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How Nonprofit Institutions Are Converting Energy Infrastructure into Financial Strategy

How Nonprofit Institutions Are Converting Energy Infrastructure into Financial Strategy

Published
16 March 2026

Your Energy Infrastructure Is Sitting on Untapped Capital

For nonprofit hospitals and private universities, energy infrastructure is one of the largest unmanaged financial liabilities on campus. Energy-as-a-Service turns that liability into a capital strategy — generating unrestricted cash, guaranteed savings, and off-balance-sheet financing in a single transaction.

What a strategic EaaS partner delivers
Significant upfront unrestricted cash
Guaranteed long-term utility savings
Full infrastructure modernization
Operational and performance risk transfer
No increase in reported long-term debt
Single contract: design through operations

Off-Balance-Sheet by Audited Design

Under audited accounting standards, EaaS upfront proceeds are recognized as deferred revenue — a prepaid contractual obligation, not debt. Monthly payments run through operations. Long-term debt does not increase. Leverage ratios and debt capacity remain intact for the investments that actually advance the mission.

Accounting Treatment

  • Upfront cash = deferred revenue (non-debt)
  • Monthly payments = operating expense
  • No increase in long-term debt
  • Leverage ratios remain intact

Independently Confirmed By

  • Big Four audit firms
  • Multiple health systems
  • Private universities
  • Healthcare financial advisors
25–35% Guaranteed reduction in utility operating expenses
$0 Increase in reported long-term debt
4 Core credit benefits cited by rating agencies

Liquidity That Shows Up in the Rating

EaaS transactions routinely generate large amounts of unrestricted cash that strengthens liquidity metrics directly. Rating agencies explicitly cite EaaS proceeds as drivers of improved outlooks — because they materially enhance cash flow and reserves while avoiding new debt issuance. Days Cash on Hand improves. Unrestricted reserves grow. Credit outlooks stabilize.

Credit Agency Benefits

  • Balance sheet strengthening
  • Enhanced liquidity
  • Operating risk mitigation
  • ESG improvements

P&L Impact

  • Operating revenue recognized over time
  • Utility expenses reduced 25–35%
  • Net operating income improves
  • Savings guaranteed contractually

This is not financial engineering. It is hard-edged operating advantage, with recurring savings contractually guaranteed and flowing directly to the bottom line.

Risk Leaves the Balance Sheet and the Building

When performance obligations shift contractually to the EaaS provider, institutions shed exposure to aging infrastructure in a way that is enforced — not aspirational. Equipment uptime is guaranteed. Energy savings are guaranteed. Premature failure risk transfers. Liquidated damages apply for underperformance. This materially reduces the institutional exposure to aging infrastructure failures that quietly threaten facility budgets every year.

Why Financial Advisors Are Calling This a Capital Strategy

Leading healthcare financial advisors have identified EaaS as a major emerging capital strategy. The structure generates 25%+ operating expense savings using tax-exempt funding, preserves capital and debt capacity, enables reinvestment into core mission initiatives, and advances sustainability goals simultaneously.

The Bottom Line

EaaS represents a rare fusion of financial accretion, liquidity creation, risk mitigation, and operational resilience — all within a single contractual structure. Few capital strategies deliver across all four dimensions at once.

Connect with Optimum Energy to model what your infrastructure could deliver as a financial asset.

Request a Conversation  →

Still have questions? Let’s Talk.


Every EaaS evaluation is different. Your balance sheet, your infrastructure age, your capital priorities, and your risk tolerance all shape what the right structure looks like. The best next step is a direct conversation with our team.

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EaaS Explained: Answers to the Questions That Matter Most

EaaS Explained: Answers to the Questions That Matter Most

Published
13 March 2026

Energy-as-a-Service: Answers to the Questions Finance Teams Ask Most

Energy-as-a-Service (EaaS) is a fundamentally different model for financing and managing infrastructure investment. Instead of deploying capital to purchase, operate, and replace aging mechanical and energy systems, organizations enter long-term service agreements that transfer lifecycle risk to a provider and convert unpredictable capital expenditures into stable, contractual payments.

The model is gaining traction across healthcare, higher education, and commercial real estate, but it raises consistent questions. Is EaaS treated as debt? How does it affect our credit rating? Is it worth it compared to traditional ownership? What happens if the provider fails?

Below are the 13 questions CFOs, finance teams, capital planning officers, and facilities leaders ask most often when evaluating an EaaS agreement, answered directly and without jargon from our experts.

Energy-as-a-Service FAQ | Optimum Energy

Frequently Asked Questions

Energy-as-a-Service: Common Questions

  • Is an EaaS transaction hidden debt?

    No. While concerns about balance sheet implications and rating agency treatment are reasonable, EaaS agreements, when structured appropriately, are long-term service contracts rather than borrowing arrangements. The transaction centers on infrastructure services, with payments tied to capacity availability, operations, maintenance, and lifecycle responsibilities. Organizations are not incurring debt but entering a contractual services arrangement that reallocates performance, lifecycle, and capital risk.

  • How does an EaaS transaction affect leverage and credit metrics?

    Rating agencies and lenders may evaluate long-term fixed service obligations as debt-like commitments when assessing economic leverage. However, treatment varies based on contract design, risk allocation, and payment mechanics. Well-structured agreements mitigate adverse credit impacts by emphasizing lifecycle risk transfer, performance obligations, and volatility reduction.

  • What is the financial benefit of EaaS compared to self-financing?

    Traditional ownership requires upfront capital deployment and retains exposure to replacement cycles, cost overruns, technology obsolescence, and operational variability. A properly structured EaaS agreement preserves liquidity, stabilizes long-term cost profiles, transfers lifecycle and performance risk, and reduces exposure to interest rate volatility.

  • Does an EaaS agreement lock us into fixed costs?

