Hot-wired for higher profits

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Dick Speelman saw the writing on the wall back in 1997, when he first heard rumblings about utility deregulation.

He knew the transition from power company monopolies to open markets would affect the full-service electrical contracting firm he had established in Tallmadge a decade earlier. He just wasn’t sure how.

Curious, Speelman started scrutinizing states that had already been deregulated. What he discovered was a deteriorating power source reliability and quality that left many businesses in the dark.

“When utilities become private companies, their incomes are reduced by their competition, and they don’t have as much money to build power plants and distribution lines. They must also reduce their costs, so they cut installation, maintenance and repair crews,” says Speelman, president of Speelman Electric Inc. “That causes more power outages and longer outage times because it takes them longer to respond.”

Computer technology compounds power problems, because computers, copiers and production machinery are powered by microprocessors. Electrical systems also have nonlinear loads that can dramatically fluctuate. Even lighting systems have electronic ballasts that can cause quality problems.

Since most electrical systems are not designed for those stresses, that can spell darkness and even disaster for businesses.

“In most companies, electrical systems are out of sight, out of mind until disaster strikes, causing costly downtime, and worse, loss of life. But two-thirds of all disasters can be avoided,” Speelman says.

Such scenarios compelled Speelman to add a division to his commercial service offerings, made possible by his induction into TEGG — an international group of 120 premier electrical contractors that specialize in predictive and proactive maintenance solutions for industrial, commercial, institutional and office facilities.

The new division hot-wired Speelman Electric for higher profits, increasing revenue by 20 percent. Using TEGG technology, such as ultrasonic testing, thermographic imaging and other diagnostic techniques, Speelman technicians can detect problems and save money.

“Considering the costs incurred to fix a problem in an emergency, and the lost revenue and productivity from power disruptions or safety risks, that cost is far greater than the cost of our TEGG service program,” Speelman says.

The technology also pinpoints problems that increase utility bills, amplify operating costs and drain equipment life cycles.

But most important, the service prevents disaster.

For example, last winter, Speelman used its TEGG technology to test systems at Alltel Communications’ Hudson headquarters.

“We identified a major problem — a high-voltage connection to an oil switch that was deteriorating,” says Speelman. “Then, we checked the systems at their U.S. data command center in Twinsburg. We also found problems there, but they were able to make repairs before experiencing costly power interruptions.”

Last spring, Speelman sent its TEGG technicians to test the underground high-voltage distribution system for The University of Akron. They found and corrected problems, preventing a campuswide power outage.

“With all the power problems we’re experiencing today, it’s not a question of if your system will fail — it’s when. Our TEGG technology helps identify potential situations before they become costly problems,” Speelman says.

Speelman predicts that over the next decade, deregulation’s aftermath will completely change the way electrical contractors do business.

“It’s like the Wal-Mart syndrome that pushed out the little guys. Even now, I’m competing against Ohio Edison and First Energy, trying to co-exist,” he says.

But he’s not biting his nails, because he’s hot-wired for success.

“I learned from other successful companies that to survive, you have to do something better than the competitor. I’m doing that now, and I think that within three years, our TEGG division will probably bring in half our revenue.” How to reach: Speelman Electric Inc., (330) 633-1410 or www.speelmanelectric.com