Michigan has enabling legislation that covers Guaranteed Energy Savings Performance Contracting (GESPC) for state agencies, local units of government, universities and K-12 school districts. The length of contracts are limited to 20 years.
The legislation states that any state agency or local government authority may contract on an energy savings performance contract basis for energy efficiency equipment that pay for themselves including through operational savings, future cost avoidance, and water savings. Renewable technologies and Behavioral Training are also allowed under state statute govering performance contracting.
The energy savings must be guaranteed and the guaranteed savings must be more than sufficient to pay the total costs of the project over the guarantee period.
There are a number of successful projects that have been implemented in Michigan over the years, including:
- In Feb, 2011 the State announced innovative performance contracts with three Michigan companies that will use Michigan workers to make energy efficiency and infrastructure updates to three state correctional facilities in Jackson and Kincheloe. The retrofits and improvements will pay for themselves by saving the state $1.7 million per year in utility savings and the reduction of more than 2 million kwH of energy, or the power for 3,767 homes, every year.
- City of Roseville: $3.4 million and $98,000 in annual savings;
- State of Michigan Agency for Energy and the Michigan Public Service Commission: $437,729 and $25,000 in annual savings;
- Monroe Metropolitan Wastewater Facility: $10.3 million and $355,060 in annual savings;
- Village of Grosse Pointe Shores: $3.2 million and $200,810 in annual savings;
- Wayne State University: $1.4 million and $368,581 in annual savings.
In just the past few years, more than 30 GESPC projects have been completed in the state's K-12 schools. These projects have leveraged nearly $100 million in private sector investments and are saving taxpayers more than $6 million annually in energy costs.
Michigan's performance contracting program utilizes several staff members to support the program activities.
The state uses a set of standardized instruments for use with GESPC for state facilities.
The State of Michigan has a local State Chapter of the Energy Services Coalition and the Chapter is very active with educational and efforts to increase awareness including an annual awards program that is recognized by the ESC as a best practice to be replicated by other Chapters.