Shipp’s on his third successful career and, at an age when most people have long since retired, he’s building another multimillion-dollar business with a neat little device called a STEMS Energy Management unit.

Always on the lookout for new investment opportunities, I asked him about what it does and how it helps his customers.

Shipp, the president of STEMS Energy Management, cut right to the chase: “My device helps commercial and industrial customers save big on their electrical bills without huge capital investments.”

Then he added, “I can also help residential customers save an average of $25 to $100 a month off their electrical bills and I can prove it.” Needless to say, after that, he had my undivided attention for the duration of the flight.

By way of background, the problem with most current energy-reduction efforts, Shipp explained, is that various government programs, most notably the U.S. Department of Energy audits and various utility savings programs around the country, are only ostensibly about savings. In reality, they’re focused on replacing outdated equipment with more efficient models, such as high-energy-efficient motors. In other words, replace the old with the new.

Unfortunately, most people – and this goes for industrial and residential consumers alike – simply don’t have the money to replace everything, no matter what the economic benefits may be. That’s true “especially now,” in the midst of the worst financial crisis in decades, Shipp noted.

And that’s what makes Shipp’s approach so unique. Made by the New Mexico-based Delta Group Electronics, the STEMS unit is a high-tech “band-pass filter” that blocks distortions in electrical power above and below normal signal range. It blocks out power spikes and surges, and cleans up utility-supplied power, which is ideal for U.S. AC (alternating current) electric motors. The bottom line: STEMS reduces equipment wear and increases equipment life.

Using logic that somehow seems to escape the Washington crowd, Shipp figured out a way to bring old equipment up to new efficiency levels using current technology that Shipp’s team has developed.

“It’s a far higher return on investment and one that offers almost immediate payback in most cases,” Shipp said. “It can also add to facility capacity without adding additional infrastructure.”

This means that big customers – such as industrial facilities, for example – can actually increase production, without making capital improvements or correspondingly expensive electrical upgrades. In plain English, they can do more with less.

By all accounts the results have been extraordinarily impressive to date. One of their customers, a large natural gas facility, with a water-injection plant that runs nonstop decreased their kilowatt demand by an average of 13.11%, dropped their kilowatt/hour usage by 22% and their cost for electricity from $362.21 per day to a new low of $223.91 per day, which is a savings of 38.18%.

In general, the more expensive the electricity bill, the bigger the potential savings. And that’s just as true for large-scale commercial industrial facilities as it is for individuals, Shipp noted.

Take Southern California, for instance. Shipp noted that electricity there starts at $0.14 per kilowatt and graduates all the way up to $0.24 per kilowatt. The more you use, the more you pay.

The problem is that the power is so bad and so limited that many electricity users literally can’t get enough power. And the power that users do get is of such poor quality that it prematurely ages their electronics, fries their computers, burns out their motors and trashes their compact fluorescent bulbs.

Admittedly, this is something I’d never really thought about, so I asked Shipp why the power companies would deliver “bad power.”

“It’s not that they want to,” he noted, “but the reality is that most power companies, particularly those in high-growth areas, cannot sufficiently produce, buy or supply the required power to the end-users. Many transmission lines are simply maxed out.”

You’d think the power companies could step up, but thanks to years of no new power plant construction, and limited alternative-energy programs, that’s not always possible. What’s more, the costs associated with upgrades are horrendously expensive.

And that’s where the STEMS units come in. Shipp’s technology actually makes more power available to the users without further stressing the utilities. The benefit is that consumers get to pay less and keep their electrically powered devices around longer – “which, in the end run, costs them, and the power companies, less money,” Shipp said.

The STEMS device, which uses high-powered capacitors, can not only clean up the existing power, it can actually reduce the required demand on systems where the units are installed by as much as 20% to 25%. Which means that the big and small consumers alike using them pay no more at the meter.

For large-scale customers, like factories and oil fields, this is like getting “free money, and it’s a lot higher return on investment (ROI) if they need to expand their capacity” noted Doug O’Conner, a longtime power industry expert working for Pacificorp. As an added benefit, power-conditioning like these units provide should result in lower bills and longer equipment lifespans. Which is, exactly what Shipp says will happen when people put one of his units into operation.

Naturally, this sounded too good to be true, so I asked Shipp if we could put one of his STEMS units on our home in Beaverton, Ore., to “prove it.”

