February 2025 Volume 7

OFFICIAL PUBLICATION OF THE FORGING INDUSTRY ASSOCIATION | FORGING.ORG | FEB 2025 FORGING TECHNOLOGY & EQUIPMENT

N-Ray Imaging: The Missing Link in Quality Assurance Page 18 Optimizing Steel Quenching with Advanced FEM Simulation Page 20

Forge Fair Returns to Cleveland Page 61

Finkl Steel finkl.com

Booth 329

LETTER FROM THE EDITOR

H appy New Year! As we step into 2025, there’s much to look forward to in our industry, with new tech nologies and new opportunities for forging industry suppliers and producers, the FIA is committed to staying at the forefront of these exciting developments. Looking ahead to May 13-15,

• Kathy Edwards, your expertise in managing iMIS and supporting various facets of the organization, including accounting and events, is integral to our daily operations. We appreciate your efficiency and organizational skills. • Amanda Dureiko, your efforts in workforce development and fundraising for the Forging Foundation play a pivotal role in securing the future of our industry. Your dedication to building relationships with educators and advancing our mission is unmatched. • Gabby Schultz, your organized coordination of both in-person and virtual trainings and events has been essential to the success of our programs. Your care, friendly face and positive attitude are a valuable asset to our team. • Dekland Barnum, your tireless work on technical projects and securing funding continues to push our industry forward. Your industry knowledge and technical eye have helped us to advance our offerings and you have become a great resource for our team and our members. • Lorean Crowder, your creativity and design skills help us to elevate our organization and our brand, and your work on FIA Magazine and Forging University is vital to our success. Thank you all for making this year a success. I look forward to another great year together. As we continue to build on the momentum of 2024, I’m excited to share that the FIA calendar is already packed with events and opportunities for engagement with the association and industry peers. I’m committed to keeping the ship steady and ensuring we continue to push forward with initiatives that benefit you and your business. Please feel free to reach out to me with any thoughts on how the FIA can support your goals in the new year. Wishing you all a prosperous 2025!

2025, we're thrilled to preview Forge Fair 2025, North America's only trade show dedicated to the forging industry [see details pg. 61]. With a packed show floor and a fantastic lineup of speakers, this event promises to be an incredible experience. We are excited to announce keynote speakers including aerospace engineer, comedian, and actress Shayla Rivera, and judges Ben Abbott and Dave Baker from the popular Forged in Fire TV show (History Channel). With so many exciting opportunities, we are expecting a great turnout and hope to see you there! As we begin this new year, we are also turning over a new leaf and embarking on a search for a new President and CEO to lead the association. Our team wants to extend our deepest gratitude to Jim Warren, former president and CEO, for his outstanding lead ership and mentorship over the years. Jim has been a true asset to the association and to me personally. His support helped me grow both professionally and personally, and I’m incredibly grateful for his vision and dedication to the forging industry. Although we’ve gone through some changes, our FIA team remains dedicated to helping you and your business thrive. Success is not the result of one person, it’s the result of collaborative efforts. I would like to extend a sincere thank you to each of our FIA team members for your hard work and dedication throughout this year. • Andrew Zielinski, your meticulous management of our finan cial and HR operations ensures everything runs smoothly. Your attention to detail and strategic oversight are truly valued. • Tricia Abruzzino, your dedication to strengthening our membership through recruitment, retention, and member bene fits has made a significant impact. You are key to building and maintaining our community. • Laura Johnson, your leadership in government affairs ensures FIA’s voice is heard on important issues. Your work with lobbying teams and lawmakers is crucial to our success.

Best regards,

Angela C. Gibian, CAE Interim President & CEO, Forging Industry Association Executive Director, FIERF Managing Editor & Publisher, FIA Magazine

PUBLISHER Angela Gibian angela@forging.org ASSOCIATE EDITOR Amanda Dureiko amanda@forging.org Editorial Staff

Board of Directors

Antonio Alvarez Robert Brodhead Robert Dimitrieff

Chelsea Lantto Louis Philippe Lapierre Jose Lozano Mike Morgus Matt Natale

DESIGN Lorean Crowder lorean@forging.org

CHAIRPERSON Jim Kravec VICE CHAIRPERSON Joe Schwegman

Bret Halley Jeff Krueger

FIA MAGAZINE | FEBRUARY 2025 1

CONTENTS

FEBRUARY 2025 | VOLUME 7

54 Stay One Step Ahead of Inventive Cyber Risks 56 No Small Decision 58 Insurance Market Updates and Property Strategies for Forgers INDUSTRY NEWS 61 Forge Fair 2025 Returns to Cleveland, Ohio 68 The Value of Forging Industry Association Committees 70 Bluestreak Compliance™ Hires Rory Godsell as Cybersecurity Compliance Specialist 71 FIA Announces Jim Warren’s Departure as President and CEO 72 Breaking through the Noise 74 Welcome New Members 76 Member Spotlight: How Charter Steel’s Vision Powers SBQ Success 78 FIA Upcoming Events FOUNDATION NEWS 80 NEW FIERF Named Professor at Colorado School of Mines 82 Forging Foundation (FIERF) Initiatives for the New Year 84 FIERF Donor Spotlight: Cleveland Hardware and Forging Company FORGING RESEARCH 85 Numerical Modeling of Tooling Improvements for Forging Processes: Final Report MEMBERS SPEAK 88 How to Start a Mentoring Program at Your Company AD INDEX 89 February Advertiser Index

p. 15

p. 61

20 Optimizing Steel Quenching with Advanced FEM Simulation 24 The U.S. Forger’s Quick Guide to Turnkey Railway Lines MAINTENANCE 26 Solving The Ten Most Common Causes of Forging Machinery Downtime 29 Water Cooling for Induction Systems: Inside and Out AUTOMATION 37 Unlocking Efficiency in the Forging Line with Forging Automation Technology 40 Driving Robustness into the Domestic U.S. Supply Chain MATERIALS 42 Reheating Steel, Reigniting Progress Bloom by Bloom 45 Eliminating energy-intensive reheating steps with direct quenching steel 50 SuperDie™: The High-Performance Hot Work Steel OPERATIONS & MANAGEMENT 52 Protecting your competitive business information and relationships

