FEATURE STORY: Powerhouses That Put A Jolt In New Projects

By Business Facilities Staff
From the May/June 2012 issue

In every project we cover on the pages of Business Facilities, there usually is tucked away in the middle of the article a reference to the role played by local or regional utility in nailing down the deal.

But we have always known that there are a select group of utilities that have made economic development a central part of their mission. This year, we have decided to give these standouts their own showcase.

We conducted a comprehensive survey of more than two dozen leading utilities. We requested that the finalists for our new Top Utilities designation send us a submission outlining the utility’s economic development program and resources. We asked them to highlight cooperative efforts between business, government and utilities that have had a regional impact on development and job creation; specific projects in which the utility played a key role in bringing the project to fruition and securing a new facility, relocation or expansion; and information regarding initiatives undertaken to develop alternative energy resources. The finalists were encouraged to submit a brief narrative, along with charts listing top projects and case histories.

After reviewing these submissions, we realized that we had two categories of contenders. Therefore, we are pleased to name two Regional Powerhouses (Tennessee Valley Authority and Entergy) along with our six selections as the Top Utilities for 2012. Without further ado, here are the designees who earned our spotlight.

TVA: Giant Among Giants

The Tennessee Valley Authority (TVA) is the nation’s largest public power provider, generating electricity that serves nine million people through local distribution utilities. Economic development is a core mission of TVA. TVA Economic Development partners with regional agencies, state governments, local power distributors, directly served customers and communities within its seven-state service region to promote economic development. TVA provides technical services, financial assistance and other incentives to help companies bring their operations to the region and succeed.

In fiscal 2011, 43,000 jobs were added or retained as a result of these efforts and total investment was $4.9 billion. TVA support has contributed to more than 300,000 new or retained jobs and $32 billion in business investment since 2005.

TVA’s Megasites program is a multi-year economic development effort designed to make it easier for large industries to find an optimal location that is ready for use. A third-party consultant (McCallum Sweeney Consulting) has identified locations that offer large developable acreage, have access to utilities, are close to interstate highways and railways, and can supply a plentiful labor force. Megasites help companies save time and money and reduce their risks in locating in the region.

Volkswagen opened a 2,000-employee, $1 billion Passat factory on a Megasite in Chattanooga, TN, in May 2011 and by September saw the 10,000th car roll off its assembly line. Employment at the VW plant by the end of this year is projected to be 3,500. Toyota, which in 2007 selected a Megasite near Tupelo, MS, for a plant to build Corollas, celebrated the first car off its production line in November 2011. Toyota and its suppliers are providing more than 2,500 jobs.

Tennessee Valley Authority 2011 Projects
Tennessee Valley Authority 2011 Projects

The Valley Investment Initiative (VII) is another economic development partnership jointly offered by TVA and participating distributors of TVA power. VII offers financial incentives to qualifying customers who contribute to economic growth in the region and also complement TVA’s power system resources. VII contracts executed in 2011 captured more than 31,000 created and retained jobs and $2.9 billion in capital investment.

TVA reaches out to its partners in local communities to increase their economic competitiveness by providing training to community leaders, helping rural communities market themselves more effectively, and linking communities with retail business opportunities through the Retail Development Program. During fiscal 2011, the Community Development staff conducted a total of 107 training and development workshops in the TVA region.

The Regional TaP (Targeted and Prepared) Community Program helps communities find ways to assist existing businesses and recruit new jobs in targeted industries. TVA retained Boyette Strategic Advisors to study regional strengths and target industries for the nine-county West Tennessee area.

In 2011, more than 40 percent of TVA’s energy came from clean or carbon-free sources, including nuclear, hydro and renewable power.

Entergy Energizes Four States

Entergy Corp. is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with about 30,000 megawatts of electric generation capacity, and it is the second largest nuclear generator in the U. S. Entergy delivers electricity to 2.8 million utility customers in major portions of Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of more than $11 billion and approximately 15,000 employees.

