Energy Efficiency Programs Help Growing Michigan Healthcare System

Spectrum Health is a not-for-profit healthcare system that provides in-patient and out-patient services at locations throughout Michigan. Spectrum Health has grown rapidly in recent years and includes nine hospitals, 190 service sites, and more than 1,900 licensed beds system-wide. Key facilities include the multi-facility Medical Center in downtown Grand Rapids, the historic Blodgett Hospital, and several community hospitals.

As part of a system-wide effort to cut costs and reduce waste, Spectrum Health has initiated an aggressive, customer-focused sustainability and energy-efficiency program. Consumers Energy programs and incentives have played a key role in helping them find energy-saving opportunities and finance projects.

Lighting Retrofit Lowers Costs and Improves Security

When upgrading the parking garage lighting at the medical center, Spectrum replaced 1,500 175-watt high-pressure sodium (HPS) lamps with 60-watt light-emitting diode (LED) fixtures. The $700,000 project provided $140,000 a year in energy savings. With $225,000 in rebates from Consumers Energy, the estimated payback for the lighting upgrade is 3.4 years. “The LED lights also have a longer life than the HPS lamps, significantly reducing maintenance costs.” according to Tom Theoret, Director of Facility Support Services at Spectrum Health. The brighter, white LED lights had the added benefit of enhancing visibility in the parking facility and improving security camera performance.

HVAC Upgrades Provide Quick Payback

Heating, ventilating, and air-conditioning (HVAC) systems are a significant energy user in healthcare facilities and a prime target for improving efficiency. Spectrum has replaced four older absorption chillers with four centrifugal units, which are smaller and more energy efficient. They also installed central chiller controls to optimize savings through automation. The $250,000 investment resulted in a three-year payback. The Blodgett Hospital was upgraded with dual-fuel boilers with a smaller capacity and with thermal energy ice storage (TES) for electric demand peak shaving. The smaller boiler size allowed facility operators to match steam capacity to demand more effectively. Energy savings from the TES device provided a quick, two-year return-on-investment for the $300,000 project.

Innovative Funding Plan Provides Financing

While energy-efficiency projects can provide substantial long-term savings, they also require an initial investment. To this end, Spectrum Health established an innovative Sustainability Fund; a $1 million revolving pool, which lends money to community hospitals for energy-efficiency upgrades. The community hospitals do not have to pay back the money, but they reap the cost-saving benefits. The Sustainability Fund is replenished from the system’s general capital fund in the amount of the savings, allowing it to grow and fund future projects. An eight member committee, including representatives from facility operations and the financial department, set guidelines and approve projects. To date, the fund has provided more than $250,000 in financing for a variety of energy-saving upgrades.

Training Increases Focus on Energy Efficiency

Spectrum Health’s rapid growth has created challenges to integrating an energy-management program, especially for the community hospitals. “Facility directors at small hospitals often have to oversee everything from safety to food service,” explains Theoret, “they may not have the time or the knowledge base to focus on energy efficiency.” To help build relationships and educate staff, Spectrum initiated a series of energy summits. Every six months, facility operators from all of the hospitals tour a different facility and talk about ways to save energy. Consumers Energy has participated in many of these sessions, presenting case studies and providing information about their rebate programs.

Innovative energy-saving concepts often come from facility staff. Recognizing this, Spectrum Health began training through the Midwest Energy Efficiency Alliance’s Building Operator Certification (BOC) program, with incentives from Consumers Energy. BOC participants learn about building systems and controls, as well as energy-conservation techniques. Classroom instruction, project assignments, and testing are part of the certification process. “We needed a way to empower our staff that are out there in the field every day and get them the knowledge they need to understand how systems work” stated Theoret. “This training has been very challenging for our staff and we hope that they will start contributing energy-saving ideas; that was the whole intention.”

Going Forward

Spectrum Health plans to build upon their initial success by looking for new ways to save energy and reduce costs. Upgrading chillers and boilers in community hospitals will be a top priority, as well as establishing a predictive maintenance program using infrared cameras and vibration analysis. The organization is currently testing LED technology for task lighting and other applications. An energy analysis of two buildings through Consumers Energy’s building commissioning program uncovered $300,000 in energy-saving opportunities.

What advice would Theoret offer to other healthcare facilities looking to reduce energy costs? “Establish a plan for energy sustainability and work your way through it. Obtain support from upper management by building credibility. Establish a means for funding your program and leverage experts like Consumers Energy.”