Can O.K. Electric Supply get any greener? Already recognized as one of the leading distributors of energy-efficient electrical products, Bernie Erickson and his Energy Solutions team have discovered a huge new retrofit opportunity: office buildings stairwells in the Big Apple.
Sports geeks wow their friends with arcane sports trivia. Gearheads regale each other with the performance-pumping modifications they make to their beloved engines to increase horsepower. And energy guys like O.K. Electric Supply's Bernie Erickson light up when they talk about the watts saved on their latest retrofit jobs. Success in their world is measured in kilowatt-hours saved, rebate dollars earned, lumens-per-watt, facility-maintenance savings and a retrofit's return on investment.
In the land of energy-efficient lighting, Erickson, president and CEO of O.K. Electric Supply Inc., Perth Amboy, N.J., is an undisputed king. It would be tough to find another full-line electrical distributor in North America who has walked more miles doing lighting audits in offices, car dealerships, hardware stores, ice-skating rinks, churches, printing plants, parking lots and an insanely long list of other applications.
Scoping out parking lot lighting on a college campus? Been there. Retrofitting a Navy ship's lighting system? Done that. Need to know about the intricacies of utility-rebate programs? He's your man. Erickson has retrofitted hundreds if not thousands of buildings and uncovered millions of rebate dollars for his customers — and he is having a blast doing it all.
Erickson has no regrets — except he wishes he could turn back the clock to the late 1980s when the first wave of utility-rebate dollars hit the beach. He says the living was really good for his customers back then and the rebate dollars available were extraordinary.
“We didn't truly understand some of the more involved rebate programs and depended on third parties who kept a majority of the available subsidy,” says Erickson. “We still made so much money for other people. If I could relive my life, I would go back to 1989, and I would do nothing but that.”
One lighting manufacturer says Erickson stands out in the market because of his passion for lighting retrofits, energy and market savvy. “I don't think there is a more knowledgeable guy about energy savings and lighting from a practical perspective in the entire country,” says Bart Pasternak, executive vice president, Westinghouse Lighting Corp., Philadelphia. “He has the interest and intellect to deal at the highest level with the utilities about rebates. Bernie combines a very special set of talents. Anytime you run into somebody who is enthusiastic, intelligent and operates from the highest sense of integrity, you know he is going to be successful and be a great spokesman for our industry.”
Bill Attardi, founder, Attardi Marketing, Colts Neck, N.J., says Erickson stuck with his vision that an electrical distributor could provide a full package of services to end users in the retrofit market. That vision became O.K. Electric Supply's Energy Solutions division, a full-service energy service company (ESCO) that audits a facility, recommends an energy-efficient upgrade, supplies products and often finds subcontractors to perform the work.
“They are a unique company, and it can be summed up in two words: Bernie Erickson,” says Attardi. “He has been in it since high school. His father was in the business before him. Bernie and Eric, his brother (the company's executive vice president), have been in the electrical supply business all their lives. Bernie saw an opportunity and developed a real expertise on the energy side. Lighting is something he really holds dear to his heart.”
Erickson and O.K. Electric's Energy Solutions division have done it all with a turnkey package of services refined over the past two decades since he; his father, the late Bernard Erickson Sr.; and John Nesti bought the company from its previous owners in 1986. They continued nurturing O.K. Electric Supply's core industrial business but expanded the focus with a specialty in lighting retrofits based on the lighting design work they did as company employees. The intricate niche they carved as an energy specialist is good for business, good for the environment and good for morale at O.K. Electric.
