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 Co-Chairs the Alabama Energy Services Coalition Chapter and works to provide education, outreach, and technical assistance to promote the usage of ESPC for capital improvements. ADECA has identified the need to streamline the ESPC process and is currently working to develope a prequalified ESCO list. 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 Reviewed: July 2020
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 Reviewed: July 2020
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 Reviewed: September 2020
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 Reviewed: September 2020
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. DGS has further established a team, developed processes, and cleared obstacles for rapid implementation of ESCO projects at state facilities in the second quarter of 2017. This significantly increased the engagement of utility on-bill financing, and other alternative financing mechanisms to implement energy efficiency projects at state facilities. The university systems and the Department of Corrections and Rehabilitation implement such contracts for their own buildings. California's Energy Efficiency Retrofit Program website contains additional information.
Forty-eight of California’s 1500 state facilities have ESCO projects implemented, and 20 more facilities have ESCO projects underway. Two large state facilities implemented performance contracts in 2018. ESCO's invested $14 million in energy efficiency loans in state facilities in 2019. In 2019, ESCO projects resulted in over 6 million kWh in annual energy savings. Total energy savings seen in 2019 from all prior years ESCO projects combined equal approximately 57 million kWh.
Last Reviewed: August 2020
Since Colorado established its Energy Performance Contracting Program (EPC) in the mid-1990s, 156 public jurisdictions have worked with an energy services company (ESCO) to identify $28.7 million in annual utility savings through a technical energy audit. Because each technical energy audit is a high-quality, investment-grade audit, these guaranteed utility savings have been leveraged to attract $606 million in capital construction funds. As of December 31, 2019, 224 active and completed projects have improved the performance of public school and university buildings, veterans facilities, libraries, parks, state, municipal and county administrative buildings, community and recreation centers, courthouses, capitol buildings, wastewater treatment plants, prisons and other government buildings in communities across 75% of Colorado's counties
Last Reviewed: July 2020
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 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.
Last Reviewed: September 2020
Title 29, Subchapter V, The Energy Performance Contracting Act encourages that agency facilities need to explore investments in energy conversation measures to ensure that there is immediate and long-term savings for facilities. These energy conservation measures include but are not limited to improving insulation, energy recovery systems, cogeneration systems, renewable energy systems, increasing the efficiency of lighting systems, and HVAC replacements. Title 29, Section 6973 authorizes an agency to enter into an energy performance contract with a qualified provider to reduce and evaluate operational costs of a facility. These providers develop a financial grade energy audit, which is combined into the final performance contract. The energy consumption and cost-savings attributed to energy savings measures must be reported on no less than annually and provide a report to the governmental unit. The Delaware Sustainable Energy Utility is now accepting applications for School Districts and State Agencies to enter into Energy Savings Performance Contracts through a tax exempt bond issuance. The DE SEU's Performance Contracting Program uses long-term utility cost savings from implementation of projects to fund the improvements performed by Energy Services Companies. Entering into the Energy Savings Performance Contracts will give participants access to technical advisors, financial and legal advisors, education, and training services.
Several activities took place in 2018. The Colonial School District completed a $7.6 million for energy efficiency and renewable energy capital improvements in sixteen buildings through an ESPC that was funded by bridge loan from the Delaware Sustainable Energy Utility (DESEU). It is slated for permanent financing from a DESEU Energy Efficiency Bond Issue in early 2019. These improvements are projected to yield $9.8 million in savings over 20 years with a net savings of $626,866.
The Delaware Division of Health and Social Services entered into and started construction on $3.7 million ESPC for energy efficiency improvements for 8 buildings that was funded by a bridge loan from the Delaware Sustainable Energy Utility (DESEU). It is slated for permanent financing from a DESEU Energy Efficiency Bond Issue in early 2019. These improvements are projected to yield $7.3 million in savings over 20 years with net savings $712,268.
The Indian River School District entered into and started construction on $8.2 million ESPC for energy efficiency improvements for 13 school buildings that was funded by a bridge loan from the Delaware Sustainable Energy Utility (DESEU). It is slated for permanent financing from a DESEU Energy Efficiency Bond Issue in early 2019. These improvements are project to yield $13 million in savings over 20 years with net savings of $1,222,924.
