Detroit Lakes firm makes mark in electric conservation:

Conservation technologies will play a key role in crafting new energy policies. Meanwhile, Total Energy Concepts, based in Detroit Lakes, MN, already is making its mark on the region’s business landscape with its surge protection and power “optimization” systems.

The three-year-old company finished installing a $60,000 system at Washburn IGA in late October. Grocer Robert Bitzer said his monthly electric bills from Xcel Energy run between $7,000 and $9,000, and he expects a payback in less than five years. While the utility doesn’t recommend specific vendors, it urges commercial-industrial customers to install equipment that protects against inside-the-building voltage surges and sags, and improves overall power efficiency.

“Xcel recommends that businesses with electric motors and big machines protect themselves from power quality problems. (Total Energy) guaranteed a 15 percent (cost) reduction, and (promises) our equipment will run cooler and last longer. Why not? Seven to nine thousand dollars times 15 percent is real money,” he said.

Damien Smith, Total Energy’s senior vice president of engineering, said the company has installed systems for 1,000 commercial, industrial and residential customers since 2003. Initially, it focused solely upon voltage sag and surge suppression with its V-Blox Corp. custom-designed power protection technology. For customers with an electric consumption record of at least 24 months, V-Blox offers a 36-month satisfaction guarantee — it will refund the cost minus any realized electrical savings to a dissatisfied customer.

V-Blox warrants its suppression equipment for 15 years. It promises to repair or replace equipment, up to $25,000 per unit, damaged or destroyed by an electrical surge due to a V-Blox failure.

In 2005, Total Energy launched its Kvar Energy Optimization System. It promises to improve “power factor” or operating efficiency of individual electric motors.

Motors account for half of all electricity consumed, and even small improvements in motor efficiency translates into significant energy savings, according to the Xcel Energy Web site, www.xcelenergy.com/commercial-&industrial/motors&adjustiblespeeddrives.

“Are your energy bills higher than they should be? A Power Factor controller can cut your costs,” states the “Motors and Adjustible Speed Drives” Web page.

A Fargo connection

Smith said the failure rate of the company’s surge suppression and power optimization products so far is a mere 1 percent. Smith, age 30, said he and the firm’s two other owners — his father Cliff Overvold and brother Dan — stumbled upon this new business opportunity in November 2002. Without elaborating, Smith said the discovery came through his father’s extensive business network.

Overvold managed the family’s Olds-Cadillac dealership in Fargo started by his father that grew to the largest of its kind in the eastern United States when it was sold in 1988, according to Smith.

In the mid-1990s, Smith brought his bachelor’s degree in electrical engineering from North Dakota State University in Fargo to Duluth, working as an Airbus A-320 structural engineer at Northwest Airline’s now-closed maintenance base here. He resigned in late 2002 with the carrier on course for the mechanics’ strike, bankruptcy filing and base closing that came in August-September 2005.

“This came along . . . sometime you have to take a risk,” he said.

Total Energy Concepts operates in a 10-state region that includes Illinois, Michigan, the Upper Midwest, Georgia, Alabama and Florida.

Total Energy is a contract distributor for the power systems, which are manufactured in Florida.

Total Energy has retrofitted some industrial systems, including a Cargill flour mill in Fairmont, ND, and is a preferred vendor for an electric upgrade at a Wal-Mart in Arcadia, FL.

But Smith said most of its projects have been small to mid-size projects: convenience stores, supermarkets, hotels, and office buildings. “It’s easier to get to the decision makers . . . you don’t have to go up a 50-step ladder,” he said.

Among its other customers in this region are Johnson Timber in Hayward; the Spooner Civic Center; Lac Courte Oreilles Casino Resort near Hayward; Spooner Economart; AmericInn in Virginia; Proctor Hockey Association; liquor distributor Better Brands in Duluth; and Pike Lake Liquors in Hermantown.

Dean Buerke, Better Brands president, installed a $14,500 surge protection system last winter after the company’s October 2005 move from West Duluth to the Duluth Airpark. “We had trouble with our computers (at the old site) and had never had so much equipment in a single building,” he said. “We haven’t had computer problems since,” he said, noting none were damaged by an April 2006 lightning strike there.

“We’ve also documented some power saving,” he said.

Pike Lake Liquors at 5686 Miller Trunk Highway was an early Total Energy customer. The company also operates a tanning salon and installed a surge suppression system in 2002 as it was adding cooling equipment and expanding from four to six tanning beds, said Jeff Erickson, vice president. “Our monthly bill had averaged $1,300 to $1,600 and dropped to about $1,000, even with the addition of cooling and tanning equipment,” he said. “The system paid for itself in less than two years,” he said.

Erickson was a then-director for the Proctor Hockey Association. He said he recommended a Total Energy solution for a recreation complex with an icemaker, three large compressors, and a monthly electric bill ranging seasonally from $4,000 to $8,000. A $20,000 Total Energy voltage suppression system reduced the annual electric bill at the hockey complex by 40 percent, Erickson said. The hockey board solicited other bids “but the others didn’t come close,” he said.

Smith said the firm has begun to market its newer Kvar power optimization technology to Pike Lake Liquors, the Proctor hockey group and others that installed the V-Blox voltage and current optimization systems. “Others have tried to copy us. Nobody has tried to put it together this way,” he said.

A powerful critic

Total Energy Concepts has a head start on competitors that bring similar technology to the market as energy conservation picks up a new tail wind. But it also has picked up detractors.

One is Daniel Schultz, senior engineer operations-distribution engineering at Minnesota Power. He terms the company’s surge suppression and power optimization technology “a glorious scam.

“If it were legitimate, wouldn’t the Minnesota Public Utilities Commission and state Legislature be all over us? We remain to be convinced,” he said. Schultz said he’s sharing only his professional opinion, not his company’s.

At the heart of this disagreement is whether the Kvar and V-Blox power correction equipment dramatically increases the internal operating efficiency of electric motors, as Total Energy claims.

Schultz said a company can reduce losses in internal wiring and thereby lower its power bill by installing capacitors between the panel box and

a motor. But the only way to decrease electric motor operating costs is to install more efficient motors, he said.

“One of the biggest factors for reducing electric costs is turning off equipment you don’t need operating, and installing energy efficient lighting,” he said.

Noting that Minnesota Power and Xcel Energy encourage power factor improvements, as well as installing premium-efficiency motors, Smith brushes off such criticism.

“We’ll probably never win over some of the utilities,” he said.