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Ohio State has entered into a public-private partnership for comprehensive energy management to strengthen the university’s sustainability while providing new resources for the university’s academic mission. On April 7, 2017, the Board of Trustees approved a 50-year concession agreement and lease with Ohio State Energy Partners, a consortium made up of ENGIE North America and Axium Infrastructure.
The partnership officially launched July 6, 2017. (See story)
There are four components to comprehensive energy management:
- Operations: OSEP will operate the systems that power, heat and cool Ohio State’s Columbus campus under a 50-year lease of the university’s energy assets.
- Sustainability: OSEP will propose, provide the capital funding for and implement energy conservation measures to improve Ohio State’s sustainability. During the first 10 years of the agreement, OSEP is required to meet the university’s goal of a 25 percent improvement in energy efficiency on the Columbus campus. The university will review each capital project and would approve only those that will provide appropriate environmental and financial benefits.
- Supply: OSEP will work to enhance Ohio State’s effectiveness in the procurement process for electricity, natural gas and other energy sources. The university will continue to buy directly from providers, and Ohio State will continue to determine its priorities in terms of sources.
- Academic collaboration: In addition to its$1.015 billion upfront payment to the university, OSEP will fund and carry out a $150 million commitment to support academics in specific areas requested by students, faculty and staff during the bidding process. Among these projects are a $50 million research hub and support for scholarships, internships, faculty and students.
Ohio State Energy Partners will mount an unprecedented energy efficiency program to meet the university's sustainability goal for energy use.
To accomplish a 25 percent improvement in energy efficiency within 10 years, OSEP will propose, provide capital funding for and manage the installation of energy conservation measures across the campus. The university has estimated the cost of those capital improvements at $250 million. This agreement creates a dedicated funding source for those improvements while preserving the university's capital funding for other priorities.
In addition, many parts of the $150 million academic collaboration package to be funded by OSEP support sustainability.
For instance, the $50 million Energy Advancement and Innovation Center will create a research hub where Ohio State faculty members, students and alumni will collaborate with ENGIE researchers, local entrepreneurs and industry experts on the next generation of smart energy systems, renewable energy and green mobility solutions. Another $15 million endowment would support sustainability initiatives outside the scope of the Comprehensive Energy Management Project.
Under this partnership, the university will continue to set the sustainability agenda at Ohio State. For example:
- We set our sustainability goals.
- We determine the mix of energy sources and fuels (and buy it directly from providers)
- We will review proposed energy-conservation projects. Only those that meet our standards will proceed.
- We will oversee any improvements to our energy grid.
Ohio State Energy Partners will pay the university $1.165 billion, the largest single investment in our academic mission. Those funds will be used to enhance access, affordability, excellence and sustainability across the university.
Beyond the financial impact of that support, this partnership will create academic collaborations that enhance Ohio State's position as a national flagship research institution.
The total value of $1.165 billion includes a $1.015 billion upfront payment to the university and a $150 million commitment to support academics in specific areas requested by students, faculty and staff during the bidding process.
Initially, the proceeds of the upfront payment will be invested into Ohio State’s endowment, dedicated to priorities being finalized in the university’s strategic plan. These areas of investment include the following:
- Student financial aid to support access, affordability and excellence
- Compensation enhancements for faculty and staff to support competitiveness with academic peers; a portion of this will be tied to improvements in teaching effectiveness
- Classrooms, research labs and performance and arts spaces across disciplines (in combination with other sources of funding)
- A fund to enhance sustainability efforts
- Other strategic initiatives
In addition, OSEP made specific commitments in its $150 million academic collaboration proposal for a $50 million research hub, faculty positions, additional student financial aid, internships, sustainability, staff development, and university philanthropy. (Read the details)
Ohio State Energy Partners is the company created specifically to serve the Ohio State University community.
The two partners in OSEP -- ENGIE North America and Axium Infrastructure - are both global leaders in energy services and sustainability.
OSEP has contracted with ENGIE Services to operate the systems that heat, cool and distribute power to the Columbus campus.
More information about ENGIE and Axium is provided on this page.
ENGIE Services offered employment to each of the 49 eligible Ohio State utility workers, who were also given the choice of remaining university employees. Most (42) accepted offers from ENGIE Services. The others decided to remain university employees.
Based on individual circumstances, Ohio State has assigned some of these university employees to continue work on projects related to the utility system. The university has placed the others in available positions that fit each individual’s skills and experience.
