EleBlog

30 Aug, 2007

GHG = a new acronym for me. It means Greenhouse Gases. According to an article in the Financial Times -- I can't provide a link, you need to subscribe (which I do) to see it online -- "GHG reductions will cost $200 billion a year by 2030." This estimate comes from the Framework Convention on Climate Change, a unit of the U.N.

Yes, that's a lot of money. And since the estimate comes from the U.N., and no one in the U.S. would trust the U.N. to get an empty Coke can to a recycling bin, it might be an underestimate, for all we know. Depending on your perspective, $200B is a whole lot of money . . . or, compared with having billions of people gag on the ambient air (see China right now) or move to high ground (in the event global warming is real, and ocean levels rise) . . . $200B is a bargain.

Here's the question, not asked in the article: Do humans have the common sense to spend this amount of money to take a precautionary action to do what they can to preserve the world's future?

30 Aug, 2007

Here's the text of a press release from AWCI (www.awci.org). I've bold-faced the sentence of note -- one out of every seven workers in construction is not a citizen, it says.

Impact of Immigration and the Construction Industry Significant
New Research Outlines Need to Continue
to Utilize Immigrants in Construction Industry

[Falls Church, VA] The latest publication in the Foundation of the Wall and Ceiling Industry’s
Foundation Research Series, Immigration and Construction, reports on the vital role— as
approximately 20 percent of the workforce— immigrants workers play in the construction
industry and the need to maintain current work force levels in the industry.

The industry has exploded in the last two decades and while there has been a slight
decline recently in the residential market, owners and contractors have had to work to
stay competitive. Part of this costeffective business strategy has included the use of
immigrant labor— legal and illegal. In the last two decades, 36.2 million immigrants
arriving in the United States from 1985 and 2005, primarily unskilled labor from Latin
America.

“With the attempted immigration reform legislation stalled at the national level, and with
states and localities creating their own laws in its absence, there was a need to educate
members of our industry in a balanced, factual and researchoriented
manner,” says Steven A. Etkin, executive vice president of the Foundation. “Immigration and
Construction was published to assist our community in examining the role of
immigration in our industry.”

Today, companies in the costruction industry struggle to find available, affortable
employees. Today, it is estimated that approximately 14 percent of the construction work
force is undocumented. Between 2002 and 2012, unskilled laborers are expected to
account for 84 percent of the total projected employment growth. Vice President Mikel
Poellinger, president of Poellinger Inc. in La Crosse, Wisc. says, “Immigration and
Construction provides our industry with the background information they need to get
involved in the immigration debate. Our industry needs immigrant workers, and we also
need to be able to work with everyone legally.”

30 Aug, 2007

Here's a quick tour of some other data that's come to my attention of late:

1. The American Institute of Architects compiles a monthly "Billing Index." It hit a very high level in July. It is all about NONresidential construction.

2. McGraw-Hill has changed its mind about 2008. In a mid-year update to its Forecast, it now says the value of construction starts next year will be down 2% from this year (already predicted to be down), instead of the up 2% outlook it provided much earlier.

3. Also in the category of looking ahead, a group of manufacturers says U.S. inflation-adjusted GDP will grow by 1.9% when 2007 is done, and predicts a 2.5% increase next year.

30 Aug, 2007

A few months ago I posted something here about how construction wasn't doing so well. I was rewarded with an e-mail from someone I respect telling me I was wrong about that (and a few other things). I am aware of more shortcomings than I'm willing to discuss, which is why I enjoy celebrating the times I turn out to be VERY right.

McGraw-Hill Construction reports monthly on the value of contracts for new construction. This is a "look-ahead" indicator, as opposed to the Commerce Department's "construction put in place" (or construction spending) report each month, which tells us what has already happened.

Here's a summary of the 8/22 McGraw-Hill release on "the value of new construction starts in July" --

1. Down 11% (in dollars, seasonally adjusted).

2. A retreat "back to a level present earlier in the year."

3. As I've noted here before, I look at the UNadjusted table (which is on the bottom of the page). According to that:

30 Aug, 2007

A warning from UL.

30 Aug, 2007

NECA's executive director of everything technical, Brooke Stauffer (and his girlfriend) went missing one week ago (TH 8/24) in what appears to be a plane crash. I was a friend of Brooke's. Indirectly, I helped him get the job at NECA in the early 1990s.

I have been severely bummed out by this news. I have tried not to think about it, but it's very hard -- NECA is a big presence in the electrical industry, and I've been involved with the organization in one way or another since 1979 (even including the six years I worked in the waste industry).

It's hard for me to avoid NECA. It's impossible right now to think "NECA" and not then think "Brooke" -- and wonder why Fate couldn't take someone else -- and to not think about the fact that I will miss him.

NECA posted an update yesterday on the search for Brooke + Karen.

27 Aug, 2007

I recently became a fan of Carbon Capture & Sequestration -- and as a result have looked deeper into it -- and now have spun 180 degrees. I think it's BALONEY.

Here's a quote from the Natural Petroleum Council report to the DOE, which came out 7/18:

"Scale is also a major consideration for CCS. In the United States, if all the [carbon dioxide] from today's coal-fired electricity generation were collected and compressed, it would total 50 million barrels a day. This amounts to 2.5 times the volume of oil handled daily in the United States."

In other words, if we hold electric power generated by coal CONSTANT (freeze it at today's levels), we'd have to find a way to "sequester" (in the ground) 50M bbls/day of captured carbon. I'm not sure what that's going to cost; I am sure, of course, that it's better than emitting this crap into the sky.

Based on this information (and other stuff I've been reading) I don't believe CCS is going to happen. If we're going to burn a lot more coal, we're going to have to find another solution. And, of course, the Chinese -- who already burn so much coal that no one in China has seen the sun since 1999 -- need CCS worse than we do.

I'm not hanging a drape. This isn't the end of something. But what it does mean, clearly, is that -- at least in the next 10-20-30 years -- we are going to pay A LOT MORE for energy. No matter what form of energy you want to talk about it . . .

23 Aug, 2007

Here's a snippet from a Siemon press release:


Here's another, longer slice -- from another Siemon release:

“Use of sub-standard patch cords in any network, either within the comms room, the data centre or at the user’s PC, will inevitably lead to network degradation and slow-down,” said Jonathan Lewis, Product Specialist at Siemon.

