Power Plant Costs Soar

Power plant construction costs have risen 130% since 2000, according to a Power Plant Capital Cost Index (PPCCI) developed by ISH Inc. and Cambridge Energy Research Associates (CERA). Their PPCCI shows that the cost of new power plant construction in North America increased 27% in the past 12 months and 19% in the most recent six months when it reached a level 130% higher than in 2000. This means that a power plant costing $1 billion in 2000 would cost $2.31 billion today. A surge began in 2005 that has pushed costs up 76% in the past three years.

High global demand, combined with tightness in the equipment and engineering markets as well as high raw material prices are said to be driving  the trend. Overseas sourcing for many components further compounds cost pressures because, as costs of raw materials and shipping have risen, those increases are passed through to projects.

"These cost are beginning to act as a drag on the power industry's ability to expand to meet growing North American demand, and leading to delays and postponements in the building of new power plants," said Candida Scott, lead researcher for the Capital Costs Analysis Forum for Power, a new project of CERA. "As the cost of construction rises, firms may be reluctant to invest in new plants, or delay and postpone these projects, in turn constraining the growth of capacity."

"Unless there is a sudden and dramatic change in the industry, activity and market pressures should keep the PCCI at these levels, if not higher, for the next 12-18 months," Scott said. She said that after that period, there may be a rebalancing of the industry with either fewer active projects or a greater amount of delivery capacity available or both.

supplyForce Honors PVF Winners
Jerry McKeller, vice president/purchasing for Houston's Piping & Equipment Co. (extending arm out), lets his exuberance show after P&E was honored at supplyForce's  recent annual meeting with the PVF Division's "Best Conversion Award." Flanking McKeller, from left, are PVF Div. Director Mike Vita, P&E Manager Tom Pettit, and supplyForce President/CEO John Eggleton. The PVF Div.'s "Excellence in Sales Leadership Award" went to Industrial & Construction Enterprises, Inc., of Washington, NC; A. P. Supply Co. of Texarkana, AR, won the "Owner-Member of the Year Award."

Douglas Barwick's Stainless Piping Okayed To NSF 61
NSF International announced that Canadian piping manufacturer  Douglas Barwick, Inc.has obtained NSF Certification to NSF/ANSI Standard 61: Drinking Water System Components -- Health Effects, for its stainless steel pipe and fittings. 43 U.S. States and 11 Canadian Provinces require that stainless steel products used in public drinking water systems comply with Standard 61 requirements.

This Is National Entrepreneurship Week
This week is the second annual U.S. National Entrepreneurship Week (Feb. 23 – March 1). In 2006, Congress designated the last week in February to be used to recognize America’s entrepreneurs. This year, organizations across the country are taking time during this week to appreciate the outstanding contributions made by entrepreneurs to our country and economy.

Apply Supply Chain Management To People
Failing to manage your company's talent needs, says Wharton management professor Peter Cappelli, "is the equivalent of failing to manage your supply chain." And yet the majority of employers have abysmal track records when it comes to the age-old problem of finding and retaining talent. In this excerpt of ideas from a book coming out in April titled, Talent on Demand: Managing Talent in an Age of Uncertainty, Cappelli takes many of its lessons from just-in-time manufacturing -- for thinking about talent management.

"Homeshoring" Trend Noted For Call Centers
Some companies have reached the conclusion that outsourcing call center jobs offshore to India and other far-flung locations have more minuses than pluses. This article from Entrepreneur magazine details the considerations.

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