    Yes, and intentionally so. Infrastructure systems are inherently fixed-cost environments regardless of ownership model. The question is whether those costs remain volatile or become stabilized. A properly structured EaaS agreement converts uncertain capital expenditures and variable maintenance costs into predictable contractual payments.

  • How should we evaluate EaaS cost competitiveness?

    Evaluation should focus on risk-adjusted lifecycle economics rather than nominal payment totals. Considerations include avoided replacement capital, maintenance volatility reduction, performance guarantees, reliability improvements, and cost of capital differentials.

  • Why pay a service provider instead of owning the infrastructure?

    Ownership is a viable strategy, but it will not preserve your balance sheet. Under a traditional ownership model, the organization retains upfront capital requirements, lifecycle replacement risk, technology obsolescence risk, and performance variability risk. EaaS structure reallocates many of these risks while converting uncertain future capital events into predictable service economics.

  • What protections exist if the EaaS provider fails?

    Well-structured transactions include multiple layers of protection, including cure rights, step-in rights, direct agreements with financing parties, and replacement mechanisms. KPIs such as energy efficiency and uptime are standard in these agreements. These provisions ensure service continuity and operational stability.

  • Why are EaaS contracts structured for longer terms 10+ to 30 years?

    Infrastructure assets are inherently long-lived. Effective financing structures align asset life, service obligations, and capital recovery periods. Long-duration agreements enable lower cost of capital, pricing stability, and lifecycle planning alignment.

  • How does an EaaS transaction affect our financial statements?

    Accounting treatment is determined based on the specific contractual structure and applicable accounting standards. EaaS structure emphasizes service-based economics, output framing, and risk allocation mechanisms intended to support appropriate classification.

  • What flexibility exists in an EaaS agreement if circumstances change?

    EaaS agreements include adjustment mechanisms, change-event provisions, and termination frameworks designed to accommodate evolving operational or regulatory conditions. These features balance long-term stability with practical flexibility.

  • Who controls the infrastructure under an EaaS agreement?

    Operational control, maintenance responsibility, and lifecycle management are typically allocated to the service provider, while the organization retains performance expectations and service requirements. This allocation ensures accountability, efficiency, and risk transfer while preserving institutional oversight.

  • How does EaaS impact an organization’s liquidity strategy?

    Properly structured EaaS transactions often function as liquidity-preservation or liquidity-generation tools. By reallocating infrastructure investment obligations, organizations can preserve unrestricted cash, defer capital commitments, and improve flexibility for strategic priorities.

  • What happens at the end of an EaaS contract term?

    End-of-term provisions vary but typically include expiry, extension options, asset transfer mechanisms, or renegotiation frameworks.

Still have questions? Let’s Talk.


Every EaaS evaluation is different. Your balance sheet, your infrastructure age, your capital priorities, and your risk tolerance all shape what the right structure looks like. The best next step is a direct conversation with our team.

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The Deferred Maintenance Tipping Point: What 2026 Means for Your Facilities Budget

The Deferred Maintenance Tipping Point: What 2026 Means for Your Facilities Budget

Published
13 March 2026

The Infrastructure Imperative — Optimum Energy
2026 Facilities Report

The Infrastructure Imperative:
Deferred Maintenance Can No Longer Wait

Healthcare systems, universities, and manufacturers face a converging crisis. The longer organizations delay action, the more the backlog compounds.

$112B Higher ed deferred maintenance backlog
4x Cost multiplier for delay
50% U.S. plants aged 30–60 years
0.10 FCI threshold for poor condition
Three sectors, one problem
Healthcare
Systems past prime
HVAC, MEP, and imaging equipment operating well beyond intended lifespan. A chiller failure puts patient safety at immediate risk.
Patient safety & care continuity
Higher Education
Buildings 50+ years old
Post-war construction now approaching 80 years. End-of-life HVAC, roofing, and electrical infrastructure hitting simultaneously.
Enrollment & retention
Manufacturing
Plants aged 30–60 years
Built for a different era. Aging infrastructure blocks automation, IoT adoption, and reshoring competitiveness.
Production & uptime
The cost of waiting
$1 deferred = $4 spent later Every dollar saved by delaying maintenance today costs four dollars to address in the future. The backlog does not shrink on its own.
$
defer
→
$
$
$
$
later
HVAC systems account for 40–60% of energy use in large facilities, making them the highest-impact starting point for infrastructure resilience and long-term cost control.
0% HVAC energy share: 40–60% 100%
How leading organizations are getting ahead

Real-time monitoring

Data-driven prioritization identifies which systems need attention now versus next year, cutting emergency response costs.

Energy-as-a-Service

Alternative financing addresses capital constraints while delivering guaranteed savings, without adding debt.

System-level optimization

Maximize efficiency of existing equipment while building a strategic replacement roadmap.

Continuous commissioning

Ongoing monitoring fights performance drift year-round rather than relying on periodic audits.

The moment to act is the moment everything shifts. Organizations that address infrastructure now gain the stability to expand clinical capacity, increase enrollment, and accelerate production.
Learn more at optimumenergyco.com
© 2026 Optimum Energy LLC  |  optimumenergyco.com

†

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The Infrastructure Imperative: How Deferred Maintenance Impacts Healthcare, Higher Education, and Manufacturing in 2026

The Infrastructure Imperative: How Deferred Maintenance Impacts Healthcare, Higher Education, and Manufacturing in 2026

Published
14 January 2026

The Infrastructure Imperative

Healthcare systems, universities, and manufacturers are facing the same problem: decades of deferred maintenance have created a facilities crisis that can no longer be ignored. Buildings age. Systems fail. And every dollar not spent on upkeep today costs four dollars tomorrow.


In 2026, these sectors are at an inflection point. Rising energy costs, tightening budgets, and the need to modernize infrastructure have collided with backlogs that threaten operations, safety, and competitiveness. The question isn’t whether to address these challenges, it is how quickly organizations can act before costs compound further.

