From Site Selection magazine, September 2004
TOP UTILITIES 2003


Tipping Points

The critical mass of large parent corporations
helped drive economic development efforts at the Top Utilities of 2003.

by ADAM BRUNS

U

tility economic development departments from 21 U.S. states and a Canadian province replied to this year's Utility Survey in order to be considered for Site Selection's sixth annual Top Utilities ranking. Based on 2003 project results from their territories drawn from Conway Data's New Plant Database, the rankings examined four distinct criteria: total capital investment, investment per capita, total new jobs created and jobs per 10,000 residents. By adding up points of the top finishers in each category, the editors of Site Selection arrived at the Top 10 and ties.
      As it happens, three of these elite ED performers -- Alabama Power, Georgia Power and Mississippi Power -- fall under the corporate umbrella of perhaps the ultimate power player in the United States: Atlanta-based Southern Company. But their ED departments only answer to the operating company executives -- demonstrating a "business unit"-like operating independence that may explain better than anything else their competitive edge. What's more, in the corporate parent's succession plan, the new CEOs of these utilities bring with them a high degree of economic development seasoning.
      Are the Top Utilities category leaders bellwethers of the times? Combined, the top 10 job attractors saw 61,080 new jobs come to their territories in 2003. That's a 10-percent decline from the 67,823 new jobs created by the top 10 in 2002, consistent with the touted jobless recovery that only began to add jobs in 2004. But a look at the capital investment top performers shows that the Top 10 for 2003 welcomed $11.6 billion up 57 percent from $7.4 billion in 2002.
      Here's a look at some of the programs that earned that growth and earned their keep:
     
Alabama Power
www.alabamaeconomicdevelopment.com
      Ever since the Alabama Power Economic and Community Development department came into being 80 years ago as the "new industries" division, it's built up an arsenal of technical, planning and legislative expertise that has helped land an equally impressive arsenal of top-flight companies. In addition to attracting four of the world's nine largest automotive companies, the state is seeing continuing investment in the aerospace and defense sectors, and Alabama Power is there to light the candle.

Cinergy Corp.
www.indiana.cinergy.com
      For evidence of Cinergy's ED ties to its territory, look no further than the directorship of the Indiana Dept. of Commerce's Region 7, part of the state's new 12-region ED plan. That Indianapolis-area position is being filled by loaned Cinergy ED professional Scott Fulford.
      Cinergy is similarly embedded in the foundation of the State of Indiana's fledgling site and building database. And it's launched such efforts as a virtual building site program called "Permits to Projects," local training for economic development professionals and the Cinergy Economic Development Network. The utility has simultaneously published maps oriented toward foreign companies and toward the life sciences sector, which has seen a rash of new projects recently. The utility also serves all or portions of 10 Ohio counties and six Kentucky counties, and helps lead ED efforts in the still-growing Cincinnati/Northern Kentucky metro.

Entergy Arkansas
www.ConsiderArkansas.com
      With major investments in the automotive, food processing and oil and chemical sectors, Arkansas rode an upsurge in investment in 2003, with a more-than-able assist from Entergy Arkansas.
      Among the organization's other successes during the year was the accreditation by the International Economic Deve-lopment Council of the University of Arkansas at Little Rock's Mid-South Basic Economic Development Course. In the field, a direct-mail industry campaign had the direct effect of catching the attention of Eakas Corp., which reversed an earlier assessment of the state and chose to locate its second U.S. plant in the town of Wynne. Finally, Entergy has provided guidance and project management skills to a 10-month study of the Metro Little Rock region due to help target specific industries when its results came available in summer 2004.

FirstEnergy Corp.
www.firstenergycorp.com/ed

      Stretched across the states of Ohio, Pennsylvania and New Jersey, the service territory of FirstEnergy Corp. is part of the U.S. industrial backbone. And as such, its ED department is deeply involved in promoting U.S. goods through its many-faceted Export Now program.
      In 2003, building on this long-term commitment, the utility coordinated a trade mission that took seven customers to three cities in Mexico. Not only were sales leads worth millions of dollars established, but meetings were held with 18 large Mexican companies with investment interest in the U.S.
      The company's Synchronist business retention software program was licensed to seven counties in 2003, helping them assess their regional economies with the kind of attention to detail that brings necessary attention to existing companies. FirstEnergy in 2003 also developed a simulation program for measuring the impact of a new investment on an area's economy.
      Among the latest partnerships to punctuate the utility's 40 years in Ohio is Team NEO, a coalition formed with six Northeastern Ohio communities.

