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State universities ask lawmakers for funding as energy costs rise

March 30, 2001

With natural gas prices soaring, universities across the state are scrambling to pay high heating bills.

“We have a budget shortfall of about $1.4 million,” said Rick Duffett, vice president for administration and finance at Ferris State University. “The major areas where we’re having a shortfall is gas, and some in electric.”

But unlike other Michigan universities, MSU primarily relies on burning coal to heat campus buildings.

The expensive alternative, natural gas, has experienced increase in price in recent months. Coal prices also have increased, but by only 30 percent compared to the doubling and tripling natural gas prices.

Michigan universities are hopeful the increase in heating costs will be considered when the Senate Appropriations Committee meets in upcoming weeks to vote on higher education funding increases. The funding proposal would give MSU an additional $22.5 million.

But in the meantime, some universities have lowered temperatures to combat high heating costs.

MSU has been one of the exceptions.

“We haven’t done any temperature setback,” said Bob Ellerhorst, MSU’s director of utilities and waste. “We have got an energy conservation program discussion. We are trying to make energy conservation for other reasons, but not because of costs.”

The increased coal prices are still having an impact, though, causing the heating plant to request more funding to make up for the higher costs. Still, coal prices remain far below natural gas prices.

“We are in the budget cycle right now,” Ellerhorst said. “We declared the issue in the budget, and the university is in the process of making budgets.”

Fred Poston, MSU vice president for finance and operations, said increased heating costs will be considered in the budget making process.

“We estimate what the increased budget costs will be for the next year,” he said. “As we do with all of the overall budget items, we will go into a series of budget meetings with the Board of Trustees.

“Anything that increases (costs) puts a strain on the process. Obviously, we need electricity and heat.”

Appropriations Committee member Sen. Mike Goschka, R-Brant, said he expects the high heating costs to be discussed during Senate deliberations.

“In normal years, in the last few when we were so awash in cash, looking at genuine need the Legislature would have been quick to address the issue,” he said. “With revenue so tight and below projections it really does leave one wondering what will be the actions of the Legislature.”

The funding increase was passed on the House floor this week, before being taken up by the state Senate.

“Increasingly, we are going to be hearing more and more situations where heating costs are so astronomical that bills cannot be paid.” Goschka said. “We’ve always been concerned about schools and costs of tuition.

“Now we are looking at some skyrocketing heating costs. That is something that we have to look at.”

The Associated Press contributed to this report.


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