Original Date: 08/26/1996
Revision Date: 01/18/2007

In 1989 and 1990, Weirton Steel Corporation (WSC) energy costs rose to account for more than 25% of the company's process costs in 1989. Using a systematic approach, WSC’s energy team reduced energy consumption costs by almost $40 million per year.

In an effort to reduce energy costs, WSC formed an energy team in 1991. Its purpose was to identify company energy consumption and cost; analyze energy information against other industry figures (benchmarking); determine major leverage areas; select high-potential improvement opportunities; and ultimately reduce energy costs.

The energy team consisted of 12 cross-functional team members, each of whom was assigned to the team for 100% of the time for a minimum of 12 months. The team applied a systematic, problem-solving process to identify energy improvement opportunities. Their approach included breaking up energy consumption into subsets of purchasing, generation, and end use. Major leverage areas within each subset were identified, and areas of high potential for improvement were selected in accordance with a set of criteria defined by the team. The criteria included a minimum dollar value for the expected cost savings; the maximum investment cost and investment-to-payback ratio; and the implementation period to start the improvements.

Through use of their energy identification, analysis, and corrective action approach, the energy team’s actions successfully saved the company more than $12.4 million between May 1991 and December 1992. By the end of 1995, annual purchased energy costs were reduced to $203 million, a savings of almost $40 million per year compared with 1989.

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