State and Local Policy Database

Energy Savings Performance Contracting

If the necessary encouragement, leadership, and resources are in place, states can finance energy improvements through Energy Savings Performance Contracts (ESPCs), which allow the state to enter into a performance-based agreement with an energy service company (ESCO). The contract allows the state to pay the company for its services with money saved by installing energy efficiency measures.

The Alabama Department of Economic and Community Affairs (ADECA) - Energy Division conducts the Performance Contracting Program providing information to procure and finance large energy improvement projects for the state’s public facilities. Alabama offers a manual with sample forms to assist with the ESPC process and a list of U.S. Department of Energy qualified ESCOs. The ADECA-Energy Division has partnered with the Energy Services Coalition to begin an Alabama Chapter to provide education, outreach, and technical assistance to promote the usage of ESPC for capital improvements. As part of the Department of Energy’s (DOE) Performance Contracting Accelerator Program, ADECA has identified the need to streamline the ESPC process and is currently working to developing a prequalified ESCO list.  ADECA has also reached their goal for the Accelerator Program by completing more that $5 million in public sector ESPC projects in the state. The goal of Performance Contracting Accelerator is to expand the use of performance contracting by federal, state, and local governments, K-12 schools, and others.

Last Updated: July 2016

In 2010, the State Legislature authorized the creation of a $250M revolving loan fund for energy efficiency retrofits for public facilities.  Energy Savings Performance Contracts (ESPCs) are one possible way to access this funding. Three Energy Services Companies (ESCOs) who offer ESPCs are retained on a three year term contract to service state-owned facilities through the Alaska Department of Transportation and Public Facilities.  ESCOs are also able to bring clients and contracts for school and municipal projects in for AHFC loans. Several ESPCs have been completed across the state with Federal, State and municipal funds. The Alaska Industrial Development Export Authority (AIDEA) has two loan programs under which ESCO and/or non-residential building owners can access State capital to make efficiency improvements. This type of contracting is a still relatively new but growing industry in Alaska.

Last Updated: July 2016

ESPCs are administered by the State Procurement Office of the Arizona Department of Administration and are reviewed by the Office of Grants and Federal Resources. A list of thirteen prequalified ESCOs is maintained, which state agencies are required to use. K-12 schools, cities, towns and counties may use the list. In 2012, legislation was passed that updated the state statutes for K-12 schools, cities, towns and counties. HB 2578 extended the life of the agreement based on the expected equipment life, term of financing agreement or 25 years, whichever is less.

Last Updated: July 2016

In accordance with Act 554 passed in 2013, the Arkansas Energy Office has designed the Arkansas Energy Performance Contracting Program. The purpose is to guide state agencies to properly use ESPCs; it offers a step-by-step guide, prequalified ESCOs companies, and model documents. Arkansas’ enabling legislation requires that the energy performance contracts require the energy service company to guarantee energy cost savings for the entirety of the performance contract. 

Act 1275 of 2015 also grants counties and municipalities the option to adopt the Arkansas Energy Office's rules.

Last Updated: July 2016

Under the terms of Public Utilities Code Section 388, the statute that allows state agencies to enter into energy savings contracts, the Department of General Services (DGS) has developed a pool of qualified energy service companies (ESCOs), and oversees projects for most state buildings.  The university systems and the Department of Corrections and Rehabilitation implement such contracts for their own buildings. In 2009 DGS developed the State Building Energy and Sustainability Program, a statewide energy retrofit program, that utilizes a variety of loan and funding sources to improve energy efficiency in state facilities.  This program has already reduced energy around 25% in 46 facilities (450 structures) in its first phase, and an additional 20 facilities are currently engaging with ESCOs.  This program continues to expand and is available to all state facilities (1,700 facilities).

Last Updated: July 2016

Since the mid 1990’s, state agencies, institutions of higher education, and local governments have successfully used the Colorado Energy Performance Contracting (EPC) program to finance facility improvements with guaranteed savings.  It is authorized by state statutes and complies with other requirements, such as the state's Taxpayer Bill of Rights (TABOR) and federal Dodd Frank regulations, as well as industry standards. The Colorado Energy Office (CEO) implements all aspects of this program with high standards and industry collaboration.

As of June 2014, Colorado’s EPC Program portfolio included 182 active and completed construction projects, totaling $447.4 million in investments. Projects are benefiting communities across 75% of Colorado counties, guaranteeing $28.8 million in annual utility costs savings. 

Last Updated: July 2016

Connecticut General Statute § 16a-37u (b) required the Commissioner of the Department of Energy and Environmental Protection (DEEP) to establish an energy management plan applicable to state-owned and leased buildings that maximizes energy efficiency. As part of the plan, the law required the state to reduce energy consumption in state buildings by 20% by 2018. To reach these goals, DEEP established numerous programs including the Energy Savings Performance Contracting Program.

