Ohio State announced this week that it has laid to rest the lingering question of whether continuing to pursue a potential privatized partnership with an energy management group is worthwhile.
With this announcement, the university has given itself the green light to continue its Comprehensive Energy Management plan, entering the third phase of a project that will help decide the fate of OSU energy management.
The energy management plan seeks to contract an energy partner that would manage the maintenance, upkeep and operating responsibilities of the Columbus campus’ energy systems, including electricity, natural gas, chilled-water cooling systems and steam-generated heating systems.
University spokesman Chris Davey said in an email that factors influencing the decision to move forward in the process included strong teams and responses identified from the previous stage, a commitment to reduce energy use by 25 percent in the first 10 years, and a commitment to meeting operational standards and interest in “retaining the expertise of our current staff.”
“Phase 2 encompassed all of the evaluation and work we did with our advisory groups, the public meetings we held, meetings with governance groups, and sessions with students, faculty and staff. That phase has just ended with the announcement that we are entering Phase 3,” he said.
Davey said the potential partnership could offer support to OSU’s academic mission, including internships, scholarships and research, adding “the university’s size and scope will allow us to have a significant amount of flexibility and opportunity in our supply arrangement moving forward – including determining our mix of renewable sources – just as we do now.”
OSU will begin investigating the capabilities of the remaining 10 multifirms’ responses to the university’s request for information regarding the undertaking of the energy project and sustainability enhancement.
The announcement was made Monday in an email to faculty, staff and students, authored by OSU Interim Executive Vice President and Provost Bruce McPheron, Senior Vice President and Chief Financial Officer Geoff Chatas, and Senior Vice President of Administration and Planning Jay Kasey.
The letter stated that in the coming months, the university will work out the energy service, reliability and financial requirements of the plan with advisory groups and nonaffiliated experts.
Phase 1 of the evaluation, a request for qualifications from interested energy management groups, was concluded in June. The second phase, the university’s request for information from prospective groups as to how they plan to implement energy management, was completed four months later, according to the OSU energy management website.
The project update email also acknowledged the existence of questions regarding the university’s investigation into a possible partnership.
On Jan. 21, University President Michael Drake’s State of the University Address speech was interrupted by student members of the OSU chapter of the United Students Against Sweatshops, who opposed the energy management plan because of potential environmental threats, the possibility of jobs leaving Columbus and for “putting corporate profit over education, selling off energy systems to fossil fuel corporations through a secret process that lacks transparency.”
Davey said the university is committed to transparency and has been since the initial announcement at the outset of the initiative.
“We’ve engaged broadly through dozens of meetings with university governance groups, stakeholders and students, and held two public meetings and participated in a Town Hall meeting hosted by USG,” he said. “This is in addition to continually updating the project website, sending multiple campus-wide emails and sharing updates through other university channels.”
However, Davey said the 10 responding groups will not be identified.
“Companies offer their best proposals when they cannot evaluate their competition, which has been especially important in the idea-generation portion of this process,” he said. “This is standard practice in the bidding process for large projects at the university. In addition, the university has asked companies to provide trade-secret, competitive information that is connected to how they derive economic value in the marketplace. So we are continuing to keep these 10 teams confidential.”
OSU believes it will be the first U.S. university to consider a comprehensive energy plan to this scale, Davey said in an email in October regarding OSU entering the second of the three-phase plan.
“Sustainability is a key reason we are considering this project,” Davey said. “If we move forward with this comprehensive energy management project, Ohio State’s partner or partners would be responsible for accomplishing campuswide energy conservation measures.”
OSU consumed nearly 590,000 megawatt hours of electricity in fiscal year 2014, according to a university energy management request for qualifications document.
Annually, the university spends more than $100 million on energy costs, Davey said in October.
A partnership proposal will be brought before the Board of Trustees if it is determined by the university to serve OSU’s sustainability, academic and financial goals.
“This process will take some time, and we want to be crystal clear that the only decision at this point is to continue exploring this project,” the email update stated. “If the university decides to enter into a partnership, that decision would happen at the earliest in the fall after students and faculty have returned to campus.”
In 2012, OSU privatized its parking when the university signed a 50-year, $483-million contract with Australian investment firm QIC Global Infrastructure to create CampusParc. OSU also holds private contracts with Coca-Cola Co., Nike Inc. and Huntington Bank, along with other companies.