Energy Efficiency Programs Benefit New Jersey Hospitals

State's biggest utility is pushing customers that use large amounts of energy to cut costs by conserving gas and electricity

Raritan Bay Medical Center
As a top hospital executive at Raritan Bay Medical Center, Vince Costantino had a long list of items backing up on his capital budget to-do list: a new roof for one of its buildings, replacement windows, new cooling towers, and on and on.

“There were a number of items on our capital list, but due to financial constraints, we were unable to pull the trigger,” recalled the hospital’s chief operating officer. Until, at least, Public Service Electric & Gas (PSE&G) came along.

With the backing of the state’s biggest electric and gas utility, Raritan Bay was able to launch a $3.4 million project, which has helped cut electric bills at its Perth Amboy facility by $300,000 to $400,000 a year.

“This initiative is a real success for us,” Costantino said. “It was the first time I ever heard my financial officer say where do I sign after just five minutes.”

PSE&G is aggressively pushing its customers, particularly those who use large amounts of energy, to take steps to use the gas and electricity they need more efficiently, spending more than $240 million on energy efficiency projects in the past couple of years. The utility says the effort has trimmed customers’ bills by $31 million.

20 by 2020

With the state seeking to cut energy consumption by 20 percent by 2020, many observers say it will never achieve that goal unless New Jersey utilities buy into the effort. Besides cutting energy use and reducing greenhouse gas emissions, advocates say the program stimulates the economy by creating jobs for contractors to retrofit lighting, space heating and other work.

Perhaps no sector has benefitted as much as New Jersey’s cash-strapped hospitals. Nineteen hospitals are enrolled in the program and more will be if the state Board of Public Utilities (BPU) approves a $105.2 million petition by PSE&G to expand its energy efficiency efforts. The utility wants to set aside $50 million of that money for hospital projects, with nearly two dozen medical centers waiting to participate in the program, officials said.

“Hospitals are strapped for funds, very much so,” said Al Matos, vice president of renewable energy and energy solutions for the utility. “We’re trying to make it very easy for hospitals to get this work done,” he said.

Nine Conservation Projects

At Raritan Bay, a 276-bed facility, the money provided to the hospital funded nine separate conservation projects, including the replacement of extremely inefficient cooling towers, which are used to chill water for heating and air conditioning. Replacing the tower alone would have cost as much $900,000, Costantino said.

Other projects followed. The medical center reduced the size of fluorescent lighting in corridors, replaced all of its exit lighting, installed higher efficiency motors on equipment, and put in new windows, among other things. The project was financed by a PSE&G grant and an-interest free loan paid back by the facility on its electric bill over a 36-month period.

Similar projects realized savings for other medical facilities. At Our Lady of Lourdes Medical Center in Camden, a $1.6 million energy efficiency program has produced an energy savings of $217,000 for the facility, according to Joe Evans, director of facility management. “It’s going to save us a lot of money,” Evans said.

The utility is helping others cut their energy use, such as nonprofit organizations. The Community FoodBank of New Jersey is expecting to save approximately $37,000 a year in electric costs following an energy efficiency project at its 280,000-square-foot warehouse in Hillside, a former manufacturing plant with the original 40-year-old lighting fixtures, according to Anthony Guido, a spokesman for the organization.

In that effort, incandescent bulbs were replaced with compact fluorescent lamps. And standard wall switches in offices, closets and other areas were swapped out for occupancy sensors so lights are not on when the room is empty.

If the utility’s current petition is approved by the state agency, it will set aside $50 million for hospital energy efficiency projects, $20 million to help multifamily units reduce energy use, and $25 million to municipal governments to reduce energy consumption. The utility hopes to have a decision on its proposal by August, according to Matos.

The impact on ratepayers is expected to be minimal, boosting the typical electric bill by 96 cents a year and an average gas bill by $1.08, according to the utility’s filing with the agency.

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