Cogeneration: A northwest medical facility`s answer to the uncertainties of deregulation

Not so long ago, in the good old days, the energy supply to a health care facility was one of the most stable. The local utility provided what was needed at a reasonable cost. Now the energy industry is being deregulated. Major uncertainties exist in all parts of the energy industry. Since reasonably priced and readily available energy is mandatory for a health care facility operation, the energy industry uncertainties reverberate through the health care industry. This article reviews how the uncertainty of electric utility deregulation was converted to an opportunity to implement the ultimate energy conservation project--cogeneration. The project development was made essentially risk free by tailoring project development to deregulation. Costs and financial exposure were minimized by taking numerous small steps in sequence. Valley Medical Center, by persevering with the development of a cogeneration plant, has been able to reduce its energy costs and more importantly, stabilize its energy supply and costs for many years to come. This article reviews activities in two arenas, internal project development and external energy industry developments, by periodically updating each arena and showing how external developments affected the project.