University of Maine System trustees authorized spending up to $5.7 million Monday to advance negotiations of a long-term energy contract worth up to $165 million to shift the Orono campus from fossil fuels to renewable energy sources.

“We are starting to spend money on the (UMaine) energy replacement project,” said Trustee Karl Turner, chairman of the trustees’ finance and facility committee. “When completed, the university will replace fossil fuel with solar and biomass for generating heat and electricity. It will virtually eliminate the use of fossil fuel at the Orono campus.”

Since May 2018, the university system has been in talks with Honeywell International for an energy contract that includes building a new biomass boiler on the Orono campus.

The funds approved Monday at the trustees meeting in Machias begin the second phase of negotiations, providing Honeywell up to $4.2 million to solidify the design and provide more precise information on the project scope and financials. The other $1.5 million is for the university to hire experts for its own work on the project. The initial Honeywell estimate for the project is $123 million, plus or minus 30 percent. Once the second phase is completed, Honeywell will provide “a firm fixed price” for board consideration, and if they approve, final design and construction begins.

A spokesman for the system said there is no timeline on this phase of the negotiations.

New York-based ConEdison Solutions initially had won the right to negotiate a contract to power the Orono campus with wood-fired steam and electricity from a former Expera mill. But in late February, a few weeks after the Portland Press Herald published stories revealing secret recordings that suggested a university official had provided inside information aimed at helping the ConEdison team win the bid, and that the university system chancellor had a conflict of interest in the bid, ConEd abruptly pulled out of the deal.

UMaine officials then went back to Honeywell, the first runner-up in a competitive bidding process, to negotiate a contract.

The energy system conversion is being driven in part by UMaine’s goal of virtually eliminating net greenhouse gas emissions by 2040. Honeywell says its project will achieve 85 percent of that goal. Adding a second element of efficiency measures that reduce energy demand on campus, such as upgrading lighting and motors, could bring that number to 94 percent.

Honeywell estimates the potential money savings from a long-term wood-fuel contract that could provide stable and predictable energy costs. UMaine now spends roughly $10 million a year on electricity and heat. That expense could be cut to $4.3 million with the new power plant and solar array, Honeywell estimates, and to $2.9 million if the so-called demand solution is integrated.

According to Honeywell, the new 6-megawatt central heating and power plant would be built by Maine subcontractors and would burn about 70,000 tons of wood chips a year from sustainably harvested timber, cut within 50 miles of Orono. The plant would be built behind the Facilities Management building on the east side of the campus, next to the East Substation. This would keep most fuel delivery trucks off campus. The 4-megawatt solar array is proposed south of the Emera Planetarium.

The project would circulate $2.1 million a year in the local economy and create 50 jobs in logging, trucking and forestry. Additional jobs would be created at the energy center.

In addition, the plant would use natural gas and oil or liquid biofuels as backups for its boilers, as well as the solar array. The plant would produce high-pressure steam to drive a turbine to generate electricity. Power from the grid would fill in the balance; no power would be sold off-campus. The plant’s design would allow it to run most of the campus in the event of a blackout or natural disaster.

If the project goes forward, it would be a much larger and more complex version of the biomass facility that currently heats the University of Maine at Farmington campus. That $11 million plant was developed by Trane U.S. Inc. It went on line in 2016, burns 4,000 tons a year of locally harvested hardwood chips, and replaced nearly 400,000 gallons of oil. University officials have said they expect the savings in energy costs to help pay off borrowing debt within 10 years.

Also Monday, the trustees were updated on a review of underenrolled academic programs.

Of the 33 underenrolled programs, selected for review because they only graduate a handful of students each year, six were suspended, which means currently enrolled students may continue the program but enrollment is closed to new students.

“Right now, six programs are being suspended and that’s with faculty input,” said Robert Neely, the vice chancellor of academic review who is leading the multiyear, systemwide review of academic offerings. “Frankly, I expect to see one or two more” in the upcoming months.

The programs being suspended are the master’s degree in social studies education at the University of Maine; the bachelor’s degree in health information systems at UMaine Farmington; the bachelor’s degrees in business management health care (online), business management – accounting and social science, all at UMaine Fort Kent; and the bachelor’s degree in art education at UMaine Presque Isle.

The remaining 27 programs are being overhauled in various ways to boost enrollment numbers and reinvigorate the programs. Six programs are moving to an online or hybrid program; Spanish and French master’s programs at UMaine will have nonthesis options; seven programs are undergoing a rebranding and marketing push.

Neely said the review process was “having the desired effect” although it will take time to see if efforts to boost enrollment in the programs are successful.

“The power of this is that now it’s an annual process,” Neely told the trustees. “If in two or three years, we are seeing these same programs coming back up, it’s not working.”

Neely, working with chief academic officers on each of the seven campuses, initially identified 130 programs – 72 undergraduate and 58 graduate – as not producing enough graduates, defined as five graduates a year at the undergraduate level, three a year at the master’s level and two a year at the doctoral level.

Neely said this is the first of what will be an ongoing annual review. Once the current process is complete in May, the campuses will start it again for ongoing academic reviews every year.