The tests were independently performed on 149 new patch cords by network test equipment manufacturer Fluke, following a ‘mystery shopper’ operation at 34 distributors, assembly houses, retail outlets and mail-order catalogues. They were tested using the Fluke patch cord certification tool.

The first one is form 7/16/03. The second from 8/8/07.

23 Aug, 2007

Years ago, in presentations to electrical contractors and electrical distributors about the future growth of the "VDV" (voice/data/video) market, I projected that ECs should (and would) buy datacom contractors . . . because if they didn't, datacom contractors would grow up and start buying ECs.

Why did I say this? It made sense. Electrical and datacom were converging. Owners would want (and it turns out they DO) a single source of responsibility. Beyond that, it would be easier for a single contractor to be responsible for ALL of a building's wiring needs, than for someone (a la MasterFormat 2004) to carefully divvy up the various wiring/cabling/system installation tasks . . . and responsibility . . . and end up, at the end of the job, with Finger-Pointing (when things didn't all work correctly).

Well, I was right. Just recently, WPCS International (stock symbol WPCS) bought Major Electric, a 13-year-old electrical contractor. That link takes you to the initial release announcing the buy, but there was another (8/7) saying that WPCS had completed the acquisition.

Here's what's relevant here. First, a description of WPCS:


Next, what WPCS said about Major in that initial release:


Third, but no less important: This is the 2nd time this year that WPCS has purchased an EC. Back in February, it purchased Voacolo Electric.

- - - - -

Of course, I enjoy being right! But more importantly -- at least in this one case -- the concept of Making Convergence Happen appeals, not only intellectually, but financially. Here's what WPCS said back when it acquired Voacolo:

23 Aug, 2007

A Network World feature "Energy tips go unheeded, experts say," gets me back to where I start every day. I remind myself that I am stupid -- one of the stupidest people anyone has ever met -- and therefore lucky to have a job (any job). And then I tell myself that everyone else is a moron, which might actually put me at an advantage on occasion.

I'm serious.

Now, click on that link and read the article. Note that NW divides its stories on short web pages, and this one covers THREE of them; the best way to see it is to click through to the "print article" thing.

Here's what's amazingly stupid in here:


In other words, these people are pumping energy out the window (air conditioning) for no good reason; 90% of them ignore the power management systems (which they apparently have); and these (and other) problems have become so horrible that the costs are rising to the sky and fixing the problem is something humans can't quite envision.

I hope the article is wrong.

23 Aug, 2007

I write a column for ENGINEERING INC, the official magazine of the American Council of Consulting Engineers. The July/Aug issue posted recently in the form of a "NxtBook" -- which takes a bit of time to come up, but is worth the seconds. The column is about China, the construction industry, and engineering opportunities.

23 Aug, 2007

Three-plus weeks ago, I started a 3-part TEDMAG.com column on the housing market. The original idea was overtaken by events, and Part 3 ended up being more about the overall economy -- and an important choice that is in the process of being made -- than housing itself.

Part One -- Does Housing's Collapse Matter?

Part Two -- What They're Saying -- quoting homebuilders, from the transcripts of recently analyst conference calls.

Part Three -- What's Going On Here? -- this part was supposed to look into the future of housing, but instead it ended up being about the government's choice (which will be made by the Federal Reserve Board) about our future. Are we going to take the pain that comes with a capitalist system? Or are we going to seek the easy way out -- and shape a future that's potentially a lot more painful?

21 Aug, 2007

Each year, McGraw-Hill's Engineering News-Record magazine -- a weekly (comes out 45x/year) -- lists the Top 600 Subcontractors, in a special fall issue. Altho the data will print in September or October of 2007 this year, the sales figures (on which the rankings are based) are for 2006. The report includes lists of the top subs in several trades -- including the Top 50 Electrical Contractors.

There a lot more than 50 ECs on the Top 600 list. My past tallies have shown that 130 to 150 of the Top 600 are electrical or utility-electrical contractors.

From where does ENR get the numbers? These days, McGraw-Hill Construction has a number of regional construction magazines.

I've visited the sites of each of them; almost all recently published regional lists of the top subcontractors. These lists are, in many cases, more extensive (including a wider volume range) than the national list. I've put links below to the words written about the subs, the data tables -- and, where possible, I've tipped you off on where to find the Electrical Contractor rankings for the state or group of states.

- - - - -

California

5-page PDF

http://california.construction.com/images/topcontrlist.pdf

Story – from California Construction

http://california.construction.com/features/archive/0708_Feature7.asp

Colorado

Top Electrical Contractors (1-page PDF)

http://colorado.construction.com/people/toplists/06_top_sc_contractors/Top_SC_Electrical_2006.pdf

Links to lists of top specialty contractors and more, 2002-06

http://colorado.construction.com/people/toplists/default.asp

New York

Story:

http://newyork.construction.com/features/archive/2007/08_coverA.asp

Mini-Chart – 3 page PDF --
Includes top Electrical – page 2.

http://newyork.construction.com/people/toplists/NYminicharts.pdf

Top 50 Specialty Contractors list (5-page PDF)

http://newyork.construction.com/people/toplists/NYTopSpecChrts.pdf

Texas

Top Specialty Contractors List (12-page PDF) --

http://texas.construction.com/people/toplists/TopSpec_charts_2007.pdf

- - - - -

Arizona, Nevada, New Mexico -- 34-page PDF - see page 27 for ECs

http://southwest.construction.com/images/C_TSR.pdf

Story – from Southwest Construction

http://southwest.constructin.com/features/archive/0708_cover.asp

Extra – Safest Specialty Contractors in the Southwest

http://southwest.construction.com/features/archive/0708_cover1.asp

Idaho, Utah, Wyoming --1-page PDF (very small type)

http://intermountain.construction.com/images/TSC_List_2007.pdf

Story – from Intermountain Contractor

http://intermountain.construction.com/features/archive/0708_cover.asp

. . . ncludes sidebar on Electrical & Mechanical Trends

+ links to profiles of Arco Electric and GSL Electric (both of Sandy, Utah)

Alabama, Arkansas, Louisiana, Mississippi, Tennessee -- 14-page PDF (story + List)

http://southcentral.construction.com/people/toplists/07TopSpContr/SC_08_01_2007_TopList.pdf

Electrical break-out rankings on page 10

Illinois, Indiana, eastern Missouri, Wisconsin

Story:

http://midwest.construction.com/features/archive/0708_feature2.asp

17-page PDF – List -- see page 15 for ECs

http://midwest.construction.com/images/2007_TopSpecialtyContractors.pdf

Florida, Georgia, N + S Carolina

Story:

http://southeast.construction.com/features/archive/0708_Cover.asp

21-page PDF – List -- see page 18 for ECs

http://southeast.construction.com/people/toplists/SE07_TopSpecContrs.pdf

Alaska, Oregon, Washington

List = 21 page PDF -- see page 15 for ECs

http://northwest.construction.com/people/toplists/06_TopSpecialtyContrs.pdf

Story – from Northwest Construction:

http://northwest.construction.com/features/archive/0708_Feature1.asp

# # #

20 Aug, 2007

AEC Bytes posted a report on May's American Institute of Architects national shindig. I'm getting to this awfully late (it was on the bottom of the pile of reading). The piece is 3,300+ words and has 15 neat color illustrations.

