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From Site Selection magazine, September 2011

Real Projects
Mean Real Progress

The best utility economic development teams help their companies
and communities achieve a better climate for growth.

Pronghorn antelope graze near Duke Energy’s Campbell Hill Windpower Project near Casper, Wyo., one of nine wind projects the company owns. Duke’s involvement in projects from renewables to smart grid to carbon capture only adds to its forward-leaning momentum in supporting its economic development department, including internationally, as the utility works with Chinese partners to bring an array of clean-energy technologies to the U.S.
Photo courtesy of Duke Energy


he most powerful utility economic development teams are backed by corporations that don't just move power around. They wield it.

Some are or soon will be wielding more power than ever: FirstEnergy's merger with Allegheny Power became official in February. The US$13.7-billion mega-merger between Progress Energy and Duke Energy is inching toward approval not too many years after Duke swallowed up Cinergy.

Others, such as TVA and Hydro-Québec, draw sustenance for their efforts from both progressive programs and their government heritage. And the many electric cooperatives across the land do their jobs best when they're working as a cohesive network with each other and their members.

The heft is necessary in a world where infrastructure investment needs are daunting. On May 11, the Brattle Group released a report that estimated the U.S. transmission investment will range between $12 billion and $16 billion annually through 2030. Meanwhile, states are applying pressure in the form of carbon footprint and water use reduction and energy-efficiency program expansion. And discussion of new federal emissions rules governing power plants has raised temperatures of utility leaders to a level of discomfort at least equal to the high temperatures that wilted much of the nation this past summer.

"Southern Company's analysis indicates that through 2020, the estimated capital cost for the company's operating subsidiaries to comply with the full range of proposed rules for coal-fired generation — including air emissions, water and coal ash — would be between $13 billion and $18 billion," said an early August release from the company.

But the bubbling cauldron of cost and regulatory challenges hasn't tempered those leaders' optimism in the economic development of their territories.

"The industrial sector continues a momentum of recovery that eventually we think will lead to job growth of our top six segments on the industrial side," Southern Company Chairman, President and CEO Thomas Fanning told Bloomberg in late July, alluding to "a dozen or so" projects around the Southeast that are expected to add 1,000 jobs or more. "Therefore, we believe that, in fact, jobs are coming," he said.


Site Selection's Top Utilities of the year helped those jobs come home in 2010. They were selected by the following mix of objective and subjective criteria: Analysis of corporate end-user project activity in that company's territory; website tools and data; survey input from corporate end users and site consultants; innovative programs and incentives for business, including energy efficiency and renewable energy programs; and the utility's own job-creating infrastructure and facility investment trends.

Alabama Power
Birmingham, Ala.


ast year Alabama Power, the second-largest subsidiary of Southern Co., helped attract $600 million in corporate investment to the state, creating 2,222 new jobs. Facility investors included BLG Logistics, Medline, GE Aviation, Shinsung Petro-Chemicals and Hyundai Heavy Industries.

Among the economic & community development team's accomplishments under the leadership of Ken Novak were the creation of a comprehensive database of incentives and financing programs across the state called the Alabama Incentive Finder. The team also redesigned its website to incorporate new features such as a GIS building and site search function and updated key industry sectors.

One of those sectors is data centers: Novak's team partnered with Jones Lang LaSalle to assess six sites throughout the state that are viable for data center locations. The team also assisted 15 communities in achieving "Advantage Site" designations on specific parcels, confirming that due diligence is done and that documentation critical to the site selection process is ready for prospective industry.

St. Louis, Mo.


n its bi-state Missouri-Illinois territory that serves a population of more than 6 million people, Ameren in 2010 helped bring to fruition more than $1.8 billion in corporate project investment that created more than 4,000 jobs.

Projects on the Illinois side came from such companies as Marathon, Air Products, ThyssenKrupp and Prairie Farms. In Missouri, Ameren lent support to expansions by Convergys, Unisys, Valent Aerostructures, Edward Jones and Mamtek.

