Rising energy prices are a problem for every single manufacturing plant in Houston and throughout the globe. Managers are being forced to look for energy savings through two major tactics–reducing energy consumption and/or adopting better energy purchasing strategies and switching energy sources. As early as a 2005 survey of manufacturers, 98% of these surveyed said that energy prices have impacted their business. That impact represents a considerable number of money.
Plant managers can take the very first tactic, to reduce energy consumption, in two basic areas: the manufacturing process and facilities/ buildings. However, many managers remain skeptical of modifying their manufacturing processes purely in the interests of reducing energy consumption. No-one really wants to sacrifice productivity and quality to take savings that’ll give questionable bottom-line results. So, the dual pressures to reduce energy consumption, without disturbing output, have forced managers into a hard position: “Reduce your power costs” and “Keep producing at a top ROI.”
The other tactic for realizing energy savings, adopting best practices for energy purchasing strategies and utilizing information technologies to see better decisions, financial strategy for manufacturers requires no compromise in the manufacturing process. However, the energy markets and the technologies available on the market, as a result of complexity, require some expertise in order to manage the risks and opportunities available. Consequently, many companies are choosing the services of energy consultants who have the expertise to deal with all the current complexities of energy markets and available technologies.
I talked with Richard L. Zdunkewicz, Director of Sales of LEGACY Energy Management Solutions, a full-service energy advisory firm, headquartered in Houston, about what kinds of solutions are available. LEGACY provides its clients with energy markets information, energy risk management services, energy procurement services, energy information management solutions and strategic energy planning services.
Mr. Zdunkewicz informs me that to “truly provide the absolute most value to clients a consultant must understand their own energy issues in the context of the businesses and their operations. There is not really a’one size that fits all’solution.”
LEGACY has assisted many clients in identifying multiple energy price and contract solutions and determining the resulting risk exposures across numerous scenarios. LEGACY and other consultants can:
- Integrate historical and ongoing load data to produce a precise depiction of the load profile at the meter, plant and enterprise levels
- Assess risk tolerance, budget goals and constraints
- Model energy usage variations across company’s facilities
- Simulate forward energy market prices using state-of-the-art technologies
- Use management to define existing usage and commodity price risks and develop an appropriate risk management strategy and execution plan
- Provide ongoing risk simulations and energy related earnings in danger analyses to greatly help the business “manage” its energy portfolio
- Utilize a skilled legal team with an original give attention to end-use client needs
- Suggest technologies that will assist the management and operational team in better understanding and managing their loads
- Develop strategies to realize financial benefits from load curtailment to the extent such strategies are suitable for the operating strategy of the business
The present energy crisis is just an additional in some challenges that have recently befallen American manufacturers, particularly our many small manufacturing companies. These companies already face rising costs in lots of area, particularly health care, pensions, and regulatory requirements, as well as new competition due to new import laws allowing duty free imports from competitors – all which deplete key resources and profits from their operations. Together with these challenges, energy’s rising cost affects manufacturers’human, capital, and raw materials.