Companies Taking Drastic Steps To Cope With Power Price Hike.

It all started last August when the electricity bill went through the roof.

Michael Denton Jr. opened his statement from Southern California Edison and saw that the electricity costs for his axle manufacturing plant in unincorporated Los Angeles had suddenly shot up from $10,000 a month to $25,000 a month, with no increase in consumption.

"It was amazing," recalls Denton, vice president of Foote Axle & Forge LLC, a decades-old company.

Denton, and his father, Michael Denton Sr., president of the company, knew that some drastic measures would have to be taken if they were to save their business, which faces stiff competition from out-of-state axle manufacturers not laboring under the same energy constraints.

So they did. They laid off one shift of 10 laborers who had been working from 6 p.m. to 3 a.m. Then on April 1, they converted the early morning shift of 28 workers to a 3 a.m.-to-noon shift that operates at off-peak hours.

The result is that the company's electricity bill has returned to $10,000 a month, but that's only because consumption has been cut by 40 percent and employees are working odd hours.

"When they started talking about rolling blackouts in January, we had to make a decision," Michael Denton Jr. recalled. "And my decision was to run the plant on mid-peak and off-peak hours."

All across Southern California, manufacturers, business owners, commercial building operators and retailers have been wracking their brains to come up with creative ideas to shave consumption of a commodity that has become outrageously pricey.

If they don't come up with creative ways to whittle down electricity usage, their energy costs may push them into bankruptcy reorganization, or liquidation.

Committees formed

To survive, businesses throughout Los Angeles, and elsewhere statewide, are holding meetings and forming committees to study the issue and develop solutions. Some of the ideas have been very simple, from cutting back air conditioning to using lower-wattage light bulbs.

"I'm sitting here at my desk with all the lights turned off, using the light from the skylight to do my work," said Lonnie Kane, president of Karen Kane Inc., a manufacturer of upscale women's clothing headquartered in Vernon. "We've rewired our cutting tables so each table's light comes on individually instead of all of them or half of them coming on when you turn on a switch."

Lock-boxes have been installed on the thermostats, with the temperature setting pegged to 76 degrees. The result is that electricity consumption has been reduced by 20 percent.

"We're going to be better off for this when the energy crisis is over," Kane said.

While Kane's solution to energy has been simple and practical, executives at Ace Clearwater Enterprises near Torrance, which makes parts for the aerospace and power-generation industries, went to great expense and time to conserve energy.

The company, which uses extremely hot metal-forming presses in its manufacturing process, spent $50,000 to move both its 30-ton presses from its Paramount foundry, which is in the Southern California Edison service territory, to its plant in an unincorporated area near Torrance, which is served by the Los Angeles Department of Water and Power. The move has reduced electricity costs and the threat of rolling blackouts this summer.

"It was a major move, but it was a good move because those presses are very busy," said Gary Johnson, vice president of the $22 million (annual revenues) company founded in 1949.

Cutting back

The company also is conserving energy by paring back the hours of operation at its Paramount foundry. It operates only three days a week now instead of five days a week. Other steps that Johnson and his team have undertaken include turning off 50 percent of the fluorescent lights, eliminating usage of personal refrigerators, and posting signs to turn off the lights in the bathroom.

He hopes such moves reassure his out-of-state clients, who are worried about getting their products on time, that the company will not be affected by California's energy shortage this summer.

"We do things on a just-in-time basis, where we are shipping to an aerospace company's shop floor," said Johnson, who has spent many hours on the phone with his clients doing "damage control." "We have a lot of long-term agreements. People want to know what our contingency plan is, and that we will be able to provide a continuous flow of products."

Supplying a continuous flow also is the name of the game over at Miller Brewing Co.'s plant in Irwindale, where 86 million cases of brew are produced every year. For awhile, the company found it more economical to produce beer at its two Texas plants and ship it into California.

"It was during the early part of this year that we were in a desperate situation in terms of cost," said company spokesman Victor Franco.

Early last year, the company had been paying 5.5 cents a kilowatt-hour for electricity. Then, during the blackouts that started last year, the price went up to $7.50 a kilowatt-hour. That's because Miller Brewing had signed up for a special I-6 energy-saving contract available to large energy users in the Southern California Edison system. The contract stated that, if there was an energy shortage, big consumers like Miller Brewing had to shut down their facilities to make energy available to other companies. Otherwise, they had to pay a premium price for electricity.

But Miller Brewing found that, with only a few hours notice, it couldn't shut down its plants right in the middle of the brewing process. So it ended up paying the premium rate of $7.50 per kilowatt-hour during blackouts. "During the last six months of 2000, we had 17 interruptions of electricity," Franco noted, explaining that the company saw its daily energy costs skyrocketing from $15,000 all the way up to $168,000.

The brewer was desperate to save energy. It hired a special consultant who came up with several suggestions.

First, the production schedule would have to be rerouted away from the peak energy-consumption hours of noon to 6 p.m. Then, the clerical staff would have to alter its schedule. Instead of working from 8 a.m. to 5 p.m., the staff now works from 6 a.m. to 2 p.m. so that less air conditioning is needed.

Half the lights in the parking lot, walkways and outside area are shut off. And the company is holding an employee contest for the best suggestions on how to save energy. The winner gets a $500 gift certificate to buy an energy-saving appliance.

So far, the efforts have helped the brewing company bring its daily electricity cost back down to $23,000.