Currently we are following a project in Ottawa where, for the energy systems that provide energy services to a number of federal buildings in Ottawa, the government is now considering whether it wants to use a PPP model to basically update and seek services from these assets for a long period of time. In the energy services model, one approach is that government will define the energy services it's seeking. This is the efficiency.
Government obviously has a mandate to seek more efficient ways to procure energy, and in a more environmentally responsible manner, so it will define the actual energy services it needs. Government will say, “We need this coolant load, this heating load, for our buildings, and we expect the private sector to provide it at this level of efficiency”—meaning that this is how much fuel you will use to provide this unit of energy.
Government can simply put out a contract stating this is the energy load it needs, this is the efficiency that it expects, and it expects the private sector to provide that energy load and efficiency for a 30-year period. As for how the private sector does that—what it builds and what it doesn't build—that's the private sector's scope. It ultimately has to deliver energy, and it has to deliver energy at a certain efficiency.
I'm simplifying things, but in effect this is it. You allow the private sector to compete. You have several groups that could qualify. The government will qualify companies that have the credentials for this type of procurement and will allow the private sector to innovate and provide that service at the most efficient cost to government.
The alternative is that government figures it out itself with engineers, etc., tries to procure on its own, manages the energy system on its own, and hopes that things go as planned, as opposed to having a contract with real teeth in it, stating that “you didn't produce the energy at a certain efficiency, so here are the penalties involved”. Once you introduce penalties, you have capital at risk.