“Perfect storm of opportunity” benefits Howard businessJuly 1, 2019
Partnership with city, power provider leads to continued success for Quality Custom Meats
A large vacant facility. A skilled workforce.
Low-cost, reliable power and a hospitable business environment.
These factors and more helped lure Quality Custom Meats to Howard, South Dakota in 2016. The wholesale meat packaging company was seeking to expand its bacon packaging line at a new location.
“We really found a perfect storm of opportunity in Howard,” said Quality Managing Partner Bart Bickley. “A building that fit our needs in a great location with low operating costs–everything lined up.”
The city teamed up with its wholesale electric power provider, Heartland, to ease Quality’s transition to its new location, including offering a special energy-only rate to reduce costs in the first few years of operation.
“Heartland has been a great partner and was instrumental in helping get Quality Custom Meats located here,” said Howard Mayor Don Arens. “We are very excited to have them as part of our community.”
Energy ONE Incentive entices
Quality’s business partners looked at several facilities and considered new construction in other locations throughout eastern South Dakota before ultimately choosing Howard.
Access to one program that had the potential to save the startup hundreds of thousands of dollars annually made the ultimate decision a lot easier.
Heartland’s Energy ONE Incentive (EOI) provides a special energy-only rate which is fixed for three years to qualifying businesses in Heartland customer communities.
The incentive may be offered to new retail loads with an approximate demand of one megawatt or larger. In communities with a population of 3,000 or less, such as Howard, the incentive may be offered to new loads with a demand of 500 kilowatts or larger.
The program is designed to facilitate significant new business development and the expansion of existing businesses.
“Heavy users of electricity typically pay a separate demand charge to have energy capacity available to them at all times,” said Heartland Director of Economic Development and Governmental Affairs Casey Crabtree. “However it can be difficult for a new business to estimate monthly demand due to lack of historical data. The Energy ONE Incentive eliminates this concern for the first three years, providing consistent and predictable pricing.”
Bickley said the program was appealing because it would help the establish a use pattern while operating under the special rate, making it easier to plan for the future.
“Having stable pricing without having to worry about unexpected spikes in demand will help ensure our success,” he said.
Quality began operating under the Energy ONE rate in June of this year. It is projected to provide annual retail savings of up to $160,000 annually through 2022.
“The three-year savings on electrical charges is very attractive to a startup like ours. It helps get our business model on solid ground,” said Bickley.
Impact on the Community
City officials are happy to see the business up and running.
“Howard might meet their needs, but they are also a great fit for us,” said Electric Superintendent Kody Dawson. “We worked hard to bring them here because we recognized the value they’d bring to the community.”
Quality operates within a re-purposed beef packing facility that had been sitting vacant for five years. The company performed extensive renovations before moving in, including installing new flooring, sewer and refrigeration systems.
“Although it needed a remodel, the existing plant was more cost-efficient than new construction,” Bickley said.
Prior to the renovations getting underway, the city utilized an economic development grant from Heartland to make updates to the site and alleviate some of the business’s upfront costs.
“We needed to make sure our services to that location were up to date and that we could accommodate the new electric load,” Dawson said. “More importantly, we wanted to make sure they felt welcome.”
Quality also brought employment to the community with the creation of 20 jobs, furthering its positive impact on the city.
“You always hate to see a building sit empty, so we couldn’t be happier to see a reputable business like Quality Custom Meats move in,” said Mayor Arens.
Recipe for success
Quality began production in January of 2018 and according to Bickley, things are going well.
“We have produced up to 23,000 pounds of bacon per day,” he said. “The transition has been smooth and the community embraced us, which has been very helpful.”
Quality’s product line also includes ham, sausage, snack sticks, brats and various other protein items which are packaged and shipped across the country.
Crabtree is pleased to see the project reach fruition, knowing how much impact a large electric load can have on a small community such as Howard.
“It’s amazing to see a story like this in rural South Dakota,” he said. “The Energy ONE Incentive is a great tool for towns of any size to recruit new businesses and this story shows that any of them can see economic development success.”