$859M Savings on Water, Energy Available with Performance Contracting

Performance Contracting infographic

by | Jul 28, 2015

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Performance Contracting infographicWestern states’ public schools and governments can save $859 million annually by using performance contracting to implement water management and energy conservation measures, according to a market study by Western Resource Advocates and McKinstry.

The report, Tapping the Power of the Market: Financial, Energy and Water Savings, and New Revenue Streams through Performance Contracting in the Colorado River Basin States, shows how government and school facilities would save more than 6 million megawatts of electricity, 4 million cubic feet of natural gas, and 40,000 acre feet of water a year by implementing conservation measures using the performance contracting approach.

The states analyzed in the report are: Arizona, California, Colorado, New Mexico, Nevada, Utah and Wyoming.

Though it’s unfamiliar to many, the performance contracting model, is a smart approach for cities, counties, school districts, and wastewater/water utilities to implement energy and water efficiency improvements in their facilities, the report concludes.

Performance contracting is a mechanism that allows public entities, such as a school district or local government, to quickly perform comprehensive energy and water retrofit projects in public buildings using a qualified private energy services company. Savings on water or electric bills resulting from the installation of energy and water conservation measures are guaranteed by an energy services company to exceed the financing costs necessary to implement the energy and water-saving upgrades. If the realized savings do not exceed the financing costs, the contracted energy services company makes up the difference.

Report authors noted that stretching limited water supplies is more important than ever with the over-allocation of the Colorado River Basin as well as extended droughts and growing populations in many western states. The report found that water utilities in Colorado River Basin states could use performance contracting for water meter replacement projects that introduce advanced technologies to not only reduce apparent water loss (resulting from customer meter inaccuracies) by 461,000 acre-feet per year, but to also provide $593 million in additional revenue per year.

 

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