Erickson and his key managers clearly love what they do. Maybe that's because for all of them, it's in their blood. Bernie and his brother aren't the only employees who learned much of the business from their father. Leon C. Mowadia Jr., the company's vice president of operations, was mentored by his father, Leon Sr., in their family's company, Atlantic Lighting Supply, Edison, N.J., which was a player in the New Jersey/New York metropolitan area's ESCO and lighting market for nearly 30 years. After that company ceased operations about five years ago, Mowadia and David Attardi, also an Atlantic Lighting Supply manager and now O.K. Electric Supply's vice president of sales, purchased John Nesti's share of the company and are now partners with Bernie and Eric Erickson. David Attardi's father, Bill Attardi of Attardi Marketing, worked in the lighting industry for 30 years before starting a new career as a marketing consultant in 1994. Interestingly, the elder Attardi and Mowadia worked together at Philips Lighting in the 1980s. Today, David Attardi and Bernie Erickson focus on the Energy Solutions division while Leon Mowadia Jr. and Eric Erickson manage O.K. Electric's electrical supply operations.
Well over six-feet tall, Bernie Erickson towers over most workers at O.K. Electric Supply's red-brick headquarters. He is quick with a good joke with employees but just as fast to offer a mile-a-minute riff delivered in the rat-a-tat-tat cadence of his New Jersey accent on the technical specifications of a breakthrough lighting product.
Ask him about his favorite lighting retrofit job of all time, and he really shifts into high gear. It's the World Bank job in Washington, D.C., which has 3.5 million square feet of office space in five buildings and parking garages. O.K. Electric Supply saved the bank $800,000 in annual lighting costs and reduced the lighting load by 4,500 kW by replacing tens of thousands of inefficient fluorescent lamps, electromagnetic ballasts and lighting fixtures with state-of-the-art T8 lamps, electronic ballasts and lighting fixtures with custom reflectors. (See sidebar on page 23.) “Annual energy savings of $800,000 with no rebates,” he says. “People say you need rebates. There was never a nickel's worth of rebates on that project. They had a 52 percent return on investment.”
He loves to publicize O.K. Electric Supply's lighting jobs and offers well-written case studies on his favorite retrofits in downloadable PDFs on the Web site for the company's Energy Solution's division at www.okelectric.com/case_studies. These case studies report on the energy savings customers enjoy from retrofits and provide details on applicable utility rebates, original lighting system and replacement equipment.
Erickson has always been a big believer in the power of marketing, and he recently bolstered that interest with an MBA in marketing from Montclair State University, Upper Montclair, N.J. He says the case studies and related references give O.K. Electric Supply a level of credibility that's tough to beat. He thinks it's a mistake that so few electrical distributors employ a similar strategy.
“Nobody has the time, and most people in this business are good operations people, but they are not writers,” he says. “Most people are not very good marketers. We have always promoted ourselves.”
“A lot of people don't put their case studies out on the Internet,” adds Mowadia. “For some reason, they think it's like putting their customer base out there. But if you have a satisfied customer, you have already locked up the business.”
Erickson also uses the Web to promote his staff's technical and educational background. He and the Energy Solutions team have decades of field experience and have earned key lighting certifications that prove they know how to sell lighting supplies like other electrical distributors, but as an ESCO they can take several giant steps further by auditing a customer's facilities, recommending energy-efficient alternatives, uncovering financing from rebates and other government programs to pay for the job — in many cases designing the systems and even sourcing out the installation.
Erickson and his brother have lighting certified (LC) credentials from the National Council on Qualifications for the Lighting Professions, Austin, Texas; Certified Lighting Efficiency Professional (CLEP) certification from the Association of Energy Engineers, Atlanta; and Certified Lighting Management Consultant (CLMC) certification from the National Association of Lighting Maintenance Companies (NALMCO), Des Moines, Iowa.
In addition to promoting employees' credentials and the company's portfolio of trophy jobs, O.K. Electric Supply's Web site has also come in handy for selling products directly to customers. Its online store sells a broad range of energy-saving products, including one from far past the borders of the electrical market: showerheads for hotel rooms. The company does a huge number of lighting retrofits at hotels throughout metropolitan New York/New Jersey. Erickson started selling showerheads after a hotel customer told him the hotel needed new showerheads in guests' rooms that would cut down on water usage. He found a suitable showerhead at specialty retailer Hammacher Schlemmer and now sources that product for hotels and other customers. “This showerhead is great,” he says. “Most people don't like watersavers because they don't feel clean. This one blows the shower curtain off, but it's only 1.5 gallons per minute.”
