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  • #5268
    Piemonte Region

    Ongoing monitoring and measurement of the EPC assets’ performance is a core element of the EPC. It is typically defined as a service to be provided by the Partner but in some cases it might be provided by an independent third party. The EPC defines the scope, frequency and standards of monitoring. Reference is often made to independent industry-standard protocols such as the IPMPV.
    Most EPCs provide for monitoring and measurement activities to be carried out in accordance with an agreed plan. Performance is typically measured and reported on an annual basis with a test of performance. The right for the Authority to approve the plan do highly influence the statistical treatment if such approval removes or reduces the Partner’s liability for underperformance.
    Besides, some EPCs allow for an initial or for special “grace period” following completion, giving the EPC assets time to settle in to their full operation and performance, in which case the guarantee is tested on each anniversary of the end of the grace period. A “grace period” of such does not influence the statistical treatment if the period of time is reasonable (e.g. 3 months for a 8 year duration of EPC). If it is considered longer than reasonable, this could be an issue of moderate importance.
    For price adjustments, 3 situations might take happen:
    1) the Authority takes the risk/benefit of fluctuations and these are neutralized in the guarantee mechanism;
    2) the risk/benefit of fluctuations is shared (e.g. by applying an agreed index to the baseline data);
    3) the Partner take the full risk on fluctuations .
    The Authority taking or sharing the risk/benefit of fluctuations in future energy prices does not influence the statistical treatment of the debt.
    Adjustments do not influence the statistical treatment if all of the following conditions are met:
    • there is a finite number of well-defined events (i.e. not an indefinite number of risks);
    • the events do not capture changes in macro-economic conditions;
    • the events are not attributable to the acts or omissions of the Partner;
    • the events, or the consequences of the events are not reasonably foreseeable or estimable; and
    • the adjustments do not compensate for anything other than the effects of the event in question.
    The above conditions applies to routine adjustments, such as weather, indoor temperature, hours/days of usage/occupancy, number of users/occupants or non-routine adjustments for adverse site conditions, change in law, the Authority vacating the site, etc…


    We consider the M&V should be carried out by a third party. The specific plan we recommend to be decided after a negotiation with th potentially interested ESCOs.

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