Energy Emergency: A Prescription for Sustained Access to Emergency Power and Energy Cost Reduction

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Few crises are more gut-wrenching to a hospital administrator than a power failure. Stories abound of such events in recent memory, and the names of storms conjure grim images: Katrina, Irene, Sandy, just to name a few. In the middle of Superstorm Sandy, New York University Langone Medical Center had to evacuate more than 200 patients when both of its backup systems failed. Medical staff had to hand pump oxygen to critically ill patients and carry them down flights of stairs so that they could be transported by ambulance to other hospitals because of the hospital's power failure.

"Hospital preparedness and well-functioning backup systems are a costly distraction from daily business, until they are needed. Like now," tweeted Art Kellerman, MD, dean of the Herbert School of Medicine at Uniformed Services University, during the Langone evacuation.

Sentinel Event Alerts, advisories issued periodically by The Joint Commission of Healthcare Organizations, serve to alert hospital administrators to qualified issues that may need their attention. In particular, Issue 37, published Sept. 6, 2006, specifically addresses the topic of "adverse events caused by emergency electrical power system failure." The recommendations of The Joint Commission extend to six points, all of which describe planning, training and preparedness coordination. The Joint Commission does not recommend how much or at what reliability power systems should be, but simply that a suitable and clearly established plan exist.

Of course, adverse events mastered without a hitch go unnoticed, because a steady power supply under anomalous conditions is perceived as normal. There were plenty of functioning hospitals during Sandy, and The Reading (Pa.) Hospital and Medical Center is one example. With less than 10 seconds of downtime, the hospital relied on its sophisticated 14.5 Megawatt microgrid to continue operations throughout the entire storm. But successful operations and positive patient outcomes don't make for great press.

The popular press regularly details power failures in hospitals, failing backup systems and missing contingency plans.1 What might be the underlying strategic issues with electrical reliability management, and what might be a better way for healthcare institutions to get to what Robert Galvin describes as "perfect power"?2

One year after Sandy, it's time to answer that question.

The costly distraction
Electrical reliability is a broad topic that goes far outside of the boundaries of emergency preparedness. Our society has developed expectations for reliability for information systems, and we expect them to be available at all times. Healthcare management has good and fair expectations of high reliability standards for the energy that powers systems critical to patient care. So what might those be?

Both National Electric Code and National Fire Protection Code limit the duration of electrical non-availability to 10 seconds.3 That's not 10 seconds per year, that's just 10 seconds until the backup generator responds to an outage, which could happen every day. In the interest of reliability improvement, let's say we set an annual performance standard.

A year has 525,600 seconds, so 10 seconds of downtime per year is 99.998 percent availability — not bad, as operations management practices go. The famed "five nines," which is 99.999 percent availability, would allow only 5.25 seconds per year of non-availability. Some medical professionals call for a single second allowable downtime, which is 99.9998097 percent downtime.

For those educated in the Six Sigma method, the six sigma goal of electrical up time would amount to 1.78 seconds of annual non-availability.4 This could perhaps be considered as a gold standard. But how can this be achieved?

Hospital administrators would have to put processes into place that would ensure six sigma uptime performance for key regions of the hospital, under most known adverse conditions, also known as credible contingencies. What would this cost?

Reliability is usually attained through redundancy and storage/latency. The reliability of a parallel system is the factor of the failure probability of each component. The simple way of thinking about this is one adds layers of systems until the mean time to failure of the overall system approaches 1.78 seconds per year. Most often this will require tripling the layers of generation, transmission and storage capacity, as simply layering emergency generation on top of the grid will not cut it.

Adding such complexity might double or triple the cost of conventional backup systems. Will the managing board of a hospital readily invest in six sigma electrical performance — for an event that is effectively unlikely?

More than good intention
Expectations that derive entirely from good intention are bound to disappoint. Milton Freeman put it simply: "One of the great mistakes is to judge policies and programs by their intentions rather than their results."5 If we are to greatly increase reliability, it will take more than the intention to do so.

