Duke Power and Economic Development: Proven History, Bright Future

Charlotte Regional Partnership Annual Meeting
June 17, 2003
Ruth Shaw
President
Duke Power

Good afternoon. What a pleasure it is to be with so many leaders from the 16 counties of the Charlotte Regional Partnership, right here in Charlotte.

I’ll confess it. I like power. I did my Ph.D. dissertation on power (the kind people have), and it is probably some sort of cosmic joke that I ended up at Duke Power, focused on the kind of power people need every day. So I like being in this crowd—a powerful group if there ever was one, committed to shaping the future of this region, knowing that together, we can make a difference.

Duke Power has been at the forefront of economic development in this region for nearly a century, building on a clear vision, business savvy, sound principles—and delivering reliable, competitively priced power for our customers. This partnership in economic development has been important throughout our history—and never more so than today.

• James Buchanan Duke (1856-1925) organized The American Development Company to acquire land and water rights on Catawba River in Chester, Lancaster and Fairfield counties.

• Workers installed power lines to energize the Charlotte region shortly after the turn of the last century.

• Catawba Power Company’s Catawba Hydro Station began operation in 1904 with 3,300 kilowatts. This is the first generating station on the Duke system, and this date is considered to be the birth of Duke Power Company.

Proven History

Many of you know the story of Duke Power’s beginnings, when Buck Duke, Gill Wylie and our other founders became the most formidable economic developers in the history of the piedmont Carolinas.

At the turn of the 20th century, this region languished in the rural, post-Civil War economic doldrums—an agrarian rut so deep that no one could see a clear way out. No one that is but Buck Duke. Duke saw the power of the Catawba River, the productive cotton fields, and the application of electricity to textile factories—and a vision was in the making.

Duke was no dreamer; he was a doer, and in March of 1904, the Catawba Hydro Station began producing electricity to its sole customer, the Victoria Cotton Mills. That small station, with its rope-driven generation, began the realization of a vision of interconnected power plants, located along the 220 miles of the Catawba/Wateree river system.

Duke did not stop there. He knew the importance of transportation, and he built an electric railroad, the Piedmont and Northern, which ran from Anderson, S.C. to Gastonia, N.C., carrying freight and passengers, and bearing the proud logo of “A Mill to the Mile.”

The stage was set for one of the most spectacular industry raids in history. abundant, inexpensive electricity; access to raw materials; people hungry for work in the mills. In 1925, New England had 80 percent of the cotton textile industry. By 1954, it had 20 percent. And much of the remainder was in the Carolinas.

It was not an easy road—economic development rarely is. Many people feared electricity in the early 1900s, and one mill owner was emphatic. “You must be drunk or a damn fool if you think I will bring electricity into my mill to kill my people.. Others were ready to be partners, and Duke was willing to invest in mills that would locate near his hydro plants.

From the beginning, Buck Duke had a bold plan—a plan that did not recognize city limits, county lines, or state borders. He looked at a region connected by its river highway and its natural resources. He did not envision a few power plants serving one or two mills, but an integrated system of large generating stations with transmission lines that would enable them to serve the needs of the region.

Bright Future

Over the years, Duke Power has continued this tradition of expansive vision, executive leadership, customer focus and public/private partnerships to promote prosperity in our region.

It is no surprise that former Duke Power Chairman and CEO Bill Lee was one of the founders of this Partnership, or that Bill spent the last day of his life lobbying for a jobs tax credit bill that would help attract more jobs for the region. He was worried that we were losing the economic recruiting wars to other Southern states who were determined to “eat our lunch,” since the Carolinas had long been the states to beat. We were, he thought, losing our edge, and he intended to do what he could to make sure we kept it.

Today, the counties of the Partnership are at a critical juncture. Like the rest of the country—and indeed, the world—we are battling extended economic doldrums. We have faced the reality that the hundreds of thousands of textile jobs we have lost over the past decade are not coming back. Our competitors for business are not just other states, they are other nations.

On the bright side, we are seeing the power of new “business clusters,” such as the automotive services cluster surrounding BMW or the biopharma cluster in the Research Triangle.

We know we must think regionally; that we must build on our competitive advantages; that we must have first-class infrastructure; and that we must compete head-to-head with a full package of benefits to attract big business that can become the center of a potent cluster. There is no substitute for hard work toward a shared vision.

At Duke Power, we are committed to do our part. That starts with competitively priced electric power. Our retail rates are 21 percent below the national average, and are holding at roughly the same price as in 1986. We are focused on innovative approaches that will help attract new and expanding businesses by providing some period of reduced electricity cost. Make no mistake. We do not intend to disadvantage existing customers, and we work hard to address business expansion as well as new business. We must have a full quiver of incentives if we are to reap the benefits of business growth in our region. The latest example of this innovation—featured on the Partnership’s Web page—is an economic redevelopment tariff designed to attract tenants to vacant commercial and industrial buildings, and which offers half-priced electricity for the first year of occupancy in eligible facilities. New business benefits us all, as jobs are created and revenues increase.

And despite the travails of the recent hard winter storms, Duke Power’s customer satisfaction is consistently at or near the top on a range of national measures and surveys.

Duke Power is also committed to be a steward of our environment and a responsible corporate citizen. Clean air and water are fundamental to good life and good business. Emissions from the burning of fossil fuels in transportation, industry and power plants contribute to smog and other air quality concerns in the Carolinas. Duke Power’s investment of nearly $2.2 billion in emission controls for our coal-fired power plants over the next decade will mean that these plants will be far below current federal limits for nitrogen oxide and sulfur dioxide emissions. These reductions in emissions are a significant response to the upcoming designation of ozone and particulate matter “non-attainment” areas.

We are in the midst of renewing our federal license to operate the Catawba/Wateree system, bringing to the table many stakeholders who care about recreation, water supply and environmental preservation as well as electric generation. The result will surely be an approach that takes into consideration the many voices of the river—that vital current of our region.

Beyond this basic strategy, Duke Power is putting more mind, muscle and money into economic development. We will be at the table, doing what we can to drive deals to the finish line.

I am actively engaged at the state and regional levels on policy issues that affect our ability to attract businesses and on specific transactions where I can make a difference. We have just named Tony Almeida as vice president of economic development for Duke Power, and Tony will bring his boundless energy to focus on this important area.

What’s more, Duke Power has created a Carolinas Investment Fund which directs cold, hard cash through economic development organizations to help attract businesses to our service territory. In one recent example, Mike Almond was down to the wire with an international prospect considering two sites—one in the Partnership, and one in Georgia. Duke Power came to the table with a grant to be directed to the business through the Charlotte Regional Partnership, and the field was narrowed to one location—ours.

Conclusion

Looking back, and looking forward, though much has changed, much is still the same in economic development for the Charlotte Region. We have been favored with an abundance of natural resources, more than our share of visionary leaders, and a work ethic that goes after business the old-fashioned way.

Just as Duke Power has helped shape this region over the past century, you can count on us to be part of building a bright future, at the table with ideas, solutions, resources—and competitive rates and superior service for electric customers in the Carolinas. We thank you for your business—now let’s go get more of it for the Charlotte Regional Partnership!