Longtime readers of this column know that I constantly rail against the high cost of electricity in New York.
In ours homes, we pay $60 more per month for electricity than the average American. At local factories and machine shops, we pay almost twice what our out-of-state competitors pay.
That second factor is especially bothersome to our economy, as it robs it of opportunity and jobs.
I know firsthand of that impact, because we’re talking about an annual power bill in the $1 million territory at Confer Plastics. The overpayment poses a serious competitive disadvantage and it has limited our ability to acquire and retain business. Over our nearly half century, we’ve lost out on some decent, high volume jobs for pennies on the dollar, pennies attributed to what is our third-highest cost at the plant, and one we really can’t control.
That has changed our business model over the years. Our New York roots and our love for our coworkers who helped make the company are strong. So how could we overcome New York’s higher costs, not only for electricity but for a wide variety of factors, and keep them and others employed? We adapted and rounded-out our capabilities by investing in larger machines, which gives us the ability to make things that very few can.
We hit a home run in that department last year, with a private investment (that is, no corporate welfare grants utilized or pursued) of $3.25 million in what is one of the largest blow molding machines in the whole world. It’s on the short list in that category, maybe in the Top Five, definitely in the Top Ten, when you look at a combination of shot size (it can drop 150 pounds of material) and press height (it can make parts 15 feet in length). That has allowed us to ramp up production in a variety of categories of consumer goods and we’ve added dozens of jobs since the machine went into use.
Last week, Lieutenant Governor Kathy Hochul and New York Power Authority Gil Quiniones toured the plant to see the machine affectionately known as “the Beast” and meet our team while announcing the availability of 400 kilowatts of ReCharge NY power to help us mitigate the cost of running the machine.
That electricity couldn’t come at a better time.
While we are trying to dominate the large-part niche and are one of only a few to do so, we’re not alone. The same year we expanded our plant, our single-greatest threat in the industry started building a plant east of the Mississippi. They always operated on the West Coast but needed an East Coast facility so they are closer to their and our existing and potential customers, which takes away the very best competitive advantage we had versus that competitor (shipping big things is not cheap).
2016 going into 2017 became a battleground. We grow. They grow.
In order to beat that new, powerful threat and keep Western New Yorkers working, that new machine of ours needed some semblance of cost certainty and lower costs at that. NYPA obliged with the cheap power.
NYPA’s faith in our job-creating abilities is much appreciated as was their ability to work with me and make this a go. After all, I’ve been someone who has consistently put New York government in the crosshairs over the dozen years of this column. They didn’t see me as a threat or a bother in this endeavor; instead, they saw me as a partner in furthering the goals of NYPA and the Niagara Power Project to use hydropower to make the economy grow and keep hard-working folks gainfully employed here on the Niagara Frontier. Their allocation of power gives us a chance to succeed now and well into the future.
In just a few years, we will have our fifty-year open house for the general public and I will encourage you to see our awesome machines and awesome people and get a feel for how a public-private partnership like this can help small companies like ours survive in a dog-eat-dog business world.
From the 06 February 2016 Greater Niagara Newspapers