Energy Saving Performance Contracts typically consist of four phases:
(1) Technical Energy Audit (TEA)
This is the initial phase of Personal Services in which the Energy Services Company (ESCO) performs a detailed evaluation of the facilities and identifies an array of potential Energy Conservation Measures (ECMs). This may also include water conservation or renewable energy systems. Each measure is evaluated for its technical and financial feasibility, and a report is generated summarizing the various measures. The owner selects a portfolio of measures that merit further development for potential implementation.
(2) Project Development Plan (PDP)
This is the second phase of Personal Services in which the ESCO provides a preliminary design of the proposed ECMs. This design is used to prepare a Guaranteed Maximum Price (GMP) for completing the design and constructing the proposed ECMs. The PDP also includes an Energy Savings Guarantee to ensure that the ECMs perform and generate the savings required by the owner. In essence, the Project Development Plan becomes the ESCO's proposal for implementation of the project. Subject to modification and negotiation, the owner and ESCO enter into a contract for Design and Construction, and for the Energy Savings Guarantee.
(3) Design and Construction
This phase is modeled on a standard Design-Build project delivery process. The ESCO prepares a complete design for the ECMs, which is subject to the owner's review and approval. The ESCO then builds the design, either with their own forces or with subcontractors.
(4) Energy Savings Guarantee
Upon completion of the Work and acceptance by the owner, the project enters the guarantee phase. This phase will typically last from one to five years. During this time, the ESCO performs Measurement & Verification to demonstrate that the project is performing and generating the guaranteed savings. If the project does not perform, the ESCO may remedy the fault or compensate the owner for lost savings.
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