Exploration comes as other institutions seek private sector investment.
- University of Iowa on April 1 plans to issue an RFQ for a potential utility system P3
- The private partner will provide the university with an upfront payment that will be incorporated into its estimated $1.8 billion endowment
- Agreement anticipated in fall 2019
The University of Iowa on April 1 plans to issue an RFQ for a potential utility system P3.
An agreement with a private partner is anticipated late in the fall semester.
The system, according to the university, is comprised of: a combined heat and power facility that provides roughly 25% of the institution’s electric power needs, as well as nearly all of its heating; four chilled water plants and three satellite chillers with a total capacity that exceeds 40,000 tons; a water plan that distributes roughly 900 million gallons annually; and its Oakdale Renewable Energy trigeneration facility which provides heat and electricity for a number of campus facilities.
Under the proposed P3 arrangement, the private partner will provide the university with an upfront payment that will be incorporated into its estimated $1.8 billion endowment. The private partner will be expected to help the plant cease burning coal entirely by 2025, as well as continue to seek out new bio-fuel resources in order to reduce costs and promote increased stability.
Despite the release of a P3 procurement timeline, the university is still only weighing its options.
“The university will be investigating the opportunity over the next nine to 10 months in order to determine if a P3 is right for our campus,” President J. Bruce Harreld said in a statement.
Notably, no less than six separate information sessions regarding the project have been planned over the next four weeks.
Iowa did not immediately respond to questions regarding the P3’s estimated value, or the reasons why a P3 is being considered at this time. However, the institution in a statement noted that it is “looking for new ways to bridge a meaningful gap in available resources.”
Iowa according to a spokesperson is being advised by Jacobs Engineering, Jones Day, and Wells Fargo. Should the institution proceed with the procurement, it would be the latest in a number of recent US university deals.
“The university will be investigating this opportunity over the next nine to 10 months in order to determine if a P3 is right for our campus.”
– J. Bruce Harreld, University of Iowa President
The University of California, Fresno is currently in the midst of procuring an approximately $130 million P3 project that entails the design, construction, financing and maintenance of its central utility plant and ancillary infrastructure. The institution earlier this month shortlisted four consortia for the project. Those were:
- Bulldog Energy Alliance: Engie Holdings and Ullico Infrastructure Management
- Bulldog Infrastructure Group: Meridiam Infrastructure North America, Noresco, United Technologies, GLHN Architects and Engineers
- Plenary Utilities Fresno: Plenary Group, Webcor Construction, Johnson Controls, Syska Hennesy
- Victor E Energy Partners: Fengate Capital Management, Veolia Energy Operating Services, W.M. Lyles Co., Kennedy/Jenks Consultants, Taylor Engineering
A university spokesperson said that the university must first obtain internal approvals before an RFP can be released to any of the consortia.
The Ohio State University in 2017 approved a roughly $1.165 billion with ENGIE North America and Fiera Axium Infrastructure in which the private partner operates all systems that power, heat and cool the Columbus campus, as well as pursue campus-wide upgrades that will improve energy efficiency by 25% over a 10-year period.
Notably, the consortium provided Ohio State with a $1 billion upfront payment, and an additional $150 million of funding to support the institution’s academic mission. In return, Ohio agreed to provide the consortium with a 45 million fixed fee which is scheduled to increase by 1.5% per year, an annual operating fee starting at $9.2 million, and a financial return for any capital investments made by the private partner.