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Dartmouth Enlists Goldman Sachs for Renewable Plan

  • The smoke stack of the Dartmouth College steam cogeneration plant is seen from East Wheelock Street in Hanover, N.H.Tuesday, April 25, 2017. Four boilers in the plant supply the steam heat the college campus after excess steam pressure is used to drive turbines that generate about 40 percent of the annual electricity used on campus. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • At the beginning of his shift, boiler operator Bruce Tuthill checks over the various systems in the Dartmouth College steam cogeneration plant, noting the temperatures and pressures of oil, air, water and steam throughout the systems in Hanover, N.H., Tuesday, April 25, 2017. Tuthill also does a visual check of the flames inside the boilers allowing to see if the fire is getting the correct amount of air, and if residue is forming. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • A fuel truck driver who declined to give his name checks on a pump after delivering a load of 8,500 gallons of number six heating oil to the tanks at Dartmouth College's steam cogeneration plant Tuesday, April 25, 2017. The plant switched from coal as a fuel to the thick molasses like number six heating oil in 1958. The driver said that on a cold winter day as many as five truck loads of fuel would be delivered to the plant. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Valley News Staff Writer
Published: 2/10/2018 12:05:49 AM
Modified: 2/10/2018 12:19:25 AM

Hanover — Dartmouth College is engaging consultants at the investment bank Goldman Sachs to explore ways in which a private firm might finance and even build a new power plant and related infrastructure to help meet the school’s renewable energy goals,

Dartmouth President Phil Hanlon last year committed the college to reducing its greenhouse gas emissions by 80 percent by 2050, among other goals to help combat global warming.

Administrators working to meet those objectives announced on Earth Day 2017 say this could involve replacing the existing schoolwide steam heating system with hot water and moving away from carbon-heavy fuel oil, which likely would require building a new power plant.

“We don’t think we can keep using the existing power plant and meet our energy goals,” Executive Vice President Rick Mills said on Friday.

The current plant near the Hood Museum of Art burns roughly 3.5 million gallons of fuel oil each year to heat more than 5 million square feet of building space, college officials said last year. But given its location in the heart of Hanover, it doesn’t have enough room to store biomass, the most likely new fuel alternative.

Replacing the plant and the school’s heating system is likely to be an extremely expensive task; administrators in the past have estimated costs in the tens of millions to upgrade the steam network alone, and Hanlon last year said the various projects, including the power plant, could cost as much as $100 million.

Those financial realities have led Mills and other Dartmouth officials to consider other options — such as public-private partnerships.

Public-private partnerships, a term school administrators are using even though Dartmouth is not strictly a “public” entity, are arrangements where a private company provides the money needed to build a piece of infrastructure that the public will use. Governments or schools such as Dartmouth receive a needed structure or piece of equipment — in this case, perhaps a power plant — without incurring the capital cost.

Private firms can make the money back in variety of ways — by selling energy from a new plant to the public entity in the deal, for instance. In the case of some privately financed public highways, drivers have been paying tolls to businesses that paid for construction.

Dartmouth this week took out a legal advertisement in the Valley News that announced a transaction that “exceeds $5,000” with Goldman Sachs to examine public private partnership options.

New Hampshire state law required the public disclosure because Dartmouth Trustee Elizabeth Cogan Fascitelli is a partner at Goldman, the notice said.

The precise sum Dartmouth is paying is “internal,” spokeswoman Diana Lawrence said, and the consultants will help determine the timeline for action.

Many details are far from resolved, Mills said, including with whom Dartmouth might partner with, where they might build a new power plant and other infrastructure, and what the terms of the deal might be.

Mills said he pitched the idea of this kind of arrangement using an analogy from Dartmouth’s past: a black-and-white picture of milking cows that belonged to the college, back when it owned its own dairy business.

“The message for the trustees was, there was a time when to get milk we needed to own cows,” Mills said. Soon enough, he said, “The time may be that to get electricity we don’t need to own a power plant.”

The 120-year-old plant, which includes a 175-foot brick smokestack, was fueled by coal until 1958 and now generates about 23 percent of the electricity used by Dartmouth, officials said last year.

If the college builds a new plant in Hanover, town officials will have a say in its siting and operational details, Town Manager Julia Griffin said. Building projects typically go before the Planning Board for site plan review and, depending on the zoning details, perhaps also before the Zoning Board of Adjustment.

Although Griffin said she didn’t expect to have a say in the making of any deal between Dartmouth and a capital provider, she noted that college and town officials had been conferring closely in their respective efforts to meet ambitious midcentury energy goals.

“The cool thing about having an Ivy League college in your community is they have both the engineering and the academic research skills to drill into these issues in a way that the town couldn’t,” Griffin said, adding that sometimes Dartmouth forwards the town’s questions to its consultants and researchers. “Boy, do we piggyback off those,” she said.

Hanover at last year’s Town Meeting passed a resolution committing the town to obtaining 100 percent of its energy from renewables by 2050. Solar installations are going up all over town-owned structures, and some may be funded through public-private arrangements, too, Griffin said.

“I think privatizing renewable energy infrastructure is not unusual out there in the marketplace at all,” she said.

Griffin noted that this kind of deal is common for solar infrastructure. Solar companies often build and own installations on the property of private citizens, businesses, cities and towns, who may pay special energy rates and receive rent in exchange for making the space available.

Colleges and universities around the country have increasingly been exploring public-private partnerships as a way to finance new infrastructure and keep debt off their books. Late last year, the University of Massachusetts system put out a handful of requests for proposals from private developers to build new dorms on at least three of its campuses, according to the Boston Globe.

Rob Wolfe can be reached at rwolfe@vnews.com or 603-727-3242.

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