Any state agency may enter into an energy performance-based contract with an energy performance contractor to significantly reduce energy costs of a state facility through one or more energy conservation or operational efficiency measures.

An Energy Savings Performance Contract (ESPC) is an agreement between a contractor, most often an energy services company, or ESCO, and a customer to perform as a condition of payment. Performance in this context means meeting a guaranteed level of energy savings.

Performance Contracting Graph

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ESCOs are essentially design-build general contractors combined with a diagnostic front end and a guaranteed-savings back end. They should provide, by some combination of in-house staff and subcontracts, all the labor, materials, equipment, and subcontractor management. If they do that well, they need little supervision. That being said, Virginia Energy can serve as an experienced and trusted third-party advisor to state agencies and local governments considering entering into an ESPC.    

Energy Performance Contracting (ESPC) is primarily equipment replacement to provide energy savings and installation of building control systems to control energy consumption, which are defined as maintenance projects. They are impacted by the Virginia Uniform Statewide Building Code. State agencies shall comply with the Construction and Professional Services Manual (CPSM) for all design and construction work under this contract. Other public bodies must comply with their local building codes.

Performance Contracting Graph

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ESPC Forms and Documents