Over the years, California’s utility companies have helped businesses save billions of dollars by teaming up to offer the best rates.

Savings By Design (SBD) is a new energy efficiency design program available to expanding and developing companies in the service territories of Pacific Gas & Electric (PG&E), Southern California Edison and San Diego Gas and Electric.

“SBD pays incentives to new and expanding companies based on the energy efficiency performance of their buildings,” said Grant Duhon, supervising program manager for Savings By Design. “Owners can get up to $150,000 per project or meter, and design teams can get up to $53,500 per project or meter.”

Through Energy Design Resources, SBD provides educational resources like case studies, design briefs, tools and training. Training is oriented toward owners and design teams, and covers everything from how to exceed California’s building code requirements to best practices for building-unique spaces like data centers, wastewater treatment plants, schools and offices.

“We also support the development of tools and software to encourage sustainable building design practices, such as simplified building modeling, daylighting tools, lifecycle costing tools and wizards that help create building commissioning documents,” said Patsy Dugger, program manager for SBD.

In September 2003, Canandaigua Wine Co. broke ground on a $12 million expansion project at its Turner Road Vintners plant in Lodi, Calif.

“To help with this expansion, I contacted PG&E’s Savings By Design engineers and they made recommendations to improve the efficiency of the winery’s new compressed air, wastewater treatment and refrigeration systems,” said Chuck Bramell, maintenance manager of Canandaigua Wine Co.’s Turner Road Vintners. “PG&E’s Savings By Design program provided not only savings, rebates and experience but education for the facility to enable us to utilize all energy better.”

The improvements are projected to have an annual energy savings of $1,179,650 per kilowatt-hour (kWh), and an annual utility cost savings of $153,355. The company also received $75,000 in incentives from PG&E.

For expanding companies in northern and central California, PG&E offers Schedule ED, a traditional electric rate incentive providing for a three-year declining discount to qualified customers based on energy, demand and customer charge portions. It is made available to companies locating to, or expanding in, enterprise zones and employment incentive areas.

Qualified customers are new commercial or industrial customers with maximum demands greater than 200 kilowatts, or existing commercial or industrial customers who add at least 200 kilowatts of maximum demand.

In addition, Schedule ED must be considered a material factor in the company’s decision to locate in the designated area.

Other statewide incentive programs include energy surveys (audits), express efficiency rebates and the Self-Generation Incentive Program.

A Focus on Non-Rate Incentive Programs

Many utilities across the country have discontinued offering traditional rate incentives for economic development. Most New York state utilities now offer a variety of incentive programs to promote business expansion and attraction.

While Rochester Gas & Electric (RG&E) and New York State Electric & Gas (NYSEG) continue to offer traditional rate incentives, the companies have added non-rate incentive programs to their economic development tool kit.

RG&E covers nine counties in upstate New York, primarily Monroe County (Rochester), and NYSEG covers 44 counties across the state.

“Approximately 80 percent of the budget is now allocated to traditional rate discounts, with the balance reserved for non-rate incentive programs like our Capital Investment Incentive Program,” said Clyde Forbes, manager of New York state economic development for RGE and NYSEG. “We can do much more than reduce power costs for relocating or expanding businesses in the region. We can help trim major capital costs as well. Our objective is to make new projects happen.”

To be eligible for this program, an existing or prospective customer must achieve a monthly peak electric demand of at least 300 kilowatts (RG&E) or 100 kilowatts (NYSEG).

“Our companies recognize the importance of offsetting upfront capital costs to potential customers,” Forbes said. “This is significant for expanding companies that require new energy infrastructure. We are focused on making it possible for them to reduce the costs of making electric infrastructure upgrades so they can grow their businesses.”

Wilson Greatbatch Technologies Inc. (WGT), one of the leading companies in the development, design and manufacture of critical components for implantable medical devices, recently benefited from a grant from NYSEG’s Brownfield/Building Redevelopment Program. This program finances utility-related infrastructure improvements necessary for the redevelopment of brownfields and abandoned buildings.

The funding will be allocated to WGT’s newly acquired facility located in western New York.

“Our new manufacturing site requires the redesign and implementation of an upgraded transmission line that will have the capacity to meet our increasing power demand as a growing western New York company,” said Larry T. DeAngelo, senior vice president for Wilson Greatbatch Technologies. “Programs of this nature not only promote local expansion and economic development but also serve to encourage partnering among energy providers and growth-oriented companies.”

The Utility Infrastructure Investment Program is another non-rate incentive program that features funding for new electricity facilities to assist in the development of certain sites or buildings.

Primary focus is on sites that are designated by the state as shovel-ready, located in an Empire Zone or included in NYSEG’s Prime Sites Program.

Other sites will be considered based on economic impact to the community.

Projects may involve an existing or prospective customer with a monthly peak electric demand of at least 100 kilowatts. To be eligible, total project cost must also involve a capital investment of at least $1 million.

Affordable Power Helps Business Expand

Like RG&E and NYSEG, the Tennessee Valley Industrial Development Association (TVIDA) works in tandem with the Tennessee Valley Authority (TVA), the largest public power company in the country, as a catalyst for economic development, offering loan assistance and energy savings incentives to companies located within its 80,000-square-mile territory. The territory includes the state of Tennessee and parts of Alabama, Georgia, Kentucky, Mississippi, North Carolina and Virginia.

“Regional cooperation is the top reason for growth in the south Kentucky region of the Tennessee Valley,” said Sam Burke, executive director of the South Kentucky Industrial Development Association (SKIDA).

SKIDA works with TVA and local chambers of commerce and economic development agencies to fuel the economy of the region.

Affordable power was just one of many reasons why Letica Corp., a manufacturer of plastic and paper industrial containers, established operations in a 120,000-square-foot facility in Kentucky’s Fulton Industrial Park in 1999.

Based in Rochester, Mich., Letica was founded in 1967 by Ilija Letica, who had escaped Communist rule in the former Yugoslavia 17 years before.

“He knew that the Communists would never allow him to flourish, so his dream was to come to America,” said his daughter, Mara Letica, executive vice president, general counsel and secretary of the company.

Her father is chairman and CEO and her brother, Anton, is president.

Flourish is exactly what Letica did. The company now employs about 2,000 workers at 13 locations across the United States.

State tax credits were still another lure, particularly incentive funds from the Kentucky Rural Economic Development Authority, which are designed to augment employment opportunities in less-developed counties.

The company’s initial growth in South Kentucky has exceeded expectations, Letica said.

Utility companies have to know just about everything there is to know about their service areas. They need to know where are the best sites to locate a new facility, whether it would be difficult to properly power that location or whether upgrades to the infrastructure would be needed. And they can help companies secure an incentive package that will help in the relocation project.