MOUND HOUSE - Business is very good at the Mound House manufacturing plant of Hess Microgen.
The maker of energy-efficient power cogeneration systems has installed 70 of its 100-kilowatt and 200-kilowatt plants since February and has 50 more back ordered. Last month one client ordered 20 systems.
"We're growing from a $2-million business to a $51 million business in 2001," said Bob Miller, the executive vice president who heads up the factory. "Not bad for about 10 guys working on the edge of town."
And not bad, considering that Hess Microgen doesn't actually sell the systems.
The company installs its equipment at hospitals, hotels, factories and military bases, then sells electricity, heat and cooling to those customers for 10 percent to 20 percent less than utilities charge.
Hess is able to undercut the big guys because its systems are more efficient and can be located at the point of use, Miller and director of operations Steve Brandon said.
The biggest gain in efficiency comes from capturing heat wasted in the electricity generating process and putting it to work satisfying customers' heating and cooling needs - space heating, hot water or even air conditioning through absorption cooling, the same process that cools propane RV refrigerators.
"The generating plants used by electric utilities are only 33 to 37 percent efficient. The rest of the energy is lost as waste heat at the plant," Brandon said. "Of the electricity that is produced, 40 to 60 percent is wasted in transmission to the customers.
"Under the standard measurement used by the Federal Energy Regulatory Commission, our systems are 80 to 90 percent efficient. And that's based on the actual electricity and heat delivered to the customer."
At Pohai Nani Good Samaritan Hospital in Kanoehe, Hawaii, a 120-kilowatt Hess cogeneration system is providing 75 percent of the institution's electrical power, 30 tons of absorption cooling and all the hot water needs for all the rooms, the kitchen and the laundry.
"We can provide 100 percent of a customer's electricity, even take them off the power grid, but we rarely do," sales director Will Winkler said. "Instead, we go to them and say, 'You're using X amount of gas now. We're going to make the same amount of heat for you with X gas and make electricity, too.' "
Hess doesn't have salesmen out making conventional sales rounds, Miller said. "One hundred percent of our customers learn of us by word of mouth. We don't even have our Web site up yet."
The customers Hess attracts often are looking for multiple installations. Hess is negotiating to install systems at most of PepsiCo's bottling plants and at several American military bases.
Hess is installing four 200-kilowatt units at the Orchid Hotel in Kona, Hawaii, and the chain has several other hotels in the Pacific that may follow suit. The price of electricity in Hawaii is the highest in the United States and energy costs in other countries are usually even higher, so the fuel efficiencies make even greater economic sense.
The Hess systems can be configured to run on natural gas, propane, diesel oil, fuel oil or even methane from sewage or recycling plants. The flexibility allows placement almost anywhere in the world.
The century-old New Yorker Hotel in New York City was originally built with an electrical plant of its own and the steam that ran it was then run through the hotel's radiators, Brandon said. Hess is now installing four 200-kilowatt cogeneration units in the New Yorker.
"They originally had cogeneration there. Now the hotel is on it again," Brandon said.
Hess powers its units with a variety of internal combustion engines, including Ford V-8's and huge International straight sixes. Each factory stock unit is disassembled in the Mound House factory, several key components are upgraded and several Hess-designed controls and monitors are added for increased efficiency and reliability and decreased emissions.
"That's a 464-horsepower truck block," Miller said, pointing to one of the Ford V-8s. "When we're done with it, it will be a 575-horsepower cogeneration engine."
Modifications can include air and fuel systems, titanium connecting rods, speed governors and sealed lubrication systems. New heat exchangers tied to the cooling and exhaust systems extract usable heat. Each spark plug gets its own ignition coil.
Sensors are installed to measure temperature at several points in the units and to track energy output in terms of heat, wattage and horsepower. A recently designed control system synchronizes the wave form of the electricity from the Hess units to the wave form of the utility's power so they can operate together. And all that information is packaged electronically so Hess can monitor units anywhere in the world from Mound House.
"Each installation is contacted at least daily and the sensors let us troubleshoot them from here," Miller said. "If anything isn't right, we can dispatch a service team to correct it."
Since Hess continues to own and operate the systems and pays for the fuel and maintenance costs, the company has plenty of incentive to keep the systems running efficiently.
The economics of ownership also gives the company a constant incentive to improve the systems. Miller showed off a new electrical generator design the company bought from a German company that may increase its systems' efficiency to 93 percent to 97 percent.
The generator uses rare-earth magnets that spin within the generator's copper windings, just the opposite of conventional generator construction. The design eliminates spinning electrical contacts and brushes that wear out and the generator can be built to produce the desired output power and alternating current frequency at an RPM that matches a motor's optimum RPM.
Another design innovation was purchased from a Utah rancher, who created a fuel intake system that uses a platinum catalyst to reduce pollution and extract more energy from fuel.
"This unmodified generator runs 20 minutes on a cup of fuel," Miller said. "But this one, with the catalyst, runs 150 minutes on the same amount of fuel."
Since February, the cogeneration business has been owned by Amerada Hess Corp., an international gas and oil production company headquartered in New York City and New Jersey.
"Hess Microgen is in Mound House because I don't want to move to New Jersey," Miller said. Miller owned the company until he sold it to Amerada Hess.
"I started the company here in 1989. It was called Intelligent solutions Inc. then," Miller said. At the time, he also owned Desert Sheet Metal, a local heating, ventilation and air conditioning company.
Now Hess has service teams throughout the world, scattered engineers and designers working under contract and the core factory team here.
"Our biggest challenge is finding good people here, because they need a lot of skills - welding, plumbing, wiring and machining," Miller said. "We're working with a college in Susanville, Calif., that has set up a curriculum to train people for us, but most of them get hired by someone else before they ever get here."
With so many orders coming in, Hess is adding a second shift and will soon double its 13,000-square-foot floor space, Miller said. More room may help with the staffing by allowing the manufacturing functions to be divided among teams.
