330-210-0070 Technical Review (1) Once the department requests the technical review fee and the applicant has paid the technical review fee, the department will conduct a technical review of the project application. If the applicant does not submit the required technical review fee to the department within 21 calendar days of from the date of the request for payment of the technical review fee, the department may deny the application. (2) The department will review the information provided in the preliminary certification application against industry standards to determine whether the project is financially and technically feasible and should operate in accordance with the representations made by the applicant. (3) To be eligible the energy conservation project must meet the following requirements: (a) The project must meet the requirements of the statutes, these rules and the Opportunity Announcement. (b) The applicant must be the owner, contract purchaser or project lessee at the time of the project’s installation or construction. (c) The applicant must be a trade, business or rental property owner with a business site in Oregon or be an Oregon non-profit organization, a federally recognized tribe or public entity that partners with an Oregon business or resident. The applicant may not restrict membership, sales or service on the basis of race, color, creed, religion, national origin, sexual preference or gender. (d) A project located at a residential property must be rental property. A rental property must meet laws related to rental accommodations and contain a dwelling unit or rooming unit with permanent living facilities. Living facilities include facilities for sleeping, eating, cooking and sanitation, for one or more persons, other than the property owner, which is subject to a rental agreement that provides for meaningful compensation to the owner. (e) The energy conservation project must have a simple payback period of greater than three years. The department bases simple payback on total project cost divided by the qualified annual energy savings. Total project cost is calculated for this purpose before any tax credits or grants are applied. (f) An applicant for a new construction or total building retrofit project must indicate that the project will meet the current standard, at the time of application submission, for one of the following: (A) Leadership in Energy and Environmental Design (LEED) (i) The project must be seeking LEED platinum certification with a minimum of eight Optimize Energy Performance points; or (ii) Using the appropriate peer reviewed energy modeling program, the project must show a minimum 26 percent improvement over ASHRAE 90.1-2007, without addenda. (B) Green Globes (i) The project must be seeking Green Globes, Four Globes certification; or (ii) Using the appropriate peer reviewed energy modeling, the project must be a building falling within the 95th percentile, or better, of the equivalent building stock listed in the Commercial Buildings Energy Consumption Survey (CBECS). Where an equivalent building type is not listed, the modeling must be equivalent to a minimum 26 percent improvement over ASHRAE 90.1-2007, without addenda. (C) Reach Code (i) Project plans must be submitted to a local building department and approved for building under the Oregon Reach Code. (ii) For proposed buildings either required to model or opting for the modeling path, the energy model must show at least an 18 percent improvement over the Oregon Energy Efficiency Specialty Code. (D) Earth Advantage (i) The project must be seeking Earth Advantage Gold Certification; or (ii) Using the appropriate peer reviewed energy modeling program, the project must show a minimum 18 percent improvement over the Oregon Energy Efficiency Specialty Code. (g) An application for replacing inefficient equipment must demonstrate that the equipment being replaced is within its useful service life and in a good state of repair. (h) A qualified third party must evaluate and recommend research and development projects. (i) The qualified annual energy savings of the energy conservation project must pay back the qualifying cost within the service life of the project. This requirement does not apply to research and development projects. (j) The department may require that the baseline energy conservation project be specifically identified and permanently decommissioned. (k) A combined heat and power or co-gen project must: (A) Increase the overall efficiency as compared to existing energy use or standard separate power and heat production that would provide the same amount of net energy. (B) Meet or exceed annual fuel conversion efficiency as outlined in the Opportunity Announcement. (C) Meet any other requirements listed in the Opportunity Announcement. (4) The department will review energy conservation project costs for eligibility to determine the qualifying cost. Qualifying costs may include the capital costs and expenses necessarily incurred in the acquisition, erection, construction and installation of an energy conservation project. The application must document total project cost by providing a list of itemized costs. (a) Qualifying costs, that directly contribute to the claimed energy savings of the energy conservation project, include: (A) The cost of components of the proposed energy conservation project; (B) Fees to design or engineer the energy conservation project; (C) The cost of title searches, escrow fees, permit and license fees, excluding fees required by this rule, and shipping; (D) Costs for all materials and supplies needed for the erection, construction, installation or acquisition of the proposed energy conservation project; (E) Cost of work performed by employees or independent contractors of the applicant based on the following conditions: (i) Employees or contractors must be certified, accredited, licensed or otherwise qualified to do the work; (ii) The work must be associated with the erection, construction, installation or acquisition of the proposed energy conservation project; (iii) Project management and other similar costs may only account for up to 15 percent of the qualifying project costs; and (iv) Costs for employees’ or contractors’ work on the energy conservation project must be detailed and documented as to specific tasks, hours worked and compensation costs. This cost may include employee benefits and