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2005 Business Facilities Utility Honor Roll

We’ve created a list of the utilities that succeeded the most in attracting new jobs and investment over the past year.

Regular readers of Business Facilities are well aware that utility companies can be vital partners in your expansion or relocation effort. Many of them—whether they are public utilities, cooperatives, or investor-owned—have full-time professional economic development departments with a mandate to attract jobs and increase quality of life.

Believe it or not, utilities are not interested in helping only large energy consumers. Their economic development departments go out of their way for companies needing office space, light manufacturing, and research laboratories by arranging site visits and introductions to other leaders. Typically utility economic developers know their territory inside and out; they also know the political leaders, the available property, the regional and local economic developers, and the available loan programs and grants. It’s not uncommon for a utility to use its large resources to take growing companies on helicopter tours of sites, or create a premium searchable database of properties.

We wanted to find a way to recognize which of these utilities are doing an outstanding job of fulfilling their missions to their communities. To do that, we invited every utility in the U.S. we know with an active economic development department to tell us about the results they posted over their last complete fiscal year. Different economic developers have different ways of measuring success, but we knew that nearly all report annually to their stakeholders on two metrics: investment and jobs.

Naturally, a utility serving an area with a large population is more likely to attract more dollars of investment and will help create more jobs than a utility in a smaller area. To control for that, we adjusted the results that were reported to us by the size of the population of each utility’s service territory. We now had a much clearer picture of what each utility’s contribution was for each man, woman, and child it serves. Looking the data, we saw a clear pack of leaders in terms of investment dollars; there were very few utilities that attracted $200 or more per service territory resident. In job creation, only a small group was able to create one new full-time job for every thousand service territory residents. These elite groups form our two Utility Honor Rolls for 2005. Two utilities made both rolls, earning our highest recognition for their efforts.

This isn’t to say that other utility organizations out there aren’t doing good work; some are working mightily against long odds due to an inherently difficult location, and others have chosen not to share their data with us. Defining the scope and service territory of a utility is not always clean-cut either—some utilities only generate power and sell it wholesale to other utilities, for example. But all things being equal, we’re confident that this list represents a collection of economic developers that we would recommend to anyone searching for a better business location.

Highest Honors—a Tie

Our highest honors are shared by the Tennessee Valley Authority, better known as TVA, and Hoosier Energy. TVA led the ranks in job creation, with a whopping 5.1 jobs created per every thousand residents in its massive service territory. Hoosier Energy was second only to TVA, with 2.7 jobs per thousand. In terms of investment dollars, Hoosier Energy was tops with an incredible $484 of investment per resident in its service territory; TVA follows two rungs lower with $233 of investment per resident.

Remember that these are not the total jobs and dollars that flowed into these service territories last year—these are only the jobs and dollars that TVA and Hoosier Energy had a hand in bringing. All of the numbers for the utilities listed here represent projects from growing companies and organizations that the utility can take substantial credit for assisting with.

TVA—the nation’s largest public power company—provides power to 8.5 million residents in the states of Tennessee, Georgia, Alabama, Mississippi, Kentucky, Virginia, and North Carolina. Part of what has given it such great results is the relative success in general that these southeastern states have had in attracting new investment, compared to the rest of the U.S. But it’s also due to TVA’s high level of organization when it comes to its economic development approach. TVA offers the extensive services for growing companies that you would expect from an organization so large.

TVA’s economic development motto is “One Source. Seven States.” Indeed, TVA claims to be the proverbial one-stop shop for all your business expansion needs, and there is little reason to doubt them. It offers selection, relocation, development, and recruitment information through several media, including a comprehensive GIS-based site and building database at TVAsites.com.

TVA has target industry specialists who have expertise in and provide services for key industries, among them automotive assembly and supplier plants, food and distribution services, life sciences/emerging technologies companies, and plastics manufacturers. TVA also certifies large industrial properties as “megasites” that are ready for automotive manufacturing or assembly plants; in this case, ready means that it has necessary attributes in place and due diligence completed so that the site will speed through certification. (Incidentally, the firm that does the certification, McCallum-Sweeney Consulting, serves on our Editorial Advisory Board and contributes often to these pages.) So far, there are five megasites certified in the Tennessee Valley.