Effective in 2011, Connecticut General Statute § 16a-37x required the state to create a new standardized Energy Savings Performance Contracting (ESPC) Program for use by state agencies and municipalities. The program’s purpose was to assist state and municipal governments in implementing a portfolio of comprehensive energy savings measures with no upfront capital. The costs of the energy retrofits are paid for by future guaranteed savings from utility and maintenance budgets. The new program, replaces the program ESPC program that existed prior to 2011. 

The State’s ESPC Program includes a number of tools that will minimize risk and simplify development and implementation of performance contracting: 1) a set of standardized contract documents, 2) a list of twelve pre-qualified Qualified Energy Services Providers, 3) a Program Manager, hired with Connecticut Energy Efficiency Fund dollars, 4) a pool of technical support providers to support individual projects (up to $10,000 in services per project, from CEEF funds), and 5) staff support at Clean Energy Finance and Investment Authority to assist with project financing. All elements of the standardized ESPC program will be available to municipalities, including pre-approved contract documents, list of pre-qualified Energy Service Companies (ESCOs), and technical assistance. Performance contracts energy-savings measures will be leveraged through incentives from the CT Energy Efficiency Fund. In 2014, the University of Connecticut Health Center has executed a new ESPC estimated to cost $12 million and the Department of Veteran’s Affairs-Rocky Hill Campus has executed a project estimated to cost $9 million.

Currently, contractors are implementing/completing energy efficiency improvements at the Connecticut Department of Mental Health and Addiction Services, the Motor Vehicle Department, and the Department of Corrections. In 2015, general obligation bonds will be used to fund ESPC projects at Connecticut Valley Hospital and Department of Motor Vehicle. 

In 2016, the Connecticut General Assembly passed SB 334 to revise the meaning of "cost effective" as applied to energy savings performance contracting, requiring that project savings outweigh project costs, including, but not limited to, financing. The bill extends the payback period from 15 to 20 years and prohibits the payback period for each measure to go beyond the measure's functional life. The bill also removes outdated requirements around lifecycle cost analysis, energy efficiency in state facilities, product standards, and others. 

There are currently 46 active ESPC projects in state and University of Connecticut buildings and 28 active Eversource municipal ESPC projects.

Last Updated: July 2016

In 2005, SB73 established Delaware’s goals for ESPCs.  The Energize Delaware Performance Contracting Program is administered through Delaware’s Sustainable Energy Utility (SEU) and facilitates ESPCs for both public buildings and qualifying private entities.  SEU is required to compile a list of prequalified ESCOs and offers both a written and graphical guide to the ESPC process.

In 2011, the State of Delaware entered into eight performance contracts, totaling $75 million, largely as a result of a $67 million bond issue administered by the Delaware SEU. The construction scope included both public buildings and higher education facilities. In the public building scope, nearly 50 buildings received energy efficiency retrofits. Outside the bond issue, two other performance contracts were initiated, covering approximately five public buildings. 

Currently, approximately 50 public buildings are engaging with performance contracts. Construction is now complete and the buildings are in the measurement and verification phase.

Last Updated: July 2016

The District Department of the Environment has a Request for Applications for a Green Bank that will rely on energy savings performance contracting (ESPCs) and is currently considering similar proposals to gain energy savings using ESPCs.

Last Updated: July 2016

ESPCs are promoted and coordinated by the Department of Management Services and the Department of Financial Services.  The state provides a manual that offers both a step-by-step description of the process and a sample of many associated documents to help streamline the process.  The Department of Financial Services provides model contracts and financing agreements, and the Department of Management Services lists prequalified ESCOs.

Last Updated: July 2016

Georgia has developed a state agency manual for performance contracting and has established a list of pre-qualified vendors. The State is actively seeking more applications for performance contracting projects from agencies. Georgia received approximately $80 million worth of project applications from state agencies in Fall 2013. 

Last Updated: July 2016

Hawaii Revised Statute 196-30  requires that “all agencies shall evaluate and identify for implementation energy efficiency retrofitting through performance contracting.” The ESPC program exists through the Department of Business, Economic Development, and Tourism. Hawaii provides a manual that outlines and standardizes how to engage in an ESPC and outlines a list of prequalified ESCOs for state projects. The Energy Services Coalition reports that Hawaii spends more on energy performance contracting per capita than any other state.

Last Updated: July 2016

Idaho’s Performance Contracting Program is administered by the Department of Administration and provides a series of resources, including a step-by-step guide to ESPCs and sample documents (such as model contracts).

Last Updated: July 2016

Illinois began a ten-year pilot program in 1994, which encouraged state buildings to take part in the then-newly enacted ESPC program, which provids assistance to the public and not-for-profit sectors. Since the program's inception, program staff oversaw the implementation of over $491 million in energy efficient capital improvements through performance contract arrangements resulting in over $35 million in combined annual savings.Information about the current ESPC program is housed under the Department of Commerce’s Energy Office, which maintains a series of documents to assist with any new ESPCs.

