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The Wall Street Journal - Online

The Extra Step

For Abt Electronics, cutting its power use isn't just about costs. It's about doing the right thing.


March 24, 2008

Like many U.S. retailers, Abt Electronics Inc. has responded to soaring energy prices and environmental concerns by shutting off its lights more frequently and reducing air conditioning and heating. But Abt will soon take a far more visible step: installing a windmill on its roof.

Taking the extra step to reduce its environmental footprint is par for the course for Abt, one of the largest single-store electronics retailers in the country, with more than 350,000 square feet under one roof in Glenview, Il. Propelled by Michael Abt, the oldest of four brothers who run the company with their father, Abt Electronics has undertaken big and small initiatives to cut waste and consume less power.

The Journal Report

How to safely dispose of products2 that are potentially harmful to the environment is a growing concern. Plus, green thinking is at the core of thousands of new communities. Here's a look at some of the approaches3. See the complete Environment4 report.In recent years, the company began using cleaner-burning biodiesel fuel in 65 of the 224 vehicles in its fleet. It installed a giant fan near its warehouse unloading bays to use heaters more efficiently. And it built a recycling center near the store to better handle the tons of packaging the store receives each year.

The windmill, along with an array of solar panels, will go up this spring. The setup will cost about $90,000, but Michael Abt estimates the savings on the company's energy bills will offset that cost within about 15 years. Other steps the company has taken have cut costs, too, but that's not the only motivation. "We don't do everything just because of money," says Mr. Abt, 44 years old. "The green thing is the right thing."

Growing Ambitions

The company's green push began after Mr. Abt joined the family business in 1989. A biology major in the early 1980s at the University of Colorado in Boulder, he says environmentalism is his hobby. He asks senders of junk mail to remove his address from their lists and attends green-technology conferences across the country for fun. His car is a hybrid.

He brought little retail experience with him back to Chicago, but "the one thing I could give to the company is to make sure to make it is as green as I could make it," he says.

One of the first things Mr. Abt did when he joined the company was to push his family to recycle the mountains of cardboard packaging that piled up in the store's garbage. The company bought a machine that compressed the cardboard into bales that could then be sold for a small price to be recycled.

Over the years, Mr. Abt pushed other projects to trim waste and reduce pollution, such as placing bins in the company's office space to collect scratch paper for recycling, and running its delivery fleet on biodiesel.

But as energy prices have mounted in recent years and the country increasingly focused on the threats posed by climate change, Mr. Abt has become more ambitious, says Vince Siragusa, a longtime Abt Electronics employee and facility manager. Mr. Abt has proposed more-creative projects and prodded employees to engage more in cutting waste.

After returning from a green-resource trade show in Las Vegas in late 2006, he asked Mr. Siragusa to study whether the company could plant grass on its roof to absorb heat and provide more insulation. (The grass turned out to be too heavy.)

Reducing Waste

Michael Abt in the recycling center he pushed his family to build In 2006, the company decided to build the recycling center, which collects the company's used cardboard, plastic and plastic-foam packaging and prepares it to be sold for recycling. Robert Taylor, Abt's director of operations, says the company now sends garbage to the landfill three days a week instead of six, thanks to the recycling center, helping the environment and saving money. The site also is becoming a community collection point for used appliances, which Abt sells to a company that refurbishes or sells them for scrap.

Mr. Abt also has been installing sensors in the warehouse that shut off lights when an area is out of use. He commissioned a thermal scan that showed heat was escaping through a poorly insulated back wall of the building, but he decided the costs of fixing the problem would outweigh the benefits.

Price Shock

Another catalyst for Abt Electronics came when deregulation of Illinois's electricity market took effect in 2007. The company generates much of its own electricity, but the price of what it buys from the local utility was set to soar to 96 cents a megawatt-hour from 20 cents, says Mr. Siragusa. The facility manager negotiated a two-year contract at a lower rate with a different utility, but, taking his cue from Mr. Abt, he says he decided to go further. Mr. Abt has "really started pushing us to find out what we really can do" to use less energy and reduce waste, says Mr. Siragusa.

First, Mr. Siragusa focused on how much power the building drew at different times of the day and year. He realized air conditioning and heating pulled the most power, so for the showroom he lowered the thermostat in winter by two degrees and raised it in the summer by two degrees; for the warehouse, which is in the same building, the adjustments were four degrees. That ended up decreasing energy use by about 25% in the first year, he says.

But in the peak of winter in January 2007, employees working near the unloading bays began complaining they were cold, even though four heaters hanging from the ceiling nearby were running much of the day. Mr. Siragusa found that the temperature was 15 degrees near the warehouse floor and closer to 90 degrees near the ceiling. The warm air kept rising away from the workers.

After researching for some weeks, he came across a solution: a 24-foot-wide fan that would circulate the air better. The $8,000 device costs three cents an hour to run and keeps that part of the warehouse at about 74 degrees from floor to ceiling. The heaters run for about two hours in the morning and shut off on their own the rest of the day, he says. Abt recently set up another huge fan at a different part of the warehouse that ships out packages.

Learning to Balance

The green push hasn't always proceeded smoothly. Several years ago, after Abt already was using some biodiesel in its fleet of delivery trucks, Mr. Abt began pushing to boost the concentration of biodiesel in the fuel. His brothers, father and even the company mechanic were wary. They didn't trust the fuel and worried that if the higher concentration caused breakdowns, they wouldn't be able to repair trucks quickly enough to avoid an interruption of deliveries.

But Michael Abt insisted, and eventually he won them over. The fuel didn't damage the trucks, but it did become a problem because it freezes at a higher temperature than regular diesel. Last November, a deep freeze in the Chicago region that lasted for several days rendered about a dozen trucks inoperable, delaying deliveries. His family steamed.

"It really did cost us money and was not a great thing from the customers' eyes," says Mr. Abt.

The experience taught him to balance better the needs of the business with his green initiatives, he says. Now the company's trucks will run on regular diesel during winter months to avoid any weather-related issues.

Still, Mr. Abt's influence has pervaded the company. When one of his brothers wanted to build a truck wash for the company's fleet last year, Michael thought it was too expensive. The brother won his approval by telling him that the wash would be able to filter and reuse more than 90% of its water.

"My brother played my green angle, which he knows gets to me in the heart," Michael says.

Mr. Brat is a staff reporter in The Wall Street Journal's Chicago bureau.

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