Special programs and services rendered to the communities and companies it serves included analysis of the wholesale trade and distribution sector; economic-impact studies of Ameren's investments in its own operations; continuing expansion of its Pure Power renewable energy credits program; and the debut of its corporate parent's solar energy program.

Duke Energy
Charlotte, N.C.


erving 11 million people in five states, Duke helped businesses in the Carolinas, Indiana, Kentucky and Ohio create nearly 13,900 jobs in 2010, backed by nearly $5.8 billion in capital investment. The predominant share of each was in the Carolinas, but Duke economic development teams in Kentucky/Ohio (led by David Smith) and Indiana (led by Marie-Christine Pence) contributed their share, including projects from Cook Pharmica, POET Biorefining and Printpak in Indiana, and from General Mills, Ford and ZF Steering in the Cincinnati area.

In addition to riders and other more traditional tools, the economic development team for Duke in the Carolinas, led by Clark Gillespy, also offers such programs as its Carolinas Investment Fund, its Site Readiness program, and its relatively new Building Readiness program, which has evaluated nine buildings. Changes in the regulatory framework are causing Duke to wind down its seven-year-old NC Community and Technical College Grant Program, but not before it had awarded more than $14 million to nearly 60 programs at 24 schools. Meanwhile, the utility's AdvanceSC program contributed more than $64 million between 2004 and 2010 to community development in its South Carolina territory, including more than $28 million to specifically enhance manufacturing competitiveness. In Indiana, eight site development grants were awarded to deserving communities, including a grant to evaluate a Bloomington site for data center development and another to support redevelopment of the former Pfizer site in Terre Haute.

Duke Energy President and CEO Jim Rogers encourages his people to "see over the horizon" and create the future before the future is created for them. Gillespy certainly takes those words to heart as he points out what he calls "the tremendous backlog we were able to build in 2010 for 2011 — I point this out because the heavy lifting the team provided in 2010 will allow us to achieve our highest-ever performance in the history of Duke Energy in 2011."

New Orleans, La. and


orporate projects facilitated by Entergy's network of six organizations in four states created more than 7,800 jobs and more than $3.1 billion in capital investment. Among them were KIOR's biofuel plant in southwest Mississippi, Atlantic Metrocast's 100-job concrete plant in New Orleans and Nucor's new $750-million iron plant in St. James Parish.

New programs in 2010 included a Community Competitiveness Program launched by Entergy Mississippi, which also started publishing the quarterly "Economy Watch" in partnership with Mississippi State University. To the west, four of the six sites qualifying for Louisiana Economic Development's Certified Site Program were initiated and produced by Entergy Economic Development. Entergy Louisiana also launched a new mapping application, and a vendor pilot program connecting its staff with potential growth opportunities from companies within Entergy's own supply chain.

Akron, Ohio


irstEnergy already had heft in 2010, serving a population of 11.3 million over 36,100 sq. miles (93,500 sq. m.). Now that it's merged with Allegheny Energy, its economic development efforts will be expanded further into Pennsylvania, Maryland and West Virginia, and its 10 distribution companies' total seven-state territory encompasses nearly twice the geographic area and 14 million people, including 6 million customers.

That increase will only boost further some pre-merger 2010 numbers that weren't too shabby: 6,517 new jobs and more than $3.7 billion in capital expenditures by private-sector firms, including projects from Kardex, Hershey Foods and Voltaix in Pennsylvania and from M&M Mars Pet Food, Magna-Norplas and U.S. Cotton in Ohio. Those were just a few of the 108 projects facilitated by FirstEnergy.

In addition to already successful programs such as Export Now and its FirstProspector GIS system, FirstEnergy is providing $7.5 million over three years to support economic development and job retention projects under an agreement reached with The Ohio Manufacturers Association. The team has supported several regional initiatives aimed at the Marcellus Shale Gas exploration and business recruitment/expansion opportunities in Pennsylvania, Ohio and West Virginia. In the alternative energy arena, the company has over 500 MW of wind power under contract, is among the solar power leaders in New Jersey, and is involved in the Norton Energy Storage Project in Ohio and a pilot fuel cell project with Ballard Power Systems.