The company also sells faux candles lit by LEDs (light-emitting diodes) online. The LEDs give the candles a flickering effect, which Erickson says restaurants use to create mood lighting. O.K. Electric Supply competes head-to-head with Amazon.com and other Web-based companies on the sale of these LED candles.
“We get into the weirdest things,” says Erickson. “We are probably one of the only distributors with a whole section of our warehouse stocked with LED candles. It's a huge item for us. We try to go outside the box to find these other items.”
A New Venture
In addition to doing audits for more conventional lighting retrofits, O.K. Electric Supply's sales team has been busy providing commercial building owners with audits and related sales proposals for a new market niche. To make it easier for building occupants to navigate stairwells during emergency situations, the New York City Building Code's Local Law 26-04 requires all Class E (commercial office) buildings at least 75 feet tall to have photoluminescent (glow-in-the-dark) exit markings and signage in stairwells no later than July 1, 2006. The law evolved from recommendations made by the World Trade Center Code Task Force, which was concerned about the problems World Trade Center occupants had on 9/11 while walking down smoke-filled stairwells after the buildings' emergency lighting failed.
Erickson says the July 1 deadline was always unrealistic because the task force took so long to draft the final law, and that building owners will be renovating their stairwells for months and years to come. He says although his company has been “bidding like crazy” on these jobs, many requests for proposals (RFPs) are just starting to come out, and few jobs have been awarded so far. Complicating the situation is the colossal amount of work that must be done. Erickson estimates more than 1,700 office buildings in New York are at least 75 feet tall (seven or eight stories) and must comply with Local Law 26-04. The photoluminescent markings and signs for the buildings require stairwell lighting of a minimum of 2 footcandles.
“You want to keep people moving in the right direction, and you don't want them to move beyond the exit,” says Erickson. “The idea is that there is a continuous illuminated pathway from the top floor to the bottom floor.”
As part of his MBA thesis, Erickson developed a business plan to attack this market. In addition to selling photoluminescent exit markings and signage, his plan includes detailed audits of existing light levels, estimates of a stairwell retrofit's cost and potential energy savings, assistance in complying with the related Local Law 26-04 paperwork regulations and subcontracting of the labor.
To provide this turnkey service, O.K. Electric Supply works with Jessup Manufacturing Co., McHenry, Ill., which manufactures the photoluminescent products. The company's Glo Brite Safety Guidance System includes tape, signs and other photoluminescent components that provide buildings with an emergency egress route. RPM, Schaumburg, Ill., installs these products.
The stairwell audit is a major element of O.K. Electric's strategy to win bids. The company uses a two-phase audit process. The preliminary audit estimates the installation and materials' costs. A second, more-detailed audit using customized software measures a facility's stairwells floor-by-floor and step-by-step and audits light levels. In the detailed audit, O.K. Electric Supply creates a project database on a password-protected Web page the customer can access to check a project's progress.
“RPM developed this unique system,” says Erickson. “We do a free pre-audit, and then we charge them for a more-detailed audit. In that one, we measure every step and every bend in the stairwell.”
Erickson laughs when describing the conditions of stairwells in New York office buildings. Many of them are often downright grimy, with dirt caked on the stairs and paint peeling off the walls. This adds to installation costs because a stairwell's steps and walls must be cleaned and prepped for the photoluminescent tape to adhere properly. He says fly-by-night outfits that want to make a few quick bucks in this market often do an inferior job of surface preparation, and that their tape and signs are soon peeling.
Auditing a stairwell can be a good workout, especially in high-rise office towers. Erickson is still laughing about his audit of the 102-story Empire State Building. “I started at the top and walked down from the 102nd floor, forgot my pen and had to go back up,” he says. “You always want to walk down, but you may get down to a certain floor and the door doesn't open, so you have to go back up to floor so-and-so for entrance. That's why I like doing audits in the winter better than in the summer. I am soaked to the skin in the summer.”
