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Posted on July 16, 2019 by Jacob Luecke (sscottmochamber)
Legislation passed in 2018 promised to modernize Missouri’s electrical grid. Today, that’s becoming a reality as our state is undergoing its biggest across-the-board power system upgrade.
The work is massive in scale and amounts to more than a billion dollars in investment each year for Missouri. Yet, for most consumers, the changes happening so far are largely invisible — even though they are having a significant economic impact in communities across the state.
Take, for example, power transformers. Missouri has thousands of them. The new law is causing many transformers to be upgraded to newer, more efficient models. The change probably won’t register to most Missourians, who have no idea where their local transformer is located or what it looks like. If you need help visualizing it, Phillip James describes it as “the largest gray box in a substation.”
James is the general manager at WEG Transformers. The Franklin County company is currently building a large order of new transformers for Ameren Missouri. It’s very detailed work involving precisely coiling copper wire, installing a multitude of connections and protecting the unit with a custom metal housing.
Upgrading Missouri’s grid has led to more than 20 percent growth at WEG this year, and the surge of new work has caused the company to retool and upgrade its production process. James said the company’s employees are excited to work on a project that’s helping their home state.
“It gives us a tremendous amount of pride,” James said. “It’s great to help our state with the products we build and to have our company receive the benefits of employment and business growth.”
WEG Vice President Marc Schillebeeckx said the new state law is creating benefits for his company and will lead to improvements for electric consumers across Missouri.
“This bill was needed for the state of Missouri,” Schillebeeckx said. “At WEG Transformers, this particular bill has contributed a significant amount of growth. But it’s not only for us, it’s also for consumers. It will help generate growth and, therefore, prosperity for all the people.”
The changes being made to Missouri’s electric grid can be traced back to Senate Bill 564. Before the bill was signed into law last summer, the state was operating under energy laws that dated back to the early 20th century.
“We were one of only seven states that hadn’t taken action to update those energy laws,” said Matt Forck, assistant vice president of community, economic development and energy solutions at Ameren Missouri. “When you’re working with a 1913 regulatory model and then you update that like we did, it’s going to lead to more investment in the grid.”
In the wake of the new law, Ameren unveiled what it calls the Smart Energy Plan, including $5.3 billion in capital investments over the next five years encompassing more than 2,000 projects. The company expects the investment will lead to the creation of about 3,000 jobs.
“People think of linemen working from a bucket truck, but it’s also leading to job creation for our suppliers and vendors who are doing all sorts of work,” Forck said. “It’s going to be wonderful for job creation in our state.”
Part of that positive impact is being felt at Joplin-based BBC Electric. The company has around 200 employees who focus on building and maintaining power lines and related equipment. The company’s work is spread far and wide, doing everything from working on transmission lines in Ohio to helping hurricane-proof the energy infrastructure in the Virgin Islands.
Recently, BBC has been hiring workers in St. Louis. As part of Ameren’s Smart Energy Plan, the company is installing new technology across the region that will help the power company better isolate outages and more quickly identify problems so they can be fixed. BBC Electric Vice President Bryan Simpson said he’s added about 12 employees because of the extra work.
“I think it’s a very good thing,” Simpson said. “I know when my power goes out it’s frustrating — and especially when it takes a long time. These things that Ameren is doing to decrease that downtime are great.”
Simpson noted that the positive economic impact from the work extends beyond his company. To complete the project in St. Louis, BBC Electric had to set up an office in the region. They have purchased new tools and rented equipment from local vendors. Meanwhile, many workers stay in local hotels during the project.
“It’s not huge, but I’d say we’re affecting the economy in the St. Louis area,” Simpson said.
Luzco Technologies is another company in the St. Louis area that’s growing as a result of the 2018 legislation. President Lus Rondón-Haberberger said her company is working closely with Ameren to design power system upgrades and provide project management services.
“We do studies and analyze the structures themselves,” Rondón-Haberberger said. “We look at, for example, the health of the pole, and we put different factors in it, like what happens when there is 60 mph wind? What happens if it snows a lot and there’s ice on top of the wire? Different factors get evaluated on how we make the final design.”
A year ago, Luzco had five staff members, but today she employs more than 20, with much of the recent growth due to the effect of Senate Bill 564.
“It’s amazing to think that one piece of legislation can create so many new positions,” Rondón-Haberberger said. “So someone could say, ‘Oh, you’re just changing poles.’ But truly it impacts so many people’s lives in terms of their buying power. And also as a ratepayer, it feels good to know that you have a more reliable system.”
The legislation is also making a difference for companies well outside of the energy industry. Take, for example, Quaker Windows & Doors. The company employs roughly 1,000 people at their sprawling manufacturing campus in and around Freeburg. Recent years have seen Quaker growing by more than 20 percent annually. President Kevin Blansett said it became clear the company needed to expand outside of Freeburg to increase capacity and reach a new labor pool.
“We’ve been working some overtime these last few years trying to keep up with the demand for our products,” Blansett said. “We feel expanding is going to give us the ability to really flex our production workflow, be able to better meet our customers’ needs and also meet our employees’ work-life balance needs.”
Quaker eventually decided to build their expansion in Eldon thanks to a new economic development incentive that was included in Senate Bill 564. The incentive helps growing companies offset their power costs by 40 percent for five years.
“We think it will be a significant driver of jobs and development in the state,” Forck said. “And for all of our customers, selling more power further divides our fixed costs, helping keep energy rates stable and predictable into the long term.”
Blansett said the rate reduction is giving Quaker the ability to speed up its vision for the Eldon plant.
“The 40 percent rate reduction allows us to shift dollars and actually invest more into the Eldon community with equipment and resources that may have been postponed for a couple years,” Blansett said. “We were looking for originally three production lines, but we’re looking at a fourth production line that will allow us to hire more out of the gate than we were anticipating as we move to Eldon.”
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