If you're an electrical contractor of significant size, you might want to browse this thing. Beyond the brilliant tactic of including graphics with the words, it appears to be well-written. Here's a slice of it (from the conclusion):

20 Aug, 2007

From the Washington Post, 8/17: "Fannie Mae Predicts Price Decline Will Accelerate in '08." Some notes:

1. I think the Post keeps links live + free for 2 weeks. So click through now to read the article, or forever hold your peace.

2. I've sat through presentations from a Fannie Mae economist on the housing market when it was in the "up" mode. I didn't think he knew what he was talking about then (he sure as heck didn't see THIS coming, I can tell you that). Therefore, I don't recommend this as reliable forecasting.

3. The specific prediction, as incorporated in the newspaper's lead:


4. Here's your self-applied Quiz for today: If The EleBlog thinks Fannie Mae is full of stuff, and it predicts housing prices will fall by 4% in 2008, by how much will they actually decline?


. . . ? ? ?

20 Aug, 2007

Back on 2/15, the Fiber Optic LAN Section (of the Telecommunications Industry Association) updated its online cost model for estimating LAN infrastructure costs. That's a boring sentence (from the release's headline) for what this really is: A way to compare the cost of doing a local area network in fiber vs. doing it in copper cable.

20 Aug, 2007

Integrated Electrical Services is a pure-play investment in electrical contracting. The company isn't as large as EMCOR Group's electrical construction wing, but it is the only way to purchase shares on a public market (the NASDAQ -- symbol IESC) in a company whose sole interest in electrical construction.

On 8/13, IES produced its FY07 Q3 report. A few background notes:

a. I couldn't bring up historical prices for this stock on Yahoo! Finance, for reasons unknown to me. I used Big Charts instead. From the look of the chart, IESC has fallen from the $35 range in July down to $21 more recently. Find the IES release here.

b. IES last year went into a "pre-packaged" bankruptcy, emerging having shed a big slice of its debt.

c. Over the years I've followed it (go back to its inception in 1997), this company has had numerous reorganizations, shifts in management, new approaches that were sure to work, new ideas, company initiatives, etc. I once went to Houston and interviewed Bobby Stalvey, who had run a local company bought by IES. He told me when he got to Houston, there were 22 (if my memory serves) initiatives from Houston HQ that local people were supposed to be implementing. Paraphrasing here, Stalvey told me: "It's not possible for people on the local level to do their jobs, locally, AND work on 22 of these. I wanted to get it down to a reasonable level. I thought 3 would be reasonable. The people here [other management types at HQ] wouldn't let me go that far, but I got it down to 5."

d. Years ago, the then-CEO of IES scared the crap out of electrical distributors and manufacturers -- when he said (circa 1999-2000) that IES would hit $3B in annual sales, at an annual run rate, in about 2003. I (on the web) said that wasn't going to happen -- because it was going to be impossible for a company to gain control over all of the local electrical contracting companies that IES had bought (my mind remembers the number 80, but that might not be accurate).

e. It was't possible. I was right (very, very, VERY right!). IEC's Q3 report shows sales through 3/4ths of this fiscal year at $666M. The company won't break $1B this year.

Now, for a look at the Q3 report:

f. That $666M is below the nearly $684M that IES did through 3/4ths of 2006.

g. Q3 sales of $222.6M were below the $241.1M in FY06.

h. Profit margins ARE higher this year. The gross margin in '07 is 16.8% thus far, vs. 15.2% through 9 months of FY06. This might be the result of:

• IES has finally shed enough of its money-losing local operations (it has sold numbers of these local operations off over time, usually selling them back to the people who initial sold them into IES . . . electrical contractors with TONS of local savvy).

• The company is doing a better job of selecting jobs to take on, and a better job of estimating what it will cost to do them profitably.

• Having taken on fewer jobs, the company is managing them better.

• All of the above.

i. The company's backlog was $330.8M on 6/30/06, $352.8M on 3/31/07, and $329.5M on 6/30/07. That's not indicative of any particular thing; it might mean IES is being more selective on the longer-range projects it elects to pursue.


STRANGE INFORMATION

All of the above is preamble for what Freaked Me Out about this quarterly release. Right up there in the headline, it said IES was reporting Q3 results "and Announces Operational Restructuring Initiative." What, yet again? YES. This time, the company "has commenced restructuring its operations into three major lines of business: Industrial, Commercial and Residential" -- from its current decentralized structure.

[I really like the use of the word "commenced" in there. It reminds me of Casey Stengel, the former Yankees manager, who used that word fairly frequently.]


There is MORE.


AND STILL MORE


Let's add it all together:


One conclusion might be: THIS IS UGLY. How ugly? I stole a look at the bottom line -- cents per share in earnings. Here's what it shows after 9 months:

20 Aug, 2007

Goldfield (stock symbol GV) is a weird company. First, the name comes from the fact that it used to be in the gold mining business (it sold that off just as gold heated up in the early 2000s!). Remaining operations combined a powerline electrical construction operation with a real estate development arm. The RE dev is in FLORIDA, where the homebuilding business ain't so damn good.

One result: GV shares, which at one time earlier this year had daily closes near a buck and a quarter (i.e., $1.23), closed last Friday at 73 cents. This kind of performance lands you in the category of "No Fun Whatsoever." See GV's Q2 results here.

BAD: The company saw decreases in its electrical construction segment in Q1 and its first half. Of course, it did the same in real estate. In theory, a company has disparate operating divisions so that one offsets the other (i.e., one goes up when the other goes down -- at the very least). This isn't happening here.