Immediately upon flipping the STEMS unit on, we noticed a 5% drop in our home’s power consumption as measured on the test-gear equipment he’d hooked up simultaneously.

Over time, the reduction began to add up just as he said it would, and ultimately last summer over one 24-hour test period we netted a 67% decrease in the power we used. I could hardly believe my eyes. I still sometimes find myself feeling amazed by the results.

In the interest of full disclosure, I asked to leave the testing unit in place and we’re busy racking up more data that I can’t wait to report to readers later this year.

Over the several months I’ve had the unit installed, my wife and I have noted a drop in our power consumption and our bills have dropped. Anecdotally, my computer backup units, which track the power I use, reflect smoother, better conditioned electricity and as well as less transient voltage – exactly as Shipp promised. In addition, we’ve noticed fewer flickering lights in our house since we’ve had the STEMS unit turned on and we haven’t had to replace the kids’ battery chargers as often.

As good as the STEMs units are, Shipp is the first to admit that there may be places in the country where there are not measurable benefits or where a STEMS unit simply isn’t appropriate. One size definitely doesn’t fit all. As you might imagine, these are typically places with low electrical bills and cooler climates. Even so, if you’ve got a hot tub, electric dryers, air conditioners or other heavy appliances, you could still save money, but the payback may take time. In general, though, the hotter your climate, and the more expensive your electricity, the more effective a STEMS unit will be.

If you’re interested in buying a residential STEMS unit for yourself, Shipp and his team have created an easy-to-use Web site that can help you select the right unit and order it in less than 20 minutes. One size does not fit all and there may be cases where a STEMS unit simply isn’t cost effective.

The smaller unit costs $695, while the larger one is $795. Shipping for both is free. Installation should take no more than an hour of your favorite electrician’s time, according to Shipp.

Best of all, as I found out, the results truly are immediate but get better over time.

Editors Note: This is the eighth installment of an ongoing series.

Source: Pledge to Hedge: Dial Down Your Utility Bill With This Energy Management Product

There’s a real “make-a-difference” philosophy at work out here that manifests itself in everything from our laws to our personal behavior. This philosophy fosters a “can-do” attitude that makes us believe that we can do almost anything – and that includes fighting back against the super-high energy prices that U.S. consumers are struggling with right now.

That’s why my wife and I are really excited to take on a personal challenge, of sorts.

Over the next 12 months, we’re going to try to shave 25% off our total energy and resources bills. This means that we’re going to make our house more efficient – and do the same with our cars.

But here’s the catch.

We’re going to try and achieve this goal with existing technology and, hopefully, without breaking the bank. That’s not because we aren’t seeking the maximum possible savings (we are); instead it’s because we believe we can do better with what we have, and through conservation.

Besides, we want to set an example – and create an energy-saving road map – that anyone can follow. We want to demonstrate that you don’t have to spend big bucks to buy the latest gadgets or invest in “bleeding-edge” conservation technologies. Common sense and careful, shrewd energy management can generate major savings in both expenses, and in energy.

This is something that our federal government just doesn’t seem to understand.

Not only did our federal government sponsor a trillion-dollar energy “pork fest” – with incentives to find, mine, drill or tap into more energy – it also mandated all sorts of things along the way. These initiatives are certain to encourage Big Business. But I believe the government would have seen much better results had simply encouraged both consumers and corporations alike to focus on energy conservation.

It gets worse. Now the government has an agriculture bill headed down the pipeline; the legislation looks promising, but by the time it gets through Congress it figures to have gotten so watered down that it will be virtually worthless.

Don’t get me wrong: I’m all for developing new, more efficient technology. Indeed, it’s necessary. But it’s also a long-term process, and what that’s very costly.

We should pursue that path, of course. But there’s another strategy that we should pursue in the meantime – conservation.

So it’s time to do our part.

Over the next 12 months, I’ll report on my family’s progress, the decisions we’re making and the technologies we’re using (as I said, we support technology-driven energy savings). And we’d like to hear about your efforts, too – assuming you, too, are interested in saving money and conservation like we are.

Hopefully, we’ll find methods and materials that we can all use. We’ll definitely let you know.

[Editor’s Note: Money Morning Investment Director Keith Fitz-Gerald will report back periodically on his domestic-energy conservation efforts.]

Source: A Pledge to Hedge: Money Morning’s Fitz-Gerald Makes Public Promise to Slash Private Power Use