LETTER FROM THE EDITOR 1 Letter from the Editor WASHINGTON UPDATE 4 Investing in America: Waiting on Washington ENERGY 6 The Benefits of Custom Induction Heaters 10 Skyrocketing Capacity Costs and Their Impact on Your Energy Spend 13 Major Policy Changes Required to Ensure Power Grid Resiliency and Reliability EQUIPMENT & TECHNOLOGY 15 Tips on Specifying a Carbide Tipped Band Saw Blade 18 N-Ray Imaging: The Missing Link in Quality Assurance

OFFICIAL PUBLICATION OF THE FORGING INDUSTRY ASSOCIATION | FORGING.ORG | FEB 2025 FORGING TECHNOLOGY & EQUIPMENT

N-Ray Imaging: The Missing Link in Quality Assurance Page 18 Optimizing Steel Quenching with Advanced FEM Simulation Page 20

Forge Fair Returns to Cleveland Page 61

For advertising contact info@forging.org

FIA Magazine (ISSN 2643-1254 (print) and ISSN 2643-1262 (online)) is published 4 times annually, May, August, November and February by the Forging Industry Association, 6363 Oak Tree Blvd., Independence, Ohio 44131. Telephone: (216) 781-6260. Only (1) copy of the print version distributed at no charge only to members of the Forging Industry Association. Digital version distributed at no charge to qualified individuals. Subscription requests available at www. forging.org. Printed in the U.S.A. Periodicals postage paid in Independence, OH and additional mailing offices. POSTMASTER: Send address changes to Forging Industry Association, 6363 Oak Tree Blvd., Independence, Ohio 44131. Copyright © 2025 by the Forging Industry Association in both printed and electronic formats. All rights reserved. The contents of this publication may not be reproduced in whole or part without the consent of the publisher. The publisher is not responsible for product claims and representations or for any statement made or opinion expressed herein. Data and information presented by the authors of specific articles are for informational purposes only and are not intended for use without independent, substantiating investigation on the part of potential users.

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FIA MAGAZINE | FEBRUARY 2025

WSHK Mechanical Upsetter

MECHANICAL UPSETTERS Technological leadership - powerful results

The WSHK is a double-acting mechanical upsetter which applies the upsetting force in a horizontal direction. Due to its three-split tool design, parts with complex geometries and undercuts can be seamlessly manufactured. As a result, the machine can be compared to “full-fledged” forging presses for some parts. Because of renewed customer demand SMS group has redesigned its widely renowned upsetters.

Key Features:

Advantages:

• Redesign of the machine frame by FEM • More efficient and wear-free drive system • New hydraulic overload protection • Newest control and sensor technology for enhanced process control • Automation options and quick tool change system

• High clamping and upsetting forces for high surface quality and precise geometries • High energy efficiency • Short cycle and die contact times • Mechanical toggle system allows for long upsetting strokes

SMS group's WSHK Mechanical Upsetter combines proven and reliable mechanical design concepts with over 40 years of experience and the latest developments and features of modern forging equipment. This product offers the forging industry a highly economical solution for preforming and forging in large quantities, enabling both efficient preforming and precise finish forging.

SMS group Inc. | 100 Sandusky Street, Pittsburgh, PA 15212 P:+1 412-231-1200 | www.sms-group.us

WASHINGTON UPDATE

INVESTING IN AMERICA: WAITING ON WASHINGTON By Omar S. Nashashibi

expensing has cost companies millions of dollars since the changes took effect. Restoring the expired provisions and extending the TCJA is a top priority for President Trump and Republicans in Congress. Many on Capitol Hill, including Speaker Johnson, are boldly predicting that they will pass an extension of the tax cuts, provide funding for the border, overhaul immigration, expand oil development, and strengthen our defense – all by Memorial Day, this year. During his first term in office, President Trump did not sign the TCJA bill into law until December 22, 2017. I note the impor tance of the date as many in Trump administration at the time also predicted that lawmakers would send a final tax bill to the President’s desk by April. In fact, some in the first Trump administration believed that Congress could pass not only one, but two reconciliation bills by April of their first year in office. The reality of working with Congress began to become apparent as the weeks and then months went by before leaders introduced the tax measure in November of that year. At the time, Republicans held the Senate by a 52-48, a margin similar to today’s 53-47 GOP majority. When lawmakers voted on the tax bill in December 2017, House Republicans controlled that lower chamber with 239 seats to 193 for Democrats, a comfortable margin by today’s standards. Twelve members of the House GOP voted against the Tax Cuts and Jobs Act, a number today’s House Republicans cannot afford to lose with only a one seat majority until special elections in the Spring to replace Trump administra tion appointments. The timing of the legislation is often secondary only to its contents. Many of the Tax Cuts and Jobs Act of 2017 provisions took effect days later, on January 1, 2018, not affording companies much time to plan, or celebrate. The FIA is lobbying lawmakers to eliminate the requirement to amortize and capitalize R&D activities, to restore 100 percent expensing, extend the deduction for passthroughs, and maintain the lower C-Corporation tax rate. In our meetings on Capitol Hill, including during the February 2025 Member Fly-in, FIA stressed the importance of timely action on these provisions that have broad GOP support. In all likelihood, the longer lawmakers take to move the measure carrying the tax language, the chances increase that Congress will again make many of the provisions temporary in an effort to reduce the overall cost of the reconciliation package, as they did in 2017. That bill, however, primarily contained tax policy, it was not

