In good times and in bad, one thing no one seems to be in short supply of is good advice. Economic development is no exception.
In fact, for those manufacturers examining the options of expanding or relocating facilities, advice regarding site selection is plentiful and invaluable - especially when obtained from a utility.
For one, utilities operate their business in the very communities your company might be considering.
"Since we operate there ourselves, we have a good feel for all the issues impacting corporation decisions," said John Sundergill, director of economic development for Baltimore Gas & Electric. "We know all of the ins and outs of the business climate. It's like getting your information from the horse's mouth."
A utility can answer questions both concerning utility service as well as sites and locations. For example, utility executives can candidly and confidentially discuss labor pricing, labor availability, taxation and other business-to-business issues. After all, utilities, whether gas, electric or water, are key components to any business location decision.
So what are the top 10 questions site selection executives might expect a utility representative to answer? Expansion Management went to the experts to find out and has come up with this list:
1. Price. Of course! But by price, this can mean price of land and labor, as well as utilities. Given a particular electrical load, what are the costs for power? What are the various rate options? (i.e. on-peak/off-peak) How can a manufacturer minimize its energy cost in a utility's service territory?
2.Skilled work force. Is this work force well-trained? Does the state or local level offer work force training dollars?
3.Other high-usage customers. What other manufacturers are located in the area that might draw large amounts of power? How many existing high-tension customers depend on energy from that substation?
4. Service capacity to a specific site. Some manufacturers require especially large electrical loads. Are adequate facilities reasonably close? How are construction costs handled? Does the existing system have capacity to serve the manufacturer's needs? If not, what is the cost and timetable of delivering that service? What is the policy on facility costs relating to service upgrades? What upgrades, if any, are planned for expanding capacity to existing gas/electric lines? How/where in your service territory can we get dual service?
5.Financial incentives. Are financial incentives available from the local and state level? Are there any publicly funded financial incentive programs available for infrastructure development as it relates to energy distribution? Does the utility provide any financial incentives for selecting urban redevelopment sites as a manufacturing location?
6.Rate reductions.
Does the utility offer rate reductions?
7.Extension costs. What are the costs and policies on sharing extension costs? Is there a formula? If an extension is required, who pays? Are there incentives associated with that?
8. Site search. Does the utility offer an economic development department that provides site selection and information services for new and expanding businesses? If a firm has not yet selected a site, utilities are superb sources for recommendations regarding site searches. Utility real estate executives know what is available. Most keep databases of available industrial sites and information regarding available services not limited to only zoning. More importantly, they know the layout of the land, i.e. what types of industries are clustered where; traffic patterns; commuting distances of various employees. They know specifically where large energy users might want to locate and what utilities are available to service such sites. What sites and buildings are available given certain criteria? Does the utility offer photos, topographical maps, site maps, or any engineering studies for a particular site or building site?
9. Environmental issues. Since utilities have a good feel for the communities in which they serve, these entities also know all the environmental issues affecting the region, inside and out. Utilities, themselves, are immersed in environmental rules and regulations.
10.Deregulation/regulation. With deregulation, is there an opportunity for purchasing power from third parties (i.e. other suppliers) through the utility that serves them? Companies must stay tuned to activity that is going on regarding the deregulation of utilities since each state is undergoing totally separate deregulation processes. Important are the terms, conditions, and time tables being set for that deregulation to occur. Every state has a different timetable.
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