The state of Minnesota has one separate state statue for Guaranteed Energy Savings Performance Contracting (GESPC) for each public market sectors: state agencies, local units of government, universities, and K-12 school districts. The statues allow for a scope of work that includes all measures that pay for themselves in energy savings, operational savings, use of water savings, and renewable technologies, as well as capital infusion. Other details in statue include contract terms in excess of 20 years, a requirement for a savings guarantee, and a provision that allows agencies to retain excess savings.
Minnesota benchmarks energy usage in state facilities, K-12 and community colleges and technical colleges, universities and cities. The state tracks GESPC projects in all state buildings, including community colleges, technical colleges and universities, as well as K-12, cities and counties.
In the past there have been examples of GESPC projects where the verified savings have exceeded the guarantee. Success stories include:
- The City of Hutchinson installed a 400-kilowatt solar array as part of a GESPC. The solar array will supply 12 to 15 percent of the electricity needed to run the city’s adjoining wastewater treatment plant. Almost two-thirds of the cost of the $1.5 million array was covered by a $958,000 Renewal Development Fund grant from Xcel Energy. The city’s share was about $510,000. The GESPC calls for a guaranteed payback of the city’s investment in about 18 years, but officials believe that could be as short as about 14 years. The array has a 25-year warranty.
The Minnesota Guaranteed Energy Savings Program employees a full-time program manager that is responsible for the oversight of GESPC projects in the state. The Minnesota program also works with local units of government in implementing GESPC projects at the local level. The program manager serves as the public sector co-chair of the Minnesota ESC State Chapter.
The Minnesota GESP program provides technical, contractual and financial assistance to state agencies, local governments, school districts, and institutions of higher learning that elect to implement energy efficiency and renewable energy improvements through Guaranteed Energy Savings Performance Contracts. The state has negotiated master contracts with eleven ESCOs to provide GESPC Services. The intent is to maximize job creation and operational cost savings through investment in public facilities with the goal of reducing energy consumption by 20 percent throughout all state agencies.
The state program uses a set of standardized instruments to promote success and help mitigate risk for the program participants. The documents are publicly posted on the internet.
The state's public sector program manager participates as the public sector co-chair in the Minnesota ESC Chapter. The Chapter formed five years ago, and meets quarterly and conducts workshops throughout the state.