Service Charge

The ESA service charge is based on a price per unit of energy savings. This price is typically set below the customer’s existing utility price and escalates at a fixed annual rate during the ESA term. The reduction in energy consumption and related utility spending, coupled with the fixed escalation of the ESA service charge, provide a hedge against future volatility in energy prices.

In each ESA billing period, the performance of the project will be quantified by the ESCO using the applicable measurement and verification (M&V) protocols. These verified savings provide the basis for the ESA service charge.

The engineering protocols used to quantify savings will vary depending on the technical scope of the project. All protocols will be defined in an attachment to the ESA and are based on M&V procedures that have been utilized in the energy industry for decades.