Someone Else May Pay For Your New A/C (No, Not A Donor)


By: Joe Patti

In: Productivity, Project & Time Management

If you have a large physical plant or campus of buildings and aging HVAC, lighting or water systems, you may want to consider an Energy Savings Performance Contract (ESPC). Under this arrangement, an energy service provider handles all the financing and upfront costs for system upgrades and guarantees the savings accrued from the improvements will be sufficient to pay for the upgrades over a period of time.

dou You Know About Energy Savings Performance Contracts?

While the bulk of ESPCs are entered into by federal, state and local government entities (including schools, libraries, water treatment plants), a U.S. Department of Energy website says:

Ideal candidates for ESPC projects include any large building or group of buildings such as city, county, and state buildings; schools; hospitals; commercial office buildings; and multifamily buildings. The size and scope of projects are governed by the savings opportunities in facilities, the types of funding sources that can be applied, the minimum size project an ESCO is willing to manage, and the financing capability. Government facilities are generally good candidates for ESPC projects, because with long-term ownership of the facilities, governments allow for 10- to 20-year financing terms. In contrast, commercial facilities often have a 3-year payback threshold and may reject a comprehensive ESPC.

As to whether ESPCs might be an option for arts organizations, I have looked at the programs of about 4-5 states. Other than Oregon’s which suggests a minimum of $100,000 in annual energy bills, there isn’t any clear guidance about what level of energy expense is appropriate to undertake such a project. Presumably your current bills should be relatively high as should the potential for energy saving to make it worth the while of your organization and the company undertaking the work.

But I think about the power use of theaters in particular with all their stage lighting and the energy savings that can be realized. LED lighting still has some color temperature and control issues which make them unsuitable for some uses, but the improvements come very quickly. Many theaters can benefit from upgrading their general lighting and HVAC systems.

Entering into an ESPC requires a lot of research and good legal counsel. The US Energy Department and State of Oregon have some good resources with which to start out.

These resources echo the issue mentioned on the Wikipedia page about ESPCs in that you will want to be clear about stipulating whether you are paying on stipulated energy savings or actual energy savings. Which is basically the difference between the mileage the manufacturer says your vehicle will get and what you actually get.

Just like the mileage of your car, the efficiency you will realize all depends on the how well the machinery is taken care of and how it is driven. Institute for Building Technology and Safety says,

One of the biggest changes that updated systems may bring is the need to train your maintenance team. New heating and cooling equipment, building controls and lighting systems may be different. This will require facility managers to learn new skills so they both understand and can maintain the new system at optimal levels after implementation.

It is common that new total building management control systems are installed and then not properly utilized to maximize efficiency. The ESPC process may include training and recorded sessions, if requested, so staff may revisit training as often as they prefer. However, staff turnover and poor oversight of this transition can also leave facility managers frustrated and struggling to use the systems as intended.

While this may all sound like an overwhelming undertaking, these arrangements are being used with increasing frequency so there is a good chance there are people in your local government or school district who can act as a source of information and advice. The savings may be well worth it.

Joe Patti
Joe Patti
In addition to writing for ArtHacker, I have been writing the blog, Butts in the Seats ( since 2004. I am also an evangelist for the effort to Build Public Will For Arts and Culture being helmed by Arts Midwest and the Metropolitan Group. ( I am currently the Theater Manager for the Rialto Theater in Loveland, CO. Across my career I have worked as the Executive Director at The Grand Opera House in Macon, GA, at University of Hawaii-Leeward Community College, University of Central Florida, Asolo Theater, Utah Shakespearean Festival, Appel Farm Arts and Music Center and numerous other places both defunct and funky.
Author Archive

Leave a Comment