Mainebiz

W W W. M A I N E B I Z . B I Z 19 J U N E 2 7 , 2 0 1 6 M A I N E ' S E N E R G Y I N D U S T R Y F O C U S versus southern-based shipyards, partic- ularly when combined with other opera- tional expenses that are lower in those shipbuilding regions," BIW says in a company statement provided by spokes- man Matt Wickenheiser in response to written questions from Mainebiz. Since energy costs are a significant element of shipbuilding, BIW continu- ously benchmarks and analyzes the cost structures of its competitors. at analy- sis shows Maine's electricity cost per kilowatt hour for large industrial users — averaging $.08/Kwh, as reported by www.electricitylocal.com — to be 20% higher than the national average. BIW's chief competitors in Mississippi, Alabama and Louisiana are 6% to 29% lower than the national average — giving them an even greater cost advantage. "ese southern states also have more sources available for the generation of electricity, such as nuclear and coal, and are within close proximity to abundant and cheap resources such as natural gas and oil for use within shipyards," the company states. Sappi North America, which employs 1,160 at its Westbrook and Somerset mills and has 1,325 employees in Maine, also benchmarks its elec- tricity and energy costs. Bob Dorko, Sappi's utilities and recovery manager who works at the Somerset Mill in Skowhegan, reports that in the com- pany's most recent analysis Maine had the highest cost among all key paper mill states. Although it's a red flag, both Maine mills are high performers in their respective markets, with Westbrook making specialty release papers used by suppliers to the fashion, textiles, auto- mobile and household industries and Somerset making coated papers. "e Sappi Somerset Mill in Skowhegan, the facility where I work, is the largest manufacturer of coated free sheet paper in the U.S.," Dorko says. "Our plant is the seventh largest of its kind in the world. It isn't feasible to pack everything up and move to a lower cost electrical service territory. Instead we optimize and reduce costs wherever we can in order to remain competitive." "In general we work on efficiency of use of fuel and power, as well as process improvement investments, to make step changes to reduce cost," he adds. "We have developed and imple- mented numerous steam or power use reduction projects. We install the most efficient equipment we can when processes are upgraded." Investing in energy efficiency Both BIW and Sappi report that they have worked closely with Efficiency Maine to find ways to conserve energy and lower their costs. Steps taken by the Bath shipyard include investing in energy management software and modern equipment that uses less energy, installing energy efficient lighting, improving insulation in its production buildings and designing all new manu- facturing plants, such as the new blast and paint facility that opened last year, to be energy efficient. It also switched from oil to natural gas in 2011, dramati- cally lowering its carbon footprint and reducing its winter heating costs. "e beauty of energy-saving proj- ects is that they deliver 24/7 during their operation," adds Dorko. "Additionally, when we invest and build projects, our suppliers benefit from all the work and materials that are purchased as the work is done." Woodcock agrees, noting that invest- ing in energy efficiency is, in his words, "by far" the most effective way a company of any size can lower its electricity costs. Industrial projects receiving partial funding by Efficiency Maine in recent years include: $300,000 to Maine Wild Blueberry Co. to leverage a $900,000 investment in an energy-efficient refrigeration system that helped the Machias- based company save approximately 1.4 million Kwh in electricity, for an annual savings of $171,000, yielding a 3.5-year payback on the investment. $45,874 to Hancock Lumber to install more efficient lighting, implement new production strategies and switch to variable frequency drives for its air compressor, fans and water pumps at its Bethel sawmill. Combined with a $32,960 U.S. Department of Agriculture grant, the project paid back in less than four months and reduced electric- ity costs by more than 25%. $59,532 to Franklin Community Health Network to install: high- performance lighting in the main hospital and an office building; energy-efficient HVAC systems; and variable frequency drives for water pumps and other motors. e project paid back in less than half a year and resulted in a $45,576 annual reduction in electricity costs. Although Sappi's Dorko recognizes Efficiency Maine can't fund 100% of the projects seeking help, he suggests the state could help Maine businesses reduce electricity costs even more by raising the program's funding cap or allowing a larger percentage of project funding to be rebated. "We have some C O N T I N U E D O N F O L L OW I N G PA G E » bernsteinshur.com CELEBRATING 1OO YEARS We welcome excellence in practice. Bernstein Shur is proud to welcome Hallie Flint Gilman as a shareholder and member of the firm's Energy Practice Group. With more than 10 years of experience in the energy sector, Hallie's practice focuses on providing legal support for the development and operation of energy infrastructure projects in Maine and nationally. She knows generation and transmission projects inside and out, and has extensive experience as regulatory counsel, general counsel, and in executive leadership for renewable energy developers.

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