Good Vibrations Generate Low-emissions Operations

AG Machining, a major supplier to an international OEM, participates in Southern California Edison’s Critical Peak Pricing program, which saves it up to $10,000 a month.

California’s stringent emissions restrictions has created pressure on utilities to incentivize their customers to reduce their power consumption.

The state’s utility rates are some of the highest in the country.

In addition, the California Air and Resource Board (CARB) has enacted a cap-and-trade initiative that penalizes companies, including manufacturers of certain products, for generating more than a specified amount of emissions. The enforceable compliance obligation aspect of the program began on January 1, 2013 for greenhouse gas (GHG) emissions.

At least one California manufacturer isn’t losing sleep over the rising rates and tightening emissions standards, though.

“Utility rates have been increasing and probably will continue to do so, and cap-and-trade is a California reality,” Moorpark, Calif.-based AG Machining Vice President Eddie Garcia said.

“Some people say, ‘Oh it’s going to cost us much more money,’” Eddie said. “But we say, ‘Hey bring the challenge on. We are going to do what we can to be on the credit side.’”

As a means of capitalizing on utility companies’ requirements, as well as to achieve company goals to reach net-zero carbon emissions and reduce their utility bills, AG Machining participates in the Critical Peak Pricing (CPP) component of Southern California Edison’s demand-response program.

“It has saved us up to $10,000 a month,” his brother Bryan Garcia, also a vice president, added.

How Demand Response Works

When he and his twin brother were young, Eddie and Bryan Garcia had a little trouble sleeping at night in their Simi Valley, Calif., home because of the vibrations coming from the compressor in their father’s garage-based machine shop. Today, those vibrations generate millions of dollars in sales annually in the now 100-plus employee contract manufacturing plant in Moorpark, Calif. Read “Good vibrations, sustainable operations”

The program works by rewarding participating companies for reducing their electricity consumption by a specified number of kilowatts on demand—that is, as directed by the utility with only a 24-hour notice. In return for participating, the manufacturer’s rates are reduced.

“They’ll say, between noon to 6 p.m., reduce your electricity usage by a certain amount. We’ve been advised that we’ll get about 10 CPP days between June and October. I think we only had one day when we had a hard time because we had production shortages,” Bryan said.

It requires a certain degree of readiness and a plan for reduction. How do they handle it? “Really, we meet that just by working off-peak hours,” Bryan said. “We move the production hours of the departments that are high-energy consumers—the equipment with the bigger motors, the welders—to start at 4 a.m. until right when peak hours start at 2 p.m.”

Bryan said their employees were cooperative. “A lot of them were like, ‘Yeah, no worries.’ Some are glad to work earlier hours because they can pick up their kids from school or they don’t have to work during the hottest part of the day.”

Eddie Garcia is aware that California’s emissions regulations may prompt an exodus of companies from California, but AG Machining will not be one of them. “I think that the people who stay and don’t take the easy way out will get paid back dividends in the long haul—environmentally and financially,” he said.

“A lot of people think that it is an extra duty that will make it more difficult, but in reality, it forces people to get better and find ways to save—not wasting resources, fuel, time … Being green, being compliant, saves money,” he added.

Sustainability Combustion

Very energy-intensive operations such as welding and laser cutting are scheduled earlier in the day during the summer months as part of the company’s involvement in an energy curtailment program of Southern California Edison’s demand-response program. Participation saves the company up to $10,000 per month on its electricity bill.

The recently more restrictive state legislation is not what sparked the Garcias’ interest in reducing energy consumption and emissions, though.

“It started when we saw a documentary called Fuel by Josh Tickell,” Eddie said. Tickell’s film documented environmental damage from refineries in the bayous of his home state of Louisiana, he said. “Seeing the water look like crude oil, sludge, seeing the impact of it, that’s what motivated us,” he added.

The brothers’ interest in sustainability expanded into their entire operations (see “Good vibrations, sustainable operations,” and prompted what they called a “lifestyle change,” Eddie said.

“We went as far as changing all our vehicles—electric lift trucks in the plant, light freight, and even our personal vehicles we drive.” Bryan traded in his 13-MPG pickup truck for a Chevy Volt. Eddie traded in his Audi 5 for a diesel-powered Audi 83 TDI, and a younger brother swapped his gas-guzzling pickup truck for a diesel-powered Volkwagen Golf TDI. Their father and company founder, Angel Garcia, caught the green bug too, and traded in his Aston Martin for a Tesla Model S.

The company runs at least half of its delivery fleet on biodiesel.

“Any diesel engine, with little or no modification, can run on biodiesel,” Eddie said.
Where do they get the biodiesel? Several employees’ family restaurants donate used cooking oil.

AG Machining installed two electric vehicle charging stations on the company property for free use by employees and non-employees alike. Angel and Bryan Garcia charge their Tesla Model S and Chevy Volt there.

The Garcias installed two EV charging stations on company property for use by employees and even the public for free.

“It makes us feel good because we’re promoting green driving. I don’t always want cost to be a roadblock. Hey, now there’re no excuses. Hopefully our employees will piggyback on that, and for their next car purchases, maybe they’ll consider an electric car for their next vehicle,” Eddie said.

He added, “If everybody makes just a small effort to be greener, I think there’d be a big impact. People always think, oh, we’re not a huge company, but we only have 100 people. If we, as the owners, make it a point to show what we’re about, that we care about being green, a lot of them will follow—and that would be 100 more people.”

AG Machining Inc., 609 Science Drive, Moorpark, CA 93021, 805-531-9555, AGM [email protected]