district.” Id. (to be codified at TEX. EDUC. CODE ANN. tj 44.901(f)-(g)).        The school
district must award an energy savings performance contract “according to the procedures established
for procuring certain professional services by Section 2254.004, Government Code,” but must
publish notice “in the manner provided for competitive bidding.” Id. (to be codified at TEX. EDUC.
CODE ANN. § 44.901(h)).


         The issue you raise is whether, for purposes of section 44.901, an energy savings
performance contract includes only contracts for the installation or implementation of improvements
or equipment, or whether it also encompasses contracts solely for services. See id. (to be codified
at TEX. EDUC. CODE ANN. 5 44.901(a)). A letter submitted in connection with this request, which
characterizes the YISD contract as being solely for services, suggests that the contract is therefore
not subject to section 44.901 .2 Determining whether this proposed contract is solely for services or
for the installation or implementation of improvements or equipment, which may include computer
software, is a fact question and is not amenable to the opinion process. See Tex. Att’y Gen. Op. No.
GA-0003 (2002) at 1 (stating that the opinion process does not determine facts); see also Tex. Att’y
Gen. Op. No. GA-0078 (2003) at 2 (stating that the attorney general does not construe particular
contracts). We answer only the legal question.

         The term “energy savings performance contract” is defined to mean only “a contract for
energy or water conservation measures.” Act of June 2,2003, 78th Leg., R.S., H.B. 2425, 8 5 (to
be codified at TEX. EDUC. CODE ANN. 8 44.901(a)). Without more, it is unclear how broadly the
legislature intended the word “measures” to be construed. On one hand, the word “measures,” by
itself, may include any plans or courses of action.3 Certain federal laws suggest that an “energy-
savings performance contract” or an “energy savings contract” may include contracts for services,
such as energy audits. See Exec. Order No. 13,123, 9 703, 3 C.F.R. 180 (1999), reprinted in 42
U.S.C. § 8251 (2000); 42 U.S.C. 8 8287c(3) (2000). On the other hand, other federal laws define



          2Letter from Jon A. McCormick, Adams, Lynch & Loftin, P.C., to William S. Spears, President, Energy
Education, Inc., at 2 (Aug. 24,200l) (on file with the Opinion Committee) (setting out the writer’s understanding that
Energy Education’s “people oriented energy use management program” does not require installing or retrofitting any
equipment, systems, or improvements).

         3We found no helpful case law defining the term “measure.” In this context, the word is commonly understood
to mean a plan or course of action. See IX OXFORDENGLISHDICTIONARY528(2d ed. 1989); TEX. GOV’T CODE ANN.
6 311.011(a) (Vernon 1998).
The Honorable Jos& R. Rodriguez      - Page 5      (GA-0100)




the term “energy conservation measure” to mean a construction project or a building material or
component.    See 42 U.S.C. 6 6326(4) (2000); 7 C.F.R. 4 1721.104(b)(l) (2003); 10 C.F.R. 8
435.302(k) (2003). The Texas legislative history sheds no light on the definition’s breadth. See,
e.g., SENATEFINANCE COMM.,BILL ANALYSIS,Tex. H.B. 2425, 78th Leg., R.S. (2003); SENATE
COMM.ONNATURALRESOURCES,         BILLANALYSIS,Tex. S.B. 1494,77th Leg., R.S. (2001); HOUSE
COMM.ONENERGYRESOURCES,        BILLANALYSIS,Tex. H.B. 2277,77th Leg., R.S. (2001).

          Given the ambiguity of the word “measures,” the second sentence of the definition serves to
narrow the definition’s scope to contracts that involve the installation or implementation of an
improvement or equipment only, such as those listed in subsections (1) through (15). See Act of
June 2,2003,78th Leg., RX, H.B. 2425, § 5 (to be codified at TEX.EDUC.CODEANN. 8 44.901(a)).
The term “includes” is typically a term of enlargement, “not of limitation or exclusive enumeration.”
TEX. GOV’TCODEANN. 8 3 11.005( 13) (Vernon 1998). It “implies that [a] list is only partial” atid
“‘illustrative.“’ Tex. Prop. & Cas. Ins. Guar. Ass ‘n/S. W. Aggregates, Inc. v. S. W. Aggregates, Inc.,
982 S.W.2d600,608      (Tex. App.-Austin 1998,nopet.) (~~~~~~~BRYANA.GARNER,ADIcTIoNARY
OF MODERN LEGALUSAGE43 l-32 (2d ed. 1995)). Subsection (15) in particular indicates that an
energy savings performance contract may be a contract for “energy or water conservation-related
improvements or equipment” only. Act of June 2, 2003, 78th Leg., R.S., H.B. 2425, 9 5 (to be
codified at TEX. EDUC. CODE ANN. 8 44.901(a)(15)) (emphasis added).

         Accordingly, for a contract to be an energy savings performance contract under section
44.901, it must be a contract for the installation or implementation of improvements or equipment
intended “to reduce energy or water consumption or operating costs of school facilities” and “the
estimated savings [must be] guaranteed to offset the cost.” Act of June 2, 2003, 78th Leg., R-S.,
H.B. 2425,s 5 (to be codified at TEX. EDUC. CODE ANN. 9 44.901(a)); see Tex. Att’y Gen. 0p. No.
JC-0410 (2001) at 3 (suggesting that, analogous to the ejusdem generis doctrine, an inclusive
definition includes only items similar to those listed). Equipment for section 44.901 ‘s purposes may
include conservation-related  software. CJ: Act of June 2,2003,78th Leg., R.S., H.B. 2425, 8 5 (to
be codified at TEX. EDUC. CODEANN. 4 44.901(a)(3)) (stating that an energy savings performance
contract may include a contract for “automatic energy contrdl systems, including computer
software”). A contract solely for services is not a contract for the installation or implementation of
improvements     or equipment and is therefore not an energy savings performance contract for
purposes of section 44.901.

         Whether the proposed YISD contract is solely a contract for services that is not subject to
section 44.901 is a question of fact that cannot be determined in the opinion process. To the extent
that it is an energy savings performance contract and therefore subject to section 44.901 of the
Education Code, the YISD must comply with section 44.901’s requirements, such as arranging
permissible financing arrangements, filing a performance bond, and letting the contract in
accordance with chapter 2254 of the Government Code.
The Honorable Jose R. Rodriguez    - Page 6      (GA-0100)




                                       SUMMARY

                       For purposes of section 44.901 of the Education Code, an
               energy savings performance       contract is a contract to install or
               implement energy or water conservation-related      improvements or
               equipment, the costs of which the provider guarantees will be offset
               by the resulting utility cost savings. See Act of June 2, 2003, 78th
               Leg., R.S., H.B. 2425, 8 5 (to be codified at TEX.EDUC.CODEANN.
               8 44.901(a)).   A contract solely to purchase energy-conservation-
               related services is not an energy savings performance contract for
               purposes of section 44.901.




BARRY R. MCBEE
First Assistant Attorney General

DON R. WILLETT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Kymberly K. Oltrogge
Assistant Attorney General, Opinion Committee
