NASEO, ESC Release Guaranteed Energy Savings Performance Contracting (GESPC) Principles

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NASEO and the Energy Services Coalition (ESC) have released a set of principles to help strengthen and expand the use of Guaranteed Energy Savings Performance Contracts (GESPCs) to cost-effectively upgrade the performance and energy efficiency of state, local, and institutional buildings and facilities. GESPCs are a form of public-private partnership under which customers can procure facility improvements without expending upfront capital; utility and operational savings delivered by the upgrades more than pay for the projects.

Having delivered over $50 billion of cost-effective energy-related upgrades over the last 30 years, GESPC has been the largest and most successful form of public-private partnership in the United States. An estimated $300 billion market remains for employing GESPC to address deferred maintenance, modernize facilities and infrastructure, achieve resource and operational savings, and improve building performance.

However, GESPC can be unfamiliar and seem complex to some agency, municipal, and institutional managers and facility operators. Also, there have been occasional instances where misunderstandings or poor project structuring have led to inadequate outcomes. These have impeded the opportunity to achieve GESPC benefits more widely.

The new NASEO-ESC Principles seek to strengthen the quality and performance of GESPC projects, and thus increase confidence in GESPC, by improving understanding and clarifying the roles and responsibilities of customers and the energy service companies (ESCOs) that construct the projects. The Principles emphasize the use of guidelines, standardized documents and methods, technical assistance, good measurement and verification of energy savings, and robust management and tracking practices. State Energy Offices can—and in many states do—play a critical role in supporting and strengthening GESPC programs and, thus, the benefits they can offer.

For more information, please contact Rodney Sobin (rsobin@naseo.org).