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Opinion: Energy deal lines pockets of few at expense of many

At the end of the day, we still do not have an answer to why the Ohio State needs a private partner to achieve sustainability goals. The answer still appears to be needing a private partner for the sake of it. The last slide of the presentation during a University Senate meeting, held on April 4, said it all: The current state of energy operations under university control and the Comprehensive Energy Management Project will both provide high standards for energy operations (proven in current, unproven with ENGIE-Axium), both allow the university to continue to determine sustainability goals (listed 25 percent increased efficiency over the next 10 years), both have the university continuing to determine the mix of energy (including renewables), and both include investments in energy system affecting university costs.

However, the “benefits” include a $1.165 billion package for the academic mission and academic collaboration, and, also a “major energy efficiency program with dedicated funding.” That last point is something that we as a university can make the conscious decision to do without the assistance of a third party. And the compensation package? This is coming off the heels of the most successful fundraising campaign in the history of the university. Why this? Why now? Additionally, stated goals coming out of the CampusParc privatization deal in 2012 have not been met, leading to grave concerns that these goals will not be met either.

Clearly, this deal is, and has always been, all about the money. Notably, tucked away deep in the back of the Request for Proposals is “Form E,” the Technical, Financial and Academic Collaboration Score Sheet. This is essentially the rubric the university used to compare the corporate bids. Here we can see what the priorities of the deal truly are. Out of 100 total points, 10 points are given for Academic Collaboration, with an additional ten points for Technical Ability/ Partnership. The other 80 points? “Upfront Payment less Residual Asset Value,” with the winner of the category shelling out the “Highest Upfront Payment.” The fact that the Highest Upfront Payment is eight times more valued than either academics or technical ability to achieve sustainability goals is disturbing and, frankly, just wrong.

The lack of acknowledgement of potential pitfalls of partnering with a private corporation is troubling. From the calling of a “special session” of the University Senate to vote on the proposal only two days before a Board of Trustees meeting, in addition to the Request for Proposals (RFP) review process lasting only two months, this deal is being rushed through. Too many unknowns exist, and the vague responses given by Drs. Drake and McPheron to university senators during the emergency meeting to vote on the proposal were less than satisfactory. The “special session” was unprecedented, mostly because it appeared to have been purposefully left out of the timeline laid out in the RFP itself. There is no mention of a senate meeting, instead only the Board of Trustees meeting is noted. This leads one to suspect that the senate is not regarded as part of this approval process, and that the “special session” was simply called to placate rather than to be taken seriously.

Therefore, who wins and who loses when the private company chooses its interests over the interests of the public? Make no mistake: a billion-dollar upfront payment is a huge loss that a private bidder will most certainly plan to earn back with significant interest over the next 50 years. How will a private company profit off this deal and how will this affect the academic mission of our university? Penalties for not achieving benchmarks and stated goals are apparently worth $10 million an infraction. Does $10 million cover everyone who is affected if the private company does not meet the 25 percent energy-efficiency standards within 10 years? Where does that money go? Who will get a share, and who will not? Consequences such as these have not been clearly articulated. Additionally, what is the “Energy Advisory Committee” going to do? There appears to be a hint of shared governance here, but shared governance is only shared when all members have equal voice and power in the relationship.

A better world is possible. As stated during this University Senate meeting, OSU is one of the few universities to own all its energy infrastructure, from electric and natural gas to geothermal, steam and chilled water. We are getting almost 25 percent of our energy sourced from wind — why can’t we ramp this up ourselves? Campuswide updates to the infrastructure would cost an estimated $250 million, which the university definitely can afford. Privatization absolutely hurts workers. Maintaining university control over energy systems means utility workers could maintain their unionized, university jobs. These jobs provide safe working conditions, quality pay and multiple benefits. Their children can get assistance in attending OSU, a university that was designed to uplift and advance the community around it. Why resort to privatization, when we have the professors and students with the knowledge and potential to advance our goals and improve our technology? We have a dedicated Buckeye workforce. We can be the international leader in sustainability and academics without selling out members of our community, only so a few hands at the top can line their pockets.

Let’s commit to us. Let’s commit to keeping this institution public, with its own control over its assets and the power to its people. This world is possible.

Jed DeBruin, Treasurer
United Students Against Sweatshops OSU Local 42
Fourth-year in geography

Nathalie Pagán, Co-President
United Students Against Sweatshops OSU Local 42
Fourth-year in globalization studies

5 comments

  1. The questions you ought to be asking are how ALL students benefit financially, not just a chosen few who get scholarships. Cut tuition, eliminate fees, reduce housing, subsidize books. That kind of money should benefit everyone. You also might ask if bonuses for top administrators, including the president, are tied to this deal. It is signed and sealed, but that doesn’t mean you can’t keep the heat on.

  2. The fact that the upfront payment dwarfs all other considerations, explicitly and quantitatively, in their report shows what this deal is all about: immediate cash. This is a loan mechanism, built to avoid the normal restrictions for public universities. Will this loan lead to financial strain in 20 years? I don’t have the answer for that, but it’s obvious that the university leadership messaging is focusing on how to spend the cash rather than talking about how it will manage costs in the future.

  3. Need to raise acknowledgment of the potential pitfalls of partnering with a private corporation to avoiding trouble.

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