Hartford Business Journal

10 HARTFORDBUSINESS.COM | SEPTEMBER 2, 2024 Building Ideas That Work... Building Ideas That Work... © 2011 BlueScope Buildings North America, Inc. All rights reserved. Butler Manufacturing ™ is a division of BlueScope Buildings North America, Inc. For more than 80 years, Borghesi Building & Engineering Co., Inc. has provided quality and reliability with design and energy efficient construction. 860.482.7613 | BorghesiBuilding.com 2155 East Main Street, Torrington, Connecticut 06790 With an attractive design, it presents to your customers a comfortable relaxing environment to help promote sales. PROJECT SPOTLIGHT: COUNTER WEIGHT BREWING When quality finishes and an attractive functional interior are required, our fine craftsmen provide the ultimate details. Howard Goldfarb, president of architectural aluminum prod- ucts manufacturer Leed Himmel Industries in Hamden, said his company, a UI customer, also has sought to adapt by being more energy efficient. "We make architectural aluminum. We paint it, we anodize it," he said, adding that the anodizing process, which coats metal with an oxide layer, uses a lot of electricity. "We changed our processes, built some new equipment, and used variable frequency drives, which use a lot less power," Goldfarb said. "It uses about a third less power than the standard motor drive on a piece of equipment." Leed Himmel also swapped out 600 or 700 lightbulbs in its facility for LEDs to reduce energy consumption. Even with all of that, his company faces a monthly electric bill "that could be close to $40,000," he said. "There's no way we can afford to do this." To try to alleviate the impact, Goldfarb said, Leed Himmel is imposing an energy surcharge for its customers of six-tenths of 1%, or $6 for every $1,000 billed. "Do I want to do that? No, I don't," he said. Doug Johnson, owner and presi- dent of Marion Manufacturing Co. in Cheshire, said he is "a little perplexed on my next move" to offset the increase in his metal-stamping company's electric bill. According to Johnson, Marion's bill jumped $2,600 in July. "It's going to be a big expense for us for the next 10 months," he said. What makes it especially painful, he added, is that Marion, which employs about two dozen people, is growing and trying to add workers while also preparing to make a $250,000 investment in a robotic inspection and packaging system. Marion also installed variable frequency drives to reduce its power usage. "In a small manufacturing company, cash is key," Johnson said. "But we just got hit with this huge electrical increase, so it's a daily struggle." The bottom line CBIA President and CEO Chris DiPentima said the spike in electric delivery costs is espe- cially painful for manu- facturers because they generally don't have high profit margins. "Let's say you're making a 10% margin," he said. "Most manu- facturers are reinvesting 3% to 5% of their profits — half of your 10% — back into capital equipment and facilities to stay innovative, to stay automated, to stay cost-competitive compared to the rest of the country. So, there goes half your margin right there." In addition, he said, Connecticut has the fifth-highest wages in the nation, which further reduces the margin. "You get a spike like this, that eats your entire bottom line," he said. Unfortunately, DiPentima said, there is likely little the state can do in the short-term to address the delivery charge spike. However, down the road, including during next year's legislative session, policymakers must address the state's high electric costs, he said. While the state is slowly moving toward solar and wind power, generating electricity here remains a challenge. At the same time, "we know energy demand is going to double over the next 20 to 30 years," DiPentima said. "ISO New England (the region's electric grid operator) has said there are going to be cost increases because we're moving towards green energy," he said. "That's the choice we've made in Connecticut. … We know green energy is going to be more expensive than more tradi- tional energy, so how are we going to pay for that increase in energy demand? You've got to put that plan in place now." Senate Republican Leader Stephen Harding, of Brookfield, said the GOP next session will re-propose several reforms that aim to better control electric prices, including limiting all future power purchase agreements to rates that are no more than 150% over the wholesale electric market price. That would ensure Connecticut doesn't pay exorbitant prices for clean energy, including wind power, Harding said. Newly metal-plated screws fall off a conveyor belt at UniMetal Surface Finishing in Thomaston. Chris DiPentima Doug Johnson Electric Rates Continued from page 9

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