Climate commitment struggle? ESCO to the rescue.
There are college administrations struggling to meet ambitious climate commitments.
The
Clinton Climate Initiative,
Second Nature and
AASHE are encouraging them to consider performance contracts. Outsource the analysis, design, construction, funding and management of energy production to an Energy Service Company (or ESCO). The ESCO guarantees cost savings and carbon emission mitigation.
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Tom Robinson
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The
American College and University Presidents Climate Commitment signed by almost 600 campus presidents calls for action in phases. Year 1: complete an analysis of the campus carbon footprint. “That analysis has been done by two-thirds of the signatories using internal staff or graduate students,” says Barry Wilhelm, energy solutions manager at
TAC, a Richmond, Virginia ESCO.
Year 2: Formulate an action plan for becoming climate neutral along with at least two projects that will reduce energy consumption and greenhouse gas emissions by specified amounts. "That’s where most signatories find themselves today,” observes Wilhelm.
A few years ago a campus might replace an old boiler with a new one. Today there are a variety of solar, geothermal and other emerging technologies. Legislative and regulatory compliance present new challenges. A tricky set of carbon credits and purchase offsets aimed at carbon neutrality complicates decision-making. How many campus administrations have the in-house expertise to design and implement complex construction projects or retrofits?
Outsourcing or marriage?
ESCOs offer a turnkey solution. They can provide engineering. They can set conservation goals. They can implement, even act as a general contractor. An ESCO may even provide a performance guarantee. An ESCO engagement may stipulate that the cost of the project is to be offset by the energy conservation measures. If the goals are not met, the ESCO pays the college the shortfall.
Performance contracting may require procedural and culture changes in the business office. Project-related services are often unbundled and purchased separately. For example: design consultant, then architect, then engineer, then general contractor. Often, the low bidder for each segment wins the engagement.
However, the general contractor with the lowest bid wins the job, builds a building or installs a power plant. “When the warranty is up, the college is on its own. With a performance contract, lifecycle cost becomes more important than first cost," explains TAC director of sales Ken Broach. "Instead of a one or two year construction timeframe, the relationship with an ESCO may involve 15 or 20 years of ongoing support.”
Also needed is an open, trusting and enduring relationship among the business office, the physical facilities office and the ESCO.
In the next installment of this series, we'll explore the performance contract procurement process at Mount St. Mary’s University.
Tom Robinson is an editor of The Greentree Gazette. He can be reached at trobinson@greentreegazette.com.