California Woodworkers Cope with Energy Crunch.

Representatives of the California Furniture Manufacturers Assn., the Woodwork Institute of California and California Energy Commission address the Golden State's power problems.

THE GOOD NEWS is that there is no threat of a rolling blackout short circuiting next month's 2001 AWFS Woodworking Machinery & Furniture Supply Fair. The Anaheim Convention Center and neighboring Disneyland are exempt from the transient power outages that many Californians have endured over the last few months.

The bad news is the state's citizens and businesses can expect more energy-related inconviences and higher power prices in the months to come.

How Bad Is It?

California's electrical customers are not battling with constant blackouts -- yet. But for commercial users the power crunch is still a problem that could worsen as the summer heats up.

Claudia Chandler, assistant executive director of the California Energy Commission, says the media has blown the problem out of proportion. "There's probably been more airtime given to blackouts than we've had actual blackouts."

Forecasting the number of blackouts that will occur this summer is as difficult and chancy as predicting the weather months in advance, Chandler says. How hot it gets, though, especially in high usage areas, will have a strong bearing on the number and impact of power stoppages.

New long-term contracts and state programs that add power sources and encourage conservation and efficiency eventually will help ease matters, Chandler says. Usage in May was down 11 percent from last year, for instance, and plants producing an extra 5,000 megawatts of electricity will be running by the end of September.

Mild weather into June helped, but if a heat wave hits this October when some power plants shut down for maintenance, it could extend the summer's woes, she says.

Profit Erosion

In the meantime the state's woodworking industry is struggling with tight power supplies that translate into higher costs, interrupted production and softening demand for their products.

For most of the state's woodworking operations, increased energy costs translates into reduced profits, says Larry Parnell, president of Oakwood Interiors, a 500-employee furniture company based in Ontario, CA. Parnell, who also serves as president of the California Furniture Manufacturers Assn., says some companies will either fold or be forced out of state to areas with lower production costs.

"We feel the effect in our West Coast sales and our direct expenses," Parnell says. Between an uncertain economy and their own higher utility bills, consumers are gun-shy when it comes to purchases.

"There are only so many places you can eat (away at higher manufacturing costs)," he says. Parnell says his company has put a priority on improving energy efficiency to help pad the blow, leading Oakwood Interiors to cut electricity consumption by 20 percent.

"Whether the market will allow us to pass it on is the question," he says. Oakwood Interiors implemented a 4 percent price increase in January--its first in two years according to Pamell, but that was not energy-related. "We haven't felt the impact of the higher bills yet, but we know they're coming."

Parnell says his company participates in a program that allows the local electrical utility to turn off Oakwood Interiors' power with a 30-minute warning when usage peaks and supplies are tight. In exchange for agreeing to a maximum number of 25 shutdowns per year, Oakwood Interiors pays a lower rate for power. By June, Oakwood Interiors had already had 19 interruptions, lasting from three to six hours each.

"Now we're coming up on the warm months and we can be hit by rolling blackouts like everyone else," Parneil says.

Oakwood Interiors' production machinery is equipped with automatic cutoffs for safety. The company's computers have battery backups to prevent data loss and programming glitches, Parnell says. He adds that the quickest and best change manufacturers can make to lessen production problems is to slide production shifts to off-peak hours.

Powering Up the Graveyard Shift 

That's the route Custom Plastics Unlimited, a fabricator of solid surface countertops and pre-laminated panels, has taken. When the temperatures rise, the Folsom, CA-based company rolls back its production shift to 4 a.m. to noon.

Skip Spence, president of Custom Plastics Unlimited, says the schedule change means that employees are more likely to get a full day's pay instead of being sent home early because of a blackout. In addition, Spence, a member of the Woodwork Institute of California's Board of Directors, says his company shuts off all lights on the production floor during the 45-minute lunch break and turns off as many lights as possible at its production facilities to conserve electricity.

Passing higher energy costs onto customers is difficult in a market as competitive as California, Spence says. He adds that an outage that shuts down glue spreaders means losing most of the day's productivity while workers take the equipment apart for cleaning. The task takes twice as long without power.

Generator Pros & Cons

To minimize power-related problems, Spence says his company has purchased generators to help cut electricity use during high-demand days. "They let us keep working and meet our commitments to our customers," he says.

Generators may not be the best solution for everyone, however.

Parnell says units that run on natural gas are in short supply, while the more easily obtained diesel units pollute and require hard-to-acquire permits from air-quality regulators.

Chandler says generators are not always the best investment compared to conservation -- shutting off lights and computer monitors -- and improving efficiency, such as by changing to compact fluorescent lights and EnergyStar monitors.

Cogeneration is one possibility to consider if a company is already burning natural gas during the production process, she added. Adding a turbine to the system to take advantage of waste heat "makes a lot of sense," Chandler says. Businesses should work with their local utility to find the best-fitting solutions, she adds.

Energy-Saving Incentives

Chandler says the Energy Commission is offering $400 million in financial incentives for businesses to conserve, add efficiencies and shift electricity use to off-peak hours. Real-time meters, for instance, break usage down by peak and off-peak periods, when utilities charge different rates.

These conservation incentives are expected to help put 500 megawatts from commercial users and 5,000 megawatts back into the pool, Chandler says. (More information about energy-saving incentives is available on the Energy Commission's Web site www.energy.ca.gov/peakload.)

In another move to relieve the energy crunch, Chandler says the state is speeding up the licensing process for plants capable of generating at least 50 megawatts in the hopes of adding another 5,000 megawatts of electrical capacity by the end of September. By the summer of 2003, the state's power generators will increase the supply by 20 percent, she adds.

Until then, electricity users will find daily status reports of the state's grid online at www.caiso.com. Run by California Independent System Operators, the Web site gives a 48-, 24- and 1-hour blackout prognosis. Because demand and supply change quickly, the longer-range forecasts are vaguer, but Chandler says they are still useful to help businesses plan schedules around potential roiling blackouts.