For light manufacturers, electricity probably won't drive their location decision, but it's still important to understand the scope and quality of local utility service.

But heavy manufacturers, with high energy needs, must approach power as a critical component of their project. Expansion Management Magazine interviewed utilities nationwide to create a list of 10 questions all companies should ask their power supplier when considering a relocation or expansion.

1. What is the status of your state's deregulation process?

Most states are in some phase of deregulation and industrial customers are the big beneficiaries.

"Companies can now choose their energy suppliers," said Jan Noya Pinna, project manager with Pacific Gas & Electric Co. "This means that your company can access competitively-priced electricity along with new technologies, new service options that are being created in the state's highly-competitive market."

2. How reliable is your service?

Ask how many outages have occurred in the last five to 10 years on the transmission line your facility will use. If there have been any outages, ask what caused them, how long they lasted, and what the utility company did to restore power.

"Especially for high-tech companies, reliability is very important," said Norm Cullerot, of Public Service of New Hampshire.

3. What is your reserve capacity, or percentage of power you hold in reserve?

"If you have a really thin reserve margin, then usually you're going to have additional generating capacity built," said Christopher Wood, New York State Electric & Gas Corp.'s manager of economic development.

If the utility company needs to build additional generating capacity, it will impose a rate increase and have customers help foot the bill.

4. Does the utility offer competitive pricing?

These are evident in options that include flexible-pricing energy contracts, interruptible service, time of use rates and incentive rates to encourage relocation and expansion.

"The most important question to ask would be of price and price certainty," said Craig Ondarchie, business development executive with AGL in Australia.

"The kilowatt demand and kilowatt hour usage are the top questions to ask," said Bud Cohoon, Carolina Electric Co-Op's director of economic development.

5. What will my rates be?

Also ask how much it will cost for the new electric service connection for your new facility and how long it will take to receive electric service. Your cost will depend on where your facility is in relation to the utility's infrastructure.

Additionally, according to Marie-Christine Pence, project manager with PSI Energy, a Cinergy Corp. company, companies should ask: "Are there any special provisions for purchasing energy from a third party?"

6. How can you help me in my site selection process?

Find out if the utility will help you finance site improvements for your facility. Also ask about the size and capability of its real estate database. Can the utility provide site selection assistance on a confidential basis?

Clay Hathaway, project manager with Central & Southwest Corp., said companies must provide utilities with some basic information before they can even begin to tackle the site-selection issue.

7. What kind of technical and R&D expertise do you have, and do you charge for these services?

Particularly in this age of deregulation, utility companies are expanding the scope of the services they offer customers. For example, some utilities help their industrial customers design energy-efficient, state-of-the-art production facilities.

8. What are your community connections and networking abilities?

That is, can the utility represent your company's individual needs to local, state and federal government bureaucracies?

Also, can the utility introduce you to influential community members that may help improve your bottom line?

9. Where is the customer service office that will be responsive to my needs on a daily basis?

Find out how quickly the office will respond to your needs and what type of key accounts program it has.

According to Fred Gassaway, executive vice president of Palmetto Economic Development Corp. in South Carolina, many investor-owned utilities have closed rural offices to cut back on expenses due to deregulation. It is advisable to ask the utility company where its decisions are made with respect to power supplies and service. If decisions are made locally, your company will have more hands-on service and more say in your own power issues.

10. Where is your high-voltage transmission line in relation to my new plant site and what is the size of that line?

The high-voltage transmission line is less subject to lightning strikes and other potential power disrupters. The closer it is to your facility, the less exposure it will have to service interruption.

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