Power uncertainty, high energy costs, the threat of rolling blackouts. Things have never looked so good for makers of uninterruptible power supply systems and anyone else offering alternative power gear.
“We have been getting twice as many phone calls and we are twice as busy,” said Kirsten King, senior account executive at Expanets Inc., a San Mateo-based supplier of uninterruptible systems and networking gear with a 400-person regional headquarters in Tustin.
Uninterruptible power systems act as auxiliary sources of energy whenever there is an outage or a spike. System makers and alternative power companies are on a roll as businesses look for ways to deal with the state’s power woes.
“In terms of inquiry and in terms of responses, this business has just gone crazy,” said Steve Bray, chief executive at Anaheim-based Power Plus Inc., which helps companies implement custom back-up systems.
Ditto for Costa Mesa-based MGE UPS Systems Inc., a unit of France’s Merlin Gerin Electronics that makes uninterruptible systems.
“We are seeing tremendous growth in our business,” said Dave Petratis, MGE’s president of North and South America.
In part because of California’s power crunch, revenue of MGE Americas grew by 80% to $270 million for the 12 months ended Sept. 30.
“Our business over the last two years has seen an average growth rate of about 55%,” Petratis said. “Our Costa Mesa operations will do about $350 million in 2001.”
MGE’s customers include Wells Fargo & Co., AOL Time Warner Inc. and Exodus Communications Inc.,users requiring a steady supply of power.
Expanet’s King said that those who thought they’d never need backup power systems now are calling up for uninterrubtile gear. Most of Expanet’s customers use back-up power to keep their computers and voice mail systems running during blackouts or spikes.
“Many of our clients are retrofitting this equipment,” said Ingrid Fields, vice president of the Southern California and Nevada region at Expanets.
Expanets recently started a 24-hour turnaround service where the company tries to meet requests within 24 hours after receiving a call.
Although the California power crisis has created a sudden surge in demand for uninterruptible systems, the sector’s growth has been brewing for the past few years.
Power consumption has increased both in California and nationally since the mid-1990s, MGE’s Petratis said. Internet use, computers and mobile phone networks today consume 15% of the power from the grid, he said, and the grid has failed to keep up.
“These products weren’t as pervasive five years back,” Petratis said.
California isn’t alone, he said. Consistent power supply is an issue elsewhere in the U.S. and worldwide.
“Last summer there were rolling blackouts up and down the Atlantic coast,” Petratis said. “There are more problems to come because there hasn’t been new generating capacity built in the U.S. over the past 20 years. It’s a long-term problem and a worldwide problem.”
The annual market for uninterruptible systems is pegged at around $5 billion, which MGE estimates will double by 2006.
And while shortage of power has been a recent phenomenon, power quality has been an issue for a while. Grid power is subject to volatile fluctuations. The resulting spikes can bring permanent damage to computer and communications networks as well as lost data. n
