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TESTIMONY OF RICHARD ESTEVES 

 Vice President SESCO, INC. 



before the 



Bonneville Power Administration Task Force 



of the 



Committee on Natural Resources 



U.S. House of Representatives 



July 12, 1993 



BACKGROUND ON SESCO, INC. 

 AND ENERGY CONSERVATION PERFORMANCE CONTRACTING 



SESCO, Inc., a minority-owned Massachusetts corporation organized in 1985, is 

 the nation's largest energy services company ("ESCO") specializing in the residential 

 and low income market. We install conservation improvements free of any cost to 

 participants. 



An ESCO (also know as a "performance" conservation contractor) is a 

 conservation company which asks to be paid based upon the savings performance of 

 its work, not on the basis of what it installs. Thus, we might weatherize and insulate 

 a house and add water heating and lighting improvements (SESCO's typical 

 package). If we do a good job and there are metered savings in future years, we are 

 paid in proportion to the savings. If there are zero savings, we get paid nothing. 

 This is the ESCO's ultimate guarantee: No Savings = No Payments. 



Since the utility can pre-set the price to be lower than it avoided generation 

 costs, the use of third party performance conservation providers is guaranteed to be 

 cost-effective for the utility and its ratepayers. This procedure assures that the ESCO 

 will seek to install only the improvements that are effective and cost-effective. It also 

 assures that a comprehensive effort is undertaken, since for a performance contractor 

 to leave needed improvements undone when they leave a customer's residence is 



TESTIMONY OF RICHARD ESTEVES Page 1 



