COLUMBUS, OHIO — With electricity deregulation looming on Ohio's horizon, processors all seem to be asking the same question: How can I save money? The answer at the Ohio Plastics Summit, held Jan. 25 in Columbus, was simple: Start preparing now and don't rely on Senate Bill 3 to do everything for you.
SB-3, which is to take effect next year, will guarantee an open marketplace for electricity suppliers and will implement a rate cap, making sure customers don't experience a rate increase from their current suppliers. But it's up to each individual processor to pursue savings from other suppliers, said seminar speaker Sam Randazzo, a lawyer with the lobbyist group Industrial Energy Users-Ohio.
"Historically, customers have reacted once the horse is out of the barn. Once the bills start coming, you ask, `What happened?'" he said.
Processors need to be armed with information, and they need to start educating themselves now, said Kathy Kolich, general manager of consulting firm E Group of Independence, Ohio. E Group, a subsidiary of utility holding company FirstEnergy Corp. in Akron, Ohio, helps FirstEnergy customers obtain the best rates.
Key factors are what time of day a company's energy use is highest, and how much energy it uses, she said. With higher demand driving rate increases, a company using most of its electricity during off-peak hours could pay a lot less for the same service, said Kolich, who also spoke at the conference.
"If you want to play this game, get your arms around the data," she advised.
Otherwise, uninformed processors could get stuck with stagnant rates while others are reaping the benefits of deregulation, Kolich said.
For some, savings could occur immediately.
Joseph Bergen, president and chief executive officer of Sajar Plastics Inc. in Middlefield, Ohio, said deregulation will allow him to buy electricity from a supplier only 50 miles south of his Northeast Ohio plant — at a savings of 47 percent. The injection molder currently spends about $600,000 a year on electricity.
Others may not see a cost reduction at all.
Minco Group of Dayton, Ohio, currently spends about 7 percent of its operating costs on electricity, well below the state average of 15 percent, said Executive Vice President Joe Minneman.
Mike Hagen, president of Pinnacle Plastic Products of Bowling Green, Ohio, said the choice was clear when it came time to chose a site for his firm's blow molding plant.
"Bowling Green's energy rates were very reasonable," he said, adding that the company currently spends about $300,000 a year on electricity. "If we were just outside Bowling Green, it would be about double that."
The company also had considered locating in Indiana and Ashland, Ohio.