Georgia Power
Atlanta, Ga.


he Georgia Power team was instrumental in boosting the state of Georgia's economic development performance in 2010, helping attract 10,987 newly created jobs that came with $2.6 billion in capital investment via 87 projects. They came from such companies as Firth Rixon in Midway, biofuel firms RWE Innogy in Waycross and Magnolia BioEnergy in Waynesville, Southwire in Carrollton, Great Dane in Statesboro, Novelis in Atlanta, and Gulfstream, which is creating another 1,000 new jobs with a major expansion in Savannah.

Highlights of the year's work also included a search application overhaul to the SelectGeorgia website, where prospects now can dig up extremely detailed information about power service for approximately 3,500 available buildings in Georgia. Other innovations included using iPads during helicopter and other site visits; and more advanced work force analytics, enabling prospects to more accurately address local labor needs down to the occupational level out to the year 2019. The utility's community and economic development team also conducted two targeted industry studies in 2010 on metal fabrication and aerospace.

Georgia Power in 2010 conducted more than 1,200 on-site commercial and industrial energy audits, and expects to invest almost $600 million over the next 10 years on demand-side programs, in addition to continuing investment in new generation, such as the Plant Vogtle nuclear power plant expansion.

Hoosier Energy
Bloomington, Ind.


oosier is the sole cooperative on this year's Top 10 list, though certainly not the only co-op to excel in economic development. Its efforts on behalf of 60 counties in southern and central Illinois and Indiana certainly bore fruit in 2010, helping 15 members report a total of 53 new or expansion projects that are expected to add more than 27 MW of monthly demand. "These commercial and industrial projects created about 2,300 jobs and brought $325 million in new investment to member communities," reported a January 2011 Hoosier Energy newsletter. In addition to five projects at Westgate@Crane Technology Park in southwest Indiana, notable projects included an expansion at NTN Driveshaft ($17 million investment and 115 jobs) and an expansion at ThyssenKrupp Waupaca Foundry ($18.2 million and 80 jobs). The biggest was the Gibson County Coal (South) coal mining project, which brought 100 jobs and a $100-million investment.

Hoosier's tools include the Hoosier InSite property search system, a fuel cost calculator, tax abatement and workers' comp estimators, regular programs and publications helping industrial customers and others improve energy efficiency, and a shovel-ready sites program that has certified 17 sites thus far.

Hydro Québec
Montréal, Québec


ike its U.S. counterpart TVA to the South, Hydro Québec at its roots is a government entity, thus placing its economic development activity (whether as project attractor or generator) in lockstep with the province's economic fortunes. "Slightly higher-than-expected demand from industrial customers" was a major factor in helping the utility to profitability in 2010, resulting in a dividend to the province of more than C$1.8 billion.

Paying more than C$33 million a year in property taxes and employing the equivalent of more than 23,600 person-years gives the utility a central role in that economy, which it exploits to good measure when it comes to industrial development. That even applies outside Canada, as HQ looks to expand its role supplying power to communities in New England and New York.

HQ also works with major industrial customers on energy efficiency improvements, as it brings them into what it calls its Energy Savers' Circle.

Among recent accomplishments in this area was reduction of annual electricity consumption by more than 71 GWh at Alcoa's Baie-Comeau aluminum smelter and by more than 300 GWh at its Deschambault smelter. IBM Canada's Bromont plant cut consumption by 20 percent, while SGL Canada cut it by 13 percent.

Since 2003, major customers have carried out 855 energy efficiency projects under Hydro-Québec's programs, saving electricity consumption equivalent to the power annually used by more than 90,000 households. The utility is also actively involved in developing electric vehicle infrastructure in multiple communities.

