University of Maine System trustees authorized spending up to $5.7 million last week to advance negotiations of a long-term energy contract worth up to $165 million to shift the Orono campus from fossil fuels to renewable energy sources.

“We are starting to spend money on the (UMaine) energy replacement project,” said Trustee Karl Turner, chairman of the trustees’ finance and facility committee. “When completed, the university will replace fossil fuel with solar and biomass for generating heat and electricity. It will virtually eliminate the use of fossil fuel at the Orono campus.”

Since May 2018, the university system has been in talks with Honeywell International for an energy contract that includes building a new biomass boiler on the Orono campus.

The funds approved Monday at the trustees meeting in Machias begin the second phase of negotiations, providing Honeywell up to $4.2 million to solidify the design and provide more precise information on the project scope and financials. The other $1.5 million is for the university to hire experts for its own work on the project. The initial Honeywell estimate for the project is $123 million, plus or minus 30 percent. Once the second phase is completed, Honeywell will provide “a firm fixed price” for board consideration, and if they approve, final design and construction begins.

A spokesman for the system said there is no timeline on this phase of the negotiations.

New York-based ConEdison Solutions initially had won the right to negotiate a contract to power the Orono campus with wood-fired steam and electricity from a former Expera mill. But in late February 2018, a few weeks after the Portland Press Herald published stories revealing secret recordings that suggested a university official had provided inside information aimed at helping the ConEdison team win the bid, and that the university system chancellor had a conflict of interest in the bid, ConEd abruptly pulled out of the deal.

UMaine officials then went back to Honeywell, the first runner-up in a competitive bidding process, to negotiate a contract.

The energy system conversion is being driven in part by UMaine’s goal of virtually eliminating net greenhouse gas emissions by 2040. Honeywell says its project will achieve 85 percent of that goal. Adding a second element of efficiency measures that reduce energy demand on campus, such as upgrading lighting and motors, could bring that number to 94 percent.

Honeywell estimates the potential money savings from a long-term wood-fuel contract that could provide stable and predictable energy costs. UMaine now spends roughly $10 million a year on electricity and heat. That expense could be cut to $4.3 million with the new power plant and solar array, Honeywell estimates, and to $2.9 million if the so-called demand solution is integrated.

UMaine officials then went back to Honeywell, the first runner-up in a competitive bidding process, to negotiate a contract.

The energy system conversion is being driven in part by UMaine’s goal of virtually eliminating net greenhouse gas emissions by 2040. Honeywell says its project will achieve 85 percent of that goal. Adding a second element of efficiency measures that reduce energy demand on campus, such as upgrading lighting and motors, could bring that number to 94 percent.

Honeywell estimates the potential money savings from a long-term wood-fuel contract that could provide stable and predictable energy costs. UMaine now spends roughly $10 million a year on electricity and heat. That expense could be cut to $4.3 million with the new power plant and solar array, Honeywell estimates, and to $2.9 million if the so-called demand solution is integrated.

If the project goes forward, it would be a much larger and more complex version of the biomass facility that currently heats the University of Maine at Farmington campus. That $11 million plant was developed by Trane U.S. Inc. It went on line in 2016, burns 4,000 tons a year of locally harvested hardwood chips, and replaced nearly 400,000 gallons of oil. University officials have said they expect the savings in energy costs to help pay off borrowing debt within 10 years.

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