The "costly distraction" finds steady management resistance when it is compared to other medical care costs that will benefit patients immediately, not in some far off, unlikely energy anomaly even though it could help protect lives during that anomaly. Therefore, the intention to invest in six sigma electrical reliability meets two points of resistance: recalcitrance to reliability planning, and more importantly, competition for capital and medical priorities.6

What if there was a way to avoid capital expenditures, and improve electrical reliability all the same? Moreover, what if the increase in reliability actually reduced retail energy cost, instead of increasing it?


The grid as a market
Another favorite lament is the condition of the U.S. power grid. While in some states the power supply is amazingly stable, it is less so in others. Sure, storms are a problem, and utilities' response to these events may or may not be appropriate. But one must differentiate between trees falling down on lines and the U.S. grid as a whole being 'rickety.'7

The reader should be aware the United States hosts the most sophisticated and largest open electrical energy markets in the world.8 In fact, the U.S. grid is so sophisticated that it is the model being copied elsewhere. The so-called Reliability Pricing Model is the underlying market method that in the last two to three years has proven able to ensure sufficient generating and transmission capacity to maximize reliability.

What does all this mean to medical facility administrators?

Deregulated electricity markets allow registered participants to offer electrical generating capacity to both energy and capacity markets. In simple terms this means that onsite generation for medical facilities can export certain classes of energy for profit when it is not needed, and import energy when it is cheap. This creates opportunity that affords more reliability while improving the bottom line, something that is sure to please the managing board.

The way forward
Electrical grid managers dispatch power in an elaborate and daily choreography that requires participating generators. If structured correctly, hospitals can actually make money with the very systems that offer greater reliability. Suddenly, five or six sigma energy security and a sophisticated grid connection doesn't seem implausible. Consider the tangible benefits of such 'microgrid' operations:

  • Microgrids are coupled to the electricity dispatch centers via a private Internet, so they are naturally configured to respond to grid signals continuously. If the grid fails, these systems simply do what they do every five minutes or so, dramatically increasing the likelihood of operating correctly in an actual energy anomaly.

  • Prevention is 80 percent of success. Human beings monitor self-dispatching energy systems 24 hours a day, 365 days a year. Weather anomalies can be anticipated: it's no secret when a potentially destructive storm is impending. Dispatch specialists can anticipate weather-related outages and remotely switch to so-called "islanding mode" — grid independent operations — at the click of a mouse.

  • Finally, these systems are so efficient and cost-effective, they literally cut energy costs in half, not accounting for capital costs. Hospital administrators do not have to choose between reliability and cost, as these systems can be externally capitalized and managed. Administrators can execute energy supply ggreements for simultaneous reliability warranties and cost reduction.

The recent development of sophisticated electricity markets, secure Internet communications and computer control technology has put hospitals much closer to attaining unprecedented reliability levels. Best of all, these achievements do not have to consume precious in-house capital, and even offer cost reductions: sophisticated healthcare managers can structure energy agreements that include power reliability performance standards such as six sigma downtime.

No longer do administrators have to intend to be resilient during an energy anomaly or emergency, they can now act fiscally prudent with the confidence that reliability is more reasonably assured.

Michael Overturf is CEO of ZF Energy Development, an industrial energy solutions company. His expertise encompasses a broad spectrum of business and industrial disciplines from lean manufacturing and JIT supply chain management, to marketing and energy arbitrage. Mr. Overturf holds several patents/patents pending in the energy field, and has contributed to Forbes and multiple energy, construction, manufacturing, and IT  journals, as well as authored a publication on the topic of energy engineering, and a white paper series on the subject of lean energy.


1 Ornstein, C. (2012, October). Why Do Hospital Generators Keep Failing? Pro Publica.


2 Galvin, R., & Yeager, K. (2009). Perfect Power. New York: McGraw Hill.


3 National Electric Code sections 517 and 700, life safety and critical power; National Fire Protection Code section 110


4 Each second would be considered a defect opportunity

5 Friedman, D. M. (1975, December 7). Living Within Our Means. The Open Mind. (R. Heffner, Interviewer)

6 Begley, S. (2012, November). Sandy Exposed Hospitals’ Lack of Disaster Preparedness. Insurance Journal

7 Kemp, J. (2013, January 10). Reuters Column. From

8 In just the eastern mid-atlantic seaboard, the PJM market involves some 185 gigawatts of generating capability, the largest in the world. Different regions of the United States have different markets. For more information see




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