Toltz: Natural Gas Nation: (Dry) Cleaning Up Profits
Natural gas is arguably the best fuel of choice for the dry cleaning industry.
My company, Denver based Dependable Cleaners, which currently has 210 employees, started preparing for natural gas price hikes in 2000-2001. At that time, wholesale prices soared to record levels of $10 per unit on the New York Mercantile Exchange. We invested over $1,000,000 to replace all of our equipment with environmentally friendly dry cleaning machines and natural gas boilers with the greatest efficiency available at the time. This allowed us to do more work with less natural gas.
Natural gas is a necessity for the dry cleaning industry.
Here’s how it works: Burners fed by natural gas heat water in boilers, these boilers generate steam and in turn create power, allowing our dry cleaning machines to move up and down, heating the presses that give garments a nice crisp finish. While our cost in using natural gas amounts to 22 cents per piece dry cleaned, a boiler using fuel oil costs around 75 cents per piece. That is a significant difference.
Despite the favorable economics of natural gas over fuel oil, operating a dry cleaning plant on a monthly basis averages over $2,000 in utility expenses. Although this cost varies with production, it is essentially a fixed cost as the natural gas heating the water creates steam, which heats the interior of the retail space (Colorado can get pretty cold in the winter!) During those times, boilers are left on a “low fire” overnight so as not to freeze.
In 1991, energy costs ranked 25th as a concern for small business according to the state of Colorado’s Director for the National Federation of Independent Businesses. By now, energy costs have risen to one of the top 10 greatest concerns for small business. Natural gasis plentiful in the United States, as well as being substantially cleaner and less expensive than alternative energy sources, so the time is long over-due to provide incentives to oil and gas producers to maximize the natural gas output.
Watch CNBC on Monday, April 9th for all-day long special reports on Natural Gas Nation: Fueling Our Future
Steven Toltz is the President of Dependable Cleaners and Shirt Laundry, Inc., Denver, Colorado, a family owned and operated dry cleaning chain started in 1930. Toltz earned his B.S. degree in business administration as a cum laude graduate of Menlo College. After graduating from the University of Denver College of Law in 1988, he practiced law, first as a prosecutor for the City of Littleton, Colorado, and later in private practice where he specialized in general business and commercial law. He served as General Counsel for Dependable Cleaners throughout his time in private practice. Steven is the immediate past Chairman of the University of Denver Bridge Project and is a member of Young Presidents’ Organization (YPO). He currently serves on the boards of Rocky Mountain Parents as Teachers, D.U. Bridge Project, Coats for Colorado, and the University of Colorado Cancer Center where holds the office of Treasurer. Steven and his wife Michelle have two children.
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