A new pilot program from Seattle City Light is testing contract structures to spur building owners to invest in energy efficiency upgrades that would otherwise benefit tenants. That split incentive dynamic has long impeded greater EE investment in commercial properties.

The Seattle program, Energy Efficiency as a Service, counts the energy savings as additional resources and pays the building owner accordingly. The program pays 7.4 to 9 cents/kWh of metered energy efficiency savings with a 2 percent annual increase and contracts up to 20 years in length, according to SCL's program manual. The contracts are modeled on typical power purchase agreements for generation resources.

Paying for efficiency investment as an additional resource gives property owners a new revenue stream and allows long-term financing of efficiency investments, writes attorney Eric Christensen of Seattle-based firm Beveridge and Diamond.

The program's contract structure builds off the success of the city's Metered Energy Efficiency Transaction Structure, which involved Seattle's Bullitt Center.

"As the Bullitt Center experience demonstrates, [these program's] transaction structure promises to revolutionize energy conservation in commercial buildings," Christensen wrote.

SCL opened the program to applicants in January with a March 31 deadline. The pilot is limited to 30 participants.

Eligibility requirements include tenant leases with a split incentive, at least 50,000 square feet of conditioned floor area, and tenants that don't have their own SCL accounts.

Contributing Editor

Dan has covered stories from Seattle to Tbilisi; spent time with the AP, Everett Daily Herald and Christian Science Monitor; and was twice a member of a team nominated for a Pulitzer Prize. He and his wife have three young children and live in Seattle.