Energy ONE Incentive provides large New Ulm employer big savings

Its creamy texture makes it a common ingredient in dips, soups and sandwiches. It’s a staple in kitchens across the country and is made in Minnesota.

Described as liquid gold, Velveeta cheese loaves transform meals, perfectly melting every time. It’s a best-selling product of Kraft Heinz, one of the largest food and beverage companies in the world.

Kraft Heinz expanded their New Ulm plant in 2017. The $100 million investment included four new production lines and 50 added jobs. It also brought Velveeta back to the city.

Kraft Heinz in New Ulm, MN underwent a $100 million expansion to accommodate Velveeta production.

Incentive keeps costs down

Today, the company is realizing savings from a special incentive rate. New Ulm Public Utilities (NUPU) and Heartland Consumers Power District partnered to offer the discount.

The Heartland Energy ONE Incentive is a special energy rate offered to large power users within Heartland’s service area. It provides a special, fixed energy price during the first three years of operation.

It saved the company over $875,000 in electricity costs since the expansion got up and running.

“Large users of electricity provide many benefits to a community. Kraft saved money with the Energy ONE Incentive. New Ulm saw an increase in jobs. The economy benefits. We are proud to play a role,” said Heartland Director of Economic Development and Governmental Relations Casey Crabtree.

Heartland partnered with New Ulm Public Utilities to offer Kraft a special energy only rate. Representatives joined Kraft officials for a special signing ceremony. Back, left to right – New Ulm City Manager Brian Gramentz, NUPU Assistant Finance Director Kris Manderfeld, NUPU Energy Services Representative Derek Nelson, New Ulm Economic Development Corporation representative Brian Tohal, former Heartland Customer Relations Manager Steve Moses, and Heartland Director of Economic Development Casey Crabtree.
Front, left to right – NUPU Commissioner Linda Heine, Heartland CEO Russell Olson, and Kraft Heinz Plant Manager Matt Hippe.

Community Impact

The New Ulm Kraft Heinz plant opened in 1955. It processes cheese for Kraft Deli Deluxe slices and a variety of other cheese products. Over 500 people work at the plant.

“Kraft Heinz made a significant investment in the community,” added Crabtree. “The incentive provided steady electricity pricing while the expansion got up and running.”

Kraft Heinz is headquartered in Pittsburgh and Chicago. It is the fifth largest food and beverage company in the world with $25 billion in net sales in 2019.

Heartland is based in Madison, SD and provides wholesale power to public power cities. Customers are situated throughout the Midwest, including New Ulm Public Utilities. Heartland’s economic development program provides other incentives through NUPU. Smaller businesses enjoy rebates on electric bills and cash incentives for job creation.

New Ulm Public Utilities provides electric, water, district energy, natural gas, and wastewater services to residents and businesses in the New Ulm area. The utility is overseen by the public utilities commission.

PREMIER Center realizes significant energy savings during first 5 years

Partnership between the City of Sioux Falls and Heartland results in $1.2 million shaved from event venue’s electricity bill

During the past five years, the Denny Sanford PREMIER Center has hosted nearly 600 public events, everything from concerts to athletic events to conventions and more.

Big-name concerts and shows typically come with big surges in electricity use as performers use lights, videos and sound systems to enhance the fans’ experience.

Garth Brooks played nine sold out shows in six days in September at the Denny Sanford PREMIER Center. Although the concert series caused a surge in electricity use, the city realized savings due to the Energy ONE Incentive.

But thanks to a partnership with their supplemental power supplier, the City of Sioux Falls was able to save more than $1 million on electricity costs since they first opened the doors in September 2014.

“Electricity is one of the largest operational costs of an events center, said Mark Cotter, City of Sioux Falls. “Our partnership with Heartland allowed us to not only save a significant amount of money during the PREMIER Center’s first years of operation, but also helped us better plan for the future. Any time the city can save money, the residents of Sioux Falls benefit.”

Heartland Consumers Power District provides supplemental power to the city of Sioux Falls as well as 29 other public power communities in the region. Heartland created the Energy ONE Incentive program to help their customers entice large economic development projects to their cities.

Large users of electricity typically pay a separate demand charge to have energy capacity available to them at all times. The Energy ONE Incentive eliminates the demand charge for the first few years of operation for new loads of one megawatt or larger.

With an annual peak demand of two megawatts, eliminating the charge for the PREMIER Center resulted in $1.2 million in savings for the city.

“Demand charges are applied based on the maximum amount of power a customer uses during a certain time period,” said Heartland Director of Economic Development and Governmental Affairs Casey Crabtree. “For the PREMIER Center, that is likely during a major concert or sporting event, and since each event is unique, can be unpredictable.”

Cotter said the Energy ONE Incentive gave the city time to establish use patterns which significantly reduced risk when the PREMIER Center began operations.

Sioux Falls was the first Heartland customer to benefit from the Energy ONE Incentive. Since then the cities of Volga and Howard, SD as well as Akron, IA and New Ulm, MN have utilized the incentive to attract new companies to their communities.

The City of Sioux Falls Public Works Electric Light Division provides public power throughout defined service territories in Sioux Falls to more than 2,710 customers. They also maintain more than 19,500 streetlights in the city.

The PREMIER Center can hold 12,000 spectators and is the largest indoor venue in South Dakota. The PREMIER Center celebrated its fifth anniversary September 19.

Sioux Falls was the first Heartland customer to utilize the Energy ONE Incentive. Heartland CEO Russell Olson provided details of the arrangement during a press conference with city officials in 2013.