Johnson Controls central energy plant strategy enables expansion of the Children’s Hospital of Alabama
Hospital protects its capital
budget and debt capacity through third party ownership of plant while
efficiently producing heating and cooling
Birmingham, Ala. – (December 9, 2010) – To enhance the construction of
a 740,000-square-foot state of the art expansion, the Children’s
Hospital of Alabama implemented an innovative financing and
construction solution to address its growing utility needs. Johnson
Controls, the global leader in delivering products, services and
solutions that increase energy efficiency in buildings, worked with
Children’s to build, manage and maintain a new central energy plant
adjacent to the facility. The strategy will help Children’s save an
estimated 10 to 12 percent in projected life cycle cost, preserve
capital, and improve predictability of utility expenses. It will also
play a role in the hospital’s efforts to become the first hospital in
Alabama to attain LEED certification.
Located in Birmingham, Children’s is the only hospital in Alabama
dedicated solely to pediatric care and home to the state’s only Level I
pediatric trauma center. In 2004, the hospital purchased three square
blocks adjacent to its existing hospital to enable its expansion,
slated to open in 2012, and meet increasing energy needs.
“We considered building the utility plant ourselves, but did not want
to direct capital dollars towards an additional construction project on
top of our ongoing expansion,” said Mike McDevitt, executive vice
president, Children’s Hospital. “We realized that instead of becoming
our own utility provider, we should look at heating and cooling service
as a commodity, and purchase it from an efficient energy provider.”
Third party ownership of the plant enabled Children’s to avoid a $35
million initial capital investment in first construction costs and move
forward with construction of the state-of-the-art expansion, while
protecting the hospital’s bond rating and debt capacity.
After a rigorous research process, Children’s selected Johnson Controls
to develop a strategy to build, own, operate and maintain the central
energy plant. The plant’s design was developed through collaboration
between Johnson Controls and other mechanical, electrical and plumbing
firms to maximize efficiency throughout its lifecycle.
Upon completion of the plant’s construction, a utility services
agreement provides financial predictability throughout construction and
ongoing maintenance while guaranteeing levels of energy efficiency,
uptime and plant performance. Through the application of best practices
in automation and a technical approach to cogeneration, Johnson
Controls estimated that it could generate the needed energy utilities
at a significantly lower energy cost.
Children’s worked with the city of Birmingham to form a Government
Utilities Services Corporation to secure tax-exempt financing for the
plant’s construction while minimizing costs of construction materials.
The new central plant will also provide thermal energy on a
supplemental basis to the new University of Alabama at Birmingham (UAB)
Women & Infants Center. This relationship will improve the
reliability and cost effectiveness of central plant services to both
Children's and UAB.
many industries, it’s common for a third party to provide cooling and
heating utility services,” said Richard Smith, director, energy
solutions healthcare, Johnson Controls. “We worked with the hospital's
administrators to develop a plan that would reduce their initial
capital investment while increasing long term operational efficiencies.”
“The margin of savings allows us to
redirect funding to resources that help us provide better care to our
patients and their families. That’s our top priority,” said McDevitt.
About Children’s Hospital
The Children’s Hospital of Alabama
is the 10th busiest pediatric medical center in the United States.
Located in Birmingham, Children’s is one of only about 45 freestanding
acute care hospitals of its kind in the nation and the only hospital in
Alabama dedicated solely to the care and treatment of children. It is
licensed for 275 beds. Children’s is a private, not-for-profit hospital
governed by a volunteer board of trustees. The hospital was recently
recognized for the excellence of its nursing care by achieving Magnet
designation from the American Nurses Credentialing Center. Children’s
will celebrate its centennial anniversary in 2011. For more
information, visit www.chsys.org.
About Johnson Controls
Johnson Controls is a global
diversified technology and industrial leader serving customers in over
150 countries. Our 130,000 employees create quality products, services
and solutions to optimize energy and operational efficiencies of
buildings; lead-acid automotive batteries and advanced batteries for
hybrid and electric vehicles; and interior systems for automobiles. Our
commitment to sustainability dates back to our roots in 1885, with the
invention of the first electric room thermostat. Through our growth
strategies and by increasing market share we are committed to
delivering value to shareholders and making our customers successful.
About Johnson Controls Building Efficiency
Johnson Controls Building Efficiency
is a leading provider of equipment, controls and services for heating,
ventilating, air-conditioning, refrigeration and security systems for
buildings. Operating from 500 branch offices in 150 countries, we
deliver products, services and solutions that increase energy
efficiency and lower operating costs for over one million customers. We
are involved in more than 500 renewable energy projects including
solar, wind and geothermal technologies. Our solutions have reduced
carbon dioxide emissions by 13.6 million metric tons and generated
savings of $7.5 billion since 2000. Many of the world’s largest
companies rely on us to manage 1.5 billion square feet of their
commercial real estate.
Visit http://www.johnsoncontrols.com for more information.
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