With 40 employees dedicated to economic development and heavy engagement in the majority of FDI projects coming to the state, Georgia Power in the US could easily pass for the publicly funded investment promotion agency. But the company, an Atlanta-based utility firm and the biggest company in the Southern Company holding, makes money from producing and selling energy.
“Supporting our communities has been embedded in our DNA ever since we were founded,” says Jonathan Sangster, general manager of economic development at Georgia Power. “But also, the more jobs and companies we have, the bigger our client base is."
This model may not be used on a wider scale, but utility companies in the south-east of the US have a long history of supporting economic development in their areas of operation. For its part, Georgia Railway and Power Company, Georgia Power's predecessor, had been involved in investment promotion since 1927, longer than any other economic development organisation in the state.
The 'more companies, more customers, more money' equation is simple, but how does investment promotion by private companies work in practice? “We have a team of project managers who develop leads and interact with clients, and a group of civil engineers who help with providing information on specific sites,” says Mr Sangster.
In that respect, the utility's economic development structure is similar to that of the entities run by local authorities. But, as a utility company, Georgia Power keeps close tabs on what is going on in the region in terms of infrastructure and demographic outlay. And that capacity – to gather and analyse various data points from across the state – can play a crucial role during negotiations with investors.
“The reality is that the site selection process is a site elimination process until investors have a shortlist of locations that meet their decision criteria the best,” says Mr Sangster. “That is why in many instances they submit a 'request for information' form with a multitude of queries, such as how many accountants or mechanics there are in the area, how many technical schools we have. Then they look at the data, make their shortlist and, if we are still in the game, they visit us.”
The first meeting between Georgia Power and prospective investors usually takes place in the company's resource centre, a modern office that contains a 50-seat auditorium. The resource centre is housed in an office complex just a 10-minute drive from the Georgia Power headquarters and even closer to the Georgia Department of Economic Development (GDED). In fact, it takes about four minutes to get there depending on the elevator traffic, as GDED's office is in the same building, 12 floors up from the resource centre.
“In a lot of states you have utilities collaborating with other [economic development] organisations, but we are co-located in the same facility and I think it is a differentiator for us,” says Mr Sangster.
Stan Vangilder, manager of the resource centre, describes the other advantages of the centre with its enormous viewing screen and multiple projectors. “We sit with the company and we say: this is how your site can look, this is your driveway and that is your parking lot. This is all conceptual, but helps investors to understand how the operation can fit on the site,” he says. “But, as much as our centre is about the data and visualisations, over its three decades of operation it has also evolved into a meeting place where we work on the relationships."
It is not just about meetings behind closed doors in which economic developers and investors talk about financial incentives. “We fill these 50 seats with community representatives, we talk about their strategy and their goals. We also facilitate meetings between the county and city officials,” says Mr Vangilder.
For Georgia Power, this is not just about being a 'good corporate citizen' and 'part of the community', there is a very practical dimension to it, too. “There is nothing worse than to show an investor around and to hear him ask – why did you bring me here? That is why we help local authorities to convey a message about how the new FDI project will influence the community,” says Steve Foster, senior urban adviser at Georgia Power.
After all the groundwork is done and site visits conducted, at the final stage, when the specific incentives are being negotiated with the state authorities, Georgia Power has to step back. “We do not offer any direct incentives. At that stage it is up to the state and local communities. We still stay in the room, but sitting at the back,” says Mr Sangster.
But, even if the decision is positive for Georgia, it is not necessarily positive for Georgia Power. It is not the only utility company operating in the area and investors are not obliged to use Georgia Power's services. Quite a risky strategy, as sometimes it takes years to secure a deal. But, according to Mr Sangster, the company's involvement in economic development pays off more often than not.
Although unable to share figures connected with the company's deal-win ratios, Mr Sangster says that they are “pretty high”. Indeed, Georgia Power delivers power to many of the companies that have invested heavily in the region, including Baxter International, an Illinois-based biotech giant, and Kia, a South Korean automotive manufacturer.
“Why do we do all that? It is really simple. What is good for Georgia will be eventually good for Georgia Power, whether we sell the electricity to a company or not,” says Mr Sangster.