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The lighting upgrade at Pequot Tool & Mfg. is saving the company nearly $15,000 a year and will pay for itself via the energy savings in less than three years.

Lighting replacements, new air compressor save energy, boost productivity for Pequot Tool & Mfg.

PEQUOT LAKES — Pequot Tool & Mfg., Inc. is a job shop for Precision CNC (computer numerical control) Machining and CNC Fabrication, stamping, assemblies and weldments. Pequot Tool began operations in 1981 as a tooling and stamping shop. Over the years it has evolved, expanded and diversified with its customers through technology, increasing the skill level of its workforce and making capital improvements to machinery and building. 

Recently the company had an opportunity to improve the energy efficiency of its 83,000 square-foot plant by changing the lighting system in about 40 percent of its building and modernizing a major air compressor.

Lighting system changes yield quick paybacks 

Two lighting systems were changed:

• A large number of T12 magnetic ballast fixtures in production areas were changed out to modern fixtures with T8 lamps and electronic ballasts, and 

• Twenty five metal halide lamps in production and shipping areas were replaced with the same number of 6 lamp high bay fluorescents.

Company President Mark Shervey estimates the savings of the T12 fixture change out is saving $12,000 per year, with a payback of under 3 years. He further estimates the metal halide lamp change out is saving $2,500 per year, with a payback of about 2.7 years. This savings is understated, says Shervey, “because of the significant growth that we have seen. This growth has required additional shifts and running on weekends. I would estimate these additional manned hours have increased our lighting usage by 15 percent.”

Both lighting projects also provided significant improvement in the working environment. “During the changeover, we had many positive comments from our employees on the improved lighting,” said Shervey.

Utility rebates for lighting upgrades

With the national phase out of magnetic ballasts and T12 lamps, Minnesota utilities no longer offer rebates for converting such lighting systems. However, with rising demand and energy charges for commercial and industrial consumers, companies that still have these in place may find it cost-effective to replace them even without rebates. Most electric utilities do, however, have rebates to support change outs of metal halide lamps for more efficient options, as well as many other kinds of lighting efficiency improvements. See Database of State Incentives for Renewable & Efficiency for more on utility rebates. 

More efficient air compressor boosts productivity, saves energy

Pequot Tool prides itself on highly skilled and continuously trained employees who accomplish tasks with a quality approach. It takes pride in the finished product, and the ability to meet deadlines is of paramount importance. Recently the company had an opportunity to further improve its plant by modernizing its compressed air function. 

As in most manufacturing facilities, a large quantity of compressed air is used throughout the working shifts. For many years two older air compressors had been delivering the approximately 300 CFM needed for production. These were replaced with a single larger and more efficient rotary screw compressor along with an improved air dryer and other associated equipment. 

The new compressor is saving 20 kW in peak monthly demand charges over the old equipment. “We have added many new production machines and increased significantly the hours these machines operate,” Shervey said. “Our power costs on this meter have increased by 12 percent from a monthly average of $9,600. I would guess that the increased production demand alone would have increased power costs over 20 percent.

“In addition,” adds Shervey, “we have seen a significant improvement in reliability and less downtime for maintenance.”

Total cost of the lighting and air compressor projects was close to $100,000. An Energy Efficiency Conservation Block Grant (EECBG) from the Minnesota Department of Commerce (via funding from the American Recovery and Reinvestment Act) paid $47,000. A rebate of about $12,000 from Xcel Energy helped pay for the projects.

Utility rebates available

Many utility companies have standard rebates available for compressed air efficiency studies and equipment, with rebate amounts based on the calculated amount of kilowatts saved. Prescriptive rebates are usually available for improved efficiency compressors as well as variable speed compressors and no loss air drains. More complex installation may involve a custom rebate.

Resources for industrial facilities

Utilities are a great source of help to industrial facilities seeking energy improvements. They can help with building assessments to identify energy-saving opportunities, and many will offer rebates for standard and customized energy-saving projects. In addition, the Midwest Industrial Initiative (MI2), a project of the Chicago-based Midwest Energy Efficiency Alliance, is a good resource. MI2 works to encourage greater adoption of energy efficiency measures by small and large industrial companies and utility, governmental, and nonprofit sectors in Minnesota and other Midwestern states. The U.S. Department of Energy’s Advanced Manufacturing Office offers tools and training to manufacturers and businesses of all sizes to identify energy saving projects.

For more information on commercial building energy retrofits, contact the Division of Energy Resources at or 800-657-3710.