Tapping into the Power of Performance-Based Contracts Amidst Rising Utility Rates | Centrica Business Solutions
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Tapping into the Power of Performance-Based Contracts Amidst Rising Utility Rates

Gas and electric rates have been rising across the United States, putting a strain on operations budgets. Read more to get Regina Durga's take on how higher utility bills can actually have a positive effect on the financing of bundled energy projects.

If you’re anything like me, you’re experiencing the pain of rising costs, particularly when it comes to the essentials like paying my ever-increasing utility bills. This is no surprise considering that rates have been rising at unprecedented levels for several years now. Just as you’re feeling the impact on your home budgets, cities, towns, and businesses are grappling with the same challenges and are looking for ways to save and bring their budgets back in balance. Solutions that cut costs, optimize energy, and increase sustainability can seem cost prohibitive in a rising cost environment, but there are contracting options that make them more accessible. Contracting options such as an Energy Savings Performance Contract (ESPC) or Energy-as-a-Service (EaaS) – could enable communities and organizations to implement a comprehensive bundled project with guaranteed energy savings. Let's delve into how this approach can improve infrastructure while stabilizing budgets for communities and organizations.

Seizing the Opportunity with Utility Rates on the Rise

As utility rates climb, they continue to cause financial burdens and budget instability across the globe. These circumstances can present an opportunity for communities and organizations to minimize the impact of their energy usage and operational expenses. By partnering with Centrica Business Solutions and opting for an ESPC or EaaS, you can proactively mitigate the impact of high utility bills and improve long-term budget forecasting.

Rising Utility Rates in the United States

Understanding Performance-Based Contracts

Performance-based contracts provide a collaborative agreement between an entity and an energy services company (ESCO) like Centrica Business Solutions. This partnership focuses on driving energy efficiency and cost savings through a comprehensive range of tailored solutions. The standout feature of these contracting options is that the generated energy savings fund the project, essentially allowing communities or organizations to implement energy conservation measures with little to no upfront capital investment. Performance-based contracts also transfer risk to the ESCO through guaranteed energy savings.

Building in Cash Flow with Energy Savings

One of the most compelling advantages of implementing a performance-based project during a period of high utility rates is the immediate positive impact on cash flow. Communities and organizations can achieve significant reductions in utility and operational costs during and after the project is implemented. These savings can then be reinvested back into core operations, expansion initiatives, or other strategic projects, driving growth and competitiveness.

Performance-Based Contracting

The convergence of rising utility rates and available incentives, such as the Inflation Reduction Act, can improve feasibility for communities and organizations wanting to implement a performance-based energy project to help stabilize budgets and enhance sustainability efforts while modernizing infrastructure.