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Inward Investment Guides

March 2010 Report on The Plains States: Discovering and Nurturing New Business

Mali R. Schantz-Feld (Feb/Mar 10)
(page 2 of 3)
South Dakota reports several wind developments. Iberdrola Renewables started construction on the Buffalo Ridge II wind farm in Brookings and Deuel counties; when completed, it will be the state's largest wind farm. In Hand County, the Titan I 25-megawatt project went online in late November. NextEra Energy, formerly FPL Energy, started construction in November on a 99-megawatt wind farm in Day County. The proposed Hyperion Energy Center in Union County - that will consist of a state-of-the-art greenfield refinery and a hydrogen-producing IGCC power plant to generate hydrogen, power, and steam - is anticipated to begin construction this year.

Incentives Pique Interest
All of these states are establishing incentives to pique the interests of potential alternative energy developers. In Iowa, Governor Chet Culver and the Iowa legislature created the Office of Energy Independence and the Iowa Power Fund, a $100 million research and development fund that will be dedicated to the future of renewable energy and reducing the use of fossil fuels.

Kansas created new financial incentives and pro-energy policies as well, initiating a new incentive that authorizes up to $5 million in bond financing for eligible wind and solar projects in the state. This was one of the key factors in Siemens Energy's decision last spring to come to Kansas. Additionally, cost savings are offered to expanding businesses through the elimination of property tax on new business machinery and equipment, as well as income tax credits, sales tax exemptions, and training assistance. In spring 2009, the legislature approved a new incentive, the Economic Revitalization and Reinvestment Act, for eligible wind and solar equipment manufacturing projects. The act authorizes bonds that provide financial support and are repaid from withholding taxes generated from the new job creation. To qualify, a project must create at least 200 jobs within five years, pay at least a $32,500 average salary, and generate a minimum capital investment of $30 million.

Many energy-related incentives and business climate improvements passed in North Dakota's 2009 legislative session including a streamlined siting process for pipeline and transmission infrastructure, property tax reduction for wind towers, a sales and use tax exemption for wind towers, an income tax credit for renewable energy devices, as well as tax exemptions for improved oil extraction and benefits for coal projects.

Educational programs such as the Cloud County Community College's Wind Energy Technician program, the Wind Applications Center at Kansas State University, and the Kansas Wind for Schools program encourage education and training to nurture and encourage a future work force in this sector.

Economic Diversification
Although energy is a prime focus of the Plains States' economy, diversification is still imperative to economic vigor. Nebraska reports development announcements across the state from a variety of firms, including Yahoo!; Specialty Protein Producers; Novozymes; InterSystems Inc.; PayFlex Systems USA; The Buckle; Vireo Resources; and Vantage ILM/Structured Solutions.

Computer database business Structured Solutions of Altadena, Calif., opened an operations center in Grand Island, Nebraska, in January. The deciding factor for this deal was "the educational aspect," says Robert Yuan, the company's CEO. "We are co-developing a curriculum at the Grand Island Community College so people can become certified in our system, and we will create a pool of quality people to choose from." The firm is one of the first technology companies to locate in the area. Yuan notes that Nebraska's reputation for following up on their development programs and dedication to "same message, commitment to execution" made them "take a chance." So far, "heir response rate and cycle time is phenomenal. Like any long range strategic plan, we have to get the right resources in place and be patient."

Nebraska also heralded plans for a data center in La Vista and a customer care center in Omaha for Internet search engine Yahoo! Scott Noteboom, director of data center operations, for Yahoo! Inc. notes, "We are thoughtful about our site locations with the goal of benefiting the local community, local businesses, Yahoo! business operations, and our users worldwide. We took many areas into consideration when choosing the Omaha site to fulfill these goals and maximize our operational efficiencies, including the Nebraska Advantage incentives for web portals; low-cost, publicly owned utilities; solid network and electrical infrastructure; a productive work force."

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