taxes; (F) Costs for legal counsel that is directly related to the development of an energy conservation project (excluding litigation, intellectual property, etc.); (G) Costs of training associated with the energy conservation project that is approved by the department; and (H) Other costs the department determines should be included. (b) Qualifying costs do not include: (A) Interest and warranty charges; (B) Litigation or other operational-related legal fees and court costs; (C) Intellectual property search, application and filing payments; (D) Donated, in-kind or volunteer labor and materials; (E) Administrative costs to apply for grants, loans, tax credits or other similar funding for an energy conservation project including, but not limited to the tax credit review charge, costs associated with the creation and development of the certified public accountant attestation letter and costs associated with securing a pass-through partner for the project; (F) Routine operational, routine maintenance and repair costs associated with the energy conservation project; (G) Expenses that are directly or indirectly offset with federal fee waivers; (H) Expenses that are deemed not to have a benefit to the energy conservation project, including but not limited to, fines, penalties, entertainment, food, alcohol, gifts and lobbying; (I) Costs that are incurred to bring a building up to building code standards or otherwise repair the building in order to install the project, including design or engineering expenses; (J) Any portion of the cost for an energy conservation project that has previously received a tax credit or grant under ORS chapters 469 or 469B; and (K) Other costs the department determines should be excluded. (c) The department may do inspections to verify information reported on the preliminary certification application. (d) Qualifying costs will be limited to the incremental costs for new facilities or for the replacement of facilities beyond their service life, including when a code, standard or other base system is required. The department will calculate incremental cost as the difference between the cost of the energy conservation project with the energy efficient features and the cost to construct a similar project at code or industry standard. (A) In new construction and total building retrofit projects, incremental cost is the difference between building to code and building to exceed the applicable required standards. (B) In other energy conservation projects, incremental cost is the difference between prevailing practices for that business or industry and a more energy efficient method. (e) Qualifying costs may be reduced by the following amounts: (A) If the energy conservation project has a simple payback greater than the service life of the project, the qualifying costs may be prorated down to an amount that would result in a payback within the service life of the project. (i) Based on the 2015 edition of ASHRAE standards or as otherwise determined in these rules, the department may prorate qualifying cost based on the remaining service life of the equipment. If the baseline project has exceeded its service life, the department will consider only the incremental cost of the project as eligible for calculating the amount of a tax credit. (ii) An applicant may submit, for department approval, a published or recognized standard or other documentation as considered necessary by the department to determine service life expectancy. If a published or recognized standard is unavailable, the department may use a 15-year limit on service life expectancy. (B) Costs for a portion of or an entire energy conservation project that has previously received a tax credit certification or grant issued by the department. (C) Costs to replace the same baseline energy conservation project more than once. (f) An applicant may incur qualifying costs prior to the submission of an application, but may not begin installation or construction. (5) The department will determine whether the project is a single energy conservation project, or is part of a larger project when considered in combination with other applications. (a) For projects applying for preliminary certification, the department considers a single energy conservation project as one or more projects that are applied for in response to the same Opportunity Announcement, owned or controlled by the same person and located at the same building or structure. (b) For small premium projects, the department considers a single energy conservation project as one or more projects that are applied for in response to the same Opportunity Announcement, for the same technology sector, owned or controlled by the same person and located at the same building or structure. (c) For the purposes of this subsection, “same person” includes affiliated or subsidiary corporations, other subsidiary business organizations or other affiliated entities owned or controlled by the same parent corporation but excludes equity-only financing partners. (d) The department may reduce the potential tax credit award or deny the application if the department finds that the proposed project is not a single energy conservation project as described in subsection (a) and (b). (e) The department will not divide energy conservation projects applied for in the same application. (6) If an application does not include all information needed to complete the technical review, the department may notify the applicant in writing, requesting additional information. If the department does not receive the requested information within 30 calendar days of the date of the notice, the department may deny the application. (7) The department will notify the applicant in writing if the department denies the application during the technical review. (8) If the technical review determines that inaccurate information was submitted by the applicant during the competitive process, the department may deny the application. (9) If the department denies the application or reduces the tax credit during the technical review, the applicant may request reconsideration in writing within 60 days from the date of denial or reduction. Statutory/Other Authority: ORS 469.040 & 469B.306 Statutes/Other Implemented: ORS 469B.270 - 469B.306 & 315.331 History: DOE 4-2016, f. & cert. ef. 11-14-16 DOE 6-2012, f. & cert. ef. 6-19-12 DOE 12-2011(Temp), f. & cert. ef. 12-23-11 thru 6-19-12