By Nick Kipper
Capital News Service
Small manufacturers in the Upper Peninsula of Michigan are getting state help to attack some of the highest electric rates in the nation.
The Michigan Agency for Energy is offering rebates of up to $10,000 to U.P. manufacturers with fewer than 50 employees for energy waste reduction. The application process remains open until the $75,000 for the program is awarded.
Facility repairs, insulation installation, leak detection and energy efficiency training are among the things companies can apply to do, said Nick Assendelft, a public information and media relations specialist for the agency.
“It’s a quick and relatively easy way to save on your utility bills and that of course helps your bottom line,” Assendelft said. “Parts of the Upper Peninsula have some of the highest utility costs in the country and we wanted to make sure we focused on them.”
Long distances between population centers and the amount of time it takes for utility companies to reach homes and businesses outside of city limits are the reasons for the high rates, Assendelft said.
Michigan has two major electricity grids. One covers the Lower Peninsula and a small portion of the eastern U.P. The other covers the rest of the U.P. Most of the state’s power plants are in the more densely populated Lower Peninsula, according to the U.S. Energy Information Administration based in Washington.
“A lot has to do with the logistics of providing utility service to an area that’s quite spread out,” Assendelft said. “Certainly the motivation for the program is to help small businesses save money on their energy bills and to find ways to take advantage of their energy waste.”
The Sault Ste. Marie Economic Development Corp. is encouraging the eight manufacturing companies in the region that are eligible for the program to apply, said Jeff Holt, the corporation’s executive director.
“There seems to be no downside to it,” Holt said. “But it can be a daunting task to send this to a business that doesn’t have the time or knowledge to make a decision like this so that’s why we reach out and offer any assistance we can.”
Before a manufacturer is approved to locate in Sault Ste. Marie, the city verifies if there is enough energy to accommodate it.
“There’s a limit to our energy supply,” Holt said. “It’s a challenge and one we’re trying to figure out how to solve.”
With winter approaching, Holt recommends businesses combat rising utility costs by improving energy efficiency.
“Saving energy is easier than creating it,” he said. “In many cases it might be as simple as weatherproofing a door or replacing a window.”
Customers and businesses struggling with power quality and reliability is a huge issue in the U.P., said Caile Richards, an energy advocate for the Small Business Association of Michigan.
“There’s several ways that businesses can get around that — one being using generators and another being renewable energy such as solar power,” Richards said.
For local manufacturers to remain competitive in a global economy, they should keep utility costs down and improve energy efficiency, Richards said.
“The cost per unit for manufacturers in the U.P. is inevitably higher than competitors across the state, across the country and across the world,” he said.
“Your competitor isn’t down the street. They’re on the other side of the ocean.”