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What is an energy savings performance contract?
An energy savings performance contract is an agreement between an energy services company (ESCO) and a building owner. The owner uses the energy cost savings to reimburse the ESCO and to pay off the loan that financed the energy conservation projects. Agreements with ESCOs are typically five to seven-year agreements. The ESCO provides an array of services:
- Conducts a facility energy study
- Identifies cost-effective projects
- Designs all aspects of the chosen projects
- Hires subcontractors
- Manages the project installation
- Finances the project
If an owner chooses, the ESCO:
- Guarantees savings (if utility savings are less than the lease cost, the ESCO pays the school district)
- Provides maintenance services
What is the history of ESCO and the State of Oregon?
On July 24, 2000, the Oregon Department of Administrative Services issued a Request for Proposal (RFP) for an energy savings performance contract at the Employment Building in Salem. Three state agencies have partnered in this effort: Oregon Department of Administrative Services (that manages the building), Employment Department, and Department of Energy.
For several years prior to the release of the RFP, considerable time was spent to develop a process that can be used as a model for performance contracting in the public sector in Oregon. As a starting point, we used template documents developed by the Energy Services Coalition (a national coalition of state energy offices, the U.S. Department of Energy, energy service companies, and other organizations). We refined those documents to meet the State of Oregon´s needs.
The Oregon Attorney General´s office did extensive review and rewrite of the documents to make them fit within Oregon´s laws. The Washington Department of General Administration (under a federal grant and under contract to the Oregon Department of Energy) advised us on the documents and the process because of their ten years of experience facilitating energy saving performance contracts in Washington.
What kinds of projects can use energy performance contracting?
Virtually any project that saves energy or produces energy can use an energy savings performance contract. Typical projects have included energy management control systems, HVAC equipment, high efficiency lighting, variable speed drives, insulation, and window replacement.
How are projects financed?
Performance contract projects are typically financed through the ESCO. However, the Oregon Department of Energy Loan Program and private lenders (banks) can also finance projects. Utility rebates/incentives, construction-site recycling, and proceeds from the sale of freon (from existing chillers) can reduce project costs.
Why use an energy performance contract?
Owners who don’t have project management expertise or simply don’t have the time to pursue cost-effective projects should consider using energy savings performance contracts. Also, an ESCO will guarantee project savings. For some, this is the impetus they need to pursue energy projects.
Where do I get assistance?
The Oregon Department of Energy can provide help develop solicitations, select firms, assess the viability of proposals, and review measurement and verification plans.
Contact:
Oregon Department of Energy
625 Marion Street, NE
Salem, OR 97301-3737
1-800-221-8035 (toll-free)
Brandon Adams, 503-378-5054 (direct) e-mail: brandon.adams@state.or.us
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Energy Savings Performance Contracting
Energy Services Companies (ESCOs)
Could Your Facility Benefit from ESPC?
Hatfield Marine Science Center Case Study (pdf)
Case Studies:
Greater Albany School District
Tigard-Tualatin School District
Pendleton School District
"Are You Asking the Hard Questions about Energy Savings Performance Contracting?" - April 9, 2003 PowerPoint presentation to Oregon School Facility Managers Association (OSFMA) Annual Conference
(Don´t have Microsoft® PowerPoint ? Download a free viewer here?)
OSU Seminar Sept. 11, 2002 on Energy Savings Performance Contracts:
Carel DeWinkel´s presentation
Clint Lougheed´s presentation
Art Vertner´s presentation
These files are in Microsoft® Word format.
(Don´t have Word?
Download a free viewer here?)
Capitol Campus case study
Central Washington case study
South Seattle Community College case study
Budget
These files are in Microsoft® Excel format.
(Don´t have Excel?
Download a free viewer here?)
Energy savings 5-02
Energy savings 9-0
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