REALLY BAD: I thought this quote from the 3rd paragraph of the GV release was telling --


Yeeeeeeeeeeeek!

20 Aug, 2007

Perhaps you've not heard of this company. It says it is "a provider of mechanical and electrical industrial services and products," which is why you find it here. Stock symbol: MCGL.OB. The stock went public at 25 cents, and last week closed at 28 cents. Along the way, it's been as high as 47 cents (according to my quick glance at daily historical trades on Yahoo! Finance) . . . a nice return on a quarter for someone!

Find MISCOR's Q2 release here. The thing that caught my eye is that, thanks to the sale of 62.5M shares of its stock, MISCOR has knocked down its deb-to-equity ratio from 7.4-to-1 to 1-to-1. Pretty neat trick.

What might be dismaying is that, accoridng to the release, this company -- which isn't new, but does have "newly minted" stock -- just recently completed a reorg of its operations. It now has 2 segments -- RRM (repair, remanufacturing, and manufacturing) and CES (construction and engineering services). In Q2, RRM's $12.1M in sales was a 12% gain; CES had $4.6M in revenue, up 26% "due to increases in electrical contracting, a strong local constructionmarket, and growing name brand recognition."

Further dismaying is this quote from John Martell, the boss: "The industrial services sector has substantial potential . . . blahblahblah." OK -- quick now: In which area (RRM or CES) is "the industrial services sector"....?

20 Aug, 2007

FY08's first quarter ended 6/30 for Black Box Corp. (BBOX is the stock symbol). The company's sales were up 10% to $252M in the quarter; it is headed for a $1B year, thanks to the acquisition of NextiraOne. As you probably know, the company is in a number of datacom and telecom businesses -- including the installation of same. At one time, BBOX spent a lot of money buying small cabling companies.

Here are parts of the release that seemed unfortunate:


Other news:

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13 Aug, 2007

With all of the chaos in all of the markets of late, it's worth making a couple of points (most of which are slanted toward electrical readers of the EleBlog):

a. The stock market went UP last week. That's right, it was up for the week. What's all of the hysteria about? Honestly, it makes one wonder. See Paul Kedrosky's weekend reading for a revealing (all GREEN on the bottom line) table.

b. As of right now, the Dow Jones Industrial Average is within a few percentage points of its recent all-time high. Decline? Big freakin' whoop, right? The Standard & Poor's 500 had a recent closing high of 1,553 (7/19). The S&P 500 stands now at 1,453. That's a dip of 100 points -- 6.44%. Big deal, right? So -- why is everyone so upset? I have an answer: The national financial picture is so fragile that people like Jim Cramer fear that the whole thing could fall apart.

And: They're right!

c. The conventional wisdom is almost always wrong. I heard a guy on ESPN say that if the Red Sox got Eric Gagne, it would be over (it, in this case, being the AL East pennant race in baseball). Hey -- it's not over; Gagne blew two games this past weekend agains the Orioles (each seemed to be "in the bag" for the Sox) . . . and the Yankees keep on coming. Similarly, folks in the financial markets (including government officials and ex-gov bigwhigs) keep saying "the housing market has bottomed." Well, it hasn't; not yet, and perhaps not until 2009.

Finally, with a big injection of cash, the central banks of the world have acted to prevent a freezing-up of the financial markets. Lots of people think that it [it being the market chaos] is over. Perhaps. But perhaps not. If the gyrations and declines are NOT over, we might well see the central banks combining to inject more and more money. At some point, however, they'll have to stand aside -- once it's been proven to them that the cash injections are NOT working, and in fact are hurting. Stay tuned!

------

d. Copper's price closed today above $3.55/pound. Considering all of the insanity, and the possibility that the U.S. (at least) has entered a recession (at least!) . . . that is amazing. See the Kitco Base Metals page here; it has the current copper spot price (top left) and selected (Dec '07 and Sept. '08) futures prices.

e. Some folks access information better if it's presented graphically, rather than numerically. Here's another Kitco page, which contains charts for copper -- from 24 hours to 5 years.

f. Finally, the commodity folks trade copper futures. For reasons at which I can't guess, the furthest-out copper future is 24 months. You can see recent/current prices for copper futures on this Yahoo page. Note that, as of the 7/25 close, the January '09 copper futures were gong for $3.096.

13 Aug, 2007

Turns out Gore Vidal had a solar electric installation at his house. According to a Q-and-A on Truthdig.com, inspectors came to his house a week after the installation was completed and ripped up a good piece of the electrical system.

Gratuitous EleBlog comment: I've been a Gore Vidal fan since he called Bill Buckley a "crypto-Nazi" in what might have been the prototype for today's "talking head" TV discussion shows. In response, Buckley came out of his chair and threatened to punch his opponent in the nose (I'm not kidding). I don't think Buckley was a crypto-Nazi, but considering all of the awful stuff that he and Barry Goldwater have spawned, to the great detriment of the United States of America . . . the world would be a better place had Buckley stayed on the damn sailboat.

13 Aug, 2007

You probably don't understand what's going on in the world's markets right now. I actually DO -- the result of several years of subscribing to, and reading, the biweekly newsletter, Grant's Interest Rate Observer. The newsletter goes for $740/year. Is it worth it? I understand what a CDO is, and I have a pretty good idea what a "CDO squared" is.

Am I lording it over you? Hell, no. There's a blog post online, from Barry Ritholtz, that helps. If you have time, print the thing out, including the comments. Read the comments. I've been spending a lot of time reading Ritholtz's blog lately, and I've found that the comments are generally helpful (and that mostly there's not a lot of tit-for-tat crap between posters).

Here's the link to Understand Credit's Alphabet Soup.

I've become inordinately fond of Ritzholtz of late. He's appearing on Larry Kudlow's TV show on CNBC. Despite the fact that I think Kudlow is an idiot, I have watched the show sometimes when Ritholtz is scheduled; he makes sense. I also enjoy and recommend the weekly Linkfest B.R. posts to TheStreet.com -- it's a compilation of topical links (some of which go to his blog) from the week previous.

13 Aug, 2007

I know the Japanese are different from the Americans -- and that on our side of the ocean, we prize diversity. But this new thing makes me want to find the place to sign up for the Luddite movement!

