Energy Savings Performance Contracts
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Energy savings performance contracts (ESPCs) allow Federal agencies to complete energy-savings projects without up-front capital costs and special Congressional appropriations.
An ESPC is a partnership between a Federal agency and an energy service company (ESCO). The ESCO conducts a comprehensive energy audit of Federal facilities and identifies improvements to save energy. In consultation with the Federal agency, the ESCO designs and constructs a project that meets the agency's needs and arranges the necessary funding. The ESCO guarantees that the improvements will generate energy cost savings to pay for the project over the term of the contract (up to 25 years). After the contract ends, all additional cost savings accrue to the agency.
U.S. Department of Energy ESPCs
U.S. Department of Energy (DOE) energy savings performance contracts are indefinite-delivery, indefinite-quantity (IDIQ) contracts designed to make ESPCs as practical and cost-effective as possible. DOE awarded these "umbrella" contracts to ESCOs based on their ability to meet terms and conditions established in IDIQ contracts. DOE ESPCs can be used for any Federally-owned facility worldwide.
DOE energy savings performance contracts help Federal agencies meet energy efficiency, renewable energy, water conservation, and emissions reduction goals by streamlining contract funding for energy management projects. Other benefits include:
- Access to private-sector expertise in energy efficiency, renewable energy, water conservation, and emissions reduction
- Built-in incentives for ESCOs to provide high-quality equipment, timely services, and thorough project commissioning
- Infrastructure improvements to enhance mission support
- Healthier and safer working and living environments
- Flexible practical contract and procurement processes
- Objective technical support through FEMP
- Smart project management that ensures building efficiency improvements and new equipment without upfront capital costs.
For more information about energy savings performance contracts, see: