Reducing Energy and Costs

Reducing Energy and Costs

When it comes to big energy consumers, hospitals rank high on the list. Laundry and dietary services demand a lot of water. Buildings never close. Bright lights and equipment run constantly.

That was the challenge behind a pilot project launched in 2012 by The Duke Endowment. Through a collaborative with three small, rural hospitals in North Carolina, the effort combined energy audits with grant money to help the facilities make positive changes.

The goal was to help the hospitals reduce their carbon footprint, and generate savings that could be redirected toward mission-related services.

“We wanted to help these hospitals discover how they could use less energy, lower their bills and continue to deliver the high quality patient care they already provide,” says Gene Cochrane, president of The Duke Endowment.

Early Efforts, Good Results

The Duke Endowment has long promoted sustainability among its grantees. In the 1990s, through its Rural Church program area, the Endowment provided funding for energy audits at United Methodist Churches.

“With very simple fixes, such as adding caulking around the windows, some churches realized a 12 percent return on their investment,” says Robb Webb, director of the Rural Church program area. “When we started seeing advances in lighting technology and other developments, we encouraged churches to take a look at making those changes as well.”

Through its Higher Education program area, the Endowment spearheaded an initiative to help the four schools it supports—Davidson College, Duke University, Furman University and Johnson C. Smith University—work together to become more environmentally sustainable. The ongoing collaboration began in 2008.

“In addition to the grants from us, the schools have been able to garner money from other funders,” says Susan McConnell, director of the Higher Education program area. “They’ve been able to implement a carbon offset program, install solar panels on a sports complex, incorporate sustainability into their curriculums and improve conservation efforts on campus.”

With encouraging results from those efforts, the Endowment turned to its Health Care program area. The need was clear. Across the country, hospital energy costs have risen 56 percent. Inpatient health care is the second most energy intensive industry in the United States.

Ideas for Saving

The pilot project included the three facilities—Transylvania Regional Hospital in Brevard, Hugh Chatham Memorial Hospital in Elkin and Northern Hospital of Surry County in Mount Airy—along with the Endowment and Duke Energy, the largest electric power holding company in the United States. (The Duke Endowment and Duke Energy are based in Charlotte and were both founded by James B. Duke, but they are separate organizations.)

Each entity had a role. Duke Energy conducted energy assessments at the hospitals, and covered 50 percent of each assessment’s cost. The company also agreed to analyze the findings, evaluate the savings and help the hospitals learn about incentive programs.

The hospitals were responsible for providing documents for the assessments and for funding 10 percent of the assessment’s cost. They also provided significant staff time and agreed to submit ongoing energy performance monitoring for evaluation.

The Endowment helped the hospitals with the assessment and provided $50,000 in grants to each facility for implementing improvements.

The audit created “an opportunity to look at our bills, our facility and our equipment,” says Bill James, Northern’s CEO. “We don’t have the opportunity to shut the lights out everywhere or cut the heat down and go home on the weekends. We’re always open, and that makes a difference in terms of our energy use. This gave us concrete recommendations on ways to save.”

‘Win-Win for Everyone’

At each hospital, the audit identified several relatively simple projects that would have immediate impact.

At Northern, crews retrofitted older fluorescent light fixtures, called T12s. Experts estimate that the new fixtures—called Super T8 lamps—will reduce energy usage by 20 to 30 percent.

The audit at Hugh Chatham also led to a light fixture conversion project, expected to save nearly $80,000 annually.

At Transylvania, the audit identified an aging air handling unit as the best opportunity for energy savings. The replacement project is underway, with expected energy costs savings of nearly $11,000 a year. Transylvania also retrofitted older fluorescent fixtures.

“Small and rural hospitals have had significant challenges in meeting operating budgets and being able to reinvest in facilities and equipment,” says Bob Bednarek, Transylvania’s CEO. “The exciting part of this project is that it delivers immediate capital, it helps us save dollars by becoming more efficient, and it helps the environment. It’s a win-win for everyone.”

David Loving, Hugh Chatham’s CEO, agrees. “We have to be smart for all the right reasons,” he says. “We want to do right by the environment—but we also know that in health care, the market is demanding more quality and efficiency at lower costs. We have to be innovative about looking at all of our expenses.”

Next Steps

Leaders at each hospital say the pilot provided a starting point in important, long-term efforts.

At Northern, for example, crews plan to upgrade air handling motors with new variable speed drives and replace old black roofing with more energy efficient white roofing. Next up at Hugh Chatham: Installing a new pump system for a heated therapy pool built in 2001.

The Endowment plans to continue working with Duke Energy to monitor results from the pilot. Leaders say the bottom line is to help hospitals in the Carolinas use their resources efficiently and provide the best care for patients.

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Lin B. Hollowell III
Director of Health Care
704.969.2132

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