University of Idaho Announces New Energy Partnership — Modeled on Ohio State and University of Iowa — to Boost Endowment and Resilience
Colleges and universities are turning to public-private partnerships (P3s) to upgrade campus energy systems, bolstering schools’ financial and environmental resilience. Higher education institutions face pressures to stabilize budgets, boost endowments, and optimize facilities usage. Many public universities also face shrinking state financial support, aging infrastructure, and projected declines in enrollment due to changing demographics. The COVID-19 pandemic has exacerbated these challenges. In response, some universities are trying creative ways to unlock the value embedded in their existing utility systems and enlisting private partners to make their physical operations and energy use more sustainable and efficient.
The “Big Ten” Model
The latest public university to embrace this emerging P3 trend is the University of Idaho, which on November 2, 2020 announced a 50-year concession with a private company to take over the university’s centralized district energy system. The new concession shows how budget-strapped universities and colleges can optimize critical utility systems and access significant funds for endowments and other purposes without incurring new debt or losing control of capital improvement programs.
Idaho is adopting the P3 model successfully implemented by two other Big Ten schools: the University of Iowa, which transferred its utility plant to a private concessionaire on March 11, 2020, and The Ohio State University, which created the P3 template and launched its concession on July 6, 2017, having previously used a P3 for its parking operations. In each of these cases, the concession contract was awarded after a transparent competitive bid process, and the jobs of existing university employees working on the utility plant were protected.