NC East Alliance presents ‘State of the Region’

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One speaker warns of ‘Electro Magnetic Pulse’ cyber-attack on electric grid

The State of the Region conference attracted a large crowd last week in Greenville.

The State of the Region conference attracted a large crowd last week in Greenville.

From left, John Chaffee, Vann Rogerson, and John Evans.

From left, John Chaffee, Vann Rogerson, and John Evans.

GREENVILLE — The State of the Region presentation is an annual event sponsored by NC East Alliance, a multi-county business development organization based in Greenville. The function has been held at numerous locations throughout the region. This year the site was on home turf at the Hilton Hotel.

The annual conference attracts business leaders, nonprofits, and elected officials from throughout eastern North Carolina. NC East Alliance uses the opportunity to do some self-promotion, and it hosts decision makers from throughout the region – as they discuss strengths and weaknesses.

As is typically the case, the meeting began with a presentation from John D Chafee, Pres./CEO of the Alliance. He gave an overview of where there has been progress to increase business development among the member counties. In so doing, he mentioned the typical comparisons between rural versus urban, and the realization that business development throughout the region is the product of many variables.

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Some businesses look for low cost of land and construction costs while others look for large open spaces, or that the geography of the area being surveyed has good schools or transportation, etc.

Clearly, any business that wants to locate in an eastern North Carolina county needs to know that the area has a labor force that can meet its needs — whatever that might be, and whether the business is new or expanding.

Chaffee explained that economic development often occurs where there are an adequate number of “rooftops,” which means that there is a sufficient number of workers from which to draw, but less so in the rural communities, which need a different strategy.

Energy

Once Chafee had completed his opening statement, he introduced the first of four guest speakers for the day: Craig Poff, Director of Business Development for Iberdrola Renewables, a Spanish company that bills itself as the largest provider of wind energy in the United States. Poff directs all aspects of the development process including site selection, real estate, environmental assessments, permitting, engineering and government and public relations. He began his career in residential and commercial development before moving into wind energy development. He currently serves on the Board of the SE Coastal Wind Coalition and is a member of the North Carolina Sustainable Energy Association and American Capital Wind Energy Association.

According to Poff, the General Assembly’s approval of Senate Bill 3 in 2007 sent a strong endorsement of wind energy prospects for the state. The controversial legislation offered generous tax credits for renewable energy projects.

In an apparent contraction, Poff said nothing is subsidized with wind energy and that all funds are risk capital. Further in his remarks, he also made reference that in order for a project to be successful, one of the things that a developer looks for is the ability of a market to which you can sell your product. Senate Bill 3 requires the state’s utilities to purchase a certain percentage of their electricity from renewable projects.

Many observers consider the requirement to be an outright subsidy for developers of renewable energy.

Electricity generated by the Iberdrola project in Pasquotank County will go to the PJ M power grid — originally known as Pennsylvania, New Jersey and Maryland, but which has now been expanded into North Carolina and as far west as Chicago. He states that PJM makes energy distribution “at the speed of light” and that there is no storage in the system whatsoever.

Poff said four things are considered when trying to decide if a project will get off the ground.

The first is the hub heights, which typically are 300 to 400 feet above the ground with an average annual wind speed of 15 mph or greater. The next is transmission capability, which provides access to infrastructure that is capable of accepting the power that is generated. Third, a permit must be obtainable for the parcels identified. Fourth, a ready market must exist as explained above.

The current project in Pasquotank County is called the Amazon Wind Farm USA East. Their customer is Amazon Web services, which operates data centers in northern Virginia. The first phase of the investment in this project will amount to $400 million and eventually produce 104 turbines with rotors that are 375 feet long from tip to tip and 492 feet tall from ground to tip.

Iberdrola is constructing 60 miles of roads and receiving aggregate base material from Virginia and concrete from CRMP – requiring 15 trucks all day long in order to supply concrete for the massive foundations, which generally takes nine hours to pour just one foundation.

In addition, the turbines are being received through the North Carolina ports creating additional economic development on the business side. On the personal side they have 150 people working on the project every day, many of whom are staying in a variety of housing situations within the general area with family members that come in from out of town to visit, and eating in various restaurants.

Landowners receive annual lease payments, and Iberdrola has become the largest payer of property tax in both Pasquotank and Perquimans counties.

