UI takes step to partner with firm to maintain utility system

Wells Fargo, a consultant to the UI in the public-private-partnership process, sent instructions to firms regarding submitting a request-for-qualifications proposal to operate the UI utility system.


Wyatt Dlouhy

The Old Capitol building is seen in 2018.

Marissa Payne, Managing Editor

The University of Iowa is proceeding with initial steps of seeking a qualified firm to partner with to operate and maintain its utility system.

After the UI spent two months gathering community input, Wells Fargo — one of three companies consulting the UI during the public-private-partnership process —  on April 18 sent instructions regarding submitting a request-for-qualifications proposal to several firms that may wish to enter into such an agreement with the UI.

The letter provided to The Daily Iowan outlines instructions firms are to follow to submit their proposals to partner with the UI. Firms must submit their proposals to Wells Fargo officials by 3 p.m. EST June 14.

Interested firms are instructed to detail their operational strategy based on the UI’s required commitments such as staffing and sustainability, describe their operational capabilities and relevant experience, and note the upfront payment they would be prepared to pay the UI.

“The receipt of proposals or other documents at any stage of either the [request for qualifications] or the procurement or transaction process will in no way obligate the university to enter into a contract of any kind,” the letter said.

The UI has not identified a dollar amount it hopes to receive from a potential partner, but after the request-for-qualifications process is complete, that will provide officials with a more concrete range of what it may receive and then be able to place into an endowment to fund the UI’s strategic priorities.

RELATED: University of Iowa exploring public-private partnership for its utility system

After narrowing down the firms from the pool that submit request-for-qualifications proposals, the UI will then proceed with the request for proposals — the step that involves competitive bidding to choose a vendor. Resources would not be allocated to this agreement until fiscal 2021, which will start July 1, 2020.

UI Strategic Communication media-relations Director Anne Bassett said in an email to the DI that the UI has not paid Wells Fargo any money yet, and “payment for professional services is contingent on the UI entering into a P3 agreement.” The UI is contracted to pay Wells Fargo for travel, she said.

Chicago-based law firm Jones Day is serving as the legal consultant in the project, and Bassett said the company has been paid $97,549.24 to date. Jeneane Beck, the UI assistant vice president for External Affairs, said Jones Day was “selected due to its work on the Ohio State University utility system P3 transaction.”

Ohio State’s partnership involves its utility system and ENGIE-Axium, a partnership of ENGIE North America and Axium Infrastructure that values $1.165 billion, according to an Ohio State news release.

The final consultant is Jacobs Engineering, which Bassett said has also not been paid to date, noting “the work effort has just begun.”

Per Gov. Kim Reynolds’ request that the three state Board of Regents universities explore such partnerships, the UI announced in February it will explore the option. Under this agreement, the UI would enter into a professional-services agreement with a private firm for up to 50 years.

“We’re not leasing the plant, we’re not selling the plant, so we’ll still own it, we need to make sure they maintain it in a first-class way,” UI President Bruce Harreld told the DI in March. “Sometime in the future, it will revert back to our ownership.”

RELATED: Iowa regent president backs UI’s consideration of a public-private partnership

Regent President Mike Richards said at the regents’ February meeting that he appreciated that the UI was thoughtful and deliberative in the process.

“Any new revenue stream such as the one the UI is looking at is another way to develop and supplement existing revenues,” Richards said. “New revenue shouldn’t replace existing sources, but it does help grow the overall pool.”

Harreld and other UI officials have emphasized that they will not commit to this agreement unless they find a partner that is committed to:

  • Ensuring the UI operates coal-free no later than Jan. 1, 2025
  • Exploring new sources of bio-fuels to create sustainable, lower-cost fuel options
  • Maintaining all facilities in similar or better condition
  • Continuing campus-wide sustainability efforts

“I won’t recommend this to the Board of Regents unless we can make sure we’re not putting any of our employees, any of our values, and any of our systems at risk in this type of transaction,” Harreld said. “If we end up mortgaging our values and our future, it’s a mistake and wrong move on our part. So we’re working on the process, and we’re trying to work very transparently.”

To learn more about the agreement, the UI will host additional information sessions:

  • May 1: 9 to 10 a.m. in the Prem Sahai Auditorium, 1110A Medical Education Research Facility
  • May 2: 1 to 2 p.m. in the Big Ten Theater, 348 IMU