Hoosier Energy, a Touchstone Energy Cooperative, generates and transmits electricity to 17 southern Indiana and rural electric distribution cooperatives. It serves the power supply needs of nearly 700,000 residents, businesses, industries, and farms in a service area covering more than 15,000 square miles. And by the measures we use, it does a fine job of helping business flourish there.

The utility touts a simple advantage to its customers: reliable power, competitive prices, and superior personalized service. The electric cooperatives in the Hoosier Energy Power Network are locally-owned and governed by its members, enabling Hoosier Energy, according to its economic developers, to focus better on meeting customers’ needs.

Hoosier puts an emphasis on the experience of its people; if you visit its Web site, you’ll find little self-promotion, a link to its simple but excellent site database hoosiersites.com, and a description of the very people you’ll be meeting when you go for a personal tour of an available property.

Leaders in Community Investment

Tucked between Hoosier Energy and TVA in our Community Investment Honor Roll is FirstEnergy, which reported $317 of investment per resident from projects it help bring to life last year. FirstEnergy Corp. is a diversified energy company headquartered in Akron, OH, with subsidiaries and affiliates involved in the generation, transmission, and distribution of electricity, marketing of natural gas, and energy management and other energy-related services. You may well know it better by its electric utility operating companies, which include Ohio Edison, The Illuminating Company, Toledo Edison, Penn Power, Pennelec, Met-Ed, and Jersey Central Power & Light. As you can probably tell, it serves customers (over 4.4 million of them, in a service territory with 10.1 million residents) in parts of Ohio, Pennsylvania, and New Jersey. FirstEnergy is the fifth largest investor-owned electric system in the nation.

Naturally, FirstEnergy’s economic development offers many years of experience, personal service, and a comprehensive site database for you to access.

Ohio, Indiana, and Kentucky were fortunate in having Cinergy—the Cincinatti, OH-based electric and gas generator and distributor—doing work to promote these regions. Cinergy just made our list at $200 of investment for each of the 4.78 million residents in its services territory.

TXU Electric Delivery, a subsidiary of TXU Corp., serves nearly half of Texas geographically, and has over 7 million people living in the 92 counties is serves. It joins our investment honor roll with $224 of investment per resident.

Importantly, the Dallas-Fort Worth (DFW) metroplex is part of TXU’s territory, providing the central backbone of what TXU has to offer expanding businesses. Companies in the TXU territory have made investments in a variety of industries, including defense, electronics, aerospace, automotive, manufacturing, telecommunications, and oil and gas development. There is also substantial activity in the insurance, communications, and distribution industries. The DFW metroplex is fourth in the nation in the number of Fortune 500 companies with operations there.

Leaders in Job Creation

TXU also made our list of those utilities that created at least one job per thousand service territory residents. Both it and Georgia Power created exactly one job per thousand residents; Cinergy was a small step up at 1.1 jobs per thousand, while Santee Cooper made it to 1.2 jobs per thousand. Georgia Power, a part of the Southern Energy conglomerate, serves power to all but six of Georgia’s 159 counties. Santee Cooper serves 138,000 customers and over 4 million residents in South Carolina.

Perhaps surprisingly for these lists dominated by Southeastern and Midwestern locations—with a little Texas thrown in—is that Portland General Electric (Portland, OR, that is) reported 1.4 jobs per thousand in its last full year of economic development effort. The utility, which has a bit over 1.5 million residents in its service territory, offers the usual bevy of services that any successful economic department offers, and it recommends prospective Oregon companies take a look at www.oregonprospector.com, a Web site developed by a partnership of utility companies and the Oregon Economic Development Association.

Equally surprising is the third-highest jobs per thousand count in the Job Creation Honor Roll, beaten only for TVA and Hoosier Energy: Northeast Utilities, New England’s largest utility system. Serving 1.7 million customers and 4.5 million residents in Connecticut, New Hampshire, Western Massachusetts, and all of New England through its transmission group, Northeast Utilities has managed to dispel the myth that the Northeast is no longer fertile ground for expanding companies. It is, like all the utilities on our Honor Rolls, a tremendous partner to business.

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