ESPC ADVANTAGES

Among the many advantages of entering into an ESPC are: GUARANTEED PERFORMANCE: ESCOs must provide a written guarantee of energy savings from the Conservation Measures implemented that will create cost avoidance larger than the costs incurred by the Government Unit. ESCOs install equipment that it guarantees will generate savings for the payback period of the loan. PARTICIPATION: During contract negotiations with ESCOs, Government Units participate in design, specifications and equipment selection. RESPONSIBILITY: ESCOs are obligated to pay in the event of an energy savings shortfall and must guarantee the energy savings. If actual savings are lower than guaranteed in any given year, the company reimburses the Government Unit for the shortfall. ESCO will have sixty (60) days to settle the shortfall. MEASUREMENT & VERIFICATION: ESCOs shall provide a written report every three (3) months which shall be certified by the ESCO's Professional Engineer (PE) and Certified 6 I Page Energy Savings Performance Contract Program Amended Regulation Measurement and Verification Professional (CMVP) and which shall detail actual performance compared to the guaranteed performance. Said reports shall be reviewed by the Contract Administrator within thirty (30) days of receipt. The report is critical to ensure that savings exceed payments. ACCOUNTABILITY The ESCO serves as a single point of accountability. FINANCING: Government Units are allowed to finance the improvements via a third party, directly from the ESCO or through other financing mechanism available, in coordination and with the financial advice of the Government Development Bank (GDB). COST CERTAINTY: Project financing costs are paid from the utility cost savings, which may be guaranteed by the Surety Bond. LOWER UTILITY COSTS: Lower energy consumption and peak electricity demand translate to lower utility bills. PUERTO RICO ECONOMY: As the project is paid for through energy savings that would otherwise purchase foreign oil, public policy established through Act 19-2012 and Act 57-2014 is effectively implemented.