School Districts’ Energy Performance Contracts (2015-MR-1)

Issued Date
August 06, 2015

[read complete report - pdf]

We also released five letter reports to the following school districts: Half Hollow Hills Central School District [pdf], Island Trees Union Free School District [pdf], Manhasset Union Free School District [pdf], Middle Country Central School District [pdf], and Sachem Central School District [pdf].

Purpose of Audit

The purpose of our audit was to review the projected cost and/or energy savings achieved by the energy performance contracts (EPCs) entered into by the five school districts for the period June 1, 2005 through November 10, 2014.


An EPC is an agreement with an energy service company (ESCO) for energy services in which energy services are installed, maintained or managed to improve the energy efficiency of, or produce energy for, a facility in exchange for a portion of the energy savings or revenues. The ESCO guarantees energy consumption savings and/or cost savings over the life of the EPC. The five school districts included in this audit each had an EPC that was approved between February 2009 and June 2011 with total capital project costs of approximately $52.5 million.

Key Findings

  • All five districts are projected to realize the guaranteed energy cost savings totaling almost $9.1 million.
  • Only three of the districts are verifying the accuracy of the ESCO’s annual verification reports or ensuring that the guaranteed energy savings are being achieved.

Key Recommendation

  • Implement monitoring procedures to ensure the actual cost savings are verified. If the cost savings are not achieved, officials should seek appropriate recourse, in accordance with the terms of their EPC.