IOWA CITY, Iowa (KWWL) - The Iowa Board of Regents passed an agreement this week allowing two French companies to operate the University of Iowa's power plant for the next 50 years.
Energy company ENGIE and global investor Merediam will pay UI $1,165,000,000 per the agreement. After paying off old utility bonds and consulting fees, UI plans to have $999 million left over.
The remaining balance will go into a newly created endowment fund, where UI plans to give back about $15 million each year in grants for projects that support its educational mission.
ENGIE aims to help communities transition to a zero carbon lifestyle, according to its website. UI representatives believe with its input, the power plant may be able to stop burning coal before the previous target date of 2025.
"That's obviously a concern for climate change; we're trying to get off of coal completely," climate activist Craig Mosher said. Mosher lives at Prairie Hill in Iowa City, a co-housing community that prides itself on eco-friendly practices.
The power plant created over 200,000 metric tons of carbon dioxide from coal burning in 2014 but that number dropped to just over 50,000 in 2018.
Mosher needs a little more convincing on UI's seriousness about moving to renewable fuel sources in the coming years.
"That's fine as a stated goal but we haven't seen anything in writing about that. And we don't know if they can do it," Mosher said.
The City of Iowa City is working to be at net zero carbon emissions by 2050. City staff put out a 100-day report last month, after declaring a climate crisis in August.
City staff say working with UI is critical to reaching those goals.
"It would be a big help if the university keeps its commitment," Sustainability Coordinator for the city Brenda Nations said. "Our climate action plan is community-wide."
UI will pay ENGIE and Merediam $35 million each year as part of the agreement. UI will retain ownership of all utility systems, with ENGIE handling operations.