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hen Siemens Medical Solutions needed a corporate headquarters last year for its American sales and services divisions, PECO Energy provided the location data the company sought.
The result? Siemens moved its U.S. medical headquarters to Great Valley Corporate Center in Malvern, Pa., in Chester County, bringing 3,000 jobs and US$75 million in capital investment to southeastern Pennsylvania.
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When GlaxoSmithKline needed to expand its pharmaceutical R&D operations in the Quaker State in 2002, PECO helped seal the deal. As a result, GSK is expanding its operations into a $40-million, 200,000-sq.-ft. (18,580-sq.-m.) building at the Renaissance Corporate Center in Upper Merion Township in Montgomery County. About 800 workers will move into the five-story building.
Results like these helped propel PECO Energy (www.peco.com) into the ranks of Site Selection‘s Top Utilities of 2002. An annual competition based upon economic development performance in four categories – capital investment, job creation, capital investment per capita and jobs per 10,000 population – the award tests the ability of energy companies to remain resilient in the face of increasing competition.
Due to a tie in this year’s rankings, the competition actually produced 11 winners: Cinergy Corp., DTE Energy, Entergy Arkansas, FirstEnergy Corp., Georgia Power, Hoosier Energy, Niagara Mohawk, Northeast Utilities, Omaha Public Power District, PECO Energy and Progress Energy.
The annual Site Selection ranking honoring performance in economic development among North American utilities began in 1999. Since the inception of the award, two utilities – Cinergy and Georgia Power – have won the award every time.
Their five-peat just edges PECO, which this year became only the third utility to register a four-peat. Greg Byrnes, director of economic development for PECO, says his company’s success is attributable to the fact that, in Philadelphia, the utility takes the lead in economic development.
“We really have been the regional leader for economic development, whereas in some areas it tends to be the chamber of commerce or some other entity,” says Byrnes.
PECO’s record is even more impressive when one considers that the utility has achieved this honor despite a sluggish national economy since 2000, the increasing pressures of utility deregulation and mounting competition from regions eager to recruit companies out of the Northeast.
“Our success is the result of year-in, year-out accumulation,” Byrnes said. “There have been a number of activities here – two new sports stadiums, the Siemens headquarters project and others – and we are looking at a number of major projects in the pipeline right now. We truly anticipate becoming much more aggressive in the region. For example, we know that in the future we will be very strong in the pharmaceutical and biotech industry.”
PECO’s dominance is evidenced by the fact that it achieved the highest total capital investment of any utility in 2002, registering $1.005 billion. FirstEnergy Corp. of Akron, Ohio, was close behind at $980.4 million, followed by Cinergy of Plainfield, Ind., at $956.6 million and Georgia Power of Atlanta at $925.6 million.
Hoosier Energy of Bloomington, Ind., claimed the top spot in investment per capita at $320.17, edging second-place Entergy Arkansas of Little Rock, which had $286.58. DTE Energy of Detroit’s territory produced the most jobs, 8,780, just ahead of Georgia Power’s 8,507 jobs. In jobs created per 10,000 population, Entergy Arkansas claimed the No. 1 honor, registering 29.86 jobs per 10,000, while Omaha Public Power District ranked second with 27.2 jobs created per 10,000.
Georgia Power’s record run of five consecutive Top 10 rankings (matched by Cinergy) was no fluke, says W. Craig Barrs, vice president of community and economic development for the Southern Company affiliate in Atlanta.
“Despite the sluggish economy in 2002, Georgia Power’s Community & Economic Development organization had another excellent year, fueled in part by several newly developed programs,” Barrs wrote in his nomination package.
Among the tools Georgia Power developed to help corporate site selectors was an enhanced Web site. “Over the years the site has been continually upgraded, but in 2002 a complete overhaul was performed in order to increase the overall functionality and make the site easier for visitors, especially those who may not be ‘Web-savvy,'” noted Barrs.
Georgia Power beefed up its Web portal (www.georgiapower.com/grc) by increasing its response speed, adding new slide-out menus and adding more dynamic information. New information was added to area maps, including flood-plain designations, hydrological features, railroads, and commercial and international airports.
Perhaps the most innovative feature added, however, was an icon that allows Web site visitors to “ring a bell for service.” One click of this icon immediately sends a request for help to the desktop of a Georgia Power staff member.
The Peach State utility also implemented a new real estate broker program, in order to inform the Atlanta offices of major and international real estate firms of the services offered by the project managers at Georgia Power, as well as to form closer partnership with those offices.
“Since its inception, this program has resulted in a noticeable increase in leads from real estate firms,” Barrs commented. “It has strengthened the relationship between Georgia Power and the brokers, and it has assisted new project managers in making contacts in the real estate brokerage community.”
These new efforts paid off. Last year, Georgia Power secured 59 major corporate real estate projects. Shaw Industries brought a $6-million warehouse/distribution project and 30 jobs to Cartersville. Pier One selected Savannah for a $30-million, 50-job logistics center. Pine Hall Brick announced it would build a $25-million factory for making stone, clay and glass in Fairmount and employ 40 workers.
Elan Corp. brought a 100-worker, $40-million chemical and pharmaceutical plant to Gainesville. And Aero Plastics announced it would bring 200 jobs and $15 million in capital investment in the form of a plastic and rubber products factory in McDonough, outside Atlanta.
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Utility companies don’t take a high profile in every state’s economic development efforts. But they do in Indiana.
Commenting on the role Cinergy plays in industrial recruitment in the Hoosier State, Indiana Lt. Gov. Joseph E. Kernan says, “Whether we are creating a Web page, evaluating a program, planning an international trade mission or responding to a client, Cinergy is there – performing beyond our expectations.”
Cinergy’s challenge is especially unique because its territory is so vast. The utility’s service area spans 16 million acres (6.5 million hectares) and includes all or portions of 69 counties in Indiana, all or portions of 10 Ohio counties including Cincinnati and the suburbs, and all or portions of six counties in Kentucky.
Last year, Cinergy played a role in securing 7,731 new jobs and $956.6 million in capital investment for its service area of 4.78 million people.
In fact, Cinergy scored the highest overall ranking of any utility in this year’s Site Selection survey by placing third in capital investment, fourth in job creation, fifth in jobs created per 10,000 population, and seventh in investment per capita.
Like Georgia Power, Cinergy invests heavily into its databases of information and Web site. The Indiana Partners’ Web site (www.indiana.cinergy.com) serves as the primary economic development portal for the state. The interactive site offers a searchable property database that combines the latest GIS mapping technology with community profiles, up-to-date demographics and aerial photographs.
The Cinergy Web portal has been consistently recognized as one of the best economic development sites in the country, and is regularly used as the portal of choice for site selection consultants seeking locations.
Top expansion projects worked by Cinergy in 2002 included a $450-million Chrysler transmission plant in Kokomo, Ind., a $44.2-million customer-service/back-office center for Fifth Third Bank in Madisonville, Ohio, and a $35-million auto parts plant for Keco Industries in Florence, Ky.
