People Power - more people buying generators as energy crisis looms - Brief Article

Kiplinger's Personal Finance Magazine, June, 2001 by Elizabeth Razzi

MARK RYAN has stopped worrying about electricity outages--whether they're triggered by the rolling blackouts threatening most of California or by the Santa Ana winds that buffet the high-power lines supplying current to his house in Santa Clarita, north of Los Angeles. He's lined up his own steady supply of juice: a natural-gas powered generator, which turns itself on automatically and supplies his whole house with 22 kilowatts of power within 15 seconds of an outage. "As my dad always used to say, you buy the big wrench because you never know when you might need it," Ryan notes.

For about $10,000, Ryan is now confident he can keep his home-based business, which does marketing and creates Internet sites for aircraft manufacturers, up and running. The only drawback is that the unit "whines like a turbine," says Ryan. "But I can't afford not to have power. Communication is what we do, and our battery backup can run only so long."

At today's high gas prices, running a 22-kilowatt generator costs about $5 an hour in Southern California. For generator owners like Ryan, that's a small price for peace of mind.

Preemptive strike. Ryan is one of a growing number of homeowners who aren't sitting back and waiting for the next blackout to roll over them. Gary Deahl, general manager of Kohler Power Systems in California, says he has had a flurry of interest since the blackouts hit early this year, and he has increased his stock of generators by 50% in anticipation of a sales surge. "Last year was busy, but this year is going to be much busier," Deahl predicts.

Kohler makes generators for the home market that start at 8.5 kilowatts and cost $4,000. That's enough power to run essentials such as lighting, a sump pump, a pump for a water well, and a TV or computer, though not necessarily all at the same time. With an 11-kilowatt generator, you could add a garage-door opener to the menu. A 17-kilowatt model would be enough to take on the additional demands of a central air conditioner and washing machine. The 22-kilowatt model--the one that Ryan bought for $10,000--can usually run a whole house.

To find a Kohler dealer near you, call 800-544-2444, or visit the company's Web site at www.kohlergenerators.com. (Prices include installation--not a do-it-yourself job--by an electrician and a plumber.)

Another popular line of generators is made by Generac Power Systems, under the Guardian brand. Guardian models have prices and capacities similar to Kohler's. For a Guardian-brand dealer, call 888-436-3722, or visit www.generac.com. The dealer will arrange for installation.

A generator, about the size of a central air conditioner, connects to an automatic transfer switch that monitors incoming current from the power company. If the switch detects an outage, it fires up an internal-combustion engine powered by natural gas or propane that feeds the current through the lines in your house. You can rig it to power only essential systems, or to run the whole house. Make sure to tell your electric company that you have a new generator. It may want to send someone out to make sure that your switch won't feed current back into the utility's lines, which could electrocute anyone who tries to repair the lines.

The latest option. Backup generators are also starting to show up as a new-home amenity--and they're not limited to California, either. Sevvonco Builders and Remodelers, in Palatine, Ill., builds large, custom homes that cost between $850,000 and $1.5 million, not counting the cost of the land. The company typically installs a 6-kilowatt to 15-kilowatt generator, which adds about $8,000 to $15,000 to the price, according to president Scott Sevon. Including a generator allows Sevon to install cheaper sump pumps that don't have a battery backup, and his customers get the added convenience of backup power.

Generators are cropping up in more modestly priced homes, too. Tanglewood Corp. is installing 8-kilowatt generators in new homes that it's building in Birmingham, Ala. Each generator accounts for about $4,000 of the home-sales price, which runs between $175,000 and $225,000. About 60% of buyers opt for the generators, says Becky Harris, a Tanglewood vice-president. "In particular, the older single ladies love it. We do have a lot of thunderstorms." --Reporter: COURTNEY MCGRATH