The University of Iowa has asked a federal judge to dismiss a lawsuit filed by its P3 partner, the University of Iowa Energy Cooperative, arguing that the case instead should be heard in state court. The university also filed its own lawsuit against UIEC in Johnson County, Iowa, where all the involved parties are based.
The university’s lawsuit alleges that UIEC has submitted expenses to be reimbursed by the university that are not allowed under the agreement, including compensation and relocation costs for company executives, while withholding supporting documentation.
On May 24, 2023, UIEC filed a dismissal of its federal court complaint. The parties have agreed to litigate the case in the Iowa District Court and further consented to transferring the state court case to the Iowa Business Specialty Court.
The lawsuit disputes that UIEC’s $1.5 million annual “operator fee” is an allowable cost given that the university already pays the company a $35 million utility fee to run the utility system.
The university’s lawsuit also alleges that UIEC is responsible for certain insurance coverage of damage to utility facilities. The university has accordingly declined to approve capital projects that would repair damage that the university believes should be UIEC’s responsibility.
The university and UIEC disagree over the terms and conditions of their 50-year contract. The university has been working to resolve the differences, including an unsuccessful mediation on Jan. 25-26.
“We are disappointed that our utilities partner has a different interpretation of the contract and felt the need to file a lawsuit against the university. We are eager for the court to provide a clear definition of the contract for both parties to adhere to,” says James Jorgensen, vice president for legal affairs and general counsel. “The university will continue to work with its P3 partners to ensure that campus utility needs will be met today and for the next 47 years.”