Cutting Power Costs

Power Cost

Cutting costs is the quickest way to improve profitability.  The electric
bill can be cut easily in most businesses.

Studies our Company has conducted in shops large and small reveal that 50% of the power
bill typically comes from only one use of power – flash curing.  The
other half of the power bill comes from everything else –  indoor
and outdoor lights, conveyor dryer, automatic press, embroidery machines, and
more. 

Flash dryer  The cost of flash curing can be cut several ways.  First,
install a temperature control switch, if the flash dryer does not already
have this control.  The switch is a rheostat that controls the amount
of power going to the heater element.  Your cost to add such a switch
will be under $50.

Second, lower the heater element to 1-2” above the garment being cured.  A
temperature control allows positioning the heater element this close to the
garment without fear of scorching.  Such a close distance reduces the
chance of curing being uneven across an image area, or curing being uneven
due to drafts in the room, such as from people walking by the flash dryer.

Third, use 220 volt rather than 110 volt flash dryers.  Heat level corresponds
to wattage, and watts are volts times amps.  So by doubling the volts
from 110 to 220 the same wattage can be achieved with half as many amps.  The
220 volt dryer can produce more heat.

Demand Charges  An inspection of the electric bill at most companies
will reveal charges for the power actually used, which are denoted as KWH,
demand charges (KW) and miscellaneous other charges like fuel surcharges.  Demand
charges are not power used, but rather the peak level at which power was
used at an instant during the billing period.  You the customer are
billed all month long for this momentary peak use of power.

Demand charges are analogous to driving a car.  At some time during the month
you might have driven as fast as 80 m.p.h. on the freeway, but for most hours
during the month your car was parked.  The power company bills you demand
charges as though you drove your maximum speed constantly for the entire month.  The
demand charge would be the same whether you drove at this speed 24 hours a
day for every day of the month, or just for an instant.

At companies that incur demand charges, the charge for demand (KW) is frequently more than
the power (KWH) actually used to operate electrical equipment like flash dryers.  So
the objective is clear.  You will want to reduce demand charges.

Flash dryers with electric bulbs cycle on and off creating sudden demands for power, that
is, demand charges.  The higher the wattage of the flash dryer, the greater
will be the demand charges.  Such glass bulb dryers also have a higher
maintenance cost replacing bulbs than infra-red heater elements.

Any high wattage or high amperage electrical equipment that is turned on will be recorded
on the demand meter owned by the power company.  A group of electrical
pieces of equipment turned on at approximately the same time will record on
the demand meter just like one larger electrical motor, flash unit or light.  A
1000 watt exposure unit being turned on while the flash dryers are running,
conveyors are running, and other power is being used in other applications
would combine to create a new peak in demand. 

The power companies automatically record demand within about every 15 minutes.  So
demand can be managed to a lower level by avoiding running a flash dryer and
turning on the 1000 watt exposure unit within the same 15 minute period.  We
no longer turn on our sodium lights in the plant and have replaced them with
fluorescent light fixtures to reduce the demand for power.  An inventory
of all electrical appliances will reveal where the greatest risk of creating
demand charges exists.

Sales tax  Another candidate for cost reduction, and possible
a refund check, is sales tax.  Not all political jurisdictions have
a sales tax on power, but most do.

Sales tax applies only to sales to the final consumer within the same state. So the farmer
who grows cotton does not charge sales tax on cotton going to the textile mill,
and the mill does not charge sales tax on shipments to wholesalers.  If
sales tax were charged, then the process would be sales tax on sales tax which
is the way the value added tax works in Europe.

If you pay sales tax on your power, or sales tax on the gas used in a conveyor dryer,
or sales tax on any other item used to produce a product, that becomes part
of the total cost of the product.  Then when the finished product is sold
to the consumer, sales tax is charged again.  That is double taxation,
and illegal, but you may nevertheless be incurring the double tax.  Here
is how double taxation can be avoided.

 First, check your electric bill to see if sales tax is stated separately, and list
the amounts paid monthly for the past three years.  Excise taxes are not
a sales tax.  If no sales tax is shown, check with the utility to find
out if sales tax is included in the utility’s rate structure.

Next, an inventory of electrical usage must be prepared.  For example, list each
flash dryer, wattage, and number of hours used per month.  Watts times
hours is KWH, or kilo watt (1000 watts)hours.  That is how the business
is billed by the utility.  Count the number of light bulbs in the ceiling,
and multiply by the watts of each bulb and number of hours the lights are on.  List
everything that uses power, the watts, (volts times amps) and hours of operation.  Power
consumption will vary by season due to air conditioners, radiant heaters that
are typically high wattage, seasonal work patterns and other determinants of
power consumption that you want to look for.

