The 1990s brought about substantial improvements in the knowledge and equipment engineers use to diagnose and resolve power quality and reliability problems. Despite these advancements, however, it isn't easy to convince customers to implement power quality solutions. At EPRI PEAC, we've conducted more than 500 site investigations in the past six years. In the cases where true money-saving solutions were presented to the customers, only half were implemented within the first year. To find out how customers perceive power quality and PQ solutions, EPRI cosponsored two information exchange forums. As you'll see, the results were quite enlightening.
The first forum, hosted by Duke Energy, was held on April 18, 2000, in Charlotte, N.C. The Tennessee Valley Authority hosted the second forum in Nashville, Tenn., on August 10, 2000. Both meetings brought together representatives from different industries, including the healthcare, textile, plastics, and hospitality industries. The feedback resulting from each day-long discussion can be broken down into three distinct areas, which are summarized in the following sections.
At the start of each forum, all participants took a few minutes to describe their general perceptions about power quality and how their company decision makers address PQ-related issues. Here's what the attendees had to say:
Participants from this segment noted the lack of understanding industry personnel have concerning downtime costs and the electrical causes behind them. In large part, the physicians drive the purchasing decisions, so educating them about the effects of poor power quality is critical.
Textiles and plastics
Electricity is a small fraction of the production costs for most textile and plastic manufacturers — labor and raw materials comprise the largest percentage. For this reason, it's more difficult to allocate funds for power-related problems. As a result, personnel must simply “live with” PQ problems. Work-around solutions in response to long-term, unidentified problems have become standard operating procedure. This creates more difficulty in justifying expenditures for solutions already perceived as having minor benefits.
In this industry, power quality generally received low marks in priority compared to other power issues (e.g., opportunities to reduce energy usage and cost). Facility maintenance, customer service, and personnel management fared much higher on the scale of importance.
Most facilities, however, have backup generation (larger hotels often have dual feeds, where available) and some type of power conditioning equipment to protect critical operations such as reservations and customer service.
Most equipment trips (e.g., elevators stopping, HVAC systems tripping offline, and alarm systems signaling improperly) are considered nuisance types — ones which a maintenance person can reset fairly quickly. They are only elevated to a high-priority status, complete with sought-out remedies, when they inconvenience guests and generate complaints.
Challenges and Barriers
The forums had another objective: to discover the major challenges or barriers that prevent the implementation of PQ solutions.
Needless to say, inexpensive wiring and grounding problems or problems that occur regularly and significantly impact bottom-line profitability are resolved immediately. But with random problems that occur sporadically, avoidance tends to be the common reaction. One attendee from the plastics industry gave this appropriate example:
At his employer's facility, the variable-frequency drives (VFDs) repeatedly tripped offline because of a capacitor-switching transient. With assistance from the local utility, the facility's engineers solved the problem by adding line reactors to all the VFDs. The attendee believed the managers were willing to purchase the line reactors primarily because they were relatively inexpensive. If the problem had been more costly to fix, the attendee doubted that management would have been as willing to pay for something they perceived to be someone else's fault.
This brings up another subject — where the responsibility lies. Customers feel that power quality is the responsibility of power companies and electricity is a product that should be delivered free of imperfections.
The meeting attendees felt that lightning and storm-related outages were unavoidable and, therefore, more acceptable than other PQ events such as tree- or animal-related faults. However, the idea that power — like any other raw material — might have some quality variations that would have to be dealt with as a matter of course was unacceptable. In other words, customers expect utilities to fix utility-side problems. That's why it's easier to get PQ solutions approved for internal, facility-induced problems.
Finally, misinformation regarding power quality terms and solutions also pose barriers to implementing PQ solutions. The terminology, it seems, is still unclear to persons who don't deal with PQ on a regular basis. Meeting participants used the terms “sags” and “spikes” interchangeably to describe conditions that make lights dim and go bright. In addition, many attendees didn't realize that solutions for capacitor-switching problems are entirely useless for problems related to voltage sags, harmonics, and so on.
The truth is that power quality isn't on the radar screens of executives who have not experienced problems directly. For them, power quality has no inherent value. They believe utilities and PQ professionals should provide the services and products that improve their processes. We know, however, that the value of quality power is improved process performance, higher-quality products, and reduced costs. The trick is to present business cases that clearly communicate these improvements to those who approve capital expenditures.
Better Business Cases
Many times, efforts to procure power conditioning solutions fall short because the business-analysis side is neglected. That's why the meeting attendees stressed the importance of downplaying power quality in solution presentations. As one participant eloquently said, “You can't sell me a solution to a problem I don't know I have, so don't try to sell me power quality.”
Customers will respond more positively to presentations based entirely on solving problems that businesses know about, such as mysterious process shutdowns, missed loom picks, computer system resets, extruder tripping, etc. This means utility personnel and PQ professionals must first understand a customer's process and how power quality disturbances affect a particular facility.
So what would customers respond to? According to the participants, business cases should clearly communicate improvements in productivity, equipment life-cycle, or bottom-line profitability. More specifically, the best business cases will:
- Convert downtime costs into dollar losses per year.
- Determine the payback period, regardless of cost.
- Specify that the solution will completely eliminate the problem or provide the expected percentage improvement.
- Explain exactly how the solution will help alleviate the problem.
Attendees discussed acceptable time frames for payback periods, and all agreed that capital expenditures promising a six-month payback would receive immediate approval. Paybacks requiring 12 months were considered worthwhile, and 18-month paybacks were likely to be pursued with additional justification. Any payback longer than 18 months was considered risky but still worth evaluating on a case-by-case basis if the cost of downtime was significant. On average, most industries require payback on process improvements in 12 to 24 months.
The two forums detailed in this article provided a unique opportunity to obtain candid feedback from a diverse audience. As these meetings demonstrated, power quality remains a mystery to many engineers and to most decision makers.
It's up to electricity providers and PQ professionals to help customers understand the value of power quality solutions from the perspective of their business needs. They must market power quality solutions in a clear manner, explaining how implementing them will increase productivity and reduce costs.
EPRI expects to translate the results of these forums, combined with a number of other power quality research efforts currently underway, into some useful power quality, business-case analysis software. The hope is that strong business cases will provide mission-critical power users with a better capacity to understand and effectively resolve power quality complaints with sound cost-benefit analyses.
Doug Dorr is the business development manager for EPRI PEAC, located in Knoxville, Tenn. You can reach him at [email protected].
Contributions to this article were also made by Steve Whisenant, Duke Energy; and Bruce Rogers, Tennessee Valley Authority.