State competing for alternative energy firms

aleasha.standley@heraldbulletin.com

INDIANAPOLIS - When it comes to attracting new businesses to Indiana, state officials believe Anderson and the Interstate 69 corridor could be the perfect place for electric automobile companies to locate.

"Clusters generally work," Indiana Economic Development Corp. Director Mitch Roob said. "There's kind of a new energy cluster that is developing up the I-69 corridor."

Roob said although state officials welcome any new business interested in Indiana, the state is especially poised to attract companies related to the new generation of vehicles.

"There are certain unique skill sets Indiana has because of our long history of engagement in the auto industry," he said. "We've also done a lot of stuff over the years with electric vehicles.

"People that are looking at electric cars gravitate to people who have experience with electric cars. If you want to build electric cars, you should come to Indiana."

But while in the midst of competing with other states like Michigan and Kentucky, which also have large numbers of automotive workers, Indiana has to use its resources wisely, Roob said.

"We're not going to throw a gazillion dollars at this or anything else," he said. "We have been pretty cost-effective in the use of our incentives. We won't win every deal, but I think companies that are in this for the long haul will see that Indiana is a better value."

Roob said some other states might appear to be putting more money into getting federal stimulus dollars to attract businesses and offering them tax incentives. Indiana, he said, might not be able to do that all the time, but is committed to keeping business taxes low. He predicted other states would raise their businesses taxes once they landed a company.

Bill Wylam, who was involved in General Motors' first attempt at an electric car in the 1990s, said Indiana was likely to receive some stiff competition for companies interested in alternative energy. He said other states had set up partnership between companies like GM and their local universities and governments to go after federal stimulus money for electric vehicle projects.

"There's some tough issues," Wylam said. "In the long run, how's Indiana going to compete? Indiana's doing some things that have been effective, but what they might have to do to compete with some of these other states, some people in Indiana might think is too much."

Indiana, however, is in a better situation that some states, like California, that made promises to companies that it likely can't keep because of a budget crisis, Wylam said.

"The reason (Indiana is) not broke is it hasn't gotten involved in some of these big giveaways," he said of the state's $75 million two-year budget for these types of projects.

Eric Burch, director for policy and outreach for the Indiana Office of Energy and Defense Development, said the last time that agency gave money to an alternative energy company, it went to Anderson's Altairnano, which creates lithium-ion batteries and products for the U.S. Department of Defense.

The office will oversee, however, $68.6 million in federal stimulus money that will go toward an energy plan submitted by the state. The agency expects to hear in the near future whether the plan was approved by the U.S. Department of Energy, and Burch said he couldn't discuss details of the plan until it was approved.

The Indiana Office of Energy and Defense Development also oversees $14 million for an energy efficiency and conservation block grant.

"What we're trying to do as the state energy office is to make sure that information is available to Indiana companies and that they're aware of it," Burch said. "It's something we've never shied away from. We're always ready to step up and say this is what we've got. We do what's feasible to attract companies here, give them a real idea of what it would be like to have their company here."

The state has taken other measures to be competitive in attracting alternative energy companies, such as creating the nonprofit Energy Systems Networks, which allows companies, universities and governments to interact, and establishing the 21st Century Fund, which awards competitive grants to businesses.

"I Power Energy Systems has two significant grants from the 21st Century Research Fund," Wylam said. "It's been helpful in this area."

Even with funding for alternative energy companies at the top of the state's and federal government's lists, it will take time before it is clear how well those companies will do, Roob said.

"It's predicated on radically altering the energy economy that's helped make Indiana a place for manufacturing," he said. "You've got to increase electric rates awfully high to make (wind and solar power) cost effective. That would affect every Hoosier pretty negatively."

The alternative fuel automobile could be more cost-effective than other energy uses.

"To the degree in which you think importing oil is a negative, it really reacts more to the electric car industry than it does to the coal industry," Roob said.