TX SB1225

Expands the definition of "local government" to include school districts for energy savings performance contracts, repealing the separate Section 44.901 of the Education Code that previously governed school district contracts

Defines key terms including "investment grade audit" (detailed analysis with physical inspections, utility data analysis, and savings projections), "measurement and verification" (method to confirm guaranteed energy savings are being met), and "preliminary utility audit" (initial assessment provided at no cost to local governments)

Prohibits local governments from using purchasing cooperatives or local cooperative organizations to procure preliminary utility audits, investment grade audits, architectural services, design services, or engineering services from providers under energy savings performance contracts exceeding $50,000

Strengthens provider qualifications to require experience in design, acquisition, implementation, construction, engineering, operation, maintenance, and repair of energy/water conservation measures, plus technical capability to verify savings and ability to secure financing for guarantees

Applies to contracts entered into, amended, or modified on or after September 1, 2025, with existing contracts governed by prior law