A t the end of this year, thirty-four tax provisions will expire or phase out, increasing taxes by over $4 trillion on manufacturers and other tax payers. Those facing these tax increases must rely upon action by the U.S. Congress by December 31st, a date that today may feel far off in the distance, but in Congress-speak, is a deadline rapidly approaching. In 2017, a Republican-led Congress passed the Tax Cuts and Jobs Act of (TCJA), which lowered the C-corporation rate to 21 percent, created a 20 percent deduction for passthrough businesses under Section 199a, allowed for companies to fully deduct their R&D activities, and granted 100 percent expensing for capital expenditures, among other provisions such as increasing the estate tax exemption. FIA members report that the law allowed them to increase their investments in technology and equipment, especially critical when combined with the tariffs President Trump imposed on Chinese imports. These combined policies not only provided incentives for the forging industry to invest, but at the time some stability and certainty. However, lawmakers made many of the most important provisions for manufacturers temporary in an effort to reduce the overall cost of the TCJA. In doing so, businesses lost the ability to fully expense their R&D on January 1, 2022, forcing them to pay taxes on their efforts to innovate and use new technologies. The following year, on January 1, 2023, another section of the law took effect, reducing 100 percent expensing of capital expendi tures to 80 percent. Today, that number stands at only 40 percent, and without Congressional action will fall further to 20 percent next year before being eliminated entirely in 2027. As forging manufacturers seek to develop new technologies and invest in new equipment, the loss of the R&D and 100%

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FIA MAGAZINE | FEBRUARY 2025

WASHINGTON UPDATE

the sweeping reconciliation envisioned by the current GOP and Trump administration tackling immigration, energy, and defense. And we have already seen how temporary provisions create uncer tainty that results in less investment in technology and equipment. As of the cost of the reconciliation bill swells to what some believe could be up to $10 trillion over ten years, tax incentives that grow the economy may take a second seat to immigration and other priorities of the President. Extending the Trump tax cuts of 2017 is not in question, which cuts are extended and for how long is the real question. FIA members cannot sit and wait for politicians to act, as most began planning their 2025 investments in 2024. However, the cost of those investments could significantly increase if Congress does not restore many of the thirty-four expired and expiring provisions by the end of the year. Those manufacturers hoping for some certainty on the timelines suggested by GOP leaders in Washington should exercise patience. Having worked on tax policy for over twenty years, it is one of the most complicated issues to educate a politician. As a lobbyist, we often counsel clients to speak to members of Congress as they would a middle schooler on a plant tour. As the father of a middle schooler and a lobbyist, I can attest to this strategy – keep it simple and relatable. Only four members of the U.S. House tax writing committee

served on that panel in 2017 when Congress passed the TCJA. The hill to educate elected officials on taxes is steep to say the least. As FIA members look to research and develop new technolo gies, invest in new equipment, and plan for this new administra tion and Congress, they should recognize that even a Washington controlled by a single party will take time to deliver results. After all, tax cuts are like sausages, best enjoyed when not seen being made.

Omar S. Nashashibi is the Founder of Inside Beltway, a nonpartisan lobbying and strategic consulting firm in Washington, D.C. Having worked in the nation’s capital for over twentyfive years, Mr. Nashashibi provides strategic consulting services to companies while also lobbying the White House and Congress on behalf of manufacturing, associations, defense firms, nonprofits, and other sectors. He works with policymakers on trade, taxes, environmental and workplace regulations, supply chains, job training and identifying grants and funding to

support projects. Having started his career in Washington D.C. in 1996, Mr. Nashashibi worked for the Office of Management and Budget, a branch of the White House, a large multistate law firm, and founded a previous lobbying firm in 2005. He graduated from the George Washington University in Washington, D.C., where he studied Political Science and International Affairs.Washington, D.C. representing the Forging Industry Association. He can be reached at omar@insidebeltway.com. NEED A FORGING PRODUCER?

Visit www.forging.org for information on FIA’s FREE Request for Quotation (RFQ) program.

www.forging.org info@forging.org (216) 781-6260

FIA MAGAZINE | FEBRUARY 2025 5

ENERGY

THE BENEFITS OF CUSTOM INDUCTION HEATERS Maximizing Efficiency and Reliability for Your Process By Eric Peterson

W hat if you could enhance your induction heating process even further? Imagine a system designed specifically for your needs—one that maximizes efficiency, reduces waste heat, and optimizes your production line. That’s where custom-built induction heaters come into play. These induction heating systems are tailored to meet the specific requirements of your parts and processes, ensuring better results and higher productivity.

