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Alternative Financing

Alternative Financing

Power Purchase Agreements (PPAs)

Department of General Service’s (DGS) Sustainability & Energy Division will seek to execute Power Purchase Agreements for renewable energy installations, thereby leveraging private capital to provide renewable energy generation on DGS assets with no debt obligation to the District. A Power Purchase Agreement is a contract between two parties, one who generates electricity for the purpose of sale (the seller) and one who is looking to purchase electricity (the buyer). This model is a proven ‘off balance sheet’ approach.

Energy Service Agreements (PPA Model for Energy Efficiency)

Distinct from a traditional model where the government typically backs debt (and a third-party provides a guarantee of savings from efficiency improvements), DGS will also explore Energy Savings Agreements (ESA) in which a counter-party carries the liability and risk. With this approach, the District would pay only for a share of savings in the form of a service agreement -- and critically, would not carry any liability on its balance sheet.