Through its operating subsidiaries, Entergy Arkansas, Inc., Entergy Louisiana, LLC, Entergy Mississippi, Inc., Entergy New Orleans, Inc., and Entergy Texas, Inc. Entergy economic development employees work closely with state, regional and local allies to attract new business investment and retain existing business. In 2011, Entergy economic development teams partnered with state and local allies to help attract 151 new projects generating $3.2 billion in new capital investment and creating approximately 10,732 new jobs. As a leading force for economic development, the Entergy Team streamlines the economic development process by providing businesses seeking to expand or locate in their service area access to the people and information they need to make the best possible business decision. Examples of cooperative efforts between communities, businesses, states and Entergy that have led to new business development and job creation include:

In August of 2011, Saint-Gobain announced a new $100 million, 100,000 square foot manufacturing facility in Saline County, AR. Saint-Gobain’s Proppants division is building a plant on a 68- acre site to produce innovative ceramic products.

GE Capital recently announced the creation of a major new corporate office in New Orleans with 300 new direct jobs to provide information technology and software development for the company’s financial services business. The 300 new jobs will have salaries ranging from $60,000 to $100,000 and will result in 600 direct and indirect jobs. This was a cooperative effort of the Louisiana Department of Economic Development, The Mayor’s Office, GNO, Inc. The New Orleans Business Alliance, Ochsner and Entergy New Orleans, Inc.

KiOR, a Houston-based pyrolysis company, has committed to constructing five plants in Mississippi with an investment in the state estimated at $500 million. The projects will create 1,000 direct and indirect jobs over a five-year period and will generate $85 million in incremental payroll for the state,

In May of 2011, Pandora Methanol reached financial closure for the purchase of an abandoned methanol and ammonia facility in Beaumont. The Entergy-Texas Economic Development team partnered with allies including the Texas office of Economic Development Group, Beaumont Chamber of Commerce, City of Beaumont and Jefferson County to assist in bringing the Pandora project to Beaumont and solidifying plans to operate the abandoned facility. Pandora has spent over $65 million in the rehabilitation of the facility.

Entergy was included in the 2011 Dow Jones Sustainability North America Index for sustainability leadership for the 10th consecutive year. Entergy also was named in 2011 to the Carbon Disclosure Leadership Index for the seventh time in eight years. The index recognizes companies with good internal data management practices for understanding greenhouse gas emissions. Entergy also was honored by the National Wildlife Federation in 2011 for its environmental programs, and it was named one of the 500 “greenest” companies in the U.S. based on Newsweek magazine’s 2011 Green Rankings.

SMUD Raises The Green Bar

When it comes to setting the bar for partnerships, the Sacramento region and the Sacramento Municipal Utility District (SMUD) are definitely raising it—and setting a new standard for other regions and utilities in the development of the cleantech sector.

Companies like Intel, Siemens Mobility, Micron-Numonyx, and SynapSense call Sacramento home. New arrivals include Jadoo Power Systems, Altergy Systems, Bloo Solar, and Zeta Communities. Sacramento cleantech players are now nearly 100 strong (see map).

The Brookings Institution, together with the Battelle Memorial Institute, produced Sizing the Clean Economy: A Green Jobs Assessment, which concluded that the growth in the clean economy in the Sacramento region significantly outpaced the growth in the same sector in the U.S. overall. Among the 100 largest metropolitan regions, Sacramento ranked 12th in the total number of clean tech jobs, numbering 37,319 and representing 4.5% of all jobs in the region.

SMUD provides electricity to the 1.4 million residents of Sacramento County, a 900-square mile area in the center of the Sacramento region.

SMUD has consistently taken the lead in developing renewable energy and energy efficiency programs, all the while keeping rates well below those of surrounding utilities. In 2010, SMUD became the first large California utility to meet—and exceed—the state-mandated 20 percent renewable portfolio standard (RPS), or required percentage of renewable power in its energy supply. SMUD has set for itself a goal of achieving 37 percent renewable energy supply by 2020.

Through its Savings by Design program, SMUD provides design and construction help, as well as cash incentives for energy efficiency. Specialists can create customized energy management plans for local businesses. Currently, public and private sector leaders in the Sacramento region are developing a collaborative economic development strategy, the Next Economy. This is a broad-based effort to create effective strategies to drive new job creation and investment, and to build an innovation-based economy in the region. Clean and green technology features prominently in this plan.

