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A Case Study of a Healthcare Energy Infrastructure Project: Ochsner Medical Center 

02-28-2019 17:49

Summary

Ochsner Health Systems is Louisiana’s largest non-profit, academic healthcare system. Ochsner provides coordinated clinical and hospital patient care through 29 hospitals and 80 health centers and urgent care centers throughout Louisiana and conducts more than 600 clinical research studies. Oschner is recognized by US News & World Report as among one of the top hospitals in the nation. Like many hospitals, Ochsner’s facility management staff face a multitude of challenges: operational risks, on-going deferred maintenance issues, aging infrastructure, rising energy and operational costs, and shrinking facilities budgets. Investment in new construction is more appealing and is often pursued over facility retro-fit or infrastructure upgrade projects. As infrastructure continues to age, facilities continue searching for cost-effective solution to these on-going challenges. In 2017, Ochsner Medical Center, the main campus of Ochsner Health System in New Orleans, Louisiana, entered into a 15-year energy management agreement designed to address these challenges.The agreement is structured as a Concession through which Bernhard, the Concessionaire, obtained a right to use Ochsner’s energy infrastructure assets in exchange for the design and construction of infrastructure upgrades; an efficiency guarantee; assumption of operational and maintenance risks; and the obligation to provide chilled water and steam services to Ochsner through a Thermal Services Agreement for which Ochsner will compensate Bernhard on a monthly basis. Not only will the project improve performance and reliability, but it will also provide needed capacity to serve the hospital’s new, seven-story expansion of the West Tower which is currently under construction. Finally, a district energy system will be constructed to connect the hospital’s existing energy plants resulting in a total of 11,000 tons of chilled water capacity for the campus. Overall, the goal of the agreement is to achieve and sustain a 40% reduction in Ochsner’s energy consumption.The Concession Agreement provides Ochsner with a comprehensive, turnkey solution that addresses capital renewal and deferred maintenance while also gaining energy savings and operational efficiency. James Britch, System Vice President of Facilities for Ochsner Health System, will present the key challenges faced by Ochsner Medical Center and explain how those challenges and hospital leadership’s concerns informed decisions made during the development.

Session 5D: Business Models, Contracting & Financing

Speakers

Michael Durham, Bernhard
James Britsch, Ochsner Health System 


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Uploaded - 02-28-2019