MATEP Construction Records,, 1971-1985

As early as 1906, Harvard University was producing its own energy with the construction of the Blackfan Street powerhouse, which provided steam and electricity for the Harvard Medical School. The Medical School powerhouse was later converted into a steam and chilled water facility. By the 1960s it became clear to the University that the existing powerhouse would not meet their growing energy needs in the coming decades. In addition, as a result of the energy crisis of the early 1970s, Harvard was determined to secure a stable and cost-efficient means of obtaining energy for its medical area research facilities.

The decision to build the Medical Area Total Energy Plant (MATEP) was the result of intensive studies by Harvard University of the existing and future energy requirements of its research facilities, nearby hospitals, alternative commercial sources of energy, existing private energy faculties, and overall cost factors. MATEP provides steam heat, chilled water, electricity, and solid waste incineration to Harvard's medical facilities and to members of the Medical Area Service Corporation (MASCO), a health-care and education purchasing group that includes the research and teaching hospitals in the Longwood Medical Area.

MATEP is a cogeneration facility that captures and reuses heat that would have been wasted by a conventional power plant. MATEP's facilities consist of two steam turbine generators, six diesel engine generators, five carrier centrifugal water chillers, eight cooling towers, and three steam generators. It had a total capacity of 62 MW of electricity, 900,000 lb/hr steam generation, and 28,000 ton/hr chilled water generation.

Construction of MATEP was not without controversy. Community activists raised objections over the forced relocation of neighborhood residents. Harvard, working with the Massachusetts Housing Finance Agency, participated in the development of the Mission Park Housing Project, which provided housing for people forced to move out of Harvard-owned residential properties as a result of MATEP construction.

Although construction on MATEP was completed in 1980, the facility did not begin operations until 1986. Public and private environmental groups raised objections over air pollution and the safe operation of the facility. The regulatory delays, cost overruns, and high interest rates pushed MATEP's original price tag from $50 million to over $350 million.

Once in operation, MATEP provided affordable and efficient energy to its users. Under the ownership of Harvard University and operation by the Cogeneration Management Corporation, MATEP produced annual revenues of over $50 million. However, it was not sufficient to cover the payments on the debt the University incurred to build the facility. Relief of the debt seemed further off, when in 1998 Massachusetts deregulated the electricity industry. This utility-restructuring plan enabled all Massachusetts power customers to choose their own electric company.

MATEP was not a utility and therefore its prices were not regulated by the Commonwealth's Dept. of Public Utilities. The MASCO hospitals paid a power price pegged to Boston Edison's lowest retail tariff discounted by 2 to 3 percent. It was in the best interests of the MASCO hospitals and the Harvard medical facilities themselves to seek more competitive prices for their energy needs.

In order to realize a benefit from the restructuring of the utility market, Harvard sold MATEP in 1998 to Advanced Energy Systems, Inc., a subsidiary of Commonwealth Energy. Harvard decided to get out of the energy providing business in order to free the University of obligations unrelated to its core mission of teaching and research.