by Scott Miller
smiller@scbiznews.com

One of the Upstate’s selling points to First Quality Tissue was cheap, reliable electricity – an economic development asset Duke Energy is investing millions of dollars to maintain.

 
First Quality, a family-owned New York company, announced plans last month to locate a $1 billion paper plant in Anderson County that will employ 1,000. When making the announcement, company representative Frank Ludovina cited many reasons for choosing the Upstate: work force, work ethic, infrastructure, business environment and an incentives package made available from state and local resources.

He also mentioned Duke Energy.

Brett Carter, president of Duke Energy Carolinas for North Carolina, was among a delegation that traveled to a First Quality plant in Pennsylvania during South Carolina’s recruitment of the company. The delegation also included Gov. Mark Sanford, state lawmakers, representatives from the Commerce Department, Anderson County and others.

“I think it went a long way in bringing a level of comfort to them that they could come to Duke’s territory in South Carolina and not have to worry about reliability issues that they may have faced in other parts of the country,” Commerce Deputy Secretary Jack Ellenberg said of Carter’s presence on the trip. “Duke Energy became involved (in the recruitment) before Anderson became a finalist.”

On the cost side, South Carolina is very competitive, regionally, nationally and internationally. According to data from the U.S. Energy Information Administration, South Carolina has one of the lowest industrial electric rates in the Southeast and the nation. Industrial consumers pay about 5.44 cents per kilowatt hour in South Carolina, while industrial consumers in the Northeast pay as much as 13.54 cents per kilowatt hour in Massachusetts. In neighboring North Carolina, the industrial rate is 5.61 cents per kilowatt hour, and in Georgia it is 6.14 cents per kilowatt hour. The U.S. average is 6.55 cents per kilowatt hour.

On international competition, Ellenberg and Upstate Alliance President and CEO Hal Johnson both pointed to American Yuncheng’s Gravure Cyclinder plant in Spartanburg. The Chinese company found utilities to be more reliable here, they said.

 
“When we recruited Yuencheng from China, they were pleasantly surprised with the reliability and the cost of electricity,” Johnson said. “It was such a cost savings that it made their project more profitable than they had imagined.”

Electric reliability and cost can be significant areas of concern for companies like First Quality that plan mass production. And Duke Energy has a team dedicated to facilitating economic development in South Carolina, working alongside state and local officials.

“The economic development team is singularly focused on bringing need jobs and industry to our service territory,” said Catherine Heigel, president of Duke’s South Carolina service region. “It’s a great thing for our business, but more importantly it’s a great thing for our communities.” 

Companies looking to invest here want to know that reliability and low-cost will remain.

Duke can’t make any guarantees about future prices, Heigel noted, but the company can point to a history of investing in infrastructure and generation.

“To some companies, power is an absolutely critical part of their business,” she said.

Duke Energy is building an 825-megawatt coal-burning plant at its Cliffside facility in Cleveland and Rutherford counties in North Carolina. When it begins operating in 2012, Cliffside Unit 6 will rank among the cleanest and most efficient pulverized coal-fired units in the nation, Duke said. The Cliffside upgrade will generate more than twice its current electricity output with significantly less emissions of sulfur dioxide, nitrogen oxide and mercury. The cost is about $1.8 billion.

Also in North Carolina, Duke plans to build two 620-megawatt natural gas-fired combined-cycle generating plants – one at a plant in Rowan County and another in Rockingham County – at a cost of around $1.37 billion.
And in South Carolina, Duke applied to build the 2,234-megawatt William States Lee III Nuclear Station in Cherokee County. That goal is to have that plant operational in 2021, Heigel said.

These efforts have faced pressure from environmental groups, but economic development leaders say new electricity development is a must.

“We need to make it easier to permit, quicker to permit for more nuclear-related facilities,” Johnson said.

“The federal government also needs to include nuclear in its definition of “renewable energies,” Johnson said.

Ellenberg noted that South Carolina has the sixth-highest population growth in the United States.

“So utilities not only have to keep up with industrial demand, but demand on the residential side too,” he said.