Douglas County Hospital officials last week announced a plan to completely revamp the facility's aging main building.
They say that over time it will save millions of dollars - guaranteed.
On January 20, county commissioners approved a contract between DCH and Johnson Controls, Inc., a Milwaukee-based firm specializing in improving building efficiency, for $1.43 million to upgrade and replace the hospital's inefficient, decades-old mechanical and electrical systems.
The company guarantees that the renovation project will reduce DCH's future energy use by 20 percent to 25 percent, saving the hospital at least $2.58 million over the next 15 years.
"That was the key thing that got me going," said Randy Anderson, DCH director of engineering. "With energy costs the way they are right now, any energy improvements we can do are not only good for us but also good for the environment."
Johnson Controls estimates the improvements, which include more efficient lighting and water fixtures, will help the hospital reduce its greenhouse gas emissions by 1,500 tons per year, which is like removing 277 cars from the road.
Nate Meyer, DCH chief financial officer, said with the schedule laid out by Johnson, the hospital can expect to start saving money in the first year following the installation of the building upgrades.
He said the company sets up target amounts for each year of the plan that DCH is guaranteed to save.
"If they don't meet those savings," Meyer said, "they'll write us a check."
On top of the guaranteed savings, hospital officials estimate that replacing the old systems with new, efficient equipment will likely save an additional $1.36 million in future operations and maintenance costs.
"We would have had to do a lot of [improvements] on our own anyway," Anderson said. "So having energy [savings] pay for it is a win-win for both sides."
Meyer said given the current economic climate, improving its overall energy efficiency is probably one of the best investments the hospital can make right now.
He said other traditional investments, such as bonds or U.S. treasury bills, aren't yielding strong returns, due to the weakened economy.
"Johnson Controls has said this is one of the best paybacks of any site they have done," Meyer said.