Whether you’re looking to improve the efficiency of your heating process, optimize production times, or integrate advanced tech nology into your existing system, custom induction heaters offer a solution that can transform your operations. Ready to learn how a custom-built induction heater can improve your manufacturing? Let’s dive into the benefits and explore why these systems are becoming the go-to choice for businesses worldwide. What is a Custom Induction Heater? When it comes to heating processes in industrial settings, custom induction heaters stand out for their ability to be tailored specifi cally to the needs of a particular application. But what exactly makes

Feature Design

Custom-Built Induction Heater

Standard Induction Heater

Tailored to specific application and part requirements

Mass-produced with fixed specifications

Provides precise, optimized heating for specific parts or processes General heating suitable for various applications

Heating Precision

Custom-designed to fit part size and shape

Pre-designed, fixed coil designs

Coil Design

Power Levels Optimized power levels for specific needs

Pre-set power levels, not adjustable for specific needs Fixed frequency, not optimized for specific parts

Optimized for optimal frequency of specific parts

Frequency Optimization

Performance Enhanced performance and efficiency for targeted applications

May lack the precision and efficiency required for specific tasks May require adjustments or modifications to fit into production May require more maintenance and adjustments Generally more affordable due to mass production Less energy-efficient, may have higher operational costs Suitable for general, less specialized heating needs

Seamlessly integrates into existing processes without major changes Higher reliability with fewer downtime and maintenance needs Typically higher upfront cost due to tailored engineering

Integration

Reliability

Cost

Optimized for energy efficiency, reducing wastage

Energy Efficiency Application

Ideal for industries with specific heating requirements (e.g., auto motive, metalworking)

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FIA MAGAZINE | FEBRUARY 2025

ENERGY

a custom-built induction heater different from standard models? How do custom-built heaters differ from standard models? A custom induction heater is designed with precision to meet the unique demands of your manufacturing process. Unlike stan dard induction heaters, which are built based on general specifications and are intended to handle a variety of applica tions, custom-built induction heaters for part-specific applications are carefully engi neered to match the exact heating require ments of a specific part or process. Benefits of a Custom Induction Heater: Custom induction heaters offer several significant advantages over standard models, making them an excellent choice for businesses looking to optimize their manufacturing processes. In this section, we will dive into the key benefits of custom-built induction heaters, from tailored solutions to efficiency gains and better control over the heating process. 1. Tailored to Specific Process Needs A custom induction heater is designed to meet the exact needs of your process. Unlike standard models, it’s built to work with specific materials and heating requirements, ensuring precision and accuracy. This tailored design allows the heater to apply heat exactly where needed, improving product quality and minimizing defects. It also ensures that you’re using the most effective heating method for your particular application. 2. More Efficient Heating with Reso nance Frequency Matching the resonance frequency of the induction heater to your material ensures maximum efficiency. When tuned correctly, the heater minimizes waste heat, using energy only where it’s needed, reducing energy consumption. This leads to faster heating, improved efficiency, and lower operational costs, making your heating process both environmentally friendly and cost-effective.

3. Reliability and Reduced Maintenance Custom-built induction heaters are more reliable than off-the-shelf models because they are designed specifically for your process. By optimizing the system to handle your unique requirements, custom heaters experience less wear and tear, resulting in a longer lifespan and fewer breakdowns. This reduces the need for frequent maintenance and keeps your A custom induction heater gives you better control over the heating process, allowing you to adjust temperature, heating time, and power levels precisely. This control leads to more consistent results, ensuring high-quality products with fewer defects. With improved process optimization, you can increase productivity, reduce waste, and achieve the desired material properties, making the entire manufacturing process more efficient. production running smoothly with less downtime. 4. Better Control and Process Optimization

Why Custom Induction Heaters Are More Efficient? When it comes to industrial heating, custom induction heaters stand out for their ability to deliver higher efficiency compared to generic, off-the-shelf models. Five Advantages of Custom Induction Heating Solutions include improved energy efficiency, precision heating, reduced maintenance, faster processing times, and lower operational costs. But what exactly makes these custom-built systems more efficient? Let's break it down. Closely Matched to Specific Heating Requirements Custom induction heaters are designed to meet the exact heating needs of your parts, ensuring precise energy delivery. Unlike generic heaters, which are made to handle various applications, custom systems are tailored to the size, shape, and material of your compo nents. This results in minimal heat loss and maximized heating efficiency. For example, if you're working with complex or delicate parts, a custom-built induction heater ensures the energy is focused exactly where it’s needed, improving both performance and the quality of the final product.

FIA MAGAZINE | FEBRUARY 2025 7

ENERGY

Reduced Energy Consumption and Faster Heating Times Custom induction heaters use just the right amount of energy to heat parts, resulting in reduced energy consumption. They are designed for faster heating, meaning parts reach the desired temperature quickly. This leads to lower power costs and improved effi ciency in production. Faster heating times also reduce cycle times, allowing more parts to be processed in less time. With less energy wasted and quicker results, these systems contribute to boosting your process output by improving both throughput and overall energy efficiency. Comparison with Generic Systems Now, let's compare custom induction heaters to generic, non-customized systems. While generic heaters are designed to handle a wide range of parts, they often end up being less efficient because they are not optimized for any one specific application. This can result in: • Excessive energy use: Generic systems tend to overheat certain areas or take longer to reach the desired temperature, which wastes energy. • Inconsistent results: Since they are not tailored for your specific part, these systems may not deliver uniform heating, leading to inconsistent quality in the final product. • Longer cycle times: With a generic system, the part may need more time in the heating process to reach the proper temperature, leading to longer production times.

