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The Daily OrangeSU steam rates still disputed
By Justin Murphy
Posted: 10/28/09, 2:36 AM EST Section: News
Syracuse University has been reselling steam to public institutions for up to twice the price at which the university buys it, according to court documents and statements by engineers with knowledge of the steam production and prices.
Since January 2004, SU has sold steam to its customers at an average mark-up of 66 percent, supposedly for maintenance and operation costs, according to an SU affidavit. A number of steam regulation experts, though, have said those rates are unjustified.
Until last week, SU bought its steam from Project Orange Associates and resold some of it to Crouse Hospital, Syracuse VA Hospital, the State University of New York College of Environmental Science and Forestry and Upstate University Health System, formerly known as SUNY Upstate Medical University.
POA announced Oct. 19 that it will no longer operate the steam plants, leaving SU to produce its own steam.
"The university has been blatantly overcharging its customers for years," said POA President Adam Victor. "It's unconscionable."
In court documents and in public, SU has consistently denied overcharging its steam customers. The resale price it sets "does not include any profit margin," according to an affidavit filed by Tim Sweet, SU Director of Energy and Computing Management.
The costs that SU reports for transporting the steam to its customers, though, are higher than those POA charged SU, even though POA had to transport the steam much farther, from its Taylor Street plants.
All the customers, like SU, are non-profit organizations. Upstate, ESF and Syracuse VA Hospital are public institutions.
BATTLE IN THE COURTS
Last November, POA and SU sued each other in the New York State Supreme Court over the terms of a 40-year agreement signed in 1990, according to which POA produces steam on SU property. On July 6, POA filed another suit, asking the state to condemn SU's steam operation through eminent domain law.
Since January 2004, SU has sold steam to its customers at an average mark-up of 66 percent, supposedly for maintenance and operation costs, according to an SU affidavit. A number of steam regulation experts, though, have said those rates are unjustified.
Until last week, SU bought its steam from Project Orange Associates and resold some of it to Crouse Hospital, Syracuse VA Hospital, the State University of New York College of Environmental Science and Forestry and Upstate University Health System, formerly known as SUNY Upstate Medical University.
POA announced Oct. 19 that it will no longer operate the steam plants, leaving SU to produce its own steam.
"The university has been blatantly overcharging its customers for years," said POA President Adam Victor. "It's unconscionable."
In court documents and in public, SU has consistently denied overcharging its steam customers. The resale price it sets "does not include any profit margin," according to an affidavit filed by Tim Sweet, SU Director of Energy and Computing Management.
The costs that SU reports for transporting the steam to its customers, though, are higher than those POA charged SU, even though POA had to transport the steam much farther, from its Taylor Street plants.
All the customers, like SU, are non-profit organizations. Upstate, ESF and Syracuse VA Hospital are public institutions.
BATTLE IN THE COURTS
Last November, POA and SU sued each other in the New York State Supreme Court over the terms of a 40-year agreement signed in 1990, according to which POA produces steam on SU property. On July 6, POA filed another suit, asking the state to condemn SU's steam operation through eminent domain law.
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