Healthcare: Patient Care Depends on Reliable Systems

Hospitals don’t get to pause operations for maintenance. Yet many health systems are running mechanical, electrical, and plumbing infrastructure well past its intended lifespan. MRI machines, CT scanners, HVAC systems, and much of the equipment patients depend on is aging, while the backlog of needed repairs continues to grow.

Why Waiting Costs More Than Acting

When a chiller fails in a hospital, patient safety is at stake. When an MRI goes down, revenue stops and care gets delayed. These aren’t hypothetical scenarios; they are happening now at facilities across the country that have deferred critical maintenance for too long.

The financial pressure is real. Health systems are caught between:

For CFOs and facility leaders, this creates impossible choices: fix the aging cooling tower or fund the new outpatient clinic? Replace the backup generator or upgrade the EHR system? These trade-offs get harder each year the backlog grows.

Higher Education: $112 Billion in Deferred Maintenance

That’s the number. $112 billion in urgent facility repairs sitting on college and university balance sheets. And it is growing.

A Perfect Storm for Campus Facilities

Post-war campus expansion built thousands of buildings now approaching 80 years old. The construction boom of the 1990s and 2000s added more and those facilities are now hitting their first major renovation cycle. HVAC systems, roofing, electrical infrastructure are all reaching end-of-life at the same time.

Many campuses now exceed a 0.10 Facility Condition Index, the industry threshold for “poor condition.” That’s not a number facilities teams want to explain to the board.

Students Notice

Prospective students tour campus. They see the outdated classroom, feel the inconsistent temperature, notice the slow Wi-Fi. In a competitive enrollment market, facilities matter. Poor building conditions directly impact recruitment and retention at a time when many institutions cannot afford to lose students.

The Funding Gap

Deferred maintenance is a hard sell to donors. No one puts their name on a new boiler. The result: operational budgets absorb emergency repairs while the underlying backlog keeps growing. Unreliable funding, rising construction costs, and inflation make the math worse every year.

Campus leaders need a different approach one that addresses infrastructure strategically rather than waiting for the next emergency.

Advanced Manufacturing: Old Plants, New Demands

Half of U.S. manufacturing plants are between 30 and 60 years old. They were built for a different era before automation, before IoT, before today’s energy and environmental requirements. Now these facilities are expected to support advanced manufacturing while operating on aging infrastructure.

The Hidden Price of Deferred Maintenance

Every dollar saved by deferring maintenance today costs four dollars later. Leaky roofs, outdated electrical systems, and failing HVAC don’t just create discomfort; they cause unplanned downtime, increase energy costs, and put production schedules at risk.

For manufacturers trying to capitalize on reshoring opportunities and supply chain restructuring, aging facilities are a competitive disadvantage. It is hard to install predictive maintenance systems when the building can’t support them.

The Talent Problem

Skilled labor shortages make everything harder. Experienced workers are retiring faster than new ones are entering the field. Competition from data centers and other growing sectors pulls talent away from manufacturing. The expertise needed to maintain aging systems is disappearing just when it is needed most.

Additional Pressures

High interest rates, material cost volatility, wage pressures, and tariff uncertainty are squeezing operating budgets. Many manufacturers are delaying capital investments in automation and digital technology, the same investments that could help solve their infrastructure and labor challenges.

Safety and environmental inspections are intensifying. Outdated systems and uncalibrated equipment expose facilities to regulatory risk. The cost of non-compliance can be severe.

Three Sectors, One Problem

The pattern is clear across healthcare, higher education, and manufacturing:

 HealthcareHigher EducationManufacturing
Infrastructure AgeSystems past primeBuildings 50+ years oldPlants 30-60 years old
What’s at StakePatient safety & careEnrollment & retentionProduction & uptime
Cost MultiplierRising costs compound delays$112B backlog growing$1 saved = $4 spent later
Talent PressurePhysician shortageEnrollment declineSkilled labor gap

Turning the Tide on Deferred Maintenance

Reactive maintenance doesn’t scale. Waiting for systems to fail costs more, disrupts operations, and puts missions at risk. The organizations getting ahead of this challenge are taking a different approach:

HVAC systems alone account for 40–60% of energy use in large facilities, which means their performance has an outsized impact on operations. When these systems are modernized and actively managed, organizations see fewer disruptions, longer equipment life, and stronger control over operating budgets. For many, it becomes the most effective starting point for strengthening overall infrastructure resilience and laying the groundwork for broader upgrades across their campus, hospital, or plant.

The Path Forward

Deferred maintenance will not solve itself. The backlog grows and the strain on budgets and operations only gets heavier. But the organizations that choose to act now unlock a different future. They create the opportunity to attract more students, expand clinical capacity, increase production output, and build environments that truly support the people who rely on them. They gain stability, momentum, and the freedom to move their mission forward.

Taking control of their infrastructure means taking control of their future. It shapes the experience of every patient, student, employee, and customer who walks through their doors. That is what secures long term success.

Those who wait stay stuck in a cycle of rising costs and constant reaction. The moment to act is the moment everything begins to shift.

Optimum Energy partners with institutions nationwide to optimize energy performance, improve campus resilience, and accelerate decarbonization without adding capital or debt. Learn more about how Energy as a Service can help your institution stay focused on its mission.

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Deferred Maintenance and Rising Costs? How EaaS Solves Higher Education’s Facilities Crisis

Deferred Maintenance and Rising Costs? How EaaS Solves Higher Education’s Facilities Crisis

Published
03 December 2025

Energy as a Service for Universities: Modernize Campus Infrastructure Without Capital Costs

In 2025, college and university presidents are confronting a convergence of challenges unlike any other period in recent history: volatile funding, a shrinking student pipeline, rising operational costs, and a growing mandate for sustainability and equity. The National Association of College and University Business Officers (NACUBO) and Gordian’s 2025 State of Facilities in Higher Education both paint a stark picture: institutions are operating with 30%–40% shortfalls in campus renewal funding, increasing deferred maintenance, and escalating costs that threaten long-term viability. 
 

