In 1969, American Electric Power released a guide titled “How to Find a Plant Site without Losing Your Mind.”
These days the “plant” might take the form of any corporate facility, but the idea is still the same: Make a smart location decision that preserves not only your company’s competitive advantage, but your wits. The nation’s Top Utilities in Economic Development (AEP among them) help you do just that. Along the way, they also help navigate the ever-changing map of state and local incentive policies, regulations and non-electric infrastructure.
As for utilities’ own infrastructure, grid modernization is in. The N.C. Clean Energy Technology Center announced in August that 36 states and the District of Columbia took some type of action on grid modernization during the second quarter of 2017, with 181 state and utility-level actions related to grid modernization proposed, pending, or enacted in the quarter. Duke Energy Vice President - Economic Development, Business Recruitment, and Territorial Strategies Stuart Heishman offers his own company’s activity level as an example:
“We are investing $25 billion over the next 10 years to create a smarter, more modern grid that delivers the services our customers expect,” he says of Duke’s system, which serves a population of 24 million in parts of seven states. “Today, the grid stands as a one-way road. In the future, it must become a multilane highway, sending energy and information in both directions.”
Information flow in all directions — and stanching that flow with confidentiality when called for — is crucial to these economic development teams’ performance and results. Each year, Site Selection evaluates the performance of these teams based on corporate facility project jobs and capex figures from the previous calendar year in the utilities’ service areas. Metrics include both straight totals and per-capita calculations, as well as website tools and data; innovative programs and incentives for business; and the utility’s own job-creating infrastructure and facility investment trends.
Here, in alphabetical order, we present this year’s Top Utilities and Honorable Mentions.
“AEP has always been willing to cooperate with prospective tenants to determine available power and to determine the most cost-effective way to establish power at a new facility,” says one real estate and site selection practitioner, noting a crucial collaboration with interconnects on a 750-MW project in Ohio. One of the biggest among $2.6 billion worth of projects AEPED facilitated (creating 7,217 jobs overall) needed a big assist: Sofidel’s $300-million paper plant in Circleville, Ohio, required moving an AEP transmission line that ran through the middle of the site. Done.
But the team’s actions go beyond its home state: When Braidy Industries this spring announced a 550-job, $1.3-billion aluminum rolling mill in Ashland, Kentucky, Braidy Chairman and CEO Craig Bouchard pointed to a key factor: “We have negotiated an efficient package with Kentucky Power and AEP because they wanted us in eastern Kentucky,” he said. “I believe we have the lowest energy cost of any rolling mill producing aluminum in the United States. The competitive advantage of that is spectacular.”
Whether engaged to the tune of $175 million in the Smart Columbus infrastructure modernization or pursuing thousands of megawatts worth of renewable power, AEP is proactively looking ahead. AEPED does likewise: Information on certified sites and data center programs; guidance for foreign companies seeking a US base; drive-time maps, supplier network analysis and workforce updates — AEPED’s in-house research team puts it all at site seekers’ fingertips, and team members on the ground in its 11-state territory (the largest of any utility’s in the nation) put that data into action.
Projected capital investment from this team’s 17 direct-involvement project “wins” in 2016 is more than $1.6 billion, translating to 6,170 jobs across the 400 municipalities and 25 counties ComEd serves in the northern third of Illinois. Moreover, the utility’s non-state EDO partners reported a total of 39,234 new jobs through economic development efforts in 2016 in northern Illinois.
Little things can mean big results: The modification of ComEd’s line extension tariff by lowering up-front deposit requirements and allowing for faster refunds benefited 27 customers who saved $36 million. Projects from those customers will create over 3,200 jobs and result in 5 million sq. ft. (464,500 sq. m.) of new facility space.
Work continues apace on ComEd’s Energy Infrastructure Modernization Act (EIMA) upgrades, which have sharply reduced outages. Over 3.4 million customers now have a smart meter installed, with the remaining portion to be completed by the end of 2018, three years ahead of schedule. “EIMA was also a boost to the Illinois economy by helping create more than 4,500 jobs,” says Ed Sitar, ComEd’s manager of economic and business development.
Among other innovations, ComEd has created the Energy Ready Zones program to match areas with available substation electricity capacity with available large vacant land sites primed for development. In 2016, ComEd also spearheaded the launch of a new statewide business outreach and retention initiative known as CORE (Creating Opportunities for Retention and Expansion, at www.COREIllinois.org).