Last Reviewed: July 2020
The District's new Green Bank (established July 2018) will use a number of financing methods including Energy Savings Performance Contracts. The Department of General Services is also investigating entering into ESPCs for select buildings.
Last Reviewed: July 2020
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.
Last Reviewed: July 2020
Georgia has developed a state agency manual for performance contracting and has established a list of pre-qualified vendors as well as a full set of standardized contracting documents. Over the past six years, the State has implemented approximately $90 million worth of performance contracts in state government facilities. It is in the process of having more approved for FY21.
Last Reviewed: July 2020
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 year, Hawaii awarded the single largest ESPC in the United States to date, a $158 million contract to retrofit 12 of the state’s airports. The renovation is expected to result in 49% annual energy savings. The state’s airports division recently added a second phase to that project in March, bringing total guaranteed energy savings at Hawaii’s airports to more than $606 million over a 15-year period. In addition, Hawaii partnered in DOE’s Better Buildings ESPC Accelerator. The Accelerator catalyzed public-sector energy efficiency investments of more than $2 billion and left a legacy of valuable tools and resources behind.
Last Reviewed: September 2020
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 Reviewed: July 2020
Illinois began a ten-year pilot program in 1994, which encouraged state buildings to take part in the then-newly enacted ESPC program, which provides 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.
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. To this day, the State continues to sponsor one-on-one technical assistance and provide template documents to public sector customers for the development and implementation of ESPCs. The State has also recently released an RFP for streetlights replacements, which will be done as a master contract so that any Illinois municipality could opt in to participate and do as an ESPC. For its own facilities, 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.
Last Reviewed: September 2020
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 Reviewed: September 2020
Iowa does not allow performance contracting.
Last Reviewed: July 2020
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 Reviewed: September 2020
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 $2.4 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 over $1 Billion in ESPC (state, local, and university) since enabling legislation in 1996.
Last Reviewed: September 2020
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 Reviewed: September 2020
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 Reviewed: July 2020
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.
Maryland is currently on the state's 8th version of the Indefinite Delivery Contract (IDC) for Energy Performance Contracting (EPC) services. The Department of General Services (DGS) manages the day-to-day operations of EPCs. As part of the IDC, Maryland maintains a list of prequalified ESCOs; the terms of the IDC allow local governments to also use this contract vehicle.
As of May 2020, the State of Maryland has 27 active EPC projects. Four of the EPC projects are under construction, the remaining 23 are in the measurement and verification phase. In aggregate, the State of Maryland's EPC projects are expected to save over $24.9M a year in energy and operational savings. The state energy database is active and continues to be updated on an ongoing basis.
Last Reviewed: July 2020
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. Municipalities also utilize energy saving performance contracts through the Department of Energy Resources (DOER). The agency provides procurement guidance and oversight, a manual and model procurement documents that regulate the process. Most municipal projects include both school and municipal sites under one ESPC project. Projects include energy and water conservation and efficiency upgrades including nontraditional measures such solar onsite energy generation and street lighting. To date, local governmental bodies have invested in almost $485 million in projects representing over $23 million in annual cost savings.
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. In 2016, Massachusetts surpassed its commitment for the ESPC Accelerator and was named one of the Energy Steward Champions by the Energy Services Coalition.
Last Reviewed: July 2020
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, requiring 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. In 2019, ESC-MI held its 9th Annual Awards event to highlight exceptional ESPC projects in Michigan. Planning for events in 2020 is currently underway.
Last Reviewed: July 2020
In 2011, the state established the 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 receive Commerce’s technical assistance.
In April 2019, Governor Walz issued Executive Order 19-25 which calls upon state agencies with state-owned buildings to adopt cost-effective energy efficiency and renewable energy strategies to achieve no less than an aggregate 30 percent reduction in energy use per square foot by 2027 from a 2017 adjusted baseline, and by pursuing renewable energy strategies that ensure state agencies collectively reduce greenhouse gas emissions by 30 percent by 2025 from a 2005 calculated baseline. EO 19-25 calls for Commerce to evaluate agency asset preservation lists and the state general obligation bond fund requests for GESP suitability; for state agencies to identify and implement best management practices and cost-effective energy efficiency and renewable energy improvements utilizing any financing mechanism that may be appropriate; for Commerce to work in partnership with state and local government and energy service companies to advance state and local government and school district utilization of energy saving performance contacting; and for Commerce to offer technical assistance for state agencies and local government and school districts that elect to implement energy-saving and renewable energy improvements.
