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The Shape of Success
from Site Selection
September 5, 2014
Utility economic development was born a century or so ago so more customers would use more electrons. Gradually it came to expand its mission to include plugging into business networks and clusters. Its future may have more to do with the ability to unplug - or at least to squeeze every electron for all it's worth.
Each year Site Selection salutes the top utility economic development teams in the US. Chief among the criteria is analysis of corporate end-user project activity in 2013 in those utilities' territories, based on data from Site Selection's New Plant Database and from utility and community reports. Other criteria include website tools and data; 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.
Here are some highlights from the 10 leaders in their field, presented in alphabetical order:
Serving 1.4 million customers across the southern two-thirds of Alabama, the Southern Company subsidiary's economic development team helped companies create 1,810 new jobs in 2013 with total capital investment closing in on $2 billion.
Corporate facility investors include BASF, Evonik, Commercial Jet, Knauf Insulation, Gestamp, Royal Cup, Infitus Energy, Kennametal Tricon, Bolta Werke GmbH, Comau, Atlas Roofing Corp. and Toyota Boshoku.
The team has partnered with others in a recruitment effort for the tool-and-die sector, part of a larger effort to fill supply chain gaps for automotive companies in the Southeast. Similar efforts are under way for the chemical sector, and for aerospace suppliers, as Airbus prepares to begin production in Mobile in 2015.
The utility's economic development team also has partnered with its GIS Department to develop a comprehensive ESRI-based site identification tool to identify new potential industrial property in Alabama Power territory.
American Electric Power
AEP's Economic & Business Development team, led by Mark James, serves a territory comprising 5 million customers, 3,000 communities and 11 states. They continue to pursue a data center site certification program that includes nine sites, as well as a more general Quality Sites program that currently encompasses 11 candidate sites working toward certification by early 2015.
Because its territory overlaps with a number of active shale plays, AEP's team, led by four oil & gas industry specialists, is also working with the utility's field personnel to install substations faster, including AEP's "Station in a Box," which comes pre-packaged and stored in a portable steel container for shipment directly to a prepared site.
In 2013, AEP hosted 10 educational forums across its service territory attended by more than 400 community partners and elected officials.
The utility's national accounts team in April earned the Edison Electric Institute's Outstanding National Key Accounts Customer Service Award. The AEP National Accounts team manages 250 large, multi-site customers representing more than 56,000 billing accounts.
In 2013 Duke's economic development team "successfully deployed an Enterprise-wide economic development strategy across our six-state service area," says Stuart N. Heishman, vice president, economic development, business development and territorial strategies. "This included an aggressive rollout of 'best practices' such as our nationally recognized Site Readiness Program, our unique Business Recruitment & Site Location Team and the introduction of a new Target Market Site Certification program."
The calendar year 2013 saw the team helping to garner more than 100 project wins, approximately $3 billion in corporate capital investment and the addition of over 13,700 new jobs in its multi-state territory, where it serves 7.2 million customers amid a population of 21 million. Investing firms included MetLife, Herbalife and Syngenta in North Carolina; Nucor, JN Fibers and Michelin in South Carolina; Tsuda Industries, GEICO and Alcoa in Indiana; Hutamaki and GE Aviation in Ohio; and CapTel Service Specialists, Instrument Transformers and Pall Corp. in Florida.
Duke enacted a new economic development rider in Florida in October 2013, and funded a Strategic Sites Inventory Program in the state in December 2013. In North Carolina Duke successfully launched the Green Source Rider. Duke continues to carry out its data center and food & beverage site certification programs in the Carolinas.
New Orleans, La.
A total of 9,221 new jobs and more than $20.7 billion in corporate facility investment was all Entergy had to show for 2013, marked by dramatic growth in the Gulf Coast economy.
"Entergy Corporation has dramatically stepped up its economic development efforts with the formation of a Corporate Business and Economic Development Department," says Mark Kleehammer, vice president of business development. Projects came from such companies as Big River Steel in Arkansas; G2X Energy in Louisiana; OCT/Natgasoline in Texas and Feuer Powertrain in Mississippi. Texas led the way with 3,183 jobs, while Louisiana led in corporate capital investment activity with more than $17 billion planned.
Entergy's major system-level initiatives include the team's Strategic Sites Initiative; Entergy's Certified Sites Program; and a planned rebuild and redesign of the Entergy Site Selection Center, the team's GIS building & site database. To aid customer speed to market, Large Project Services - a team of project managers with engineering backgrounds - was created.
The Entergy team helped launch the Central East Texas Alliance, and a farmer education program in Louisiana which Entergy plans to replicate in its other three states in 2014.
FirstEnergy and its 10 utility operating companies helped corporate end users invest nearly $3 billion and create a planned 7,792 jobs across its service territory of 6 million customers amid a population of 13.4 million across six states. Projects came from such investors as Amazon and Bayer in New Jersey; Volvo in Maryland; BASF, Sherwin-Williams and H.J. Heinz in Ohio; and Albemarle and Procter & Gamble in Pennsylvania.
The utility has formed a Shale Task Force to help firms "better facilitate future growth, explore mutual business opportunities, real estate transactions and mutual planning of infrastructure enhancements to help electrify the new load."
