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Energy Service Companies

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ESCOs

Soon the City of Fort Lauderdale will be able to make energy-efficient retrofits to their buildings, structures, lighting and facilities through entering into Energy Savings Performance Contracts (ESPCs) with Energy Service Companies (ESCOs).

Here is how it works. ESCOs are energy performance contractors who are responsible for an energy improvement project’s design, financing, installation and operational requirements. This is completed either directly by the ESCO or through subcontractors. The ESCO arranges for long-term project financing that is provided by a third-party financing company.  It also provides a guarantee (to the City) that the savings produced by the project will be sufficient to cover the cost of project financing for the life of the project. Using ESCOs allows the City to invest in energy efficiency without the upfront costs or financial risk.

After the project construction and implementation is complete, the ESCO monitors the savings and may also provide service upgrades for a period of time.  After the ESPC term is over, the customer (in this case the City of Fort Lauderdale) stops making payments to the ESCO and begins to operate and maintain the energy efficiency improvements and retains all energy savings. In many cases, an ESCO will guarantee a certain level of energy savings to the customer (enough to finance the full cost of the project).  If the guaranteed level of energy savings is not delivered, the ESCO will have to pay the difference between the guarantee and the actual level of savings.

You can find success stories of the work done by the ESCO called Chevron Energy Solutions in the cities of Brea, California and Austin, Texas.

The projects involving ESCOs are a Press Play Fort Lauderdale Strategic Plan 2018 Initiative, included within the “Internal Support Cylinder of Excellence,” specifically advancing Goal 12, Objective 3, Initiative 5: Integrate energy efficient retro-fits and sustainable design elements in City facilities.  Further, this effort advances the Fast Forward Fort Lauderdale Vision Plan 2035: We Are United, and support the goals of our Sustainability Action Plan.

More Information and Sources

Working with ESCOs may be a viable strategy for some businesses operating within our City. Learn more via these resources.

http://www.naesco.org/what-is-an-esco

http://www.institutebe.com/Building-Energy-Retrofits/Energy-Performance-Contracting.aspx 

http://www.energystar.gov/ia/partners/spp_res/Introduction_to_Performance_Contracting.pdf

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