While any business expansion or relocation project comes with its own distinct site location issues, projects occurring in rural areas sometimes present some special circumstances.

In a metro area, for instance, there are usually plenty of choices for any given project: a choice of land, building inventory and labor — coupled with an ample basic infrastructure.

But beyond the bright lights of the big city, there might not be so many choices.

Wide-open expanses of land and a healthy work force are often some of the favorable perks that come with a rural location. However, the flip side of the coin is that there could be building inventory shortages and infrastructure challenges.

Like most companies that choose to expand beyond a traditional metro area, Iowa-based Keifer Built had some challenges to overcome when it decided to expand its operations westward two years ago.

For starters, the manufacturer of horse, livestock and cargo trailers needed to be up and running in a short timeframe.

Subsequently, the company’s first challenge was finding a building that fit its needs, one that offered 300 feet of continuous length to accommodate its steel, steel-framed and aluminum trailer manufacturing processes.

Working through the state of Idaho, Keifer Built found a 126,000 square foot former fresh-pack potato warehouse that just happened to be 320 feet long in the city of Gooding.

While the vacant building offered ideal space, the infrastructure was another story. When the prior tenant had moved out, it took a lot of the infrastructure, including the lighting and electrical panels, with it.

“We replaced the transformers, service wire and meter package in order to get them up and running,” said Dan Olmstead, community relations manager of the southern region for Idaho Power, which now provides power to Keifer Built.

Luckily, when it comes to infrastructure improvements, state-funded community development block grants can come in handy. They can help offset the costs of infrastructure improvements, including utility, water and sewer lines, as well as transportation upgrades, which oftentimes fall on the incoming tenant.

When all was said and done, Keifer Built celebrated its grand opening last year and now employs nearly 40 workers at the facility, where it churns out one trailer a day.

Aside from infrastructure, other utility-related issues need to be considered when a company is considering an expansion or relocation beyond the metro area.

There are two main things to consider, said Kevin Fletcher, vice president of community and economic development for Georgia Power. One, the reputation and service record of electric providers for that region — customer service, responsiveness when problems arise, etc. Secondly, the company needs to know its facility’s requirements for electric service — peak load, hours of operations, kWh needs, and what its tolerance is for outages and voltage fluctuations vs. cost.

Once a company better understands its own needs, it can better assess how a utility can address those needs.

So Who Pays?

When lines need to be extended or run to a new business facility in a rural area, who gets the bill?

In most cases, a new business is responsible for much of the new infrastructure, to a degree, although it’s important to remember that no two projects are alike.

“Every project is handled on a case-by-case basis,” said Christopher Bell, vice president of economic and community development for Alabama Power. “But the key to ensuring little or no cost increases to the prospect is understanding the prospect’s needs as quickly as possible. If the economic development team understands the client’s total infrastructure needs, then industrial sites/parks can usually be found where the majority of the client’s needs can be met.”

In the event lines do not exist, most electric utilities establish capital investment limits to serve a specific electrical load and the new customer would be responsible for any capital investment over that limit, he added.

Georgia Power’s Fletcher added that costs of additional lines or other infrastructure improvements are handled by the policies of each utility.

“The types of costs and the circumstances can make the handling of these costs vary greatly,” he said.

On another money-related topic, most utility experts said that when it comes to basic electric rates, there should be no difference, cost-wise, whether that electricity is fired up in the country or in the city.

Knowledge Is Key to Success

When siting an expansion project, a thorough understanding of a location’s utility provider and services will aid in ensuring a good experience.

“Companies should understand the power supply of the local utility,” said Dennis Hall, economic development manager of Nebraska Public Power District. “Does the utility generate its own power? What is the generation mix? Each generation source has different drivers, which determine its price. Prices vary for coal, natural gas, nuclear, wind, hydroelectric, oil and other generation sources.”

It’s also important to inquire about a company’s reliability track record. Utility companies should be able to provide information on a location’s history of reliability.

The good thing about establishing operations beyond the city limits is that, typically, utility services are very similar to what is offered within city limits.

That said, the more rural a community is, the fewer electrical service options may be available.

Reliability is usually no more of an issue either, unless power lines extend for great distances, thereby subjecting the lines to greater exposure to weather conditions.

“All of this depends on the electric utility’s existing infrastructure and the distance to the utility’s transmission grid,” Alabama Power’s Bell said.

He pointed out that, from a utility company’s standpoint, the key to successfully working a project in a rural area is preparation and anticipation of a prospect’s needs.

“Most electric utilities work very closely with their area economic development personnel and will only present sites that can meet a prospect’s labor force, site development and infrastructure needs,” Bell said.

In all cases, determining what is best for your project is founded in good communication regarding your company’s distinct needs, as well as close scrutiny of such things as utility reliability, customer service, flexibility, integrity, and other products and services available.

In most cases, utility companies can offer substantial assistance in a variety of forms to help address a company’s project challenges and, furthermore, find solutions.