The administration is in the process of altering Illinois legislation in order to finance the construction of the Renewable Energy Center.

President Bill Perry said the university has worked with Sen. Dale Righter, R-Mattoon, and Rep. Chapin Rose, R-Mahomet, in amending the Public University Energy Conservation Act.

If passed, the amendment would allow Eastern to forgo the traditional construction bidding process, and allow for quicker and flexible construction, while putting the university in control of construction costs.

“We wouldn’t be asking the state for capital money,” Perry said. “We wouldn’t be asking the students for a fee. That is the value of this.”

But many concerns exist with lawmakers in the General Assembly about giving unique access to Eastern with the amendment.

The administration hopes the Illinois Senate will vote on the amendment next week when the Senate reconvenes from Easter recess.

Paul McCann, interim vice president for business affairs, said the amendment is necessary for a variety of reasons.

Mainly, the current act does not allow a state agency to build a new energy conservation facility. He said the current act allows for repairs to existing energy conservation facilities, such as replacing heating and cooling systems.

If the amendment is approved, McCann said the Capital Development Board, the state entity that typically handles state construction projects, would not be involved in building the center.

He said Eastern and Honeywell International would create conceptual designs of the center. Honeywell would then hire a contactor, who would be in charge of building the design at a fixed cost up front.

This process is called design-build, and McCann said the process is the greatest advantage to constructing the center through the act.

He said with the traditional bidding process, if the architect who controls the design wants to modify the center during construction, the change in order would create additional costs.

But, with design-build, because the contractor is in charge of building the conceptual design, the contractor does not have stringent demands during construction, McCann said.

Some architects are critical of the design-build process because they say it increases costs long-term because of possible modifications to the structure in the future, McCann said.

“We like the design-build because it gives us a little more flexibility on how we go about doing a project,” he said. “It allows us to be involved in the project.”

With the center expected to be around $40 million to construct, Eastern intends to enter into a guarantee with Honeywell. Because of that, Honeywell would have to ensure the center could generate enough heating and cooling savings for 20 years to allow Eastern to pay off the loan borrowed for construction.

McCann said state appropriations and student fees would still go toward utility costs but not increase, if Honeywell’s guarantee proves true.

“It’s going to save us enough money by itself to pay for itself,” he said.

McCann said that state law makes purchasing contracts last up to 10 years, where as Eastern is looking to enter a contract with Honeywell for 20 years.

The energy conservation act, however, allows purchasing contracts for energy conservation projects, which last up to 20 years, the time length needed for Eastern to pay the loan borrowed for constructing the center.

Perry said the university has entered into these types of agreements before with smaller-scale energy projects, and the company’s guarantee has always happened.

McCann said construction completion is another advantage with Eastern wanting to abandon the traditional bidding process and Capital Development Board.

He said Eastern officials have estimated construction to be completed in 18 months with the design-build process opposed to three years with CDB controlling construction.

“We control the speed,” McCann said about why construction would be quicker.

But all of these intricacies with Eastern and Honeywell cannot happen unless the amendment to the energy conservation act is passed.

McCann said the current act, which includes the design-build process and the 20-year purchasing contract, only applies to repairs to existing energy conservation facilities, not the construction of a new facility.

He said, from conservations with Springfield lawmakers, the act was designed that way to ensure public universities were not abusing the broad power of the law to create facilities that were not intended to conserve energy, such as a sports stadium.

Because of this, many concerns exist with lawmakers in Springfield about the amendment, with Speaker of the House Michael Madigan, D-Chicago, having the most concerns.

McCann said Madigan’s primary concern is making sure Honeywell comes through on their guarantee. He added Madigan wanted Honeywell to promise an agreement, similar to an insurance policy. Honeywell has agreed, McCann said.

Another concern is making sure Eastern pays prevailing wage to construction workers, who are supported by various labor unions. Prevailing wage exists to ensure that state agencies are paying comparable wages for construction workers in the area. For example, Eastern would pay plumbers the same wages plumbers make in east central Illinois.

Perry said Eastern has always done this and will continue to do this in the future.

The final concern is the amendment would allow other state agencies to manipulate the act to build new facilities and label them as energy conservation projects.

To address that, Righter, who sponsored the bill, labeled the amendment as a pilot project for Eastern’s Renewable Energy Center, with the possibility of the amendment expanding if the project goes well.

“In trying to get this pilot project approved, we are educating, letting people know the details and the benefits,” Perry said.

If constructed, the center will replace the steam plant, which is operating on 1928 technology. Construction of the center was announced in November, but the administration retracted the announcement, citing the economy as a reason not to proceed with construction.

McCann said he believes the Senate needs to approve the amendment by the end of the month; otherwise, the bill dies.

If the Senate approves it, the administration is hoping the House sends the amendment to committee for review and then moves it to the floor for a vote.

Perry said, if the amendment is denied, Eastern will have to look at different funding options, which could include asking for state money or increasing student fees.

“From our perspective, the pilot project makes perfect sense all around,” Perry said. “You don’t have to charge the fee to students, and we don’t have to ask the state for money. It’s a win, win, win.”

Stephen Di Benedetto can be reached at 581-7942 or at sdibenedetto@eiu.edu.

(Drawn From The News / Dylan Polk)

(more…)