You’ve probably heard that we’re living in “unprecedented times,” and that overused phrase does NOT exclude the paint manufacturing industry.
“This is going to be the most challenging time in our professional career.”
If I’ve said that phrase once in the last month, I’ve said it a hundred times. Because supply chain disruptions are causing significant and immediate price increases as well as challenging, uncharted lead times, those of us in the chemical industry are facing unprecedented challenges due to these unknown and/or undefined constraints. Continue reading Enduring Supply Chain Challenges the Induron Way→
We’re excited to welcome Trevor Nicholas to the Induron team as a Senior Chemist! Trevor has extensive experience in the coatings industry and is excited to dive into product optimizations and development. He is not only passionate about trying new things, but also making paint better, safer, stronger, longer-lasting, and most importantly, less expensive.
The paint and coatings industries have made strides toward reducing air pollution dating back to the 1980s. Current regulations have lowered the amount of volatile organic compound (VOC) emissions from coatings products in different regions and will continue to do so in the future. This discussion is based on a regional or national standard for achieving these air quality goals. Continue reading The Challenges of OTC Regulations→
The number of customers Induron retains is a strong indicator of value delivery. Understanding the value our products and services bring to business partners and customers is paramount to ongoing growth and success. A product’s value to its users is not always an apples-to-apples comparison. We watch and participate with clients using our products to see how well they accomplish their tasks. Continue reading Setting Value→
To ensure AquaClean’s performance matches its user-friendly and good-looking finish, many important design traits are formulated into the coating system.
First, AquaClean is formulated to be compliant to the OTC (Ozone Transport Commission) standard for low VOC content. Complying with OTC allows us to sell AquaClean in most U.S. markets. Continue reading AquaClean: The Chemistry Behind the Product→
Like most marketplaces, the industrial coating market becomes more and more competitive each day. Consequently, this competition cultivates an omnipresent sense of “We need to build a better mousetrap.” At Induron, our Research and Development Department is challenged with this exact task. With the help of our suppliers and partners, who consistently bring us the latest and greatest chemical technology, we are equipped with the necessary tools for innovation. Continue reading AquaClean: User-Friendly, Good-Looking and Long-Lasting→
With the recent uptick in fuel prices, it wouldn’t appear to be the case. However, a recent article in Chemical Processing indicates that significant strides are being made to really get there.
The likely biggest domestic energy development toward that end is the availability of gas from shale oil. New technology is allowing easier access to this enormous untapped energy resource. Michael Cowen of the International Energy Agency (EIA) states that, “within five years, the U.S. is likely to break the record output high reached more than two decades ago, to flirt with the position of top world producer.” Imagine that… having greater output than the Saudis! This can be possible with efficient shale oil conversion, combined with investments in new pipelines. If both methods are employed, it would significantly lower U.S. demand from oil imports, and move us closer to energy independence. Continue reading Is the U.S. Really Heading Toward Energy Independence?→
Our Core Values here at Induron are Integrity, Respect, RELIABILTY and Innovation. I was reminded of the least referenced one of these while reading this article in “Chemical Processing.”
As industrial paint manufacturers, we are considered part of the chemical industry, not only by ourselves, but also by the U.S. government. This article begins with the statement, “Reliability improvement remains imperative for chemical makers,” and mentions two of our biggest suppliers – Air Products and Chemicals and Dow Chemicals.
At Induron, we regularly report our Cycle Count (read more about Cycle Count here), which is an internal measure of doing things correctly time after time. More accurately put, it’s a measure of reliability. We consistently score in the 0.15 – 0.25 range (the lower the better), which by all accounts is an industry outlier.
This article talks about how Air Products and Dow have both taken an inward-looking metric and turned it inside out. This places their focus more on their customers than just their internal processes, and puts reliability at the forefront.
Two comments by Wilbur Mok, Air Products vice president of North American tonnage gases, that I particularly appreciated are, “We took the best operating practices and shared them globally. So now we operate each plant the same way.” This led to Air Products “freeing up site teams to spend more time on higher value tasks, such as preventative maintenance, improvement projects and troubleshooting.” Continue reading Impacting Reliability→
I recently read this article in “Chemical Processing” about the salaries and overall happiness of chemical engineers, and I found it quite interesting.
Although this article is about one particular field (chemical engineers), it can apply to nearly any professional career. I particularly like the comments, “No job is worth having if you can’t enjoy most of it. There is no good job that you will enjoy every aspect of. That’s why they pay us,” and “Stay current, the field is continually evolving and there is a lot to learn.” Do those quotes sound like they could have been made by your peers and/or predecessors? I think they’re good reminders that we all need to maintain a positive attitude and continue to try to grow through learning.
I also found the statement, “Lack of recognition remains the leading downside most respondents identified about their jobs,” to be similar to ring true in my business. Simply put, people like to be recognized for their successes… I know I do!
This is a NEW ADDITION providing SIGNIFICANT IMPACT on the tower to ENHANCE SERVICE LIFE.
While fixing foundations maintains what’s already there, applying Induraguard 9200 is like adding a fresh layer. It’s a new addition. The process needs to be done on a larger scale, so it’s important enough to be closely looked at by the Public Utilities Commission (PUC). With the huge U.S. electrical grid that can rust over time, the importance is clear. When this helps a structure stay useful for much longer and costs much less than getting a new one, it’s a real benefit for ratepayers.
WHY are you hearing this now?
