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BY TUX TURKEL
Blethen Maine Newspapers 03/30/2008

Blethen Maine Newspapers

Many business owners are complaining about the rising cost of energy, but not Jim Wellehan. Chief executive officer of the Lamey-Wellehan shoe chain, Wellehan has chosen to see the energy challenge as an opportunity, a chance to become more efficient.

"In the past three years, we've been able to grow our business and flat-line our energy bills," he said.

Lamey-Wellehan has accomplished this largely by making efficiency improvements that pay for themselves in a matter of months. The investments typically were financed by cash flow. Most are invisible to customers in the chain's seven stores.

Why don't more businesses pick this low-hanging fruit, as Wellehan calls it? "The prime obstacle is inertia," he reasoned. "We're used to having energy bills come in and paying them. That's changing now."

Wellehan will talk about his experiences Thursday in Augusta at the Governor's Energy Efficiency Summit, a conference aimed at helping Maine businesses learn new ways to cut their energy costs and improve their operations. Organizers are expecting up to 400 participants, including vendors, government representatives and economic development officials.

Energy costs are hardly a new concern for Maine businesses. But record oil and gasoline prices are creating a new urgency, forcing companies to examine alternatives that may have seemed uneconomic or inconvenient in the recent past.

"We feel there's a lot of affordable, achievable efficiency that the business community isn't taking advantage of," said Ian Burns, deputy director of policy and planning in Gov. John Baldacci's energy office.

Time and again, Burns said, engineering firms tell him that many business owners still aren't taking advantage of basic strategies to lower energy costs. Some companies see these steps as risky investments. Others have watched oil prices rise and collapse in the past; they're wary of making costly changes and are hoping to ride out the current surge.

"But energy costs are what sets us apart from much of the country," Burns said. "If business is going to succeed in Maine, we have to get a handle on energy."

The business impact is being studied for the conference by state university researchers in Portland and Orono. A white paper to be presented to participants will show, in part, how energy costs in Maine exceed the national average for business expenses, topping labor, taxes and office space.

Worldwide demand

Charles Colgan, a professor and economist at the University of Southern Maine, said business owners who have weathered past price spikes should be aware that the latest situation is driven largely by growing worldwide demand for oil, rather than supply shortages. That suggests real prices won't fall much, Colgan said, which is why the state is pushing the efficiency message for businesses.

That message has already gotten through to many larger companies and institutions, such as schools and factories, which often have staff dedicated to equipment and facilities.

One example is Eastern Maine Medical Center in Bangor.

In 2006, the hospital fired up an $8.4 million co-generation plant that provides most of the power, heat and air conditioning for its sprawling campus. The plant burns natural gas to power a combustion turbine similar to a jet engine for electricity. It recovers hot gases to make steam to heat buildings. That process captures the energy, up to 50 percent, wasted in a typical power plant.

The investment will pay for itself in roughly five years, according to Jeff Mylen, the hospital's director of facilities special projects. Fuel and electricity savings totaled more than $791,000 in the first year, he said.

Co-generation isn't a new idea in the power industry. But the technology has become so standardized and dependable, Mylen said, that smaller institutions with high energy demand can now consider it.

EMMC had one big advantage. It won a $3 million federal grant to help finance the project. But even without that, Mylen said, the plant could be justified by the added benefits of providing secure energy for a hospital system, which can't afford to be without reliable power.

Mylen will discuss the plant at Thursday's energy summit. The event's keynote speaker, Thomas Casten, who chairs Illinois-based Recycled Energy Development LLC, is an expert in decentralized energy projects that capture waste heat.

Undertaking the due diligence on a major energy investment is harder for small businesses and nonprofits, according to David Clay, a manager at Mechanical Services Inc. in Portland. His company installs heating and cooling equipment, as well as energy management systems, but finds many small businesses are too busy with the daily operations to keep up with changing technologies and resources.

"Small business is sort of the forgotten child in the world of energy efficiency," said Clay, who will speak about energy controls at the summit. Mechanical Services works with the state's Efficiency Maine business program, which offers cash incentives and technical advice. The company also promotes a Green Energy System Contract, which allows businesses to pay the cost of energy projects with savings from the upgrades.

Two workshops at the summit will focus on how to finance energy investments.

Lamey-Wellehan, for instance, tapped Efficiency Maine to audit its facilities and identify cost-effective energy improvements. These upgrades included more efficient lighting, new thermostats, fan and light sensors and plastic door coverings at freight entrances. The company also has bought more efficient heating equipment and appliances, and set room temperatures at 68 degrees in winter and 75 degrees in summer.

Lamey-Wellehan also is a participant in the Governor's Carbon Challenge program, aimed at reducing emissions associated with global climate change. Switching to hybrid cars, fueling a truck with biodiesel, along with other energy-saving measures, have helped cut carbon dioxide emissions by 21 percent, Wellehan said.

This year, the company may install fans to better circulate air for greater comfort and lower costs. It's placing signs in parking lots asking visitors not to idle their cars. Having skimmed off the easiest energy savings, Wellehan is now digging deeper to study more exotic options, such as a wind turbine.

Energy efficiency is an ongoing process in business, Wellehan said. He's guided by a thought he has for his managers: Enter the store each day and try to see it as a customer, not an employee.

"Always try to walk in with fresh eyes," he said.

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