Combined Heat & Power

Originally approved as a combined project with the West Regional Chilled Water Plant under a total budget of $203 million, the Combined Heat & Power (CHP) Unit received Authorization to Plan and Proceed in June 2024. Approval was granted before completion of final design and budget development to meet federal Inflation Reduction Act (IRA) Investment Tax Credit (ITC) deadlines.

As design advanced, project scope, procurement requirements, ITC eligibility criteria, and construction costs became more clearly defined. The updated budget reflects the fully developed project scope, market volatility affecting labor and material costs, and the accelerated delivery schedule required to preserve eligibility for available federal tax incentives.

To maximize financing flexibility and support the application of IRA Investment Tax Credits, the original combined project has been divided into two separate capital projects.

The Combined Heat & Power (CHP) Unit project will construct a new CHP unit at the T.B. Simon Power Plant to increase on-campus electric generation capacity, restore steam generation capacity that has been lost through equipment retirement, and enhance the reliability, resiliency, and long-term sustainability of Michigan State University's utility infrastructure. The project will strengthen the university's ability to meet current and future campus energy demands while supporting strategic infrastructure modernization.

Phase

• Construction - 
• View the time lapse video to CHP-Addition 6

Budget

• $185 million

Schedule

• Design start: July 2024 
• Construction start: October 2025
• Originally approved combined with the West Regional Chilled Water Plant project with a combined budget of $203M.
• New budget of $185M was approved April 2026 Board meeting.
• June 2026: 90% design completion and 25% construction completion. Major equipment procurements are 95% complete.
• Substantial completion: January 2028

Capital project number

• CP23037