Patti Poppe (left) is president and CEO of Jackson, Michigan-based CMS Energy and its principal subsidiary, Consumers Energy, Michigan’s largest utility and the nation’s fourth largest combination utility. Poppe has focused on connecting the company more closely with its customers and adapting lean operating system principles throughout the utility. Consumers Energy provides electricity and natural gas to 6.7 million of Michigan’s 10 million residents in all 68 Lower Peninsula counties. Poppe talked with Site Selection about Michigan’s business landscape and Consumers Energy’s role in helping the state win new business investment.
SITE SELECTION: What role does Consumers Energy play in economic development?
Poppe: Our job is to build confidence in Michigan site selection decisions and the siting process. We’re working to eliminate risk by offering competitive industrial rate options, natural gas prices 60 percent lower than a decade ago, and robust new construction and energy efficiency incentives. We’re proud of our deep relationships with the Michigan Economic Development Corporation and local economic development agencies. No matter how a business begins the siting process, we’re at the table as a team to understand a company’s long-term goals and provide tools beyond energy to reach them, with focus on growth. One example is our shared Energy Ready site inventory that offers detailed energy infrastructure information. Understanding each site’s energy assets enables us to quickly develop customized proposals based on how businesses use energy. The result is a seamless, from-all-angles customer experience that shows prospective businesses “we’ve got this.” That’s a major reason why leaders in automotive, furniture, data center and other industries invested more than $800 million and created more than 1,700 jobs in Consumers Energy’s service territory in 2016.
SS: Energy costs are a significant factor in site selection. How do rates and incentives work together to make Consumers Energy and Michigan stand out in a competitive field?
Poppe: Attracting businesses to Michigan and keeping them here means keeping upfront and ongoing energy costs competitive. We offer new construction incentives that can reduce or eliminate upfront energy infrastructure costs. Our goals are competitively priced — or potentially zero upfront cost — energy infrastructure for new energy-intensive businesses. Working with the Michigan Public Service Commission, we’ve led the way in reducing energy-intensive industrial electric rates by as much as 15 percent. Overall industrial rates have fallen 5 percent since 2014. Energy efficiency incentives for current and planned upgrades have saved our customers $1 billion since 2009, and offer competitive energy- and cost-saving advantages for new and existing businesses. We also assign a no-cost energy advisor to help new and existing businesses maximize energy efficiency incentives.
SS: Almost half of Fortune 500 companies have established clean-energy targets, according to a recent Bloomberg report. How can Consumers Energy support those goals?
Poppe: We’re excited to support large businesses that want to be powered 100 percent by renewable energy such as wind, solar and hydroelectricity. Large employers looking to locate or expand in Michigan want to know if energy providers like us can help them achieve their clean energy goals. That’s why we proposed a program to enable large businesses to match their energy use with renewable energy sources. This pilot program is part of our clean and lean mindset — increasing renewable energy, helping customers use less energy and offering demand response and peak shaving programs to reduce grid demand.
SS: What inherent advantages does Michigan offer?
Poppe: As a Michigan native, I’m biased — but this is a great place to live and work. Michigan offers many business advantages: temperate climate, a stable and predictable tax and regulatory environment, proximity to major Midwest cities and Canada, natural resources, a skilled workforce and plentiful engineering and research and development talent that supports a strong manufacturing presence. We work as a team with our allies at the Michigan Economic Development Corp. and local economic development agencies to market Michigan’s total value proposition as the best place to do business. From education and talent to tax incentives, electric rates and natural resources, we’re connecting all the dots. That means investing time and resources to understand how all factors fit together — and to recognize what works for one business might not for another. Consumers Energy shares in Michigan’s quest to become a top-tier state for business attraction. We know that goal is achievable, and we’re improving every day. In fact, Michigan ranked fifth in the top 10 states and first in the east north central region in Site Selection magazine’s 2017 Prosperity Cup — a one-spot jump from sixth in 2016.
SS: What should prospective businesses know about Michigan’s labor landscape?
Poppe: Michigan is bucking the national trend of focus on college readiness over career readiness, and is working to balance the scales. Consumers Energy played a key role in forming the Michigan Talent Architecture Coalition. Within it, we’ve formed a policy group to identify the best way to meet demand for skilled trades workers. Michigan is a top 10 state for completed science, technology, engineering and mathematics (STEM) degrees. Michigan offers about 90,000 engineers — more than any other U.S. state — and six mechanical, industrial and aerospace engineers per 1,000 residents (three times higher than the national average).
SS: How is Michigan using tax incentives to help attract new businesses?
Poppe: Competing to win means having the right incentives available to grow Michigan’s economy. Targeted incentives are one key component in a comprehensive economic development strategy to create jobs, strengthen communities and grow Michigan’s economy. For example, Gov. Rick Snyder just signed “Good Jobs for Michigan” legislation into law in July. That was a big win for our state — and for businesses weighing whether to locate here. The performance-based legislation offers job-creating businesses the ability to capture up to 100 percent of the new employees’ personal income tax withholdings for up to 10 years depending on the number of jobs created and the wages paid to fill them. These types of performance-based initiatives are what Michigan needs to compete and win in a global marketplace.
This Investment Profile was prepared under the auspices of Consumers Energy. For more about Consumers Energy’s economic development services, contact Jeff Mayes, Director of Economic Development, at 989-667-5284, or visit ConsumersEnergy.com/econdev.