IOWA CITY, Iowa (KCRG) -- Administrators for the University of Iowa told the Board of Regents on Tuesday that they want to get out of the utility business and have a private company run the school's power plant.
The University of Iowa Power Plant on Friday, Nov. 22, 2019 (Randy Dircks/KCRG)
University of Iowa President Bruce Harreld said he thinks it's important the Regents approve his plan because in the long term, he said, it will save them money.
Under the university's current system, utilities are paid by each unit individually, like residence halls and the hospital, right back to the University who runs the program themselves. Their current total budget is $98 million.
Under the new plan, the University would still own the system but partner with a private company to run the operation. That company would also pay the University a fee so they could set up an endowment to pay their bills. The University would still cover the costs of fuel, maintenance, and employees.
The company would be given a fee of $35 million that would increase 1.5 percent every year after the first five years of the partnership over the next 50 years. Harreld says while 50 years may sound like a long time, that kind of term is something the University is already doing in other areas.
"This is not something new," Harreld said. "We've used 50-year leases in a couple of other areas, most notably in research and our research park."
Harreld told the regents, under the plan, he thinks the University could be coal-free before 2025.
University spokesperson Anne Basset said they are not able to share the number of vendors that have responded to the proposal.
The Board of Regents is scheduled to meet to review the University's proposal next Tuesday.