Quebec - Canada

Assistance in contract negotiations with an ESCO

EXPERTISE : , Project Implementation, Energy Performance Contracting
SECTOR : , Public

Client

Parc olympique

projeCt Description

In 2014, the Olympic Park started a process of call for bids to select an energy service company (ESCO) to implement a guaranteed energy savings project.

The size of the project proposed by the successful bidder ESCO amounted to 25 million dollars, making it one of the largest in recent years in the province of Quebec and even in Canada.

The Olympic Park board of directors required that a firm specialized in energy performance contracting (EPC) assist the Olympic Park in conducting contract negotiations with the ESCO.

Highlights

Econoler was hired to provide the Olympic Park with advice during contract negotiations with the bid-winning ESCO. As part of its project, the Olympic Park was required to sign two contracts with the ESCO:

  • A contract for conducting a detailed feasibility study.
  • An energy performance contract.

To fulfill this assignment, Econoler performed the following tasks:

Studying and examining the project documentation, including the documents for:

  • The call for applications
  • The request for proposals
  • The ESCO’s proposal

Making recommendations regarding the contract for the detailed feasibility study and the energy performance contract:

  • Reviewing the proposed contracts
  • Analyzing the gaps and risks in the proposed contracts
  • Giving suggestions for improvements

Providing assistance in negotiating the contract of a detailed feasibility study and the energy performance contract, including:

  • Analyzing the ESCO’s proposition
  • Holding discussions with the Olympic Park’s lawyer
  • Attending negotiation meetings

As part of its evaluation of the gaps and risks of the proposed contracts, Econoler paid special attention to the following, among other terms and conditions:

  • The obligations of each party before, during and after project implementation by the ESCO;
  • The construction standards to be met;
  • The detailed contents of the energy audit;
  •  The method for calculating the savings;
  • The procedures for implementing the energy efficiency measures;
  • Terms of payment;
  • The guarantee mechanism linked to energy performance, including the period of the guarantee and the costs and charges;
  • The measurement and verification plan; and
  • Other elements, such as ownership, the energy floor prices, a force majeure clause, the disputes, etc.

Econoler’s contract-negotiation expertise and approach helped the Olympic Park quickly conclude the contracts with the ESCO.

More importantly, the modifications made to the two contracts allowed the stakeholders to anticipate the risks usually associated with the implementation of an EPC project as well as understand the legal context conducive to the successful implementation of one of the largest ESCO projects in Canada in recent years.

 

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