Seamless Integration with Existing and New Production Lines Custom induction heaters are designed to easily integrate into both new and existing production lines. Whether you’re building a new facility or upgrading your current equipment, these heaters can be tailored to fit your exact needs. They help improve efficiency, performance, and energy use, without the need for major overhauls. For existing systems, custom heaters can be retrofitted, enhancing heating precision and speed while main taining smooth operation. The result is an efficient process that boosts overall production without causing disruption. How ThermESC Intl.'s Technology Saves Energy and Boosts Sustainability To truly understand the benefits of custom induction heaters in a real-world scenario, let’s take a closer look at ThermESC Intl., a leading company in the induction heating industry. They recently imple mented a custom-built induction heater at a facility that specializes in forging parts for the automotive industry. This case study highlights how their custom solution led to significant energy savings, boosted efficiency, and improved production. The Challenge: Outdated Equipment and High Downtime Before the upgrade, the facility was using a 30-year-old 750KW induction machine with outdated SCR technology. This machine had numerous issues that not only made it inefficient but also prone to frequent breakdowns. The result? Costly downtime and expensive repairs. The facility struggled to meet increasing demand, as their outdated system couldn’t keep up with the required production speeds and energy efficiency. The Solution: The ForgeMax Series Induction Heater To address these issues, the facility decided to replace the old system with the ForgeMax 750KW IGBT technology. This custom induction heater was specifically designed for their forging processes and provided several key improvements:

How Custom Induction Heaters Integrate with Existing Processes When it comes to improving your manufacturing process, the ability to easily integrate custom induction heaters into your existing setup is a game-changer. Whether you’re working with new production lines or looking to upgrade your current equipment, custom-built induction heaters can be seamlessly incorporated without causing disruption.

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FIA MAGAZINE | FEBRUARY 2025

ENERGY

Efficiency and Precision with ThermESC Intl.'s Custom-Built Induction Heaters In conclusion, investing in a custom-built induction heater from ThermESC Intl. boosts efficiency, reliability, and precision in your heating processes. Tailored to meet your specific needs, our heaters enhance product quality, reduce waste, and lower energy consumption. This commitment aligns with our core values of innovation, quality, and customer satisfaction. Let ThermESC Intl. provide you with a cutting-edge, long-lasting solution that optimizes your production line and ensures sustainable, cost-effective results for your business.

1. Increased Production Speed: The new system led to a 10% increase in production speed. This allowed the facility to meet growing demand without needing to expand their workforce or extend operational hours. The ability to produce more with the same resources is a huge win for any manufacturing business. 2. Energy Efficiency and Cost Savings: One of the most significant advantages was the reduction in energy waste. The ForgeMax system cut energy consumption by over 35%, which translated into substantial cost savings. By optimizing the heating process, the facility reduced energy costs, helping them operate more profitably. Addi tionally, the reduction in energy consumption also resulted in a smaller carbon foot print, aligning with sustainability goals and environmental regulations. 3. Improved Product Quality: Another key benefit of the custom induction heater was the improvement in product quality. The consistent heating provided by the ForgeMax system ensured that every billet was heated to the precise temperature required for the forging process. This precision reduced the likelihood of defects and the need for rework, which ultimately led to better-quality parts and a smoother production process.

Eric Peterson CEO ThermEsc. Intl. Phone: 970-483-5232 Email: Eric.Peterson@EscInduction.com

Business Outcomes: Enhanced Reputation and Customer Satisfaction The benefits of this custom-built solution were not limited to energy savings and produc tion efficiency. The improved product quality helped the facility maintain ISO 9000 certification, which is crucial for maintaining industry standards and customer trust. The enhanced consistency in the forging process also led to increased customer satisfaction, as clients received higher-quality products on time. This reputation for quality and reliability led to repeat business and strengthened the facility's position in the competitive automo tive market.

FIA MAGAZINE | FEBRUARY 2025 9

ENERGY

SKYROCKETING CAPACITY COSTS AND THEIR IMPACT ON YOUR ENERGY SPEND By Nancy Gardner

O n July 20th, 2024, PJM - the across 13 states - announced the results of its annual Base Residual Auction (BRA) for the 2025-2026 delivery year (06/01/25 05/31/26). This auction sets the capacity prices that power providers must pay to ensure reliable electricity supply. –As a result, PJM reported a 750% WEIGHTED AVERAGE INCREASE in capacity costs compared to the prior year. This will have a significant impact on your organization's energy bills. Prices are stated in dollars per megawatt day ($/MW-d). What does this mean for you? • Capacity costs, which typically • Your third-party supply agreements and utility tariffs include provisions to pass through changes in capacity costs, so you will see these increases reflected in your energy bills regard less of your energy buying strategy. • This dramatic rise in capacity prices is driven by several factors, including Regional Transmission Organiza tion that manages the electric grid account for 7-8% of your total elec tricity spend, are set to rise substan tially. fewer power plants bidding into the auction, forecasted growth in electricity demand, and regulatory changes. FAQs What is the Expected Cost Impact?

DEO&K, MAAC, Eastern MAAC, and DPL-South were consolidated into RTO.