The state has recently entered into a new energy performance contract to upgrade the energy efficiency of six Department of Human Services’ facilities in the Chicago region, with guaranteed energy savings valued at $10 million. The state is exploring additional energy performance contract opportunities at Department of Corrections’ facilities, with assistance from the State Energy Office’s Energy Performance Contracting Technical Assistance Program. For over 15 years, the Energy Performance Contracting Program has provided assistance to the public and not-for-profit sectors. During this time, program staff oversaw the implementation of over $491 million in energy efficient capital improvements through performance contract arrangements resulting in over $35 million in combined annual savings.

SB 241, proposed in 2016, would change the period of time in which guaranteed energy savings contracts begin becoming cost effective from 20 years to 10 years.

Last Updated: July 2016

The Office of Energy Development administers the Guaranteed Energy Savings Contract (GESC) program for local governments and maintains a list of approved ESCOs, which are the only permissible ESCOs for use by local governments engaging in ESPCs. This is required by a separate statute than the statute covering state ESPCs. The Department of Administration oversees ESPCs entered into by state buildings on the main campus.

Agencies with their facilities, such as prisons and hospitals, manage their own ESPCs with input from the Office of Management and Budget.

Last Updated: July 2016

Iowa’s code 473.19 sets an energy fund to develop or identify guidelines and model energy techniques for the completion of energy analyses for state agencies, political subdivisions of the state, school districts, area education agencies, community colleges, and nonprofit organizations. This also provides technical assistance for conducting or evaluating energy analyses for state agencies, political subdivisions of the state, school districts, area education agencies, community colleges, and nonprofit organizations. The purpose is to provide alternative financing under the energy loan program for the state, state agencies, political subdivisions of the state, school districts, area education agencies, community colleges, and nonprofit organizations to implement energy management improvements or energy analyses.

The current loan program is established in a way that loan repayments are tied to the payback periods of the projects undertaken thereby enabling the energy savings to pay off the loans. Iowa does not allow performance contracting.

Last Updated: July 2016

Kansas has a long-standing performance contracting program, the Facility Conservation Improvement Program (FCIP), which is administered by the Kansas Corporation Commission.  FCIP provides a list of preapproved ESCO partners and walks users through a series of well-laid-out steps toward forming an ESPC.  The FCIP website links to the Energy Services Coalition for model documents rather than providing its own.  After Hawaii, Kansas is ranked #2 in the nation by the Energy Services Coalition for performance contracting spending per capita. 

Last Updated: July 2016

Kentucky statutes incentivize agencies to review the possibility of using an ESPC and implement one if appropriate. ESPC projects are regularly implemented by the state government, with ESPC projects totaling over $250 million. The Department for Facilities and Support Services (Division of Engineering and Contract Administration) provides online information about state ESPC processes.

In recent years the state has increased its use of ESPCs. The state-funded Green Bank of Kentucky, originally capitalized with $14 million to provide low-interest loans to state agencies, has all been loaned and principle and interest payments have begun to provide loans for a second generation of ESPCs, with nearly $1.5 million currently in the bank available for more loans. All state-owned buildings above 20,000 sq. ft. have been evaluated and all those that were found to be viable candidates have now been included in an ESPC project. All seven state-supported universities have had ESPCs on their campuses. In addition, all 16 colleges (with more than 70 campuses) of the Kentucky Community and Technical College System have implemented ESPCs.

Kentucky has seen nearly $800 million in ESPC since enabling legislation in 1996.  

Last Updated: July 2016

Louisiana statutes require that performance contracting be used to the “maximum extent possible”, and in 2008, Governor Jindal released an executive order that called for energy efficiency targets to be met using ESPCs.  The Department of Administration’s Office of Contractual Review houses the information about ESPCs, including a model contract, state ESPC rules, and a flowchart to describe the process step-by-step.

Last Updated: July 2016

In 1999, Maine enacted an energy savings pilot project, which used ESPCs to achieve energy efficiency goals.  In 2005, the governor of Maine joined the Energy Star Challenge, committing to encourage building owners and operators to improve energy efficiency by 10% using performance contracting and other mechanisms.  Today, all energy efficiency programming in the State of Maine is administered by Efficiency Maine.

The State of Maine has identified specific projects that could be part of a performance contract agreement.  The long term plans for the State include the development of additional Energy Saving Performance contracting at a variety of facilities and locations. BGS is working to determine the viability of Private Public Partnerships for renovation and energy improvements at older state facilities.

Last Updated: July 2016

In 2007, Governor O’Malley mandated reducing energy consumption in state buildings through a variety of means, including ESPCs. Additionally, Maryland statutes required state agencies to assess their energy use and present energy conservation and efficiency plans by 2008, citing ESPCs as one of the key options to attain these goals. The Department of General Services (DGS) manages the day-to-day operations of ESPCs in the state with some assistance from the Maryland Energy Administration. The state provides an in-depth guide to ESPC contracting and qualification processes and has produced a series of helpful documents description the history of ESPCs. Maryland maintains a list of prequalified ESCOs and is also currently working on a database to publicly track energy usage by state agency. In 2013, DGS approved two small ESCO firms to work through an “Indefinite Delivery Contract” and are available to work on small energy efficiency and renewable energy projects for state agencies. 