Erickson says Local Law 26-04 has created a mammoth sales opportunity that could get even larger if the regulation is amended to cover additional buildings such as hotels, hospitals, apartment buildings and movie theaters. “There is so much to be done, but there is limited manufacturing capacity and relatively few people in this market,” he says. “Everybody and their mother could be running around with a suitcase selling photoluminescent tape. We wanted to figure out how we could sell a solution.”
Erickson says all the company's niches, whether it's lighting, stairwells or its historical base in the industrial market, have forced him and his management team to think outside the box and to develop a consultative selling style. That's a selling strategy electrical distributors don't typically utilize, he says. “For the same reasons we are successful with lighting, this works for us,” he says. “Most people don't want to get into that level of detail. You must become an engineering/consulting type of person. We took that approach in the industrial market doing controls and automation and then applied it in lighting. Now we are taking it into this new market.”
When asked why he is so eager to share his secrets of success in the energy market, Erickson says he doesn't worry about competition from other electrical distributors because he has more business than he knows what to do with, and he would rather see electrical distributors grab a share of the energy market than competitors from outside the electrical industry.
“We have so much referral business from customers, vendors and utilities,” he says. “We are backlogged right now. It's a wonderful thing. We need more salespeople, because we are having difficulty handling this volume. I have 10 million square feet of space to survey for lighting audits in New York City. I am backed up.”
For O.K. Electric's Bernie Erickson, the bigger the bulb the better. He and his team at the company's Energy Solutions division enjoy the challenge of helping customers save money with energy-efficient lighting retrofits.
O.K. Electric Supply by the Numbers
Annual sales. $10 million for total company.
Employees and locations. 25 employees at one location in Perth Amboy, N.J.
Company history. O.K. Electric Supply was founded in 1919 as a full-line electrical distributor. The company evolved into a strong player in the industrial market and was purchased in 1986 by Bernard Erickson Sr., Bernard “Bernie” Erickson Jr. and John Nesti. Today, Bernie Erickson, Eric Erickson, Leon Mowadia Jr. and David Attardi are the four partners who own the company. The company continues to supply industrial customers in metropolitan New Jersey/New York, but it has become one of the best-known players in the energy market through its Energy Solutions division, a full-service energy-service company (ESCO).
Eye-Popping Annual Savings
Over the past two decades, retrofits by O.K. Electric Supply's Energy Solutions' division have saved customers millions of dollars in energy costs. The customers who have benefited from the company's energy expertise are a diverse group that includes the U.S. Navy, churches, breweries, property-management companies, printing plants, factories, schools, casinos and theaters. Here are several of O.K. Electric's biggest retrofits.
World Bank Group, Washington, D.C.
The facility. 3.5 million square feet of office space in five buildings and parking garages.
Annual savings. $800,000.
The retrofit. Replaced more than 43,000 fluorescent lamps and magnetic ballasts in recessed fluorescent lighting fixtures with T8 lamps, electronic ballasts and custom-designed reflector kits. In mechanical spaces throughout the facilities, the company replaced more than 2,500 older fluorescent lighting fixtures and lamps with a new lighting system.
Anheuser Busch Brewery, Newark, N.J.
The facility. Brewery, warehouse and offices.
Annual savings. $125,000.
The retrofit. Replaced 1,639 incandescent lamps that had a lamp life of approximately 750 hours with 538 high-intensity discharge (HID) lamps rated at 24,000 hours. Also replaced cumbersome and inefficient 8-foot fluorescent lamps with 20,000-hour T8 fluorescent lighting systems and electronic ballasts. Installing compact-fluorescent lamps and LED exit signs also increased energy savings.
Star Ledger Printing Plants, Piscataway and Pine Brook, N.J.
The facilities. Newspaper printing plants.
Annual savings. $276,000 ($224,000 in energy savings and $52,000 in maintenance savings). The new system paid for itself in less than two years.
The retrofit. The conversion of 1,000W metal-halide fixtures to dual-reflector HID fixtures slashed energy costs by 59 percent and increased lamp life by 40 percent. T5 fluorescent lamps with custom reflectors and LED exit signs were also key elements of the retrofit.