Environment

The next speaker was John Evans, Chief Deputy Secretary of the North Carolina Department of Environment and Natural Resources. Evans joined the department in 1992 then left the agency in 2004 to 2007 to serve as assistant attorney general in the NC Department of Justice. He returned to the agency in 2008 serving in various capacities before being elevated to his current position. He has published numerous papers on environmental topics and is an honors grad from North Carolina Central University School of Law. He also has earned a Bachelor’s Degree in Mechanical Engineering.

Evans pointed to the fact that the agency changed its name within the last year. He stated that customer service is a big part of what his agency strives to achieve. Getting people through the maze of the various regulatory issues is a key to successful Business Development for any project that has an environmental component.

He and the agency had been working with the federal government to explore offshore drilling for oil and natural gas and felt that they were making really good progress in meeting the requirements to achieve a successful outcome. However, the federal government removed this type of energy exploration from consideration, which Mr. Evans describes as regrettable. He does believe that the federal government will open areas of the Atlantic Ocean for Wind Leases somewhere in the area off of Kitty Hawk – perhaps as early as 2017.

One of the major issues that he and the agency are concerned with is Electro Magnetic Pulse cyber-attack on a segment of the electricity grid. He said this is becoming a concern throughout the entire country.

The Natural Gas revolution has been an important component in our energy resources but the state does not want to put all of its eggs in this basket. Likewise, nuclear development needs to be a part of the Energy Plan but there are no projects currently under consideration.

Evans discussed “federal overreach,” which has been dubbed the Federal Power Plant. It is not well known that the Obama administration proposed last summer to take over the system. Surprisingly, in a very unusual move, the Supreme Court issued a stay on this proposal, which was the first time ever. Evans is concerned that this project could become reality — North Carolina residents might see their electric utility rates increase by 44 percent, and that industrial and business users would see an increase of 10 percent to 30 percent. He is gratified to see that the legal challenge has been successful because there is so much at stake.

Transportation

Charles Edwards

Charles Edwards

The next speaker was Charles Edwards, Director of Freight and Logistics planning with the North Carolina Department of Transportation. He began his career in the logistics industry as a truck driver and worked his way up in the ranks to become director of one of the largest divisions of the largest agency in our state. Edwards was on the senior management team of the North Carolina-based airline that started United Parcel Service Airlines and helped to introduce an innovative container to the International Airline Industry. He managed a Commercial Airport, and led the development of the world’s largest air vehicle, and has been a senior advisor to public and private aviation and logistics projects in the United States. He holds degrees from universities in Canada, the United Kingdom and the United States. He has served on the faculty of the Darden School at the University of Virginia and has been a guest lecturer at universities throughout North Carolina and New Mexico.

Among Edwards’ top priorities is the issue of Port access. Not only do cargo ships have difficulty turning around at the Port of Wilmington, they must travel 17 miles up the Cape Fear River from open seas — a very slow process. The port of Morehead City, on the other hand, is only five miles from open seas ships do encounter difficulty turning around. In addition, truck traffic carrying containers out of both of ports are hamstrung with traffic signals and motor vehicle traffic trying to get into an out of the ports in order to get to open highway.

The fact that Highway 17 and US 64 West from the Virginia line to Raleigh has been identified, is a good thing albeit that it will take a long time to realize any benefit from increased transportation through the Highway 17 portion.

Carl Warren

Carl Warren

In addition, Carl Warren, Director Industrial Development-East for CSX Transportation also spoke. Carl has held a number of roles, utilizing his experience in infrastructure development, strategic planning and intermodal. In his current role, he is responsible for infrastructure development with Ports and Industrial development in South Carolina, North Carolina, Virginia, Maryland, Delaware, Pennsylvania, New Jersey, New York, Massachusetts and the Canadian Province of Québec.

Warren addressed the need to improve rail service from the North Carolina ports to and intermodal hub where cargo can be picked up by Tractor Trailer and transported to wherever it is needed. The Commonwealth of Virginia had the same problems several years ago that North Carolina is having now. They built what they called an in land Port in Front Royal Virginia to solve this problem and to give trucks the opportunity to pick up their car go from that location and transported on the interstate highway system all over the United States. We have a facility such as that in Kinston North Carolina identified as the Global Trans Park.

Conclusion

The State of the Region conference offered a wealth of information and many problems were identified. There are a number of very capable people who are working to solve these problems but to suggest that there is a solution on the horizon simply is not the case. There are demands for capital in every segment of our state and physical concerns that need to be addressed which groups like the NC East Alliance are working toward, but the progress is extremely slow at best.

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