Performance Contracting and Energy Efficiency in the State Government Market

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In this study, we review the magnitude of energy efficiency activity in the state government sector, identify remaining market barriers, and discuss "best practices" employed in successful ESPC programs in the state government market. We decided to focus on the state government market segment because previous studies have suggested that ESCO activity in this sector has lagged behind other institutional markets (e.g. K-12 schools, local governments, and federal market) and that there may be significant remaining energy efficiency opportunities in state government facilities. We define the state government market to include state offices, state universities, correctional facilities, and other state facilities (e.g. healthcare, transportation agency offices). Given resource and budget constraints, we utilized a case study approach. We focused on twelve states that consist of some of the largest markets in terms of building stock and population in the US or have been cited as past and/or emerging leaders in ESPC: Pennsylvania, Kansas, New York, Illinois, Massachusetts, Texas, Washington, California, Maryland, Florida, Colorado, and Missouri (Donahue & Associates 2006).

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