Yet amid this uncertainty, one truth remains clear: higher education’s mission is indispensable. Universities are not just centers of learning; they are critical infrastructure, anchors of local economies, engines of research and innovation, and sources of community stability. The challenge for today’s leaders is to preserve that mission while modernizing operations to meet new realities.

Taking the Long View: Aligning Mission and Operations 

Institutions must “take the long view” in their operational decisions, balancing financial sustainability with their educational purpose. Too often, operational strategy is reactive, driven by budget cycles or short-term crises. The institutions that will thrive are those that understand energy systems, facilities, and sustainability initiatives are not just expenses; they are enablers of opportunity. 

Presidents and boards are being asked to think like stewards of infrastructure, not just stewards of ideas. That means planning for the next fifty years, not the next fiscal year, and viewing operational investments as integral to long-term student success, workforce retention, and institutional reputation.

The Perfect Storm Ahead

The 2025 NACUBO survey highlights a “profound uncertainty” among higher education business officers, citing unreliable funding sources, policy disruptions, and surging operational expenses. Gordian’s facility data echoes that sentiment: the average deferred maintenance backlog now exceeds $140 per square foot. For many institutions, these pressures converge into a perfect storm: 

These forces collectively risk diverting leadership attention away from the institution’s core mission, education, research, and community service, toward crisis management. 

Partnering for Resilience: Energy as a Service 

At Optimum Energy, we believe institutions don’t have to face this storm alone. For nearly two decades, we’ve partnered with leading universities to transform how they manage and optimize energy performance across their campuses. By leveraging data analytics, smart automation, and alternative financing structures, we help colleges and universities reduce operational costs, decarbonize faster, and reinvest savings into their mission without adding capital or debt. 

One powerful tool is Energy as a Service (EaaS). Instead of paying upfront for costly equipment upgrades, institutions partner with Optimum Energy and our finance collaborators to fund and implement energy efficiency projects through long-term service agreements. These projects deliver: 

EaaS is more than a financing model; it’s a pathway for institutions to modernize infrastructure, strengthen financial stability, and meet climate goals all while remaining focused on student success rather than capital constraints. 

Empowering Leaders to Stay Mission-Focused 

In a time when presidents and provosts are being pulled in every direction, fundraising, enrollment, politics, and now technology disruption, the ability to delegate operational complexity to trusted partners is invaluable. By outsourcing energy performance to experts, universities reclaim the bandwidth to focus on what truly matters: advancing their academic mission and supporting their people. 

That partnership mindset reflects a growing recognition that operational excellence is foundational to educational excellence. When energy and facility systems perform reliably, campuses become more resilient, faculty and students thrive, and the institution’s brand of innovation extends beyond the classroom. 

Building the Campus of the Future 

The future of higher education belongs to those who view their campuses not as liabilities to maintain but as living ecosystems to evolve. AI-driven optimization, decarbonization, and energy intelligence will soon define the most competitive universities, those capable of operating sustainably and flexibly in a constrained economy. 

The question for presidents today is not whether to act, but how quickly they can align mission and operations to secure their institution’s future. The answer lies in partnerships that combine financial creativity, technological innovation, and shared purpose, precisely where Optimum Energy operates. 

Optimum Energy partners with higher education institutions nationwide to optimize energy performance, improve campus resilience, and accelerate decarbonization without adding capital or debt. Learn more about how Energy as a Service can help your institution stay focused on its mission at optimumenergyco.com. 

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The Future of Building Optimization Is AI-Driven

The Future of Building Optimization Is AI-Driven

Published
24 November 2025

How AI Building Optimization Cuts Energy Costs Through Predictive Maintenance

By Sam Voisin, Senior Machine Learning Software Engineer at Optimum Energy

Across every sector from healthcare and higher education to advanced manufacturing, leaders are rethinking how their buildings perform and the cost of that performance. Energy optimization has long been about reducing waste and improving efficiency, but today the stakes are higher. Achieving true performance resilience now depends on a critical capability: artificial intelligence. 

Beyond Control, The Path Toward Intelligent Optimization Economics

Traditional building optimization relies on set schedules, static thresholds, and reactive adjustments. AI changes that model completely. By continuously analyzing real-time data from HVAC systems, peripheral sensors, and external data sources like weather forecasts, AI transforms static operations into dynamic systems that learn, predict, and adapt. 

This continuous learning is what makes AI so powerful. Intelligent analytics tools evolve with every data point, understanding how climate drift and operational changes impact performance over time. They learn the critical factors affecting facility performance and adjust accordingly, ensuring systems operate efficiently even under shifting conditions. Through predictive analytics and sensitivity analysis, AI can evaluate how different efficiency measures respond to changes in the local climate, allowing for proactive adjustments that minimize costs and energy use. 

Predictive Maintenance and Continuous Reliability 

AI-driven systems do not wait for equipment to fail. They identify early warning signs and adjust operations or alert teams before issues escalate. This shift from reactive to predictive maintenance reduces downtime, extends equipment life, and preserves capital budgets while maintaining comfort and reliability.

“For as long as I’ve been in the industry, the holy grail of smart buildings and facility management has been trying to switch from reactive, break/fix management to predictive maintenance. AI is finally putting this within reach and Optimum is primed to capitalize, sitting on over 20 years of accumulated performance data.” -Stephen Kozlen, Sr. Product Manager in Development

AI’s ability to aggregate and interpret data across an entire facility allows it to detect long-term trends in performance and equipment health that might otherwise go unnoticed. By recognizing subtle patterns that indicate wear or deterioration, AI helps ensure that equipment lasts longer and continues to perform efficiently for years to come.

A Smarter Path to Sustainability and Comfort?

AI also bridges the gap between sustainability and occupant experience. By understanding patterns of use, environmental conditions, and cost drivers, AI fine-tunes temperature, lighting, and ventilation in real time. It balances comfort and energy efficiency, optimizing the best possible outcomes for both people and the planet.

