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BPU weighs expansion of hospital energy efficiency effort

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As the Board of Public Utilities discusses whether to expand its hospital energy efficiency program, one New Brunswick hospital is thankful for the help the program provided.

Robert Mulcahy, vice president of facilities for St. Peter's University Hospital, said the program allowed the hospital to undertake a $4.8 million upgrade project with no capital outlays.

"The challenging part for a hospital is you need to invest in medical equipment, and when capital is allocated, that's usually where it goes," Mulcahy said. "We never really have enough money to do it as aggressively to the level that we did."

The hospital upgraded its existing water chillers and piping to make the air conditioning system more efficient, which Mulcahy said enhances patients' comfort, in addition to scaling back energy bills.

The final phase of the project is to replace boiler burners, which is going on now. The new burners will be more efficient and reduce pollution and reliance on oil. Mulcahy said the hospital anticipates a savings of more than $500,000 in energy costs. The project began near the end of 2010.

The program offers an investment grade audit of energy systems for free. If the hospital qualifies, it can apply for upgrade projects that can reach its initial costs in savings in fewer than 15 years. The BPU pays the first seven years of costs, then spreads two more years of payments out through the hospital's energy bills.

If the project reaches savings equal to initial costs within nine years, the hospital does not lay out any capital, and sees positive cash flows by the ninth year. Mulcahy said nearly all of St. Peter's projects fell into a nine-year plan.

An unexpected perk, Mulcahy said, is the number of workers on the project who have expressed to him gratefulness for the job opportunity.

"It really hits home," Mulcahy said.


On Friday, the BPU did approve expansion of the hospital efficiency program, which is run by PSE&G, by $50 million. PSE&G spokesman Fran Sullivan said the company currently has 19 hospitals enrolled in the program that have received $79 million in upgrades, and will start to enroll additional hospitals in the near future.

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