Performance Contracting in Existing Buildings

Energy performance contracting enables state governments to invest in energy-saving equipment, using future utility cost savings (or avoided costs) to pay for the improvements. A lease-purchase agreement is paid through annually guaranteed cost savings that are realized in utility and operating budgets. Substantial facility improvements can be accomplished in this way while reducing future utility and maintenance costs, mitigating the future risk of volatile utility prices and modernizing state facilities.

An energy performance contract begins with a feasibility study, performed by the Governor’s Energy Office (GEO), with the support of the Office of the State Architect, and the agency’s Energy Manager. Using analytical tools, the GEO will determine if the facility is under performing other buildings of the same building and occupancy type.

If the facility is identified as one that will benefit from energy upgrades, the agency is referred to GEO’s list of pre-approved Energy Service Companies (ESCO). An ESCO is a private firm that oversees the engineering and installation of energy-savings improvements, provides the long-term financing for those improvements, and guarantees the energy savings over a fixed period of time, generally about 15 years.

The Greening Government Executive Orders require all state facilities that have not yet engaged in performance contacting to undergo an energy performance contracting feasibility study.

Contact the Governor's Energy Office Commercial/Institutional Buildings Program Manager for assistance with Performance Contracting in your existing building.