How can you mitigate the impact? While the capacity price increase is unavoidable, there are steps you can take to manage the other half of the capacity cost equation - your electricity demand: • Implement Demand Response programs to reduce usage during peak hours • Deploy energy management software to optimize your facilities' energy consumption • Explore load shifting, energy efficiency, and energy storage solutions to lower your Peak Load Contribution (PLC) values Transparent Energy is here to help. As your trusted energy partner, we can analyze your portfolio, identify cost-saving opportunities, and develop customized strategies to mini mize the impact of these capacity cost increases. Contact us today to learn more. If you’d like to learn more about capacity auctions, please refer to the following FAQs. Nancy Gardner Transparent Energy Email: ngardner@transparentedge.com Phone: 732-288-5126

Why Did Capacity Costs Increase? PJM sited three primary drivers of higher capacity prices: 1. Fewer offers into the auction - due to power plant retirements, the number of assets entering bids into the auction was less than in prior years. 2. Forecast growth - increasing reliance on electricity in the transportation, data center, and heating sectors is expected to drive demand growth. 3. FERC implemented several market reforms including measures to adjust for extreme weather and verify each resource's ability to perform as intended.

Nearly every third-party supply agreement covering electricity rates within the PJM service territory includes language to adjust for changes in capacity costs relative to the results of the annual Base Residual Auction. Utility supply tariffs are similarly struc tured to pass through any cost increases or decreases relating to capacity auction prices. In 2024, capacity has accounted for an average of 7-8% of total electric supply costs. Considering the RTO-average increase from $28.92 to $269.92 (+833%), that figure is set to increase substantially.

FIA MAGAZINE | FEBRUARY 2025 10

ENERGY

are willing to provide at a certain price point. Prices are stated in dollars per megawatt day ($/MW-d). This means that for each MW that clears the auction, the generator will receive the auction clearing price every day for the entire planning year. Along the same lines, end-users will pay the auction price of capacity for each MW of demand, as defined by the peak load contribution (PLC). EXAMPLE: A customer with a PLC of 1 MW (1,000 kW) will pay $269.92 every day in capacity costs. ($269.92 * 365 days * 1 MW = $98,520.80). What is a PLC? Peak Load Contribution (PLC) is a defined figure for every elec tric meter within PJM. The number is determined by calculating the average electric demand (in MW) for each meter as recorded during the five highest-demand intervals during the prior summer (referred to as 5 Coincident Peak, or 5 CP hours). PJM assigns a PLC value to each meter based on its individual contribution to total load when the grid is under the most stress. These 5 Coinci dent Peak hours typically take place on summer weekday evenings between 4pm and 8pm. In 2023, the 5 CP hours occurred on July 27, Sept 5, July 28, Sept 6, and July 5. All of these occur rences took place between 5pm-6pm when grid demand exceeded 137,800 MW. PLC values for 2024 were determined by each meter's electric demand during these summer 2023 hours. What Else Should You Know About PJM's Base Residual Capacity Auction? • A total of 133,684 MW of capacity cleared in the Base Residual Auction. Incremental auctions will be held in the future to secure additional capacity for 2025/2026. • Resources clearing in the auction included natural gas (48%), nuclear (21%), coal (18%), Demand Response (5%), hydro (4%), wind and solar (1% each). • The 2026/2027 Base Residual Auction is scheduled to take place in May 2025.

Can Anything be Done to Avoid These Cost Increases? The auction established the value of each MW of capacity. That makes up one half of the equation that establishes final capacity costs, and this change was unavoidable. The other half of the equation is manageable, as it depends on electric demand during the 5 CP hours. Lower PLC values will result in reduced electric supply costs. Opportunities to control PLC values include demand response, energy management software, load shifting, energy effi ciency, and energy storage. What is a Capacity Auction? In a capacity auction, the grid operator dictates how much capacity will be required to meet demand in future years. Power generators then determine how much electricity they will be able to provide at a given price. Once the amount of electricity offered meets the target demand figure, the price of the final MW entered into the auction sets the clearing price. PJM hosts annual capacity auctions in order to secure generation resources to meet expected demand in future years. Capacity payments are made to electric generators, efficiency resources, and Demand Response assets that have demonstrated the ability and willingness to generate (or curtail) electricity during periods of peak grid demand. Capacity payments are an additional revenue stream for power generators on top of energy payments received for every kWh of electricity generated (or avoided) in the wholesale marketplace. The purpose of these auctions is to provide price signals to investors who can then determine whether or not it makes sense to invest capital to build a new power plant. Typically, these auctions occur three years prior to the delivery period to allow ample time planning and participation. Due to numerous delays by PJM and FERC, this latest auction took place less than a year before the changes will take place, allowing little time for consumers to budget or take action to reduce peak load contribution (PLC) values. How are Capacity Costs Calculated? All types of electric generators (natural gas, nuclear, coal, wind, solar, etc.) bid in certain amount of capacity (in MW) that they

FIA MAGAZINE | FEBRUARY 2025 11

When the Cutting Gets hard and abrasive...

Advanz TM FS

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When cutting challenging abrasive materials such as castings, gates and risers, you need precise cuts and superb finishes. Starrett Advanz FS Carbide Tipped

Band Saw Blades with triple chip tooth geometry cut faster, resist shock and last longer than any other blade. And we are ready to prove it.

