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Performance Contracting

What is performance contracting?

Performance contracting is a service that provides a comprehensive retrofit or construction package, including:

  • Project identification
  • Project management
  • Financing through quantified savings (so you — the customer — have no out-of-pocket expense)
  • Positive cash flow over the contract term (typically five to 10 years)
  • Guaranteed energy savings

There are typically multiple parties involved in a performance contract:

  • Customer (business or institution requiring the services)
  • Project developer (performance contractor providing the services)
  • Financier (the project developer or a third-party financial institution providing financing for the services)

 

Roles and Responsibilities

To initiate a performance contract, the customer:

  • Determines project scope
  • Pays the project developer or financier for the project from the energy savings on a monthly basis over the contract term
  • Receives long-term energy savings and new technology benefits

Woman in hard hat reading blueprints on construction siteThe project developer (which includes contracts, energy services companies (ESCOs), architecture and engineering firms, manufacturers and distributors of energy-efficiency products and regulated utilities):

  • Provides the technology and process expertise
  • Assumes responsibility for installation of the energy-efficiency measures
  • Provides or coordinates funding for the installation
  • Arranges or provides on-going servicing if required/desired
  • Guarantees project energy savings to customer

The administrator (an independent energy efficiency program consultant under contract with Alliant Energy-IPL):

  • Promotes and administers the program
  • Ensures that energy savings are verified

The evaluator (an independent engineering consultant with energy expertise and under contract with Alliant Energy-IPL):

  • Reviews the project, including energy savings and operating cost savings
  • Verifies the project energy savings as compared to those calculated, submitted and installed by the project developer

 

Project types and sizes

Performance contracts, which can be performed on a variety of high-efficiency measures might include:

  • Compressed air systems
  • Energy management control systems
  • Heating and cooling systems
  • Pipe insulation
  • Lighting fixtures and controls
  • Processing equipment
  • Refrigeration systems
  • Variable frequency drives
  • Ventilation systems
  • Waste heat recovery systems
  • Other equipment that uses electricity or natural gas supplied by Alliant Energy-IPL

 

Positive cash flow and energy savings

The chart below illustrates the paid-from-savings feature of a performance contract with a five-year term. Once the contract is completed, you reap the benefits of lower energy costs, as well as new, energy-efficient equipment.

Although you can agree to include operational savings in the contract to ensure a positive cash flow, the Performance Contracting program guarantees only energy savings.

 

Customer benefits

Receipt rollTake advantage of the many benefits of a performance contract:

  • The ability to invest in new technology and equipment with no up-front capital investment
  • Consistent monthly payments/consistent budgets with no surprises
  • Guaranteed positive cash flow based on energy savings
  • Energy savings years after the contract is paid
  • Project management, so you can focus on your business

 

Customer eligibility

The Performance Contracting program is available to retail electric and/or natural gas commercial, industrial and agricultural customers of Alliant Energy-IPL. To qualify, energy-efficiency projects must be located within the Alliant Energy-IPL Iowa service territory.

 

Ineligible Projects

Equipment powered by renewable energy sources, such as wind and biomass, is not eligible for the performance contracting program.

Energy savings associate with fuel switching are also ineligible. Fuel switching is defined as changing the power source for an existing function of process, such as switching from a gas-fired system to an electric-powered system.

 

Questions?

For more details on how Performance Contracting works, download the following printer-friendly brochures:

Performance Contracting Flyer [PDF]

Custom Rebates & Performance Contracting Guidelines Booklet [PDF]

We have a complete list of project developers and their contact information available in an easy to download PDF. For more information, contact your Alliant Energy-IPL representative, call our Business Resource Center at 1-866-ALLIANT (1-866-255-4268) or e-mail performancecontracting@alliantenergy.com.

 

Alliant Energy-IPL does not guarantee that the installation of high-efficiency equipment will result in reduced usage or demand or in cost savings. The manner in which a customer uses and maintains energy-efficient equipment affects potential cost savings. Alliant Energy-IPL makes no warranties, expressed or implied, with respect to any equipment purchased and/or installed, including, but not limited to, any warranty of merchantability or fitness for a particular purpose. In no event shall Alliant Energy-IPL be liable for any incidental or consequential damage.

Products and services from Alliant Energy-IPL detailed here are offered to retail customers of Alliant Energy-IPL in Iowa. Alliant Energy-IPL reserves the right to cancel or change programs at any time.