The essence of a performance contract is a capital improvement project, (normally implemented by an Energy Service Company (ESCO), that results in energy cost savings for the customer and that those savings will at least cover the customer’s payment on the loan obtained to design and build the project. In this way, the project is revenue neutral, or may even provide a net cost reduction to the customer. The new funds obtained through a Performance Contract are used to improve the facilities infrastructure and generate utility cost savings that will continue long after the loan is repaid.
Performance Contract Process
The University of Idaho develops scope of work, advertises an RFQ, and selects an ESCO. This process was completed and McKinstry out of Seattle was selected.
The ESCO performs a Technical Audit and proposes utility Cost Saving Measures (CSM). This process is completed.
The University of Idaho selects a package of CSMs and negotiates a Performance Contract with the ESCO to implement the CSMs. This process is currently underway. Negotiations for a campus wide lighting package were completed, a Heating Ventilation and Air Conditioning package is close to completion, and a central utility system package is currently in the design stage.
The ESCO implements the project at a guaranteed cost with guaranteed CSM performance, and provides savings verification over life of contract. The lighting upgrade package is currently under construction.