What is guaranteed energy savings performance contracting?

What is guaranteed energy savings performance contracting?

Definition of Guaranteed Energy Savings Performance Contract:
Performance contracting is the acquisition of comprehensive capital energy improvements (such as lighting, HVAC equipment, and controls) and services, provided by qualified Energy Service Companies (ESCOs) where the energy and cost savings achieved by the installed energy project cover all project costs, including financing, over a specified contract term. In Pennsylvania, contract terms are limited to 20 years from the date of completed project installation.

What are the benefits of performance contracting?
Lower utility bills.
Reducing frequent repairs and high maintenance costs due to inadequate, aging, or obsolete equipment.
Providing needed technical training and knowledge to agency operating personnel.
Improved Indoor Air Quality (IAQ) and increased productivity of employees in comfortable working environment.
Fewer comfort complaints and maintenance requests for staff.
Enhancing local economies through ESCOs’ use of local subcontractors.
Ability to lower your environmental impact – carbon footprint.
Guaranteed savings for the life of the contract.
Ability to select best value contractor rather than low-bid.
Turn-key design, construction and commissioning project delivery method.

Standard steps in a performance contract:
Publicly Advertise / Request for Qualifications
Receive ESCO responses
Evaluate submissions and select ESCO for Investment Grade Audit (IGA)
ESCO performs IGA to finalize project scope, cost and savings
Approve audit results and negotiate Guaranteed Energy Savings Agreement (GESA)
Project construction and commissioning
Measurement and verification of savings

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