Because AI solutions continuously learn from data across Optimum Energy’s global portfolio of facilities, every system benefits from collective intelligence. Insights gathered from each facility can inform performance improvements across all others, driving faster adaptation and smarter outcomes on a global scale.

The Cost of Standing Still 

Many organizations are still relying on traditional optimization methods that are rules-based, manual, and disconnected from the full data picture. The truth is optimization without AI is no longer enough. As systems grow more complex and operational expectations rise, buildings that lack intelligent automation risk higher costs, lower efficiency, and lost competitive ground. 

According to EnergyInnovation.org, wholesale electricity prices are expected to increase by 25 percent by 2030 and 74 percent by 2035, while consumer electricity rates are projected to rise between 9 and 18 percent by 2035. With such significant increases on the horizon, facilities that do not leverage AI to continuously monitor and adapt will face escalating operational expenses and reduced resilience. 

Driving toward Realized Efficiency and Savings

AI is not the future of building optimization; it is the standard. Integrating intelligent analytics, predictive controls, and data aggregation into your energy strategy ensures your systems perform at their best today while continuing to learn and improve tomorrow.

With scalable, seamlessly integrated solutions, Optimum Energy delivers optimization that adapts with your facility over time, providing measurable savings, resilience, and operational confidence in a rapidly changing energy landscape.

About the Author, Sam Voisin

Sam Voisin is a data scientist and machine learning engineer with more than ten years of combined experience in industry and academia. He holds a master’s degree in Statistical Science from Duke University. Sam has developed and deployed machine learning applications across diverse sectors, including defense, healthcare, economics, and energy optimization. His work centers on building scalable AI systems that deliver actionable insights and measurable results.

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Transforming Infrastructure: From Expense to Revenue Stream

Transforming Infrastructure: From Expense to Revenue Stream

Published
17 November 2025

Can Infrastructure Be a Profit Center? How Optimum Energy Can Turn Central Plants into Cash Flow

The Deal Podcast | November 17th, 2025

With Ken Bernhard, VP of Project Development


Ken Bernhard, VP of Project Development and fourth-generation construction industry professional, discusses our innovative approach to infrastructure development through energy-as-a-service models. The conversation covers how Optimum Energy transforms expensive capital expenditures into revenue-generating assets for hospitals, universities, and large manufacturing facilities.


Read the Full Transcript Here

Joshua Wilson:
Good day, everybody. Welcome to The Deal Podcast powered by FA Mergers. I’m here with a friend—a new friend—but I’ve known these guys for a while. Mr. Ken, welcome to the show. Tell us who you are and what you do.

Ken Bernhard:
So, I’m Ken Bernhard. It’s great to meet you and to be with you today and spend some time. I’m a developer—an energy developer—but not in the sense of oil and gas.

Joshua Wilson:
Right, energy developer not in the sense of oil and gas. Now, we’re here in Lafayette, Louisiana. I do a lot of work in Texas, and if you’re in Texas and say you’re in energy, people expect oil and gas—or maybe something involving the Dallas Cowboys, which I know you have a few stories about. So energy, but not oil and gas. Explain what that is.

Ken Bernhard:
Yeah, I don’t know much about oil and gas. I have a lot of friends who grew up in it, but I know very little. We’re on the energy conservation side. We do something called energy as a service, where we take infrastructure that’s primarily an expense and turn it into a revenue source.

These large central plants that run hospitals, higher education campuses, big universities, smart manufacturing—Intel, Johnson & Johnson, car manufacturers—they all have massive central plants they’re forced to build. But those plants aren’t revenue sources for them.

Growing up in the mechanical construction business, we built those plants. We were the experts. And we found a clever way to finance them off balance sheet and shift the risk onto the concessionaire. We did that, sold that company, and that went well. But then we found a better way to do it. So now I’m back a second time, doing it the better, smarter way—focused on long-term relationships and utilizing AI, because that’s where we are now.

Joshua Wilson:
Interesting. Okay, walk us through one of those deals. This is The Deal Podcast, so let’s talk deals. Two things I want you to go over:

Turning an expense into revenue — where did that idea originate, and how did your family execute it?

The clever way you financed things off-balance-sheet.

Walk us through both.

Ken Bernhard:
Sure. To get there, I’ll give a little background.

I’m fourth-generation in a mechanical construction business started by my great-grandfather. My grandfather expanded it, and my dad expanded it further. My uncle, who wasn’t part of the mechanical business, built a construction company from three people to 30,000. They built and maintained nuclear facilities, chemical facilities, military bases—that sort of thing.

When he sold his company, he came back to the mechanical business and said, “We did something interesting in the past—we built a big co-generation plant for LSU and Louisiana Tech. We were looking at one for Texas A&M. How do we do that again? And why did you stop?”

The answer was: the price of natural gas skyrocketed after Katrina, so it was no longer advantageous for universities. But their utility bills remained extremely high—1, 2, 3, even 7 million square feet of campus.

We explained the business model. He understood it immediately. Then he asked, “What stops you from doing it now?” And we said, “Easy money.” He replied, “I’m starting a capital company—so we’ll eliminate that. What else stops you?”

We realized nothing else stopped us. People just didn’t understand how to do it. So we set out to finance energy plants differently—by becoming a third-party concessionaire.

Here’s what that looks like:

We go into a large healthcare system. We long-term lease their central plant. In exchange for that lease, we perform a large energy conservation project inside their facility—maybe $25 million worth. That refreshes their infrastructure at a time when money is tight, margins are razor thin, and the political environment is shifting constantly.

After that, we sell back the chilled water, heating water, and steam that the central plant produces as a commodity—just like natural gas or water.

Auditing firms will classify this as off balance sheet if certain tests are met—one is having the ability to sell that commodity to neighboring properties within about three miles. As long as those tests are met, the hospitals keep the debt off their balance sheet and reserve their borrowing for revenue-generating projects like surgery suites and ER expansions—not for a $100 million central plant that only creates cooling.

