USC’s energy contract with the Los Angeles Department of Water and Power expires at the end of the year, and both the university and DWP are looking for ways to produce more sustainable energy.USC has been under contract with DWP for 10 years, according to Matthew Oden, manager of the USC Sustainability Program, and that contract has prevented the school from implementing more sustainable practices.Once the contract is up, however, the school and DWP will likely work out a memorandum of understanding — a non-legally binding list of agreements outlining future projects and goals. DWP has been working on such agreements with many of its larger customers.“I think that’s a reflection of how rapidly the landscape in the energy climate world is evolving right now that DWP doesn’t want to take the risk of getting locked into 10-year contracts,” Oden said.The switch from contracts to MOUs would also allow USC to change the way it approaches energy consumption. Under its 10-year contract, USC has been required to get all of its energy from DWP and been unable to produce its own energy.“There’s been a lot of inquiries about why USC doesn’t have solar [power] on campus, and that’s the answer,” Oden said. “We haven’t been contractually been allowed to, and the bottom line of that is that it could be a good thing.”Oden said, however, that USC won’t implement the DWP’s Solar Incentive Program once the MOU is drafted. The program asks customers like USC to purchase solar panels to power their own property. Any energy not used by the customer flows back to the city’s power grid and the customer receives a rebate and federal tax credits. Oden said such a program does not fit USC’s needs.“We have energy efficiency projects that are cheaper and will reduce greenhouse gases more quickly,” Oden said. “Until we have all those done, it doesn’t make financial sense [to go solar] when we could be building large wind farms out in the desert.”Mark Gangi, an expert on sustainable design, said by focusing on energy efficient projects, USC can earn DWP rebates, which are offered for more than just use of solar panels, and can use the transition as a learning experience.“It’s a great opportunity to actually have students in a building that teaches them about what they are studying that has value beyond economic analysis,” he said.A Sept. 15 executive order signed by Gov. Arnold Schwarzenegger requires a statewide, 33 percent increase in renewable energy use by 2020. Oden said the order could be one reason why DWP plans to change the way it approaches its contracts.DWP hopes to use 20 percent renewable energy by 2010 and 40 percent by 2020, said DWP spokeswoman Carol Tucker. Under California’s Renewable Portfolio Standard, which provides regulations and benchmarks for the statewide switch to renewable energy, DWP would use hydropower, wind power, biomass energy and geothermal energy.To reach these benchmarks, DWP recently opened the largest municipally-owned wind farm in the country, located in Utah. Wind farms generate energy through turbines with spinning blades creating electricity and transmitting the power back to LA. DWP is also agreeing to other projects and transmission lines to transport power from places farther than LA, Tucker said.Although DWP is USC’s only source of energy, their new initiatives will not change the total amount of energy USC receives, Oden said.