13 Aug, 2007

I'm doing a cruise of the usual-suspect blogs (I've got 'em all bookmarked) right now, and I just spotted an outstanding piece linked from the EE/RE Investing blog (EE = energy efficiency, RE = renewable energy). I've not read it yet, but it's "outstanding" because I've not previously seen someone tackle the idea of investing in energy storage stocks. The guy IDs two potential opportunities.

13 Aug, 2007

Lots of electrical industry suppliers are getting stuff from China -- which means lot of electrical contractors are installing Chinese-made stuff (with UL labels, probably . . . altho it is said that some are counterfeit).

Now people who think about manufacturing and distribution are speculating that making things in China might not be the greatest think since sliced cheese.


EleBlog take: I don't have a fully formed concept here. I'm against doing business with Communist-run countries (a funny position for a liberal, doncha think?); but these bloggers never even touch on that.

Yes, being against doing business with China seems damn stupid right now -- and you probably think I'm a hypocrite as well as a damn weird kinda liberal! But I try to walk the walk; I refuse to shop at Wal-Mart; I own an American-made car (a Saturn Ion). If 300 million Americans followed that same policy, things would be a lot different -- in The Middle Kingdom, and here as well.

Note: I've followed one of these bloggers for many years; generally, I've noticed that disagreeing with Adam Fein is not necessarily a sound long-term strategy.
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13 Aug, 2007

I'm not telling anyone they "should" comment on the stuff here. However, Kaarin, the webmistress of this site, has successfuly enabled the Comments. You'll find a link with each item that allows you to Comment.

This is NOT exactly a new thing for blogs, as most will know. We had comments enabled when the EleBlog launched -- and we harvested a Mega-Ton of Porn/Spam. Kaarin and I were spending valuable time deleting spam after spam -- real XXX-rated crap. We decided to disable Comments shortly thereafter.

Now they're back. You're invited to agree, disagree, criticize, etc.

10 Aug, 2007

I stumble across a number of things, and I actually read them. I found a "Department of Defense Bloggers Roundtable" transcript (from 6/9) -- more than 4,000 words. The host for the event was Col. Michael Moon, director, electrical sector development, Gulf Region division, Army Corps of Engineers.

Interestingly enough, the transcript is available here.

I recommend reading it; it's kind of interesting (and our government and military should be praised for holding such roundtables, and publishing the transcript!). Here's a piece that contained information I didn't know:

• as of 3/03, Iraq "was receiving about 4 to 8 hours of power a day" -- with "the lion's share" going to Baghdad, which had 16-24 hours a day of electrical power.

• After our invasion was successfully concluded; "75% of Iraq automatically was receiving twice as much power as they did before." But not Baghdad -- "they saw the reduction."

• Goal today: "to provide 10 to 12 hours of power daily throughout the country."

If you add this up, it means people in Iraq's largest city are probably going to remain unhappy -- with the U.S. military and/or the current civilian government of Iraq -- for quite some time. Our "goal" is 10-12 hours a day of electricity throughout the country, which includes Baghdad; these people can remember 16-24 hours a day of power in the Saddam days.

- - - - -

An additional quote from Col. Moon that I really appreciated: "You know, as much as we hate the bureaucracy in America, boy, I've really learned that it gets stuff done, it actually works. And the problem is there is absolutely no bureaucracy [in Iraq]."



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10 Aug, 2007

Somehow, I tripped over a story on ElectricityForum.com about how net metering isn't working for customers of the utility FirstEnergy. It makes for interesting reading. Three folks who tried to install their own turbines "believe that FirstEnergy, though probably technically abiding by the law, isn't exactly bending over backwards to make it easy for people to take advantage of net-metering," according to the report.

10 Aug, 2007

I just scanned the transcript of EMCOR Group's Q2 earnings conference call.

According to Frank MacInnis (the boss), "Our U.S. Electrical & Facilities Services segment companies nearly doubled their operating income [compared with Q2 '06, one assumes] to $21.2 million or 6.2% of revenues on an 11% increase in revenues."

I can't find the transcript online, but you can listen to the conference call (a web recording) at EMCOR's home page.

10 Aug, 2007

"Industry Convergence Was the Biz Buzz at NXTcomm" is what the president of the TIA says in his July online column. He (Grant Seiffert of TIA) approvingly quotes a commentary from a show daily at the NXTcomm event:


Seiffert's column also notes four other trends from the event.

10 Aug, 2007

An article in a June issue of The Washington Post noted that there are only 1,145 public gas stations that offer E85 (the motor fuel that's 85% ethanol and 15% gasoline). There are 167,000 retail gas outlets in the country. The article notes "many drivers don't even know their recent-model flexible fuel cars can handle E85."

All changes takes time. This one, too.

10 Aug, 2007

My contention is that NOTHING in building construction (+ modernization + maintenance) is as potentially "green" as electrical construction. CE Pro recently ( June 6) posted an article about "integrating green technology into homes" -- four tips for green systems integration. It's worth a read.

10 Aug, 2007

I ran across this in a 5/31 article in TIME magazine:

"Last year, Exxon Mobil spent $19.9 billion looking for oil and improving its refinery, pipeline, and pumping capacity . . . adjusted for inflation, it's only about 60% of what Exxon and Mobil together spent in 1981."

EleBlog take: If you watch the energy biz (which I do), you will find the energy companies UNDERinvesting in exploration, equipment, new transportation (ships), and more. There are a number of explanations for why they would all do this at the same time. One of them is: THEY believe in Peak Oil.

Think about it.

06 Aug, 2007

Here's a draft definition of an Intelligent Building, found on the AutomatedBuildings.com website (on which The EleBlog advertises!) --

“A building that provides superior occupant comfort, efficiency and safety through the application of appropriate technology. It supports a sustainable environment by minimizing the use of scarce resources and providing a platform for innovative conservation moving forward. The intelligent building supports the financial and social objectives of the enterprise, the community and the economy. Building Intelligence is not static, but a process that begins with design and proceeds through construction and commissioning to a continuous management cycle of monitoring, evaluation, change, with eventual decommissioning”

06 Aug, 2007

Somehow, my attention was called recently to the annual report of Virco, a domestic furniture manufacturer. I'm not going to be investing in stocks for quite some time (I haven't, really, since 1988, unless you count precious metals and water stocks). I leafed through the report, and came cross this info, from page 6 of the Virco Mfg. 2006 report:

- - - - -

"At the low point of our revenue decline in early 2003, we made a careful comparison of our own domestically manufactured furniture with similar products sourced offshore. We had been doing business in China for over 10 years, giving us a factual basis for comparison. We also studied larger-scale distributors, such as Wal-Mart and Lowe's, which we felt represented the state-of-the-art in global sourcing.