But to us, the central plant is revenue generating.

We own, operate, and maintain it for 20–25 years. That was the opportunity. And it worked—it was wildly successful.

Joshua Wilson:
Okay, before we get to the “different,” let’s talk numbers. What does a typical range look like?

Ken Bernhard:
It depends on the size of the facility. The valuation of a central plant isn’t replacement cost—it’s more like real estate, or really, the output of the plant. What can it produce? For how long? At what price?

One question I always get: “Why would you reduce energy use if you’re selling chilled water as a commodity? Wouldn’t you want them to use more?”

Our thesis: No. Every central plant is oversized by 30–40%. There’s stranded capacity. If you reduce the building’s thermal appetite through conservation, you create even more stranded capacity—which you can then sell to neighbors.

That’s margin.

Joshua Wilson:
I love it. So the pitch is: we take an expense off your books, refresh your infrastructure, you pay the same or less for chilled water, and we assume the risk. And the hardest part isn’t the engineering—it’s trust.

Ken Bernhard:
Exactly. When you innovate, you immediately meet resistance. “This isn’t how we’ve always done it.” But once trust is established, everything else follows.

Joshua Wilson::
Now let’s go to the new way—AI. You sold the first company. Congrats. Now you’re approaching this differently. What does that look like?

Ken Bernhard:
The past company was named Bernhard. We were vertically integrated—design, build, finance. But to achieve off-balance-sheet treatment, we had to take control of the asset, meaning we operated it for 25 years. That tail was necessary, but our focus back then was really design and construction.

Then we discovered a small software company in Seattle—Optimum Energy. Their software dramatically reduces the cost of operating a central plant. Operators can do it manually, but not at scale. Optimum originally thought they were a pure software company—sell a CD, load software, run algorithms. But every central plant is different. Their software needed the plant to be “prepared” first.

They ended up becoming a tool for large ESCOs. Johnson Controls white-labeled it as “Central Plant Optimization 30%” because on average it saved 30% in utilities. Huge impact—40% of a campus’s electricity goes to the central plant.

Johnson did 140+ projects using it.

When we saw Optimum, we realized something:
They weren’t a software company.
They were an energy-as-a-service company—they just didn’t know it yet.

Today, Optimum’s AI augments operators. It doesn’t replace them—it scales them. One operator could never run 100 plants manually. Software can. We leverage the savings to refresh infrastructure and manage long-term performance.

We’re focused on the 25-year relationship—operations and maintenance excellence. Do a good job for the first 25 years, and you’re hired for the next 25. That’s a 50-year plan.

Joshua Wilson::
Your family has been building businesses for four generations. Why is a multi-generational mindset so important?

Ken Bernhard:
We’re owned by a family capital company—Bernhard Capital Partners. At the end of the day, what we’re building is a utility company. Mid-sized cities used to have their own utilities. Over time, infrastructure matures and must be rebuilt. We’re in the business of rebuilding—smarter.

Air conditioning hasn’t even been around that long. Two generations ago most homes didn’t have it. Infrastructure needs to be refreshed.

Joshua Wilson:
With data centers, EVs, crypto mining—all these new power demands—how does your model fit into that?

Ken Bernhard:
Conservation is cheaper than building more generation. The demand for power has never been greater, and the grid can only scale so fast. In many regions—especially the Northeast—the grid is fragile.

So the responsible approach is: use technology to do more with less.

Just like cars went from carburetors and eight miles per gallon to 30-mpg trucks and electric vehicles, infrastructure must evolve. We’re just helping it evolve.

About Optimum Energy
Optimum Energy is an established global leader in holistic energy infrastructure optimization, providing comprehensive and integrated solutions to mission-critical facilities. Its expertise spans a full spectrum of services, from initial engineering and construction to ongoing maintenance, asset management, and Energy-as-a-Service (EaaS) offerings. By serving key sectors such as healthcare, higher education, and advanced manufacturing, Optimum Energy delivers measurable efficiency and enhanced resilience. The company leverages proprietary innovation and AI-driven technology to provide continued savings, reliability, and resilience, while its flexible financing models, including off-balance sheet structures, enable its clients to accelerate cost savings and meet performance goals with confidence. For more information, visit www.optimumenergyco.com

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Optimum Energy Earns 2025 TVA EnergyRight PPN Award

Optimum Energy Earns 2025 TVA EnergyRight PPN Award

Published
24 October 2025

Optimum Energy Recognized for Commissioning Excellence with 2025 TVA EnergyRight PPN Award


SEATTLE, WA and BATON ROUGE, LA – October 24, 2025 – Optimum Energy LLC has been recognized as a 2025 Tennessee Valley Authority (TVA) EnergyRight Preferred Partners Network (PPN) Award Winner.

This distinction acknowledges our excellence in performance in Commissioning. The TVA specifically cited our outstanding service, dedication, and the results we have delivered to their customers and surrounding communities.

The award recognizes Optimum Energy’s consistent success in helping the community achieve energy and cost savings through participation in TVA’s EnergyRight programs. This honor affirms our contribution to TVA’s overarching mission to enhance the quality of life in the Valley region by providing reliable, low-cost power and promoting responsible environmental stewardship.

We remain committed to supporting the TVA and its EnergyRight initiatives by delivering exceptional energy solutions.

