University of Kentucky Central Utility Plant Project

The new Central Utility Plant (CUP) at the University of Kentucky will be a critical component of the University’s long-term campus infrastructure strategy.

The project will deliver expanded heating, cooling, and backup power capacity to support major capital programs, including the expansion of the University of Kentucky Albert B. Chandler Hospital and other key facilities.

Under a long-term public-private partnership agreement, KIP will design, build, finance, and operate the facility for approximately 30 years following construction completion, ensuring long-term performance, reliability, and efficiency.

The project includes:

• Construction of a new central utility plant providing steam and chilled water capacity,
• Installation of new distribution piping and system connections across campus,
• Modernization and optimization of existing utility systems to be performed by Optimum Energy, and
• Backup power infrastructure to enhance resiliency for critical healthcare operations.

Sustainability features

The Project Agreement includes performance guarantees (KPIs) for the steam and chilled water systems within the CUP. The Developer is subject to financial penalties if these efficiency targets are not achieved, helping ensure optimal system performance and supporting the University’s effective management of utility costs, including water, natural gas, and electricity.

In addition, the capacity provided by the new CUP will reduce demand on the University’s existing utility plants, improving overall campus energy efficiency.

Design features

The CUP will consist of a new, 100,000 square-foot state-of-the-art facility at the corner of University Drive and Hospital Drive in Lexington. The primary equipment for the steam and chilled waters systems, respectively, are 2 100,000 lb/hr dual-fuel boilers and 6 3,000-ton electric-drive chillers housed on the first floor of the CUP. The first floor of the CUP also includes a robust backup generator lineup to support the Chandler Hospital and the CUP itself, as well as employee facilities such as offices, conference rooms, and laboratory space.

The second floor of the CUP building is planned for cooling pumps, electrical equipment rooms, and chemical storage tanks.

Innovations

This is only the second DBFOM P3 project delivered using the 501(c)(3) non-profit contractual structure, which allows the client to achieve the full risk-transfer of a P3 at a substantially lower cost of capital than a standard taxable debt transaction, without a PABs or TIFIA allocation.