Energy Law

Using Energy Engineering Consultants in ESCO Contracts

, The Legal Intelligencer


The Pennsylvania Guaranteed Energy Savings Act, like many analogous state statutes, authorizes governmental entities to enter into long-term energy service company (ESCO) contracts, often utilizing third-party financing and requiring a 15-year payback. The operating theory is that capital upgrades, equipment procurement and operational modifications are funded through recognized energy savings resulting from the implementation of facility improvement measures (FIMs). Typically, the ESCO procures financing, balancing short-term returns on investment, such as upgraded lighting and insulation, with longer-term aspects of the build-out, such as co-generation facilities. But with the ESCO performing so many integrated services, can the commonwealth be assured it has maximized its savings and in the most cost-effective manner?

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