The World’s Largest Saw Blade Manufacturer

To learn more about Advanz FS test / trial blade program and a documented cost-per-cut analysis, visit starrett.com/AdvanzFS • 978-249-3551 •

CARBIDE & DIAMOND GRIT BLADES

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CARBIDE-TIPPED BLADES

MAJOR POLICY CHANGES REQUIRED TO ENSURE POWER GRID RESILIENCY AND RELIABILITY By Bud Weinstein ENERGY

B etween 2005 and 2020, the demand for electricity in the U.S. remained relatively constant at roughly 4,000 terawatt hours per year Better insulated homes, more efficient appli ances, and energy conservation led some experts to proclaim that power demand in America had reached a permanent plateau. But since 2021, annual consumption of electricity has jumped by almost 8%, and the Energy Information Administration proj ects another 2% increase in 2025 with demand reaching 5,200 terawatt hours by 2050. The growing demand for power is a reflection of the ongoing “elec trification” of America as our economy expands faster than most other countries. As a result of “re-shoring,” hundreds of new facto ries are being constructed across the U.S. Crypto-mining, which is likely to get a boost under President Trump, requires huge amounts of energy. The greater use of electric vehicles and heat pumps for homes and businesses is also boosting power demand. Producing hydrogen fuel, which is just now coming into its own, requires huge amounts of electricity. At the same time companies such as Microsoft, Google and Amazon are scrambling to ensure reliable power sources for data centers and artificial intelligence. According to a recent study by the Department of Energy, data center power demand could nearly triple in the next three years and consume up to 12% of the nation’s electricity. That’s the demand side of the future. What about the supply side? Will we have enough electrons to meet future demand? We sometimes forget that it takes power to make power. Billions of investments in wind and solar farms in recent years have created the perception that huge amounts of new electricity have come on line. In fact, these additions have been largely offset by the closure of coal, nuclear, and some natural gas generating plants. According to the North American Electric Reliability Corporation (NERC), about 50 gigawatts of fossil fuel generation have dropped off the power grid over the past decade while more than 1,000 coal plants have been shuttered. The substitution of intermittent renewable energy for base-load, 24/7 power has made the nation’s electric grids less resilient, less secure, and less reliable. What is more, as Bjorn Lomborg of the Copenhagen Consensus often points out, the argument that wind and solar are now a cheaper power source than fossil fuels is based on the cost of elec tricity only when the wind is blowing and the sun is shining. The costs of backup power, which is usually a gas or coal plant, are not included. Nor do these cost estimates take into account federal

government tax credits that amounted to $20 billion in 2024. Many states offer additional subsidies for renewable generation. Lomborg estimates the total hidden cost of credits and subsidies for renewable energy in the U.S. at $60 billion last year, suggesting the real costs of wind and solar generation are far greater than what its advocates claim. Ensuring America has enough electricity to meet future demand will require some major policy changes that allow existing and future base-load power plants to remain competitive and feed their electrons onto the nation’s transmission grids. In particular, the new Trump Administration and the U.S. Congress should revise or replace the onerous EPA “carbon capture” rules that were adopted last year. If they remain in force, the closure of both coal- and gas-fired power plants will accelerate since capturing up to 90 percent of CO2 emissions is neither economically nor technically feasible. The egregious subsidies for wind and solar farms that have been in place for nearly fifty years have served their purpose, with renew ables now accounting for more than 20% of installed generation capacity. It’s time to put them to the market test to see if they’re truly cost competitive with coal, gas, and nuclear. Coal, in particular, has a critical role to play in assuring adequate power for the ongoing electrification of America. Though oper ating thermal coal plants provide only 16% of America’s power today, these “always on” generators are critical for maintaining grid reliability, especially during extreme weather events which are becoming more common across the nation. As NERC warned several years ago, the accelerated closure of coal and nuclear plants may lead to power outages and transmission problems in many parts of the U.S. For decades, American households and businesses have benefited from an electricity delivery system built upon a mix of generation sources. To ensure this is the case in the future, we need to adopt policies and regulations that will keep base-load power in that mix.

Bernard L. Weinstein is retired associate director of the Maguire Energy Institute at Southern Methodist University, professor emeritus at the University of North Texas, and a fellow of Goodenough College, London. (Reprinted with the permission of Real Clear Energy)

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Billet Descaling Solutions

Features and Benefits › Demand-dependent water and energy consumption › Complete turnkey solutions › Suitable for steel, stainless steel, copper alloys and other non-ferrous metals › Customized design for all product shapes and sizes › System optimization through pressure control

HBT Americas, LLC 1325 Evans City Road Evans City, Pennsylvania 16033 Phone: 724 789-7050 Fax: 724 789-7056 Hauhinco.info@hbt-group.com www.hauhinco.com

EQUIPMENT & TECHNOLOGY

TIPS ON SPECIFYING A CARBIDE-TIPPED BAND SAW BLADE

• Blade solutions for degating in a foundry typically involves the removal of heads, runners, gates, risers and sprues from castings to prepare parts for post processing machining and finishing operations. One of the most common and efficient solutions is the band saw blade due to its precision and versatility. Thinner kerf blades are ideal for contour cutting, while wider blades offer greater stability and finish for straight cuts. Look for blades that are specifically designed for degating applications such as Starrett Advanz FS series for foundry use. • Pay attention to factors such as pitch, blade width, tooth set and rake angle design.

T ungsten carbide or simply “carbide” is three times harder than steel, and when placed on saw blades, cuts cleanly through steel. Tungsten carbide is one of the hardest compounds and used to produce a long wearing, heat and scratch resistant material when combined or cemented with other materials. While the benefits are well known, what should you look for when selecting the best carbide-tipped band saw blade for the application at hand? Starrett Advanz™ FS Carbide-Tipped Band Saw Blade shown degating an engine block.

