Keeping existing industry healthy and retaining jobs are always important, but with the U.S. economy now in recession, it is even more critical. While new projects often steal headlines, existing business and industry is the main driver of job creation.
To this end, the Tennessee Valley Authority (TVA) has launched a new program that offers incentives for business and industry in its seven-state area to stay put. On Oct. 30, the TVA board approved a new economic development program called the Valley Investment Initiative. The program offers incentive awards to existing industries that remain in the Tennessee Valley, increase their capital investment, add quality jobs and use energy efficiently.
Minimum qualifications for industries to be eligible for an incentive award will include investing a percentage of their facilities’ value in their Tennessee Valley operations annually and meeting minimum workforce and monthly power demand requirements.
“The goal of the Valley Investment Initiative is to enhance economic development of the Tennessee Valley and reward the industries already here for their contributions to economic growth,” said TVA senior vice president of economic development John Bradley. “The amount of incentive award a qualifying company could receive will depend on the company’s overall contribution to the Valley economy and compatibility with TVA’s power system and environmental goals.”
The Valley Investment Initiative grew out of the utility’s 2007 Strategic Plan. TVA periodically reviews its economic development program portfolios and introduces new initiatives to adjust with changes in the marketplace and customer needs. TVA’s 2007 Strategic Plan recognized economic development as a core part of its mission, and directed efforts to consider, among other things, the quality of jobs created, capital investment, environmental impact, load volatility and capacity needs in order to balance the needs of TVA, companies and communities.
“Current conditions do require a more targeted approach to economic development,” Bradley said. “The Valley Investment Initiative program rewards desirable corporate behavior, such as continued capital investment in the Valley, employment of workers with above average wages, energy-efficient operations and load characteristics that complement the TVA system. Combined, these factors benefit existing industries, the TVA system and the Valley economy.”
The Valley Investment Initiative program does not have funding for the current budget year. Funding for the program will be determined annually through the TVA budget process. TVA will work with local power distributors and directly served customers on the design and implementation of the program in the coming months.
Funding will not be available until Oct. 1, 2009, when the TVA board considers the fiscal year 2010 budget.
The size of the award qualifying companies will receive depends on the outcome of an extensive program evaluation that includes criteria such as: energy efficiency; wages; capital investment; jobs retained and/or created; and, power usage characteristics during periods of high demand and annually.
In the coming months, TVA said it would work with local power distributors on the design and implementation of the new Valley Investment Initiative, and will begin meeting with industries to discuss the program after April 1, 2009, when the program becomes effective.
TVA reports early response by customers to the new program has been positive.
“TVA power distributors have played an important role in helping to shape the VII program concept. We continue to be encouraged by the support this effort has received,” Bradley said.
The utility hopes the Valley Investment Initiative keeps its economic development momentum rolling, as the TVA had its second-best year ever for business investment in 2008. Volkswagen’s decision to build a $1-billion plant in Chattanooga, Tenn., helped boost total investment.
TVA’s economic development staff worked with its partners on new and expanding business projects in fiscal 2008 that brought more than $5.5 billion to the Tennessee Valley, and should generate approximately 41,620 jobs.
Bradley pointed to the Toyota plant in Blue Springs as an example of the ripple effect caused by such a large project. Both the Volkswagen and Toyota plants are being built on sites certified as automotive megasites by an independent consultant as part of another TVA initiative.
Bradley said 2008’s numbers are good considering the challenging economic climate.
“I think we had a substantial year, given the market,” he said.
Contact MBJ staff writer Wally Northway at email@example.com.