Section 1

Adds new Part 3, “Guaranteed Energy Savings Contracts,” to GS Chapter 143, Article 3B. Provides citations for provisions recodified in new Part 3: GS 143-64.18 (was, GS 143-64.17B), GS 143-64.18D (was, GS 143-64.17D), GS 143-64.18E (was, GS 143-64.17E), GS 143-64.18F (was, GS 143-64.17F), GS 143-64.18J (was, GS 143-64.17G), and GS 143-64.18K (was, GS 143-64.17H).

As part of new Part 3, enacts GS 143-64.18A requiring a governmental unit to issue a request for qualifications (RFQ) before entering a guaranteed energy savings contract. Provides notice requirements for RFQs. Provides minimum content requirements of RFQ.

Requires the governmental unit to select the qualified provider that best meets the needs of the governmental unit based on an evaluation of: (1) demonstrated competence of the provider; (2) provider’s past performance on energy saving projects; (3) technical feasibility of the proposal; (4) the life cycle cost analysis; (5) certification by a licensed professional engineer that proposed measurement and verification protocol is capable of measuring actual savings; (6) the total project cost with a side-by-side comparison if multiple financing options are available; (7) for state governmental units, inclusion of a contract provision that requires an impartial third-party to conduct the annual measurement and verification review and include the third-party’s compensation in the total cost; and (8) any other criteria stated in the RFQ.

Requires the governmental unit to evaluate RFQ responses and develop a shortlist of the most highly qualified respondents. Permits the unit to proceed with the evaluation and selection without resoliciation, if only one response is received from a qualified provider and the unit makes a written determination that resoliciation is unlikely to increase competition. For state governmental units, if only one response is received, the State Energy Office must concur with the determination. Requires a qualified reviewer to review the shortlist and provide the unit with a written evaluation. Provides minimum requirements for that evaluation. Then, the unit must rank the shortlisted respondents, select the highest-ranked qualified provider, and negotiate the terms of the contract. If negotiations are unsuccessful, the unit can proceed to the next-ranked provider.

Requires the qualified provider to: (1) submit, prepare, and make available for public inspection a report that summarizes the estimated costs of installation, maintenance, repairs, and debt service, in addition to estimates of the amounts of energy or operating costs’ reduction, and includes a life-cycle cost analysis and (2) conduct an investment grade audit that includes a life cycle cost analysis of each energy conservation measure in the final proposal, unless the local governmental unit waives the audit requirement, permitted for a contract with a total cost below $250,000. If the audit results are not within 10% (state units) or 15% (local units) of both the guaranteed savings in the proposal and total proposal amount, either the governmental unit or the qualified provider may terminate the project with no additional obligation to the other party. If the governmental unit terminates the project after an audit is conducted and results are within the applicable variance, the unit must reimburse the qualified provider the reasonable cost incurred in conducting the audit, and the results of the audit must become the property of the unit.

Requires the qualified reviewer to review the qualified provider’s final proposal, cost-benefit analysis, and other relevant documents prior to the governmental unit entering a contract. Details process and requirements for the State Energy Office’s completion of such review for state units. Prohibits a unit from entering a contract until the State Energy Office has determined the proposal complies with Article 3B. Clarifies that nothing in GS 143-64.18A limits governmental unit authority as provided in GS Chapter 143, Article 3D.

Amends recodified GS 143-64.18B by (1) adding new subsection (c1) requiring a qualified provider to pay a non-refundable administrative fee of $1,000 to the State Energy Office to be applied to the costs of reviewing contracts and administering the program, within 30 days of entering a guaranteed energy savings contract. Prohibits provider from charging or seeking reimbursement of the administrative fee cost from the governmental unit and prohibits provider from including the cost in the total cost of the contract; (2) amending subsection (d), which provides what costs are included in the total cost, by adding capital funding to the list of funds to be subtracted out of the listed costs provided; (3) removes subsection (f) related to the investment grade audit qualified providers must complete.

Section 2

Makes conforming changes to GS 115C-47, GS 115D-20, GS 133-4.1, GS 143-129.4, GS 143-135.37, GS 160A-20, GS 143-64.12, GS 142-61, GS 142-63, GS 159-151, GS 143-64.17K, GS 142-63, and GS 143-64.17L .

Section 3

Amends GS 143-64.17 to make clear that the definitions apply both to Part 2 and new Part 3 of Article 3B and removes the request for proposals definition. Repeals GS 143-64.17A, related to solicitation of guaranteed energy savings contracts. Makes technical change to GS 143-64.17I through 143-64.17L, deleting the word “Part” wherever it appears and substituting the word “Article.”

Section 4

Requires the Department of Administration (Department) to adopt temporary rules (effective until permanent rules replace them) to implement Sections 1-3 and permanent rules to replace those temporary rules.

Section 5

Defines Financing Disclosure Rule by reference to 01 NCAC 41B .0302 (Solicitation Documents). Requires the Department to implement the Financing Disclosure Rule as provided in this section until the effective date of the revised permanent rule. Provides that solicitation documents must include the estimated cost of financing obtained from the Director of Debt Management, Office of the Treasurer, for state governmental units and permits local governmental units to obtain information on estimated cost of financing from the Office of the State Treasurer or from a qualified provider. Requires the Department to adopt a rule to amend the Financing Disclosure Rule consistent with this section and requires the permanent rule to be substantively identical. Section 5 expires when permanent rules adopted become effective.

Section 6

Defines Federal Funds Certification Rule by reference to 01 NCAC 41B .0305 (Prohibition on Federal Funds). Requires the Department to implement the Federal Funds Certification Rule as provided in this section until the effective date of the revised permanent rule. Provides that when a guaranteed energy savings contract will be paid in whole or in part with federal funds, the agency must certify prior to executing the contract that the use of federal funds complies with all applicable federal requirements. Requires certification and supporting confirmation to be included in the contract documents submitted to the Office of State Budget and Management. Requires written confirmation from one of the listed people to support the certification and that the confirmation’s form is appropriate to the funding source and addresses whether the proposed contract structure, procurement method, and use of funds are permissible under applicable federal award terms. Requires the Department to adopt a rule to amend the Federal Funds Certification Rule consistent with this section and requires the permanent rule to be substantively identical. Section 6 expires when permanent rules adopted become effective.

Section 7

Act is effective July 1, 2026, and applies to requests for qualifications issued on or after that date.