ESCO defined

Lately, I've been mentioning ESCOs (energy services companies) a bit. I'm doing this because the Town could potentially be looking at investing in millions of dollars over the next few years... in an effort to conserve energy and money. Anyway, I came across this "definition" of an ESCO, as well as a definition of "performance contracting." I think it's a pretty good explanation, so I wanted to share it with you:

Energy service companies provide a various array of solutions for end-user needs. These services encompass everything from energy audits to lighting retrofits. Due to rising and volatile energy prices, a push on energy conservation has increased significantly. End-users are looking more and more to demand/response and meter reading to help analyze, predict, and control energy usage.

ESCO products and services typically include the following:

• Heating, ventilation and air-conditioning (HVAC) upgrades
• Lighting retrofits
• Uninterrupted power supplies (UPS) and power storage technologies
• Back-up power
• Upgrades on industrial equipment, including motors and controls
• Facility management
• Renewable technology application including wind, solar, fuel cells, and biomass waste to energy
• On-site heat and power (co-generation) systems; combined heat and power (CHP)
• Commodity procurement consulting
• Demand and load management

Energy service companies that have experienced levels of success often share this success due to their ability to effectively blend a wide range of solutions for their clients, often times with the capability to guarantee performance. ESCOs also often use performance contracting – a contract in which the energy service company bears the cost of implementation of all services and products and then recovers these costs along with profits from the savings spawned by the applicable services.

ESCO products and services continue to accommodate lighting and comfort needs for end-users but there is a definite shift of focus toward reducing energy consumption and lowering energy costs. Government mandates relative to conservation, record high fuel prices, and aging infrastructures have spurred growth throughout what was a relatively mature market.

Tim White
Town Council, Energy Commission liaison