Conservation Ethic

The percentage of an auto shredder’s operating budget that goes toward utilities varies by operation, with some operators saying power costs fall toward the bottom of the list, preceded by the cost of feedstock, wear parts and ASR disposal. For other auto shredder operators, power rates rank much higher.

Regional disparities contribute to these differences. For instance, industries in the Pacific Noncontiguous (Alaska) and New England states (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont) paid more for electrical service, averaging 16.05 cents per kilowatt hour and 12.41 cents per kilowatt hour, respectively, in 2007, according to the Energy Information Administration (EIA) of the U.S. Department of Energy. Industries in East South Central states (Alabama, Kentucky, Mississippi and Tennessee) paid an average of 5.13 cents per kilowatt hour in 2007, according to the EIA, coming in at the low-end of the retail pricing spectrum for electrical service.

While recyclers can do little to address these regional differences, they can take other steps to downsize their utility costs.

The extent to which auto shredder operators can shop around for utility providers varies by state. The EIA’s Howard Stone says that 15 to 20 states have implemented retail choice for utility services with varying levels of success. "Some have disbanded the programs because of lack of competition or in response to significant rate increases that were required following transition periods from regulation to competition," he says. "Each state has adopted its own version, so it is difficult to generalize about the structure or the terms or conditions by which customers may switch suppliers."

In general, Stone says, retail choice is potentially a complex matter for consumers. "It requires some understanding of contracts and the separate function of electrical service (distribution, transmission and generation). For a customer to succeed, it requires some education and a willingness to engage in price discovery among competing suppliers both as to price and non-price terms and conditions," he says.

At least one recycler says he prefers the stability of his area’s main utility provider relative to any potential savings he could realize by using another vendor.

"I feel we have a competitive rate," Adam Weitsman, president of Upstate Shredding, Owego, N.Y., says. The company processes 35,000 tons per month through its 6,000 hp shredder.

While Upstate Shredding has the ability to comparison shop, other shredder operators don’t have that option.

Jim Brewer of Silver Dollar Recycling, Las Vegas, says only one power company services his area. Silver Dollar has arranged to operate in off-peak hours in the summer months to get a price break. The cost for electrical power typically increases in the summer in light of the demand air conditioning places on the area’s electrical grid. By running its 4,000-horsepower shredder during off-peak hours, Silver Dollar can moderate this seasonal increase somewhat, Brewer says.

Apart from taking advantage of this seasonal option, the company has had to find other ways to save on energy costs.

Silver Dollar has decided to address the rising costs of fuel and energy by choosing electric cranes over hydraulic, fuel-powered models. With five or six material handlers consuming 75 gallons of fuel apiece per day on average, Brewer says Silver Dollar’s fuel costs were "astronomical." By replacing most of its hydraulic units with electric cranes, the company was able to realize considerable savings.

When it comes to the shredder in particular, Brewer says Silver Dollar runs it to capacity to achieve optimal efficiency. Additionally, Mueller Engineering, New Berlin, Wis., inspects the shredder from top to bottom every six months to make sure it’s performing at its peak.

Upstate Shredding also invests time and money in shredder maintenance. Weitsman says the company has a full rebuild on its shredder motor every five years and performs preventive maintenance weekly. Upstate also houses the motor in a dust-free room.

Weitsman says building a relationship with Upstate’s utility provider has helped in controlling power costs. "You can use the utility’s experience to your benefit," he says. "I use the experts at the utility to help me run a better shredder."

This is part of the reason Upstate Shredding has decided against having its own generator on site to power its auto shredder. "I like having the utility behind me because of the service they provide," Weitsman says, adding that this reliability is worth any potential savings a generator might provide.

However, energy analyst Jim Williams of WTRG Economics, London, Ark., says natural-gas-powered generators could offer auto shredder operators considerable savings. Natural gas providers usually give steep discounts to industrial customers when compared to residential rates, he says. While a residential customer may pay $18/m btu, an industrial customer may pay $8/m btu.

Williams also says recyclers have the option of plugging into the power grid should their generators fail.

In addition to natural-gas-powered generators, recyclers can also investigate diesel options, though Williams cautions that recyclers must carefully compare the potential costs before deciding on an energy option.

The author is managing editor of Recycling Today and can be reached at dtoto@gie.net.