Public-Private Partnerships (P3) are contractual relationships between a public agency and a private sector entity. The public agency can be federal, state, or local, and the private party can be virtually any form of legal entity. Public-Public-Private Partnerships (P4) are contractual relationships between two public agencies and a private sector entity. P4 transactions are becoming much more common and oftentimes involve a state or federal agency working with a local municipality or county government, and both agencies working with a private entity.
A good example of a P4 is a critical load renewable energy microgrid project developed and implemented by Chevron USA’s energy services division at the Marine Corps Logistics Base (MCLB) in Albany, Georgia. In this case, the project was developed under the U.S. Department of Energy’s (DOE) Energy Savings Performance Contracting (ESPC) program with two federal agencies, DOE and the U.S. Department of Defense, and Dougherty County, Georgia.
In order to provide renewable fuel to a new onsite cogeneration system that served mission critical loads, Dougherty County entered into a methane off-take agreement with MCLB. Instead of flaring excess landfill-derived methane as they’d previously been doing, Dougherty County elected to reduce their greenhouse gas emissions by capturing and diverting the methane for a beneficial purpose that also served to create a new revenue stream for the County.
The benefits of the project were numerous: MCLB improved their level of energy resilience, funded their microgrid project with the cost savings it generated, and reduced their greenhouse gas footprint by reducing their volume of purchased electricity. Dougherty County created a new revenue stream and assisted one of its key constituents in implementing a mission critical project; and the world benefitted from a significant greenhouse gas reduction project. This P4 project surely created 4x benefit for the partnership.
The principals of PowerSurety have been deeply involved in developing, financing, implementing, and operating of P3- and P4-based energy infrastructure projects for over two decades and have a collective base of experience of over 65 years in structuring these types of projects.
With the advent of community microgrid projects and the intense focus public entities of all types have to reduce energy usage, improve energy resiliency, and reduce costs, P3s are rapidly becoming a preferred transactional structure due to their overall effectiveness and the high degree of flexibility they provide.
If you would like to learn more about Public-Private Partnerships or could use support with the transactional structuring or technical development of a P3 or P4 initiative, please connect with us and we’ll get to work for you.