How does FCIP work?
Using FCIP, energy conservation is achieved through an energy performance contract with an energy service company, known as an ESCO. In brief, it is a project approach that uses energy savings to pay for the cost of new energy efficient equipment and systems over time. More specifically, it involves a single procurement contract that:
- covers everything from initial design and engineering through installation, startup, and measurement and verification of outcomes;
- identifies energy savings improvements sufficient to pay for all costs associated with implementing the project (i.e., equipment, materials, labor, fees, bonds, permits, and debt service) over the life of the contract.
Who can participate?
Kansas Statutes Authorize Energy Performance Contracting for Political Subdivisions and State Agencies
KSA 75‐37,125 allows political subdivisions and state agencies to enter into a contract or lease‐purchase agreement for an energy conservation measure, which is defined as an energy study, audit, improvement or equipment designed to provide energy and operational cost savings at least equivalent to the amount expended for the study/audit/improvement/equipment over a period of not more than 30 years after the equipment or improvement is installed or becomes operational.
What are the benefits?
In a conventional approach to replacing energy equipment, multiple contracts and often multiple firms, may be involved in designing a project, purchasing equipment, installing equipment, and commissioning. Even under a design/build contract, which integrates these processes under a single company, once the project has been accepted, the long‐term operational risk lies with the customer.
In contrast, in energy performance contracting, one or more Energy Service Companies (ESCOs) will conduct a preliminary assessment of the energy‐savings potential of your facility. If the potential seems promising, you select an ESCO to conduct a comprehensive Investment Grade Audit that identifies all energy efficiency opportunities for the facility. You work with the ESCO to select the energy improvements that best meet your needs and budget, resulting in a contract that specifies scope of project, compensation, liability, accountability, guarantee of savings, and post installation monitoring.
Because energy performance contracting pays for new equipment with the savings from reduced energy usage, the best candidates for a project are facilities with higher energy bills and outdated, energy‐inefficient equipment.
How can I get involved?
FCIP is working to prepare a new contact for pre‐approved ESCOs that will go out for bid later in 2018 and this will include program guidance. In the meantime, political subdivisions and state agencies would need to follow the appropriate procurement processes to select an ESCO for any energy performance contract project. However, Energy Division staff in partnership with Kansas State University – Engineering Extension staff would be available to answer questions and provide assistance, including oversight assistance during the Investment Grade Audit and Energy Performance Contract process. FCIP is a fee‐funded State program, fees would apply for oversight assistance.