SMUD is a prominent supporter of the Sacramento Regional Technology Alliance (SARTA), an organization which promotes the development of technology-led industry in the Sacramento region. CleanStart is an initiative of SARTA designed to accelerate the development of clean technology ventures within the Sacramento region.

According to the latest CleanStart Progress Report, in 2011 the Sacramento region’s clean tech companies generated revenue exceeding $1.5 billion—double any previous yearly number. Sacramento Mayor Kevin Johnson, the former NBA great, has called the Sacramento region “the Emerald Valley,” which aims to be “the greenest region in the country.”

Hoosier Grows Rural Indiana

Hoosier Energy is the generation and transmission utility for 17 member electric distribution cooperatives in central and southern Indiana. In 2011, it added a member cooperative in southeastern Illinois. This addition increased the population of our service area to 600,000. Because much of its service territory is rural Hoosier channels a great deal of its time and resources along with tailoring its programs to help local government develop their properties from undeveloped farm land to shovel ready sites. Members of Hoosier’s power network are on dozens of local development boards and many regional development groups.

In recognition of the ever increasing role of the Internet in the business location process Hoosier Energy continues to place a great deal of emphasis on its economic development website, Hoosiersites.com. Besides an extensive property search feature, called “Hoosier InSite,” and a cost of living calculator, the Hoosier site offers two unique tools—a property tax abatement estimator and a workers’ compensation estimator.

Hoosier Energy in 2011 facilitated the creation of 2,766 jobs and $630.5 million in investment of which 2,668 jobs and $602 million in investment were non-retail, non-government (see chart).

The 2011 announcement of the $37-million expansion at Honda provides another chapter in a long development process that started in the 1990s. Hoosier’s involvement first began with the fight to save the abandoned Conrail rail line that served the eventual Greensburg, IN Honda site. Over the intervening years Hoosier paid for engineering/ infrastructure cost studies on Interstate interchange property to help convince local development to get under control as much land as they could. In hindsight this turned out be fortuitous because Greensburg was able to offer 800 acres when land negotiations fell apart elsewhere. Hoosier led the fight to convince City government to establish a redevelopment commission, which offered TIF financed incentives to Honda. Finally, when Honda came looking Hoosier offered as an inducement an attractive economic development rate and promised to provide dual transmission service.

Also in 2011, Hoosier Energy furthered its sources of renewable energy with several projects. These include the purchase of a landfill generating plant in east central Illinois; a 20-year purchase power agreement from a northern Illinois hydroelectric plant; a 25-megawatt wind purchase power agreement; and the start of construction of a plant in western Indiana that will tap coal bed methane reserves to directly produce electric power.

GA Power: A Global Rep

Georgia Power, the largest subsidiary of Southern Company, is an investor-owned utility known around the world for its work in economic development. Georgia Power has been helping companies locate and expand in Georgia since 1927, and over the past decade alone has helped bring almost 100,000 jobs and $19 billion in capital investment to the state. The Community and Economic Development organization works in partnership with state and local partners on all economic development projects.

Georgia Power has one of the most experienced and knowledgeable teams of economic development professionals in the world, including five statewide project managers, four engineers, a five-person Metro Atlanta team, and a seven-person non-metro regional team.

Georgia Power offers a full range of products and services:

  • Total project management, including coordination of site/ community tours
  • Use of the Georgia Resource Center, the first multimedia, interactive facility for site selection in the world when it opened in 1992
  • Online database of all available sites and buildings in Georgia, includes information such as population, income, workforce, taxes and incentives
  • Custom city and state comparisons
  • Custom maps, including labor sheds and drive-times
  • Workforce analysis
  • Engineering evaluation/site analysis
  • Preliminary site plans and designs
  • Site optimization earthwork analysis with cost estimates
  • Infrastructure analysis: electrical, water, sewer, telecom
  • Virtual 3-D building construction

Georgia Power’s online property search tool, found at www.SelectGeorgia.net, contains more than 500 data fields on each buildings and site, including surrounding population, workforce, taxes, incentives, wage and salary information, zoning and land use, fire insurance ratings and transportation infrastructure. Technical colleges and universities in the area, as well as the closest hospitals and trauma centers, also can be found.

