USC hopes to end idle facility’s ongoing problems
"That particular plant with those pieces and those assumptions on volume and input and output just won't work," said Ed Walton, the chief financial officer. "We need to get the variables back under control, because there were too many failures. A plant like that shouldn't fail."
The 19,000-square-foot biomass plant, originally expected to provide at least 75 percent of the university's campus demand for steam, currently sits idle. It was promised by USC as "an innovative and long-term solution to the institution's rising energy costs" but failed from almost the beginning, according to USC officials.
Its myriad of woes were explained in detail by a recent report in The State newspaper, which outlined a potentially lethal explosion, legal troubles and distrust between USC and Johnson Controls officials. The report also showed how several members of the university's administration frequently and vociferously questioned each other.
Johnson Controls officials and USC engineers will consider several options in upcoming days after years of struggles, Walton said. The plant could eventually function as something other than a biomass plant to produce energy. Walton expects a report from engineers and Johnson Control officials by the end of November. A spokeswoman from JCI didn't immediately return a request for comment.
Walton said an ideal solution for the university would be a reconfiguration of the plant in which it could provide $2.1 million in energy savings — or the amount guaranteed by Johnson Controls in the original contract, Walton said. Leaving the plant idle forever isn't acceptable to the university, Walton added.
But should Johnson Controls not remedy the plant's ongoing woes, USC won't face financial damages, Walton said. Terms of the long-term contract between the university and Johnson Controls guarantee that USC will receive either $2.1 million in energy savings or cash each year for 11 more years. USC would eventually recoup its approximately $20 million investment.
Walton said that Johnson Controls had previously paid the university $4.3 million, and another payment of $2.1 million will be billed to the company soon. He said the company wasn't contesting the payments.
"They could do nothing and continue to pay us," Walton said. "We're not contemplating getting out of the contract, and we're not thinking they're going to want to do nothing."
USC should have demanded results earlier from the biomass plant, Walton said. But whatever mistakes were made "were covered by the fact we were guaranteed savings to be paid in cash," he explained.
"There was more damage to our reputation than financial damage," he said.