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Jump in UH's light bill less than predicted

New System-wide contract could raise cost by about 18 percent

by Portia-Elaine Gant
Senior Staff Writer

The cost of electricity under a new contract at the University was expected in February to increase by 40 or 50 percent this spring, but final numbers show the increase will likely be closer to 18 percent, Associate Vice President for Plant Operations David Irvin said.

Constellation NewEnergy submitted a bid of $13 million for the UH System, and the University will pay $10.4 million of that.

"They're new to us, but they're a nationwide firm. They supply energy to Texas A&M, the Medical Center and most of the UT campuses, excluding the main campus," Irvin said. "They are reliable and have a lot of experience in universities and the kind of reliability and dependability that we require."

UH's electric bill is expected to increase $1.6 million, which Irvin attributed to the square footage on campus and late hours at the M.D. Anderson Memorial Library and the Social Work Building.

"It's a slight increase. If you just looked at fuel prices, you would expect we'd have gone up 46 percent," Irvin said. "Part of the reason it didn't go up as high is that we had a pre-bid conference, and at that conference, we had 11 companies show up. They knew they had a lot of competition."

Of those 11, seven submitted qualified bids to the University, and sorting out the fine print took quite a bit of time.

"Some of the contracts did have clauses where if we added new buildings, they would bring those on at a lot more dollars per square foot," Irvin said. "That's why it took us a while to analyze and look at all of the options. We had to make sure that everything they were proposing was accurate."

The addition of new buildings was a fundamental talking point in negotiations, especially with the new Science and Research building under construction. Because that building will be completed before the two-year contract ends, Irvin said it was essential that new buildings be accounted for in the negotiations.

The new contract is for a minimum of $13 million a year because it does not include buildings under construction, which will be added later at the same rate, Irvin said.

Student fees have been adjusted based on higher utility projections -- the Campus Recreation and Wellness Center fee, for example, will increase by $4 in the fall to cover rising utility costs, and housing fees will also increase by about 3 percent. That means some organizations will end up with extra money, but Irvin said those dollars are needed.

"Many of the departments ... eliminated a lot of deferred maintenance because utilities were going to go up," Irvin said. 

"The fact that we have good news on the utility front means that they might be able to do additional maintenance. They'll have some funds to look at some other priorities that utilities were pushing out of the way."

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