Georgia Power’s community development teams work with local leaders to help their communities grow and prosper. Leadership development, strategic planning and implementing the services and infrastructure needed for business recruitment, expansion and retention are vital to a region’s long-term economic health.

Santee Cooper: No. 3 In U.S.

Santee Cooper (South Carolina Public Service Authority) is South Carolina’s state-owned electric and water utility and the state’s largest power producer. Based on generation, Santee Cooper is the nation’s third-largest publicly owned utility among state, municipal, and district systems based on megawatt-hour sales to ultimate customers. The source of power for more than 2 million South Carolinians, Santee Cooper provides direct service to more than 164,000 retail customers in Berkeley, Georgetown and Horry counties. Santee Cooper is the primary source of power distributed by the state’s 20 electric cooperatives to more than 700,000 customers located in the state’s 46 counties.

Santee Cooper also supplies power directly to 29 large industrial customers in 10 counties, the town of Bamberg, the city of Georgetown and the Charleston Air Force Base. Santee Cooper operates two regional water systems: the Santee Cooper Regional Water System on Lake Moultrie, and the Lake Marion Regional Water System. Santee Cooper was the first utility in the state to offer electricity generated by renewable resources such as solar, wind and landfill methane gas. The Green Power program recently notched its 10th anniversary.

Through the Santee Cooper Rural Economic Development fund and the Santee Cooper Economic Development Investment Fund, the utility partners with electric cooperatives, local governments and regional economic development corporations by providing funding for strategic planning, professional development, marketing, and infrastructure and site development. As a member of the South Carolina Power Team, Santee Cooper provides funding for certification of industrial sites through the SC Department of Commerce Industrial Site Certification Program. Since 2006, Santee Cooper has invested $945,201 in 24 site certifications. In 2011, the efforts of Santee Cooper and its partners resulted in more than 1,450 new jobs and capital investment exceeding $193,645,000.

Santee Cooper and SCANA Corp. are in a cooperative effort at the V.C. Summer Nuclear Station to construct two nuclear reactors. Santee Cooper holds a 45 percent ownership in this effort, which will employ up to 3,000 construction workers and 600 to 800 permanent employees.

In 2011, Santee Cooper was pleased to be an integral partner in the expansion of Showa DenkoCarbon, Inc., one of the world’s premier manufacturers of ultra high-powered graphite electrodes. The expansion created over 100 new jobs.

Committed to product development, Santee Cooper is a key player in the Myrtle Beach International Technology and Aerospace Park (MBITAP). Santee Cooper has partnered with the Myrtle Beach International Airport, Horry County, Myrtle Beach Regional Economic Development Corporation, the city of Myrtle Beach, the Myrtle Beach Air Force Base Redevelopment Authority, and the South Carolina Power Team to develop and certify this 420-acre industrial park adjacent to Myrtle Beach International Airport. Santee Cooper continues to help promote the MBITAP as a premier location for aerospace and aviation companies.

Santee Cooper is also engaged in the development of the Bucksport Marine Industrial Park in cooperation with Horry County and the Grand Strand Water and Sewer Authority. Master planning and environmental permitting are underway to create this 200-acre industrial park with bulkhead for heavy-cargo loading and travel lift, supporting large boat manufacturing.

Green Power is available for purchase by customers in blocks of 100-200 kilowatt hours, and all revenues generated by these voluntary purchases are reinvested in new renewable generation. In January, Santee Cooper unveiled its Reduce the Use business campaign offering a suite of initiatives and rebates to substantially reduce the use of electricity and improve energy efficiency among its roughly 30,000 business customers.

In January, Santee Cooper introduced the Economic Development Incentive Rate Program offering significant reductions in power costs to new or expanding industrial customers. The rate has an eight-year commitment, workforce and capital investment requirements, and a four-year discount period.

National Grid: Smart Growth

National Grid’s economic development program promotes sustainable, “smart” growth in upstate NY by redeveloping vacant buildings, Brownfield sites, and urban centers. National Grid’s grant programs have helped to create or retain over 19,000 jobs since 2003; over 700 grant applications have been approved to date, representing $46 million in funding.

