VHA Southwest, TUX Energy sign $150 million power deal

By the OGJ Online Staff

HOUSTON, Oct. 22, 2001 – A regional health care company said it signed a $150 million, 3-year power supply deal with TXU Energy, a unit of TXU Corp., Dallas.

VHA Southwest, the regional health care system of VHA Inc., said under the agreement, TXU Energy will buy electricity and provide demand-side management for VHA Southwest members who sign with TXU through VHA Southwest’s regional energy program.

VHA Southwest is an alliance of 22 community-based health care organizations, controlling 87 free standing hospitals and health care operations in Texas and parts of New Mexico. Of those member organizations, 19 have already committed to working with TXU.

Electricity competition in most of Texas begins Jan. 1. VHA Southwest CEO Phil Trimarco said energy costs are a very large expenditure for members’ hospitals and health care operations.

TXU estimated the transactional value for the procurement of electricity for VHA Southwest members to be 500-700 million kw-hr/year, or about $40 million. The Dallas power company said $10-$20 million could be added to the total value of the transaction through its provision of demand-side management services, including engineering, design, construction, operation, and maintenance of facilities and control of performance and power quality.

VHA said the contract with TXU is one of numerous regional product and service contracts developed to supplement national VHA Inc. and Novation contracts. With 8,000 customers in 33 states, TXU Energy has completed more than 3,500 energy management projects nationwide.

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