MEA also runs the Energy Performance Contracting Assistance Program to provide technical assistance and owner’s agent to local governments and public housing authorities as they pursue EPCs.

Last Updated: July 2016

In 2007, Executive Order 484 was signed, setting aggressive targets for reductions in energy use and greenhouse gas emissions, and increases in use of renewable energy across state government operations. It included a provision that directed state agencies to implement ESPCs for all facilities larger than 100,000 square feet. The Department of Administration and Finance houses the ESPC Program under its sub-Department of Capital and Asset Management and Maintenance (DCAMM). Massachusetts offers some model documents, including a model contract.

Through the DCAMM-DOER Accelerated Energy Program which began in 2012, a total of some $470 million in energy investments will be made for projects across 58 million square feet of state buildings, resulting in a 25% energy reduction and a decrease in greenhouse gas emissions totaling 135,000 metric tons. All projects have been initiated as of December 31, 2014. Municipalities also utilize energy saving performance contracts. Between 2002 and the present, one hundred eighty-three Massachusetts local governmental bodies (municipalities, schools, regional schools) contracted for ESPC with reported contracts valued at almost $400 million. These projects will provide guaranteed energy cost savings of at least $20 million annually.  Projects implemented in 2015 represent $40 million in project costs that will deliver nearly $2 million in annual energy cost savings over the next twenty years. 

Additionally, DOER signed onto the DOE Better Buildings Performance Contracting Accelerator, pledging at least $350 million toward energy projects at state and municipal buildings between 2013 and 2016. Under this program to date, 93 state and municipal projects are underway, representing an investment of more than $265 million, or nearly 76% of the full commitment. Of these, 36 are state projects and 57 are municipal projects, estimated to save these entities more than $9 million and $5.8 million in annual energy costs, respectively.   

Last Updated: July 2016

PA 625 was passed in 2012 and builds on previous EPC enabling legislation, including PA 122 of 1987, to encourage the use of energy savings performance contracts by state and local governmental units. The Michigan Department of Technology, Management and Budget (DTMB) has begun implementation of the legislation. The legislation designated DTMB as the lead agency in the development and promotion of energy performance contracts in governmental units, requring DTMB to assemble a list of qualified energy service providers and develop a standardized energy performance contract process and standardized documents. The act also enables the department to charge fees for administrative support/technical assistance from the governmental units that use its services and outlines cost-savings measures that can be implemented including the maximum timeframe by which a measure must demonstrate cost-effectiveness. Municipalities have requested and received Michigan Energy Office technical assistance to plan a large building energy efficiency retrofit project using ESPC.  ESPC training was also delivered. 

The State Energy Office is participating on behalf of the State of Michigan in the U.S. Department of Energy Performance Contracting Accelerator. The goal is to increase the use of performance contracting in the State by targeting the K-12 and local government audiences. Through the Accelerator, the State Energy Office has participated in the update of model documents and testing of the e-Project Builder database. These tools will be made available to ESCOs and to the targeted audience to increase an understanding of PC. A $35 million ESPC was executed at a state correctional facility, substantially exceeding the state's 3-year investment goal for the Performance Contracting Accelerator.

The State Energy Office participates in the Michigan Chapter of the Energy Services Coalition, which provides education and outreach to entities interested in PC. The Chapter held the 4th Annual Awards event in fall 2014 to highlight exceptional PC projects in the State, and to educate other entities about PC. The Chapter set 2015 objectives and initiated planning for a 2nd Quarter educational event on commercial PACE project financing for EE and RE building-related projects.

Last Updated: July 2016

In April 2011, Governor Dayton issued Executive Order 11-12 which calls upon state organizations and local governments to investigate the use of ESPCs to improve energy efficiency.  EO 11-12 established the Office of Guaranteed Energy Savings Program (GESP), within the Department of Commerce, Division of Energy Resources. GESP provides technical, contractual and financial assistance to state agencies, local government units, school districts, and institutions of higher learning that elect to implement energy efficiency and renewable energy improvements through Guaranteed Energy Savings Contracts. GESP offers a list of pre-qualified contractors and model contracts. All projects implemented by state facilities must use the Guaranteed Energy Savings Program.  Municipals and schools are not required to use GESP, but if they do, they must report the project to the Department of Commerce. 272 buildings participate in Minnesota's Guaranteed Energy Savings Program, in addition to an unknown number of local governments and school buildings that participate in non-GESP ESPC projects.

