Performance Contracting Guidelines and Reviews

Energy Performance Contracting is a construction method that allows a facility to complete energy-saving improvements within an existing budget by financing them with money saved through reduced utility expenditures. Facilities make no up-front investments and instead finance projects through guaranteed annual energy savings.

To enter into a guaranteed energy savings performance contract (ESPC), a state agency must notify SECO of their intent, issue a Request for Qualifications (RFQ), and select a performance contractor, usually an energy service company (ESCO). After identifying eligible projects, the contractor designs and installs the needed improvements. The agency pays for the financed project out of savings realized by the improvements. By law, the contractor must guarantee that the savings will always be at least equal to the payments for the cost of the improvements.

Current Texas law enables institutions of higher education, state agencies, public school districts, and local governments to enter into energy performance contracting arrangements. To view the relevant sections of state law, please select one of the following items:

School Districts: Education Code 44.901
Higher Education: Education Code 51.927
State Agencies: Government Code 2166.406
Local Government: Local Government Code 302.004

Guidelines and Approval Process for State Agencies and Performance Contractors: While you may use these guidelines, please note that these guidelines do not reflect recent changes in Texas law. We are working on that update now (see Guidelines and Approval Process). Please keep checking back for the updated version. If you have any questions, please contact Charles Bredwell at (512) 463-1947 or 1-800-531-5441, ext 1947, or by email.

Water Conservation Guidelines: These are suggested guidelines for water conservation, and contains suggestions that in no way serve as a minimum, nor should they be considered all inclusive. This may be considered a "living" document and SECO encourages comments and suggestions for improvement or clarification. State agencies are encouraged to undertake all cost effective water conservation measures (see Water Conservation Guidelines). SECO will update the guidelines from time to time, so please recheck this website for notices of future updates.