Healthcare SLA Clauses for Energy‑Related Availability Risks

Hook: Why healthcare contracts must treat energy risk as a first class SLA item in 2026

Healthcare IT leaders migrating Allscripts and other clinical systems to cloud platforms face a new, immediate threat to availability: energy and grid capacity risk. Late 2025 and early 2026 policy shifts, growing state proposals to make data centers pay for grid upgrades, and record electricity demand from AI‑driven compute growth have turned utility charges, capacity constraints, and demand response events into material contract risks. If your SLA still only references generic force majeure and uptime percentages, you are exposed to surprise energy surcharges, throttled power, and multi‑hour interruptions that directly affect patient care and regulatory compliance.

Topline guidance: What to negotiate now

Do not accept open ended pass throughs for energy charges or vague Force Majeure carveouts. Require precise definitions, transparent pass through mechanics, caps, mitigation obligations, and non‑monetary remedies such as termination, migration credits, and design upgrades. Insist on resilience commitments for health critical workloads like EHR, lab interfaces, and clinical messaging that put patient safety first.

Quick checklist

• Define energy events and grid capacity events separately from standard force majeure
• Require 60–90 days advance notice for surcharges and a cap or phased pass through
• Obligate provider to implement resilience measures before billing surcharges
• Establish service credits scaled to recurrence of events, with termination triggers
• Demand audit rights for energy invoices and evidence of mitigation activities

The 2026 landscape: why energy clauses matter more than ever

In 2025 and into 2026 regulators, legislators, and grid operators accelerated scrutiny of data center energy use. Proposals surfaced to have data centers contribute to the cost of grid upgrades and capacity, and multiple US states explored new tariffs for high draw facilities. At the same time, AI‑driven compute growth continues to increase peak loads in congestion zones. Those trends mean cloud and colocation providers now face new cost pressure that they will attempt to recover through contractual surcharges and new charge types.

For healthcare organizations, the consequence is simple: availability and predictable costs are linked to the electric grid. When a utility directs curtailment, imposes capacity charges, or a regulator allows cost recovery, an ill‑drafted SLA can transfer disproportionate operational and clinical risk to the healthcare customer.

Key contract concepts and definitions to add to healthcare SLAs

Clarity starts with definitions. Below are essential terms to add or refine in any managed services or cloud hosting contract for healthcare workloads.

Suggested definitions

• Energy Event — Any circumstance resulting in an increase in billed energy charges to the Provider attributable to changes in wholesale energy rates, utility demand or capacity charges, state or federal regulatory orders, or other grid management actions that materially increase the Provider cost of providing Services.
• Grid Capacity Event — An event where a local utility, ISO, or RTO issues a capacity or curtailment directive, or otherwise limits electrical delivery to the Data Center hosting Customer systems, resulting in potential or actual reduction of service capability.
• Energy Surcharge — A pass through fee or per unit charge imposed by the Provider to recover incremental energy costs arising from Energy Events, subject to the limitations and notice requirements herein.
• Resilience Threshold — The minimum level of capacity, back up generation, or redundancy required by the Provider to be in place for Healthcare Critical Workloads, expressed as hours of on site generation and RTO targets for failover. See infrastructure patterns in edge container and resilience work.

Draft SLA clauses: practical language you can adapt

Below are redline‑ready clauses to incorporate into master services agreements. Each clause is followed by negotiation notes explaining why it matters.

1. Energy Event Notification and Approval

Provider shall give Customer written notice of any proposed Energy Surcharge at least 90 days prior to the proposed effective date. Provider shall provide the meaningful details supporting the surcharge including the underlying invoices, tariff citations, calculation worksheets, and a mitigation plan demonstrating why existing resilience measures are insufficient. No Energy Surcharge shall apply to Customer until Customer provides written approval or 60 days pass without denial. If Customer denies the surcharge, the Parties shall escalate to senior executives for good faith resolution. In the absence of resolution, Customer may elect to terminate affected Services without early termination charge.

Negotiation note: Require transparency and an actual chance to dispute surcharges or exit. Ninety day notice gives clinical organizations time to migrate or seek alternatives rather than accept surprise billing.

2. Energy Surcharge Cap and Phase In

Any Energy Surcharge shall be limited to the lesser of (i) actual incremental costs demonstrably incurred by Provider and supported by invoices, or (ii) 10% of the then current Monthly Recurring Charges for the affected Services. Provider may apply increases in two not more than 5% increments in any consecutive 12 month period unless otherwise mutually agreed in writing.

