ESPC Process
What is Energy Savings Performance Contracting?
Energy Savings Performance Contracting is a method of implementing improvements to existing buildings and other facilities, while using guaranteed resource savings to pay for part or all of the improvements. Resource savings can include electricity, gas, water, wastewater, or solid waste disposal. Performance contracting allows owners to realize resource savings and improve their facilities while maximizing the financial benefits and minimizing risk. Quantum is focused solely on ESPC as the contracting method that best serves our clients.
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What is an Energy Services Company (ESCo)?
An ESCo is a company that implements performance contracting projects. They typically guarantee both the maximum cost of implementing the resource conservation measures and the associated savings. They perform the auditing and engineering analysis of existing systems (lighting, mechanical, controls, building envelop, etc.), manage construction, and provide ongoing measurement and verification of savings and performance.
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How the Process Works
Clients typically select an ESCo based on qualifications, similar to the selection process used for architects or engineers. Once a client selects an ESCo, the client directs the ESCo to perform a resource conservation audit of one or more of its facilities. The ESCo will generate a list of facility improvements that save resources, and the client will choose which measures to implement. The facility engineer is typically an integral part of the decision-making team throughout this process. The ESCo will present a proposal for guaranteed resource savings, project costs,
and project financing. Most ESCo’s can arrange several sources of financing, or the Owner can directly fund part or all of the project.
Upon approval by the client of the ESCo’s proposal, the ESCo moves forward with design and constructionof the project. Ideally, and depending upon the ESCo involved, the project will be competitively bid to subcontractors, and the entire process will be a cooperative effort between the client and the ESCo. The ESCo takes full responsibility for the project – from the audit phase through design, construction, and commissioning. Again, the ESCo works very closely with the facility engineer to assure that the project meets the clients’ needs, and to minimize the impact to the occupants.
After the improvements are built, the ESCo monitors and verifies proper operation periodically to assure that the resource savings are being achieved. If the project was financed through a loan, the loan payments are made with the proceeds from the resource savings (which are reflected in lower utility bills).
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The Benefits of this Process
- Facility improvements with reduced capital outlay.
- Owner involvement and input throughout the engineering and construction process.
- Guaranteed construction costs.
- Guaranteed resource savings.
- Guaranteed performance.
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New Energy
Efficiency Grants
For Washington’s K-12 schools, colleges and universities there’s never been a better time to pursue energy and water conservation based facility improvements, with $100 million in competitive grants available to support these activities and create jobs. And there is no ESCo with a more successful track record of securing these competitive grants than Quantum. A pilot program in 2009 saw grants awarded to 50 school districts – 24 of which are Quantum customers. For more information on how to take advantage of the new grants, call Fritz Feiten at (206) 523-5314.
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