ENGIE Services and Communications Workers of America (CWA) have completed a collective bargaining agreement that continues union representation for CWA employees who have accepted positions with ENGIE.
The goal to achieve a 25 percent improvement in building energy efficiency within 10 years was incorporated within the requirements of the Comprehensive Energy Management Project.
The project also will be part of meeting the university’s commitment to achieving climate neutrality. Ohio State joined the American College and University Presidents’ Climate Commitment (ACUPCC) in 2008.
Other goals (such as increasing the tree canopy and energy improvements to the university’s fleet) involve aspects of sustainability are not directly part of the comprehensive energy management project.
As was the case before the transition, any customer service requests for campus buildings will be handled by the university’s Service2Facilities group, which can be reached via email (email@example.com) or by phone (614-292-HELP). All individual building operations will continue to be the responsibility of campus maintenance teams.
The university has consolidated energy purchases for all campuses, so all campuses will benefit from the partner’s support in the procurement of electricity, natural gas or other energy sources. (Ohio State will continue to contract directly with suppliers, but the partner will assist the university in this process.)
Beyond operating the utility systems and installing energy conservation measures on the Columbus campus, the partner will also provide recommendations regarding energy efficiency improvements on our regional campuses. That review process may start within two years of a comprehensive energy management agreement.
Why do we need a partner to help us with energy efficiency and conservation measures?
We have made progress, but it is clear that we need to address energy efficiency from a campus-wide perspective to meet our sustainability goals.
The university estimates that a campus-wide conservation project would cost more than $250 million. Partnering with companies that have the technical, environmental and financial resources to oversee this work would allow us to focus our capital investments on other priorities.
It’s worth noting that the university had traditionally employed partners for many of the functions included in this partnership. Expert contractors have been used to install energy conservation measures and upgrade our energy grid. We buy our energy supply on the commercial market, and that will continue under this agreement.
By using a single team to manage all of these elements, as well as our energy operations, we can propel progress on our sustainability goals while maintaining high quality standards.
(See this fact sheet on how Ohio State continues to retain control of major energy and sustainability decisions.)
What made Ohio State’s energy systems an attractive option for a third-party partner?
The university's energy assets are part of an established system that has been well maintained, generates stable demand, and has a forecast for continued growth.
In addition, the university is an ideal customer – large, likely to have growing needs and stable (we pay our bills). We also would be a great proving ground for a partner, since we have such a broad range of facilities (residences, classrooms, labs, medical facilities, etc.) where a partner can apply their expertise.
Why a 50-year partnership?
A 50-year term aligns the partner with our long-term interests and maximizes the value of a partnership for the university.
For instance, a longer term allows a partner to take on larger-scale capital projects that would take longer to realize the environmental and financial benefits. Utility investments are capital intensive, with utility infrastructure typically having a life span of 30 or more years.
We recognize that 50 years is a long time, which is why the project team has built in the appropriate controls and flexibility to allow for adjustments over time. The university would control our sustainability goals and policy decisions, and the partner would propose how to best meet those.
How has this project been shared with the university community?
The university held a series of meetings in October, November and December 2014 to introduce the project to faculty, staff and students through the university governance process, meeting with groups such as the Senate Fiscal Committee, Senate Steering Committee, Faculty Council, University Staff Advisory Committee, Senior Management Council, the Council of Deans and student government leaders and representatives.
The university met with more than 30 groups, held in depth discussions with the President and Provost’s Council on Sustainability (PPCS), created and met with a Faculty Advisory Group, and as a direct result of feedback from faculty, tapped the University Senate-appointed Council on the Physical Environment (COPE) to provide advice on the project.
All three advisory groups — which include faculty, staff and students — provided advice and input throughout the process. All three also were involved in ranking the three final bids: PPCS evaluated the academic collaboration proposal, the Faculty Advisory Group had access to the full proposals and ranked the technical aspects, and COPE ranked the human resources components. All three groups, working independently of one another, ranked the Ohio State Energy Partners bid as the top proposal.
Prior to approval of the public-private partnership with Ohio State Energy Partners, the university shared a presentation about the proposal to University Senate on April 4, 2017. The Senate approved a resolution supporting the project, with 40 members in favor, 22 against and 14 abstaining.
Updates on the project were shared with the full university community throughout the evaluation process. Updates were shared through campus-wide email updates and university news channels including onCampus Today, onCampus Weekly and onCampus. In addition, this project website has been updated as new information became available. The project team also responded to questions and comments sent to this email address.