 Soon you will realize the benefits of turning off lights and equipment not in use.  We
had the Coke delivery man remove the light bulb from the soda machine since
we all know where the machine is located.  We removed one of two exit
light bulbs at every exit, and replaced worn out 25 watt bulbs with 15 watt
bulbs.  The hours of operating of outdoor lights on our plant and parking
lots were cut to those hours where we need light.  Preparing the inventory
will suggest opportunities for you to cut your power costs.

Power used in non-production areas like accounting and the sales office are taxable.  Power
used to produce the product is exempt from sales tax.  So power to a press,
flash dryer, conveyor dryer, lights in the printing or embroidery area, and
compressor is exempt.  The products could not be created for sale without
these uses of power.  By contrast, power is consumed in accounting and
sales areas without any connection to producing the product. 

Studies we have conducted in screen printing shops have resulted in exemptions as high
as 85% of total power consumed.  Once approved by the state sales tax
bureau, sales tax  is applied in these cases to only 15% of the power
bill.  Now that is a savings every month that goes right to the pre-tax
line of the income statement.

The state sales tax bureau will tell you their procedure to follow.   In New
York we submitted our engineering study, which was the inventory of electrical
usage showing wattage and hours, to the sales tax bureau on their forms and
received an exemption letter in return.  We then sent a copy of the sales
tax exemption letter to the utility which removed sales tax from all future
power bills.

As part of our submittal to the sales tax bureau we requested  a three year refund
of sales taxes paid multiplied by the exemption percentage.  In about
six weeks we received the check for 85% of the sales taxes we had paid.

Now we calculate the sales tax to be paid to the state and add that amount on the
periodic sales tax return.  However, that cash payment for us is at the
end of the sales tax reporting period rather than paying the utility which
has use of our sales tax money interest free until the utility remits to the
state at a future date.  So we have also improved our cash flow.

Other Power Saving Moves  Flash and conveyor dryers
can be rendered inefficient by air flow in the shop.  Air will flow
between doors and windows.  A conveyor should be positioned perpendicular
to that natural air flow so air does not flow through the conveyor dryer.  A
flash dryer should be isolated from the flow by a barrier and close proximity
to the garment being flash cured.  Flash cure units should not be
positioned near lanes where people walk creating air turbulence. 

A conveyor with a vent can be turbo-charged by placing a flat sheet of metal over the
vent converting the conveyor from a convection oven to a baking oven.  Convection
ovens raise a lot of lint off the garments, but baking ovens do not.  The
down side of a baking oven is some dark shirts have a strong odor when the
dye is cured, and your personnel might find that objectionable.  If windows
or doors can be opened, a fan can be used to remove the odor.  Converting
a convection oven to a baking oven makes it more efficient  and allows
turning the temperature and electric bill down.

If the conveyor dryer has openings at both end that are higher than required by the
garments going through the dryer, tape cardboard over the portion of the opening
not required for garments to pass under the door.  Insulated doors and
dryer hoods will be more efficient. 

Higher mesh counts, thinner stencils, and inks with less pigment  produce ink
films that are easier, faster and less expensive to cure.  Half tone
dots printed with transparent process ink through a 305 mesh cure faster and
with less heat than pigment loaded white ink through a 110 mesh.  So every
step possible to require less heat will save money.  That means using
retensionable screens so ink is not driven into the garment, using the highest
mesh count possible, and creating bright images with a half tone underbase
rather than a thick slab of ink, for example.

Often when visiting customers I observe flash units running up the power bill, but the
employees “on break”  or the flash dryer not being used for
some other reason.  Shops with two people or more will use their dryers
more efficiently, if they work in shifts so that the press and dryers are always
being used.

Measuring Power Costs  A power bill can be confusing to
read and understand.  Here is how to make it very simple.  Just
take the amount of the check you write, that is, the bottom line, and divide
by the number of KWH or kilo watt hours.  If you are paying over 12
cents, you have one of the most expensive power companies in the U.S.  If
you are paying around 3 cents, you have one of the least expensive.  Customers
served by Rural Electric Coops, small municipalities and selected government
funded organizations pay less typically, and customers served by large
utilities pay more.  In our experience supplying well over 4000 high
voltage electrical substation and transmission projects the larger utilities
have less control over capital expenditures, and that is reflected in your
power bill.

Your Next Dryer Purchase  Flash and conveyor dryers
that have air pushed through the heater element are more effective at curing
and less likely to scorch the garment.  Such an air assist will add
to your initial cost, but will pay back quickly.  If fans are used,
then you must clean the filters daily to prevent clogging the holes in
the dryer, or you are better off not buying such a dryer.

Conclusion  There are many ways to cut the power bill and make more money.  You don’t
give any vendor or employee a blank check, and can tear up the blank check
for power.  The savings will start shortly after the inventory of power
consumption is prepared and you take action.