About Optimum Energy
Optimum Energy is an established global leader in holistic energy infrastructure optimization, providing comprehensive and integrated solutions to mission-critical facilities. Its expertise spans a full spectrum of services, from initial engineering and construction to ongoing maintenance, asset management, and Energy-as-a-Service (EaaS) offerings. By serving key sectors such as healthcare, higher education, and advanced manufacturing, Optimum Energy delivers measurable efficiency and enhanced resilience. The company leverages proprietary innovation and AI-driven technology to provide continued savings, reliability, and resilience, while its flexible financing models, including off-balance sheet structures, enable its clients to accelerate cost savings and meet performance goals with confidence. For more information, visit www.optimumenergyco.com

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Regulation vs. Reality: What the OBBBA Really Means for Energy and the Environment

Regulation vs. Reality: What the OBBBA Really Means for Energy and the Environment

Published
24 October 2025

Looking Past the Policy Pendulum: Benefits of Investing in Sustainable Energy Remain Certain

Intro

We asked our team of experts for their insights on the recent passing of the One Big Beautiful Bill Act. Our ESG Chair, Kay John, put in the work to research the new legislation. In collaboration with our Engineering experts, Kay found useful insights to share what the bill means for energy costs, grid reliability, the environment, and corporate sustainability.

On July 4th, the “One Big Beautiful Bill Act” was passed by the United States Congress. To save our word count, let’s refer to it as OBBBA. This lengthy piece of legislative ruling is still a hot topic, as it impacts many aspects of Americans’ daily lives and American businesses. The OBBA laid the groundwork for the current Administration to quickly implement changes to Federal policy. Since the Bill was passed, several related Federal initiatives have already been launched. In this post, we’re going to zero in on what the Bill means for the future of energy, the environment, and corporate responsibility.

The OBBBA is a stark contrast to the Inflation Reduction Act (IRA) passed in the Biden Administration, and it targets many initiatives drawn in the IRA by repealing or rescinding legislation that provided green energy incentives. It phases out or scraps tax credits that support development of infrastructure and components for producing clean energy, all while giving a significant boost to traditional oil and gas production, effectively slowing our transition to a green and diversified energy infrastructure.

Sections 50401-50404 provide funding for petroleum, rescind funding for projects eligible for energy infrastructure reinvestment, rescind financing for projects that avoid or reduce air pollutants and GHGs, and remove controls on fossil fuel projects that would avoid or reduce air pollution. 

Sections 60001-60026 rescind funding for EPA and other government-sponsored emissions-reduction initiatives: research on public health effects from pollution, research on calculating emissions over a fuel’s life cycle, and emissions reporting software systems, compliance, visibility, monitoring, and standardization.

Chapter 5 eliminates or phases out multiple energy-related federal tax credits from the IRA, including the purchasing of EV vehicles, the energy-efficient improvement or development of commercial and residential buildings, and the production of nuclear, hydrogen, wind, and solar energy.

Energy Economics

The OBBBA is projected to negatively impact the US electricity grid by increasing costs and affecting grid reliability over the next 10 years. 

Over the last decade, federal policy like the Inflation Reduction Act helped infrastructure grow significantly in the solar and wind energy space, burgeoning an effecient supply chain and an interested market that was driving costs down as demand was growing, making these alternatives the most cost-efficient and quickest-to-deploy (source) forms of energy. Gas, on the other hand, has a constrained supply chain (source), and policy that creates more reliance on gas – and inevitably the development of more gas plants – will come to face high costs and long procurement lead times. Coal is also supported by the OBBBA, but the US has not built a new coal plant for over a decade and hundreds of coal plants have retired since the mid-2000s (source). With federal policy banking on fossil fuels, the US is limiting its ability to capitalize on the most cost-efficient and fast approach to generating energy: solar and wind power. Limited supply in a high-demand market will increase costs. According to Energy Innovation.Org, “wholesale electricity prices will increase 25% by 2030 and 74% by 2035; electricity rates paid by consumers will increase between 9-18 percent by 2035.” 

Grid reliability is also at stake. The US has been moving quickly towards electrification of buildings and development of data centers, requiring a significant increase in electricity generation. Solar and wind have been major contributors to the grid in the last few years. According to the US Energy Information Administration, 21% of new capacity for the grid in 2023 came from solar and wind power. By 2035, Energy Innovation forecasts a 340 gigawatt decrease in generation capacity without federal backing of solar and wind energy production, which could raise costs to meet growing demand.

At a time when global atmospheric temperatures are increasing every year (NOAA), and heat waves become more frequent, intense, and longer in duration (EPA) – the rise in energy demand is higher than ever to keep buildings and homes cool. Critical buildings like hospitals, manufacturing facilities, and higher education campuses may struggle to meet a higher operational level needed to maintain occupant comfort and compliance. Therefore, heating and cooling systems must be optimized to run with less energy to maintain stability in a less reliable and more expensive grid. 

Environmental Impacts

Increased energy production from fossil fuels will lead to increased air pollution. According to the EPA, “Oil and natural gas production produces a significant source of emissions of methane… It also is the largest industrial source of emissions of volatile organic compounds (VOCs), a group of chemicals that contribute to the formation of ground-level ozone (smog).“ Air pollution has known health effects and can add pressure on hospitals with at-risk groups impacted by increased smog. According to the National Institute of Environmental Health Sciences, “Air pollution, in all forms, is responsible for more than 6.5 million deaths each year globally, a number that has increased over the past two decades.” The impact of pollution on health remains much greater than that of war, disease, and substance abuse (source). OBBBA’s repeal of Biden-administration policies to monitor emissions, air quality, and health effects from fossil fuel pollution can lead to a more hazardous environment for humans. When air quality reaches dangerous levels, we return indoors, thus putting further demand on electricity and HVAC in buildings. We know that emissions produced from energy electricity and heat in buildings accounts for 18% of global energy-related emissions (IEA), creating a vicious cycle of generating more emissions due to sheltering from the effects of emissions. It will become increasingly more important for companies to know and analyze their building and campus HVAC emissions so they can limit their own impact on the atmosphere.

What does this mean for businesses with Sustainability goals?

Many of the world’s largest companies made emissions-reduction goals during the previous US Administration – committing to targets in effect by 2030 or 2050. The question now is: Will American companies abandon objectives if they are no longer incentivized by the government? Some experts are calling this a “sustainability recession” marking this era by the pendulum swing in political influence on environmental awareness. US Presidency terms are a limited period of time, a blip compared to the overall global energy transition, where corporations and long-term investors are looking forward 5 to 50 years for large infrastructure investments. Therefore, companies should remain diligent in executing their sustainability targets for long-term value creation. 

