Energy Strategy

Right Prescription
For Hospital System
CHICAGOThe delivery of patient The facility council comprises facil- actual experience in performing com-
care may be the primary mission in the ity managers from each hospital who petitive electric procurement work in
healthcare business, but controlling costs meet monthly to address system-wide is- other parts of the country. Siemens was
and mitigating risk in todays economy sues, explains Rohde. The strategic is- also an independent, unbiased energy
can distract even the most proficient of sue of energy is now addressed regularly procurement firm and was not an energy
caregivers. Heres how one 10-hospital and thoroughly by the council. Siemens producer or marketer.
system took a strategic approach to de- is an important player in that process be- Siemens provides five energy services
veloping an energy initiative that saves cause they serve as our advisor on all as part of the three-year contract with
more than $1 million annually in utility energy-related matters. Advocate: electric and gas procurement,
costs while enhancing the environment Initially, Advocate had eyed aggrega- load profiling, utility bill monitoring,
of care. tion for energy procurement with a local strategic energy planning, and high-level
As the largest, fully integrated healthcare association. But when energy consulting services. These ser-
healthcare delivery system in metropoli- Advocates senior management learned vices were originally projected to save
tan Chicago and one of the top 10 sys- that there might be a better way to buy Advocate approximately $500,000 each
tems in the country, Advocate Health energy competitively, they requested pro- contract year in gas and electricity costs,
Care is accustomed to developing lead- posals from five consulting companies, but generated more than twice the amount
ership initiatives. Two years ago, sens- then narrowed the field to Siemens so far.
ing impending changes in a volatile en- the only service company at the time with Additionally, the utility bill monitor-
ergy landscape, management believed
the time was right to take a more strate-
gic approach to energy and utility re-
source management and to reassess the
imminent risks and opportunities.
What Advocate had in mind was to
strengthen its position as a premier
healthcare provider, but not to become
an energy expert in a restructured en-
ergy industry. The goal was to better
manage utility resources so as to achieve
optimal savings without compromising
patient and employee comfort. Advocate
also needed assurance that its total util-
ity budget nearly $14 million annu-
ally in gas and electricity across the 10
hospital locations was being managed
professionally for all of its facilities in
the most proficient and sensible man-
ner possible, for both short and long
terms.
A key to the implementation of a new
energy initiative, according to Deborah
Rohde, vice president of facilities and
construction, was for its facility council
to address energy issues using an
outsourced, independent energy services
company which was not affiliated with
an energy supplier. This led to the ap-
pointment of Siemens Building Tech-
nologies for Advocates strategic energy CHICAGO - Advocate Lutheran General Hospital is one of 10 sites that use Siemens
program. Building Technologies to address system-wide energy issues.
ing services have validated and resolved
more than $450,000 worth of disputed
bills with local utilities resulting in a sig-
nificant amount of credit, while constant
attention and advisement regarding bill-
ing rate changes and improvements in
self-generation strategies have netted an
additional $100,000 of savings or
avoided cost.
The most valuable service in the con-
tract, Rohde points out, is the competi-
tive energy procurement for deregulated
electricity and gas, for two reasons: com-
plexity and dollar value. This is a very
complicated marketplace with factors like
pricing options and derivatives, she con-
tinues. Its like a foreign language to
the lay healthcare person who doesnt do
this every day. That is why the hospital
system outsources the intricate work such
as procurement and utility bill monitor-
ing.
In a business where we work hard to
get a 1% to 2% profit margin, energy
savings that amount to about $1 million
becomes quite significant, said Rohde.
The risk management aspect of stra-
tegic energy services is vitally important
to Advocate. Siemens job is to help man-
agement find its ideal balance between
the levels of risk they are willing to as-
sume and the resulting savings they re-
ceive. This was the surest way, Advocate
reasoned, that they can enjoy the optimal
utility cost savings every year after the
business risks are mitigated.
Rohde also emphasizes that there are
other mission-critical issues relating to
energy that transcend cost savings and risk
management. These include keeping op-
erating rooms running without interrup-
tion, improving indoor comfort levels,
and increasing the total environmental
quality of patient care. These issues re-
quire strict attention to proven, best prac-
tices and procedures for healthcare insti-
tutions.
To help develop an accurate load pro-
file for Advocate sites, Siemens installed
more than 60 meters and recorders in stra-
tegic locations throughout all of the hos-
pitals in order to capture energy usage
data. Comprehensive load profile infor-
mation was provided in a much more
timely fashion than Advocate had previ-
ously been able to obtain by its own in-
spection of monthly utility bills. The en-
gineers and operators at each location are
now e-mailed daily load profile reports
for their equipment and buildings, while
the managers and directors receive
weekly or monthly summary reports.
This tool also allows Siemens and Advo-
cate engineers to continually troubleshoot
areas of unnecessary energy usage dur-
ing high-cost peak periods, such as the
one caused by the housekeeping staff at
one hospital recharging battery-operated
equipment while they went to lunch.
Load prof iling helped us identify
anomalies in our hospital operations that
we would have never uncovered under
normal circumstances, adds Rohde. We
were able to investigate these situations
with accurate information and take cor-
rective actions.
In addition, the benchmarking of load
profile information among all hospitals
gives rise to more collaborative discus-
sions among facility directors in deter-
mining why they are using more or less
energy per square foot. Such discussions
encourage discovery of more opportuni-
ties for energy conservation within the
system.

Photography courtesy Advocate Health Care

Three of Advocate Health Cares 10 Chicago sites. Left photo is Advocate Christ Medical Center.
Upper right is Advocate Good Samaritan Hospital and lower right is Advocate Good Shepherd Hospital.

Copyright 2003, American Society of Heating, Refrigerating & Air-Conditioning Engineers, Inc., 1791 Tullie Circle NE, Atlanta, GA 30329.
Reprinted by permission from the January 27, 2003 Issue of ASHRAE Journals Official Show Daily.