Still, utility rates may be the first factor on the list that can be altered. The labor scene is essentially fixed. And, a city's basic infrastructure can't be overhauled to meet one company's needs.

"For most companies, on the average, energy prices are not critical to their overall operation," explained Jeff Lebow, project manager with Southern California Edison. "Take a plastics company, for example. The most important criteria might be raw materials, second might be labor, and third could be utilities.

"It's not the most critical thing, but the utilities may be the only variable there. So, sometimes, even though it might be third in line in terms of impact on a decision, it could be the first variable."

Incentive rates: part of the package
Many utility companies offer what are termed economic development rates. These are usually discounts off of standard rates. Customer qualifications vary from utility to utility, as do the definition and terms of the discount.

"What we offer at BG&E is an economic development incentive rate," said John Sundergill, director of economic development for Baltimore Gas & Electric. "It is a discount for electric customers expanding within our territory.

"It's not going to be a deal breaker, but packaged with the other public incentive programs, it certainly adds up to a nice dollar," added Sundergill.

In recent months, utility rates played a major part in the expansion of Chesapeake Biological Laboratories and the opening of ship builder Baltimore Marine Industries.

In most cases, utilities do not stand on their own in an attempt to woo a potential client. They are generally a part of a larger incentive package that is jointly developed with state and local government and business organizations.

"Our requirement is that we have to package them with the public incentive programs," said Sundergill. "It's all designed to be part of a large and strong package to offer to expanding or relocating companies."

At Southern California Edison, utility executives first determine whether an incoming company is "qualified" to receive an economic development rate, based on the amount of electricity it will be using. The company must also be a manufacturer or involved in film production.

Then a Red Team, which consists of members from the California Trade and Commerce Agency, the local economic development agency, and the utility, meet with the company to assess its needs. If there is a threat that a new or existing company might take its business elsewhere, then the opportunity arises for an incentive.

"That opens the door to allow us to offer the economic development rate," said Lebow. "So it's not simply the utility acting alone."

A recent success in California was the retention of guitar giant Fender Musical Instruments in Corona.

In partnership with a team of state and local officials, Southern California Edison offered Fender an incentive package consisting of an economic development discount rate and other state and local financial incentives.

Special rates
For many utility companies that are deregulated, or are in the process of becoming deregulated, incentive rates are evolving to keep pace with the times.

"We have an economic development incentive rate and an ED (economic development) zone rate," said Chris Wood, manager of Economic Development for New York State Electric & Gas Co. "But the key rate we have is a negotiated rate."

That rate is available to companies meeting a predetermined threshold of power use.

In New York, where deregulation is staking an early claim with many utilities, companies may find that their utility costs could be dramatically reduced by a negotiated rate.

"If a company is looking at Ithaca, New York, and they're looking at Richmond, Virginia, or Memphis, Tennessee, we will negotiate a rate with the company that's competitive with whatever they would pay in Richmond or in Memphis," Wood said. "And we'll negotiate a rate that's good over a three-to-seven-year contract. Wherever else they're looking, we'll have a rate that's commensurate to that competing location.

"Our goal basically is to take the cost of energy out of the location decision and focus on the other issues that drive the project," he said. "Typically in the Northeast, you have high utility rates, so what we have is a situation where we're able to remove the high utility rate as a barrier to growth."

And those aren't the only advantages to a negotiated rate. With a typical rate schedule, there is always the chance that the rate could go up or down. However, with a negotiated rate, a company can predict its energy costs.

"On a negotiated rate, we're signing a firm contract with a customer, so the customer knows over the duration of the contract what his rate is going to be," said Wood.

Although not deregulated, Indiana's Cinergy PSI also offers contract pricing options.

"For instance, with steel (mills), we can negotiate a contract and agree that we will provide them with a fixed rate for a certain period of time," said Marie-Christine Pence, project manager with Cinergy PSI.

And if customers think they can find a better utility rate from another company outside Cinergy's territory, there's something they can do about it.

"The company can ask us to go out and buy the electricity from that utility and we will sell it back to them," said Pence. "That's another option in a contract."

Two steel mills, Qualitech, and Heartland Steel, have recently built facilities in Indiana due, in part, to negotiated utility rates.

Low costs as an incentive
Utility companies have been innovative in devising ways to accommodate their customers' cost- management needs.

While PECO Energy's research associate Eileen McLaughlin agrees that energy costs don't necessarily make or break a deal, she says her Pennsylvania utility company still strives to help companies on an individual basis.

At PP&L, Donna Buchheit, economic development manager, says Pennsylvania's deregulation status gives companies the opportunity to manage their costs themselves.

Pennsylvania is in the midst of the deregulation process, and by January of 2000, all 5.2 million electric customers in the state will have the power of choice.

Because PP&L is in the business of delivering energy -- not generating it -- there is little need for economic development incentives.

"We're just delivering the electricity to them (the companies)," said Buchheit. "That's a very small portion of the total energy bill. So what good does it do to give a big discount on something that's tiny to begin with?"

Still other utility companies see little need for incentive rates, contending that their prices are already low.

Georgia Power has provided electricity to residents of the state for more than 70 years and currently serves 1.7 million customers in all but six of Georgia's 159 counties.

The company's base rates have not increased since 1991, making them among the lowest in the nation -- 15 percent below the national average.

"(Economic development) rates didn't mean much here because our rates are already very competitive with any of the other states around us. The general rates themselves are incentives."

Canada's Ontario Hydro does not offer economic development rates. What it does offer is low-cost power.

In fact, the company hasn't increased its rates since 1993, and won't until at least 2000.

"Not many companies can say that," said Ahmed Mayeenuddin, program manager of Economic Development for the company.

"Incentives are not going to make or break a business decision," he adds.

Ontario Hydro also offers flexible pricing, which gives customers options in the way their bills are structured.

As deregulation continues to alter the appearance of the utility industry, it's certain that utility companies will continue to vie aggressively for their customers' business.

Utility incentive rates, in one form or another, will most likely remain a lure to businesses looking to grow and expand.