Expanding may make good business sense, but it often provides companies with a host of technical and logistical challenges. Brian Weber says it’s a phenomenon he has witnessed firsthand as senior engineer of facilities for Toyota Industrial Equipment Manufacturing (TIEM), a Columbus, Indiana-based manufacturer and distributor of Toyota forklifts that counts Canada, Mexico and Brazil among its top markets.
“We’ve built at least a dozen [new buildings] since our inception in 1989,” Weber says, adding that such growth has necessitated numerous system and power upgrades. Fortunately, TIEM hasn’t had to go it alone. Thanks to its partnership with Bloomington, Indiana-based Hoosier Energy, TIEM benefits from 24/7 access to an energy provider that’s “responsive to our changing needs,” according to Weber. “As a matter of fact, they just changed out a transformer for me,” he says, laughing.
In addition to providing TIEM with technical assistance, Hoosier Energy also handles the forklift manufacturer’s rate structures and utility rebates. For instance, if TIEM upgrades to more energy-efficient lighting or embarks on another energy-saving initiative, the company is eligible for Hoosier Energy’s rebate program. From a corporate perspective, Weber says such measures have been a major boon to business. “[Hoosier Energy] is a very good entity to work with,” he adds.
Harold Gutzwiller, Hoosier Energy’s manager of Economic Development and key accounts, says his company’s relationship with TIEM highlights the high level of service Hoosier Energy provides customers. “First and foremost, we’re a generation and transmission electric cooperative, which means our board works with large electric energy users on establishing rates to meet individual corporate needs,” he says. Along with incentivizing companies to achieve their energy-efficiency goals, Hoosier Energy offers manufacturers an economic development rider to lower their energy costs over a five-year period. “More typically, however, we can help manufacturers locate buildings and sites,” Gutzwiller says. And it’s this offering that he’s particularly loquacious about.
Since Hoosier Energy serves a largely rural territory, creating new growth opportunities—as well as maintaining the region’s existing manufacturing base—is critical, according to Gutzwiller.
“Communities either grow or slowly fade away,” he says. “As industries go through the growth cycle—and many times decline—new business and industries must take their place.” He says that’s why Hoosier Energy’s economic development initiatives are so vital to the long-term success of the communities it serves. “While we would like to say all of our efforts are altruistic, obviously we need growth of electric sales to keep our rates competitive and attractive,” he adds.
Another utility provider that has taken an active role in economic development is Commonwealth Edison (ComEd). Hector Garcia, head of economic and business development for ComEd, says the Chicago-based company engages with Illinois’ economic development organizations “from start to finish” and designs customized energy plans for large employers coming to the region. “We consider ourselves a key partner in driving job growth and economic vitality in [Chicago and Northern Illinois],” he says.
ComEd is so focused on economic development, in fact, that it sponsors the Rockford Area Economic Development Council’s (RAEDC) business retention program. Under ComEd’s partnership with the RAEDC—the city of Rockford is one of the electric company’s biggest territories—ComEd provides the council with dedicated business retention software for its annual “Voice of the Customer” initiative. “Analysis of RAEDC’s business visits offer real, tangible solutions to improve the regional economy,” Garcia says, which ultimately strengths relationships between local businesses and economic developers. It also puts Northern Illinois on the map for continued business growth, he maintains.
Further propelling business—particularly manufacturing—is
ComEd’s 10-year, $2.6 billion push to modernize Northern Illinois’ power system, a move that comes on the heels of the 2011 passage of the Smart Grid law. Garcia calls the investment a game-changer for local business, saying that it will enhance reliability and ensure the region’s electric infrastructure is equipped to handle the most sophisticated technologies. So far, ComEd has completed more than half of the infrastructure enhancements and installed more than 1 million new digital smart meters. Combined with the more than $440 million in energy-efficiency incentives ComEd has divvied out since 2008, Garcia argues that such upgrades have big implications for local businesses.
Winnebago County-area companies (home to Rockford) have especially benefitted from ComEd’s programs, enjoying more than $7.2 million in total business incentives since 2008. “Our electric utility attributes, along with the region’s assets, help position
Rockford as a destination for business growth,” Garcia says. But like Hoosier Energy’s Harold Gutzwiller, Garcia acknowledges that ComEd’s motivations for economic development aren’t completely philanthropic. “Altogether,” Garcia says, “delivering safe, reliable electricity; educating prospective businesses on the competitive energy market; and offering programs to save on energy are vital to Illinois’ economic growth.” And what’s good for the local economy is good for ComEd’s bottom line.
Not that it’s always that simple, Gutzwiller points out. “Utility-related economic development activities are not for the faint of heart,” he cautions. “Economic development is a long-term proposition and often the return on investment isn’t calculable or even evident.” Because of this, he encourages utility companies to do their due diligence and determine whether their region has sufficient financial and human capital to address ongoing needs before embarking on an economic development initiative. If the answer is yes—such as in the case of Columbus, Indiana’s TIEM—it can result in a win-win situation for all involved.