Last Reviewed: July 2020
Public entities in Mississippi are authorized to engage in ESPCs under the provisions of Mississippi Code §31-7-14. Since 2017, the Mississippi Development Authority (MDA) - Energy & Natural Resources Division developed a framework to prequalify ESCOs which state agencies, K-12 schools, municipalities, and other public entities may use. ENRD has since pre-qualified 12 ESCOs. The Division routinely engages in informational and technical assistance campaigns to increase the utilization of ESPCs as a means to acheive energy savings and capital improvement for Mississippi's public entities.
Last Reviewed: July 2020
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.
Last Reviewed: July 2020
The Montana Energy Office serves as the lead agency for Energy Performance Contracting (EPC). EPC provides an alternative procurement method for design and construction services that reduce facility operating costs through energy conservation improvements. EPC is an attractive financing model that uses cost savings from the project to finance the construction work, sometimes with no upfront cost. Also, all EPC projects must be completed by a qualified Energy Service Provider (ESP) whose qualifications have been vetted by the State; this helps ensure the ESP maintains a high standard of technical expertise and has sufficient financial resources to guarantee cost savings for project financing. The 2019 Legislature amended statute to better define “cost-effectiveness” of EPC projects.
Last Reviewed: July 2020
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 of the 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 Reviewed: July 2020
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. 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. GOE is also active in both national and local chapters of the Energy Services Coalition (ESC).
Nye County was issued a PCAAP award in 2019 to evaluate the heating, ventilation and air conditioning systems, building automation and controls, building lighting and envelope; water fixtures, and solar power potential, and is scheduled to submit their final audit report at the end of May 2020. Washoe County School District (WCSD) is set to finish their multi-year, multi-phase performance contracting project this summer. The latest phase (Phase Three) was awarded a PCAAP award in January 2019, and the implementation is well underway, with no delays due to the pandemic.
Last Reviewed: July 2020
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 has completed three major ESPC projects. The first project was completed in August 2016 at the state’s largest office campus in Concord, NH. These project improvements included energy efficiency improvements, installation of solar PV, and construction of a biomass boiler heating plant. A second ESPC was completed for the state-run ski area, Cannon Mountain, which included efficiency upgrades to their snowmaking process. The Department of Administrative Services (DAS) completed a third ESPC for 28 buildings in Concord, NH. These project improvements included energy efficiency improvements and installation of two solar PV systems. In the Spring of 2018, the DAS released a fourth RFP for energy efficiency upgrades for five state agencies occupying twenty-seven state-owned buildings in the seacoast region. This project is currently in the construction phase. For the fall of 2020, the DAS plans to release a fifth RFP for energy efficiency upgrades.
The DAS developed and promotes an Energy Savings Performance Contracting (ESPC) Champions Toolkit for state agencies to use and are exploring ways to increase their capacity to administer more ESPCs.
Last Reviewed: July 2020
New Jersey’s ESPC policies stem from a 2009 law which allows New Jersey government entities to enter into energy savings performance contracts through the New Jersey Energy Savings Improvement Program (ESIP). The program complements the New Jersey Clean Energy Program and provides some model ESIP documents.
The ESIP allows public facilities to enter into long-term energy savings agreements without utilizing their capital budgets. There are currently sixteen Treasury-approved Energy Services Contractors in the state who can publicly bid for these energy efficiency construction projects. New Jersey has 127 approved ESIP projects as of August 2020, with $1.06 billion in total contracts worth $1.30 billion in annual savings.
The NJ Board of Public Utilities’ Division of State Energy Services manages the performance contracting process for all local public facilities. The State of New Jersey’s Department of Property Management and Construction within the Department of Treasury manages performance contracting for state facilities.
ESPC has assisted both school districts and municipalities in making comprehensive energy efficiency upgrades to facilities without impacting taxpayers.
