Case Snapshot
| Client | McAllen Independent School District |
| Contract type | Energy Savings Agreement (Energy Savings Performance Contract) |
| Defendant | Ameresco, Inc. |
| Core allegations | Guaranteed energy savings never materialized; defective installation of conservation measures |
| Result | $15,000,000 settlement (March 30, 2022) |
| CoCounsel | The Law Offices of Colby Lewis, Houston, Texas |
What Is an Energy Savings Agreement?
An Energy Savings Agreement, also called an energy savings performance contract (ESPC), is a contract in which an energy services company installs upgrades like HVAC systems, lighting, and building controls, and guarantees the improvements will pay for themselves through reduced utility costs. In Texas, school districts enter these contracts under Texas Education Code Section 44.901, which requires the provider to guarantee the savings in writing. Cities and counties sign the same type of contract under Local Government Code Chapter 302.
That guarantee is the whole point of the deal. Districts finance millions of dollars in improvements on the promise that energy savings will cover the debt. Section 44.901 builds in protections: the provider must guarantee the savings amount, a licensed professional engineer must review the projected savings before the district signs, and the district’s annual payment obligation cannot exceed the projected annual savings.
When the savings never show up, or the equipment behind the savings is installed defectively, the district isn’t just stuck with a bad deal. It’s paying debt service on improvements that were supposed to pay for themselves, with taxpayer money.
The Case: McAllen ISD v. Ameresco
In 2012, McAllen ISD signed an Energy Savings Agreement with Ameresco, one of the largest energy services companies in North America. The contract covered energy conservation measures across 39 district facilities, roughly $16 million in infrastructure work, with Ameresco projecting more than $1.2 million in annual energy savings.
The district alleged the deal didn’t perform. Two problems, and they compounded each other:
The guaranteed savings didn’t materialize. The financial engine of an Energy Savings Agreement is the savings guarantee. When actual utility costs don’t drop the way the provider promised, the district is paying for the improvements out of its general fund instead of out of savings. That’s the exact outcome Section 44.901 exists to prevent.
The work itself was defective. Energy conservation measures only save energy if they’re designed and installed correctly. The district alleged defects in the installed measures, which meant McAllen ISD wasn’t just missing its savings targets. It owned equipment problems on top of them.
How We Built the Case
Energy Savings Agreement cases sit at the intersection of construction defect law and contract performance, and they have to be proven with data. Our approach followed the same playbook we use in every public-entity case:
- Forensic review of the savings guarantee. We compared the contract’s guaranteed savings against actual, metered utility performance year over year. The gap between promise and performance is the damages model.
- Engineering investigation of the installed measures. We worked with independent engineers to inspect the conservation measures across district facilities and document installation and performance defects.
- Measurement and verification scrutiny. ESPC providers self-report their savings through measurement and verification (M&V) reports. There are recognized national standards for how savings should be measured, including the U.S. Department of Energy’s M&V Guidelines for performance-based contracts. Provider reports get tested against those standards and against real utility bills, not taken at face value.
- Trial preparation from day one. We prepare every case like it’s going to be tried. That’s what moves defendants and their carriers to the table.
On March 30, 2022, McAllen ISD resolved its claims against Ameresco for $15 million.
Why This Result Matters for Texas School Districts
Energy Savings Agreements are marketed to school boards as no-risk: the savings pay for the project, guaranteed. School districts, cities, and counties across Texas have signed them, and the State Energy Conservation Office (SECO) actively promotes performance contracting for public entities. As SECO itself puts it, the contractor must guarantee that savings will at least equal the payments for the improvements.
Most board members and administrators have no practical way to verify whether the promised savings ever actually arrive, and providers control the M&V reporting that says everything is fine.
The McAllen ISD result shows the guarantee is enforceable. A district that isn’t getting the savings it was promised, or that’s dealing with defective equipment installed under an ESPC, has real legal remedies, and the recovery can be substantial.
Warning Signs Your Energy Savings Agreement Is Underperforming
- Utility bills haven’t dropped the way the provider projected, or have gone up
- The provider’s M&V reports show “savings” that don’t match your actual budget experience
- Savings are reported using adjusted baselines, stipulated values, or assumptions you can’t verify
- HVAC, lighting, or control systems installed under the contract need frequent repair
- The provider attributes shortfalls to your staff’s “operational changes” instead of its own work
- You’re paying debt service on the project out of general funds because savings don’t cover it
If two or more of these sound familiar, have the contract and the performance data reviewed. Limitations periods apply, and the analysis costs you nothing.
Frequently Asked Questions
What is an Energy Savings Agreement for a school district?
It’s a contract, authorized in Texas by Education Code Section 44.901, in which an energy services company installs conservation measures (HVAC, lighting, controls, building envelope work) and guarantees the resulting utility savings will cover the cost. If the term exceeds one year, the district’s annual obligation can’t exceed the projected annual savings.
Can a Texas school district sue over a failed Energy Savings Agreement?
Yes. The savings guarantee is a contractual obligation, and defective installation of conservation measures can support construction defect claims. McAllen ISD recovered $15 million in 2022 on claims arising from its Energy Savings Agreement with Ameresco.
Who guarantees the savings in an energy savings performance contract?
The provider (the energy services company) must guarantee the savings under Texas Education Code Section 44.901. A licensed professional engineer must also review the projected savings before the district signs.
How do you prove an Energy Savings Agreement failed?
By comparing guaranteed savings against actual metered utility data, auditing the provider’s measurement and verification reports, and having independent engineers inspect the installed measures for defects. The shortfall between promised and actual performance frames the damages.
What does it cost a school district to pursue an ESPC claim?
Our firm handles these cases on a contingency basis. The district pays nothing unless there’s a recovery, and the initial review of the contract and performance data is free.
Talk to Us Before the Clock Runs Out
For more than 20 years, The Law Offices of Colby Lewis has represented Texas school districts, cities, counties, and public entities in construction defect and insurance recovery cases, with more than $200 million recovered. If your district signed an Energy Savings Agreement and the savings haven’t shown up, let’s review the facts, at no cost and no obligation.
Call 1-866-265-2948 or visit ClewisLaw.com.
Attorney Advertising. Past results do not guarantee, warrant, or predict future outcomes. Every case is different and must be evaluated on its own facts. The settlement described above reflects the specific circumstances of that matter. Principal office: Houston, Texas.
