This week the University of Iowa announced that they are partnering with Engie, a French energy company, to privatize their utilities for the next 50 years. The Gazette’s Vanessa Miller reported that the deal will earn UI $1.165 billion, which the university will use to pay off existing debt, pay consultants hired for the project, and then put the rest into an endowment.
The deal closely mirrors the one Ohio State has with Engie. And Gov. Reynolds announced the partnership could provide a model for more public-private collaborations.
Engie is partnering with Meridiam, a French investing company, on the project and creating the University of Iowa Energy Collaborative Holdings, LLC. Beyond that, the board is withholding most information related to the deal’s financing. The new collaborative is reporting that 21.5 percent of the “private placement financing” comes from Iowa-based investors. Those names are being withheld, because they are considered “confidential trade secrets.”
As a public university, UI belongs to the people of Iowa. And Iowans deserve a more transparent process and deal.
While a move to privatize the UI’s utilities has been in the works for a long time, the process to make public the finalists and immediately approve one of them did not provide the public time to understand the nuances or make public the rationale used to make the selection. The analysis and the potential future risks were kept from public view. Other formats, including a work session in which finalists are presented and analysis of each offer explained, would have helped build public trust.
While the UI has held multiple public meetings to clarify the process and their plans in general, the public didn’t have enough information to form an opinion beyond whether a public-private partnership could make sense. Information about the finalists and some framework of the deal allows for more informed public opinion.
Withholding the names of the Iowa-based investors is an inappropriate use of the confidential trade secrets clause, a strategy the UI has used in recent years to keep other contracts secret. Identifying the project’s investors makes clear who has interests in the projects and helps build public understanding of the risk being undertaken in the deal.
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We do hope this project serves as a model for other public-private partnerships, but without additional information, it will be difficult for anyone other than a select few to know.
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