Utility Services Agreement
You`ll find an overview and example of structuring on the CalCEF and Federal Energy Management Program Utility Energy Service Contracts websites. The owner, in this case the research campus, does not bear the costs in advance through this agreement, pays the developer an amount similar to his traditional supply bill and may consider the financial agreement as an off-balance sheet. Due to energy savings, the developer can then apply these monthly revenues to reimbursement and maintenance costs. This contract is akin to an energy-saving contract; In this case, the distribution company (instead of an ESCO) provides energy services and pays for upgrades for payment from the research campus. Payments are made on the basis of the energy savings made by the project. In a managed utility contract (MUSC), a developer builds and operates energy-efficient systems on campus and pays campus energy bills through a formalized contract agreement. In addition to reducing ex ante costs, the campus also benefits from efficiency improvements and cost-neutral operating savings over the life of the contract.