Georgia Power
www.georgiapower.com/grc

      A founding member of the ED coalition Georgia Allies, Georgia Power uses its Atlanta base to full advantage. Its ED team also uses technology, whether in the field or on the Web. One of its latest innovations is 360-degree views of "hot" industrial buildings on the market. Building on that is a customized Web portal for prospects, complete with FTP capabilities that allow for sharing of CAD files, engineering drawings and other technical documents. Another ongoing project, similar to the canvassing CoStar has launched nationwide, is full-scale aerial documentation of all properties and existing tenants at the state's major office and industrial parks.
      Georgia Power also produced two target industry reports in 2003 on food processing and electronics, and conducted a seminar on logistics for community ED professionals.

LG&E Energy
www.site-selection.com

      Besides its catchy URL, the LG&E ED team gets the word out about Kentucky's business advantages via a direct-mail campaign highlighting a different community each month, and high visibility at a planned 16 major conferences in 2004. In 2003, the utility also held three regional ED workshops.
      "Competitive utility rates and reliable service are key drivers of economic development," said LG&E Energy President and CEO Vic Staffieri in March 2003, when the company was honored with the highest ranking for midsize business customer service by J.D. Power and Associates. "I'm very proud that our employees are doing their part to bring good jobs to the Commonwealth and keep them here."

Mississippi Power
www.mspower.com/ecodev

      Through three operating divisions stretching from Gulfport to Meridian, this Southern Co. operating company serves a 23-county area in southeast Mississippi. Its ED professionals work in concert with the Mississippi Development Authority and local organizations to foster growth in the industrial base.
      As of January 2004, the company had a new president and CEO, Anthony J. Topazi. With 35 years at Southern Co., Topazi brings company-wide and region-wide savvy to the utility, including current ED affiliations with a host of regional and statewide groups.

Northeast Utilities
www.nu.com

      NU recently funded a study touting its Connecticut and Massachusetts territory as a location for medical device manufacturers. But its territory extends into New Hampshire as well, where it helped launch with the state a "Start-up New Hampshire" program to fund product commercialization. NU's ED reach covers all of New England, backed by four electricity subsidiaries, one gas subsidiary, six competitive energy companies and four realty subsidiaries.
      NU's new "Easy Circuits" program identifies circuits where "available capacity and local zoning align to absorb accelerated economic development," writes Douglas G. Fisher, director of economic and business development.

PECO Energy (Exelon)
www.peco.com/economic
      PECO, like Entergy and the Southern Co. affiliates, draws some benefit in its ED efforts from the heft of its parent company, Exelon, which also owns Chicago-based ComED. At the bottom of the ComED Web page touting Northern Illinois appears this live-link question: "Interested in discovering Philadelphia, Pennsylvania?"
      From all indications, many companies are indeed interested, even in PECO's own property. Wells Fargo Financial Acceptance is moving 350 employees from its nearby airport base to the eye-catching former PECO generating station in Chester, and making a $60-million investment in the renovation.
      Headlining its 2003 efforts, the utility teamed with local leaders to launch the new Select Greater Philadelphia regional ED program, encompassing 11 counties and three states. It's all broadcast through the coalition's dynamic Web site, www. selectgreaterphiladelphia.com, and through PECO's top-notch "Communiqué" newsletter.

Progress Energy
www.progress-energy.com
      A successful North Carolina ED rider program allows qualified companies to receive a 50-percent electricity discount when locating into existing buildings in the 47 N.C. counties Progress serves. In 2003, the rider was expanded to the utility's 13-county South Carolina territory, with equally valuable results. The utility also serves 32 counties in central and northern Florida, and its ED team already helped shepherd 11 new projects in its service area in the first quarter of 2004.
      The utility is partnering with Atlanta-based Earthlink on a "broadband over power lines" pilot program that it hopes to use to extend high-speed Internet access to rural areas.

TXU Electric Delivery Co./TXU Gas Co.
www.locationtexas.com

      Known as Oncor until its June 2004 renaming, this Dallas-based utility serves 122 Texas counties and their 643 cities and towns across the middle part of the state, and has been doing so for more than 40 years.
      Certainly the $200-million location by Certainteed in Sherman was a big deal in any year in TXU territory, but all deals were dwarfed in 2003 by Texas Instruments' announcement of a $3-billion investment in the Dallas-Ft. Worth community of Richardson.
      In February 2004, TXU Corp. named C. John Wilder, former executive vice president and CFO at Entergy, as its new president and CEO. The 20-year Royal Dutch/Shell Group veteran was named early in 2004 by Institutional Investor as the best CFO in the electric utilities industry.
      As TXU Corp. restructures and sells non-core units, TXU's Electric Delivery segment is helping drive the parent company's operational earnings improvement at the same time it seeks to help customers do the same. Site Selection

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