"We concluded that a counter-intuitive economic boundary existed, below which the benefits of cheap labor were offset by higher freight costs. We called this boundry the 'price/cube threshold.' It became the basis of our long-term decision to keep our domestic factories open, even as conventional wisdom argued for the closure of one or both of them.

"The price/cube threshold was also the day-to-day dividing line between what we imported and what we made ourselves. Continuous monitoring of both absolute and relative costs over the intervening years confirmed that raw materials were escalating evenly in both markets, but offshore labor plus freight was climbing faster than domestic labor alone.

"For the following reasons, we believe this trend is likely to continue:

• Wage rates in coastal China increased approximately 20% in 2006.

• Labor shortages in China are now creating occasional supply chain disruptions.

• Deferred environmental clean-up costs -- estimated by the World Bank at 8-12% of China's GDP -- are not factored into current pricing.

• Upward valuation of China's currency may increase the cost of exports.

• Ocean freight and port costs are likely to rise."

- - - - -

That's one (not particular recent) perspective. To that, you can add the recent developments -- toy recalls, food export problems, dogfood contamination. One can't say that there's cause to believe that U.S. manufacturing will make a comeback -- and that maybe the electrical construction industry will net some engagements to restore old abandoned factories for 2008-2009 re-starts . . . but we can hope, and keep an eye on it.

06 Aug, 2007

Go here to read this story (and see a video). Shame. SHAME. Shame!!!

06 Aug, 2007

In today's (8/6) Financial Times (a British newspaper), the lead columnist -- "Lex" -- talks about data on the U.S. electrical grid. The headline on the column is Gridlock. Here's a piece of it, which contains numbers I've heard previously, but with a proper attribution:

"Cambridge Energy Research Associates reckons the sector needs $900bn of investment over the next 15 years – in effect, more than replacing the net $750bn worth of plant already in place. The only thing worse than having to spend that amount would be not spending it. Overall, spare generation capacity could drop below 15 per cent of peak demand – the minimum usually required to avoid blackouts – by 2009. Two-year electricity futures have risen by two-thirds since 2004."

06 Aug, 2007

I don't know if I want to embrace everything that The Freedonia Group emits in the form of market research. In my years of reading TFG releases, it has seemed to me that the company exists to give mid-level corporate types some numbers to splash on a wall for presentations . . . any numbers will do. I could be wrong about that.

But here's a release (undated, but recent I think) on U.S. demand for electrical T&D equipment:

- - - - -

US DEMAND FOR ELECTRIC TRANSMISSION AND DISTRIBUTION
EQUIPMENT TO APPROACH $21 BILLION IN 2011

US demand for electric transmission and distribution equipment is expected to
increase 3.6 percent annually, approaching $21 billion in 2011. Increases will be
supported by a healthy industrial environment coming out of the early 2000s economic
downturn, and growth in nonutility power generation.

In addition, the maturation of
deregulation efforts and regulatory changes designed to ensure returns on investment
in the electric grid will support demand from electric utilities. These and other trends are
presented in Electric Transmission & Distribution Equipment, a new study from The
Freedonia Group, Inc., a Cleveland-based industry market research firm.

By their very nature, the largest and most traditional markets for electric
transmission and distribution equipment are the electric utilities and industrial
sectors. In 2006, electric utilities accounted for nearly 45 percent of total demand, with
the industrial sector -- including nonutility generators -- accounting for an additional 35
percent.

Growth in these markets will be supported by increasing electricity generation
by independent power producers and cogenerators, combined with an improved outlook
for capital spending by utilities and regulatory changes designed to ensure returns on
investment in the electric grid.

The smaller government and institutional market will see the fastest increases
through 2011, with gains supported by growth in transportation construction spending
and government fixed investment. Both the commercial and residential markets will see
below average increases, with particularly weak prospects in the residential market due
to the slowdown in residential construction. Still, the continuing penetration of
consumer electronics and electric transmission and distribution product innovations will
provide opportunities in residential applications.

The best opportunities will be in specialty transformers and metal-clad and metalenclosed
switchgear. Demand for specialty transformers will increase 5.9 percent
annually through 2011 benefitting from the improved outlook for machinery markets and
industrial construction, as well as solid increases in nonresidential fixed investment.
Metal-clad and metal-enclosed switchgear demand will rise 5.7 percent per year
through 2011, driven by an improved outlook for electric utility capital expenditures, a
strong replacement market and technological innovations. Power circuit breakers and
electric meters will also see solid increases.

[there is a table in the release that I can't reproduce here right now, for reasons that tick me off]

© 2007 by The Freedonia Group, Inc.
Electric Transmission & Distribution Equipment (published 07/2007, 300 pages) is
available for $4,400 from The Freedonia Group, Inc., 767 Beta Drive, Cleveland, OH
44143-2326. For further details, please contact Corinne Gangloff by phone
440.684.9600, fax 440.646.0484 or e-mail pr@freedoniagroup.com. Information may
also be obtained through www.freedoniagroup.com.
###
A limited license to use or reprint information from

06 Aug, 2007

According to Network World's 8/1 article, Aberdeen Group did a survey of corporate wireless LAN deployments found, among other things, the following:

“One thing that really shocked me was the average cost of $93 to add a person to their wireless net by the best-in-class organizations, and that is less than one-quarter of the cost of adding someone to a wired Ethernet,” he says. It is also less than half the cost of wireless adds compared to the rest of the companies in the study.

A related statistic is that best-in-class organizations say it takes them 11% less time adding a person to their wireless network compared with their wired LAN, and reported 60% fewer WLAN-related help desk calls per user per month, compared with all other organizations in the study.

06 Aug, 2007

Floyd Norris of the New York Times is one of my all-time favorite business writers. He also has a blog on the www.nytimes.com (I don't know if you can access it, if it's open to non-payers or not). Here's the entirety of a 7/18 entry that should make all of us think for a bit:

- - - - -

Productivity Tumbles, Or Maybe Employment Numbers Are Wrong

04 Aug, 2007

In St. Louis, IBEW Local #1 and NECA's local chapter just completed negotiations on a contract. I know this because a local labor official (from Pride of St. Louis) penned a 674-word op-ed piece in the St. Louis Post-Dispatch on 7/29. I found it in my research on Nexis (I can't provide a link or otherwise violate the newspaper's copyright). Here's a slice of the article, the most interesting stuff:

- - - - -

All of this leads up to the article's conclusion:"But as IBEW-NECA clearly demonstrate, our industry has a duty to recognize that even highly skilled workers can have job security snatched away when overall economic pressures are ignored. Productivity is as great a priority on our projects as safety and quality. That's the stewardship of the union construction industry that we are advancing in St. Louis and must advance nationally."