Negotiation note: Caps avoid destabilizing budgets. Consider raising or lowering the cap based on leverage: 5% preferred, 10% reasonable in tight markets.

3. Resilience and Mitigation First

Before applying any Energy Surcharge, Provider shall implement commercially reasonable mitigation measures at its cost, including demand shifting, on site generation, battery storage commissioning, load migration to alternative availability zones, and enrollment in demand response programs. Provider shall prioritize mitigation for Healthcare Critical Workloads and document completion of mitigation activities within 30 days of the Energy Event notice.

Negotiation note: Put the onus on the provider to manage its fleet and grid exposure before charging customers. For health critical services, demand shifting and capacity reservation across sites should be contractual obligations. Consider energy efficiency measures and smart controls demonstrated in vendor case studies such as the smart outlet retrofit.

4. Service Levels for Grid Capacity Events

Provider warrants that for Healthcare Critical Workloads it will maintain a Resilience Threshold of no less than 24 hours of on site generation backed by battery UPS systems and tested failover to a geographically diverse availability zone with RPO of 15 minutes and RTO of 30 minutes. In the event Provider cannot meet the Resilience Threshold because of a Grid Capacity Event, Service Availability shall be calculated excluding the period of nonavailability only where Provider has documented compliance with the mitigation obligations above. If Provider fails to meet both the Resilience Threshold and mitigation obligations, Customer shall be eligible for Service Credits as set forth in Section X.

Negotiation note: RPO/RTO targets and concrete hours for on site generation provide measurable expectations. Tailor thresholds to risk: EHR may need 24 hours minimum; noncritical reporting can accept longer.

5. Service Credits and Escalating Remedies

Service Credits for Energy and Grid Capacity Events are in addition to standard availability credits and calculated as follows: Credit Percentage = min(100%, (Target Availability % - Actual Availability %) / Target Availability %) multiplied by 150% of Monthly Recurring Charges prorated to the affected Services. In addition, if Customer experiences three or more Energy Events causing Service Unavailability exceeding 2 hours in any 90 day period, Customer may (i) require Provider to fund migration assistance equal to three months of monthly charges, or (ii) terminate the affected Services for convenience with pro rata refund of prepaid fees.

Negotiation note: Increase the multiplier for energy events to reflect clinical risk and incentivize provider mitigation. Provide additional non‑monetary remedies like funded migration or termination to reduce lock in risk.

6. Pass Through Mechanics and Audit Rights

Provider may pass through only actual, incremental energy costs supported by third party invoices and not otherwise recoverable. Customer shall have the right to audit such charges, including direct access to underlying utility invoices, once per 12 month period, with confidentiality protections. If audit reveals an overcharge exceeding 5% of the billed amount, Provider shall reimburse Customer audit fees and refund the overcharged amount with interest.

Negotiation note: Audit rights are critical to prevent opaque fees. Insist on invoice access even if provider uses consolidated billing.

7. Regulatory Change and Cost Allocation

If a change in law or regulation enacted after the Effective Date materially increases the cost to Provider of providing Services (a Regulatory Cost Increase), the Parties shall negotiate in good faith an equitable allocation of such costs. Provider shall not unilaterally impose pass throughs for Regulatory Cost Increases without Customer consent until Provider demonstrates that it has exhausted alternative cost reduction strategies across its customer base.

Negotiation note: Regulatory changes are precisely the scenario under debate in early 2026. Avoid one‑way cost shifting.

Resilience design requirements procurement teams should demand

In addition to contractual language, require technical guarantees and reporting:

• Redundant utility feeds from separate substations in healthcare critical zones
• N+1 critical power and cooling with documented maintenance and recent test results
• On site generation sized for full load of Critical Workloads for minimum 24 hours
• UPS with ride‑through to battery systems to cover transfer to generator (consider portable and field power patterns in market reviews such as our portable power field review)
• Bi‑directional replication to a second availability zone with monthly failover tests and annual DR exercises observed by the customer (pair with edge auditability practices in operational decision planes)
• Quarterly reporting on energy usage, demand peaks, and participation in demand response

Pricing models and negotiation levers for energy risk

There are multiple ways providers will try to recoup energy costs. Know the options and negotiate the right model for healthcare workloads.

