Below is an email exchange following a webinar with Ohio State University:

Team,

There is quite a bit of a back story to this partnership, much of which likely won’t be highlighted in the conversation tomorrow.

When this partnership was announced several years ago it garnered a lot of interest because of the stated $1 billion that was coming to the University as part of this private-partnership agreement.

Iowa engaged in a similar agreement a few years later, again with a stated huge “influx” of cash to the University.

Suffice it to say, nothing comes for free, much less $1 billion dollars.

It is not quite this simple and don’t take what I am about to say literally or without doing your own homework, but the $1 billion dollars is going to cost well over $2 billion to the University over this 50 year agreement.  My summary of this deal is that the University basically leveraged the value of future energy payments to get a bunch of cash up front. From a financial perspective, this is a really bad deal.

When this deal came out, the University of Illinois was charged with looking at the viability of doing something similar. We hired a consultant to help us evaluate the merits and financing of the deal, and the result of that evaluation was that financially this was a really bad deal.

All that being said, we are already doing much of what Ohio State is talking about doing and more.

A big part of the Ohio State deal is investment in a new Co-Gen plant. We have been investing in our infrastructure consistently for the last 20 years and are looking actively at additional investments in the near and long term.

The investment in buildings and energy savings have been going strong through ESCOs, building and controls upgrades, as well retro commissioning for 10+ years. Those savings continue to be re-invested resulting in more savings. We have already achieved the 25% savings and Ohio State is talking about.

In no way I am discouraging anyone from listening to this conversation tomorrow. I am sure that there are some things that we can learn from them, but please keep in mind that there is a lot more to this agreement that I am sure will not be covered in the hour they have allotted.

If these is additional interests in the Ohio State deal let me know and I can share more.

Mike Larson

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Hi Mike,

Thanks for the information. It is great to hear your perspective and the backstory. I recollect we talked about this several years ago at a team meeting.

My interest is to hear about the student and faculty collaborations.

Andy

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If you are interested here are the slides from the webinar yesterday. The recording will be made available later.

Andy