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Panel 1: MAPC Presentation

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Presentation by Helen Aki, Energy Services Coordinator. "What is an ESCO and how does an energy performance contract work?"

Presentation by Helen Aki, Energy Services Coordinator. "What is an ESCO and how does an energy performance contract work?"

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Panel 1: MAPC Presentation Panel 1: MAPC Presentation Presentation Transcript

  • ESCO & Performance Contracting 101 Municipal Energy Efficiency Finance Workshop November 15, 2012For more information, contact:Helen Aki, Energy Services Coordinator,haki@mapc.org / (617) 451-2770 X 2054
  • Key Terms ESCO = Energy Services Company ESPC = Energy Savings Performance Contract EMSA = Energy Management Services Agreement ESPC = EMSA
  • What is ESPC? Up to 20 year term Performance Guaranteed energy savings contracting is a mechanism for ESCO identifies and installs project capital improvements measures; monitors savings and asset modernization. Upfront investment in projects repaid through savings over term of (more than energy contract savings) Annual savings must exceed debt services
  • Performance Contracting Process IGA ESCO Town Town ESCO choosesprocured Agreement completes proceeds Signed PEA; IGA with through projects;25A RFQ -Breakage identifies EMSA OR fee potential ESCO or RFP completes pays for identified projects IGA IGAIGA = Investment Grade AuditPEA = Preliminary Energy AuditEMSA = Energy Management Services Agreement
  • Cash Flows1) Town secures project financing COSTS • Common misconception: “the ESCO • IGA breakage fee ($10-50k) pays for the projects.” This is false. • Owner’s Agent2) ESCO is paid as projects are completed fee ($10-50k)3) Energy savings should exceed debt service • Financing for full EMSA (total • Important: keep utility line flat! project cost)4) Savings are measured and verified5) Actual savings reconciled against guarantees
  • Regional ESCO 2011Objective: To select a single Energy Services Company (ESCO) to provide comprehensive energy services to all 14 participating communities. Arlington  Norwell  Procurement funded under the MA District Local Technical Ashland  Rockport Assistance (DLTA) program in 2011 Chelsea  Sharon  Satisfies public contracting Everett  Sherborn requirements under M.G.L. Ch. 25A §11i Framingham  Sudbury Gloucester  Topsfield Bold = approved IGA agreements Melrose  Wayland as of 10/2012