Ohio State University’s board of trustees has approved a 50-year agreement with Ohio State Energy Partners that will contribute an upfront payment of $1.015 billion to the university’s endowment. It is the largest single investment to date toward Ohio State’s academic mission.
Ohio State Energy Partners, which is comprised of energy company ENGIE North America and investment firm Axium Infrastructure, will operate the systems that power, heat, and cool the university’s Columbus campus. It will also install energy conservation measures throughout the campus to meet the university’s sustainability goals.
“This partnership would position us as an international leader in energy and sustainability and further strengthen us as a national flagship public research university,” said Ohio State University President Michael Drake.
The university’s Comprehensive Energy Management Project is valued at $1.165 billion, including the $1.015 billion upfront payment and a $150 million commitment to support academics through – among other things – financial aid and compensation for faculty and staff. The proceeds of the upfront payment will initially be invested in Ohio State’s endowment, the university said.
Key elements of the Comprehensive Energy Management Project include operation and optimization of the university’s utility system, including energy conservation management services.
“Within 10 years, conservation measures would improve our energy efficiency by 25%, reducing our carbon footprint,” said Ohio State University Provost Bruce McPheron.
The project also includes construction of a $50 million energy advancement and innovation center for energy research and commercialization. The center will allow faculty, students, alumni, entrepreneurs, industry experts, and ENGIE researchers to collaborate on smart energy systems, renewable energy, and green mobility.
Under the terms of the deal, Ohio State will pay Ohio State Energy Partners a fixed fee, an operating fee, and a variable fee every year. The fixed fee will start at $45 million a year and escalate by 1.5 percent per year to cover inflation. The operating fee will start at approximately $9.2 million, which reflects the university’s average operating and maintenance costs for the past three years. The variable fee will be directly tied to approved capital investments that Ohio State Energy Partners will make on the Ohio State campus.