Energy Risks and Hospitals

For all hospitals, especially those using cogeneration or combined heat and power facilities, energy budgeting can be complicated.

An understanding of both natural gas pricing and the heat rating of their generator is a challenging budgeting necessity for some hospitals. While a fixed price for natural gas can reduce the price exposure for natural gas, changes in weather, utility capacity constraints and the need to purchase or sell natural gas based on consumption fluctuations can make it difficult to have confidence in establishing, and managing, annual energy budgets.

For hospitals that do not use a cogeneration plant, the cost of natural gas is still affected by changes in the weather, fluctuating natural gas prices and utility capacity. The consequence of these variables is often a difference between actual and budgeted energy costs.

Probabilistic analysis can help hospitals manage their natural gas price risk to ensure that they conclude the year at, or under budget, with a specific degree of certainty. For example, Aegent Energy Advisors can help a hospital to set their budget and be 90% certain of meeting, or performing better than, the targeted cost.

To learn more about how Aegent can help, call us at (416) 622-9449.