Energy Performance Contracting for Public and Indian Housing

Energy Performance Contracting is an innovative financing technique that uses cost savings from reduced energy consumption to repay the cost of installing energy conservation measures. Normally offered by Energy Service Companies (ESCOs), this innovative financing technique allows the capture of benefits from energy savings without up front capital expenses on the part of the building owners, since the costs of the energy improvements are borne by the performance contractor and paid back out of the energy savings. Other advantages include the ability to use a single contractor to do necessary energy audits and retrofit and to guarantee the energy savings from a selected series of conservation measures.

The Building Design and Performance Program developed a guidebook (Energy Performance Contracting for Public and Indian Housing, HUD-1354-CPD, February 1992) to explore and clarify the use of energy performance contracting by Public Housing Agencies and Indian Housing Authorities (PHAs and IHAs). It defines how performance contracting may be done in accordance with regulations governing HUD's Performance Funding System for Public and Indian Housing. Designed for PHAs/IHAs that have little or no experience with performance contracts, the Guidebook begins with an explanation of energy conservation incentives available in HUD's Performance Funding System. It continues with a general description of performance contracts, HUD procurement requirements, and step-by-step guidance for contractor selection, negotiation, and monitoring.

The Building Design and Performance Program also helped to develop and conduct a four-day workshop on performance contracting in public housing. The workshop combined lectures with hands-on exercises to teach Public Housing Authority officials the details of performance contracting and HUD regulations so that they would leave fully equipped to enter the performance contracting process. The workshop was also designed to teach ESCOs the intracies of implementing performance contracts following HUD regulations. A Course Guide and Reference Guide were developed for the course. The Course Guide provides copies of the lecture slides and hands-on exercises. The Reference Guide includes two guidebooks (one as described above) and background material on such topics as regulatory references, measurement and verification protocols, and performance contracting case studies in public housing.