Obviously, this was written "by a union guy." And just as obviously, if you've visited here before, I owe you a disclaimer -- NECA-IBEW is one of my clients. So I'm prejudiced in favor of the union people as well.

But I've put it here for a serious reason: These people are trying to change MORE than just the perception of the union construction edifice. The contract points above are going to be implemented. The next-to-last bullet point (getting the 30-hour OSHA certification for each IBEW member in ST. Louis) is a real thing, which will either be accomplished or not -- and if it is, it will have real safety benefits . . . for the worker, for the employing contractor, and falso or the customers that hire those contractors.

Does this mean your company should hire a union electrical contractor? Does it mean that, if you are a non-union contractor, you should pick up the phone today, call the local NECA chapter, and talk about joining the team? NO. I am not an evangelist.

However, there IS something going on. If The EleBlog is going to "cover" the electrical construction industry, it ought to include information like this, when merited.

04 Aug, 2007

An Investor's Business Daily (7/27) carried the headline "Electric Equipment Makers Ride Industrial Construction Demand." It's about investing in the stocks of these companies, of course. Interesting fact: IBD's electrical equipment group (26 stocks) hit an all-time high on 7/19 and was up about 26% in the year's first seven months.

04 Aug, 2007

The Friday 8/3 employment report updated the Construction and Electrical Construction numbers accessible online via the http://stats.bls.gov website.

Here's what I found -- and a bit of analysis, and a guess.

CONSTRUCTION --


ELECTRICAL CONTRACTING --


WHAT THE HECK DOES ALL OF THIS MEAN?

Nice of you to ask. Here are more facts and a guess.

04 Aug, 2007

AGC offers one-page (I think most are 1 page) fact sheets on the role of construction in each state. There's a map, click on your state. It's free.

04 Aug, 2007

There have been a lot of posts (some of them Good, even) here lately. You might want to click on links on the right -- to the July 2007 page (lot of good stuff there) or August (to catch up). I'm not "making up" for the weeks I missed due to vacation + a minor illness . . . there's just a lot going on!

02 Aug, 2007

I recently penned a column on "Alternative Energy & Belief Systems" for Energy & Power Management magazine. To see the column, go to the July issue archive and click on the link to it -- you'll then be asked to register (registration is FREE).

Here is a piece of what I wrote:


This column provoked several letters to the editor -- which is always rewarding. People took issue with almost everything I had to say (in different letters). One of the respondents included the paragraph that follows. Please note that it's NOT from an idiot. From my reading of the letter, it's from a person who (a) took the time to write, (b) from the content of the letter, is intelligent, and (c) if he's getting the magazine, is probably a professional in the energy or buildings field.

I have a general awareness that there are inherent inefficiencies and losses in the transmission and distribution of electrical energy but I had not heard of it being quantified at such a low level before; this situation begs to be addressed. Renewable sources could, at least, help minimize the transmission inefficiencies. Solar roofs, community wind, and micro hydro from existing flows would all, individually and collectively, reduce the transmission distances and the inefficiencies associated with conventional power distribution systems. Massive transmission lines and corridors do not seem to help address these efficiency issues

What's distressing to me here is NOT that someone disagreed with me -- if you express opinions, you must expect that. And the general drift of his opinion ("reduce the transmission distances") is, in my opinion, CORRECT . . . we made a major mistake 100+ years ago when we went with Westinghouse's vision instead of what Thomas Alva Edison wanted!

No -- what's upsetting in that letter is that a person who is clearly intelligent, and who "should" have a background in and knowledge of the energy biz, "had not heard of" losses in electricity being on the order of 67%.

Of course, I had a limited amount of space in the column, so I didn't launch a detailed attack on Electricity. The losses in electricity in our system do NOT mostly occur in the transmission & distribution piece (altho some do, and it varies). The big losses happen right there at the power plant, where most of the energy that's created to turn the turbine is vented into the atmosphere and LOST (i.e., not put to work). This is a fact.

- - - - -

How can we do something about it? We should build factories right next to power plants, so the steam vented into the atmosphere can be put to work. Do you see this happening? The problems with our current set up are: (a) the power plants are mostly in remote locations (no one wants a 1,000 mW plant in his/her backyard); (b) no arrangements were made, when these plants were built (including right now, I guess) for making use of the waste energy; (c) we're not building a lot of industrial facilities right now, so even if we wanted to put the waste energy to use, we'd be hard-pressed to figure out how.

What's the alternative? There are MANY alternatives, even if you stick with coal- or gas- or nuclear-fired power plants. These include basic ideas: Put the municipal sewage plant next to the power plant, and use the generating station's waste heat to dry the sewage sludge (this is being done somewhere in Florida, I think -- one place in a nation of 300 million sewage-producers!). Build smaller local power plants, put them where people live and work, and use the heat in buildings (at least in winter); this is a trend referenced as "combined heat and power" (CHP) . . . sounds like something new to people when they first here it, but it's actually an old idea.

My favorite story along these lines is the car wash chain in upstate NY that generated its own electricity (with turbines). The power was generated by small turbines, right there at the car wash. The heat was put to work, heating the water that washed the cars. The car wash chain was "off" the grid . . . and tremendously efficient. If I remember this story correctly, the chain found out that its customers were very interested to hear about this set up -- so they built their new systems with glass walls, so people could actually watch the thing in action (what else do you have to do with all of that time waiting at a car wash?).

And there's more. This thing is long enough already, so I won't provide all of the details. But be assured, there are a lot of ways to get electricity and NOT waste the input energy.

- - - - -

SOMEPLACE -- on the DOE or EPA site -- there is a chart that details the energy flow of the U.S. -- where it comes from, the different forms, and how much is wasted. I have seen this thing at a conference. I have even seen it on the web, in the past . . . but three recent efforts to find the bloody thing online have come to naught. I'll keep looking. However, the Galvin people have detailed energy waste here -- I've excerpted this bit:

- - - - -

Today’s electric power system is shockingly inefficient in terms of both resource use and the market economy.

