The State of Arizona has enabling legislation that covers Guaranteed Energy Savings Performance Contracting (GESPC) in four public market sectors: state agencies, local units of government, universities, and K-12 school districts. The one statue covers state agencies, municipalities/counties and universities, and a separate statue covers K-12. The length of contracts are determined by a life-cycle calculation.
The legislation allows for a scope of work that includes all measures that pay for themselves in energy savings, the use of operational savings, future cost avoidance, use of water savings, and allows capital funds to be added as buy-down.
The statue requires the energy service company (ESCO) provide an energy savings guarantee and an annual reconciliation statement that documents through a prescribed Measurement and Verification protocol the annual energy savings achieved versus the guarantee.
The end-user is allowed to retain any excess savings in their department budget if the savings exceed the guarantee.
In the past there have been examples where the verified savings have exceeded the guarantee:
- Chino Valley School District initiated a contract in 2012. Savings have increased each year. John Scholl, support services director, said the deals are saving money with energy saved, plus the updated heating, ventilation and air-conditioning systems save money on maintenance.
- Scottsdale Unified School District has entered into several contracts for different schools in the district. Arwood said the savings are allowing the district to pay off upgrades early and direct funds back to the classrooms.
- Marana Unified School District has done $13.5 million in contracts, using Recovery Act grants for some of the work.
- Pinal County entered its first contract in 1999 and now has 29 facilities under contract, saving a total of more than $600,000 a year.
- Arizona State University, University of Arizona and Northern Arizona University all have contracts. ASU saves 29 percent on energy annually, or $5 million a year.
- In 2010 the Department of Corrections completed a $5 million contract for energy and water measures at its Tucson complex. During the first year after installation, electricity consumption fell by 18 percent, a $230,000-a-year savings.
There is a program administrator and the administrators services are extended to local units of government.
The state program uses a set of standardized instruments for use with GESPC for state facilities and modifications to the documents are not allowed.
The Arizona Energy Services Coalition (ESC) Chapter was formed in 2007. The Chapter is currently inactive but has in the past provided outreach and education efforts and events for end-users.
Neither the Chapter or the State has an awards program to recognize outstanding projects.