A Heartland Consumers Power District economic development incentive helped save Sioux Falls, South Dakota, $1.2 million in electricity costs for a convention center and arena.
“Electricity is one of the largest operational costs of an events center,” Mark Cotter, Sioux Falls director of public works, said. “Our partnership with Heartland allowed us to not only save a significant amount of money during the PREMIER Center’s first years of operation, but also helped us better plan for the future.”
Heartland’s customers include 30 municipal electric systems in South Dakota, Minnesota, Nebraska, Kansas and Iowa. Besides supplying electricity to the municipalities, Heartland, based in Madison, South Dakota, has a range of economic development programs, including loans, incentives and grants.
The program used by Sioux Falls for its events center — the Energy ONE Incentive — may be Heartland’s most attractive incentive for large electric loads, according to Casey Crabtree, director of economic development and governmental affairs for the public power utility.
Under the program, a demand charge is waived for the first three years and new businesses and expanding businesses pay only a flat energy rate. The incentive offers predictable pricing for qualifying retail customers, who can then establish use patterns, giving them a better handle on future costs, according to Heartland.
The incentive is available for new or expanded loads of more than 1 megawatt, or more than 500 kilowatts in customer communities with less than 3,000 people.
The Sioux Falls events center, which opened in September 2014, was the first facility to take advantage of the Energy ONE Incentive. The center is the largest indoor venue in South Dakota.
“Any time the city can save money, the residents of Sioux Falls benefit,” Cotter added.
Heartland is involved early in the process when towns are looking to attract new businesses or help existing ones expand, according to Crabtree.
“It’s all about partnering with our communities so they can continue to grow,” he said. “We’re starting to see the incentive hit its stride.”
Howard, South Dakota, a town of about 800, was able to use the incentive to help attract Quality Custom Meats, a meat processing company, to take over a processing facility that had been vacant for several years, according to Crabtree.
“It was a huge win for that community,” Crabtree said, noting the company upgraded the processing facility and hired about 20 workers.
Quality, which started using the energy-only rate in June, expects to save up to $160,000 a year on electricity through 2022.
In Akron, Iowa, the city’s largest customer, L.G. Everist, used the incentive rate as part of its expansion of a dredging operation, according to Crabtree.
In another success story, Heartland teamed up with New Ulm Public Utilities in Minnesota to provide the Energy ONE rate to Kraft Heinz, which invested $100 million in a plant expansion in the town of about 13,500.
Volga, South Dakota, took advantage of the incentive rate to attract Prairie AquaTech, which this summer finished building a multimillion dollar facility to convert soybean meal into fish feed.
In each example, Crabtree credits the individual community for progressively thinking about economic development.
“We want to help add value to the communities we serve and the Energy ONE is just one example of that. Our customers are great partners in carrying out our programs to drive their own success.“