Last Updated: July 2015

Housed in the Mississippi Development Authority (MDA), the state has a detailed program with dedicated staff that oversees the Energy Savings Performance Contracting Program and Energy Efficiency Lease Program. The Program is actively involved, promotes the use of ESPCs, and offers a guide to clarify the process of using ESPCs and offers some sample documents. Under State Statute, MDA Energy and Natural Resources Division must review and approve Performance Contracts prior to their execution between an ESCO and any public entity.

Last Updated: July 2016

The Office of Administration – Division of Facilities, Management, Design, and Construction is the lead agency for ESPCs.  The agency provides technical assistance to state agencies and has overseen 70% of floor space of 3500 buildings retrofitted using performance contracting. Since 2005 OA-FMDC performed approximately $100,000,000 of energy retrofits, upgrades, installations of controls and addition of some sub - metering in numerous state buildings totaling approximately 14.7 million square feet. Missouri offers a list of prequalified ESCOs and a series of documents to help streamline the process.

Last Updated: July 2016

Montana statute declares that “it is the policy of the state of Montana to promote efficient use of energy and water resources in local government and state agency buildings… by authorizing local government units and state agencies to enter into energy performance contracts.”  Information is housed in the Department of Environmental Quality and includes prequalified ESCOs and a model contract.

The 2015 Legislature amended statute 90-4-1103 to encourage more use of EPC as a financing tool for K-12 schools and local governments. 

Last Updated: July 2016

There is enabling legislation (N.R.S. 66-1063) for the use of ESPCs by public entities in the state. Notwithstanding the procedures for public lettings in sections 73-101 to 73-106 or any other statute of the State of Nebraska relating to the letting of bids by a governmental unit, a governmental unit may enter into an energy financing contract with an energy service company pursuant to sections 66-1062 to 66-1066. In 2016, the Legislature passed LB 881, modifying some ot eh existing statutes. N.R.S. 66-1062 was amended to allow for more types of energy conservation measures. The legislation takes effect August 2016.

Last Updated: July 2016

Nevada's ESPC programs were enacted initially in 2003 by Nevada Revised Statutes (NRS) 332 and 333A and have been updated and revised over the years to improve their effectiveness. The statutes require state and local government agencies to follow specific guidelines and practices to ensure ESPC program success, including instructions for completing comprehensive audits, contracting, obtaining professional advice and technical assistance, measurement, oversight, and reporting.  The state Public Works Division periodically prequalifies ESCOs and the Purchasing Division prequalifies ESPC Third Party Consultants. As of 2012, over $180 million in ESPC projects have been completed in the State. Nevada School District Boards are required by NRS 332.362 to establish criteria for evaluating all proposed capital improvement projects for their ESPC potential and to report annually on all ESPC projects successfully completed and potential projects not completed, in accordance with NRS 332.360.

The Nevada Governor's Office of Energy (GOE) website provides education, tools, and outreach assistance to all government entities and private building owners on the subject of performance contracting, including a step-by -step guide, resources, and success stories. Grants are offered through the GOE's Performance Contracting Audit Assistance Program (PCAAP) to offset the cost of industrial grade energy audits for performance contract projects. Through this program, Nevada government entities that choose to enter into a performance contract for operational cost savings measures are eligible to have their Financial-Grade Operational Audit (FOGA) funded by the GOE. Eligible Nevada Government Entities include counties, cities, school districts, state colleges and universities, and state agencies. There are currently 182 public buildings engaging with ESPCs. The state recently issued $500,000 to the Clark County Schools District (CCSD) for their financial grade operational audit. CCSD currently has contracts for work in 50 of 320 schools and plans to target the rest over the next five years. The state also recently granted $100,000 for performance contracting activities to the City of Henderson and is actively promoting this program through the Nevada League of Cities and Municipalities, among other avenues.

Last Updated: August 2016

Section 21-I:19-d allows state agencies and municipalities to enter into energy performance contracts (EPCs), requires an RFP (Request for Proposals) process, and provides criteria for selecting energy services companies. It also requires state agencies to submit their recommendations to a multi-agency scoring team to review and score proposals. The state is currently involved in a major ESPC for its largest office campus in Concord, NH. This project, which includes energy efficiency, solar PV, and a biomass boiler, is scheduled for completion in August 2016. A second ESPC contract has been issued for the State-run ski area, Cannon Mountain. This project has completed its energy audit and its construction contract will be going to Governor and Executive Council for approval in June. Upon approval, construction will commence. The Department of Administrative Services is preparing to issue a third RFP for an ESPC for 28 buildings in Concord. The state is also developing a toolkit for state agencies and exploring capacity to administer more ESPCs.

Last Updated: July 2016

New Jersey’s ESPCs policies are part of the larger “Clean Energy Program” (NJCEP) and stem from 2009 legislation which allows New Jersey state facilities to enter into ESPCs through the Energy Savings Improvement Program. The website does provide some model documents.

The New Jersey Energy Savings Improvement Program (ESIP) is allows public facilities to enter into long-term energy savings agreements. New Jersey has had 65 ESIP projects to date, with $300 million in total contracts worth $40 million in annual savings. The Office of State Energy manages the performance contracting process for public facilities and has assisted school districts with poor bond ratings to actually finance energy efficiency projects through ESIP.

