9 Ways Performance Contracting Can Conserve Energy
By Peter J.H. Thomson
To achieve efficiency improvements, water and wastewater utilities might be wise to consider performance contracting. A performance contract with an Energy Services Company (ESCO) can deliver much-needed operational efficiencies with manageable lifecycle costs and minimized risk.
The ESCO delivers the efficiency project under a progressive design-build approach. Benefiting from the efficiencies, the owner pays the ESCO for the improvements. In return, the ESCO provides a guarantee of operational savings, which are specified in the performance contract. If the savings fall short, the ESCO has to reimburse the owner. The intent of the performance contract is that the guaranteed savings generated will cover the debt service for the upgrades.