While the McDonald's account does pose special challenges, those suppliers who make the cut are likely to be around for a long time. "McDonald's is a marquee name in the national accounts arena," says Worthy, of PG&E Energy Services. "Once you're part of the McDonald's family, they take care of you. They treat their vendors like family."
Because of the value McDonald's places on long-term relationships, the suppliers who are already involved in deals tend to be tapped time and again for special projects with the fast food king. Often, these deals include energy-efficiency projects.
For example, besides the energy supply deal for the California restaurants, PG&E Energy Services is intimately involved in monitoring an energy-efficient McDonald's in Bay Point, Calif., near San Francisco. Cinergy, a partner in the Cadence power supply pilot in Massachusetts, is also helping McDonald's analyze load profiles of restaurants in the Cincinnati area. And Detroit Edison has been performing energy audits for restaurants in southeastern Michigan and is helping McDonald's install a geothermal heat pump in an "energy-friendly restaurant" in Westland, Mich.
That does not mean, however, that these companies are shoo-ins. For example, Enron Energy Services, a power marketer, won the right to procure power for 23 McDonald's restaurants under a small, $250,000 Missouri pilot program that requires a Utilicorp subsidiary to wheel power that Enron purchases on McDonald's behalf. Yet Enron later lost its bid to supply energy to the 100 restaurants participating in the Pennsylvania pilot. That hard-fought victory was won by Peco Energy, Enron's arch-rival.
Phil Eastman, director of Peco Energy's national energy team, says the company won the $1 million contract to broker power for McDonald's because the agreement included a price cap and performance guarantees. And, not surprisingly, it also included energy audits that will identify energy-saving opportunities. Overall, the pilot should save franchisees around 13 percent, he says.
And once the pilot program ends at the end of 1998, Peco fully expects to continue buying power for those McDonald's restaurants and hopes to begin serving all 400 restaurants in Pennsylvania.
Also a Pennsylvania also-ran was Chicago's Commonwealth Edison, which has been working with McDonald's for several years to develop customized benchmarking studies comparing energy costs and usage at more than 400 restaurants in the Chicago area. ComEd also is working on several telemetering projects and is developing a customized consolidated billing system for McDonald's headquarters in Oak Brook, Illinois.
Meanwhile, ComEd's parent company, Unicom, has been collaborating closely with McDonald's in the installation and testing of a micro-turbine generator in a new energy-efficient restaurant in Bensenville, Illinois. Beta-testing is set to begin in 1998, and because of the restaurant's proximity to headquarters, the experiment is expected to be watched quite closely.
The "pint-sized power plant," as some have called it, could help McDonald's shave peak electricity usage or even shed load, in areas with high-cost electricity, such as the Northeast.
Perhaps even more promising to McDonald's, however, is the micro-turbine generator's potential to expand the company's fast-food franchise internationally. "We've run out of easy countries," says Spata, the engineer. "There are still a lot more out there, but procuring reliable power is getting more and more difficult."
The micro-turbines might even be able to supplement, or even supplant, the sometimes unreliable diesel generators used by international franchisees, assuming there is a source of natural gas or other fuels to run them. Heck, the thing might actually run on waste shortening from the fryers, Spata says. Far-fetched, perhaps, but worth exploring.
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