In May 2011, National Grid was the recipient of the New York State Economic Development Council’s Chairman’s Award for its role in creating economic development results.

GlobalFoundries Fab 8 commenced operations earlier this year. National Grid built electric and gas infrastructure, including three high voltage electric feeds to the GlobalFoundries site, in record time. The project will create 1,500 new high-tech jobs, with a $4 billion capital investment. The electric load will exceed 75 MW and the operation will consume 35 million therms per year by 2014.

The GE Battery project is an adaptive reuse of an industrial building in the GE complex in Schenectady, NY, the latest step in GE’s transformation from an old-line manufacturer to one embracing green technologies, such as wind power and batteries that can provide uninterrupted back-up electricity for 20 years to cell phone towers, data centers and other facilities. Last year GE opened its Global Renewable Energy headquarters on the Schenectady campus. When it is finished next year, the plant will be capable of initially producing 1 million advanced battery cells annually; it will employ 350 people.

National Grid approved its first application for the Renewable Energy and Economic Development program, a $750,000 grant that will assist in the development of a biomass generation project at an upstate NY paper mill. Several other large projects have been approved thus far, including what is expected to be New York State’s largest dairy farm digester project in WNY. Five Brownfield Redevelopment Assistance grants provided $850,000 in funding to aid in the clean up and redevelopment of sites in the Capital, Central and Western NY regions. Three ShovelReady Infrastructure grants were reimbursed during the year, including support for a $2 million infrastructure improvement project at the 46-acre Tech Meadows light industrial park in Glens Falls and a $1.5 million utility/road project at the 100-acre Woodbine

Business Park in the Town of Dewitt. Three grants were provided to customers through our Power Quality Enhancement program, including two health care service providers who used National Grid grant funds to install equipment that will help mitigate serious power quality disturbance issues and enable the continued growth of their operations. Our Manufacturing Productivity Program (MPP) provides matching grants for “lean manufacturing” and other productivity assistance, as well as growth-oriented initiatives that are designed to utilize excess manufacturing capacity. Fifteen MPP projects were completed providing over $206,000 in assistance to mostly small and medium sized manufacturing businesses across upstate New York. According to data from the annual survey of MPP grant recipients, $966,800 in cost savings and $19 million in new annual revenues were achieved through the program.

Northeast Utilities: Pooling The Resources Of Six States

Northeast Utilities’ “Discover New England for Business” initiative began formally in 1999 to help stimulate increased business investment in the company’s regulated service territories.

The New England program started with a partnership between the economic development operations of Connecticut Light & Power, Yankee Gas Services, Western Massachusetts Electric Company and Public Service of New Hampshire, all Northeast Utilities’ subsidiaries. NU then began to convene business recruiters who work for the region’s six state development agencies and state-level nonprofit business and real estate marketing arms. NU partners in this effort with The New England Council, which serves as the regional consortium’s “bank.”

The strategy was to enhance the business recruitment efforts of the six states by pooling their marketing resources and capitalizing on opportunities they were previously unable or unwilling to address. In 2002, NU hired a full-time economic development marketing veteran to coordinate marketing outreach and provide marketing training for the region’s state-level economic development representatives.

NU joined with Blue Cross, Liberty Mutual, The New England Council, Yankee magazine, the region’s six state tourism offices and various nonprofit groups to commission a university research survey of an estimated 400 domestic business executives, 100 international executives, 50 site selection consultants and 1,000 random adults from across the country to gauge their perceptions of New England.

The survey prompted the group to create a new trade show exhibit booth that emphasized New England as a whole and highlighted its business and educational assets. In addition, the group published the first six-state business development marketing brochure; produced a New England Developments newsletter to bring attention to policy issues affecting the region; designed a new web site to serve as a regional portal; and jump-started a comprehensive branding project.

Over the past 10 years, Northeast Utilities has invested $1.5 million in the “Discover New England for Business” initiative, leveraging more than $1 million from the six states’ economic development departments and allied non-profit organizations in support of marketing activities. The New England Council is working with NU on the branding initiative.

Economic and policy leaders throughout New England see NU as an important and neutral economic development partner and catalyst (a time-honored role for large utilities nationwide) in the region’s business development initiatives.