An ESCO is an accredited Energy Service Company that provides all of the services required to design and implement a comprehensive project at the customer facility, from the initial energy audit through long-term guarantee of project savings through an Energy Performance Contract (EPC). The EPC provides customers with a comprehensive set of energy efficiency, renewable energy and distributed generation measures and is accompanied with guarantees that the energy and operational savings produced by the project will be sufficient to finance the full cost of the project.

The process begins with the Preliminary Technical Audit (PTA) where multiple ESCOs provide high level analyses of a facility. The report provides a list of potential Energy Conservation Measures (ECMs) detailing what that particular measure will cost, what the expected annual savings will be, and payback time. The PTA is the primary basis for selection of an ESCO for a particular project. Once the PTA is complete and an ESCO is awarded the project, an Energy Audit Agreement is signed and the Investment Grade Audit (IGA) begins. The IGA is the last, and necessary, step before the full Energy Services Agreement (ESA) is signed and sealed. Essentially, the IGA affirms for the owner that the technical and economic bases for the project are sound. It will also serve as the critical reference in the event of savings/payback disputes if they occur. The IGA report will provide a final list and design of all potential Energy Conservation Measures (ECMs), related costs, and related guaranteed annual savings. If the University decides to proceed with a contract, the cost of the IGA will be rolled into the total project cost. The ESA is signed upon completion of the IGA, and construction can begin.