ANDERSON — Eight communities served by the Indiana Municipal Power Agency may soon have a new tool in their economic development tool box.
The Anderson Board of Public Works on Tuesday and the Anderson City Council on Thursday gave preliminary approval to an economic development rider that would provide discounts for the purchase of electrical power.
Final approval is expected at the city council’s June meeting.
Tony Pochard, superintendent of Anderson Municipal Light & Power, said if an existing company invests $1 million or increases their electrical usage by 1,000 kilowatt hours it will be eligible for a discounted rate.
He said the same discounted rate will apply for a new company locating in Anderson that makes a $1 million investment and uses 1,000 kilowatt hours per month.
The discounted electric rate will be 20 percent the first year; 15 percent in the second year; 10 percent for the third and fourth year; and 5 percent in the fifth year.
Councilwoman Rebecca Crumes, D-at large, wanted to amend the ordinance to require council approval of any discounted electric rates. She wanted the council to at least be notified of any requests.
Council President Greg Graham, D-at large, said the council has no authority to approve a request made to Anderson Light & Power, which is overseen by the Board of Public Works.
He said the notification could be amended into the ordinance in June.
Crumes said she was concerned that a company denied the discounted electric rates would approach the council to overturn the decision.
City attorney Tim Lanane said there is an appeal process through the Indiana Utility Regulatory Commission.
“I support the program,” Crumes said. “I want the council involved in the approval process.”
Greg Winkler, executive director of the Anderson Economic Development Department, called the proposed economic development rider to lower utility costs a game changer.
“It’s a really big deal and won’t cost Anderson anything, the discount comes off the wholesale rate,” he said.
Winkler said part of the contractual agreement with NTN Driveshaft was at least a 5 percent economic development rider.
“This will meet that requirement, and NTK Precision Axle will also be eligible for the discounts,” he said.
“This is a huge deal,” Winkler said. “It makes Anderson very competitive with other markets. I think it will entice companies to look at locating in Anderson.”
Pochard said there will be no cost to Anderson Light & Power because the Indiana Municipal Power Agency (IMPA) will discount what it charges the city for the electrical energy.
“This is a great tool to provide incentives for businesses to locate or expand in our community,” he said.
The discounted electric rates have to be approved by both Anderson Light & Power and IMPA.
Pochard said investor-owned utilities like Duke Energy and Indiana and Michigan already provide the discounted electric rates.
“This will help us compete with other areas of Indiana and the Midwest,” he said. “The customer applies with Anderson Light & Power, and the city makes a recommendation to IMPA.”
Pochard said the IMPA board approved the program in March and it will eventually have to be approved by the Indiana Utility Regulatory Commission.
Bryan Brackemyre, economic development specialist with IMPA, said the agency wants to make the public power rates as low as possible.
“The decrease in fuel costs is allowing IMPA to make the program available to our communities,” he said.
Brackemyre said eight communities that receive power from IMPA will be applying with the Indiana Utility Regulatory Commission for the discount program at the same time.
“Anderson will not lose any revenues,” he said. “We provide the discount to the city, which then passes it on to the customer.”
Brackemyer said with the current economic conditions there is a lot of interest from companies considering locating in Anderson.
“When companies are looking at expanding or locating one of the top factors is the utility costs,” he said. “Utility costs are in the top five when it comes to business expenses.
“We’re excited about offering these incentives to companies looking to expand or locate in one of our communities,” Brackemyer said.
Follow Ken de la Bastide on Twitter @KendelaBastide, or call 640-4863.
Here are the key details of the economic development rider on electric rates being proposed by the Indiana Municipal Power Agency, which supplies all power to Anderson Light & Power:
• An existing or new company has to make an investment of $1 million and increase their electrical demand by 1,000 kilowatt hours per month, equivalent to the usage of 200 average homes.
• Discounts passed on by IMPA to APL and then to the customer.
First year — 20 percent
Second year —15 percent
Third and fourth years — 10 percent
Fifth year — 5 percent