Among the host of projects HQ is involved in is a partnership with Germany's Süd-Chemie (via subsidiary Phostech Lithium), Université de Montréal and Centre National de la Recherche Scientifique (CNRS) on issuing sublicenses for lithium iron phosphate (LMP/LFP), and related battery materials used in rechargeable batteries. Initial sublicense agreements have been concluded with two Japanese and two Taiwanese companies, including Advanced Lithium Electrochemistry (Cayman) Co., Ltd (ALEEES), which "has undertaken to build and operate an industrial size manufacturing plant in the province of Québec, Canada," said a July 2011 news release.

Progress Energy
Raleigh, N.C.


n 2010, Progress Energy's collaborative efforts with its state, regional and local economic development partners enticed more than $675.1 million in industrial investment across Florida and the Carolinas, along with the corresponding creation of 2,366 jobs. Corporate physical plant investments included Pilgrim's Pride's expansion in Live Oak, Fla.; The Plastek Group's reopening of a closed Rexam site in Hamlet, N.C.; expansions by Coca-Cola North America and Harvill's Produce in Orange County, Fla.; and an expansion by Kaydon Corp. via a purchase of a closed Bosch facility in Sumter County, S.C.

One project illustrates how a utility's operations and economic development aims can be intertwined: Environmental upgrades at Progress Energy generating plants in Roxboro, N.C., played a central role in bringing CertainTeed to an adjacent property, where a new $160-million, 89-job wallboard manufacturing plant will utilize raw materials extracted from Progress Energy's emissions-reducing scrubbers. Elsewhere in its home state, Progress helped German auto supplier Reich land in Buncombe County by providing upgrades to electrical infrastructure.

In 2010, thanks to its South Carolina License Fee Credit program, which enables the company to direct its license fee credit toward industrial infrastructure and site improvements, Progress Energy directed $100,000 to Kershaw County for the certification of the Conder MegaSite. The program also assisted Darlington County in constructing a new rail spur in support of PolyQuest's $8-million expansion there.

In the alternatives arena, Progress has embarked on an array of programs aimed at showcasing plug-in vehicles and preparing infrastructure to support their adoption, including a partnership with Duke Energy, GM and the Electric Power Research Institute. Its SunSense Commercial Solar PV Program continues to provide rebates to businesses that install photovoltaic panels on their rooftops. And the utility has partnered with Poultry Power USA, a unit of Jacksonville, Fla.-based Green Frontiers Energy, for the purchase of 36 MW from a poultry waste-to-biogas plant under construction in Montgomery County, N.C.

The partnership is creating 100 permanent jobs in a community stung by recent textile plant closures.

Nashville, Tenn.


he Tennessee Valley Authority's technical services, financial assistance and other incentives helped companies invest $4.3 billion in economic development projects and attract or retain 41,000 jobs across the region in fiscal year 2010, led by middle and western Tennessee. TVA economic development support has contributed to 264,500 new or retained jobs and $27 billion in business investment since 2005.

The project list included two major distribution centers from in Chattanooga and nearby Bradley County, Tenn.; a project from A.P. Plasman in Fort Payne, Ala.; and an expansion by Amneal Pharmaceuticals in Glasgow, Ky.

In 2010 TVA assessed more than 50 locations across its service area for access, telecommunications, power availability and reliability, and other characteristics suitable for data center development. That work continues, with the utility certifying its 17th and 18th data center sites in July in Huntsville, Ala., and Adairville, Ky.

TVA's board also recently voted to expand its successful Valley Investment Initiative incentive program, which pays awarded funds as monthly power bill credits over a five-year period. And it's a partner in Tennessee's new $50-million Energy Efficiency Loan Program, run by Pathway Lending.

Story in Pictures

High-level LEED certifications for headquarters are de rigeur for utilities wishing to lead their territories to both new energy solutions and economic growth. Duke Energy’s Charlotte headquarters (above), located in a former Wachovia headquarters project now renamed the Duke Energy Center, was certified LEED-Platinum in mid-2010.
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