Saint Agnes Hospital Appeals Gas Usage Penalty After Boiler System Failures

Saint Agnes Hospital is facing significant financial challenges following a request to waive a penalty fee imposed by Baltimore Gas and Electric (BGE) due to a failure to cease gas usage during a scheduled interruption. The hospital's troubles began with a catastrophic boiler system failure in November 2024, which was traced back to issues with a contractor, NextGen, that mismanaged the system's maintenance and software upgrades.

In response to the boiler failure, which caused extensive damage to critical components, Saint Agnes incurred over $590,000 in repair costs and anticipates total expenses could reach $670,000. To address the immediate crisis, the hospital brought in a temporary boiler and technicians from Kentucky while re-engaging with the original system provider, MicroMod, for ongoing maintenance.

Despite passing a physical interruption test on December 10, 2024, the hospital's boilers failed to switch from natural gas to fuel oil during a scheduled curtailment in January 2025 due to malfunctioning oxygen sensors. This failure resulted in BGE assessing a penalty fee that could shift the hospital's financial standing from a modest profit to an operational loss, potentially forcing cuts in other critical areas.

In light of Saint Agnes' good faith efforts and the circumstances surrounding the noncompliance, staff recommended a 47% reduction of the penalty fee, bringing it down to approximately $1.25 million. This recommendation considers the hospital's documented repair costs and the financial strain the penalty would impose.

The situation highlights the ongoing challenges faced by healthcare providers in maintaining essential services while navigating operational disruptions and financial pressures. As Saint Agnes moves forward, the hospital plans to implement monthly checks to ensure compliance with future interruption events, aiming to stabilize its operations and financial health.