An Indiana-based site consultant compliments Duke for “being able to help drive the real estate identification process on a confidential basis.” That’s just the starting line for a multi-state utility economic development team that helped bring to fruition projects worth $4 billion that are creating more than 14,000 jobs.
Three primary initiatives in 2016 were the acquisition of Piedmont Natural Gas, which expanded economic development service offerings in the Carolinas and Tennessee; expansion of the business recruitment team, with key people now in the strategic markets of San Francisco, Orlando, Raleigh, Detroit, and Atlanta; and the formation of an Electrification Team that will lead the company’s efforts to identify and promote wider adoption of new and emerging grid-enabled technologies, including electric vehicle charging infrastructure.
Duke knows its customers are looking for more renewable power. Duke will invest $11 billion in natural gas and renewables over the next 10 years. The utility has spent more than $5 billion over the past 10 years in commercial renewables.
“If you get right down to it, this $1 million is an investment in the most precious natural resource that God has entrusted to us. That is our people,” said Louisiana Governor John Bel Edwards in November 2016 when Entergy committed $1 million in training funds to workforce development programs. As part of a five-year, $5-million initiative, in 2016 Entergy committed grants totaling $2.2 million to 17 workforce development programs across its four-state region.
Such commitment from the corporate level may help the utility’s economic development pros deliver even better results than in 2016, when corporate facility investments in Entergy territory totaled $27.4 billion, helping create 5,758 jobs.
Entergy’s online Site Selection Center, complete with GIS mapping data, continues to grow more robust. But it’s the blend of information and above-and-beyond service that wins the day. Exhibit A: Asked to help Highland Pellets assess energy needs for its facility in Pine Bluff, Arkansas, Entergy ended up tapping a transmission line and building a dedicated substation, delivered on time and at no cost to the customer.
Speaking of his No. 1 and No. 2 picks TVA and Georgia Power, one site consultant says, “The top two utilities … do a particularly good job of keeping abreast of the infrastructure capabilities (electric, water, sewer, rail, etc.) of all the major sites within their service territories. This saves a considerable amount of time in our decision-making and due diligence processes.”
Another observes how “Georgia Power does a great job partnering with the state EDC on projects.” Such fluid coordination is one reason the Georgia Power team helped its territory tally projects worth $2.9 billion that are expected to create 20,334 jobs. Among initiatives implemented during 2016, the team’s added a licensed drone pilot, enabling drone video to be combined with existing 3D modeling tools to help a prospect evaluate a site. Those prospects can view all the whiz-bang features at the utility’s economic development showroom that in 2016 was rebranded as the “Georgia Experience Center.” Meanwhile, the team last year consolidated its Education and Workforce Development and Community and Economic Development teams, which benefits prospects and communities in one fell swoop. Finally, it’s appointed one site expert as the main contact for the burgeoning population of film and TV scouts in Georgia who might wish to take advantage of the company’s vast properties (including land, buildings and lakes) for filming.
A total of $1.8 billion invested and 12,692 jobs created via 235 projects describe this perennial leader’s year in a very big nutshell. The utility’s economic development rider conferred more than $850,000 in credits in 2016, and the company also has invested over $500,000 via zero-interest loans to support development of industrial land in two Kentucky communities.
Meanwhile, as part of partnering with the KentuckyUnited marketing effort, the company participated in missions to Texas, New York, California, Illinois, Tennessee, New Jersey, Georgia and internationally to Canada and Germany.
Among the niches the utility is pursuing is data centers. “LG&E and KU’s average industrial rate for data centers is $0.068 per kWh with a 2,500 kW load at 90 percent load factor,” the team says on its economic development home page. “When IT represents 30-40 percent of a typical company’s energy consumption and corporate data center operating costs are reportedly growing by 20 percent per year, these numbers can make a big difference.”
Among other initiatives in renewables, LG&E and KU constructed Kentucky’s largest universal solar facility, with more than 44,000 panls located on 50 acres at its E.W. Brown Generating Station in Mercer County, the same location that is serving as an energy storage research and demonstration site.
