IOWA CITY, Iowa (AP) -- The University of Iowa is advancing a plan to lease its utility system to a for-profit operator for 50 years in exchange for a large upfront payment that would be used for strategic goals.
University President Bruce Harreld outlined the plan Tuesday during a meeting with the Iowa Board of Regents, which is expected to consider its approval next week.
He said the plan would turn over the operation of plants that provide power, steam, and water to campus to a newly-formed company involving two energy firms. Harreld didn’t identify them but called them “leaders in the field.”
Harreld didn’t release the size of the upfront payment UI would receive. But he said that it would go into an endowment fund that would generate $3 billion over 50 years if it received a conservative 4 percent annual return.
The endowment would subsidize energy costs to avoid price hikes for campus departments, and generate $15 million annually to support strategic goals like improving its retention and graduation rates.
The company would get a $35 million fixed fee annually from the university that would eventually go up for inflation, plus additional costs.