Engie CFO Judith Hartmann said Tuesday that concerns over Ohio State’s private-partnership with the French energy company should be tempered because it’s a global industry leader that will bring “best practices” to the university.
“Of course, if you bring in a global expert that’s done this for many, many other places, then they will bring in best practices, and the university will benefit from this,” Hartmann told The Lantern in an interview. “We have tried out many things in many places, and we can really bring best practices to the table here. Then, of course, we have to prove it.”
In March, when the university announced it signed a 50-year lease of its energy assets with Ohio State Energy Partners — a partnership between Engie and Axium, an investment firm created during the bidding process — critics decried the deal, citing concerns about transparency and its benefits.
Those concerns peaked in April when professor emeritus Bruce Weide sued Ohio State to release more information on the Comprehensive Energy Management Plan, three days before the Board of Trustees voted on the deal.
When asked about transparency concerns, Hartmann said she wasn’t sure of their validity because she said Engie had engaged with Ohio State for more than two years and “lots of input has come into this.”
“If you think about all the different exchanges that had to go into this, and all the different competition that was here, quite frankly, this was a very well-run process, I would say,” Hartmann said.
Ohio State Energy Partners CEO Serdar Tufekci said because every capital project proposed by the group is subject to approval by the Board of Trustees, “it’s not really a true privatization” of the university’s energy.
“It’s a public-private partnership,” he said.
Why Ohio State?
Engie is a global leader in energy production, so why would it choose to invest more than $1 billion on a partnership with a land-grant college across the world?
To answer it simply, Ohio State’s scale and influence is greater or equal to that of the cities they work with today, Hartmann said.
“This kind of concept (a privatized energy partnership) doesn’t really exist and to combine forces with a global company and a university of this size, I mean there’s got to be great areas that we can work on together and really have a cross-pollination between the different worlds and work on innovation,” Hartmann said.
Engie is working with one other university: the University of Maryland. It runs the university’s energy operations for 262 buildings and manages upgrades to steam, electricity and cooling systems, according to documents Ohio State provided.
However, the University of Maryland management is not close in scale to that of the newly formed Energy Partners. Hartmann said the “landmark” partnership was the first time Engie considered a collaboration like this with a university, adding that Ohio State approached the company.
“I really think that we can have a win-win situation,” she said.
Keeping Ohio State energy employees
In addition to transparency questions, one major concern for university staff and faculty was whether Ohio State’s utility systems’ employees prior to the deal would stay as part of the Energy Partners. For the most part, they have.
Forty-two of the 49 utility-system employees will continue their work in energy management with the Energy Partners, an accomplishment Tufekci said is due to multiple practices.
“One of them is we just are who we are. We’re a good employer,” Tufekci said. “People join Engie, and they usually stay, so we presented [an employment] package that mirrored packages that we do elsewhere.”
Tufekci said Engie also flew out two of its employees from the University of Maryland to meet potential Ohio State employees and explain their working roles. He said they also relied on other face-to-face meetings, such as the director of operations meeting with each of the 49 employees every day for a week.
He said many of the frustrations Ohio State employees had revolved around the nature of the acquisition.
“There is a natural unknown and certain things cannot be released to every employee as part of the business, so they just voiced their concerns, the frustrations they had,” Tufekci said.
“One of the questions (an Ohio State employee had) was, ‘Are you guys going to bring an army of Engie employees to replace us?’ And the answer is no,” Tufekci said. “This is your plant, you’ve been operating it. You know it more than any employee we can bring.”
Energy Partners plans to hire local employees. “Our preference is to have a diversity from within Ohio, but at the end of the day, we will hire the best candidate that applies for a role,” he said.
Meeting academic standards
As part of its agreement to meet Ohio State’s academic focus, Energy Partners will create a $50 million Energy Advancement and Innovation Center. It will also devote $5 million to a program to hire 500 interns throughout the 50-year deal, with 10 each year.
Tufekci said a construction date and location for the Energy Advancement and Innovation Center is unknown, but the Energy Partners have high expectations.
“The target is that after football, when people think of Ohio State, they think about the innovation center,” Tufekci said. “That’s the goal, that it’s going to be unique in North America.”
He said the center will be comparable to tech hubs in the East and West coasts.
Tufekci added Energy Partners has already begun work with the provost’s office to define how the internship program will work, figure out which of Ohio State’s colleges potential hires will come from and what kind of topics they would like the internships to focus on.
He said in addition to Columbus, interns will work at Engie’s regional headquarters in Houston, as well as internationally. Tufekci hopes to have some interns in place by Spring 2018.[highlight][/highlight]
Ohio State Energy Partners also announced a $200,000 donation Tuesday to Ohio State for the Billy Ireland Cartoon Library and Museum, the Women in Engineering program and student sustainability initiatives.