It all started last August when the electricity bill went through the roof.
Michael Denton Jr. opened his bill from Southern California Edison and saw that the electricity costs for his axle manufacturing plant in an unincorporated part of Los Angeles had suddenly shot up from $10,000 a month to $25,000 a month, with no increase in consumption.
“It was amazing,” recalls Denton, vice president of Foote Axle & Forge LLC, a decades-old company.
Denton, and his father, Michael Denton Sr., president of the company, knew that some drastic measures would have to be taken if they were to save their business, which faces stiff competition from out-of-state axle manufacturers not laboring under the same energy constraints.
So they did. They laid off one shift of 10 laborers who had been working from 6 p.m. to 3 a.m. Then on April 1, they converted the early morning shift of 28 workers to a 3 a.m.-to-noon shift that operates at off-peak hours.
The result is that the company’s electricity bill has returned to $10,000 a month, but that’s only because consumption has been cut by 40% and employees are working odd hours.
“When they started talking about rolling blackouts in January, we had to make a decision,” Michael Denton Jr. recalled. “And my decision was to run the plant on mid-peak and off-peak hours.”
All across Southern California, manufacturers, business owners, commercial building operators and retailers have been wracking their brains to come up with creative ideas to shave consumption of a commodity that has become outrageously pricey.
In Orange County, companies are cutting back air conditioning, dimming lights and shutting down computers and other office equipment that once stayed on all night. Much of the state’s conservation effort is expected to fall on businesses, which use around 60% of California’s energy supply.
If businesses don’t come up with creative ways to whittle down electricity usage, energy costs may push some into bankruptcy.
And it’s not just higher electricity costs that are confounding businesses.
Last month, struggling Anaheim Mills Corp., a fabric dyer, said it is shutting down its operations. The company said rising natural-gas prices were the straw that broke the camel’s back. The fabric dyer is laying off 120 workers.
To survive, businesses throughout the Southland and elsewhere statewide are holding meetings and forming committees to study the issue and develop solutions. Some of the ideas have been simple, including using lower-wattage light bulbs or shutting off lights altogether.
At Conexant Systems Inc., the Newport Beach-based chipmaker, spokeswoman Lisa Briggs said she’s been working in the dark for weeks now. To save power, Briggs shuts off the lights in her office and relies on the windows and the glow of her computer screen to work.
“I don’t like fluorescent lights anyway,” Briggs said.
The situation is same across the Southland.
“I’m sitting here at my desk with all the lights turned off, using the light from the skylight to do my work,” said Lonnie Kane, president of Karen Kane Inc., a manufacturer of upscale women’s clothing headquartered in Vernon. “We’ve rewired our cutting tables so each table’s light comes on individually instead of all of them or half of them coming on when you turn on a switch.”
Lock-boxes have been installed on the thermostats at Karen Kane, with the temperature setting pegged to 76 degrees. The result is that electricity consumption has been reduced by 20%.
“We’re going to be better off for this when the energy crisis is over,” Kane said.
While Kane’s solution to energy has been simple and practical, executives at Ace Clearwater Enterprises near Torrance, which makes parts for the aerospace and power-generation industries, went to great expense and time to conserve energy.
The company, which uses extremely hot metal-forming presses in its manufacturing process, spent $50,000 to move both its 30-ton presses from its Paramount foundry, which is in the Southern California Edison service territory, to its plant in an unincorporated area near Torrance, which is served by the Los Angeles Department of Water and Power. The move has reduced electricity costs and the threat of rolling blackouts this summer.
“It was a major move, but it was a good move because those presses are very busy,” said Gary Johnson, vice president of the $22 million (annual revenues) company founded in 1949.
The company also is conserving energy by paring back the hours of operation at its Paramount foundry. It operates only three days a week now instead of five days a week. Other steps that Johnson and his team have undertaken include turning off 50% of the fluorescent lights, eliminating usage of personal refrigerators, and posting signs to turn off the bathroom.
He hopes such moves reassure his out-of-state clients, who are worried about getting their products on time, that the company will not be affected by California’s energy shortage this summer.
“We do things on a just-in-time basis, where we are shipping to an aerospace company’s shop floor,” said Johnson, who has spent hours on the phone with his clients doing “damage control.”
“We have a lot of long-term agreements,” Johnson said. “People want to know what our contingency plan is, and that we will be able to provide a continuous flow of products.”
Supplying a continuous flow also is the name of the game over at Miller Brewing Co.’s plant in Irwindale, where 86 million cases of brew are produced every year. For awhile, the company found it more economical to produce beer at its two Texas plants and ship it into California.
“It was during the early part of this year that we were in a desperate situation in terms of cost,” said company spokesman Victor Franco.
The brewer has been desperate to save energy. It hired a special consultant who came up with several suggestions.
First, the production schedule would have to be rerouted away from the peak energy-consumption hours of noon to 6 p.m. Then, the clerical staff would have to alter its schedule. Instead of working from 8 a.m. to 5 p.m., the staff now works from 6 a.m. to 2 p.m. so that less air conditioning is needed.
Half the lights in the parking lot, walkways and outside area are shut off. And the company is holding an employee contest for the best suggestions on how to save energy. The winner gets a $500 gift certificate to buy an energy-saving appliance.
Belgum is a staff writer with the Los Angeles Business Journal. n