Common pricing approaches

• Flat fee with full pass through — predictable base fee but risk of large true ups. Accept only with strong caps and audit rights.
• Blended energy add on — small fixed energy surcharge built into rate. Easier to budget but might become uncompetitive in high demand regions.
• Usage based utility recovery — direct charge per kWh/demand. Most accurate but requires invoice access and close monitoring.
• Capacity reservation model — prepay for committed capacity to reduce demand charges. Good for steady critical loads where you can forecast needs.
• Shared risk pool — negotiate a pooled surcharge across multiple customers in a region with governance and caps. Useful when provider lacks transparency.

Negotiation levers

• Request historical energy and demand charge data for the specific facility
• Insist on advance notice windows, caps, and phase in schedules for any surcharge
• Require provider to propose and fund efficiency measures before passing costs through
• Negotiate a blended rate for an initial term, with true up only at renewal or major regulatory change

Operational playbook: what to do when an Energy Event arrives

1. Immediately activate incident command for EHR and clinical systems, and notify the provider of clinical impact
2. Request the provider's mitigation dossier and evidence of resilience testing within 2 hours
3. Escalate to contractual dispute resolution if the provider cannot meet RTO/RPO obligations
4. Audit any proposed surcharge, and if necessary, invoke migration or termination remedies per the SLA
5. Document clinical impact and regulatory notifications for HIPAA and state reporting requirements

Practical examples and scenarios

Example 1 — Surprise capacity charge: A regional cloud provider hosts a hospital EHR in a single metro. An ISO orders capacity upgrades and allows cost recovery. Provider issues a sudden 18% Energy Surcharge with 30 days notice. Because the hospital had negotiated a 10% cap, audit rights, and the right to terminate if surge exceeds cap, the hospital forced renegotiation and obtained a phased approach plus funded migration assistance.

Example 2 — Curtailment during a heat wave: A demand response event caused a 3 hour curtailment. The provider lacked tested failover to the secondary AZ. Because the contract required a 24 hour generator and RTO 30 minutes for healthcare workloads, the provider paid enhanced service credits and funded an emergency DR exercise to restore compliance. The provider also covered clinical overtime costs borne by the hospital during the outage.

Compliance and patient safety considerations

Availability issues tied to energy events can trigger regulatory and accreditation consequences. Ensure that your SLA preserves your ability to meet HIPAA continuity obligations, state reporting, and CMS requirements for clinical availability. Include language that requires the provider to cooperate with any regulatory audits and to indemnify the customer for fines or corrective action directly attributable to Provider failure to meet Resilience Thresholds.

Advanced strategies and future proofing for 2026 and beyond

As energy policy evolves in 2026, consider these strategic steps:

• Favor providers with investments in on site renewable generation + storage and microgrids
• Insist on multifactor resilience that includes commercial PPA protections and hedging for fuel costs
• Negotiate options for committed capacity across multiple geographic regions to avoid single zone grid exposure
• Work with providers to implement workload mobility and containerization that reduce migration friction in emergencies
• Engage legal and energy advisors to model long term cost scenarios under different regulatory outcomes

Negotiation playbook by stakeholder

How to assign roles during negotiation:

• Procurement: drive the commercial model, caps, phase in and migration remedies
• IT/Cloud Architects: define technical resilience thresholds, RPO/RTO and testing requirements
• Security/Compliance: ensure BAA updates and indemnity for regulatory fines
• Clinical leadership: certify acceptable outage windows and critical workload classification
• Legal: draft definitions, audit rights, regulatory change clauses and termination triggers

Final takeaways: what to insist on in 2026 healthcare SLAs

• Energy risk is contract risk. Do not let providers treat energy events as routine force majeure.
• Require transparency, caps, and audit rights for any energy or grid capacity pass through.
• Insist on resilience commitments for healthcare critical workloads including hours of on site generation, tested failover, RPO/RTO targets, and documented DR exercises.
• Negotiate stronger remedies than standard service credits: migration assistance, termination rights, and indemnity for regulatory costs.
• Plan ahead with architecture, legal, and clinical teams involved so energy events do not become clinical events.

Call to action

If your team is renegotiating hosting or managed services agreements in 2026, get expert help to translate the energy landscape into enforceable contract language and technical guarantees. Contact Allscripts Cloud advisory services to run an energy risk review, draft SLA language tailored to your EHR and clinical workloads, and negotiate provider commitments that prioritize patient safety and predictable costs.

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