News From Terre Haute, Indiana

February 25, 2014

ISU expects to save money on natural gas purchase

Sue Loughlin
The Tribune-Star

TERRE HAUTE — Indiana State University anticipates saving about $1 million over the next few years because of declining natural gas prices, university officials say.

“The price is down dramatically from where it was a few years ago,” said President Dan Bradley.

At its power plant, ISU uses natural gas to generate steam, which is used to heat buildings.  

The university enters into long-term “hedge” contracts for natural gas, said Diann McKee, vice president for business affairs. It can add years to its existing contract and take advantage of market conditions.

“We have locked in prices through 2016,” she said. “We go out to market as future years are available and decide whether we want to lock in contracts now because we think prices may go up or down.”

Certain times of year are more desirable to purchase, she said. “There are a lot of different factors that go into the decision about whether to extend a contract into another year.” ISU works with natural gas buyers.

Dollars saved in natural gas costs can be put into salaries, deferred maintenance or other university priorities, McKee said.

As far as electricity, ISU is not able to lock in long-term rates, she said. It pays the market rate — and those costs are going up. “On that side, we have to work on controlling demand if we want to control that aspect of the utility budget,” she said.



Sue Loughlin can be reached at 812-231-4235 or sue.loughlin

@tribstar.com.