Location: Henderson, TN
Program: TVA-EnerNOC Demand Response
DR Strategy: Curtailment Only
Primary Curtailment Strategy: Shutting down one manufacturing area
Annual Payments: Approximately $12,000
Additional Savings: Approximately $2,500/month
The Big Picture
MGM Industries manufactures new construction and replacement vinyl windows for the residential and light commercial sectors. This traditional manufacturer is located in the heart of Tennessee, where it’s been part of the local community for forty years. In 2008, the economic downturn forced MGM to lay off employees for the first time in the history of the company. It also encouraged the company to take a hard look at all of its expenses, including electricity, which is one of its largest line items for the extrusion department.
Established by the Tennessee Valley Authority (TVA) and offered by Nashville Electric Service (NES), MGM enrolled in the TVA-EnerNOC Demand Response (DR) program in 2009, attracted by the approximately $12,000 a year in payments that it receives for reducing 300 kilowatts (kW) of electricity during DR dispatches. Shutting down non-essential manufacturing equipment temporarily makes no difference to MGM’s operations.
The company also uses EnerNOC's energy intelligence software to identify other areas where reducing consumption can make a big impact on its electricity demand, and its bills. “EnerNOC gave us the power to manage our power,” quips John MacKorell, process improvement engineer. Thanks to EnerNOC's software, MGM is reducing its electricity bill by more than $2,500 a month—additional savings that let it keep employees’ jobs secure and ensure the ongoing success of the company.
Cutting Costs to Survive A Downturn
When business was good, MGM Industries didn’t spend a lot of time on the finer details of its expenses. Like any company faced with heavy demand, MGM focused on meeting the need for its products—a wide range of vinyl windows required for the then-booming housing market. “During the busy times, power optimization was not on our radar screen,” recalls John MacKorell, process improvement engineer. “Now every dollar saved helps us save jobs. We don’t run any equipment we don’t have to run. And we’ve become very conservative, taking a hard look at every expense.”
Cutting energy costs was on the top of the company’s list. “The company owner and I were looking at ways to cut our electricity bill, which is about $20,000 a month,” says MacKorell. “When we found out about the TVA-EnerNOC DR program through our energy provider, Nashville Electric Service, we knew we had found what we were looking for. Those payments make a big difference to our bottom line and help reduce our costs.”
An initial assessment by EnerNOC uncovered specific areas of the facility where energy consumption could be temporarily reduced, without affecting production. Two of MGM’s buildings house its main manufacturing operation, where work needs to proceed ahead uninterrupted. But a third building contains its extrusion facility and other related equipment. This 100,000-square-foot facility is the focus of MGM’s DR efforts.
To control more of its supply chain, MGM decided to extrude its own vinyl, the raw material for its windows. While this capability helps it control costs and keep more of its manufacturing on site, it also requires energy-intensive processes. “One of our main buildings, Building C, has a lot of machinery that uses a lot of power,” says MacKorell. “We have extruders, downstream tables, pullers, saws, a centralized chilling system to cool the vinyl and the machines, and a regrind department for reclaiming processed materials made up of shredders, granulators, vacuum conveying systems, and a pulverizer,” says MacKorell. “In short, there are a lot of motors in that building.” Overall, Building C accounts for more than half of MGM’s monthly electricity bill.
Fortunately, the company can choose when it manufactures and reprocesses vinyl. With lower demand comes more flexibility. “During a dispatch, we can shut down or reduce our energy-intensive operations in Building C,” says MacKorell. “That facility is not imperative to production, so it doesn’t make any difference to our production schedule or our customers.”
When MacKorell and his team receive notification of an impending DR dispatch, they reduce lighting, shut down two extrusion production lines, adjust its chillers by twenty tons, and halt all regrinding processes. The team implements these changes manually in about ten minutes.
These production changes enable MGM to lower its electrical consumption by 300 kW during DR dispatches—without affecting overall production. By being available to reduce when necessary, MGM earns annual payments of more than $12,000 from EnerNOC. While these payments were what initially attracted the company to enroll in EnerNOC DR, a secondary result proved to be just as beneficial.
“Total annual cost savings thanks to EnerNOC's energy intelligence software total more than $30,000,” says MacKorell. “So with the software, we ended up saving about three times the amount of our DR payments. These additional funds are really helpful to our business.”
At first, MGM used EnerNOC's energy intelligence software (EIS) as part of its DR implementation—to monitor reductions during DR dispatches. But then the company widened its use of the technology to take a more careful look at its energy use. “Now we use EnerNOC to know a lot more about how we use energy, such as how many amps each piece of equipment draws,” says MacKorell. “This knowledge helps us time our production schedule better and use the right equipment at the right time. Ultimately, we save more by trimming off peaks of demand and rescheduling some production for non-peak periods.”
As part of its efforts, MGM now has a weekly meeting with its production managers to manage and maximize its energy use. These meetings provide an opportunity to translate its energy management down to actual day-to-day operations. “EnerNOC's software helps us get all the throughput we can from our equipment when it’s turned on and drawing electricity,” says MacKorell. “We work with users to make sure equipment isn’t just sitting there. In the past, it might not have mattered. But now we need to make smarter, more informed energy decisions at all levels.”
In 2008, MGM’s average demand was 598 kW a month. Its goal is to use EnerNOC's energy intelligence software to keep this figure below 400 kW. In March 2009, it reduced its demand to 384 kW, saving more than $2,700 on its electric bill in March alone.
The overall financial impact of MGM’s partnership with EnerNOC includes $12,000 in annual DR payments and more than $30,000 in annual energy cost reductions. These bottom-line benefits are very important to MGM, which is working hard to continue thriving in a challenging economy. More importantly, these payments and savings are possible without affecting its core manufacturing operations. Other benefits that DR brings to MGM include:
MGM sees DR as an opportunity to earn payments and cut costs—funds that directly impact its workforce. “We want to protect our people from layoffs,” says MacKorell. “Finding ways to save money has become our priority—to save jobs and ensure the ongoing health of our company.” In short, DR is a proven strategy for businesses weathering an economic downturn.
“Enrolling in DR and implementing the program was simple,” says MacKorell. “EnerNOC was extremely professional. They’re great to work with.”
Smarter Equipment Decisions
EnerNOC helps MGM know more about its energy demand. It also provides detailed insights into key energy-consuming equipment. “For example, we realized that we’re wasting a lot of energy in our chillers and pumps,” says MacKorell. “So we’re considering lower-horsepower solutions that still provide the cooling and flow we need, but that use less energy.” From coolers to grinders, MGM is taking a close look at its equipment and right-sizing it for its needs.
“Conserving power is critical for our community,” says MacKorell. “We don’t want another power plant in the valley. We don’t want our rates to go up. And we all share the responsibility to do what we can to be efficient and smarter about energy. EnerNOC DR is part of our commitment to sustainability—and to our community.”
MGM Industries is alerting other local manufacturers and businesses about the potential of EnerNOC DR—and serving as a model of efficiency in its community. “We’re telling everyone about EnerNOC DR,” says MacKorell. “DR is one of the easiest ways to help out your bottom line.”