Performance Contracting Offers Water and Energy Savings for Schools and Governments

A new report suggests that western public school schools and government facilities can reduce energy and water usage and save vast sums of money by using performance contracting. The western states covered in the report are Arizona, California, Colorado, New Mexico, Nevada, Utah and Wyoming.

Performance Based Contracting is a results-oriented contracting method that grantees a particular outcome. This approach focuses on the outputs, quality, or outcomes that are tied to a contractor’s payment. If the contractor fails to meet the contracted objectives the contractor must make up the difference.

According to a study released at the end of July by Western Resource Advocates and McKinstry, there are almost $1 billion worth of savings to be had.

The research specifically said that using performance contracting a total of $859 million can be saved through water management and energy conservation measures.

The report, titled Tapping the Power of the Market: Financial, Energy and Water Savings, and New Revenue Streams through Performance Contracting in the Colorado River Basin States, indicates that together schools and governments in the west could save more than 6 million megawatts of electricity, 4 million cubic feet of natural gas, and 40,000 acre feet of water every year.

The study concludes that the performance contracting model, is well suited to energy and water contracts given out by cities, counties, school districts, and wastewater/water utilities .

This approach is particularly important in the Colorado River Basin which has been plagued by the combination of decreasing water supply and increasing demand. Persistent droughts and growing populations are straining resources to the limit.

Performance contracting can both reduce apparent water loss through customer meter inaccuracies by 461,000 acre-feet per year. It can also provide $593 million in additional revenue per year.