STRATEGIC ENERGY MANAGEMENT PLAN ENGLEHART AND DISTRICT HOSPITAL

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1 STRATEGIC ENERGY MANAGEMENT PLAN ENGLEHART AND DISTRICT HOSPITAL TABLE OF CONTENTS Introduction Energy Management Vision Guiding Principles for Energy Management Business Case for Strategic Energy Management Business Proposition Energy Management Goals and Objectives Timeline and Responsibilities for Plan Adoption and Implementation Introduction The purpose of Englehart and District Hospital s energy management plan is to promote good stewardship of our environment and community resources. In keeping with our core values of accountability, Englehart and District Hospital s energy management program will strive to reduce operating costs and enable us to provide compassionate services to our community. Utility and energy related costs are a significant part of EDH s overall operating budget Utility costs in 2011 were $103, The Hospital s Energy Use Index (EUI) was 68, ekwh/ft 2 With energy management an integral part of business decisions, Englehart and District Hospital strives to: Promote energy saving reinvestments with a 5 year return Promote conservation Promote green technologies where applicable Promote internal knowledge of energy consumption and environmental impact Strategic Energy Management Plan Page 1 of 5

2 Recent activity associated with managing these costs include the following Roof replacement with increase to insulation R value Boiler Replacement increased efficiency rating Replacement of pipe insulate in boiler room with higher R value Retro fitting of all internal fluorescent light fixtures Replacement of 4 water fed AC units to closed loop coolant type Heat recovery system use of boiler exhaust to preheat domestic hot water Upgrade of building control Computer based monitoring Exterior lighting retrofit pilot project To further strengthen and obtain full value from energy management activities, a strategic approach will be taken: the organization will fully integrated energy management into its business decision-making. Active management of energy related costs and risks in this manner provide an economic return to the organization and will support other key organizational objectives. Energy Management Vision We consider our facilities to be a leader in Quality health care services, an innovative and valued partner in our community, and key to this is the ability to use our resources with accountability. Guiding Principles for Strategic Energy Management Englehart and District Hospital s energy management will be guided by these principles: Taking A Strategic Approach: While Englehart and District Hospital actively manages energy costs by implementing opportunities as they are identified, by acting strategically, Englehart and District Hospital will strive to improve its energy-related performance. Internalizing energy management into our organization s every-day decision-making operation, it will help assure substantial and long-lasting conservation of energy use throughout Englehart and District Hospital. Supporting Mission-Critical Goals: Strategic energy management will directly support Englehart and District Hospital s goals of caring for the environment and the community; optimizing the healing and working environment; improving the hospital s financial bottom line by reducing unnecessary energy costs; optimizing the capacity of existing energy systems to meet current and expanding operational needs. Pursuing Long-Term Change to Core Business Practices: The core of our strategic approach is the consistent incorporation of energy management into our organization s core practices and decision making such as the strategic planning and budgeting processes. Change in energyrelated business practice will cover all applications of energy management new construction and major renovations, existing facility operations and upgrades, and the economic analysis and procurement practices underlying these practices. Fostering Organizational Commitment and Involvement: Executive and organizational commitment and involvement is critical to successful strategic energy management. Top management at Englehart and District Hospital will work with the Senior Director of Operations Strategic Energy Management Plan Page 2 of 5

