What is an energy savings performance contract?
An energy savings performance contract is an agreement between an energy services company (ESCO) and a building owner. Oregon defines it as a public contract between a state agency and a qualified energy service company for the identification, evaluation, recommendation, design and construction of energy conservation measures, including a design-build contract, that guarantee energy savings or performance. (ORS 279A.010) At its core, an energy savings performance contract is a “design-build” contract with some highly tailored specializations. The owner uses the energy cost savings to reimburse the ESCO and to pay off the loan that financed the energy conservation projects. Agreements with ESCOs are typically five to seven-year agreements.