Last Updated: August 2016

The Energy, Conservation, and Management division (ECMD) of the New Mexico Energy, Minerals, and Natural Resources Department (EMNRD) houses information about the state’s ESPC statutes, including guidelines for qualifying ESCOs and a few other model documents. EMNRD has initiated and now co-chairs the New Mexico Energy Service Coalition, a public-private partnership that seeks to support the use of energy performance contracting; educate the general public on energy efficiency; develop and disseminate information on energy efficiency practices; and provide a forum for networking. Coalition members include EMNRD, energy service providers, financiers, efficient equipment suppliers and reps, building improvement and service companies, building owners and property managers, and others from schools, higher education, government, and healthcare facilities. 

ECMD has processed $49.5 million in energy performance contracting projects in the past few years. These projeccts span over 200 buildings across 13 institutions and 8.6 million square feet. These efforts are supporting New Mexico’s partnership with DOE in the Better Buildings Performance Contracting Accelerator, through which the state committed to achieve $50 million in energy performance contracting projects by 2016. The state currently has $15.7 million worth of efficiency projects under construction.

Also, House Memorial 61 (HM 61) requests a study of energy performance contracting, water conservation, and financing for public facilities in New Mexico. A task force, comprised of representatives from various governmental agencies, was created to evaluate how to expand, improve, and promote energy performance contracting.

New Mexico’s General Services Department established statewide price agreements with seven energy services companies (ESCOs) in 2015: Ameresco, Energy Control Inc./Opterra, Johnson Controls, McKinstry, NORESCO, Siemens, and YESCO (Yearout Mechanical).  These ESCOs are deemed Qualified Providers in the Energy Performance Contracting (EPC) Program managed by the Energy, Minerals and Natural Resources Department.  They are available for direct selection by eligible governmental entities, which include state/local governments, K-12 public schools, and higher educational institutions.

Last Updated: July 2016

The New York Power Authority (NYPA) has been offering its Energy Services Program for 25 years.  Between 1987 and 2015, NYPA has financed and invested over $2 billion across 3,900 facilities within New York State. Under this Energy Services Program, NYPA provides services that include developing feasibility studies, engineering design, life-cycle cost analyses, procuring equipment, contractor labor, hazardous waste disposal, managing projects/construction and financing projects.  Measures include, but are not limited to: lighting retrofits, building envelop-related improvements, HVAC modernization, including energy-efficient chillers, boilers, and controls, high-efficiency motors, variable-speed drives, energy management systems, process controls, and distributed generation.  These installations, and many more, have been performed throughout the NYPA customer base.  New York State governmental entities, municipalities, school districts, public housing authorities, wastewater treatment plants, prisons, hospitals, museums, zoos, and public colleges are all continuing participants in the NYPA program. In 2014, NYPA initiated approximately $240 million in energy efficiency projects across over 260 public buildings statewide. The programs are implemented without performance guarantees which are traditionally offered by ESCOs.

Last Updated: July 2016

North Carolina’s utilities have an energy savings strategic plan that relies significantly on ESPCs. Their annual report(s) demonstrate the recent use of such contracting. State Statutes recommend that state entities use guaranteed energy savings contracts when feasible and practical. Additionally, the North Carolina Department of Commerce helps to administer ESPCs to schools, universities, and state & municipal government buildings.  The State Energy Office provides a guide to ESPCs, maintains a list of prequalified ESCOs, lays out the process, and provides some model documents. In addition, the engineers and architects assigned to the program are available for onsite technical assistance in the preparation of RFP and contract documents as well as review of RFP responses and final documents.

In 2015 the state invested just under $274 million in performance contracts with state agencies and universities.

Last Updated: July 2016

Section 48-05-10 & 48-05-11 of North Dakota Code enables energy savings contracts.

Last Updated: July 2016

In Ohio, ESPCs are coordinated by the Ohio Facilities Construction Commission, formed by a recent merge between the Office of Energy Services and the Ohio School Facilities Commission. ESPCs have been in use since 1994 in public buildings and universities.

Last Updated: July 2016

ESPCs were included in the State Energy Facilities Program, which ended in 2016.

Last Updated: July 2016

Oregon offers a number of financial incentives to promote ESPCs, including a loan program to help minimize interest rates and fees imposed by ESCOs and a business energy tax credit that limits/postpones tax burdens on energy efficiency products.  The Oregon Department of Energy maintains a number of resources, including a list of prequalified ESCOs and a detailed guide to the process for users. ESCOs audits for K-12 Public Schools qualify for reimbursement under the SB 1149 funded Energy Efficient Schools program, if they are carried out to that standard. There are different rules for state agencies, who must also comply with State Energy Efficient Design (SEED) statutory requirements (ORS 276.900) when seeking to use an ESPC for a project. 

