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Businesses finding solid returns on generator investments

One of the many hard lessons learned in the aftermath of Hurricane Katrina is that when the lights go out, so do the cash registers. A more recent spate of severe weather and tornadoes that raked large parts of the state, causing extensive power outages, drove that lesson home anew. And, the next hurricane season starts June 1.

It would seem Mississippi’s business and industry is keeping an eye to the sky and preparing for whatever Mother Nature has in store by using back-up electric generators. These units are not inexpensive, but Tom Kossen says all business owners need to do is the math. Usually, the return on an investment in a back-up generator is quick and profitable.

“The first decision a company has to make is what it costs to do business per hour,” said Kossen, president and owner of Kossen Equipment Inc. in Jackson. “We have 35-40 employees here, and it would be costly if we were without power for two days. It’s not just the lost revenue. It’s also employees who are idled. What does that cost?”

Steep costs

Of Kossen Equipment customer base, more than 90% are industrial concerns, entities that cannot afford downtime. Kossen said Hurricane Katrina had a profound impact on the business community, reinforcing the need for back-up power. Sales spiked soon after the storm.

John Scarborough saw that same spike. He is a sales representative at Taylor Power Products in Richland. It counts customers all over the world, and maintains a strong customer base in “refrigeration generators” used in ports, on ships and banana plantations.

“After Katrina and Rita, we saw a pretty good boon,” Scarborough said. He added, “It has leveled off, about back to normal. But, we still are seeing a lot of interest in generators.”

Loss of electricity means no air conditioning, and in the heart of a Mississippi summer, that alone can keep a business idled or slowed. In some settings, oppressive heat could lead to fatigue, a prime cause of accidents and injuries.

There are options available in this area. A good example is Trane’s cooling contingency plan. It helps businesses operate when the cooling fails during emergencies or destructive weather events.

However, it would seem that cooling is not on the top of business owners’ minds. Mike Turner, vice president of McInvale Heating & Cooling in Ridgeland, said he is not aware that any business has contacted his company asking for contingency plans or system redundancy.

He added jokingly, “I think some employees like it when the power goes off. They can go home.”

Things to consider

Scarborough points out that businesses need to do their homework, and get solid advice and counsel, when buying a back-up generator. It is not cookie cutter — once size does not fit all.

“We have a lot of questions to ask. Sometimes, we have to even survey the site, which we do for free,” he said. “If you are going to spend that kind of money, you want to make sure it does what you want and need it to do.”

Scarborough said if someone wants a generator for a home, he would need to know what the customer needed the generator to do. Does she want to power her whole house, or just some appliances? Air conditioners can be tricky, he said. They are notoriously hard to start sometimes. So, he would need to know exactly what type air conditioning unit was to be run.

He added that the same is true for businesses. He said a good place to start to access what a company’s needs might be is to obtain a load history report from the utility. It is important to look at what the business is using, not spending, in terms of electricity.

Scarborough also said in addition to air conditioners, most electric motors are hard to crank. So, if a company needs those type units to fire, it needs a generator capable of handling the load.

Scarborough said business should consult a professional when purchasing and installing a generator, and Entergy agrees. The utility says a qualified, licensed electrician should install a standby built-in generator. The installation should include a switch to transfer the power source between Entergy and the standby built-in generator. When in use, the generator must be isolated from Entergy’s electrical system.

Commercial customers would consult with an independent engineer or electrician to size the generator, modify wiring and provide and automatic method to transfer power during an outage, and should consult with local authorities about required permits before starting any work in a business.

As far as portable generators go, Entergy says, while useful following a disaster, they also can be hazardous. The primary hazards are carbon monoxide poisoning from the engine exhaust, electric shock or electrocution and fire.

There is a difference between home and commercial generators, according to PoweredGenerators.com. It points out that commercial generators provide a lot more power and have bigger fuel tanks to provide that power over long periods. With so much power provided over longer periods, commercial generators require better noise reduction and a better cooling system.

Contact MBJ staff writer Wally Northway at wally.northway@msbusiness.com.


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