Contracts save University
energy costs
By Sarah Szczepanski
Assistant Features Editor
Purdue isn't as
harshly affected by increased energy costs as other places in the country
because the University produces some of its own electricity and purchases
power from long-term contracts.
The long-term energy
contracts can protect the University from paying for radical market
changes in costs.
For example, natural
gas is purchased at least one year in advance at a predicted value of
what it is going to cost for the next year, said Joe Mikesell, senior
director of engineering utilities and construction.
Coal is bought in
three-year contracts, and with the University's current contract there
is an escalation clause that states if the price of diesel fuel rises
to a certain extent, then only a small charge is added.
But besides the
long-term contracts, Purdue has another way that it can save money.
The Wade Power Plant,
located on the southern part of campus, allows Purdue, which can be
powered by coal, natural gas or fuel oil, to take advantage of the fluctuating
energy prices by purchasing power from outside companies when energy
prices are lower.
The total amount
spent by Purdue on full and purchase utilities last fiscal year was
$11.9 million, said Brian Conner, the financial manager of utilities.
At this time of
year, in the afternoon, when energy consumption and prices are at their
peak, the power plant produces two thirds of Purdue’s power, according
to Mikesell.
At night, when costs
are lower, the University purchases more power from outside sources
because it's cheaper than making it itself.
"Thank goodness
that whoever planned this had foresight," Mikesell said.
Other Universities,
such as Missouri, Iowa State and Michigan State, have systems like Purdue's.
Praise has even been given to one of them.
When gas prices
rose last year, Michigan State, which can be powered by coal or natural
gas, was able to switch from natural gas to coal.
The system was viewed
favorably by the local newspapers and the public because Michigan State
was the only university in the state to use coal, according to Bob Ellerhorst,
director of utilities for Michigan State.
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