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February 24, 2015

Kaiser Permanente makes biggest clean energy buy in health care

Daily Briefing

    Kaiser Permanente, which operates nearly 40 hospitals and hundreds of health care clinics nationwide, last week announced that it signed three contracts to purchase electricity from wind- and sun-powered electricity plants to reduce carbon emissions at its health care facilities.

    According to Rame Hemstreet, Kaiser's chief energy officer, "Climate change is also a health issue [and] the health impacts are already being experienced by our communities, our members."

    Going green: The first step to becoming a more sustainable hospital

    Specifically, the health giant will install 100 rooftop solar panels at its hospital, parking facilities, and medical offices, which it says will decrease carbon emissions by 30%. It also signed a 20-year power purchase agreement buy 43 megawatts of electricity from a new wind farm at a Southern California solar plant known as Altamont Pass. Florida-based NextEra Energy will use funding from the contract to replace 700 wind turbines at the Altamont facility with newer models.

    Kaiser has also inked an additional deal with NextEra to buy 110 megawatts from Blythe solar plant in Riverside County, California.

    In a third deal made with NRG Energy, based in New Jersey and Texas, the system will install solar arrays both in the ground and on rooftops of more than 170 health care facilitates in California. The deal should bring about 70 megawatts overall for Kaiser real estate statewide.

    Altogether, the health system expects to purchase enough solar and wind power to supply about 50% of the electricity needs for its 500 California facilities. According to Modern Healthcare, the deal is considered the largest renewable energy purchase to date for a health care organization.

    "We're confident over the course of 20 years, the projects will be, at worst, cost neutral and are likely to save us money and lock in prices, creating certainty," says Hemstreet. However, Hemstreet was clear that climate change was the system's "primary motivation" (O'Brien, San Jose Mercury News, 2/18; Rubenfire, Modern Healthcare, 2/23 [subscription required]).

    The takeaway: One California-based health system is making a big investment in clean energy, noting that "climate change is also a health issue [and] the health impacts are already being experienced by our communities, our members." Looking to make your hospital more sustainable? Start with this 10-step guide to reducing red bag waste.

    How we can help you become more sustainable

    The Advisory Board Company is fully committed to helping our members identify and implement sustainable best practices to lower costs and improve population health. We are still early in our exploration of this area, but Joanna Schneider, Zac Stillerman, and their team have been building out a strategy that helps hospitals figure out where to start on a pro-bono basis.

    • Do you work on sustainability for your institution? If so, we’d love to do a 30-minute research call and potentially highlight your best practices with our members. Please email us to set up an initial conversation.
    • Are you a hospital executive who has prioritized sustainability at your institution, or wants to? Email us to set up a 30-minute conversation about how ABC can serve your needs.
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