By Eileen Hardy
Department for Energy Development and Independence
The message bears repeating. “Good things are happening in Kentucky,” said Brad Thomas, associate manager of economic development at East Kentucky Power Cooperative, during his presentation to kick-off the “C-Suite Energy Forum” last January. And for the 30 corporate leaders attending the forum, this message was echoed by fellow presenters from utility companies and industry leaders as they highlighted personal success stories of energy conservation, dollars saved, and the dynamics between Kentucky’s energy and economic landscape.
The C-Suite Energy Forum—The Business Case For Corporate Leaders was first in a series of regional energy programs organized by the Kentucky Energy and Environment Cabinet (EEC), the Kentucky Pollution Prevention Center (KPPC) and partnering organizations, the Kentucky Association of Manufacturers (KAM) and ENERGY STAR. Since the initial workshop, energy efficiency sponsors and utilities around the state have been ramping up efforts to support energy saving goals for Kentucky’s industrial and commercial markets. What sets the educational sessions apart are the relevant topics tailored to Kentucky companies, all designed to help energy intensive facilities build self-sustaining energy- and cost-savings programs.
Greg Higdon, President and CEO, Kentucky Association of Manufacturers, said of the forum, “Energy delivery, reliability and cost remain critically important to Kentucky’s manufacturers. The C-Suite Forum provided a tremendous opportunity to address these issues and help industry stay competitive.”
“Energy and environmental concerns are intertwined in Kentucky’s unique economic fabric,” said Lee Colten, assistant director for the Energy Cabinet’s division of efficiency and conservation. “Energy efficiency is key to our future by enabling us to do more while using less. The development and implementation of energy-efficient products, technologies and services saves consumers and businesses money, drives innovation and productivity and supports a cleaner environment. Most importantly, it does so without sacrifice. Energy efficiency enables us to do more while using less energy.”
Kentucky’s industrial and commercial markets account for more than half of the energy consumed annually across the Bluegrass state. This also represents great opportunity for energy savings. Aron Patrick, assistant director responsible for data analysis in the cabinet, provided a snapshot of Kentucky’s energy dynamics during his presentation, “Kentucky’s Energy Profile” (5th Edition 2015).
“Kentucky remains a leader in energy production and consumption,” said Patrick. “In 2014, 40 percent of the energy and electricity consumed went to manufacturing alone, which remains our largest source of revenue and leading source of employment. In addition to large flagship manufacturers such as General Electric, Toyota, and Ford, who have located in Kentucky—in part due to the low energy costs and central location—Kentucky is also home to particularly energy-intensive manufacturing processes including aluminum smelting, iron and steel mills, paper mills, chemical production and glass manufacturing.”
Patrick also noted after more than two centuries of commercial mining operations, Kentucky’s domestic supply of coal remains the state’s primary source of energy and an important component of Kentucky’s economy. Coal accounts for 87 percent of Kentucky’s own electricity portfolio and 50 percent of our total energy consumption. Historically, Kentucky’s low energy costs stimulate economic growth by lowering the costs of doing business.
However, in the past several years, the coal industry has struggled due to competition from natural gas, rising production costs in eastern Kentucky coalfields and more stringet environmental standards. Given these changes and uncertainties, and the industrial and commercial sectors as major drivers of Kentucky’s economy, the efficient use of energy can contribute to positive economic growth.
With the opening sentence, “Good things are happening in Kentucky,” Brad Thomas discussed Kentucky’s economic development landscape, noting that Kentucky added manufacturing jobs at three times the national rate in 2015.
“Kentucky is an advanced manufacturing state,” said Thomas. One example of our growing momentum is illustrated in manufacturing industry employment which has increased 12.2 percent between 2010 and 2014. This is compared to a 5.7 increase nationally. Our automotive industry employment increased 72 percent since 1990 while nationally falling 26 percent. Thomas identified other good things happening in Kentucky such as our expanding international influence and increase in exports. “Kentucky is home to 447 internationally owned facilities from 33 nations,” he said. “These facilities employ 89,500 people. In the past five year’s Kentucky’s exports have shattered records. In 2015, we exported a record $27.6 billion in goods to 198 countries, which supported 125,000 Kentucky jobs.”
Thomas also discussed challenges facing the industrial and commercial markets, including the need to pursue a skilled workforce and the uncertainties of maintaining affordable, reliable energy. The workforce has emerged as a vital issue in the successful implementation of energy efficiency through all sectors.
Panel discussions by other C-Suite presenters, Louisville Gas and Electric/Kentucky Utilities and Duke Energy, highlighted opportunities for low-cost energy savings from utility energy efficiency programs. Programs provide incentives to commercial and industrial consumers for installation of high efficiency equipment in applications involving new construction, retrofit and replacement of failed equipment. A highlight of the day featured executives from Western Kentucky University, Kellogg Company bakery and Olin Brass manufacturing who presented real world examples of their ongoing work to conserve energy and improve the environment, including their strategies for success.
“Corporate energy management drives improvement across the company,” said Bruce Bremer, in making the business case for energy management. Bremer Energy Consulting Services, Inc. is a Strategic Advisor of ENERGY STAR.
“Energy costs are controllable,” he said, “and should be managed with the same expertise and passion used to manage other parts of the business. Why manage energy? The answer is multi-faceted. Energy management addresses unpredictable energy prices, risks of supply reliability and is a low-cost solution to the impacts of legislation. It provides a competitive advantage, controls costs, supply chain risk mitigation and, it’s the right thing to do.”
“We designed the forum as a meeting place for all types of business leaders in Kentucky – large and small,” said Lee Colten. “The C-Suite Energy Forum offered opportunities to network and exchange ideas as well as information about the technical and financial resources to assist Kentucky businesses.” Attendees learned there are tremendous opportunities to instill the tenets of energy efficiency in industrial and commercial markets – sectors that employ and influence millions of Kentuckians.