Lisha Coffey, a spokeswoman for Alliant Energy, a utility provider that serves more than 1.4 million customers in Iowa, Illinois, Minnesota and Wisconsin, finds that some businesses place a premium on reliability, while others on price.
“We take a case-by-case approach with our customers,” she said.
For example, Alliant Energy helped Monsanto select a site for a new seed production plant, evaluating extension costs for gas and electric at different sites and providing resources from public and private agencies.
Extending service increased infrastructure costs but lowered operating costs. Alliant also assisted in the design of an internal high voltage and gas infrastructure.
“We took into account Monsanto’s needs for current construction,” Coffey said. “However, we created a system that could easily expand as the facility grew.”
Monsanto could have opted for a cheaper design if they were concerned only with the current load, she added. However, future expansions would have been much more expensive. The company decided to have Alliant install the high voltage and natural gas system, although the utility’s costs were higher than another bidder.
“They felt confident in our long-term reliability,” Coffey pointed out. “They are now positioned for the future.”
Alliant helped Grinnell Mutual Reinsurance Co. move its operation toward e-business. The company had hired a consultant for this purpose. The consultant recommended standby generation to insure reliability of power, but the company could not justify the investment since they were very close to a substation and had reliable power.
Alliant Energy helped design equipment that would utilize Grinnell’s two internal feeds and provide backup to either feed depending on which one it was utilizing at the time of an interruption. Grinnell is helping to pay back the investment from the savings of the interruptible rate program.
Alliant’s interruptible program is a voluntary contract agreement between the utility and participating commercial and industrial customers. In exchange for a lower price for electricity throughout the year, customers agree to a reduced or interrupted power supply when necessary and save a significant amount of money by participating.
Alliant Energy also worked with executives at Didion Milling, a dry corn milling and soybean processing facility, to expand its facility in the most cost-effective way.
“Alliant Energy showed us how our company could reduce energy consumption by changing some of our manufacturing processes,” said John Didion, CEO of Didion Milling. “With its help, we were able to move some of our manufacturing to off-peak energy consumption hours and take advantage of off-peak energy pricing.”
Alliant also helped the company identify high-efficiency equipment and arranged financing through its Shared Savings program.
Energy-saving equipment and redesigned manufacturing processes are expected to save Didion Milling more than $221,000 in energy costs each year.
“Without the combination of experience and financing, it would have been difficult for us to undertake the project,” Didion said. “This is going to lower our operating costs, helping our company grow and remain competitive.”
While cutting costs and saving energy are key issues for most customers, it seems that expanded reliability is the major concern among the companies Duke Power serves.
“Every business is concerned with reliability,” said Tom Williams, a spokesman for Charlotte, N.C.,-based Duke Power, one of the nation’s largest investor-owned electric utilities. “But in some industries, being down for even an hour can cost the company millions of dollars in losses and put them out of business.”
The cost incurred in acquiring backup generators or uninterrupted power supply may be higher than a basic plan, but it’s not nearly as costly as losing power or lost production.
Industries that require special customized backup solutions are healthcare, technology, electronics, retail, call centers and insurance companies because they can’t afford any downtime, Williams said. Headquarters for major corporations also rely on maximum reliability.
Duke works with private and public economic development agencies to help new companies establish vacant industrial sites.
“New qualifying businesses can get half price electricity for the first year of operation,” Williams noted.
Reliability assessment is one of the proactive services Duke Power offers to help companies increase productivity and improve profits.
Duke Power worked closely with Culp Inc., a global leader in the manufacturing of furniture upholstery fabric and mattress ticking, to identify and resolve a problem with its equipment, which halted production at its Burlington, N.C., facility.
Duke Power’s reliability experts suspected a ground fault was to blame and located the source of the fault.
However, by this time Culp had incurred more than $200,000 in lost production and $15,000 in equipment repairs. Culp partnered with Duke Power to prevent future losses, choosing a High Resistance Grounding System (HRGS).
Once installed, the HRGS prevents damaging overvoltage conditions like those experienced at the Burlington facility. The estimated savings from a single avoided incident is $162,000 and the estimated cost to install the HRGS: $53,000.
Deborah Lehman is a freelance business writer based in Fanwood, N.J.
Means the article is accessible only to our magazine subscribers.
