Energy Services Performance Contracting (ESPC or performance contracting) is a funding method of using guaranteed energy savings to implement facility improvements, equipment upgrades and energy efficiency techniques. Municipal and state governments cope with tight budgets and pressure from citizens to keep taxes low. Schools, colleges and universities confront expanding enrollment and demands to improve academics. In each situation, facility managers and owners are often forced to defer maintenance and equipment upgrades in order to control costs. Performance contracting is an alternative project delivery method available to alleviate additional costs and help finance a project.
Since 2017, NCBPA has been leading efforts to extend North Carolina’s energy and water savings goals in public buildings (including state agencies and institutions) that were successfully met in 2015. To do this, the association has prioritized lobbying work to enable House Bill 330 “Efficient Government Buildings & Savings Act” of 2019 with primary sponsors Rep. John Szoka (R-45), Rep. Dean Arp (R-69), Rep. Stephen Ross (R-63) and Rep. Chris Humphrey (R-12). Filed in March of 2019, the legislation seeks to avoid nearly $1.1 Billion in utility costs between 2018 and 2025 and net North Carolina taxpayers $252 Million in savings by establishing new energy and water conservation goals for public buildings of 40% and 30%, respectively. The prior goals of 30% and 20% by 2015 resulted in more than $1.4 Billion in taxpayer savings since 2003 through roughly $60 Million of state funding.
“If North Carolina were to fully act on the policy, utility and workforce development opportunities available through our industry, the state would save $13.9 Billion in energy over the next ten years,” said Aaron Hope of Southern Energy Management. “With those energy savings, people would also be healthier, businesses would see increased productivity, we’d have healthier school environments for our children and there would be vast economic and environmental benefits as well,” said Hope.
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Case Studies from NCBPA Member Companies
North Carolina Museum of Art
$500,000 per year in energy savings (58% reduction). The North Carolina Museum of Art underwent a performance contract under ESCO Trane Comfort Solutions. Following the recommendations of the General Survey, and an additional survey by an independent engineer, the Museum established performance targets to follow for the Performance Contract. Required Standards for Mechanical Systems (HVAC) necessary to ensure the Long-Term Preservation of the Art Collections of the NCMA.
North Carolina State University
$1.6 Million per year in energy savings, resulting in an 11-year payback. North Carolina State University turned to Schneider Electric to provide a campus-wide solution to improve energy efficiency and drive sustainable, clean energy projects in 1.6 million square feet of building space across 13 campus facilities. The comprehensive solution developed includes new or enhanced direct digital controls, improved lighting controls with occupancy sensors, improvements to the heating and cooling systems and a solar thermal heating system for domestic water and swimming pools.
Central Piedmont Community College
Nearly $800,000 energy savings exceeded the savings guarantee by 11 percent in year one and 19 percent in year two. As Central Piedmont Community College (CPCC) in Charlotte, North Carolina continued to increase its enrollment and expand its campuses, the school sought to upgrade its infrastructure to ensure an optimal learning environment for students. Challenged by budget constraints, the college also wanted to reduce energy and operational costs to improve building performance, while implementing conservation measures in alignment with its sustainability goals.
Brunswick County Schools
$942,087 guaranteed annual energy and water savings. Brunswick County Schools maintains over 2 million square feet of facilities for their students. Twelve sites still heated their buildings with fuel oil, an expensive and messy energy source. Schneider Electric converted all of these schools to either natural gas or propane, in order to eliminate their use of fuel oil. Converting to natural gas or propane also gave Brunswick County Schools the opportunity to get various new heating system upgrades and refurbishments.
Kannapolis City Schools
$301,260 guaranteed annual energy and water savings. Guaranteed Energy Savings Performance Contract enabled this North Carolina public school system to employ over $ 3,400,000 in facility upgrades across 11 schools and buildings with annual anticipated guaranteed savings of $ 301,260 annually. This project will enter the construction phase in July 2019 and verification resulting a cumulative anticipated savings of $ 5,419,898 annually.
Caldwell County Schools
$501,983 guaranteed annual energy and water savings. Guaranteed Energy Savings Performance Contract enabled this North Carolina public school system to employ over $6,420,000 in facility upgrades across 29 schools and buildings with annual anticipated guaranteed savings of $ 501,983 annually. This project will enter the construction phase in June 2019 and verification resulting a cumulative anticipated savings of $ 8,945,499 annually.
Hoke County Schools
Superintendent Freddie Williamson said the ESPC his district entered was the only way the school system could finance needed work without increasing taxes or debt. The $6.2 million in energy efficiency retrofits implemented as part of the 2015 ESPC are being paid for by guarantees of $8.1 million in energy savings over the 15 year contract.
Greensboro Coliseum Complex
Through a series of facility improvement measures, Siemens reduced the electrical energy of the facility by nearly 25 percent, water consumption by nearly 30 percent and gas use by more than 50 percent. These improvement measures will result in energy reductions equivalent to three tons a year in CO2 emissions.
Veterans Integrated Services Network
VA Mid-Atlantic Health Care Network (VISN 6) turned to energy savings performance contracting to cut its energy consumption by $1.5 million, but it reinvested those dollars into equipment that was reaching the end of its useful life. This enabled the hospitals to focus on their mission and passion to provide safe, efficient, effective, and compassionate care to the men and women they so proudly serve.
Swain County Schools
Swain County School District entered into a performance contract with Schneider Electric that allowed the school system to upgrade heavy mechanical systems and switch fuel sources to further save energy and costs. The $2,390,006 project was financed through a guaranteed energy services performance contract that yields $173,933 in average annual savings.
