Community

On your terms: Aligning economic development with community values

When it comes to attracting or retaining business in a community, it is not simply the more the merrier. You need to find a match between what your community has to offer and what the business can provide.

Public power utilities in Florida, Nebraska, and North Carolina offered insights into how they align their development goals with local values. Each impressive win has occurred not by happenstance, but through careful relationship management and a lot of advanced planning.

Here’s how these utilities are helping to create new jobs and prosperity on terms that work for their local communities.

Be specific

If at first you don’t succeed, then try, try again turned out to be more than a platitude for Omaha, Nebraska. The city tried to attract a Facebook data center about six years ago, but the social media giant chose another site.

Undeterred, Omaha used what it had learned and tried again. And in 2017 Facebook chose a county in the greater Omaha metropolitan area as the site of its new 2.6 million square-foot facility.

Omaha Public Power District, the 12th largest public power utility in the U.S., played a key role, first making sure it had the infrastructure in place for the data center. “This didn't happen overnight. It goes back about 10 years when Nebraska decided data centers are a great investment,” said Tim O’Brien, OPPD’s director of economic development and external relations.

If there’s a specific business your community wants to attract, then “be specific in what you want to attract and ensure the policy and the programs and site locations are in place,” advised O’Brien. Once that’s done, let the world know what you have to offer, he said.

Even before Facebook started looking at greater Omaha, OPPD had built a substation that would accommodate the company’s needs. “We took it to Facebook and said, ‘Look we're ready for you to be here,’” said O’Brien. “They were quite impressed with the progress we had made and the property we had.”

A few weeks later, Facebook was taking a closer look at the site in Sarpy County. But it took more than just the right utility infrastructure to draw in a company that has the ability to bring several hundred million dollars to the region.

Facebook wanted 100 percent renewable energy. OPPD went to work trying to figure out how to make the economics work in a way that would appeal to a large customer. It came up with Rate 261M, a high voltage service rate that gives a renewable energy customer access to Southwest Power Pool wholesale market pricing. With the rate in place, Facebook was able to sign on for 200 megawatts of the 320-MW Rattlesnake Creek Wind Project, being developed by Tradewind Energy and owned by Enel Green Power North America.

Is Facebook happy with the deal? Apparently so. The company announced in April 2018 that it’s going to build a bigger data center than originally planned at the site — six buildings rather than two — a project that will require 1,000 construction workers onsite through 2023.

Know your niche

Taking the time to talk to customers pays dividends. As Chris Padgett, chief administrative officer of Greenville Utilities Commission in North Carolina, said, “Sometimes we help them find solutions to problems that they don't even realize they have.”

The utility meets regularly with its business customers, especially in pharmaceuticals, a key industry served by the provider of natural gas, electricity, water, and wastewater treatment.

The utility’s service territory, centered in Pitt County, has been attracting medical companies from all over the world. The growth, in part, has been fueled by “industry buzz” that is in large part a result of forward-thinking electric services.

“One of the things we really focus on is our existing business and industry. We've had really great success here in Greenville and Pitt County with some of our larger businesses and industries expanding, adding in some cases hundreds of new jobs, tens of millions of dollars of new investment. And we like to think we play a role in that,” Padgett said.

Employers include Vidant Medical Center, a regional hospital system; Mayne Pharma, an Australian-owned pharmaceutical company whose recent expansion added 110 jobs and $80 million of investment; Patheon, a global pharma company that was recently purchased by Thermo Fisher out of Boston; and DSM, a supplier for pharmaceutical companies.

The area is also home to East Carolina University, which is a pipeline for the chemists and specialty medical positions needed for its workforce.

To better serve customers, Greenville Utilities worked with community partners to obtain site-ready certification for an area industrial park — called Indigreen — from ElectriCities, a tri-state organization advocating for public power utilities. Greenville Utilities can also show large potential customers that the park can serve their total utility needs and then some. Aesthetic and functional improvements include LED street lighting, sanitary sewer, and natural gas throughout the park.

