Gain Power Through Knowledge at the Indiana Energy Management Conference

Concerned about rising energy demands and costs? Join experts and colleagues at the Indiana Conference on Energy Management for the latest updates, forecasts and trends regarding energy issues.

Learn how to cut costs while remaining compliant and see what’s coming down the pipeline during the day-and-a-half conference (July 31-August 1) at the Hyatt Regency Indianapolis.

Choose from among 12 sessions and attend two keynote presentations, a roundtable lunch and reception. Browse and network at the concurrent Expo.

The program is ideal for facility and energy managers, plant operations managers, maintenance supervisors, energy aggregators, energy engineers, utility company managers, governmental affairs managers and others.

Session topics include:

  • Real-time energy management
  • Corporate renewable energy in Indiana
  • Demand reduction versus peak shaving
  • Economic benefits of distributed generation
  • What’s next with the Volkswagen Environmental Trust
  • How the dynamic electric utility industry impacts industrial and manufacturing customers
  • Saving energy in compressor systems

Registration is $399 for Chamber members with a special $199 rate for government employees. Register two or more and receive a 20% discount.

The conference is sponsored by Indiana Michigan Power along with Ice Miller, Apex Clean Energy, MacAllister Power Systems, EDF Energy Services, Vectren, Cummins, Inc., Citizens Energy Group, Geronimo Energy, Country Mark and NIPSCO. Additional sponsorship opportunities are available. Contact Jim Wagner at (317) 264-6876 for details.

Preview the complete agendaregister or call (800) 824-6885 for more information.

High Electricity Prices are Bad for Everyone

The headline might seem like an obvious one – you’ve most likely seen your energy bills go up over the last several years. But it’s not just families struggling to pay high electric bills. Hoosier companies, particularly those that are energy intensive (such as manufacturing facilities), face exponentially-higher sticker shock when it comes to paying the electricity bill.

And the consequences of companies paying more for electricity is far-reaching: less money for employees, higher prices for consumers, fewer opportunities to expand and lost economic development chances.

Here’s a little history: In the early 2000s, Indiana was fifth lowest in the country, in terms of electricity prices. Today, the state has fallen to the middle of the pack, around 27th lowest.

The State Utility Forecasting Group (SUFG) out of Purdue University puts together electricity forecasts every two years. The current forecast (released at the end of 2013) points to prices increasing by over 30% over the next 20 years, with electricity demand in Indiana staying almost stagnant.

We look at the reasons for the higher prices and the lower demand in the new edition of BizVoice®. I spoke with the director of the SUFG, as well as the president of a small foundry in Rochester and a representative from the Indiana Industrial Energy Consumers, Inc. (which represents some of the state’s largest industrial energy users) for their reactions to the SUFG report.

While I didn’t have the opportunity to include an email interview with Wayne Harman, manager of energy procurement from ArcelorMittal USA, I’m able to share some of it here. Here’s a shortened Q&A:

BizVoice®: What is the consequence of high electricity prices for a large energy-intensive company like ArcelorMittal USA?

Harman: “Higher electricity costs translates to net higher costs for manufacturing finished steel products. Added costs cause inflationary pressure when they can be passed on to customers or squeeze profit margins when a commodity’s market selling price is too low to fully cover the added manufacturing costs. Business investment tends to be reduced until a later period when profit margins are stronger.”

BV: When determining where to build new plants (nationally or abroad), how much of a factor are electricity prices?

Harman: “The cost of power is a key factor in making such a decision, but also the availability and reliability of that power source need to be taken into consideration. Market demand and a company’s supply position to serve that market area need are more important in making such decisions … Above a certain cost point, electricity costs become a deal breaker for such investments.”

BV: Nationally, Indiana used to rank fifth lowest in electricity prices, now we’re somewhere around 27th lowest. What kind of an impact is that making when companies compare states to locate their new or expanding businesses?