Last Reviewed: October 2020
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. Since December of 2013 to the present, New Mexico implemented $280.4 million in Energy Savings Performance Contracting that is saving 127.47 million kWh and providing $12.6 million in guaranteed utility savings. The New Mexico General Services Department has updated their state price agreement. Agencies can implement projects by directly contacting the approved vendors and conducting an Investment Grade Audit. The program confidence has improved by implementing a third party review process to help guide agencies through the audit development process and verification of measures installed in the facilities. In addition, measurement and verification reports are required to be reported to the NM Energy Conservation and Management Division every January to confirm the guaranteed savings.
ECMD has processed $49.5 million in energy performance contracting projects in the past few years. These projects 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 Reviewed: July 2020
The New York Power Authority (NYPA) has been offering its Energy Services Program for 32 years. Between 1987 and 2019, NYPA has financed and invested over $3.1 billion across 6,953 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 2019, NYPA initiated approximately $532 million in energy efficiency projects across over 293 public buildings statewide. The programs are implemented without performance guarantees which are traditionally offered by ESCOs. NYPA has been steadily expanding its program services and is on track to exceed $600M in 2020. DASNY also has the authorizing language to support performance contracting, and many municipalities and K-12 schools issue their own procurements independently to obtain performance contracting services.
Last Reviewed: August 2020
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 Environmental Quality helps to administer ESPCs to schools, universities, and state and 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. In the past 3 years, local governmental units have enacted ESPCs totaling $47,888,969 with an annual guaranteed savings of $3,998,615.
Last Reviewed: July 2020
Section 48-05-10 & 48-05-11 of North Dakota Code enables energy savings contracts.
Last Reviewed: July 2020
In Ohio, ESPCs are coordinated by the Ohio Facilities Construction Commission, formed by a 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 Reviewed: July 2020
ESPCs in Oklahoma are managed by the Division of Capital Assets Management within the Office of Management and Enterprise Services as part of the state's Performance-Based Efficiency Program. In 2016 Oklahoma underwent a bid process and prequalified two service companies. ESPCs are also included in the State Energy Facilities Program.
Last Reviewed: July 2020
The Oregon Department of Energy maintains a number of resources on an ESPC web page. The web page contains tools to guide choices, including a qualified ESCO list, energy use index calculator, audit guide, and an ESPC Contracting Guidebook. ESCO audits for K-12 Public Schools qualify for reimbursement under Oregon’s 1149 Public Purpose Charge funded Energy Efficient Schools program, if they are carried out to that standard. There are different rules for state agencies, who must work with a qualified ESCO from the ODOE list and also comply with State Energy Efficient Design (SEED) statutory requirements (ORS 276.900) when implementing a project.
Last Reviewed: July 2020
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.
Last Reviewed: July 2020
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 Reviewed: July 2020
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.
Last Reviewed: September 2020
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 Reviewed: September 2020
The State of Tennessee does not track public sector performance contract projects. However, TDEC OEP is aware of at least eight performance contracts which have either been contracted for construction or completed within the last five years, including: The University of Tennessee Health Science Center, Bradley County Schools, Cleveland Housing Authority, the City of Knoxville, Montgomery County, Williamson County Government, Williamson County Schools, and the City of Paris.
Additionally, the State of Tennessee has completed 32 projects through two separate contract efforts, with projected annual energy cost savings amounting to almost $10 million. The Tennessee Board of Regents, which is the Supervisory Board for State universities outside of the University of Tennessee system, community colleges, and vocational-technical schools, has completed 17 ESPC projects since 2004, totaling $54 million in investment. The annual projected savings for these projects was $6.8 million.
In May 2018, the Tennessee legislature passed legislation acknowledging that State procurement agencies may enter into performance contracts for energy savings for State-owned buildings and facilities through alternative procurement or contracting vehicles. The legislation also encourages up to five pilot projects. This bill amended TCA Title 4 and Title 12.
Also in May 2018, the University of Tennessee Health Science Center in Memphis signed a contract for a $5.5 million ESPC project. This is the first phase of a planned $30 million project to overhaul the campus’ energy and plant equipment. Construction is expected to begin in the summer of 2019. Additionally, in March 2018, Williamson County initiated a multi-phase ESPC project for upgrades to their county buildings and facilities. In January 2019, Williamson County signed the first phase of the contract ($18M) to begin construction, which it is anticipated to be completed in early 2020.
