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DELAWARE VALLEY HEALTHCARE COUNCIL AND ENRON FORM ENERGY ALLIANCE
FOR IMMEDIATE RELEASE: Friday, November 7, 1997
PHILADELPHIA - Delaware Valley Energy Options (DVEO), a wholly-owned subsidiary of the Delaware Valley Healthcare Council (DVHC) and Enron Energy Services, a operating unit of Enron Corp., announced today an alliance which will enhance the healthcare organizations' ability to respond to opportunities in the changing energy marketplace and reduce their overall energy costs.
Through the program, DVEO will offer comprehensive energy services to help participants realize the benefits of energy deregulation and reduce expenses. The net effect will reduce non labor expenses and free additional financial resources that hospitals can redirect to community health services.
"Hospitals in our region spend approximately $500 million annually on energy-related items, including electricity, natural gas and fuel oil; equipment operations and infrastructure financing. By reducing non labor-related expenses, we can help participants cope with the enormous marketplace pressure they feel. Not only is this program good for hospitals, nursing homes and others, it will help maintain healthcare workers' jobs," said Andrew Wigglesworth, president of DVHC.
The growth of managed care, advances in medical technology that reduce hospital stays, reductions in reimbursement rates
and the increasing number of uninsured patients have all contributed to the intense financial pressure on healthcare organizations. The DVEO program is an innovative way to help relieve that pressure.
While group purchasing programs for energy related commodities such as natural gas are commonplace, the DVEO program is believed to be the first association program designed to present an integrated approach to address energy needs. The DVHC Board initiated this program to help its 150 members reduce energy costs and to take advantage of the deregulating electricity market in Pennsylvania.
"We are pleased to team up with DVEO to help its membership maximize the benefits of a competitive energy marketplace in the Philadelphia area," said Kenneth L. Lay, Chairman and chief executive officer of Enron. "The lack of availability of integrated services in the regulated utility industry has forced many institutions to devote significant time to decisions regarding a broad range of energy issues, time and money most healthcare leaders would rather spend on their core mission of healthcare services, teaching and research. The DVEO-Enron alliance will provide opportunities for its DVHC and other program participants to embrace customer choice and reduce energy costs while staying focused on the business at hand."
Through its new alliance with Enron, DVEO will offer hospitals, nursing homes and other healthcare organizations comprehensive services across the energy spectrum, including energy purchasing, including access to renewable energy; working with local companies to design consumption reduction plans; providing innovative financing for those solutions; and advising entities on energy issues, among other options.
Based on a review of energy consumption of ten-member organizations with energy expenses totaling $20 million annually, DVEO estimates that greater than 20 percent of such expenditures could be saved through consumption reduction alone. Additional savings resulting from the deregulation process will be expected on commodity supply.
"Ultimately, the savings achieved will strengthen the well-being of the healthcare system and serve the community's best interests," said Wigglesworth.
DVHC is a regional organization that includes almost 150 healthcare organizations as members, including health systems, hospitals and other provider organizations in Southeastern Pennsylvania, Southern New Jersey and Delaware. Through its mission, the Council assists its members to improve the health status of their communities, and exercises leadership in addressing the appropriate restructuring of the regional healthcare system.
Enron Corp., based in Houston, is one of the world's largest integrated natural gas and electricity companies. Enron transports natural gas, buys and sells natural gas, natural gas liquids and electricity, manages fixed-price natural gas risk management contracts, and, explores for and produces natural gas and crude oil. Enron also develops, constructs and manages energy infrastructure and manufactures and supplies solar and wind renewable energy worldwide. Enron's assets are approximately $21 billion, its internet address is www.enron.com and the common stock trades under the ticker symbol "ENE."
For additional information please contact:
Gary Foster-Enron
(713)853-4527
Andrew Wigglesworth-DVHC
(215)735-9695
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