ENERGY BLUES

The energy crisis continues to gather momentum on all fronts, and all signs are pointing toward a big boost in the sales of energy-efficient electrical products because of power shortages.

In one of the most recent developments, California's lawmakers passed legislation providing $850 million in incentives for peak-load reduction and energy-efficient upgrades for lighting and motor-driven systems. On a broader front, Federal regulators ordered market-based price ceilings on electricity sales across Western states to provide “breathing room” for the markets to correct themselves.

Even Southern California's jaded television and entertainment industry is getting into the act. An episode of NBC's The Tonight Show was recently scheduled to be taped without studio lights, television monitors, amplifiers and other power sources, in recognition of the need for energy conservation, in light of California's energy concerns. Unfortunately, there's no quick or easy fix in sight for the nation's power problems — in California or in other areas of the United States.

“The type of crisis they're facing in California will be seen elsewhere,” says Bill Attardi, Attardi Marketing, Colts Neck, N.J. “In areas where there are large populations and high energy usage coupled with high costs, we will see similar situations.” Attardi also sees similar energy problems in the Northeast, Atlanta, Florida, Texas and Upper Midwest.

Susan Bloom, manager of market research and public relations, Advance Transformer Co., Rosemont, Ill., agrees with Attardi on the impact that the power crisis is having on different states.

“These energy conservation efforts make more sense in some states than in others,” she says. “It's the states with the high kilowatt-hour rates and high usage that will be affected most.”

Bloom says this increased focus on energy-efficient products offers huge potential for manufacturers, distributors and reps.

“The average commercial building in this country was built before 1986. As a result, the majority of buildings were constructed prior to any of the energy initiatives we've become accustomed to.”

Legislation such as that enacted in California, which earmarked $850 million in cash incentives for end users who implement energy-efficient initiatives, will do much to stimulate activity. The California legislation, Senate Bill 5x and Assembly Bill 29x, provides incentives for peak load reduction and energy-efficient upgrades for lighting and motor-driven systems.

The legislation also has significant funds for distributed generation solutions and advanced metering technology that contributes to peak load reduction. Included in the incentive program are lamps, lighting controls, occupancy sensors, entire lighting systems, pumps, motors and controls.

According to Timothy Feldman, government affairs vice president for the National Electrical Manufacturers Association (NEMA), Washington, D.C., a major requirement to qualify for grants covered in the legislation is that end users must demonstrate the energy conservation plans that the grants enable will be installed by October.

Feldman does not think any state will enact legislation on the scale of California's new laws. But he does believe manufacturers and distributors have already seen a sales boost from the Golden State's action.

“Many of them had projects in place and ready to move as soon as the legislation was enacted,” he says.

Peter Bleasby, director of industry relations, Osram Sylvania. Inc., Danvers, Mass., agrees the legislation has impacted business. “It's difficult to keep a compact fluorescent on the shelf in California. “In addition, there are some 48 million T12 lamps with magnetic ballasts in the ceilings in buildings in California. This is obviously an area offering great potential.”

Joe Howley, manager of industry relations and environmental marketing, GE Lighting, Nela Park, Ohio, also sees increased sales, and says GE will continue its strong marketing push for energy-efficient lighting products. “We've been effectively marketing our products that way for the last 40 or 50 years,” he says.

Industry observers say the electrical industry can expect the energy crisis, manufacturers' marketing efforts, utility rebates and legislation all to create demand for energy-efficient products.

NEMA's Feldman notes that the California legislation is “very specific to that state and it was enacted to address their capacity imbalance.”

“They have too much demand and not enough capacity. Long term, what they obviously have to do is add capacity, but that will take three to five years. In the short term, they must conserve.”

Bill Attardi sees more utility rebates down the road in some regions of the United States. “Rather than legislating energy conservation, what I see happening is something similar to what is already going on in New Jersey. The utilities will be making incentive money available for energy-efficient products.”

Advance's Bloom also believes that utility rebates are coming back, and says a number of electric utilities that she has talked to believe they will help cut electrical demand.
— Jack Foster, Contributing Writer