Local firm turns water into juice
Canyon Industries known worldwide

by Christopher Key

 

 

You’d think that a business with a worldwide reputation would be a bit easier to find. First, you head east on the Mt. Baker Highway. Take a right on Mosquito Lake Road. Take a left on a logging road with delusions of grandeur called Canyon Lake Road. Keep bearing to the right and eventually you will run right into Canyon Industries.

There is a very good reason why it’s located here. Dan New’s father looked all over the northwest before purchasing this homestead in 1939. He was a visionary who wanted to develop his own hydroelectric system and you need just the right conditions to do that. This is where he found them.

He may have built airplanes for Boeing during the day, but in his off time he tinkered with water turbines. Eventually, he assembled the 15 kilowatt (KW) system that still powers the homestead, if not the adjacent factory. Word gets around in small communities and people started asking him to build small turbines for them.

In September of 1976, Popular Science magazine published an article that included an interview with Dan’s Dad. He died before the article came out and never made turbines commercially. But the article helped Dan turn Dad’s hobby into a business.

Canyon Industries is a major player in small hydro on both a national and international level. It produces about 20 percent of the small turbines worldwide and about 60 to 75 percent of the installations in the US. Having said that, it should be noted that Canyon is a big frog in a very small puddle. The requirements for a viable small hydro plant are such that very few can take advantage of it.

Water power is measured terms of flow, available quantity of water, and head, the total vertical feet of fall. Finding a combination of those factors is difficult. Then throw in environmental regulations about diverting natural stream flow and you have a fairly small potential market. One that doesn’t result in a high profile.

“We haven’t tried to increase our visibility locally,” Dan New said, “but that’s not intentional. It’s just that our customer base is not here.”

That customer base ranges from Alaska to Morocco to Papua New Guinea. In addition to five standard turbine models, Canyon builds custom designs with outputs ranging from 10 kilowatts to 10 megawatts. That requires a pretty impressive machine shop.

“Most of the local machine shops know us,” New said, “because we have some of the biggest equipment in the area.”

Like a lathe that will handle material up to 100 inches in diameter. The demand for small hydro fluctuates wildly, so Canyon Industries keeps its 15 employees busy by doing jobs that smaller machine shops can’t handle. They do a lot of work rebuilding hydraulic systems and cylinders. But the focus remains on hydro turbines and the remote location suits everybody just fine. Four of the employees commute from Bellingham, one from Everson, one from Lynden, and the rest are more-or-less local.

“It’s quiet, out of the way, beautiful surroundings,” said New. “The staff likes to mountain bike and hike the creeks. On the other hand, it’s a long way from our vendors.”

One of those vendors is Morse Steel, featured on our cover this month. Modern communications systems help Canyon stay in touch.

“We have a digital extension off the Verizon system here,” said New. “It’s only the second one that Verizon has done. It’s faster than dial-up, but slower than broadband. We have four phone lines plus dedicated Internet. Communication is not a problem.”

Over the years, Canyon has grown from a small shed to a modern, 12,000 square foot facility. Only the turbines are manufactured here. You can buy a complete hydro system from Canyon, but they purchase the generator sets from other manufacturers.

If you’re Bonneville Power and one of your turbines at Grand Coulee needs to be replaced, don’t come to Canyon. On the other hand, if you’re a small hydropower developer, you’ll find the companies that make the megamachines can’t make a small turbine efficiently. Canyon Industries can and it has turned into a business that grosses two to three million dollars annually. And it gets a boost from the environmental movement.

“Small hydro is clean, low-impact and environmentally friendly,” New said. “Different areas of the country have different levels of consciousness about this. Colorado is way up the scale, so is Utah.”

Most public utilities aren’t particularly interested in developing small hydro facilities, but they are quite willing to purchase power from private developers. Those private developers are among Canyon’s best customers.

“Washington is not very active on the small hydro scene,” New said, “because the extensive hydro development by BPA has kept power rates low. That is changing. BC (British Columbia) Hydro pays good prices to private developers because they ship a lot of power south of the border.”

Still, the industry has its ups and downs.

“When it’s up, we have to figure out how to keep pace,” New said. “When it’s down, we have to figure out how to pay the bills.”

It took a lot of time to establish Canyon’s reputation as a builder of quality turbines, but it was worth it.

“Our business is very much based on word-of-mouth,” New said. “If we sell one system in a particular area, we will likely sell several more.”

Dan’s son Richard is also his partner in the business.

“Fathers and sons can work together,” New said. “It just happens. You try to keep home and work separate and be conscious of the different relationship with a son and a partner.”

Their employees also become members of the family.

“We’re slow to hire people and slow to let them go,” New said. “It’s our people who make it work.”

New makes an effort to purchase materials locally.

“The local people supported us when it was just a one man operation,” New said. “We remember that.”

There has been the occasional indication of interest in a larger company buying out Canyon Industries, but Dan has had no trouble resisting that temptation.

“We’re not all that attractive,” New said. “This is a family business. Eventually my grandsons will take it over.”

Most of the Canyon turbines use either the Pelton wheel or crossflow designs, depending on the circumstances of the customer and the site.

“Developers want maximum efficiency and can usually pay for it,” New said. “Places like Morocco, New Guinea, Nicaragua, simplicity and durability are more important. Those are the fun jobs. Most people in this trade like to build things and derive great satisfaction from that.”

New travels six to eight weeks a year and has spanned the globe.

“We’ll grow as we see the need,” New said. “We may even have to move to an industrial park eventually, but that won’t change the character of the business.”

The character of the business is such that it can survive and grow in a rather limited niche market. That gives them the freedom to do what they love in a relatively remote location. They’re only hard to find if you don’t know what you’re looking for.