MPP Inc. Cites Electricity Costs As It Lays Off 20 Workers
By Anusha Shrivastava, Waterbury Republican-American, Conn.
Dec. 23–WATERBURY, Conn. — For MPP Inc., news of a proposed 22 percent increase in electricity costs by Connecticut Light & Power Co. was just too much: the manufacturer laid off 20 workers — more than 40 percent of its 47-member work force — on Thursday.
“We can’t continue to digest these increases,” said Richard DuPont, vice president and general manager of MPP, a 50-year-old company at 346 Huntingdon Ave. “We’ve taken advantage of every energy conservation measure, lean manufacturing technique, everything. First, we had to deal with a 40 percent increase in natural gas prices, and now this. This stuff is killing us.”
The proposed 22.4 percent increase received preliminary approval from the state Department of Public Utility Control in a draft decision Wednesday. A final decision is expected Dec. 28.
The proposed increase is cushioned to some degree because CL&P already had contracts in place for about half of what it needed to serve customers in 2006.
Not only has MPP — which refinishes metal for the paper, film and food industries — cut staff for the first time in 20 years, it is also considering moving out of state, DuPont said.
“We are being aggressively courted by other states,” he said, adding that high taxes and increasing utility rates are making the area uncompetitive. “We never thought we’d look outside Connecticut, but now we have to.”
MPP is not alone. Other area manufacturers are also looking at options outside the state.
“It’s a consideration for the long term,” said Rick Allen, chief operating officer of Naugatuck-based Custom Bottle Inc., which makes plastic bottles and packaging products for the cosmetics and pharmaceutical industries. “Energy is a meaningful cost for us and no meaningful cost can keep increasing 30 percent. This is very frustrating for us and very discouraging for manufacturers.”
The 25-year-old company employs 160 people. Allen said the company has no desire to move, but with a plant running 24 hours a day, 350 days a year, it will be hard to stay. “We are not about to move, but I will say that our competitors in the South pay less than half what we do for utilities,” he said.
The latest increase boosts the trend of companies moving out of Connecticut, said Pete Gioia, an economist with the Connecticut Business & Industry Association, which represents nearly 10,000 businesses in the state.
“Larger companies may consider self-generation (of power), but small companies do not have the wherewithal to withstand such increases,” Gioia said. “Manufacturers have been doing all they can to cut costs already.”
Conditions have been tough for quite some time now, agreed Bill Jason, product manager at High Tech Sintered Metals in Naugatuck, which makes parts for the cosmetic and firearms industries.
“Everybody is looking for lower prices,” Jason said.
Describing the proposed increase as “huge,” Frank Johnson, president of the Manufacturing Alliance of Connecticut, said 30 members of the alliance have signed up to buy power from Constellation New Energy, a natural gas and electricity supplier that is offering power at a lower rate than CL&P.
The alliance plans to get more of its members to join the pool and take advantage of lower rates that will be fixed for a period of three years, he said.
Gov. M. Jodi Rell on Thursday asked Attorney General Richard Blumenthal and Consumer Counsel Mary Healey to review the proposed draft decision.
—–
To see more of the Waterbury Republican-American, or to subscribe to the newspaper, go to http://www.rep-am.com.
Copyright (c) 2005, Waterbury Republican-American, Conn.
Distributed by Knight Ridder/Tribune Business News.
For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.
NU,