In a performance contract, the ESCO guarantees energy or financial savings for the project, which means ESCOs only make money if the project performs as promised.
Severely strained government budgets have convinced state and local governments across the United States to embrace a new form of performance-based investments in energy efficiencyoffered by energy services companies, or ESCOs.
Rather than shifting or shedding load, the principal response strategy for customers receiving service under MHP rates has been to enter power-supply contracts with third-party ESCOs that limit their exposure to daily price fluctuations.