Additionally, the impact of consumers cannot be ignored. A clear indicator of attention to corporate responsibility is the rise of ESG. ESG is a framework developed in the early 2000s by the UN, used to assess a corporation’s activities related to its impact on people and the planet. It is an acronym to reflect the three pillars of sustainability: Environmental, Social, Governance. Environmental (E) assesses a company’s impact on our planet, including efforts related to carbon emissions, waste management, and energy efficiency. Social (S) examines how a company manages its relationships with employees, customers, suppliers, and the communities it operates within. Governance (G) refers to the company’s internal systems and practices related to executive functioning. ESG has gained significant importance in recent years because investors, consumers, employees, and regulators are demanding greater transparency and accountability from businesses as it relates to environmental and social impact . Ernest and Young has reported that companies with strong ESG performance achieved an average return on investment of 10.4% compared to 7.4% for those with weak ESG performance (source). Strong ESG practices can drive commercial success while examining existing internal programs through the lens of sustainability.

The “One Big Beautiful Bill Act” – and several Federal initiatives enacted since its passing – do not support many aspects of ESG, but market forces, investor expectations, employee demands, and growing consumer awareness of corporate responsibility will continue to drive ESG value. For companies serving higher education, advanced manufacturing, and healthcare, adapting to this new US administration means doubling down on ESG promises, demonstrating real value in how they conduct business efficiently and sustainably, and staying nimble in an ESG world that may have less federal backing, but remains highly demanding. Those who continue to integrate ESG into their core business strategies will be in the best position for long-term success and resilience.

How Optimum Energy Can Help?

In this extraordinary era of dynamic policy on energy and the environment, Optimum Energy offers a powerful solution by helping companies find solid ground. Through innovation that delivers lower costs and higher efficiency, we help companies meet their sustainability goals. With 20-years experience, Optimum Energy is the best in class in tracking accurate and live energy consumption from facility and campus HVAC operations. OE’s solutions provide the critical data and analysis needed to validate your progress toward ESG and NetZero goals, helping to demonstrate unwavering commitment to corporate responsibility and reducing owned building emissions. 

Even if your plant is reliant on fossil fuels, it is still possible to be more sustainable, reliable, and cost-efficient. Optimum Energy provides a comprehensive, end-to-end solution for any large plant. Our expert engineering consultation, BAS optimization software, and procurement support for equipment upgrades deliver immediate and long-term value. 

We’ve seen firsthand how the energy cost savings from implementing our solutions can fund sustainable, long-term improvements to your chilled water and boiler plants. With our proven ability to optimize heating and cooling systems to use 30-50% less energy, we deliver real benefits that reduce costs, improve reliability, and meet your sustainability goals. 

Leverage policy changes as an opportunity. Contact Optimum Energy today to take control of your energy costs and secure long-term sustainability success.

Leverage policy changes as an opportunity

Contact Optimum Energy today to take control of your energy costs and secure long-term sustainability success.

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Optimum Energy Powers Up Partnership with Conference USA

Optimum Energy Powers Up Partnership with Conference USA

Published
16 October 2025

Optimum Energy Powers Up Partnership with Conference USA

SEATTLE, WA and BATON ROUGE, LA – October 16, 2025 — Optimum Energy, a leading energy as a service provider for higher education, announced it will serve as a premier corporate sponsor for Conference USA (CUSA). This partnership champions CUSA’s mission of fostering success through dynamic partnerships, highlighting Optimum Energy’s dedication to supporting the operational and academic excellence of its member institutions.

A Strategic Partnership


Optimum Energy’s sponsorship of CUSA underscores its commitment to higher education. The company delivers customized energy-as-a-service solutions across the entire project lifecycle, from assessment to ongoing optimization, leveraging advanced technology for improving operations and maintenance, helping universities reduce costs, strengthen infrastructure, and achieve long-term sustainability.

“Higher education is a cornerstone of the customers we serve,” said Lisa Roy, CEO & President of Optimum Energy. “Our operational expertise complements Conference USA’s vision by addressing the infrastructure challenges universities face every day. Together, we are strengthening the foundation that allows institutions to reduce costs, improve sustainability, and stay focused on delivering the best possible student experience.”

Optimum Energy and Conference USA share a forward‑looking philosophy: advancing higher education by challenging convention. As CUSA pushes its member schools and student‑athletes to reach new levels of achievement, Optimum Energy ensures campuses have the sustainable, efficient foundations needed to support that progress. This alignment allows both organizations to focus on what they do best, elevating higher education and the communities it serves.

“We are thrilled to welcome Optimum Energy as a sponsor of CUSA,” CUSA Chief Revenue Officer Drew Maulsby said. “As we continue to grow our partnership portfolio, we value the opportunity to build meaningful relationships with companies like Optimum Energy.”

About Optimum Energy
Optimum Energy is an established global leader in holistic energy infrastructure optimization, providing comprehensive and integrated solutions to mission-critical facilities. Its expertise spans a full spectrum of services, from initial engineering and construction to ongoing maintenance, asset management, and Energy-as-a-Service (EaaS) offerings. By serving key sectors such as healthcare, higher education, and advanced manufacturing, Optimum Energy delivers measurable efficiency and enhanced resilience. The company leverages proprietary innovation and AI-driven technology to provide continued savings, reliability, and resilience, while its flexible financing models, including off-balance sheet structures, enable its clients to accelerate cost savings and meet performance goals with confidence. For more information, visit www.optimumenergyco.com

About Conference USA

Conference USA is an NCAA Division I athletic conference championing success in college athletics through dedicated leadership, dynamic partnerships, and diverse membership. Founded in 1995 and based in Dallas, CUSA is home to a growing number of member institutions.

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