Harvard Closes MATEP Deal

Harvard completed the sale Sunday of its controversial Medical Area Total Energy Plant (MATEP) to Commonwealth Energy System for $147 million.

The sale was made under the terms of an agreement announced in March.

The transfer of MATEP, located at Harvard's Longwood Campus in Boston, to Cambridge-based Commonwealth Energy, resulted in a large financial loss for the University.

The selling price of $147 million is approximately one-fourth of the plant's construction costs, adjusting for inflation, making Harvard's loss equivalent to about half a billion dollars.

MATEP was completed by Harvard in 1985 at a cost of $350 million, almost $150 million over budget, because of cost overruns and delays created by community protests.

The 62-megawatt facility provides "total energy" in the form of steam, electricity and chilled water to Harvard Medical School, Dental School and School of Public Health, as well as five affiliated hospitals.

In addition to expanding the number of customers who rely on MATEP, Commonwealth Energy will seek to introduce technological improvements to the plant, according to a news release announcing the transfer.

University officials said that a key factor in Harvard's decision to sell the plant was the recent deregulation of the electricity industry which has allowed Harvard to buy electricity at lower prices.

"Whatever our capacities are as a University, they do not really extend to great sophistication to running energy plants in a highly deregulated environment," said President Neil L. Rudenstine in an interview shortly before the terms of the sale were first announced earlier this year.

The sale "free[s] Harvard of obligations unrelated to its core mission--teaching and research," said Thomas E. Vautin, Harvard's associate vice president for Facilities and Environmental Services.

MATEP was planned during the oil crisis of the '70s as a means for holding down Harvard's fuel costs in the event of an energy crisis.

The plant is considered one of the most environmentally sound power plants in New England. It uses the energy wasted from one conversion process to produce another form of energy.