Public Power Magazine

The Wow Factor

From the January-February 2005 issue of Public Power

Originally published

By Jeanne LaBella
Vice President, Publishing

Not many vendors climb out of bed in the wee hours of the morning to attend to customer needs. “Take two aspirin and call me in the morning,” might be the expected response from most providers. But in communities served by public power utilities, a different ethic exists. The people who staff and set policy for the utility live in the community. They appreciate the important contributions of local businesses to the local economy and they take a very neighborly approach to dealing with their customers.

So last Oct. 8, when an underground primary cable failed at an Analog Devices plant in 

And more . . .

Low rates and superior customer service make public power communities nationwide  inviting for business. Click on the links below to read about more examples of hands-on, personal utility service for local businesses.

Palo Alto Utilities
Silicon Valley Power
Reading Municipal Light Department
Rochester Public Utilities
City Utilities of Springfield, Mo. and Battlefield Mall
City Utilities of Springfield, Mo. and St. John's Health Plan
Greenville Utilities Commission
City of High Point
City of Lexington
City of Rocky Mount
Oberlin Municipal Light & Power System
Wadsworth Electric & Telecommunications
Athens Utilities
Burlington Electric Department
Chelan County Public Utility District No. 1

Wilmington, Mass., the chief engineer for Reading Municipal Light Plant was at the company’s site at 3 a.m. And when Goldsmith & Eggleton, a rubber reprocessing company in Wadsworth, Ohio, had an overnight maintenance project that required power lines to be de-energized, Bill Lyren Jr. of Wadsworth Electric and Communications was in touch by cell phone and on the scene to help where needed at 2:30 in the morning.

These instances underscore the service ethic that characterizes public power utilities and demonstrate why business customers like public power’s local presence and superior, personal service. It’s the kind of service that often leaves customers saying “wow.”

Steve Kreidler, administration vice president for the University of Central Oklahoma in Edmond, and Rob Rector, manager of Battlefield Mall in Springfield, Mo., had similar “wow” experiences, albeit during daylight hours, with their publicly owned electricity providers.

For Kreidler, the “wow” occurred on a hot day last summer when a loud explosion rocked the campus. An Edmond Electric crew happened to be working in the neighborhood and was on campus within one minute after the explosion occurred.

“Unbelievable,” Kreidler said.

The explosion was caused by a short on a cable that fed into the university library. It vaporized an eight-foot stretch of five-inch-diameter cable. Utility staff worked with the university all day to assess the problem and reroute power to the building from another source.

A cable failure in mid-August left Rector feeling desperate too. It was back-to-school shopping time, an important sales season for retailers. A 15,000-volt three-phase cable feed to Battlefield Mall went out, leaving the shopping center without electricity. After Rector and his staff sized up the problem, he called his corporate office in Indianapolis and learned that the nearest replacement cable was four to six hours away. But a call to Joe Stokes, key accounts manager for City Utilities of Springfield, saved the day. Within five minutes of Rector’s call, Stokes called back to say City Utilities had the cable in stock and could help mall personnel install it.

“We were literally back on line the same day in a process that could have taken us anywhere from two to three days,” Rector said. The mall reimbursed the utility for the cable and labor. “But I can’t reimburse them and thank them enough for helping us out,” he said. “Their efforts really saved us a lot of time and sales.”

Even prior to the cable failure, Rector was a big fan of City Utilities. “The line of communications is absolutely fantastic,” he said. “Joe Stokes is always readily accessible. I can call him at any time and the information I need is usually back with me in a short time. If he can’t get me the information, he’ll put me in touch with the individual at City Utilities who can get it for me.”

Rector also likes the quarterly luncheons City Utilities hosts for its large customers. “That enables us to meet one another and also discuss topics at hand. We learn more about City Utilities and the future of City Utilities.”

When the cable failed at Analog Devices’ semiconductor wafer fabrication plant last October, Reading Municipal Light Department provided middle-of the night assistance, helping the company replace the cable and restore power to the affected building in less than 12 hours, said Lee Bianchetto, senior facilities engineer.

