Countless municipalities and utilities are facing aging water and wastewater facilities. Addressing these issues is expected to cost $2 trillion over the next 25 years. Budget shortfalls, shrinking revenues and staff reductions make it difficult to tackle inefficient infrastructure and escalating regulatory demands. As political and public pressure mounts for utilities to operate more efficiently and become more sustainable, the gap between financial needs and what rates and fees will cover is growing. Rather than turn to traditional design-bid- build solutions, more and more municipalities are choosing performance contracting, which offers a way to fund costly upgrades and improve operational efficiency — all with a guarantee that transfers risk from the utility to an energy services company, such as Schneider Electric. However, understanding performance contracting, as well as choosing the right partner, is key to achieving desired results.
