Efficiency Services Agreement
We are proud to partner with Metrus Energy to introduce the Efficiency Services Agreement (ESA), a pay-for-performance financing solution that allows customers to implement energy efficiency projects without any upfront capital expenditure. Through the ESA, Metrus Energy pays for all development and construction costs. After a project is operational, the customer uses a portion of the cost savings associated with reduced energy consumption to make periodic service payments to Metrus.
Like a typical utility bill, the ESA service payments are based on a measured quantity of energy units, i.e. kilowatt-hours of electricity and therms of natural gas. However, ESA service payments are based on energy units that are saved, enabling customers to treat energy efficiency as a resource that improves their bottom line and mitigates the environmental impact of their business. The price per unit of energy savings is an output-based charge that is set at or below existing utility prices, resulting in reduced operating expenses.
- Metrus Energy enters into the ESA directly with the Customer and pays a third-party contractor (energy service company, or ESCO) to engineer, implement and maintain the energy efficiency project.
- Metrus Energy retains ownership of all project-related assets for the duration of the ESA term and pays for associated maintenance services to ensure long-term reliability and optimal performance.
- In each billing period, the performance of the project will be quantified using agreed-upon measurement and verification (M&V) protocols. These verified savings provide the basis for the ESA service charge.
- After the ESA term expires, the customer has the option to purchase the equipment at fair market value.
Benefits
The ESA provides customers with a variety of financial and operational benefits:
- Avoid Capital Outlay. Metrus pays for all project design and implementation costs, enabling customers to conserve scarce capital funds for investment in their core business
- Use Savings to Pay for Project. ESA payments are set as an output based charge that solely reflects the realized energy and operational savings created by the project
- Reduce Operating Costs. ESA payments are set below the current utility price, which immediately improves the customer’s bottom line
- Enhance Reliability of Operations. Metrus pays for periodic maintenance services to ensure long-term reliability and performance of the project equipment
- Scalable Financing Solution. Metrus’ ESA utilizes standard terms and conditions that can be applied to a wide range of efficiency projects across a customer’s entire portfolio of facilities
- ESA Payments are an Operating Expense. The ESA is designed to be an off-balance sheet financing solution with regular payments that are similar to a standard utility bill
- Reduce Exposure to Utility Price Uncertainty. ESA payments escalate at a fixed annual rate that is set below historical annual utility price increases
