By Joe Salimando www.eleblog.com
When the NASDAQ rose 86% in 1999, I freaked out (I wrote about it, too – in January 2000). It later fell from 5,038 to 1,100, and hasn’t been near 3,000 since.
During the housing nuttiness, I saw signs offering 125% loan-to-value mortgages. Putting pencil to paper, I couldn’t make it work. Turns out, it actually DID NOT work!
Signs
Now, the world may be returning to something resembling Common Sense. Consider:
1. The AIA Q1/10 Home Design Trends Survey I know – you’re not in the residential electrical biz. These words have meaning beyond houses –
“We continue to move away from the ‘McMansion’ chapter of residential design, with more demand for practicality throughout the home,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “And with that there has been a drop off in the popularity of upscale property enhancements such as formal landscaping, decorative water features, tennis courts and gazebos . . . There has been a steady decline in both the square footage and volume in home design in recent years.
2. Head of Europe’s central bank calls for austerity. There’s a lot on the Internet on this – including the Financial Times op-ed piece Jean-Claude Trichet wrote, and this New York Times blogger commentary. Why is this important?
a. It’s a Frenchman, not a German, calling for austerity. That turns 220 years of history on its head.
b. By getting out front on this, Trichet made it harder for the U.S. to run up bigger deficits via more stimulus programs and money-printing.
c. Once, Europe took its cue on economic matters from the U.S. Fed and the U.S. government. No more?
3. Maryland regulators turn down BG&E proposal on TSG
The MD utility (equipped with stimulus money) wanted to go to town on The Smart Grid. Here’s a key sentence from the PSC:
“The proposal asks BG&E’s ratepayers to take significant financial and technological risks and adapt to categorical changes in rate design, all in exchange for savings that are largely indirect, highly contingent and a long way off.”
What’s interesting here: A utility regulator stood up to a big utility on a hot new technology.
4. Directly relevant to NECA members, see CEO John Grau’s blog post on Unsustainability.
Add it all up
I can’t tell you Common Sense will win in the end. But here’s what it might mean:
A. Go back to your customers and listen.
A few years ago, I spoke with a lighting expert who said end-users usually rejected lighting retrofit proposals short of a 40% ROI. I found that shocking; it seemed tough for American corporations to get even a 15% ROI elsewhere
Your customers might have changed. Listen to them! You might end up taking those retrofit proposals off the shelf, updating the technology – and doing the work.
B. Big corporations may call less and less of the tune.
At a Smart Grid conference in September 2009, I heard speakers talk about a pilot project that wasn’t working out the way the utility had envisioned. Why not? Customers (mostly residential) . . . just didn’t want the utility to come near their property. No trust!
What we need, someone in front of the room said, is a third party to work in the middle on The Smart Grid. (Of course, I am paraphrasing.)
It was a big room; by the time I got to the microphone to suggest “electrical contractors” as people customers might actually trust, the session had ended.
Similarly auto-makers and the utilities are seeking someone to solve their problems with in-home charging-station installation for EVs. Guess who came to mind? YOU.
c. Understanding technology has great value.
It’s taken me decades to appreciate the advantages ECs have here (and typically do not use). Examples:
1 – The average commercial or industrial customer doesn’t know how to read a monthly electricity bill. You can do it, ‘splain it to your customers . . . and make money! In some cases, all it takes to cut costs is a call to the utility (changing the “tariff” under which the customer is billed).
2 – At a “green” conference last October, I heard an engineer talk about an (unnamed) client. The client company worked 6-day weeks in 2006, 2007, and much of 2008; the building was on a 6-day schedule. When the economy blew up, the client returned to a 5-day week.
. . . except no one “told” the building’s operators. We can be sure the people running the building KNEW it wasn’t being used on Saturdays in 2009. But no one told the operators to return the building to the 5-day-a-week schedule. As a result, when the engineer’s company was asked to help lower the energy bill, it was child’s play!
How much of this is out there?
3 – New technology keeps coming down the pike. Consider LEDs: There’s a lot of misleading information out there on these new things. What’s more, if you think you know something about LEDs and commercial lighting, just wait five minutes . . . your knowledge will be out-of-date.
In such a situation, the contractor who develops and sustains a high level of understanding and customer communication creates for himself/herself a tremendous advantage.
Where this leaves us
Reexamine your assumptions, especially on energy matters. You might well be in a better position than you had come to believe!