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Utilizing Energy Service Agreements to Implement Energy Savings Measures

Abstract

The discussion will focus on analyzing a financing strategy for investments in renewable and energy storage technology projects by utilizing energy service agreements. In this model, financing is provided through a long-term lease thereby enabling implementation of projects with long-term paybacks. The vendor owns the equipment until the lease expires and the customer purchases the power, chilled water, etc. at a pre-determined price and escalations from the vendor.

An accurate contractual, financial and sensitivity assessment is paramount before entering into such agreements. The presentation will cover areas that an end user, developer, or investor needs to be completely comfortable with while pursuing a major opportunity. This includes term and site considerations, system operations and efficiency guarantees, pricing and proforma review. Case studies will be presented to illustrate the need for oversight in these areas as well as quantify the impact of a facility’s return on investment (ROI) if not thoroughly scrutinized.

A well thought out project enables the buyer to achieve energy, sustainability, or cost reduction and target budget goals they would otherwise be unable to accomplish. 

Presented By

Rakesh Parasuraman, C.E.M., C.E.A.
Director - Commodity Management
Luthin Associates, Inc.

Rakesh Parasuraman joined Luthin Associates in September of 2003. He has extensive experience in recommendation and implementation of energy risk management and hedging strategies. He is knowledgeable in modeling utility tariffs, complex supply products, developing budget forecasts and assessing performance against industry accepted metrics. He also oversees project management responsibilities for economic incentive grant applications. He is a Certified Energy Manager (CEM) and has prior work experience in energy analysis and forecasting related to the fossil fuel markets. Mr. Parasuraman worked in business development positions for several years prior to joining Luthin Associates. He earned an MBA from the State University of New York at Buffalo with majors in Marketing and Financial Analysis. He holds a bachelor's degree in mechanical engineering from the University of Mumbai, India.

Rakesh has also received certification as a Certified Energy Auditor (CEA) by the Association of Energy Engineers. He currently heads the procurement division as Luthin Associates’ Director of Commodity Management.