Knowledge is power: University of Iowa seeks utilities partner

27 February 2019 Consulting.us

The University of Iowa (UI) has hired three external consultants to “evaluate its assets, identify potential partners, and map out a transaction plan,” according to an article by the Iowan daily newspaper, The Gazette.

UI is weighing the option of allowing a company to take over its utilities system. Doing so — along with the upfront fee that follows the decision — could allow UI to create an endowment supporting academics “that annually would support the university’s ‘core missions’ of teaching, research, and scholarship.”

Ohio State University recently secured a similar deal and received an upfront payment of more than $1 billion. But OSU is twice UI’s size. While a deal could be made, the university must keep its hopes in check when it comes to the financial side of things, officials have warned.

UI last month signed an approximately $200,000 contract with Jacobs Engineering Group to “develop an inventory report along with high-level assessment and future requirements of its central steam, chilled water, electrical, and water treatment systems,” according to The Gazette. 

Knowledge is power: University of Iowa seeks utilities partner

The university also signed an engagement letter with international, US-based law firm Jones Day, seeking the firm’s advice on whether a utility partnership would indeed make financial sense. Investment advisor Wells Fargo will also offer assistance.

UI is hoping to choose a partner by the start of the fall semester, which typically begins in late August. “If all goes as planned, a new utilities partnership would let UI maintain ownership of its system while entering a 50-year agreement with a firm to operate it. The deal would benefit the company by allowing it to control energy used across campus and collect UI payments.”

There are concerns among university faculty regarding the risk of such a long-term agreement. The deal, professors say, might mean short-term payoffs but long-term losses. Regardless, there is still plenty of time for debate. “Based on the preliminary timeline, UI officials say the institution wouldn’t start allocating resources from a utilities endowment until the 2021 budget year,” The Gazette wrote.

Universities around the world regularly seek the help of consultants, be it in practical, research, or educational capacities.

Global IT consultancy Atos, for example, partnered in October with the Technical University of Denmark, which would allow the university to use Atos’ Quantum Learning Machine hardware and software to further its research on quantum technology.

In August, England’s Sheffield City Council approved consulting firm Mace’s plans for a new structure at the University of Sheffield, which will be used for residential and other student purposes.

Further pushing the list, Sia Partners has signed on to become a founding partner at The Hong Kong University of Science and Technology’s artificial intelligence research center. Catalyst Development, meanwhile, has entered into a strategic alliance with Lithuania’s Vilniaus Gedimino Technikos Universitetas, one of the country’s top universities, while Tata Consultancy Services has entered into a personnel and technology exchange agreement with the Institute of Industrial Science at the University of Tokyo, in Japan.


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