By working with the park owner on the upgrades, Greenville Utilities showed that it is serious about attracting new, high-use customers and their employees. “When these new industries are looking for a home, you want to make it easy for them to say yes to you,” Padgett said.

Make energy an attraction

Home to Disney World, Orlando, Florida is one of the world’s tourist meccas. The Orlando International Airport is central to Orlando’s identity and prosperity — and the city’s municipal utility, the Orlando Utilities Commission, is ensuring it has an energy system equal to the city’s star power.

The airport is bordered by about 272 acres of ponds, which means that when some of the 40 million annual passengers look out of their cabin window, they can spot an alligator. And now, under a pending final agreement between the Greater Orlando Aviation Authority and OUC, passengers might also see $500,000 worth of floating solar panels on the pond under the airport shuttle train trestle.

The solar project is included in a proposal for a $59 million upgrade that would also provide the airport with 20 to 28 MW of standby power, electric vehicle chargers, and a chilled water system.

“We put a proposal on the table and it was bundled with a number of creative projects, like the solar installation and 67 EV charging stations,” said Jan Aspuru, chief operating officer at OUC.

The airport is going through a tremendous expansion, including a new terminal that will require significant growth in chilled water production and distribution for air conditioning (added installed capacity of about 12,600 tons) and power for the terminal itself. The proposal calls for the utility to own, operate and maintain the new equipment.

In addition to serving the airport, OUC provides electric, water and lighting services to more than 400,000 customer accounts in and around Orlando.

“Our long history of both reliability and sustainability helped push this forward. The airport is one of our largest customers and we are offering business solutions to keep the airport operating efficiently 24/7, while also showcasing Orlando as the innovative city that it is,” Aspuru said.

Avoiding overwhelming development from cryptocurrency miners

It’s usually a good thing when businesses move into a community. But what do you do if the new industry quickly doubles electric demand, but can pack up and leave overnight?

Sometimes, new electric demand needs to be managed to protect the community. For Chelan County Public Utility District in Washington state, low electric rates and outstanding fiber broadband have attracted energy-hungry cryptocurrency miners.

The miners generally run their equipment, mainly computers, and for large users, air conditioners, 24/7. And this equipment is easily moved. “We’ve had concerns because of their portability,” said general manager Steve Wright. “They can be here today and gone tomorrow.”

But while they are there, the utility might have to make power purchase commitments and expand infrastructure to guarantee them service. These costs have to be borne by the utility, a challenge requiring creative problem-solving.

“Given the volatility of the commodity that they're producing, we've had to be thoughtful about the way that we structure rates and upfront charges and fees to make sure that our community will not be disadvantaged by that growth,” Wright said.

The utility has proposed that the crypto miners pay an upfront charge to ensure cost recovery for any transmission or distribution investment that would be necessary for the utility to cover the cost of serving them. It also has proposed that the miners pay a market-based rate for energy supply.

“The assumption is that we'll purchase from the market, time-limited, and that we can shut off the power supply quickly if they depart,” Wright said. 

The rate proposal has faced some controversy. “Those who provided public comment have expressed extreme concern that the rate will put them out of business. But the value of bitcoin has also been dropping precipitously,” Wright said. “So the value that they can generate has been declining at the same time as our rate has increased.”

The coming and goings of the miners is compounded by geography. If the miners are in a residential area, mining in their homes, they could create a new peak demand for the area.

To address this, Wright said the utility is trying to encourage miners to locate where there is less demand on the grid and it takes fewer dollars and less time to serve them. This in turn creates less exposure for the other customers on the system.

The result is the evolution of cryptocurrency zones that indicate the best places for miners to site. “If you're a small miner, you're more worried about the distribution component. If you're a big miner, you're more worried about the transmission component. So all of that information is available to help you decide where you want to go,” Wright said.

The bottom line? Too much business too fast requires careful planning.

“When that load becomes too big, it overwhelms you, and you've got to control it because it creates a cost that will be borne by your other customers — if you don't have a management system in place,” Wright said.

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