When demand is expected to be very high — generally, sweltering summer evenings when city residents return home and crank up their air conditioners — the city must give Hamilton Brass at least 24 hours notice, asking the firm to rearrange its high-electric-use processes during those periods so electric demand in the city doesn’t exceed power production.
“I think it’s a great deal,” said the company’s president, Tom Koehler. “Anything we can do to defray some higher fixed costs is a big help for us, because with a demand charge, it doesn’t matter if you melt (metal) 15 minutes a month. Obviously, we melt more than that, but you pay the same. Any 15-minute interval, you’re charged for your demand, so it’s very expensive for us because of that.”
Hamilton Brass is a 10-employee (including Koehler) foundry that makes metal castings for industrial manufacturers, particularly companies that produce pumps and valves. The business serves manufacturers in the Ohio, Kentucky and Indiana region.
Kevin Maynard, the city’s director of public utilities, estimated the savings for Hamilton Brass could be in the tens of thousands of dollars. Koehler stopped short of saying that himself, but did say the increase on bills could be “significant.”
“It’s really too early to tell” the size of the savings, Koehler said. “What I don’t know is the fact that at some point we may have to stop production because of the high demand that they’re anticipating. And I don’t know how difficult that will be for us. I’m thinking it probably won’t be too bad, because they normally will ask us to do that toward the end of our production shift, with some exceptions.”
Maynard said the city’s electric utilities tend to have their peak demand between 3 and 7 p.m. on summer weekdays. The city’s utilities can save money by reducing the amount of power it buys from the nation’s electric grid during those peak periods during the year.
Hamilton’s utilities also have to demonstrate they can generate sufficient power during the five highest peak days of the year for some electric systems, “so there’s just a few days out of the year that determine a pretty significant part of our cost here,” Maynard said. The city’s costs of buying power during those days can be very costly.
Aside from generating more power those days, another option is to have large users reduce their operations, Maynard said.
Having Hamilton Brass interrupt its melting operations “is just as good as putting a generator online, and offsetting that load,” Maynard said.
“If it looks like it works well, then we can develop it into a regular electric rate, or tariff, that could be offered to others that might be able to do the same thing,” Maynard said. Such arrangements are fairly common among large public utilities.
“It’s not an unusual concept,” Maynard said. “They had expressed some concerns about the viability of continuing to operate here in Hamilton, and anytime somebody expresses those kinds of concerns, we listen.”
In exchange for the rate reduction, “They have to provide value to the entire community by doing this, by altering their operations, and by helping us to save money we can pass along our savings to Hamilton Brass.”
Koehler said his grandfather started the business in his garage in “1918 was what my Dad used to say, but he wasn’t certain either — so it was somewhere in that ballpark.”
Hamilton Brass doesn’t have as many employees as it did in the past, partly because of greater efficiencies, and in part because of the economy, and a crash of the energy markets.
“Some of our customers are just now starting to perk back up because they were impacted by the lower energy prices — oil and gas, natural gas — and that adversely affected the people we sell to, who make equipment for people in the energy field.”
Koehler said Hamilton used to have a number of foundries, many of them owned by larger companies.
“At one time, Hamilton had at least 10, maybe 15, foundries,” he said. “And we’ve been the only one operating probably since the ’90s, I guess. What you’ve seen in our industry has been a lot of consolidation, and some of the businesses moved offshore, probably permanently, mostly to China and India. But the people that have remained in operation domestically, you’ve seen a consolidation there, and a lot of the smaller foundries have kind of gone by the wayside.”
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