Wednesday, November 19, 2008 5:09 PM CST
Perry: Economy halts EIU energy center
Citing credit crunch, officials postpone controversial eco-friendly energy center project
By NATHANIEL WEST/Staff Writer
CHARLESTON — Less than 15 hours after touting the urgency for a new high-tech campus heating and cooling plant, Eastern Illinois University officials put the brakes on the controversial Renewable Energy Center.
EIU released a statement from President William Perry Tuesday morning announcing that plans for an environmentally friendly “biomass” gasification plant have been halted temporarily because of the recent squeeze in the credit markets.
“During the development of the project, an unforeseen factor, the current economic downturn, has adversely affected the feasibility of the project,” Perry said. “The energy savings under the project must be sufficient to finance the project. The interest rates and terms available in the credit markets do not allow this for a project of this magnitude.
“Therefore, the project is being put on hold, pending further analysis and assessment of credit markets.”
At the informational meeting that lasted past 8 p.m. Monday — the third and final such event prior to the EIU Board of Trustees’ meeting Friday, when the board was slated to vote on borrowing money and seeking construction bids for the $40 million project — the university’s top financial official gave little indication that funding would be a problem.
Vice President for Business Affairs Jeff Cooley said the board Friday would be asked to issue revenue bonds to pay for the new plant. Meanwhile, “performance contractor” Honeywell International would guarantee certain energy cost savings to offset some of the price tag for the Renewable Energy Center.
On Tuesday, Cooley said the project is by no means a nonstarter. “Credit markets will hopefully adjust to allow us to proceed,” he said.
“This is a project that the president wants us to pursue. It has been postponed, not dropped.”
Like the two previous informational meetings, Monday’s session was attended by angry residents of the Charleston neighborhood where the proposed energy center would be located. Their complaints focused on the potential loss in value of their homes, and they criticized EIU officials for not apprising residents sooner of plans to build the energy plant along Illinois Route 130 north of Edgar Drive.
The plant would heat small wood chips in a low oxygen environment, effectively vaporizing them into a synthetic natural gas, which would burn much cleaner than the coal used in EIU’s existing heating and cooling system, officials said. Steam from the new plant’s boiler would be piped underground to campus buildings.
During informational meetings, EIU officials stressed the unreliability and growing costs of the current coal-fired energy plant as reasons for their haste. They said they hoped to have the new plant up and running within two years.
“We’re disappointed, of course, with the delay, but understand the reasoning,” said Gary Reed, director of EIU’s Facilities, Planning and Management, on Tuesday. “The president and his advisers have analyzed the economics of the project and agree that the current interest rates make movement forward at this time considerably less attractive financially.
“As for the reliability of the existing power plant, well, it is what it is. There’s a reason we call it ‘mission critical.’ It’s in bad shape and there’s little we can do to change that. Our crews will continue to work to keep the plant going, but I certainly can’t predict what its future holds.”
In his statement, President Perry said EIU is “still committed to a ‘green option’ to our steam plant replacement,” and officials will begin looking at “alternative funding models.”
Perry also recognized the comments from Charleston residents upset by the proposed project, although he also said plans for relocating the steam plant to the proposed location were first announced in 2002. During a Board of Trustees meeting, the board approved changes to the university’s “master plan” that included the steam plant site change.
Perry said he is establishing an advisory group, which will include community residents, “for consultation with regard to these and associated issues.”
He noted that the master plan is scheduled to be updated again, and the community will be represented on the task force assigned to look at these modifications.
“We will use Web sites, press releases, open forums and other means to fully inform campus and community on the details of the proposed update, well in advance of any formal action,” Perry said.
Contact Nathaniel West at nwest@jg-tc.com or 238-6860.
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cd wrote on Nov 20, 2008 3:58 PM:
Most everyone knew that land belonged to the university. What did you expect EIU to build there, Residence Halls???
Why haven't you complained about those businesses along Rt. 130? Their are no guarantees for what kind of businesses that call those buildings home.
Should Rt 16 (Lincoln Ave) have sole rights to the Pros and Cons of not being strictly residential? "