Approximately two-thirds of the fuel burned to generate electricity is lost in the generation and delivery process. Or, to put it another way, our electric power system operates at approximately 33 percent efficiency.

There has been no improvement in efficiency in the electric power industry since the 1960s.

Approximately 5 percent of the waste is the result of “line losses” — essentially power leakage as electricity travels from generator to end user. Line losses are increasing because the system is becoming overloaded. The amount of electricity lost over power lines has doubled between 1980 and 2006 — placing in essence a $12 billion “tax” on electricity that consumers now pay.

- - - - -

If you extrapolate, if roughly 5% of the loss comes due to "line losses" -- which means from the transmission & distribution system -- and the electricity supply system is 33% efficient, that means most of the losses (more than 60% of the input energy) happens at the central power station.

One of the problems of being so OLD (I am 53) and having worked in a given business for such a long time (I went to work as Senior Editor of Electrical Contractor in 1979) is that some basic elements of knowledge become so ingrained in your brain that you come to think that "everyone knows this." Obviously, at least one intelligent, literate reader of Energy & Power Management DID NOT KNOW anything about that 33% number.

- - - - -

EleBlog take: The headline on this is "A Lesson About Electricity." But I'm not referencing the lesson on the 33%. The lesson here is FOR ME, and perhaps others.

In this age when everyone has an opinion on Green this and Green that, and with PHEVs (plug-in hybrid electric vehicles) about to get a major promotional push, it's important for people who are neither anti- or pro- any specific thing (but who ARE in favor of good decisions!) to keep getting INFORMATION in front of people. Not a one of us can assume that any of the others of us "know" the basics of electricity, natural gas, coal sequestration, nuclear power, and the rest of it.

02 Aug, 2007

On 7/31 the USG emitted the "Construction put in place" report on the year's first six months (they do this monthly, and most people refer to what's in there as "construction spending"). There's a headline number that's seasonally adjusted, blahblahblah -- but I cut to the chase, which in this case is UNadjusted numbers (Table 2 in the report). Here's what's in there:


In essence, because Residential is (or was) so freakin' BIG, the down in resi outplays the UP elsewhere to produce a negative number for the total.

EleBlog take: Is this report bad or good? It's probably GOOD for electrical contractors, who put a lot more workers and material to work in nonresidential buildings than in houses.

I see a bit of worrisome news in here. The first six months of 2007 saw $163 billion in nonresidential construction, of which nearly a quarter -- $39 billion -- was in the "commercial" subcategory. As delineated by the Census Bureau (which produces these numbers), "commercial" includes a lot of things (it's a "junk drawer" of nonresidential construction) . . . but it's about 65% retail construction.

Commercial is up 15.8% at the 6-month mark. I would guess, given the parlous condition of retail spending these days -- and the fact that people on or close to the margin are finding that they can't convert more home equity into cash -- that there might be a pull-back in retail construction some time soon (in Q4? In Q1 of 2008?) . . . and perhaps the nonresidential tide will subside.

FINAL NOTES - INFLATION --

02 Aug, 2007

Here's a selected list of recent columns (by me) posted to TEDMAG.com:

Mid-Year Copper Pulse-Taking (7/25)

Four-part series on "smarter buildings" and the electrical industry:

6/13 -- part one, introducing the subject

6/20 -- a report from a BuilConn session on installation

6/27 -- contrasting smarter buildings with idiotic buildings

7/11 -- convergence, major trends, and more + links for more info

02 Aug, 2007

I have debated (inside my head) on whether or not to post this. I decided in favor, but here's a warning: It's self-interested and self-absorbed.

On the other hand: Intelligent Buildings IS one of the categories of info I try to "cover" here. And the relationship between the electrical construction industry and intelligent buildings is what you'll get a ton of info on if you follow what is suggested here.

- - - - -

Browse over to www.ElectricTV.net to see a video interview with John Maisel, Publisher of Electrical Contractor magazine, on "The IBS Opportunity." IBS = integrated building systems. John talks about how electrical contractors are diversifying into making today's (and tomorrow's) integrated building WORK. When you get to the site, look for the "sit down" interview (it's the second link on the right).

- - - -

Why is this self-interested?

02 Aug, 2007

As an investor, I am generally AGAINST stock buy-backs by companies. Home Depot is planning to engage in a massive stock buy-back. Despite the fact that the company has designated a price range of $39 to $44 per share for its repurchases, HD stock is trading BELOW the low end of the range (it closed yesterday at $37.77, and -- in yesterday's trading -- made a new recent low of $36.55.

I've posted an opinion piece about the HD buyback -- which is more about philosophy about buy-backs in general. Click on that link to download the 5-page PDF.
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02 Aug, 2007

I'm posting this one for my friend Jim Hayes of the Structured Cabling Association:

The Structured Cabling Association, Inc., the professional society of structured cabling, has created a free PowerPoint presentation for schools wanting to offer training in structured cabling installation for communications and security systems. The free SCA program was created to allow schools to include cabling in their telecommunications or information technology curriculum as early as high school to encourage students to consider this lucrative profession.
"Teaching communications cabling needs to be included in technical programs as early as the high school level." says Tom Collins, Professor at Gateway Community & Technical College in Cincinnati, a founder of the SCA and a contributor to the curriculum. "Many schools have communications programs but lack the materials to teach a cabling course, essential to the overall understanding of communications technology. Developing such a course is not easy for most instructors. The SCA, true to its non-profit professional society outlook, created this program to distribute free to instructors to facilitate teaching cabling and particularly to encourage younger students to consider a career in cabling, where jobs currently are readily available."
The four-part series includes over 200 PowerPoint slides keyed to the SCA textbook, Data, Voice and Video Cabling published by Delmar Learning. Topics include introduction to communications cabling, introduction to structured cabling, structured wiring and wiring practices and fiber optics in structured cabling. The PowerPoint slides are editable to allow instructors to adapt the presentations to their classes and add other relevant materials to the slides. The materials are easily integrated into in a telecommunications or information technology curriculum. With the current interest in residential cabling to support broadband connections like fiber to the home, the material is also appropriate for many electrical training programs and apprenticeships.

02 Aug, 2007

That's where construction is headed, according to a brief blog entry on the Architectural Record site. IPD advocates want it to replace the much-despised (but still around!) design-bid-build process.