American Recovery and Reinvestment Act Can Fund Hospital Efficiency Improvements

Earlier this year, the American Hospital Association reported that 45% of hospitals were delaying the purchase of equipment due to the economic meltdown that had raised the cost of borrowing by 15%. Potential purchases of energy efficient equipment may have been put on hold by the frozen credit market, but the federal government is hoping to restore those purchases through the economic stimulus funds from the American Recovery and Reinvestment Act (ARRA). With billions of dollars now going to the state and local governments, your opportunity to acquire state-of-the-art efficiency technology has never been better. How do you find those stimulus dollars and what can you do to best position yourself (and your hospital) to meet the requirements?

State Energy Program Funds

There are two streams of money that hospitals can potentially tap into for energy efficiency improvements. The first is called State Energy Program (SEP) funds which the Department of Energy (DOE) made available to all states and territories in August. The $3.1 billion fund was allocated to 56 states and territories based partly on population and energy consumption. To see how much State Energy Program money was allocated to your state, visit http://apps1.eere.energy.gov/state_energy_program/recovery_act.cfm.

States will use this money to lower energy use, reduce carbon pollution, and create green jobs locally—and they have wide latitude on how to spend it. Some states will fund projects to upgrade publicly owned buildings, start revolving loan funds and energy saving performance contracting, or offer rebates for the purchase of ENERGY STAR qualified products. Other states will help commercial buildings improve energy efficiency by subsidizing the purchase of equipment and may target specific sectors like healthcare or schools. To find out if your state offers efficiency funding for public, non-profit, or private sector facilities, visit your state energy office website. A listing of all state energy offices can be found at http://www.naseo.org/members/states/default.aspx.

Energy Efficiency Community Block Grant Funds

The second stream of funds that hospitals may be able to use are Energy Efficiency Community Block Grants (EECBG). U.S. States, territories, local governments, and Indian tribes received over $2.7 billion in formula grants which were apportioned in a similar way as the SEP funds. At least 60% of each state's award will be passed through to local cities and counties. As of this writing, more than $354 million in funding was awarded to 22 states to support energy efficiency and conservation activities. The remaining states may already be funded by the time this story goes to print. To see how much EECBG money was allocated to your city, county, or tribe, visit http://www.eecbg.energy.gov/.

State and local governments will use the community block grant monies to fund local priorities including building audits and retrofits; installation of distributed energy technologies like combined heat and power and district heating and cooling systems; upgrades to traffic signals and streetlights; implementation and enforcement of advanced building codes; and installation of renewable energy technologies on government buildings. Check with your municipal government for details now, since many governments will have short windows of opportunity in which to apply for funds.

Eligible projects

Examples of energy efficiency and conservation projects that are eligible for both types of funding include the development of an energy efficiency and conservation strategy, energy efficiency audits and retrofits, and the creation of financial incentive programs for energy efficiency improvements, among others.

Use Portfolio Manager to Verify and Document Results

Transparency and accountability are important for all Recovery Act projects. DOE has obligated state and local governments to report all energy use and greenhouse gas reduction results. In turn, these governments are passing those requirements on to potential grant applicants by asking for metrics like energy use intensity, energy efficiency improvement over a baseline, and greenhouse gas emissions associated with building energy use.

That’s good news to the more than 2,600 hospitals (representing 76% of the acute care market) that are already using Portfolio Manager, the U.S. Environmental Protection Agency’s (EPA) online energy tracking tool. Portfolio Manager automatically generates these metrics whenever energy consumption data is updated. Many state and local governments—including Iowa, Pennsylvania, New Mexico, Utah, and New York—are explicitly requiring the use of Portfolio Manager in their applications.

If you are considering applying for ARRA funding but have not yet opened a free account within Portfolio Manager, visit www.energystar.gov/businesstraining. Listen to either the 90 minute pre-recorded session entitled, “Healthcare: Rating Energy Performance Using EPA’s Portfolio Manager” or register for a live training under the same name. Then set up your private account at www.energystar.gov/benchmark.

If you have not kept your facility’s account current with recent energy consumption data, now is the time to update your account. You will need to benchmark before and after completion of any ARRA-funded energy efficiency upgrades. If you have forgotten your Portfolio Manager password, email buildings@energystar.gov for instructions.

Towards a Sustainable 21st Century

In the face of an economic crisis, the magnitude of which we have not seen since the Great Depression, the American Recovery and Reinvestment Act represents a strategic—and significant—investment in our country’s future. The Act will save and create three to four million jobs—90 percent of them in the private sector. It will provide more than $150 billion to low-income and vulnerable households, spurring increased economic activity that will save and create more than one million jobs. The Act includes measures to modernize the nation's infrastructure, enhance America's energy independence, expand educational opportunities, increase access to health care, provide tax relief, and protect those in greatest need. These measures are necessary to help the millions of families whose lives have been upended by the economic crisis. But, this Act will do more than provide short-term stimulus. By modernizing our health care, improving our schools, and investing in the clean energy technologies of the future, the Act will lay the foundation for a robust and sustainable 21st century economy.