Energy Performance Contract Guidelines
Defining the Scope
An Energy Performance Contract (EPC) is an agreement by an Energy Service Company (ESCO) for the provision of energy services in which energy systems are installed, maintained, or managed to improve the energy efficiency of, or produce energy for, a facility in exchange for a portion of the energy savings. A preliminary project scope should be included in the Request For Proposals so that a more effective comparison can be made of proposals used in selecting an ESCO. The project scope must be directly related to energy savings. Projects that do not reduce energy use are not appropriate. Projects that replace, repair, or maintain systems and equipment that are covered by previous EPCs are not acceptable. For example, repair or replacement of lighting fixtures or temperature control systems that were installed by a previous EPC, water conservation plumbing fixture replacement, replacement of paper towels in toilet rooms with electric hand dryers, fire alarm systems, security systems, telephone systems, technology cabling, etc. and any work in new construction are not appropriate for EPCs.
The EPC project scope must be complete and designed to be independent of any and all other projects that may be proposed or underway and all construction and administrative costs necessary to install EPC work must be the responsibility of the ESCO. If the EPC work includes multiple buildings, each building requires a separate project submission and project costs must be separated by building. "Phasing" whereby different parts of work in the same building in the same year are submitted separately and do not constitute a fully functioning system or complete elements of work is not allowed. Since EPCs represent guaranteed installed cost installations with a defined payback period, change orders to EPCs are not acceptable and any additional segments of work will be processed as new, separate project submissions, each requiring a building permit. Each project must stand on its own as a complete, fully operational, code compliant project. Each project submission must individually meet all the requirements for submission of final plans and specifications and Commissioner's Regulations 155.20, including the payback provision. It is not appropriate for an EPC to be dependent upon the school district or other contract to perform work necessary for its installation. For example, turning over materials or equipment for installation by another contractor is not appropriate and demolition or removal of existing equipment, final connections to heating equipment or electric fixtures, lintels, louvers, curbs, equipment pads, construction or reconstruction of space necessary to install EPC equipment, etc. need to be included in the EPC agreement. For specific direction on the requirements for individual project submissions, please contact your assigned project manager for additional information.
We will be reviewing very carefully the replacement of head-end temperature control equipment that does not include the installation of associated panels, sensors and terminal control devices. Energy management system submissions will require a detailed bill of materials, complete description of interconnections of system components and the proposed energy control strategies, with calculations of energy savings. Claimed savings for control strategies that are currently available on existing systems cannot be used to fund replacement of the temperature control system or any other project cost.