Kuakini Health System has signed an energy efficiency contract with California-based Metrus Energy, pursuant to which it will receive $5.8m in energy-efficient upgrades to its non-profit hospital, Kuakini Medical Center, located in Honolulu, Hawaii.

It is a partnership between Energy Industries, which will provide installation and maintenance services, and Metrus Energy, which is providing the financing.

Metrus will finance and implement $5.8m in energy upgrades, including a new central cooling and heating plant, lighting upgrades and energy management and control systems at Kuakini Medical Center in Honolulu.

Kuakini will pay Metrus based on realised energy savings once the project becomes operational.

Metrus Energy president and CEO Bob Hinkle said that Kuakini is the company’s largest deal to date, and its first project with a hospital.

"With rising health care costs, hospitals are increasingly turning to energy efficiency as a way to help reduce operating expenses and achieve more sustainable business practices," Hinkle added.

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Metrus will fund the initial costs as part of its Efficiency Services Agreement (ESA) that involves constructing, maintaining and monitoring the upgrades, and Kuakini will see a reduction in its total utility bill while also improving its efficiency and creating a more comfortable environment for its patients and the community.

Kuakini Health System vice president of fiscal services and CFO Quin Ogawa said that Metrus will handle the financial and technical aspects involved in making the hospital more energy efficient, allowing it to focus on providing high-quality patient care.

"We are excited to kick off 2014 with this project, which enables us to improve the environmental health and sustainability of our hospital," Ogawa added.

"With rising health care costs, hospitals are increasingly turning to energy efficiency as a way to help reduce operating expenses and achieve more sustainable business practices."

The project is designed to generate approximately 3.5 million kWh of electricity savings and 11,000 therms of natural gas savings and is scheduled to be completed by September 2014.

This translates into expected annual savings of more than $1m.

Energy Industries president and COO Duane Ashimine said the company is pleased to implement the retrofit project, as it achieves deep energy savings for an important organisation in the community.

"The project represents the latest advancements in the eight-year partnership between Kuakini and Energy Industries to continuously deliver energy efficiency services," Ashimine added.

Metrus is partnering with Energy Industries, Energi and San Francisco-based New Resource Bank on the project.

Metrus’s use of an energy savings insurance policy underwritten by Energi is a key component of the deal.

The Kuakini project is part of Metrus’s $75m commitment to the US government’s Better Buildings Challenge.

Kuakini Medical Center, a subsidiary of the Kuakini Health System, is a licensed, 212-bed acute care teaching hospital accredited by the Joint Commission.