Letters to the editor – Jan. 27, 2017

Posted: January 27th, 2017 | Featured, Letters to the editor, Opinion | 1 Comment

Power plant numbers need clarification

Re: “Sharp Hospital goes off the grid” [Volume 6, Issue 12 or]

I read your article on the new power plant at Grossmont Hospital. It doesn’t make sense to me but I don’t have the figures.

The hospital pays $180,000 monthly to SDG&E ($43,000,000 over 20 years). The facility cost $47,000,000.

Interest on tax exempt bonds should be somewhat over 2 percent about $960,000 each year. The interest will drop as the principal is paid off. Let’s guess $13,000.000.

Perhaps the power plant does not run unattended. One person at $100,000 annually with fringe benefits times five people (needed to keep one staff member on duty at all times) $500,000 annually or $10,000,000 for 20 years.

The natural gas needed to power the plant isn’t free. What do you think? Perhaps $400,000 each year or $8,000,000 for the period we discussed.

How about insurance? What about $50,000 or $1,000,000 for 20 years?

Let’s talk about service contracts. Solar charged $18,000,000. Perhaps $80,000 annually. You got it $1,600,000.

Your article explained a byproduct is free heating and chilling. Isn’t that a part of the current SDG&E bill?

No problems if SDG&E goes down. Everything breaks at some point.  The hospital will need to maintain their current generators. Not mentioned in the article.

Also, the plant reduces pollutants by 90 percent. While that is probably true I am not aware of any generating plants in East County. Therefore, am I correct the 10 percent pollutants released by the plant will be expelled in East County and somewhere else will get the benefits of reduced pollution — not you or me?

Now I know I am guessing at the numbers, but I’ll bet I’m pretty close. I probably forgot some expenses too. Can we get the actual numbers?

My guess, we taxpayers and patients get stuck with $32,600,000 over 20 years.

It’s our money folks!

—Jim Elliott, La Mesa

Interesting article about Sharp Hospital in the La Mesa Courier. How misleading can an article be?

Free power forever?  “Zero” as you stated in a well-worded statement.

Ninety percent reduction in greenhouse gas. Were you fed this info, or did you just make it up yourself?

The gas company is giving them free natural gas? Extra employee or two to run the plant for free? Etcetera.

The hot exhaust has no greenhouse gas? Are you kidding me. This little power plant runs 10 times as efficient as a SDG&E power plant?

Answers please. What is the net cost saving per month?  My guess, with all maintenance and depreciation? Negative 20 percent.

When I see such a misleading article, I am compelled to speak out.

—Jerry Kay, La Mesa

One Comments

  1. The Grossmont Healthcare District (GHD) is pleased to provide answers to Mr. Elliott’s questions. As a longtime neighbor of Grossmont Hospital, it’s important that his concerns are addressed.

    As is often the case with state-of-the-art hospital improvement projects, all the complexities simply can’t be addressed in a press release. So, we appreciate Mr. Elliott trying to understand the details. Here are some more:

    Some of the confusion may be that the new Central Energy Plant is made up of two components, one paid for by the taxpayers of GHD and the second by Sharp Grossmont Hospital:

    — The main Central Energy Plant building, approved by the citizens of GHD as part of Proposition G in 2006 – This replaces the original outdated Central Plant and much of its decades old equipment with a new facility and the needed increased capacity to power the new Heart & Vascular Center and other future campus improvements.

    — Cogeneration Unit – This component of the new Central Energy Plant replaces the old 1970s Cogen plant, which uses outdated technology. One hundred percent of the $18 million in debt for the full cost of the new Cogen is borne by Sharp Grossmont Hospital. GHD was able to arrange the financing, but Sharp agreed to pay the debt for the cost of this building – based on new technology, increased efficiency, significantly reduced emissions and long-term cost savings, all benefitting Sharp’s operations as well as the environment.

    It was suggested there are no other generator plants in East County, so the addition of this one would actually increase pollutants. That is not the case.

    As noted above, Grossmont Hospital operated a Cogeneration unit since the 1970s, in the same location, which also used natural gas to produce electricity. However, the old unit was able to produce only about 40 percent of the Hospital’s electricity needs. The new plant is capable of producing 100 percent on site. The old Cogeneration unit was reaching the end of its useful life and the aging equipment is now considered significantly less “clean” than today’s green technology.

    So, yes, the new Cogeneration unit does reduce existing pollutants by 90 percent.

    As mentioned, the new Cogen is just one piece of the overall new Central Energy Plant, which replaces the original 1950s plant, including some equipment more than 50 years old. Like the new one, the old plant required all the related staffing, insurance and maintenance costs, as well as the emergency generators that Mr. Elliott mentions. The facility and its equipment, staffing and insurance costs have always been needed to run the Hospital, all expenses that are part of the operating budget paid by Sharp Grossmont since 1991.

    However, in the time since the original Hospital and plant was built in 1955, several improvements have been completed, including a new patient tower in the 1970s, Women’s Center in 1989, Cancer Center in the 1993, and Emergency Department in 2004.

    In June 2006 the voters of the East Region approved Proposition G – passed with over 77 percent of the vote – to make another approximately $250 million in improvements at the Hospital, including 90 new critical care beds and a new Heart & Vascular Center. The Prop G improvements also include a new Central Energy Plant to replace the original plant facility, required to provide the capacity to operate the new Heart & Vascular facility. The debt on those bonds is indeed being paid by the property owners of GHD. The tax is $23.15 per $100,000 of a home’s tax-assessed value, under $70 annually for the average homeowner in the area.

    In addition to the $250 million in public funds, Sharp is more than matching that amount in facility improvements and state-of-the-art patient care equipment. This is one of the significant community benefits derived from the public-private partnership between GHD and Sharp HealthCare.

    Lastly, as mentioned previously, an added component of the new Central Plant is the new Cogeneration unit and related equipment, originally estimated at $18 million, but completed for $14.7 million. Unlike the Prop G bonds, however, the taxpayers are not paying the debt for the added benefit of that facility. Sharp Grossmont Hospital agreed to pay that debt over 9.5 years, until paid off in 2021, for the reasons previously noted.

    The overall new Central Plant, then, includes the main facility, paid for by East Region property owners, and the Cogeneration system, paid for by Sharp Grossmont Hospital.

    We are proud of the significant facility improvements underway at Sharp Grossmont Hospital, now including a new energy-saving Central Energy Plant, thus ensuring the capacity to provide the highest quality patient care services at the Hospital for many years into the future.

    I’d be happy to further discuss this with Mr. Elliott or any La Mesa Courier readers, if they have any questions. I can be reached at 619-825-5050.

    Barry Jantz

    Chief Executive Officer

    Grossmont Healthcare District


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