Entergy Arkansas Juices Economic Development

Arkansas Power & Light, Entergy’s original forerunner, once made home economics a part of its economic development work. This exhibit was set up in a gymnasium in the 1950s.

When economic developer Danny Games foresaw a billion-dollar steel mill in Osceola over a decade ago, he knew the project would need both the nearby Mississippi River and an altogether different kind of current.

“High-voltage electricity, and well-priced high-voltage power,” he said, along with river barge access. As a former senior project manager at Entergy Arkansas Inc., the state’s largest electric utility, Games was in a strong position to help. Though his first bid for a steel plant was rebuffed in the early 2000s by Thyssenkrupp AG of Germany, the Osceola site eventually landed Big River Steel in 2013 in the state’s largest economic development endeavor to date. In June, the $1.3 billion steel plant announced a $1.2 billion expansion plan.

The steel project, like Entergy’s 2007 triumph bringing LM Windpower (now GE) to the Port of Little Rock, illustrates a little-known reality: Entergy, which serves over 700,000 electric customers in Arkansas, has long been an engine of economic development, a gene present in the company’s DNA since its birth more than a century ago.

“When you talk about our involvement in economic development, the accurate answer is really since the founding of the company,” Games said.

Big projects and power consumption go hand in hand, he said, noting that rural electrification was one of the top economic drivers of the 20th century. Nowadays, electric infrastructure is crucial as site readiness becomes growing companies’ top concern.

Entergy’s eight-member economic development team and support staff help Arkansas communities prepare. Games is Entergy’s director of business and economic development.

Games left Entergy in 2007 and spent a decade in the natural gas industry and at the Arkansas Economic Development Commission. He rejoined the utility early this year. Asked what economic developement can do for utilities, he replied, “If you want to sell more electricity, you need more customers. It’s simple.”

Entergy’s DNA
To illustrate, Games plunged into history, both America’s and Entergy’s.

“Back in the 1800s, railroads were the forerunners for economic development before there was even a catchphrase for it,” Games said at a table in his office in the Simmons Tower in downtown Little Rock. “They moved people and freight through the country and built lines that determined where cities and businesses were built.”

In the early 1900s, electrification began driving growth. “That was the impetus behind the industrial revolution,” Games said, citing Entergy’s original forerunner company, Arkansas Power & Light. “When our company was founded, Harvey Couch knew that to serve more customers you have to build out your electrification system, and he became the forerunner for the entire state. He was a friend to titans of business, to presidents, and he would bring companies and financiers into our state to sell them on its resources.

“He obviously had an interest in growing his company,” Games said. Couch, born in 1877 as a Columbia County minister’s son, built an empire on telephone and power poles and made industry a partner to Arkansas’ agricultural economy. Couch’s 1914 purchase of a 22-mile electrical line from Malvern to Arkadelphia gave rise to Arkansas Power Co., which became AP&L and then EAI, an arm of Entergy Inc. of New Orleans.

Entergy’s economic development group, with dedicated help from company engineers and customer service representatives, works hand in hand with the AEDC, where Games once worked around the corner from Mike Preston, the state agency’s executive director. “We used to wear out the carpet around that corner,” Games said. “We’re like-minded and realize that the competition for these projects is only going to get better. The bar is constantly raised higher.”

So Entergy’s economic development group emphasizes preparedness.

“We do a lot of what AEDC does, but not all that they do,” Games said. “We’re aligned in business development and we have dedicated project managers working with prospective companies to satisfy needs.”

The program includes an existing industry segment that works on expansions and accounts of large customers. The other side, the community development initiative, works on site preparation and matching sites with prospects.

When Harvey Couch built Arkansas Power & Light Co. in the early 20th century, he first burned sawdust to generate electricity, then turned to hydroelectric sources. Work on Carpenter Dam, left, was started in February 1929. Its big brother on the Ouachita River, Remmel Dam, finished in 1924, created Lake Catherine, which is named for Couch’s daughter.

Readiness Is Crucial
In recent years, Entergy’s efforts have helped to land companies like Welspun Tubular in Little Rock, which makes steel pipes and employs 950, and Hino Motors Manufacturing in Marion, which has 750 workers and makes automotive axles and assemblies (see sidebar).

The key is showing companies they can move in quickly, and that falls under a program called Select Sites. “I liken it to if you’re trying to sell a home,” Games said. “You can sell it as-is, and hope people overlook some of the problems and risks, or you can go about getting that home ready, investing time and energy to give prospective buyers more certainty.”

Preston said the AEDC gets help from public and private-sector partners, as well as utilities, to make Arkansas enticing for projects to grow and diversify the economy. “One of the best ways to attract investors in manufacturing, corporate headquarters and data warehousing is having shovel-ready sites that are ready to build and utilities that help communities be more competitive for jobs and investments,” Preston said. “The team at Entergy plays an integral part in reaching the state’s overall goal.”