Last Reviewed: July 2020
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 revolving loan fund to help mitigate the cost of ESPCs to state agencies. SECO also provides numerous model documents and lays out the process for establishing an ESPC in a guide. Title 10, Texas Government Code §2166.406 mandates SECO develop guidelines and review ESPCs.
Last Reviewed: July 2020
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 K-12 school districts, municipal facilities, large state universities, 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.
The Governor's Office of Energy Development (OED) and Division of Facilities Construction and Management (DFCM) successfully established a new, pre-approved list of third party reviewers for energy savings performance contracting (ESPC). The list complements a pre-approved list of energy savings companies and fills a gap identified by ESPC end users. The national Energy Services Coalition, State Liaison Team conducted a three-part survey with OED and DFCM to evaluate their approaches to Guaranteed Energy Savings Performance Contracting (GESPC). Overall, the ESC found that Utah fulfills the majority of metrics for a successful GESPC program, including a contract terms of up to 20 years and a requirement that energy savings companies guarantee savings. There are presently seven vendors on the pre-qualified list.
As part of the new ESC Utah Chapter efforts, OED is working with the members to establish contract templates to streamline project development and contract negotiations. Templates will be created for each phase of a project, from the Request for Proposal stage through project closing. The intent of the templates is to simplify the process for end users who may not have in house resources to effectively evaluate performance contracting projects.
Last Reviewed: August 2020
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.
Last Reviewed: July 2020
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 2015, the state has invested over $192 million dollars in EPCs and has saved over 14 million kWh. DMME has managed a statewide ESPC program since 2002. In 2019, a new statewide contract was advertised and a refreshed list of pre-qualified ESCOs were selected to continue the program.
Last Reviewed: July 2020
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 began in 1986, it has completed more than $1.5 billion in public facility efficiency projects in over 430 public agencies, received $86 million in utility rebates and now saves more than $49 million in annual energy costs.
Last Reviewed: July 2020
West Virginia state code (§18-5-9a and §5A-3B-2) authorizes county boards of education and state agencies to enter 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 Reviewed: July 2020
Wisconsin state statute §16.85 (5) directs the Department of Administration (DOA) to promote the use of energy conservation methods in state-owned facilities, to implement and refine a statewide energy monitoring system and to develop and implement initiatives of replacing fossil fuels with renewable energy fuels. The standing order from the executive branch, as outlined in Governor Walker’s Executive Order #63, made the DOA responsible to ensure that new state facilities were constructed to be 10% more energy efficient than commercial code.
Under DOA, the State of Wisconsin Building Commission is responsible for implementing the State Building Program authorized by the legislature. State statute §20.866 (2) (ws) authorizes the Department of Administration to provide funding to state agencies for energy conservation construction projects through contracting public debt from the capital improvement fund in an amount not exceeding $220,000,000. The contract shall set forth the minimum savings in energy usage that will be realized by the state from construction of the project and the contractor shall guarantee that the savings will be realized pursuant to §16.847 (2) (c).
The commission, under §13.48 (2) (h), may not authorize the release of funds for bidding and construction of any new building, structure, major remodeling or building addition unless the design concept incorporates an active solar energy system or photovoltaic solar energy system or other renewable energy resource system, unless not justified on the basis of a technical and economic feasibility evaluation. Other rules and minimum standards for planning, improvement, and management of buildings under the authority of the State Building Program are outlined by the Sustainable Facilities Policy, Energy Conservation Policy and Energy Design Guidelines found in the State of Wisconsin Building Commission Policy and Procedures Manual and Wisc. Adm. Code § SPS 363.
Wisconsin state statue §66.0133 enables local governmental units to enter into a performance contract with a qualified provider (under the DOE Qualified List of Energy Service Companies) to reduce energy costs. Prior to entering into the contract, the qualified provider shall provide a report to the local governmental unit containing recommendations concerning how much should be spent on energy conservation and facility improvement measures and the savings that will be realized by the improvements. The Municipal Energy Efficiency Technical Assistance Program (MEETAP), ran out of Wisconsin’s Office of Energy Innovation, provides technical expertise to help municipalities through the complex processes of ESPCs.
Last Reviewed: September 2020
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 Reviewed: September 2020