LOS ANGELES (April 18, 11:40 a.m. EDT) — California´s electric crisis has focused plastics industry attention in the Golden State on ways to save energy — from all-electric injection presses to insulating blankets wrapped around injection barrels to keep heat in, like carriers use to deliver a pizza.
Several exhibitors displayed products aimed at cutting energy use during the Plastics Encounter show, held April 10-12 in Los Angeles.
Skyrocketing electric prices and rolling blackouts have caused headaches for businesses and consumers throughout much of California.
"The big fear with our customers are the rolling blackouts, and the disruptions they cause," said Scott Merrill, regional sales manager for Milacron Inc.´s injection machinery business. At Plastics Encounter, Milacron touted its Powerline all-electric injection press, which the company claims consumes 50-90 percent less electricity than hydraulic machines.
In California, several factors contributed to a botched deregulation process: a shortage of power plants, strong economic growth and a regulatory system that capped the prices electric companies could charge for power — while the unregulated wholesale price they must pay for that power has leaped.
Just a few days before the trade show, Pacific Gas & Electric filed for Chapter 11 bankruptcy protection. Southern California Edison also is facing financial trouble. According to the Los Angeles Business Journal, the two utilities face debts totaling $14 billion.
The city of Los Angeles has been spared the chaos, since its municipal electric system was not included in the deregulation. So the lights stayed on during the trade show, held at the downtown Los Angeles Convention Center.
Merrill, who is based in Anaheim, has sold Milacron machines in California for 20 years. He said San Diego was the first part of the state to deregulate its electricity, about five years ago. There were problems.
"That was the harbinger of things to come, but the rest of the state just missed it," he said.
The Cincinnati-based machinery maker claims that three all-electric presses can run on the same power consumed by one similar-size hydraulic machine. It´s a good selling point these days in California, even with a slow economy, Merrill said at Milacron´s booth.
"The machines we are selling right now are electric machines," he said. "When you´re going in and talking to the customers now, the first thing they talk about is electric machines."
On April 11, California Gov. Gray Davis approved $850 million to finance a statewide energy conservation package. Davis wants to avoid more rolling blackouts this summer. Part of the plan includes incentives to help businesses reduce energy use.
Milacron is hoping some of the money will bring back programs that encourage molders, through credits or rebates, to buy all-electric presses and scrap machines that use hydraulic power.
Van Dorn Demag Corp. does not offer an all-electric press yet, but the Strongsville, Ohio, company did roll out something called the Power Miser. The variable-speed drive system, hooked up to a traditional press, can save 30-50 percent in energy costs, according to Van Dorn.
Power Miser controls alternating-current motors that run the hydraulic pumps, turning on the power only as needed to perform a function on the machine. Van Dorn Demag sent out a direct-mail promotion the week before the show.
"We´ve had several customers contact us back already. They´re very interested," said Alfred D. Tolliver, director of parts and service support.
Power Miser works both on Van Dorn presses equipped with the company´s Pathfinder controller, and on other brands of machines, he said.
Magnum LLC of Garden Grove, Calif., did not exhibit at Plastics Encounter, but one of its owners, Pat Mulligan, attended the show and conference. Magnum offers variable-speed drives for injection presses, to reduce energy use when the motor does not need to run.
In California, customers "are knocking the doors off" to find energy-saving products, Mulligan said.
Also at the show, competitors Insul-Vest Inc. of Mulvane, Kan., and Uni-Therm Insulating Systems of Lewisville, Texas, touted their insulating vests that slip over the barrels of injection presses, extruders or blow molding machines.
At Uni-Therm´s booth, President Dan Sherrill directed a visitor to place his hand on a barrel section heated to 400° F, and covered by one of the blankets. It felt slightly warm.
"What these people are paying right now in energy costs is astronomical," Sherrill said. "They can buy an insulating system for a nominal amount and it saves big money."
Sherrill and John Pendergraft, vice president of Insul-Vest, said sales have taken off in California. Their products are simple to explain and promise a quick payback, they said. A cover for a typical injection molding machine sells for around $500. The blanket also keeps workers from getting burned.
"The return on investment is phenomenal," Pendergraft said. "With the incentive programs that a lot of the power companies are offering now, there´s a lot of interest."
Sherrill said processors in Southern California are paying about 12 cents a kilowatt hour for electricity. But some companies that signed up for deals to get discounts now face being shut off in times of very high demand, or keep running at hugely inflated rates.
"What´s happening is, when they go into peak demand, they´re paying $9 (per kwh)," he said.
Magnum´s Mulligan said some plastics companies are moving out of the state. That is bad news in California, which had 137,000 plastics jobs in 1999, making it the top state for plastics-related employment, according to the Society of the Plastics Industry Inc. in Washington.
"It shouldn´t have gotten this far," Mulligan said.