Persian Gulf crisis costs U. millions

As the Persian Gulf crisis heats up, the University is going to be paying an arm and a leg just to keep warm. The University is expecting to pay at least $1.5 million more than it did last year for steam to heat buildings, Associate Director of Engineering and Utilities Juan Suarez said yesterday. He said costs could rise by as much as $4 million. The cost increase is due to rate hikes by Philadelphia Thermal Energy. Suarez said Philadelphia Thermal has already raised its prices by 15 percent. He added that the increases are "absolutely . . . a consequence of the crisis." Steam is used to heat all campus buildings, Suarez said. He said the University used about 180 million pounds of steam last year, costing the University close to $11 million. Suarez estimated that fiscal year 1991s steam costs could go as high as $15 million, depending on the winter's severity. Philadelphia Thermal officials were unavailable for comment yesterday because of the Jewish holiday. Even before the sharp increases in energy costs due to the Persian Gulf situation, the University cited utility costs as one reason for a 6.7 percent hike in the 1990-1991 academic year's tuition and fees. It is unclear if the larger-than-expected increases in energy costs will affect next year's tuition and fee rates. For now, the University is dependent on Philadelphia utilities. The administration is continuing to accept proposals from contractors willing to finance, build and operate a cogeneration power plant, estimated to cost about $100 million. The facility is expected to have a 60-megawatt electricity-producing capacity and a 300,000-pound steam-producing capacity. Philadelphia Electric Company spokesperson Bill Jones said yesterday that the crisis in the Middle East has almost no effect on electricity rates because the utility relies primarily on nuclear energy to generate electricity. But he added that this was not always the case. In 1972, 46 percent of electricity was generated by oil. Jones said electricity rates climbed 31 percent over the next three years. With the city's addition of four nuclear generators in the past 16 years, PECO has reduced reliance on oil to only four percent. Philadelphia Gas Works spokesperson Audrey Dean said yesterday that the Persian Gulf crisis did not have any effect on customers for the month of September, but could not predict future costs and effects. "We'll just have to wait and see," she said.

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