FirstEnergy in 2013 became a member of the Board of Directors for Choose New Jersey and launched a plan to identify potential sites for data center operations. As part of the Electric Security Plan in Ohio, FirstEnergy has pledged $3 million toward providing assistance for economic development in its Ohio service territory.
Florida Power & Light
Juno Beach, Fla.
The team at FPL helped companies in its territory create 11,997 jobs with nearly $15 billion in project investments, among 4.6 million customers in a 35-country area of Florida populated by 13.3 million people. Headlining the list was the headquarters move by Hertz to the Greater Fort Myers area - a project aided by FPL's PoweringFlorida Resource Center.
2014 Honorable Mention Top Utilities in Economic Development
St. Louis, Mo.
Nebraska Public Power District
Las Vegas, Nev.
Omaha Public Power District
Santee Cooper/SC Power Team
Southern California Edison - Economic Development Services
"FPL's economic development efforts blossomed in 2013," says the FPL team. As of December 2013, 16 businesses bringing 1,187 new jobs qualified for FPL's economic development rider (EDR) rate, which requires 25 jobs per 350 kWh of new demand. EDR represented savings of nearly $200,000 to those growing businesses. An additional 12 businesses had applied for EDR and would qualify upon completion of construction projects adding over 3,300 new jobs. In late 2013, FPL petitioned the Florida Public Service Commission to authorize a negotiated rate or Commercial/Industrial Service Rate (CISR), designed to attract new, large power users to the state as part of a competitive location project. It was authorized in early 2014.
Serving a population of 10.2 million in 155 of its state's 159 companies, this Southern Co. subsidiary continues to show the way in how to align with and enhance state economic development goals. The utility's Community & Economic Development team helped attract 18,532 new jobs and $2.7 billion in private-sector capital investment last year via 78 projects from such companies as Alcon Labs in Johns Creek; Engineered Floors in Dalton and Eton; Medient Studios in Effingham County just north of Savannah; and India's Shrivallabh Pittie Group in Sylvania.
New programs and services included an overhaul of the already impressive SelectGeorgia Database; speeding up IT systems throughout the network as well as at the showcase Georgia Resource Center in Atlanta; new and updated industry reports and publications; a program to repurpose 15 coal- and oil-fired power plants the utility is closing; ESRI-enabled "story maps"; and a new "Select Success" seminar series to help prepare local economic development teams to welcome and respond to prospects.
During 2013, the Georgia Resource Center hosted 537 events with more than 4,500 visitors, the highest level in the facility's 22-year history.
This Southern Co. utility serving 10 counties across Northwest Florida helped companies create 3,436 jobs last year with total facility investments of $386 million. Investing companies included Navy Federal Credit Union and CHCS Services in Pensacola, FedEx Ground in Panama City, and West Fraser Mill in McDavid.
Gulf Power in 2013 introduced a new job creation rate rider incentive, as well as a reoccupancy incentive that pays cash incentives to business owners who are willing to occupy existing vacant buildings - four customers already have moved into previously unused space. The utility also hired a full-time researcher who completed over 100 projects for community partners.
This summer the company launched a new website to market 13 key industrial sites in Northwest Florida that are going through the company's new site certification program. "Having great sites is key to being competitive for new jobs," said John Hutchinson, Gulf Power's director of Community and Economic Development.
Serving a population of 3.5 million, this Kentucky utility helped companies create 10,303 jobs and invest nearly $2.6 billion in facility location or expansion projects in 2013. Those are hefty chunks of the 12,598 jobs and overall $3.1 billion the state as a whole attracted last year. Growing companies in the service territory included Toyota, Martinrea, Nestlé Prepared Foods, Asahi Forge, Total Quality Logistics, CertainTeed, Johnson Controls and a number of major distilleries.
During 2013, LG&E and KU worked closely with the Kentucky Workforce Investment Board as it ramped up the new Work Ready Community program. LG&E and KU also are among several smart utilities partnered with the Location One Information System (LOIS), a Web-based interface. Also like other smart utilities, it is retiring a number of coal-fired power plants.
The utilities continue to provide leadership to a number of state and local organizations, councils and chambers. They also continue a long-term investment strategy to support the development of industrial land in two Kentucky communities, where the company has invested $380,140 in zero-interest loans.
Tennessee Valley Authority
Last in our alphabetical list, but first in so many ways that count, TVA's economic development team continues to be a leader among leaders in such categories as total new jobs it helped companies create (52,000) and total capital investment associated with that job creation ($5 billion) across its huge seven-state territory serving a population of 9 million people.
TVA's economic development team continues to focus on the target sectors of data centers, advanced manufacturing, transportation manufacturing and food processing. The team's Enterprise Data Center Site identification program selected its first Enterprise Data Center Site, Tiger Jones Technology in Jackson, Tenn.
To date, a total of 23 data center sites are designated as "ready for development" across the TVA service area.
TVA's sites and buildings database, TVAsites.com, was completely redesigned and re-launched in 2013.
In 2013, 13 Valley communities were part of the utility's new Valley Sustainable Communities Program, and Community Development staff conducted a total of 69 training and development workshops throughout the TVA region.