When Bill Miller, director of strategic initiatives at HealthTrust’s inSight Advisory Services–Energy, recently called Robert Mulcahy, vice president of facilities, operations and support services at Saint Peter’s University Hospital, the conversation did not go as expected. Miller hoped to help Saint Peter’s procure energy, increase efficiency and decrease costs. Miller asked Mulcahy what he always asks HealthTrust members during initial consultations: Do you have on-site solar? Have you implemented energy-saving measures at the hospital? Do you have an energy procurement plan for the next 12 months?
“Robert was the first person who said ‘yes’ to his facility already doing all three,” Miller says. During his tenure at Saint Peter’s, Mulcahy has turned the hospital into a sustainable energy leader. When Miller called Mulcahy more than five years ago, the New Brunswick, New Jersey-based hospital had already installed solar panels across four campuses. They had retrofitted boilers with high-efficiency burners and purchased a new computerized building management program to control heating and air. They had also replaced regular bulbs with LED lighting.
Miller quickly realized that Saint Peter’s didn’t need convincing to pursue energy efficiency; they needed support for projects that were already underway. Together, Miller and Mulcahy designed a plan that would optimize Saint Peter’s established initiatives and make the hospital even more sustainable.
HealthTrust’s inSight Advisory Services–Energy consultants help members purchase energy. As Miller explains, energy contracts are not one-size-fits-all.
“We come up with the most optimal way to contract so that a member doesn’t overbuy or underbuy,” he says. Because Saint Peter’s used energy-efficient hospital equipment and solar panels, the hospital was at risk for overbuying power. Mulcahy also planned to install on-site generation, which would require more natural gas but less electricity. Miller adds, “To give Robert the flexibility he needed, we advised him on how to enter into contracts so he could buy energy on the open market.”
Identifying a better contract for purchasing gas and electricity cut Saint Peter’s already-reduced energy costs. Miller and his team also identified peak usage times and advised Saint Peter’s to curb usage at certain hours, reducing the hospital’s reliance on the grid. “The relationship with HealthTrust has helped us maximize everything we could,” Mulcahy notes. “We’ve made the most of our return on investment because of Bill’s expertise.”
Today, Saint Peter’s and HealthTrust continue their dynamic partnership. HealthTrust continues to monitor Saint Peter’s solar system to ensure energy goals are reached. “We make certain nothing falls through the cracks and that everything is operating as we expect it to,” Miller adds. When Saint Peter’s electricity contract expires, HealthTrust will help the hospital reevaluate its needs and purchase wisely.
Since that first phone call, Saint Peter’s and HealthTrust have collaborated to implement further conservation measures, negotiate optimal energy contracts and build resilience against catastrophic events. With funds from the state of New Jersey’s Energy Resilience Bank, the hospital recently installed a combined heat and power (CHP) system. The system went online in August 2018 and is slated to save over $1 million annually.
“We’re the first hospital in New Jersey to have the source up and running,” Mulcahy says. In the event of another disaster like Hurricane Sandy that affected the hospital, the CHP system allows Saint Peter’s to run completely off the grid.
“Saint Peter’s was so far out in front of everybody getting incentives and rebates from utility and equipment companies,” Miller adds. “We want every HealthTrust member to be forward-thinking and realize there’s so much money sitting out there.”
By taking advantage of state and federal incentive programs like the Energy Resilience Bank, along with consultation from inSight Advisory Services–Energy, Saint Peter’s has implemented more than $20 million worth of projects with minimal capital outlay.
“Saint Peter’s has a new heart—in terms of infrastructure—that is very efficient,” Mulcahy says. “We don’t have to lay out capital for the future; we can save it instead for clinical needs.” In other words, instead of paying for gas and electricity to keep the hospital running, Saint Peter’s can direct funds toward life-saving innovations.
The results of such forward-thinking practices speak for themselves. Back in 2011, Saint Peter’s utility costs topped $7.5 million a year. Today the hospital’s projected annual budget is $3.5 million—a $4 million savings every year.
For Mulcahy, the savings are satisfying, but he’s even more excited about the impact these energy efficiency measures have on the local community.
Mulcahy adds, “We deliver 5,500 babies here a year, and those children are going into a cleaner environment that we helped establish for this community. I’m proud to say Saint Peter’s is doing its part.”