Energized by power shortage

Jennifer Kho

COSTA MESA -- The energy shortage that has threatened Newport Beach

and Costa Mesa with possible blackouts has given one business a surge of

money.

Other businesses’ fears that blackouts could interrupt their work have

translated into rapid growth for MGE UPS Systems, which sells backup

equipment to protect against energy inconsistencies.

“The Internet and PC technology has penetrated our lives on a broad

scale faster than any industry in the U.S. ever has,” said MGE President

Dave Petratis. “Especially in the last 10 years, we have had an Internet

and PC revolution and nobody’s building power plants. The speed of

introduction that nobody saw is creating the energy problems we have

today, and it doesn’t look like there are any easy solutions. People

don’t realize that clicking a mouse and leaving a computer on uses

electrical signals. But the energy problems have been good for us. We’ve

been very successful, far exceeding our own expectations.”

MGE produces and sells uninterruptable power supply systems, which

control power flow to a location and “clean up” the energy before it’s

used, Petratis said.

The systems protect against burnouts, blackouts and surges, and

immediately switches to a battery -- without any gap in energy flow --

when the power goes out, he said, adding that although generators are

used for longer blackouts, batteries fill the gaps between when the power

turns off and the generators turn on.

The company is made up of mergers between four technology-based

companies -- EPE Technologies, Merlin Gerin, Topaz and Square D.

Merlin Gerin, a French company, invented the first UPS system for

military defense use more than 30 years ago, Petratis said. Since then,

its business has shifted to mainly computer and Internet protection.

Signs of the company’s success include, in the last year, 344 new

employees, two new plants in Santa Ana comprising 200,000 square feet,

and $600,000 in bonuses distributed to the company’s 900 Costa Mesa and

Santa Ana employees last week.

The company has averaged a 32.5% increase in profit per year for the

last five years, with a 52% increase each year for the last two, Petratis

said.

Ed Fawcett, Costa Mesa Chamber of Commerce’s chief executive, said

that when Petratis took over the business in 1993, the company was

considering moving out of the country.

Fawcett attributes the company’s success to the Internet explosion and

to Petratis’ management skills.

“Some markets have really opened to the business since [Petratis] took

over,” Fawcett said. “The Internet explosion created servers that require

UPSs, and other markets that didn’t exist when [MGE] came on board now

require UPSs. When I first met [Petratis,] strict business policies out

of Sacramento were causing a lot of flight out of the state. The company

was considering [moving,] but Petratis focused on correct marketing and

turned business around. Now it’s just bursting at the seams.”

Although the energy crisis has increased business, Petratis said that

an end to the crisis will not jeopardize MGE.

Internet use -- a major driving force for the business -- is not going

away, and new cellular technology in the works will require new cell

stations, which also require UPSs, he said.

The one threat, Petratis said, is new technology -- such as

microturbans and fuel cells -- that might fill gaps in the energy

industry.

“Those are both a threat and an opportunity,” he said. The new

technology “could have an effect on UPSs. But in the short term, we’re in

pretty good shape.”