Goldsmith & Eggleton, the rubber reprocessing company in Wadsworth, Ohio, used to buy electricity from an investor-owned electric utility. In 1997, Pete Giacomo, a neighbor who worked for Wadsworth Electric and Communications, approached Joe Falanga, manager of manufacturing operations for Goldsmith & Eggleton, and suggested he consider switching electricity suppliers.

“I could save you some money,” Giacomo told Falanga.

 photo of Goldsmith-Eggleton worker
Dramatically lower electric rates prompted Goldsmith & Eggleton to move from FirstEnergy to Wadsworth Electric & Communications in the late 1990s. Tom Ady (above) is a working group leader for the rubber reprocessing company.  Photo by Paul Alic, Goldsmith & Eggleton.
Company founder Robert Eggleton resisted the idea because he’d been dealing with Ohio Edison Co. (now FirstEnergy) for more than two decades. After Eggleton saw the numbers, he realized he could not ignore Wadsworth Electric’s offer. The city-owned utility was offering a rate that would save the company $13,000 a month on electricity costs.

“We had Ohio Edison come in a couple times,” Falanga said. “We told them what we were going to do and said if they could meet that, we’d be more than happy to stay with them. They said, ‘wait until deregulation comes in 2000 or 2001 and we’ll be able to meet that.’ But we realized that in those two or three years, we’d be able to save a ton of money. They would not budge off that number. We decided to chuck it all and go with Wadsworth Utilities.”

Falanga likes the close personal service Goldsmith & Eggleton gets from Wadsworth Electric. Utility Superintendent Gene Post, a City Council member, and others on the utility staff pay a visit at least once a year to each of the utility’s large customers. The practice promotes a healthy and useful relationship not only between the utility and its customers, but also between the large customers and city officials. Post and his entourage review electricity usage with each customer and give them a heads up about rate changes.

“They ask if we have any projects going on in the next 12 months that they can help us with,” said Falanga. It’s just back-and-forth dialogue—very honest and open dialogue.”

The public power customer service ethic is strong across the United States, but perhaps nowhere as much as in North Carolina, where public power rates are higher than those charged by private and cooperative utilities due to a massive debt incurred by the city-owned utilities, who stepped forward in the early 1980s to bail out private utility nuclear plants.

 photo of Newton generator at Triad Fabco plant
The city of Newton placed back-up generators at six customer sites, including PolyMask Corp. (above) to enhance customer service and boost reliability. Photo courtesy PolyMask Corp.
A few years ago, the city of Newton, N.C., purchased nine back-up generators and placed them at three municipal and six large customer sites. The investment has strengthened reliability and enabled Newton to reduce its wholesale power costs. If peak demand threatens to push up wholesale power costs, the city turns on the generators. If bad weather hits, the city turns on the generators to make sure the customers have a continuous power supply, said Assistant City Manager Glenn Pattishall. The city uses the money it saves on wholesale power bills to invest in its distribution system. Newton is upgrading all distribution lines to 24-kV, replacing transformers and poles and is trimming trees aggressively. It has constructed a digital record of its entire electrical system, which enhances outage and maintenance management, Pattishall said.

One of the city-owned generators is located at a Polymask Corp. plant, where Richard Owen is manager. “It’s been a big advantage for us primarily because before they put it in, for one reason or another, it seemed like if a storm was brewing, we would lose power and maybe be out of power for several hours,” Owen said. “Once they put the generator in, they control it from their city location or, if there’s a power outage, it automatically comes on. It’s been a blessing for us. Basically, we may have a minute of lost power, but shortly thereafter we’re back in business.”

Rick Heithold, strategic sourcing manager of energy, maintenance and store services for the

 Food Lion storefront

Food Lion stores like the customized service and quick attention provided by public power utilities. Photo courtesy Food Lion.

 Food Lion chain of grocery stores, deals with more than 800 electric, water, gas and other utilities serving the company’s 1,220 stores. Food Lion stores stretch from Pennsylvania to Daytona Beach, Fla., and west to Nashville, Tenn., with a concentration in the Carolinas and Virginia. Heithold likes the fact that in North Carolina, he can deal with one entity, ElectriCities, to reach several dozen municipal utilities in the state.

