Electric Returns

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Electrical utility deregulation has transformed something hospitals used to do simply as good corporate citizens into a money-making opportunity. Selling excess power back to your local utility during peak power usage times may not buy you that new CT scanner, but it can provide valuable cash back to the operations budget with minimal sacrifice.

Companies like New York-based ConsumerPowerline help large electric consumers, including corporate headquarters, manufacturing facilities and hospitals, manage their energy needs so that the local utility can count on power usage cutbacks on high-peak days, such as during this past summer’s July heat wave that saw several days near 100 degrees as far north as New England. ConsumerPowerline client New York Presbyterian Hospital volunteers to enact certain power-saving measures on such days, including switching to steam power to run HVAC units or shutting down excess banks of elevators or escalators in return for cash payments. Some hospitals avoid any shutdowns in such large appliances by using backup generator power, although NYP does not. In return, such customers can get handsome payouts, according to Jennifer Kearney, director of energy programs at NYP. Kearney declined to provide a figure except to say that annual payments for so-called “demand-response events” can equal up to 2.5 percent of her energy budget, depending on weather patterns.

“We’re put on alert by the state any time there is a projection of consecutive days of 90 degrees plus,” she says. “It’s an important contribution to avoid a blackout in our area.”

Although Kearney stresses that the hospital participated voluntarily for no remuneration in a similar plan through local utility Con Edison before deregulation, she concedes that the program does help fund some of her department’s extra needs.

Demand-response programs in some form exist in most regions, says Chelle Ii, director of asset services at ConsumerPowerline, but certain areas, like New England, the New York City area, sections of the mid-Atlantic states, the Midwest and California offer payments to large consumers who commit to cutbacks on peak days.

“It’s the way the markets are deregulating,” she says. “The markets with the largest energy constraints are the ones looking at this first.”

Kearney says hospitals can help the power grid significantly during peak times and have a responsibility to do so. Her department has become more conscious of power conservation, and her team has done multiple evaluations “on where we can cut back without posing any risk to patient comfort and safety,” she says. “Energy conservation comes third.”

—Philip Betbeze




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