French utility company Engie SA, through its affiliate ENGIE North America Inc., and Paris-headquartered infrastructure investor Meridiam Infrastructure Finance SARL have been awarded a concession valued at over $1 billion for 50 years to operate the University of Iowa's utility system.
Engie and Meridiam will form a 50/50 partnership to update and operate on-campus utility systems, including heating, cooling, electricity, sanitary water and storm water. The university will retain ownership of its utility assets.
One objective will be to help the university transition to coal-free electricity production by Jan. 1, 2025. The university, in Iowa City, Iowa, set that goal in 2017. According to S&P Global Market Intelligence data, the university owns about 33 MW of operating generating capacity at three plants, the largest of which, three coal units. Two additional gas-fired units are scheduled to be in operation in late 2020.
The Engie/Meridiam partnership will look at incorporating lower-cost and renewable resources into the university's fuel mix.
"With Engie and Meridiam, the university has found partners that share our values of investing in people, improving sustainability and transitioning toward a zero-carbon footprint," university President Bruce Harreld said in a Dec. 10 news release. The university's Board of Regents and the state of Iowa approved the partnership.
Under the concession, Engie and Meridiam will pay the entire $1.165 billion upfront, money that will be placed into an endowment. Once $153 million in existing utility system bonds and $13 million in consulting fees are paid off, the endowment will have about $999 million, the university said.
ENGIE and Meridiam will also work with the university to provide multiple services and solutions for a reduction in energy usage, as well as generation sources such as renewable energy, microgrids, energy storage and other innovative technologies preparing the campuses for a more sustainable future.
Additionally, the two companies will build innovative programs about the energy transition for students and employees through internships, projects and research opportunities.
"Over the next 50 years, we will continually work to improve system efficiency, cost, and performance both operationally and environmentally, leveraging the power of our global experience and focus on innovation to make the University of Iowa a showcase in next-generation energy management and sustainability," ENGIE CEO Isabelle Kocher said in a Dec. 10 news release.
In 2017, Engie and Axium Infrastructure won a 50-year concession, also for $1.165 billion, to operate utility systems at The Ohio State University.