then established Lobo Energy to develop a
strategic business plan for meeting the university’s utility needs and potentially also
serve as a third-party energy service provider.
The company was designated a 501(c)( 3)
‘research park’ corporation under the State
of New Mexico’s University Research Park Act.
Under the act, Lobo Energy’s status was that
of a state agency with the ability to enter
into non-competitive long-term contracts
with other state agencies. The corporation
would be able to move quickly in negotiating
and contracting with outside consultants and
could enter into a 30- or 40-year agreement
with a third-party utility provider, if such a
strategy were deemed advisable. Thus, Lobo
Energy would be treated as a private, nonprofit corporation in its dealings with third
parties, without the public institution procurement limitations of UNM, but it would
be treated the same as UNM in its dealings
with governmental and state agencies.
To head Lobo Energy, the UNM regents
hired Jeff Easton as chief executive officer
and appointed a board of directors, consisting of five upper-level university leaders and
two external directors. An administrative
manager and a consultant in fuels and regulatory affairs were brought on board; the
university’s utilities engineer also worked
with the corporation.
The Lobo Energy team conferred with
architectural, engineering and financial consultants as it studied infrastructure improvement options. Early on in the planning
process it was determined that it would be
more beneficial, financially and operationally,
for the university to continue providing utility services internally than it would be to contract with Lobo Energy as a third-party energy supplier. Lobo Energy then drafted a business plan outlining a comprehensive utility
The plan also proposed
an innovative financing
strategy allowing the
university to fund the
renewal project itself.
system upgrade designed to meet projected
campus energy needs for a 20-year period.
The four-year plan integrated chilled-water
system improvements, renovation of Ford
Utilities Center and energy conservation
measures to reduce the need for installed
plant capacity and improve campus energy
efficiency.
The plan also proposed an innovative
financing strategy allowing the university to
fund the renewal project itself. UNM would
issue its own 25-year tax-free revenue bonds
in the amount of $60 million. These bonds
would be repaid with energy savings resulting from improved efficiency and lower
energy consumption. The savings would be
sufficient to service all but $250,000 of the
$3.6 million annual payment on the bond
debt and, later, continue to provide cash
flow for future projects. The UNM Physical
Plant Department would be responsible for
setting up the financial controls and processes, and maintaining and operating the new
systems in such a way as to ensure that the
debt would be retired.
UNM’s infrastructure renewal has captured some attention for its success.
It was named 2004 Project of the Year
by Energy User News (now Energy &
Power Management). The publication
conferred the honor as part of its
annual Energy-Efficient Building
Awards, presented in September 2004
at the World Energy Engineering
Congress. The Project of the Year
award recognizes innovations in
building management and energy
efficiency that provide unique building solutions and also achieve significant energy and cost savings.
Moving Ahead
In August 2000, the UNM board of
regents approved Lobo Energy’s plan. In
spring 2001, the New Mexico Commission on
Higher Education and New Mexico State
Board of Finance approved the university’s
bond issue request and gave it the green
light to proceed with projects. At that point,
Lobo Energy’s focus became more tactical as
the company shifted into project management responsibilities and future planning.
Day-to-day project management rested with
a newly created utility project team formed
within the Physical Plant Department.
In October 2001, the infrastructure
upgrade kicked off with the first of its energy
conservation projects: retrofitting the lighting
in most campus buildings with new high-efficiency parts. More than 220,000 lamps
and 80,000 electronic ballasts were replaced
over 18 months.
By April 2003, after a series of continuous coordinated projects, the existing North
Chiller Plant was abandoned and a new
19,000-sq-ft facility, the Lomas Chilled Water
Plant, built in its place. One of the largest
and most efficient cooling systems in New
Mexico, the plant is equipped with three new
electric chillers and one absorption chiller
Courtesy UNM Hospital Lifeguard One Helicopter.
The new chilled-water facility, the Lomas Chilled Water Plant, was built on this site on the university’s
north campus.
