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Creating a Business Case to Solve PQ Problems

To develop tools for end-use customers that communicate the business effects of power quality, EPRI PEAC (now EPRI Solutions) had to first understand how customers make decisions when attempting to resolve power quality problems. To that end, Duke Energy and the Tennessee Valley Authority hosted two industry stakeholder meetings to discuss power quality business issues with representatives of a variety

To develop tools for end-use customers that communicate the business effects of power quality, EPRI PEAC (now EPRI Solutions) had to first understand how customers make decisions when attempting to resolve power quality problems. To that end, Duke Energy and the Tennessee Valley Authority hosted two industry stakeholder meetings to discuss power quality business issues with representatives of a variety of industries, including textiles, plastics, health-care, hospitality, and power electronics.

Stakeholder meeting results. At the beginning of each meeting, stakeholder attendees laid out the following specific objectives:

  • Determine industry-specific and common views of power quality.

  • Determine the value of good power quality, as related to specific industries.

  • Translate power quality from a technological to a business perspective.

  • Determine how decisions are made in industry, and who makes those decisions.

  • Explore the economics of power quality solutions.

  • Explore the possibility of developing equipment standards for good power quality.

  • Determine how power quality can be delivered differently to better meet the needs of end-users.

  • Determine the effects of deregulation on the power quality market.

The two stakeholder meetings revealed that, despite progress made in the identification and correction of power quality problems, the concept of power quality itself remains a mystery to many engineers and most decision makers within industrial facilities. Also, decision makers aren't particularly interested in technical details, but rather in the business effects of interruptions caused by power quality disturbances and in any proposed solution to a known problem for the respective facility. Most industries require payback on process improvements of between 12 and 24 months.

Overall, the electric utility attendees at these stakeholder meetings felt that power conditioning shouldn't be sold to their customers as a solution to power quality problems. Instead, they felt that management would respond more positively to business cases based entirely on solving known business and manufacturing problems, such as mysterious shutdowns, missed textile loom picks, or extruder problems.

The stakeholder attendees also felt that when assisting an individual industrial customer, a utility must first understand the customer's process and how power quality disturbances affect its facility. In other words, utilities must use their knowledge of power quality to present and justify a solution to a problem that their industrial customers know they have. As one stakeholder attendee said, “You can't sell me a solution to a problem that I don't know I have.”

Industry specific recommendations and observations. Each participant of the two stakeholder meetings was asked to respond to specific objective questions and provide opinions and commentary on those questions, as well as offer any other power quality related recommendations and observations they felt were of importance. The following is a short recap of the meeting proceedings and the opinions (by industry) expressed by those in attendance:


  • The health-care industry doesn't fully understand downtime costs.

  • Decisions are based on collegial recommendations/physician demands.

  • Industry personnel never think to blame the power systems for a problem, unless an interruption occurs.

  • Facilities don't typically employ engineers familiar with power quality issues.

  • The main constraint on equipment decisions is purchasing agreements.

  • Physicians and, to a lesser extent, nurses drive the purchasing and solution efforts in the industry. CEOs and hospital directors have final say, but physicians drive the decisions. Therefore, educating physicians on the effects of poor power quality is key.


  • Power quality isn't on the “radar screen” of decision makers or plant engineers.

  • The textile industry doesn't see tie-ins between power quality and production goals.

  • If power quality solutions are tied to improvements in productivity, selling solutions won't be difficult. Ideally, identifying a productivity improvement in a known problem area or major cost driver is the best way to communicate the benefits of a power quality solution.

  • Overall, electricity is a small fraction of the production cost of textiles. Labor and raw materials are the largest costs.

  • Life cycle costing is important in the textile industry. Eventually, all cost and benefit calculations must be reduced to terms like “dollars per pound of product.”

  • Facilities generally live with power quality problems if they're not identified specifically. Many unidentified power quality problems have existed for a long time in this industry, and workaround solutions have become standard operating procedure. This creates difficulties in justifying additional cost for a solution that has a perceived minor benefit.

  • Central office personnel (senior executives, CFOs) make final decisions about capital expenditures. Lead engineers and plant managers champion and push capital expenditures on process fixes. General operational concerns make investigating minor events a non-priority.

  • Selling power quality in the textile industry will be analogous to selling education: Executive aren't willing to pay for education but would buy performance-improving skills certification. Similarly, power quality solutions should be marketed as power conditioning that improves productivity.

Plastics. The results and comments from the plastics industry representatives were very similar to those from the textile industry in operations. However, plastic processors are often smaller businesses, so decision makers and operational managers are tied more closely. The single largest concern to plastics processors is unplanned interruptions.

Hospitality. Because the hospitality industry caters to customer needs rather than manufacturing a product, it may or may not be particularly sensitive to power quality as it relates to short outages or sags. It depends entirely on the upfront design specification for the facility. Many facilities are equipped with backup generation capable of providing power locally if the utility supply is unavailable. Larger hotels will often have dual feeds when available. Most equipment trips are due to momentary power quality variations and are considered “nuisance type,” which can be reset fairly quickly if someone from maintenance is available. Examples include elevators topping, HVAC equipment tripping off line, and alarm systems sporadically false signaling.

In the case of newer hospitality facilities, these problems don't occur because the facilities have enough online generation to support their own internal distribution system when interruptions do occur on the utility system. Typically, the equipment for critical operations is already protected by some type of power conditioning equipment.

Overall, the two stakeholder meetings yielded several important conclusions about end-users' feelings on power quality. Most challenging may be the end-users' beliefs about the issue. Many feel that power quality is the responsibility of the electric utility and that electricity is a product that should be delivered free of imperfections.

However, both customers and utility representatives do see eye-to-eye on the fact that accurate information on solutions to power quality problems is a significant consideration in using analytical tools to help with cost-payback assessment.

In the end, though, an educational gap remains regarding the fact that a solution for problems related to capacitor-switching transients is entirely useless for problems related to voltage sags, harmonics, and the like. As a result, it will be necessary to educate utility personnel on the operations of specific industries so that when the electric utility representative assists an industry in solving a power quality problem, that representative will understand the technical and business issues in that industry.

Whisenant is in the offer management department of Duke Energy in Charlotte, N.C., Rogers is program manager of power delivery with the Tennessee Valley Authority in Chattanooga, Tenn., and Dorr a director with EPRI Solutions in Knoxville, Tenn.

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