For many of us, the New Year provides a natural time to review what is working in our lives and what is not working. It gives businesses like Induron the same opportunity to reflect. Too many of us get caught up in the hustle and bustle of establishing goals and New Year’s resolutions that we forget to reflect on the good things going on. Continue reading Reflecting on 2016→
You’ve heard us talk about “cycle count.” This number is a tool used to gauge how efficient and consistent we are when making paint.
Each time a batch is made, technicians perform a battery of tests to ensure it matches the formula and meets qualifications for viscosity, solids and flow. If it’s just right the first time, the cycle count is zero. If something is even a tiny bit off, the batch goes back to our technicians and is adjusted. Testing is then repeated until the paint matches the qualifications exactly. Continue reading Why Cycle Count Matters and Why We Share Ours→
“Zero Defects!” So proclaimed a huge sign over the entrance to Lockheed Martin‘s production facility in Marietta, GA. It was 1966, and I was a newly minted junior engineer doing structural analysis on the forward bulkhead of the C-5A Galaxy. It seemed pretty obvious that defects in manufacturing an aircraft capable of lifting 800,000 pounds into the air were not well tolerated. Continue reading Striving for Zero Defects→
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→
Last week, I spoke about the importance of cycle count in terms of efficiency. Our numbers are consistently low, and that’s something we are especially proud of around here.
The final numbers are in, and I can say that annually, our cycle count has been at .25 or less since 2007. That’s 5 years running. So how did we get and keep our numbers so low?
I can sum it up in one word: communication.
Our paint is made great by three teams: Paint Makers in our production department, the technical folks in the lab and quality control. Internally, these departments have a genuine respect for each other’s work. They have trusted relationships that allow for feedback. Continue reading What Cycle Count Says About Teamwork→
You’ve heard us talk about “cycle count.” This number is a tool to gauge how efficient and consistent you are when making paint.
Each time a batch is made, technicians perform a battery of tests to ensure it matches the formula and meets qualifications for viscosity, solids and flow. If it’s just right the first time, the cycle count is zero. If something is even a tiny bit off, the batch goes back to technicians and is adjusted. Testing is then repeated until the paint matches the qualifications exactly.
Each adjustment adds a number to the count. One adjustment equals a cycle count of 1, and so on. We take the average number of adjustments to get our cycle count. You can see why you would want to keep this number low: Continue reading Why Cycle Count Matters in Paint Production→
Our Cycle Count for January 2012 was 0.17. This is a great start to the new year, and shows our employees are ready to tackle 2012 with exceptional accuracy. Can we go lower in February? We’ll find out soon!
What is Cycle Count?
Each month, we do an internal report called “Cycle Count,” to summarize all our “Production corrections” in one number. Cycle count is a direct measure of how well we perform at “doing it right the first time, every time.” Continue reading First Cycle Count of 2012→
Our Cycle Count for December 2011 was 0.21. This is a great number, but even better are our 4th quarter and year-end cycle counts – 0.17 and 0.19, respectively!
We met all of our Quality Goals in the 4th quarter of 2011 – it was our best quarter and year-to-date ever! Congratulations Induron Operations Team!
Our Cycle Count for October was an impressive 0.17 – our lowest ever! Thanks to our amazing employees for a great month!
What is Cycle Count?
Each month, we do an internal report called “Cycle Count,” to summarize all our “Production corrections” in one number. Continue reading October Cycle Count→
“Zero Defects!” So proclaimed a huge sign over the entrance to Lockheed- Martin’s production facility in Marietta, Ga. It was 1966, and I was a newly minted junior engineer doing structural analysis on the forward bulkhead of the C-5A Galaxy. It seemed pretty obvious that defects in manufacturing an aircraft capable of lifting 800,000 pounds into the air were not well tolerated. Continue reading Zero Defects!→
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.