Last Updated: July 2016

In 1998 the Pennsylvania legislature passed the Guaranteed Energy Savings Act (Act 57), amended by Act 77 in 2004 and Act 39 in 2010. The act allows local governments, schools, and other agencies to receive state funding to enter into guaranteed energy savings contracts without the formal bid process. Act 57 of 1998, Act 77 of 2004, and Act 39 of 2010 are amendments to Title 62 (Procurement) of the Pennsylvania Consolidated Statutes, in guaranteed energy savings contracts, further providing for definitions, for contracting procedures and for contract provisions.  In 2004, an executive order was issued mandating energy efficiency improvements in state buildings and encouraged the usage of ESPCs.  The Department of General Services administers the ESPC program for the Commonwealth. Currently 39 public buildings are engaging with ESPCs.

Last Updated: July 2016

The Rhode Island Office of Energy Resources lists ESPCs as one of the main ways it promotes energy efficiency and cites funds used to engage energy service companies to use ESPCs.  The state provides a model contract and a list of qualified ESCOs.

Last Updated: July 2016

State legislation (Section 48-52-670) allows agencies to energy into performance contracts.Savings realized from energy conservation measures may be carried forward. The South Carolina Energy Office presents information about ESPCs and offers a manual that lays out the process for interested entities. The Office of the State Engineer makes common contract documents available to simplify the process of performance contracting. The South Carolina Energy Office recently announced the Palmetto Energy Efficient Retrofits (PEER) Program to facilitate energy efficiency upgrades in public facilities including state agencies, public college and universities and public K-12 school districts.  

Last Updated: July 2016

South Dakota enables ESPCs throughout the state and is currently conducting a study through the Department of Transportation to identify which state facilities provide opportunities for energy savings. The Board of Regents is investigating the usage of ESPC for improvements at the higher education campuses. In 2016 the Governor signed House Bill 1032 to revise certain provisions regarding guaranteed energy savings contracts, clarifying the procurement process for EPCs.

Last Updated: July 2016

The State allows and encourages ESPC as a viable solution to investing in energy efficiency at State facilities and higher education campuses. The Tennessee State Building Energy Management Program implements the Energy Action Plan for Tennessee Buildings, which cites Energy Savings Performance Contracting as a key element. Before the Action Plan, Tennessee rarely utilized ESPCs. Since the Plan was drafted, several successful efforts to use ESPCs have occurred. The state has completed thirty-two projects through two separate contract efforts, with projected annual energy cost savings amounting to almost $10 million. The Tennessee Board of Regents, the Supervisory Board for State universities outside of the University of Tennessee system, community colleges, and vocational-technical schools, has completed 17 ESPC projects through FY2014, totaling $54,000,000 in investment. The annual projected savings for these projects is $6,800,000. 

Tennessee State government agencies are also exploring opportunities to utilize performance contracting as part of the ongoing EmPower TN Initiative.  

Last Updated: July 2016

The Texas State Energy Conservation Office (SECO) and Texas Higher Education Coordinating Board provide services to state agencies and institutions of higher education, respectively, to review and analyze savings in performance contracts (SB 533, 2013). SECO offers a number of financing options to help mitigate the cost of ESPCs to state agencies, including a revolving loan fund and bond financing. SECO also provides numerous model documents and lays out the process for establishing an ESPC in a guide.

Last Updated: July 2016

Utah’s ESPC work was initiated by legislation – the Quality Growth Act of 1999 – directing Utah to undertake “aggressive programs to reduce energy use in state facilities in order to reduce operating costs of government and to set an example for the public.”

Following an executive order in 2006 by Governor Jon Huntsman that called for an increase in energy efficiency in state buildings, the use of ESPCs exploded in Utah as a means of attaining these goals. The Division of Facilities Construction and Management (DFCM), in partnership with the Governor's Office of Energy Development, maintains a prequalified list of ESCO through a cooperative contract with State Purchasing allowing this list to be used by all public entities across the State. The Division of Facilities Construction and Management, in partnership with the Governor's Office of Energy Development is, in complement to this existing contract, developing a pre-qualified list of third-party reviewers to represent public entities in the review of ESCO services offered. Within DFCM, the State Building Energy Efficiency Program (SBEEP) is the primary entity in the state that assists with all forms of energy efficiency improvements (including ESPCs). SBEEP oversaw the selection of prequalified ESCOs to provide services in the Energy Performance Contract Program (EPCP) and allow interested agencies and institutions to bypass the solicitation and selection process, thereby expediting ESPC processes and cost recovery. This program now focuses on large state university and college campuses. In addition, the Governor's Office of Energy Development and energy performance contracting stakeholders agreed to reinstate the Utah Chapter of the Energy Services Coalition to raise awareness and educate stakeholders about energy performance contracting opportunities. 

