IOWA CITY, Iowa – (CBS2/Fox28) — The Board of Regents, State of Iowa is approving a one-billion dollar public-private partnership between the University of Iowa utility system and ENGIE North America and Meridiam.
Under the agreement, ENGIE and Meridiam will pay $1.165 billion to the University of Iowa for a 50-year operating agreement for its utility system. Most of the upfront payment will be put into an endowment. This endowment is projected to make $15 million a year which the university says will help with “predictable, sustainable funding necessary for the UI to carry out its strategic plan.”
That plan includes “economic development and engagement, diversity, equity, inclusion. The things that make the university of Iowa successful,” according to UI VP of finance and operations Rod Lehnertz.
The university will still own the utility system and all operations will return to the university after the 50-year deal. There will be no university staff positions cut under the agreement, says a Board of Regents press release.
“They will operate it, we’ll pay them a service fee,” says Lehnertz.
Lehnertz says the Board of Regents and even Governor Kim Reynolds have applauded the move.
In that release, Board of Regents President Dr. Michael Richards says the agreement is an excellent step forward for the University of Iowa.
We must continue to be creative in leveraging our assets to find ways to provide the funding that Iowa’s public universities need to be their best.
The university will pay ENGIE and Meridiam a $35 million annual fee in the first five years of the deal, with the fee increasing by 1.5 percent annually after five years. The UI says it will use $166 million of the lump sum to pay off existing utility bonds and consulting fees.
The University of Iowa has come under major scrutiny from climate activists, who say the university’s sustainability goals are outdated and take issue with the burning of coal at the university’s power plant.
In October, the student-led IC Climate Strikers held a large rally, featuring Swedish activist Greta Thunberg. The crowd called on UI President Herrald to join a Town-Gown Climate Accord and move up plans to end coal burning.
“We recognize that there is a climate emergency,” Lehnertz says, reiterating what UI President Bruce Herrald said earlier this week.
“We’re glad they’ve finally acknowledged there is a climate crisis and they’re going to take steps to try to mitigate their effect,” IC Climate Striker and University of Iowa student Maddie Patterson says.
The sophomore says the climate strikers feel like months of protests and pressure against the university is finally paying off.
The Board of Regents says ENGIE and Meridiam will adopt the UI’s existing goal of operating coal-free by 2025 or sooner and continue campus-wide sustainability efforts. Lehnertz says their new partners have taken a look at their resources and people and believe that deadline can be moved to 2023.
Engie says it will also explore new sources of sustainable energy, including renewable energy, microgrids, energy storage, and other innovative technologies.
The IC Climate Strikers reacted to Tuesday’s news on Twitter, saying more still needs to be done.
“I think our big concern now is going to be if the University of Iowa is going to work with the climate strikers and the city of Iowa City,” Patterson says.
She adds the strikes aren’t over.
“Until we can get the university to agree to that town-gown accord,” she says.
And it’s not just the university itself. Patterson says she’s the only UI student striker and she wants to see her peers effort the next big change in their school’s sustainability plans.
“If we don’t pressure them as a student body, there’s no way they’re going to keep moving forward,” she says.
The university provided a timeline of how this agreement was reached, stating they requested feedback from faculty, staff, and students before putting out requests for qualifications. They say the selection was made after a “rigorous 10-month competitive bidding process.”
They also list several information sessions held in March, May, and September.
The university has an information session planned for December 12 on the west side of campus. That session will take place from 2 to 2:30 pm in the Urmila Sahai Conference Room (room 2117) in the Medical Education Research Facility.
