HomeMy WebLinkAboutA001 - Letter from Sundstrand Hydro-Transmission with concerns Sundstrand Hydro-Transmission
unit of Sundstrand Corporation SUN0SMAND
25O0 EAST 13TH STREET,ANAES,IA 50010•PHONE 515 239-B000•TWX 91 O 520-115❑
April 27, 1982
Mr. John W. Elwell
City Manager
Main and Pearle
Ames, IA 50010
Dear Mr. Elwell :
Sundstrand has participated in the Ames community for just over a decade
with its Hydro-Transmission Division headquarters and manufacturing
operation. We have been pleased that we chose Ames and consider that
we have prospered here, albeit the current economic downturn.
We are, however, concerned with the June expiration of the electric
utility contract and the potential cost increase which might occur.
Sundstrand hydrostatic products are delivered into a very competitive
marketplace. While we are not actually an energy-intensive manufacturer,
electric costs do make up a significant element of product cost.
Sundstrand proposes that the City of Ames and Sundstrand enter into
a new multi-year electrical utility agreement which is essentially
an extension of the current agreement.
As you know, Sundstrand operates manufacturing facilities in various
cities and communities throughout the United States. We have recently
completed a summary of the rates at all locations. i have attached
a comparison of rates applied at all locations where we consume between
10 and 25 million kilowatt hours of electrical energy per year for
the years 1978 through 1981 . You can see that Ames is already the most
expensive community in which to procure electrical power. Any additional
sharp increase would not make good business sense and would, in fact,
be viewed by Sundstrand with serious concern.
Sundstrand is continually studying additional investment in buildings
and machinery. There are several rather significant studies currently
underway. Ames is one community under consideration. One of the factors
involved in such decisions is electric rates, both current and projected.
Perhaps more important, we will view the electric rates actions by
the City as an indication of its willingness to participate mutually
with Sundstrand in the years ahead.
Mr. John W. Elwell
Page 2
Sundstrand intends to be a good citizen of any community in which it
becomes involved. We have worked very hard to establish an internal
environment of cleanliness, safety, and human sensitivity to our employ-
ees. Recently, we have "dressed up" the exterior of our facility trusting
that we could enhance the overall appearance of this fine community.
Currently there is a building addition under construction to house
a water-processing operation and to cover oily chips and containers.
This investment is intended to move us further into the safety zone
toward protecting our environment into the years ahead.
Sundstrand has implemented projects and is working on other projects
to conserve energy and curb peak-load demands. I believe there are
other ways in which we could cooperate with the city to the benefit
of the city's electric utility management.
We would be anxious to discuss your ideas of a contract that should
be agreed upon between the City of Ames and Sundstrand Hydro-Transmission.
Please let me know when we might meet to discuss this issue with you.
Sincerely yours,
?i /4 AU,
ohn C. McKercher
Vice President, Manufacturing Operations
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