Last Updated: July 2016

The Department of Buildings and General Services (BGS) operates the State Energy Management Program (SEMP) - its own in-house revolving loan fund for building efficiency which essentially makes the state its own ESPC contractor. In its Strategic Plan, BGS calls for using EPSCs to complete energy improvements within correctional facilities. BGS is currently entered into an ESPC with NORESCO for the Montpelier Capital Complex. Monitoring and verification will continue until 2019 for the 14 energy conservation measures implemented throughout the complex.  

Last Updated: July 2016

The Department of Mines, Minerals and Energy (DMME) and Department of General Services (DGS) administer under the Virginia Energy Management Program (VEMP) a performance contracting program for state facilities and other public bodies that provides on-site technical assistance; code and safety compliance oversight; a well-defined, low-risk process under a statewide contract; template documents and other resources; and list of a pre-qualified energy service companies. In 2010, Governor McDonnell issued an executive order that requires state agencies to engage with both departments to attain energy efficiency improvements. Executive Directive 2, issued in 2011, directs DMME and DGS to examine conversion of VEMP to a self-sustaining enterprise operation and to create a plan to centralize energy management across state facilities to seek out economies of scale and greater energy efficiencies.

Governor McAuliffe issued Executive Order 31 in October, 2014 that directs all executive branch agencies, authorities, departments, and all institutions of higher education to proactively pursue energy efficiency measures, especially Energy Performance Contracting (EPC) to reduce energy consumption. Agencies already employing EPC should re-evaluate their overall energy consumption to identify areas for further efficiency improvements.  Agencies should utilize the current EPC process, which provides for a general audit to assess whether EPC is appropriate for the agency. Those audits will be conducted with the goal of implementing an EPC by 2016. Since July 2014, sixteen performance contracts have been negotiated for 95 state and local government buildings, totalling almost 7 million square feet.

Last Updated: July 2016

Washington has an extensive energy performance contracting program administered by the Washington State Department of Enterprise Services. The program is available to State Agencies, Colleges, Universities, Cities and Towns, Counties, School Districts, Hospital Districts, Library Districts, Port Districts and other local governments. Since the program was started in 1986, the program has completed more than $1 billion in public facility efficiency projects, received $442 million in utility rebates and now saves $22 million in annual energy costs. The program, which started in 1986, has completed millions of dollars in public facility efficiency projects.  In the last 5 years alone, the program has implemented $288 million in public building energy efficiency upgrades. 

Washington has an extensive energy performance contracting program administered by the Washington State Dept. of Enterprise Services. The program is available to State Agencies, Colleges, Universities, Cities and Towns, Counties, School Districts, Hospital Districts, Library Districts, Port Districts and other local governments. Since the program was started in 1986, the program has completed more than $350 million in public facility efficiency projects, received $442 million in utility rebates and now saves $22 million in annual energy costs. The program, which started in 1986, has completed millions of dollars in public facility efficiency projects.  In the last 5 years alone, the program has implemented $288 million in public building energy efficiency upgrades. 

Last Updated: July 2016

West Virginia state code (§18-5-9a and §5A-3B-2) authorizes county boards of education and state agencies to ender into energy-savings contracts. During the March 2011 legislative session, legislation was enacted to allow energy saving contracts by county boards of education to extend up to 15 years. Energy savings contracts are subject to competitive bidding requirements. For state agencies, state code mandates that “An energy-savings contract is subject to competitive bidding requirements.

Last Updated: July 2016

Former governor Jim Doyle signed an executive order to promote ESPCs in state buildings. The ESPC Program is housed in the Department of Administration (DOA), within the Division of State Facilities. Wisconsin provides a list of prequalified ESCOs and a guide to interested entities, which enumerates the process for attaining and ESPC. Since 2008, DOA has operated the state’s energy bond fund, which provides financing for energy savings performance contracting (ESPC) projects across all state facilities owned by agencies (including universities) that opt-in to the program. 

The bond fund supports the Performance Contracting Program administered by the Wisconsin Division of Facilities Development (DFD), which is part of the DOA. This program provides a method for the DOA to enter into a contract with a qualified energy service company (ESCO) on behalf of a state agency for development, implementation, verification, and repayment of one or more cost savings measures. Agencies benefit through reduced overall energy costs, improved facilities, and a reduction in energy consumption.

The ESCO candidates on the pre-approved list of providers work with agencies to identify energy conservation measures (ECMs) and have them implemented with no up-front capital expenditures. The expenses are paid through the energy savings that result. Energy bills are guaranteed by the ESCO to be reduced and the savings realized are drawn from the agency's utility account to pay back the bonds that financed this effort.  This agreement may last over a term not to exceed 20 years which is the maximum bonding capability for energy efficiency work.

Last Updated: July 2016

The Wyoming Business Council, in conjunction with the State Energy Office, re-launched the Wyoming Energy Conservation Improvement Program (WYECIP) in 2011. This program provides support for facilities seeking to enter into an ESPC, including model contracts and other documents to assist with implementation of performance contracts.

Last Updated: July 2016