WILLIAMS: Where the Smart Money Goes

SUBMITTED BY KELLEY WILLIAMS WITH BIGGER PIE FORUM

“Capital goes the place it’s welcome and stays the place it’s appreciated,” Williams writes.

The legislature met in particular session final week and voted $247 million in state incentives (sweeteners) for Metal Dynamics’ new $2.5 billion recycled aluminum plant and different investments.  The plant is to be in-built The Golden Triangle. (Starkville-Columbus-West Level space) in Northeast Mississippi.  The justification for the incentives is jobs, associated investments, and different financial multiplier results.

We’ve heard this justification earlier than. Bear in mind Kemper’s $7 billion failed lignite to artificial pure fuel experiment, Kior’s $76 million pine bushes to diesel fantasy, Stion’s $75 million unworkable photo voltaic panels, Twin Creeks Applied sciences’ $24 million silicon panels chapter, the notorious Beef Plant hustle, and so on.

Nevertheless it seems we discovered one thing from these embarrassing fiascos.  They left taxpayers on the hook whereas promoters and movie star administrators skated.  (Bear in mind Condoleezza Rice with Kior inventory choices gushing about its imaginary know-how?)

This time there are strings hooked up to the incentives to forestall repeats.  However they most likely received’t be wanted.  This mission seems to be actual.  Metal Dynamics is an actual firm with a profitable monitor report with actual merchandise, know-how, know-how, and pores and skin within the recreation.  This seems to be just like the Toyota and Continental Tire initiatives.

The plant is to be positioned within the Golden Triangle Industrial Park the place Metal Dynamics already has a metal mill.  The situation is critical.  Why?  The realm is a sophisticated manufacturing hub with $6 billion current investments and 6,000 jobs.  It has a labor pool of 500,000 folks.  Mississippi State graduates 600 engineers yearly.  Group schools provide superior robotic coaching for firms within the space.  It’s a producing cluster with important mass and flywheel development momentum.

It has good infrastructure: interstate freeway community, entry to the Tennessee-Tombigbee waterway, regional airport, rail service to industrial parks, and electrical energy from the Tennessee Valley Authority (TVA).  Dependable and reasonably priced electrical energy is important for recycling aluminum.

TVA is probably the most dependable and sure the most cost effective supply of electrical energy within the state for such initiatives.  It has a various era fleet and a strong transmission system to straight serve massive prospects.

Coincidentally, it’s (flippantly) regulated by the Federal Vitality Regulatory Fee (FERC) – not by the Mississippi Public Service Fee which introduced us Mississippi Energy’s Kemper County Lignite Plant.  And now brings us photo voltaic producing vegetation with increased value and fewer dependable electrical energy.

TVA is basically self-regulated.  Not surprisingly, it appears to ship extra reasonably priced extra dependable electrical energy than different utilities within the state topic to oversight by the PSC (assisted by the Mississippi Public Utilities Workers).

There’s predictable opposition to the Governor’s particular session and incentives for the aluminum plant.  Critics say it’s not proper to supply incentives to encourage financial improvement whereas ignoring urgent human wants issues.  They cite Jackson’s perpetual water plant points, unused potential Medicaid funding, rural hospital closings, and so forth.  Additionally they play the race card.

The truth is competitors drives incentives.  Firm executives play the: “I can find my plant in Alabama or one other state” card.  It’s true to a level.  However there are fewer location choices if the plant requires a lot of reasonably priced dependable electrical energy.  These choices are reducing as extra electrical utilities contaminate their grids with intermittent inexperienced vitality (photo voltaic and wind).

So the Governor holds some playing cards too.  Different firms with vegetation requiring dependable electrical energy will doubtless discover the Golden Triangle enticing.  Sadly, they’re much less prone to discover central and south Mississippi as enticing.  That’s as a result of Entergy and Mississippi Energy have monopoly service areas there.  Their electrical energy is turning into dearer. Entergy is including costly, intermittent, much less dependable solar energy to its grid.  Mississippi Energy is shutting down older vegetation with low-cost electrical energy in favor of dearer electrical energy from PSC face-saving remnants of the Kemper debacle.

The Governor would maintain extra playing cards if these utilities have been extra aggressive.  Mississippi is crossed by one of many nation’s largest concentrations of high-capacity pure fuel pipe traces.  It has the potential so as to add virtually limitless dependable producing capability to draw different vitality intensive manufacturing vegetation.  Many firms with such vegetation are fleeing Germany and different international locations the place mandated inexperienced vitality has destroyed their economies and impoverished their residents.

Mississippi might be a haven for these firms.  Not simply within the Golden Triangle.  The PSC may encourage and allow the utilities it regulates to grab this chance.  Why doesn’t it?  Why does it allow and encourage these utilities to do silly issues which can be good for his or her investor shareholders however unhealthy for patrons?  And unhealthy for the state’s financial development.

Capital goes the place it’s welcome and stays the place it’s appreciated.  The CEO of Metal Dynamics stated: “We’re wanting to increase our presence in Columbus, and we admire the nice and cozy welcome and assist that we’ve got obtained from Governor Tate Reeves and Mississippi.”

As we speak, good cash goes the place there’s dependable reasonably priced electrical energy.  Kudos for the Golden Triangle’s success and FERC / TVA’s contribution of low-cost dependable electrical energy.  Rotten tomatoes for the PSC / Entergy / Mississippi Energy’s dearer much less dependable electrical energy in the remainder of the state.

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Submitted by Kelley Williams with Larger Pie Discussion board. Selling market-driven financial development for a much bigger and brighter Mississippi. Be taught extra about BPF right here.