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COPYRIGHT 2001 Business News Publishing Co.
Moving from the boiler room to the board room
Changes wrought by energy deregulation-- along with continuing volatility in price and supply --are sending a clear call for a fundamental redefinition of the role of energy management, a call to make energy management an integral part of business strategy. In short, there is a need to move energy management from the boiler room to the boardroom.
Energy management as a critical boardroom issue is not overstating the case. This remains true despite the easing of the situation in California. Energy prices are, by their very nature, highly volatile, and ongoing deregulation may begin to expose companies to that volatility. In addition, energy can, and does, have a significant impact on business's financial well being, far beyond its mere cost. For example, a brief power outage caused a South Carolina-based polyester manufacturing facility to shut down for repairs for an extended period of time. During the shutdown, the company lost more than 80 million pounds of production, or about 8% of the site's annual output. The damage was more than material: company officials estimate that lower sales volumes and property damages from the outage will reduce earnings by $12.5 million, or 25 cents a share.
Until that day, it is likely that few in the company considered the deep impact that energy could have on their business. Without a dependable energy flow, business grinds to a halt. Employees can't work. Companies lose critical production time. And...
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