What is Performance Contracting?

Sunday, October 12, 2008

Performance Contracting (PC) is a procurement process by which facility owners outsource the purchase of any combination of; energy efficiency improvements, operations and maintenance, capital improvements, or commodity (energy) purchases. The concept is to identify and implement energy related projects that support themselves financially based upon the measured and verified savings they generate. Typically, an agreed to percentage of the annual savings is paid to Cogenex to cover the cost of the services provided. Any resulting positive cash flow to our customers goes directly to their bottom line, in many cases with no investment required on their part.

In order to implement these types of projects, Cogenex provides a team of experts to provide the turnkey services to implement such projects. These services include project management, energy analysis, commodity procurement, engineering, construction, arrangement of recycling for project hazardous waste, operator training, central plant operation, maintenance, measurement and verification, customer service and financing to implement efficiency projects in existing buildings. The Cogenex team combines technical and financial solutions, coupled with tried and true technologies, to meet the needs of our customers.

Many states and the Federal Government have passed legislation that specifically identifies Performance Contracting as a distinct procurement method. Cogenex is pleased to be one of the pioneers in this industry with our first Performance Contract dating back to 1983.

The Federal Government's version of PC is implemented at facilities through Energy Savings Performance Contracts (ESPC). The ESPC permits the ESCO to be paid only from proven energy cost and/or maintenance savings. Typical contracts last from five to twenty years, during which time the building owner and the ESCO share in the energy cost savings. Cogenex has the first ESPC project with the Department of Veteran Affairs, VA Connecticut Healthcare System in West Haven, Connecticut. This project was implemented in 1992/1993.

Cogenex is accredited by both the National Association of Energy Service Companies (NAESCO) as well as the Canadian Association of Energy Service Companies (CAESCO). In addition we are on both the Department of Energy (DOE) and the Department of Defense (DOD) list of certified energy service companies.

Source: Previous Cogenex.com site