Harman: “Clearly the higher cost of electricity in Indiana now as compared to just a few years ago is a disadvantage. Companies must also factor in projections for how the electricity costs will likely increase going forward as compared to other geographical regions, as there is a wide range for current power costs and power generation mix (nuclear, coal, natural gas, etc.) region to region. Indiana is heavily coal-fired generation and as such the costs to deal with tightened EPA emissions from these power plants has translated into higher power prices.”

BV: The SUFG released a recent forecast that predicted that prices will grow by over 30% over the next 20 years, while demand stays relatively flat. If companies have a hard time keeping up with costs now, what is the impact that an extra 30% will have over time?

Harman: “All companies are being forced to reduce the energy intensity of their businesses in order to offset what they can of the future electricity cost increases. Any cost increases that cannot be passed on through higher selling prices cause profit margin compression and reduce the financial health of a company. Companies are sensitive to customer demands that they must first do everything in their power to avoid any increases in costs before they try to seek cost recovery through price increases. …

Since 2006, ArcelorMittal USA has reduced energy costs by more than $163 million through focused improvements and energy management, making us the only steelmaker to be named an Energy Star® partner by the US EPA and participant in the US Department of Energy’s Better Plants Program.”

Read the full story.

All in the Nuclear Family

Did you know:

  • There are currently 104 nuclear reactors in 31 states (count Indiana among the other 19)
  • Nuclear provides about 20% of the nation’s electricity
  • No new nuclear facilities have been built for decades due to environmental opposition and regulatory uncertainty

Minnesota has banned all new nuclear plants, and 12 other states have put various restrictions on any potential construction.

Some states, and a number of other countries, have demonstrated that nuclear can be a safe and valuable contributor to the energy mix. A strong energy policy that promotes a serious look at nuclear as part of the solution would be a welcome addition.

Stanley: Duke Energy’s New Edwardsport Plant to Contribute to Affordable Electricity

Jim Stanley, President of Duke Energy Indiana, relays the status of the company’s new Edwardsport coal gasification facility.

Duke Energy’s new power plant using advanced integrated gasification combined cycle, or IGCC, technology that is being built in Edwardsport, Indiana, is an investment in the local community, the state and our future. 

When local, state and community leaders offered their support for Duke Energy’s decision to move forward with the project, they did so knowing the positive impact that reliable, affordable electricity could have on our state, the local community and the people we serve. When completed in 2012, the plant will produce 10 times as much power with significantly less environmental impact than the much smaller and older plant it will replace. It will be the first major new power plant built in Indiana in more than 20 years and serve as a critical starting point to modernize the state’s aging electrical systems.

Some will say now is not the time to build an expensive new power plant. But by investing now, we can ensure our children and grandchildren will have the infrastructure they need for a better future. And by spreading out the cost of the plant over time, we can meet our future energy needs and pay for our investment without a dramatic increase in our family energy bills.

Furthermore, in these challenging economic times the impact the construction and eventual operation of the plant is having and will have on our economy is dramatic, generating good-paying, high-skilled jobs and spurring economic growth across the state. 

Currently about 1,400 electrical workers, iron workers, plumbers, carpenters, laborers, and other professionals are working on the construction site.  This number is expected to grow to about 2,000 this summer. And when completed, the plant will employ about 100 full-time workers with high-skilled well-paid jobs. In addition, the 1.4 million to 1.7 million tons of Indiana coal the plant will use each year will contribute to an estimated 350+ new mining and railroad jobs. And, as one of the largest construction projects in Indiana, the Edwardsport plant has generated approximately $468 million dollars through contracts with 141 Indiana businesses, such as Bowen Engineering, BMW Constructors, F.A. Wilhelm, Gribbins Insulations and Solid Platform, just to name a few.

In these economic times, when Indiana workers are hard-pressed to find work and businesses are cutting back, supporters of the project should be commended for supporting high-value construction projects like Edwardsport that have an immediate economic impact on our state and local economies and serve as a catalyst for further growth and investment in the future.

Editor’s UPDATE: Congrats to Mr. Stanley on his new position as Duke Energy’s Senior VP of power delivery for U.S. operations.