Utilities: Our Country’s Powerline

Stable, reliable and cost-effective energy prices are key factors that spur economic growth across the nation. Over the years, economic growth has boomed in some regions of the country in large part because of low-cost, reliable electricity provided by the local utility company. That’s why utility companies play a major role in the economic development of American communities. They are strategic partners that help promote job creation and drive local economic development.

This effort happens for a number of reasons, but key among them is the fact that communities and businesses depend on reliable and cost-effective energy to support their day-to-day operations. As manufacturers consider building new or expanding existing manufacturing facilities, energy costs are a critical consideration. Local energy suppliers provide valuable resources to help manufacturers make those important investment and resource allocation decisions.

Additionally, utility companies are not only strategic business partners, but also community partners investing in organizations, schools, and sponsoring other philanthropic activities that further contribute to the health and vitality of a regional economy.

This month, we are examining the impact utilities are having in growing local and state economies. We will hear from the Tennessee Valley Authority, the nation’s largest public utility, that was recently honored by Site Selection Magazine for its success in business attraction and retention. We’ll also hear from the Economic Development Partnership of Alabama, which is an organization established with strong support from utilities to advance economic development efforts. We will also share perspectives from the National Association of Manufacturers and the U.S. Chamber of Commerce’s Global Energy Institute on how utilities play a vital part in creating a stronger and more competitive business environment for all.

Gloria Story Dittus, Chairman, Story Partners

Made in America: Utilities’ Impact on Manufacturing

Affordable, reliable energy is the lifeblood of manufacturing in America. Our industry accounts for nearly one-third of the energy consumed in the country. That powers us to contribute $2.38 trillion to GDP and employ more than 12.8 million Americans.

Energy costs are therefore top of mind when companies choose where and whether to invest in new facilities and jobs. When policymakers debate energy policy, manufacturers stand firmly on the side of legislation and regulation that will keep the energy costs reasonable and the supply reliable.

We are also tireless advocates for improving energy efficiency and sustainability. Leading by example, manufacturers have leveraged new technologies and reduced the carbon footprint of our products by 21% over the past decade while contributing 18% more to the economy.

To continue this progress, the NAM joined with the Department of Energy to launch the Sustainability in Manufacturing Partnership. We are partners in the EPA’s Smart Sectors Program to foster collaboration on sustainable practices. According to a recent NAM survey, nearly 80% of manufacturers have a sustainability policy or are developing one, and more than 76% have a program to recycle and reuse their waste streams.

Efficient resource use is essential not only to keeping costs down but also to addressing the shared challenge of global climate change. Manufacturers believe that economic growth and environmental stewardship must go hand-in-hand.

In recent years, manufacturers have benefitted from increased regulatory certainty from federal agencies. We have a responsibility to show we can be trusted to continue leading on the environment. It is a promise we have made and one we will keep.

Addressing environmental and energy challenges requires government officials to work alongside community leaders, local utilities and manufacturers—to ensure the success of America’s manufacturing workers and to protect our earth, the only home we have.

Jay Timmons, President and CEO, The National Association of Manufacturers (NAM)

Jay Timmons is president and CEO of the National Association of Manufacturers, the largest manufacturing association in the United States.

A TVA Core Mission: Economic Development

With some of the biggest corporate names in manufacturing, aerospace and defense, technology, and transportation calling the Tennessee Valley home, it’s easy to forget that the largest public power utility in the nation was borne because of a need to help a struggling region that was locked in poverty.

The Tennessee Valley Authority (TVA) was intended to be an energy provider that not only improved the quality of life for residents, but also served as a stimulus for the region’s economy. Today – 86 years later – economic development remains one of TVA’s core missions.

Our success stems from leveraging strong partnerships with state and local economic development professionals for maximum impact. Companies want to take advantage of the area’s competitive electric power rates, excellent reliability and capacity, and business-friendly climate.

In the last five years, TVA has helped to recruit $53 billion worth of capital investment into the Tennessee Valley bringing with it over 350,000 jobs. While some of the biggest names garner some of the biggest headlines, thousands of other economic development wins should not be overlooked.

For example, a company named Portobello America, which creates high-quality ceramics decided to locate its U.S. headquarters in Baxter, Tennessee – home to roughly 1,300 people. They invested $150 million and created 220 jobs in Baxter in the process. So, while our economic development efforts have made a difference for the whole seven-state region, Portobello America made a difference in Baxter.

Looking ahead, our mission will remain to deliver high quality, safe, reliable electricity at a competitive price that people can afford and that will attract economic investment to the Tennessee Valley.

– Jeff Lyash, President & CEO, TVA

Energy’s Impact on Site Selection

Over the past 30 years being involved with manufacturing plants and manufacturing greenfield projects, it has become more and more important to make the reliable and cost-effective energy sources to a facility a top three priority. This not only is evident in the facility that may already exist, but also and more importantly, when selecting a greenfield site to establish a manufacturing facility.

I have been active in the past six years in selecting sites and constructing two different manufacturing facilities in the floor tile manufacturing sector. The first of which is currently producing with the second in the environmental and permitting phases. Both projects in the $150,000,000 range.

The site selection process consists of factors that affect the bottom-line of the facility. At the top of the list as previously stated is energy sources, namely electricity. The first factor for consideration is the cost of energy and the reliable service of the provider. My experience over the years has made my first priority of site selection within the TVA coverage area. The main factor being reliability of service, with or without a firm-based billing structure. I have been involved with several different billing options of which all have given exceptional service with little or no interruption of service due to maintenance or weather-related issues. The second reason is cost of energy from TVA. The rate structure over the years has been stable. This makes budgeting and planning reliable for the corporation involved. Thirdly, TVA has been helpful with community interaction, site study, and incentives. These three items when combined as a factor of site selection makes the site selection decision easier in many ways. Not only the sizable incentives offered, but also the relationships brought to the table within the community being reviewed and informative data about the site.

-James “Jed” Durbin, VP Manufacturing & Outsourcing, North America, Portobello America

Portobello Grupo, a leading ceramic surfaces company in Brazil and one of the top ten companies in the world, made the decision to locate their U.S. headquarters and first U.S. production plant in Baxter, Tennessee.

Powering Our Lives

Most homeowners have a simple relationship with their local utility: a bill comes in the mail each month and they pay it. The lights come on and their appliances work.

But these everyday conveniences are predominately taken for granted. Utility customers rarely stop to think about the importance of reliable, affordable energy in their daily lives. Local electric and gas companies literally provide the fuel for much of what makes our lives what they are today – light at night, warmth in the winter, relief from summer heat, and the tools with which we stay closely connected with our families and friends, even if thousands of miles apart.

In our communities, utilities power our schools, move public transportation, and empower businesses – both new and old – to develop and grow their trade both locally and beyond. Local utilities are often heavily involved in their communities, sponsoring arts, culture and educational programs that we all benefit from.

Utilities also mean jobs. Jobs for their office staffs behind the scenes and the skilled men and women who show up on-site, in rain, snow, or shine, to fix utility infrastructure in the rare instances where service is interrupted. These jobs also support everything from the vehicle and equipment manufacturers and dealers, to the coffee shop and diner proprietors that ensure that feed them when they are on the job. Utilities support every layer of local economic development, pure and simple.

America benefits immensely from our utility providers, who are investing every day in new and better technology to improve their service delivery and environmental footprint. They are the backbone of our economy and we literally can’t live without them.

Marty Durbin,  President, Global Energy Institute, U.S. Chamber of Commerce

Marty Durbin is president of the U.S. Chamber of Commerce’s Global Energy Institute (GEI).