NORWALK, CT – With energy costs and conservation consciousness rising, health facility managers see the wisdom behind improving energy efficiency.
However, retrofitting existing structures can be difficult and costly, and with capital budgets often designated for clinical investments, such projects struggle to get funding.
Not so at Norwalk (Conn.) Hospital. The 328-bed, not-for-profit community hospital is in the midst of a $10 million plant improvement process that will include 18 independent facility improvement projects.
Financing for the project involves a creative combination of low-interest loans from programs operated by the Connecticut Hospital Association, an eventual $1.1 million incentive payment from the state’s Energy Efficiency Fund, rebates and federal grants.
All told, the hospital expects a 10-year payoff for the program, where annual savings will essentially cover the costs of the project, a joint effort of the hospital, the power company and Milwaukee-based Johnson Controls, Inc. Participants say the approach could be a model for energy-conscious providers who want to save energy and money without eating into capital funds.
“We had to do something more creative to manage the increasing costs of energy,” said John Pierro, vice president of planning and business development for the hospital. “The cost of the project is the equivalent of four or five MRIs or an operating suite. That causes you to weigh the cost of this project carefully.”
Norwalk Hospital began considering the energy conservation project about 18 months ago, in the face of rising natural gas prices, which increased $1 million for the 691,000-square-foot facility last year. The hospital also expected higher costs for electricity, which it cogenerates.
Hospital officials decided to work with Johnson Controls after an extensive bid process, which saw the company propose 18 projects that could provide the biggest return on investment.
The upfront analysis was one of the biggest reasons for maximizing the impact of the project, said Mark C. McClenaghan, regional solutions manager for Johnson Controls.
Completion of all projects is expected by the end of the year and should achieve a 28-percent reduction in the hospital’s consumption of electricity, gas, oil and water. Those savings are critical on the East Coast, which is facing higher energy rates and a bigger push to conserve energy.
The scope of the projects at Norwalk Hospital is wide-ranging and includes upgrading equipment with energy-efficient technology. The project includes a comprehensive energy management systems upgrade, which will optimize the operations for all air-handling units, heating and chiller plants, emergency generators and critical equipment.
The hospital already has seen a positive return from its earliest steps, such as using more energy-efficient lighting, and it anticipates savings of about $600,000 in 2007, Pierro said.
“This would be the kind of program that every hospital could look at,” he said. “It allows a hospital to improve patient care and the environment.”