3 and other key staff to ensure that adequate organizational support and resources are provided to maximize the benefits of energy management. Obtaining Solid Economic Returns: Energy management investments will yield solid economic returns that meet Englehart and District Hospital s standard internal rate of return (IRR) requirements which are applied through the hospital s capital budgeting process. Englehart and District Hospital will apply consistent financial analysis methods that consider life-cycle to reduce total cost of facility ownership and operation. Using Available Resources and Assistance: Use national, regional, and local sources of strategic, technical, and financial assistance to help achieve our energy management goals. These include utilities, government, Canadian HealthCare Engineering Society, Canadian Coalition of Green Health Care and HealthCare Energy Leaders Ontario. The Business Case for Strategic Energy Management Below are the central business arguments for Englehart District Hospital s pursuit of strategic energy management. Strengthened Community Leadership and Environmental Stewardship Energy management is a visible, public commitment to the community and environment. Through aggressive energy management, the hospital can provide leadership in promoting sustainable communities, efficient business practices, and environmental stewardship. Enhanced Healing and Working Environment In existing facilities, efficient operating practices improve patient as well as employee comfort with more stable air temperature, and better indoor air quality and lighting. In new facilities more daylight and personal control of comfort contribute to a healing and patient-focused environment, and an improved working environment. Recent research has found that daylight eases surgical pain and contributes to substantial savings in pharmacy costs. Improved Financial Health and Operating Cost Reduction Strategic energy management presents a highly leveraged opportunity to reduce operating costs and positively impact Englehart and District Hospital s bottom line. Dollars of operating cost savings directly improve the operating margin. Optimization of Capacity to Meet Current and Expanding Operational Needs Energy efficiency optimizes inefficient or poorly designed and operated equipment/systems so wasted energy system capacity can be reclaimed for current and expanding operational needs. This free capacity can eliminate the need to add major new energy capacity and be much less expensive. Business Proposition With energy management considerations as an integral and relevant business practice and decision-making process, Englehart and District Hospital s energy-related costs for heating can be reduced by 24.38% over a 5-year period. (based on energy savings as a result of building envelop enhancements, at current market rate for natural gas). Based on 2013 natural gas utility rates, this will result in $7, in annual value to the bottom line, or a total $39,630 over a 5-year period. Integration of energy management into organizational Strategic Energy Management Plan Page 3 of 5

4 decision making and business practices will continue to produce value annually for a much longer period of time. Based on average 50% utilization per year (note that currently municipal water metering is not in place) it is proposed to reduce water consumption by approximately 13,816 litres per year. This can be achieved as a result of removal / upgrading of remaining water fed AC cooling units. (dependent on ministry infrastructure funding allocation) Energy Management Goals Implement Financial Practices and Decision Making Processes; Review Funding Resources Implement Strategic Energy Management Practices Instill Purchasing/Procurement Procedures and Specifications to enhance energy management Enhanced Design & Construction Practices Enhanced Facility Operating Practices Cost-Effective Facility Upgrades Active Commodity Management Monitoring, Track, with Goal to Improve Performance Goal: Approval, Resources to Implement Executive approval and resources. Support from key staff (financial management, purchasing/procurement, construction, building operations, etc.). Continue to review mechanisms/processes to make resources available. Review and communicate to staff roles and responsibilities for energy management. Goal: Implement Financial Practices and Decision Making Processes Money spent to achieve energy efficiency is viewed as an investment, not a cost. Financial decision makers will consistently use life cycle cost analysis (LCCA) on all new construction, major renovations, and equipment replacements over $5,000. Internal rate of return (IRR) will be calculated to qualify approval. Train staff on IRR and financial requirements and decision making process. Decisions about energy management investments will be part of Englehart and District Hospital s high-level, long range process of budgeting for capital and operations. Goal: Purchasing Specifications for Energy Efficient Equipment and Services Consistently use purchasing specifications that minimize life-cycle costs for energy efficient equipment and services. Refer to industry best practices for efficiency specifications for standard equipment routinely replaced (e.g. lights, motors, and unitary HVAC equipment). Refer to industry best practices guidelines that apply LCCA / IRR for custom equipment purchases (e.g. chillers). Refer to best practices for efficiency standards for design and construction, and for building operations and maintenance services. Strategic Energy Management Plan Page 4 of 5

5 Goal: Improve Building Operating Performance Continue to work with contracted building services for equipment tune-up and improved operations and maintenance (O&M) to achieve efficiencies while supporting patient care, and facility comfort and safety. Goal: Implement Cost-Effective Facility Upgrades Implement equipment and system upgrades where justified by life-cycle cost analysis. (dependent on funding allocation) Goal: Actively Manage Energy Commodity Minimize utility costs and exposure to market risks. Utility costs include natural gas, electricity, water, and sewer. Participate in the energy/utility regulatory process. Goal: Monitor, Track, and Reward Progress Track energy consumptions, monthly and annually. Establish base line averages in order to strive to increase efficiencies. Timeline and Responsibilities for Plan Adoption and Implementation Plan development and adoption by Senior team April June 2014 Implementation July 1, 2014 Plan will be update on fifth anniversary, with review process commencing in March Strategic Energy Management Plan Page 5 of 5

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