The recent FERC ruling outlined the specific requirements for obtaining CapEx treatment when revitalizing towers.
FERC (Federal Energy Regulatory Commission) Update Enables Capitalization of T&D Coatings Initiatives
Formerly, utility companies could include replacement costs for transmission towers and poles in their capitalization, but corrosion control for these assets was excluded. A groundbreaking shift introduced by the Federal Energy Regulatory Commission now allows utility providers to categorize corrosion control programs (coating programs) for transmission structures as a “significant addition,” thereby enabling them to capitalize these expenses for accounting purposes. This alteration is poised to significantly impact the condition of the nation’s aging electric utility infrastructure.
On February 22, 2022, the Federal Energy Regulatory Commission (FERC) approved a utility company’s proposal to classify their tower coating programs as “substantial additions.” The order (1) clarifies, “The Commission has previously permitted utilities to consider the addition of minor property items that were previously absent as substantial additions and to capitalize the related costs when such costs extend the useful life, operational capacity, or efficiency of the associated retirement units.” Utility companies are now authorized to capitalize on the costs linked with corrosion control. This change aligns with generally accepted accounting principles (GAAP) and offers various financial advantages, including a more balanced assets-to-liabilities ratio and reduced income fluctuations.
In numerous instances, corrosion control solutions such as coatings have been repeatedly applied to structures, demonstrating anticipated performance and proven outcomes. Corrosion control coating programs, such as Induraguard 9200, possess the capacity to effectively prolong the service life of structures indefinitely.
HOW is this possible?
PG&E successfully presented a rate case supporting their proposal, citing examples of Southern Company and other utilities employing similar CapEx treatment. The PUC specified certain documentation requirements, but in the end, they granted the CapEx treatment as long as those requirements were met.
“Why should the ratepayer or the environment be asked to bear the cost of a new tower when coatings can be used to keep the one we already have operating indefinitely at a much lower cost?”
In PG&E’s success rate case proposal, FERC highlighted that comparable accommodations have been extended to prominent utilities such as Georgia Power and Southern California Edison. This ruling established a much-needed precedent and framework for other utilities to make the case that they have a responsible coatings program. Such programs can significantly enhance existing structures and potentially extend their operational lifespan by two decades or beyond.
The Tower Is Revitalized
Once the integrity of the galvanizing is compromised, the tower’s initial environmental protection is ineffective. However, the structural integrity remains intact. Implementing a new protective measure will ensure its preservation.
The application of Induraguard 9200 involves installing it on energized towers, typically at a rate of 1-2 towers per day for standard sizes.
Results In Monetary and Environmental Savings
Using Induraguard 9200 to restore a tower costs much less than replacing the whole tower – less than a tenth of the cost. It achieves the same goal while significantly reducing the need for procurement, engineering, and other human resources.
The environmental impact of mining, fabricating, shipping, and installing a new tower is drastically more detrimental compared to the environmental impact of prolonging the use of existing infrastructure.
Achieves An Indefinite Service Life
These structures, composed of steel and reinforced concrete, possess an indefinite design life if we manage environmental deterioration. This means there is no predetermined limit on the amount of value and serviceability after the initial installation at the ratepayer’s expense.
By implementing future applications of Induraguard 9200, the potential utilization timeframe for the structure becomes limitless. This becomes especially significant due to the existing strain on constructing new power infrastructure. It underscores the fact that we cannot simultaneously construct all the required new facilities and overhaul the current grid.
Revitalization Is Now A Capital Expense
The utilization of Induron’s Induraguard 9200 as a protective coating has gained recognition as a Capital Expense by both FERC and Public Utilities Commissions across the United States. This acknowledgment enables the potential cost of installing a replacement tower to come off of ratepayers while permitting the utilization of CapEx funds for this undertaking.
The Replacement Tower Is Now A Capital Expense
Once the existing tower has reached the end of its serviceable lifespan, the cycle starts over — thorough planning, procurement efforts, and assessment for a rate case to install a new replacement tower that is incredibly expensive and potentially disruptive to critical power transmission. This will be classified as a Capital Expense, thereby falling within the responsibility of the ratepayers again.
The Tower Corrodes And Needs Replacement
As the galvanizing layer diminishes, corrosion sets in, initiating the deterioration of the asset itself. This progression leads to visible corrosion and a reduction in structural integrity, ultimately necessitating the replacement of the entire structure.
Maintenance is classified as an O&M expense
Maintenance activities for the tower are categorized under Operations & Maintenance expenditures. Given that the asset was acquired using CapEx funds from ratepayers, the mentality of operation-to-failure takes hold. The objective then shifts to maximizing the asset’s operational lifespan before allocating further CapEx funds for its replacement.
The Tower Needs Maintenance
Over the tower’s lifespan, regular maintenance tasks are performed. Bolts are periodically replaced, foundations undergo repairs, and in some instances, structural elements are swapped out. However, it’s important to note that these routine maintenance activities do not mitigate the gradual degradation of the galvanizing layer, which ultimately leads to corrosion and, ultimately, the failure of the entire structure over time.
The Tower Is Built
The need for a new power transmission line is assessed, followed by meticulous planning, procurement of materials, and installation. The newly constructed tower is fortified with a protective layer of zinc, commonly referred to as galvanizing, which can have a lifespan of 20 to 50 years, contingent upon its quality, quantity, and service environment. This is financed through Capital Expenditure (Capex) funding, thereby distributing the financial responsibility to ratepayers through their imposed rates.