Blade pitch , defined as the number of teeth per inch (25 mm), needs to be properly selected. The number of teeth that come in contact with the work can affect both blade performance and dura bility. Too few teeth in contact with the work can lead to early tooth strippage. Contrastingly, too many teeth can pack the gullets, greatly reduce cutting rates and ultimately make the material impos sible to cut. At lower cutting rates there is less penetration per tooth, causing more rubbing than cutting, which can result in substantial work hardening of the mate rial. While there are exceptions from appli cation-to-application, the rule of thumb is to have no fewer than three teeth per inch in the material at all times. For Carbide-Tipped blades are ideal for cutting hard, abrasive materials.

• Blade solutions for difficult sawing are useful for addressing cutting challenges such as harder materials including cast iron, hard and abrasive steels, stainless steels, compacted graphite iron (CGI), high-nickel and special alloys. For example, for very hard materials, a carbide-tipped blade with a multi-chip grind and high-low sequence produces more chips spread out over more teeth, and offers faster cutting to maximize productivity and blade life. In addition, look for blades that offer a “backgrind” technology. For example, AMP technology available from Starrett features a custom back edge enhancement on the blade which generates a rocking motion while cutting, further enhancing tooth penetration while reducing feed pressure. This cutting motion also serves to minimize surface contact area, increasing the blade life on hard-to-cut alloys.

MC7 (Seven Multiple Chips)

AMP

Starrett Advanz™ MC7 carbide tipped blade has a progressively ground four-tooth trapezoidal design that creates seven chips and is available with AMP technology.

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EQUIPMENT & TECHNOLOGY

example, if you have a one-inch piece of cast aluminum and put three teeth into it, it’s going to cut through it without any issues. Too many teeth will cause a problem as well. When cutting two-inch hard, abrasive steels, or compacted graphite iron (CGI) with a 10/14 pitch, it will be a very slow process and the teeth will rip off due to the gullets and teeth loading up with material. When there is a chip load on each tooth, the gullet capacity needs to be adequate so that the tooth can penetrate, fill up the gullet and evacuate the chips. When cutting Inconel, it is so hard that there should be more teeth engaged in the material.

Since Inconel does not produce a big chip, there will not be issues with filling up the gullet. Challenges arise when trying to cut a wide range of materials with one blade, and trying to come up with a middle ground for tooth pitch. It is best to consider the mate rial you are cutting most often and then get yourself within the ballpark. A constant pitch blade (uniform distance from one tooth tip to the next tip) can increase harmonic vibrations. Harmonic vibrations can lead to excessive noise, unde sirable saw or saw blade vibrations and in severe cases, bad cuts. When considering

Starrett Advanz™ FS Carbide-Tipped Band Saw Blades offer precision and versatility for degating and other abrasive processes. Tips for Extending Blade Life Break-in the Blade Taking the time to break-in a saw blade is well spent and we recommend that this step is always performed. The process to break-in a band saw blade will vary depending on the characteristics of the material being cut. While breaking-in a blade, have the machine running at the normal surface feet per minute (SFPM). For harder materials, such as nickel-based alloys including Inconel, or other diffi cult materials such as hardened steels, tool steels and stainless steels, adjust the feed pressure to 75% of the normal cutting rate for 25-75 square inches. Gradually increase the cutting rate to reach 100% after 50 square inches. As the feed pres sure is increased to the 100% cutting rate, be careful to avoid creating vibrations that can occur by increasing the rate too quickly. Cutting Fluid Considerations Cutting fluid, a.k.a. coolants and lubri cants, is important in band sawing opera tions because it cools the blade, lubricates the teeth and washes chips away. Without it, a blade would likely overheat, wearing out the teeth faster with chips filling the blade gullets, which leads to blade stress, tooth breakage and inferior cuts. A rich cutting fluid solution does a better job coating and lubricating the blade throughout the entire cut. Coolant should wash over the blade as it enters and exits

the cut, re-circulating throughout the cutting process. Water will evaporate from the mixed solution, so replace it as needed. Also, keep an eye out for chips that fly into the machine and block coolant flow, as well as system leaks – all of which can also cause problems. When the use of cutting fluids isn’t possible, such as with vertical machines, consider using a lubricant stick to apply on the teeth of the blade. This will reduce heat build up and extend the life of the blade. Proper Feeds and Speeds Proper feeds and speeds are necessary not only for blade life and sawing production, but also for the surface quality of the piece being cut. Blade speed should be estab lished based on the type of material. If the speed is set too low, the teeth can over penetrate which will put excessive stress on them, eventually causing the teeth to strip. Running a blade at too slow a speed will result in teeth with loaded chips, allowing the teeth to “walk”. Too fast a feed rate will also cause the teeth to load, producing a similar outcome. It is also important to refer to cutting recommendations from the saw machine manufacturer. Establish the Right Tension Tension should be set to the machine manufacturer’s recommendations and a blade tension gauge should always be used to check it. Most production machines require between 28,000-32,000 psi of blade tension. Low blade tension allows

the blade to “walk”, bowing the blade as it travels between the guide arms which may cause cracking in the back of the blade. Without adequate and proper blade tension, the beam strength will be insuf ficient to hold the blade straight, resulting in crooked cuts. Brush Off the Blade Most saw machines have a rotating wire brush that clears chips out of blade gullets while the blade is cutting, helping to extend blade life. It is important to keep the brush in good working condition, and it should be positioned close to the drive wheel. The brush needs to be close enough to the blade for the filaments to effectively remove chips from gullets. However, do not set the brush too close to the blade because the hard-hitting filaments could prematurely dull band saw teeth. A brush set too close to the blade could also wear itself out and quickly become useless. The brush should reach in and touch without going beyond the deepest part of gullets. Starrett 682EMZ Saw Tension Gage

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