Power costs reduction measures at Lafarge Whitehall plant

In 1991, the cement companies in eastern Pennsylvania suffered from a poor economy and strong competition within the marketplace. The Lafarge Whitehall plant was no exception and endeavored to become more profitable through cost reduction. Rigorous analysis of both corporate and cement industry costs revealed that the plant power costs were excessive compared to industry standards. In fact, the plant had the highest power costs of all Lafarge North American plants. This paper gives a history of cost saving measures and results thereof. The two major areas identified for improvement were the power contract and power utilization efficiency. The plant initiated power contract negotiations with Pennsylvania Power and Light Company (PP&L) in 1992, which concluded with a new interruptible power contract in August of that year. The contract guaranteed lower demand and energy rates, yet subjected the customer to power curtailments. With the interruptible contract in place, the various components of the contract were analyzed for additional cost savings. Primary measures taken included production schedule optimization and careful utilization of production equipment during on-peak hours. Diesel generators were installed in 1995 to provide an alternate source of power during curtailments, lessening the burden on the utility to guarantee costly firm demand levels. As a result, the 1996 plant power costs were reduced by 40.6% from 1991 costs.