An engineer, Heithold once worked in the utility industry and now does business with private power companies, rural electric cooperatives and municipally owned electric utilities. The municipal power suppliers he deals with are much more responsive than private companies, he said.

When natural disasters hit, it is critically important for grocery stores to remain open. The 2004 hurricane season was relentless—four storms battered the Southeastern United States in August and September. Heithold said he was surprised and pleased by the response and restoration time of municipal utilities in the eastern part of North Carolina, especially when compared with neighboring private utilities. “They’ve got people local within the community,” he said. “They’re close. It’s not a 1-800 call center. That’s been a good experience, especially after this past hurricane system, which was very painful for us.”

He also likes the willingness of municipal electric utilities to employ creativity and flexibility in setting rates. To assure reliable electric service, Food Lion is installing on-site generators at its stores. Seventy generators are in place and another 30 are under construction. When the company was opening a new store in Newton, N.C., it had the opportunity to choose between the city-owned utility in Newton or Duke Power Co. The city offered the grocery store a very attractive rate that rewarded the company for having an on-site generator. Food Lion opted to go with the city.

“Energy is the second-largest operating expense for our stores,” Heithold said. Grocery stores operate on a very slim profit margin, typically in the range of 1 to 3 percent. “Any dollar you can save on the expense side is equivalent to somebody selling $30 to $40 worth of groceries,” he said. “If we save a dollar on our energy expense, all of that goes to the bottom line outside of tax.”

But attractive rates are not the only advantage of municipal electric utilities. Heithold appreciates the attentive service too. Dealing with 800 separate utilities is bound to bring some billing problems. When the city of Huntersville, N.C., sent Food Lion an electric bill that was substantially higher than it should have been, the issue was resolved in less than half a day. “That sounds like a trivial thing, but that’s a big thing when you’re dealing with 4,000 bills a month,” he said. Sometimes it takes months before billing problems are resolved.

Another company with facilities in North Carolina, Japanese-owned Fuji Silysia Chemical USA Ltd., conducted a thorough search in 1997 for its first production facility in the United States. The company, which makes micron-sized silica gel particles, looked at several sites, mostly in the Southeast.

The company settled on Greenville for a variety of reasons, said Brian Baymiller, treasurer/director. The cost of land, labor, fresh water and electricity were all important factors. Mack Green, the former general manager of Greenville Utilities, who died in March 2004, was a major reason the company chose Greenville. Green visited the company’s plants in Japan. “That local presence was very important,” Baymiller said. “We felt we could call him anytime we had a special need and he would answer.” The company continues to enjoy a close personal relationship with Greenville Utilities Commission. “They are very accessible,” Baymiller said.

Cost control is very important to Fuji Silysia. Greenville Utilities has been very cooperative about warning the company when electric rates will increase. When peaks soar on a hot summer day “we automatically give up the comfort level,” Baymiller said. “The air conditioning goes off in the administration building. The lights go down.”

In Oklahoma, state law allows customers to shop for power suppliers and the University of Central Oklahoma, the city of Edmond’s largest electric customer, has shopped. But switching suppliers is unlikely.

“Our service with Edmond Electric has been so good for so long, that we’re not inclined to go find someone else,” said Steve Kreidler, vice president, administration, for the university.

The university likes the city’s attentiveness to its needs and the efficiency of addressing and resolving issues locally. In 2003, the city worked with the university to develop a special rate structure for a peak-shaving program. The university has a thermal storage tank system that holds chilled water to run the campus air conditioning system. The university saves money on electricity and the city levels its load by chilling water in off-peak times, then using that water to cool campus buildings during the hot part of the day, Kreidler said. The arrangement saves the school $120,000, which may sound like a pittance, but represents two full-time faculty, he said.

In developing the rate “we didn’t have to go through the huge regulatory stuff with the state Corporation Commission,” Kreidler said. “These things were decided locally. We knew them, they knew us—we have a 115-year history together. We were able to strike that deal very quickly and very reasonably and to the satisfaction of both sides. You can’t put a price on that.”


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