Through partnering with the Mississippi Development Authority and local economic developers, this relatively small player in the Southern Company family helped bring 2,326 jobs and $977 million to its 23-county area in 2016. Among the projects: PG Technologies announced the creation of 400 jobs in Ellisville; TopShip, LLC (Edison Chouest Offshore) announced a shipbuilding facility that will create 1,000 jobs in Gulfport; and Aerojet Rocketdyne announced the creation of 70 jobs at its facility located at Stennis Space Center. At the Port of Gulfport, new projects came from SeaOne Holdings (a $580-million, 100-job compressed gas liquids facility) and Chiquita Brands International.
The combined experience of the utility’s 14-person team totals 126 years of collective economic development experience, which they brought to bear on several focus areas in 2016. The Project Ready certified site program was redesigned and now includes nine industrial sites. A newly added workforce development rep is championing the ACT Work Ready Communities program, among other initiatives. And the Large Business Development rate rider and Small Business Redevelopment rider continue to incent growth in the region.
In addition to active recruitment of European firms, the team organized the Mississippi Aerospace and Defense Symposium, hosting 10 companies.
OPPD’s involvement in 74 projects in 2016 resulted in more than $1.6 billion in capital investment connected to the creation of 3,134 jobs across its 13-county territory serving 820,000 people in southeast Nebraska. Project investors included Mutual of Omaha (361 jobs), Pacific Life (100 jobs) and Rotella’s Italian Bakery (also 100 jobs). But one project stands out for not being in OPPD territory.
Costco/Lincoln Poultry’s 800-plus-job project is taking place in Fremont. OPPD helped with the Elkhorn Valley Transmission project that will support growth opportunities from Blair to Fremont. “This project with the City of Fremont Utilities was vital to support the effort to attract the Costco/Lincoln Poultry project to Fremont,” says OPPD. “OPPD will also provide services to the poultry grower network.”
In addition to committing in 2016 to no general rate increase for five years, the OPPD board also approved the innovative rate schedule 261M, instrumental in the attraction of the Facebook data center project. More than 50 OPPD employees across various departments were actively engaged in bringing the Facebook project across the finish line.
In addition to making 100 direct customer contacts and corporate HQ visits as part of its business retention and expansion efforts, the OPPD team partnered with the state on re-working tax incentive legislation; hosting a fifth annual Data Center Day event; and helping Bellevue and Fort Calhoun attain recognition as a Nebraska Certified Community and Nebraska Certified Leadership program, respectively.
When Econsult Solutions and the Economy League of Greater Philadelphia last year estimated PECO’s economic impact on the region, they arrived at $4.3 billion, including $98 million in savings for commercial and residential customers via the utility’s Smart Ideas suite of energy efficiency programs. But that didn’t count the massive impact of PECO’s seven-person economic development team, which last year helped companies create 10,421 jobs and invest $2.4 billion in investment in Greater Philadelphia.
PECO’s roster of more than 50 projects in 2016 includes everything from Aramark’s $250-million R&D center and Comcast’s Innovation & Technology Center in Philly proper to GSK in Collegeville, Teva Pharmaceuticals’ expansion in Malvern and convenience store chain Wawa’s new HQ and test kitchen in Chester Heights in Delaware County, where the company has been based since 1902. That’s the same county where PECO in December completed construction of a new $32-million electric distribution substation to support increased demand and future growth in Marcus Hook, where so much energy sector activity is taking place.
One site consultant praises TVA for “expediting the delivery of electric infrastructure to a site to meet a critical project timeline.” That’s pretty much de rigeur for TVA and other top utilities. TVA Economic Development achieved another successful year in 2016 by attracting and retaining more than 72,100 jobs and $8.3 billion in business investments in the Valley, including major investments by Bridgestone, Google, GM, GE Aviation, Bowling Green Metalforming and Agero.
Among the more satisfying had to be Google’s choice to put a second data center in TVA territory, locating it at the former Hemlock Semiconductor site in Clarksville, Tennessee — a certified TVA Megasite, where Hemlock had shuttered its plant before it even opened.
Like the corporate prospects it pitches to, the TVA team is constantly re-evaluating its portfolio. After a study led by Boyette Strategic Advisors, it is realigning its target industries to focus on Consumer and Industrial Products, which were previously food processing and general manufacturing, respectively.
In 2016, TVA announced the certification of two new Megasites in the region: the Huntsville Megasite in Huntsville, Alabama, and the Infinity Megasite in Columbus, Mississippi.
Also new in 2016, TVA Economic Development introduced The Valley Workforce Institute, an event where such topics as recruitment and retention of talent, in-migration and the gap in middle skills were explored.