Ohio State plans to privatize energy with largest investment in university history

Source: Owen Daugherty and Summer Cartwright, The Lantern, March 30, 2017
Ohio State has proposed a plan to receive its largest investment in the university’s history by selling its energy to the highest bidder. In accepting the unprecedented proposal, OSU will move forward in a public-private partnership with ENGIE, a French global energy producer and operator, who would control the energy used on campus for the next 50 years. The agreement, which is the first of its stature, includes the largest upfront payment — to the tune of $1.015 billion — between an American university and a global energy partner, OSU officials said. University officials said they ultimately chose the proposal from ENGIE-Axium because it offered the largest upfront payment of the three competitors, in turn committing the most money to the University’s endowment. This continues the trend of OSU privatizing its resources, which began with its CampusParc deal in 2012. The 50-year, $483 million deal was also the largest of its kind. …


Ohio State CFO will recuse himself from decision in energy privatization plan
Source: Tom Knox, Columbus Business First, March 9, 2017

The chief financial officer at Ohio State University will recuse himself from deciding who will privatize the university’s energy operations. Geoff Chatas will help analyze the financial aspects of the deal but won’t know who the final candidates are – they’ll be masked to avoid the appearance of conflict of interest, said Ohio State President Michael Drake. … The CFO won’t have a say in who will run the university’s energy operations for 50 years because of a choice he made in 2015 when he accepted a job at the parent company of CampusParc, which in 2012 had negotiated a deal with university officials, including Chatas, to privatize OSU’s parking operations. The move raised questions of quid pro quo, which Chatas vehemently denied, but he soon reversed course and stayed at the university. … Ohio State expects to make a choice on energy privatization before the end of the school year. It’s a unique arrangement for a public university: a group of companies would for 50 years operate utility assets that make Ohio State run, including natural gas and chilled and heated water facilities. The winning bidder would have to meet sustainability goals sought by Ohio State. …

OSU moving toward privatizing its power system
Source: Laura A. Bischoff, Dayton Daily News, February 11, 2017

Ohio State University says it is taking the next step toward becoming the largest institution nationwide to hire private companies to manage its energy systems for decades to come. OSU Provost Bruce McPheron gave notice to staff and students on Thursday that the university will formally ask finalists to submit proposals for the massive project. The finalists in the running have not been disclosed. Ohio State administrators will determine by the end of the current semester whether to ask trustees to pull the trigger on it. The university is weighing whether to hire private contractors to take control of critical assets: the utility system that heats, cools and powers more than 400 buildings on main campus. OSU would receive an undetermined amoung of upfront cash and then agree to buy its energy from the vendor. The contractor would be responsible for making energy efficiency upgrades to cut OSU consumption by 25 percent within a decade. …

OSU weighing controversial energy contract
Source: Laura A. Bischoff, Dayton Daily News, June 5, 2016

Four years after a controversial deal to lease its parking spaces to an outside vendor, Ohio State University is once again looking to the private sector for a cash infusion in exchange for control over critical assets: the utility system that heats, cools and powers more than 400 buildings on the main campus. If the plan is implemented, Ohio State would be the largest public institution in the United States to privatize its utility system on such a broad scale. The deal is not without risks, however. In exchange for an undetermined amount of upfront cash, Ohio State would turn over control of its heating, cooling and electricity assets and agree to buy energy from the vendor for 50 years. … Ohio State officials say the deal would have safeguards to make certain the vendor maintains the assets and meets the school’s standards for customer service and energy efficiency. The in-house utility team hits the university’s 99.96 percent reliability target most years, said OSU spokesman Rob Messinger. … This fall, Ohio State is expected to invite six of the 10 semi-finalists to submit detailed proposals. Competing vendors must have extensive experience and pockets deep enough to provide the hundreds of thousands of dollars that would be expected as an upfront payment. The university is not disclosing which firms are in the running.

6 teams left in the running to manage Ohio State’s energy
Source: Tom Knox, Columbus Business First, April 26, 2016

Ohio State University has narrowed the finalists for its energy privatization project expected to reap millions of dollars for the 65,000-student school. The school in February pared from 40 to 10 the groups interested in bidding for the job. Now it’s down to six candidates, according to an email Ohio State administrators sent to students, staff and faculty in an end-of-semester update. … Some labor groups concerned about the impact on employees have expressed opposition to the plans. The university email said every utility employee would get an interview with the winning bidder. For those who want to remain school employees, “Ohio State will find suitable positions that will provide the same pay as their current roles,” the email said. There are 52 utility employees, according to a school spokesman. Some are union workers. The privatization push is part of Ohio State transitioning out of managing its non-academic operations, including its parking, which was leased to a management group in 2012.

Ohio State energy privatization moving toward final stage
Source: Tom Knox, Ohio Energy Inc, February 22, 2016

Ohio State University is moving toward the third and final stage of its plan to privatize its energy management. The school recently pared down the list of potential partners to 10 groups. On Monday officials said there’s enough interest to move toward the next step: a request for proposals. … Officials said the next stage does not mean it definitely will enter into a partnership. In the email the school said “we want to be crystal clear that the only decision at this point is to continue exploring this project.” Exploration means delving into the details, figuring out the specific requirements for such an arrangement. …

Ohio State U. Launching Another Privatization
Source: Caitlin Devitt, Bond Buyer, March 24, 2015

The Ohio State University expects to drum up considerable cash by finding a private partner to take over its large campus energy system, as it seeks to offset waning traditional revenue sources. The proposal — which would be the latest first-of-its-kind financing for OSU — calls for the university to lease its energy system for 50 years to a concessionaire in exchange for what officials hope will be a “substantial” upfront payment. The private team would take on the cost of operating and upgrading the system, as well as procuring energy and achieving energy saving goals…. The 50-year concession and lease of the university’s entire utility system would include electric, steam, gas, heating, cooling and production and distribution assets serving the main Columbus campus. The private partner would also supply the campus with energy and operate and maintain the university’s electricity and natural gas supply contracts. Papadakis said the university wants to transfer all risk of operating the utility system and the cost of the energy-efficiency upgrades to the private company. The RFQ also proposes a so-called affinity relationship between the school and the private team, which could range from research collaboration to “integrated co-branded energy marketing opportunities.”…