HomeMy WebLinkAboutA001 - Letter from Amcor Rigid Plastics dated January 6, 2015 amcor
Michael Simpson,Senior Plants Manager
Amcor Rigid Plastics
520 Bell Avenue
Ames, IA 50010
January 6.2015
Ann Campbell. Mayor
PO Box 811
515 Clark Avenue
Ames. IA 50010
Dear Ms.Campbell,
The purpose of this writing is to begin a discussion on an opportunity to benefit both Ames Electric
Services industrial customers and the City of Ames Utility.
In general.the Ames Electric Service could control cost of supplementing power from the grid,as well
protect from or delay a capital investment for capacity. This would be achieved by working with its
largest industrial customers to control the timing of their Peak Demand relative to that of the residential
community.
Background:
The utility which services 70%residential and 30%industrial customers, based on output,will have
peaks in the summer months,generally during the warmest times of the day,identified as the window
between 5pm and 8pm. This is most critical on weekdays Monday to Thursday.
The industrial demand is roughly 35MW. Arncor,as the utilities largest customer.represents roughly a
third of this demand (9.5MW).
Amcor is operating in a commodity industry where operational costs are not only critical to competing
with other companies but also for existing business within our own organization. Electricity which is one
of our top cost drivers is evaluated and published monthly. It is recognized that Ames electrical cost is
well above the median within our company which has 25 plants across the country.
Over the last year,Amcor Ames has gone to great efforts to"flatten" its electric load profile which as a
result has reduced its peak, helping us and the utility control costs. This summer we were recognized by
the city and joined the Mayor's"Green Team' as a result of these efforts. Amcor,and the City's
remaining Industrial customers, can take further steps to reduce the City's peak by controlling the timing
of our own usage relative to that of the residential community, but we need the City Council's help to
accomplish this.
Amcor Rigid Plastics North America
520 Hell Avenue.Ames,IA 50010 USA 1 14515-239-9600 F 1+515-239-9606 www.amcor.corn
• r
Opportunity:
Amcor and the other City Industrial customers can create a Win-Win situation. The Energy Rate,as it
exists today,gives no deference to when we use energy. Also,the Demand Charge is applied to our
usage equally without regard for when we set our peak. If we set our peak when the City typically peaks
it has a direct impact on the City of Ames operational costs, likewise if our peak was not coincident
with the city peak the impact would be positive to the utility's operational cost.
As a result,Amcor would ask the City Council to consider the development of a specialized 'off peak"
rate for its industrial customers. Our suggestion would be that:
• The window of time in which our"Peak"could be recorded is reduced to the critical window
when residential demand is high. In this scenario we would schedule our production around this
window and control our usage during the timeframe.
• The electricity used when residential consumption is lowest, identified as Monday -Thursday
from 7pm to lam and on weekends,is reduced to a rate more in line with the market during
those time frames.
By creating this on/off peak rate,Amcor Ames would have the incentive it needs to adjust production
schedule to help its own bottom line and help the city at the same time. We would hope to utilize this
further by attracting business and competing internally for additional business at our Amcor Ames plant.
As outlined in your Excellence through People program,the city desires to provide "exceptional service
at the best price". I believe that designing a rate structure which encourages the industrial electric
customer to make cost-saving choices in alignment with the city goal of Demand Reduction is
consistent with your ideals.
Thank, you for your consideration.
Best Regards,
Michael Simpson
Amcor Rigid Plastics,Ames
(515)239-9601
cc. Gloria Betcher-Ward One,Tim Gartin-Ward Two,Peter Orazem-Ward Three,Chris Nelson-Ward Four,
Amber Corrieri-At Large,Matthew Goodman--At Large,Lissandra Villa-Ex-Officio.Donald Korn-Director
Electric Services,Steve Wilson-Coordinator Electric Services