 Danny Games

Entergy works with AEDC on its Competitive Communities Initiative, which evaluates participating communities for preparedness. “Good community development precedes good business development,” Games said, wishing he had an Arkansas football program metaphor to mention. Instead, he quoted the mantra of a rival, Alabama coach Nick Saban. “Just trust the process, do the work and pay attention to fundamentals. You’ll get the result you desire.”

In the case of Big River Steel, the third try was charmed for Entergy. Thyssenkrupp first decided not to build in the U.S., then eventually put a plant in Alabama. But former Nucor Steel executive John Correnti, who became Big River’s CEO, remembered the Osceola site and pursued it, choosing it in 2013. (Correnti died in 2015.) The land was largely owned by Entergy, which bought it for a potential power generation plant and offered it up as an example of one of the Competitive Communities Initiative’s “four pillars” of economic development: local site control or ownership. “That’s a big issue. Having a plot of land in mind is not an available site; you actually want a legal option or ownership that you can rightfully represent.”

The other three pillars are having an economic development unit with strong leadership and access to funding for local incentives or infrastructure investment; ready and presentable site options; and what Games calls the workforce narrative. “You have to be able to articulate the kind of workforce you have, the skill sets available and educational amenities,” he said.

He said the CCI program is practical, intended to give mayors, county judges and chamber officials useful tools to land economic projects. “They have to answer questions and then they’re evaluated by a team from both AEDC and the respective electric utility,” Games said.

“It’s important for communities to get a healthy self-assessment and see relative benefits. A 20-employee operation in McGehee or Dumas is equivalent to several hundred jobs in Little Rock. So right-size yourself and be who you are.”

Every business executive knows time is money, but in economic development, it’s often the whole pot. “In almost every case, a company looking to put in an operation has options among several states,” Games said.

Smooth Landings

Entergy Arkansas economic development chief Danny Games knows state economic development priorities inside and out, having also worked for the Arkansas Economic Development Commission and private energy companies.

“In our world, being on time and ahead of the competition is the key,” said Games, whose eight-employee unit is backed up with designated engineering help and 15 customer service representatives working with communities across the state.

He and and his colleagues offered a sampling of some major projects the team has helped to land since 2000:

Checking Off Every Box
“When a company wants to go to market, expand, add product lines or capacity, they’re making decisions under current market conditions. If they could flip a switch and, boom, they have this capacity, they’ve eliminated this little thing in between called risk. What looks good now could be devastating to your company eight or nine months out, so when we discuss being prepared, we look to shrink that window of uncertainty.”

A town with a 100-acre site available should be ready to check off every box on a company’s wish list, from power, water and sewer infrastructure to regulatory guidance. “The governor says we’re not in this just to compete, we’re in it to win,” Games said. “That’s the mentality.”

The formula for winning includes incentives, but Games said simply offering companies more isn’t a sustainable plan. Big River Steel was landed with a multimillion-dollar package of state incentives, including a $125 million bond issue under Amendment 82 of the state Constitution, also known as Arkansas’ “superproject” provision.

The expansion going on now will double the plant’s hot-rolled steel production capacity to 3.3 million tons a year and will mean an additional 500 steel jobs in northeast Arkansas paying an average of some $75,000 a year, the AEDC said. Construction, which could be completed in mid-2020, will involve some 1,300 workers.

Games said his team at Entergy may have its eye on as many as 50 potential projects at any one time, but is really competing for 20 or 25, with even fewer facing imminent decisions. “Right now, we’re a little low on available building inventory, which speaks of a great economy, but we want to make sure we’re listing everything we possibly can.”

Entergy’s site selection center, an online database, is used by the AEDC as its resource on available sites and buildings. “We push that out to communities to get their sites and buildings onto that database,” Games said.

To emphasize how crucial preparedness can be, Games recalled how LM Glasfiber came to choose a spot near the Little Rock port for its wind turbine factory in 2007. After a location consultant identified central Arkansas as a possibility, along with sites in Texas and Oklahoma, LM’s regional account manager for North and South America, Warren Ault, went over the company’s wish list with Paul Latture, then executive director of the Port of Little Rock. Ault was asking questions about the site, with Latture answering each by directing him to a certain tab in a three-ring binder the economic development team had prepared.

After about five questions, Ault asked about soil samples, but said that based on Latture’s ready answers, he expected to just be directed to another tab. He was right, and he got to keep the binder.

“That was the shortest discussion about a site I’d ever been involved in,” Games said. “It was there, it was ready, and everything had been vetted.”