Oregon manufacturers get help keeping a lid on the price of production


Cost-containment can mean the difference between manufacturers surviving or going under.

Let costs get out of hand and market share erodes, profits disappear, plants are shuttered and employees are out of their jobs.

Now, Oregon manufacturers are getting a boost in controlling operating costs. A plan created by the Legislature recycles part of everyone's electric bill into a reinvestment pool that provides incentives for companies to buy energy-efficient equipment or upgrade equipment to reduce kilowatt use.

Erickson Air-Crane Inc. and Timber Products Co. were the first operations in the state to receive incentive checks from the Energy Trust of Oregon's Production Efficiency program, and a flotilla of manufacturers lined up behind them.

A — percent public purpose charge on Pacific Power and Portland General Electric bills brings in about &

36;68 million annually for a variety of Energy Trust programs. Of that, approximately 38 percent goes to conservation. So far, nearly &

36;9.9 million worth of production efficiency projects have been approved, qualifying for nearly &

36;5.7 million in incentives. The 50 qualified projects will produce an annual savings of 48 million kilowatt hours.
This is not about lowering the lights or temperature, says Buzz Thielemann of RHT Energy Solutions, which administers the program south of Eugene.

Costs such as engineering, demolition and electrical are all covered, he says. Anything that can be invoiced.

Incentives are capped at 50 percent of project costs, but an early adoption increased the amount by 4 cents per kilowatt saved.

Thielemann says one thing industrial applicants for reimbursement can't do is begin a project and order equipment before getting RHT to sign on.

The program, however, enables manufacturers to invest in a more energy-efficient operation without having to wait several years to recoup the dollars.

Erickson Air-Crane, which operates, builds and sells S-64 Air-Crane helitankers, jumped at the opportunity to save money and improve its production capability.

Last fall, Erickson signed a &

36;95 million deal with the State Forestry Corps of Italy to build four helitankers, abruptly increasing the company's production load.

The sale has generated longer work hours and Saturday workdays that we might not have had otherwise, says Cary Stauffer, Erickson's facilities manager. So we're using all of our utilities more heavily than before.

It also strained Erickson's production capacity as the number of sandblasting cabinets increased.

We were using large amounts of air and that was causing low pressure throughout the system and would shut down some of our computer milling machines, Stauffer says. Production would stop in one department due to the needs in other departments.

The Energy Trust has allowed Erickson to install a new compressor with a variable frequency drive and a cycling refrigerated dryer that will save the company 578,170 kilowatt hours of electricity and nearly &

36;24,000 per year.

The new 150 horsepower compressor is 7 feet tall, about 10 feet long and 4 feet wide and distributes about 600 cubic feet of air per minute. The old unit, pushed out 360 cubic feet per minute.

The project totaled &

36;66,500, but with Energy Trust incentives of more than &

36;43,000, the project has a simple payback of 1.3 years and qualified for Oregon business energy tax credits.

Typically, if a project has a four-year payback, it's considered doable, Stauffer says. When it's two years, or less, it's really worth going after. We could have chosen a less expensive solution, but it wouldn't have met our needs for long.

Capital investments for state-of-the-art equipment doesn't necessarily pencil out without help. In Timber Products' case, a wish-list became reality as the mill installed a new pollution control device and new energy-efficient motors.

From a business perspective this allows us to do capital projects that will increase our productivity and undertake capital projects we probably wouldn't have been able to do otherwise, says Brad Beavers, TP's regional process control specialist.

Timber Products installed a 40-foot tall, 20-foot diameter Donaldson Torit 484 RFW10 baghouse to capture wood dust, a system that uses just two-thirds of the energy used by earlier designs. Previously, dust was vented into the atmosphere.

The new equipment consumes 386,458 fewer kilowatt-hours than standard equipment, at an annual savings of more than &

36;15,000. Energy Trust incentives totaled nearly &

36;52,000, and Timber Products expects to recover investment costs within three years.

Beavers says Timber Products plans additional projects this year to replace dryer motors at its Grants Pass plant, while updating equipment and changing conveying methods at the Medford plant.

Right now we're using low-pressure air to run the conveyor system, Beavers says. We're going to a mechanical system which will save considerable power.

It's hard to predict if the investments will create more jobs down the road, Beavers says. But it makes it much less likely that we're going to let anybody go.

As energy conservation has become more important to engineers, motor designs have changed with the times.

Eastman Kodak's White City DryView medical imaging film plant has an 8-foot tall, 14-foot long and 6-foot wide piece of equipment known as a chiller, which cools water. In the past, the chiller has been run by a single-speed motor that controls the flow of water.

retrofitting the chiller, Kodak will save &

36;18,000 annually on its electrical bill.

That's a relatively small amount for us, concedes Tom Dube, utilities project administrator at the plant.

Kodak's incentives totaled &

36;58,000, and Dube says Kodak will be lining up more projects .

Sierra Pine's Medite Division has four projects lined up with RHT and a lighting program lined up with Aspen Systems, another Energy Trust administrator.

The company's total cost for equipment and installation is &

36;354,853 with the Energy Trust returning &

36;259,529. The medium-density fiberboard producer's annual power savings will be nearly &

36;145,000.

A major component in Sierra Pine's undertaking is revamping 10 150-horsepower motors that move a 6,400 ton press.

The hydraulic pumps run continuously, but are in use for about 20 percent of the press cycle, says Wayne Ralph, Sierra Pine's electrical supervisor.

Using the existing motors, we've installed new soft starts ' a device that will reduce the voltage to the motor and bring it up softly so it doesn't ramp up, Ralph says. It's similar to when you flip the switch on the wall, the lights go on immediately. But if you use a dimmer switch, they gradually go from low to high light.
Pool is divided in five ways

The Oregon Energy Deregulation act of March 2002 added — percent to all Pacific Power and Light and Portland General Electric customers' bills. The &

36;68 million raised annually goes into a public purpose funding pool that is divided five ways.

56.7 percent, or &

36;38 million, for conservation.

17.1 percent, or &

36;12 million, for renewable energy such as solar and wind.

11.7 percent, or &

36;8 million, for low-income weatherization.

10 percent, or &

36;7 million, for schools.

4.5 percent, or &

36;3 million, for low income housing.