State Treasurer’s Office Lease Purchase Program

The South Carolina State Treasurer’s Office (STO) Master Lease Program provides state agencies with an efficient and low cost means of financing purchases of equipment or other personal property. The STO Master Lease Program funds may be used to finance energy conservation projects with approval by the Energy Office’s Director. For more details, visit the STO website.

Performance Contracting

A Guaranteed Energy Savings Performance Contract (GESPC) allows a building owner to identify and complete energy savings projects without having to pay upfront capital costs. EPCs begin when the building owner enters into an agreement with a private Energy Service Company (ESCO). An ESCO is a business that identifies, evaluates, recommends, develops, installs, and arranges financing for projects that are designed to improve the energy and water efficiency and reduce maintenance costs for a facility. The ESCO conducts a comprehensive energy audit for the facility and identifies improvements to save energy. In consultation with the agency, the ESCO designs and constructs a project that meets the agency's needs and arranges the necessary funding. The ESCO will guarantee that savings meet or exceed annual payments to cover most or all of the project costs over the term of the contract. If the energy savings don’t materialize, the ESCO pays the difference, not the building owner. After the contract ends, all additional cost savings accrue to the building owner.

South Carolina Code Section 48-52-670 enables government entities to enter into guaranteed energy, water, or wastewater savings contracts. For entities subject to the South Carolina Consolidated Procurement Code, these contracts are pursuant to Code Section 11-35-1530, which allows for contracts to be entered into via competitive sealed proposals rather than competitive sealed bids. Before soliciting proposals, a request for qualifications (RFQ) may be issued. The RFQ contains a description of the scope of work to be solicited and requires information on the respondents’ qualifications, experience, and ability to perform the requirements of the contract. After receipt of the RFQ responses, the prospective offerors are ranked by a selection committee from most qualified to least qualified on the basis of the information provided. Proposals then must be solicited from at least the top three prospective offerors by means of a request for proposals (RFP). The RFP package requires completion of an energy audit and will include proposals of specific recommended energy conservation measures. Respondents may also be asked to present the details of their proposals in an oral interview. The selection committee then ranks the proposals and recommends negotiation to the Head of Agency with one or more proposers. This process is overseen by the Office of State Engineer (OSE). GESPCs must be reviewed and approved by the Joint Bond Review Committee and State Fiscal Accountability Authority before funds may be committed a project.

The Energy Office may be requested to sit on any GESPC selection committee. Government entities may also request that the Energy Office review the methodology used by an ESCO to project and measure savings and future billable revenues. The Energy Office is to deliver our approval or non-approval within thirty days of receipt of the GESPC. The Energy Office is authorized to charge a reasonable hourly rate for this review, and payment of the charges may be included in the financing for the GESPC.

For the most current performance contracting documents, please see the OSE Manual.

The Energy Office does not endorse any specific contractor. For more information on performance contracting, visit the National Association of Energy Service Companies (NAESCO) website.