Region's Business 20 December 2012

10 SOCIAL MEDIA TIPS FOR EXECUTIVES CITIBANK CLOSURES HIT SUBURBS

DRAMATIC CHANGES TO CITY SCHOOLS WELCOME, NEEDED

REGION’S BUSINESS

PHILADELPHIA EDITION

A JOURNAL OF BUSINESS AND POLITICS

ENERGY OUTLOOK: POWERING THE REGION’S FUTURE Pennsylvania finds itself in an enviable position, but the renewable sector remains caught in a legislative back and forth.

MAKING THE CASE FOR EXTENDING WIND ENERGY TAX CREDITS DRAMATIC STONE HIGHLIGHTS NEW HOPE ESTATE HOLIDAY MUSIC (AND GERSHWIN) IN ORIGINAL FORM RegionsBusiness.com $2.00 U.S.

13 DECEMBER 2012

20 DECEMBER 2012

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CONTENTS

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3

The play for power

! Pennsylvania is in a good spot when it comes to power, but there are questions, particularly about the renewable sector.

[OBAMACARE] IS INVALID IN THIS STATE, IS NOT RECOGNIZED BY THIS STATE, IS SPECIFICALLY REJECTED BY THIS STATE, AND IS NULL AND VOID AND OF NO EFFECT IN THIS STATE.’

15 The case

for wind tax credits ! An op-ed writer says the state’s fledgling wind energy industry needs tax incentives to acheive long-term viability.

BILL INTRODUCED BY FIVE SOUTH CAROLINA STATE REPRESENTATIVES

25

18

Set in stone in New Hope

Hite’s proposal hits the mark

This week’s featured fine estate is located in one of Bucks County’s most trendy locations and is crafted with eyecatching stone.

In the end, the new leader of Philadelphia’s schools may not end up closing one out of every six buildings, but he sends a clear message that dramatic change is needed.

!

5

Citibank closing shop ! Center City locations spared.

PRG welcomes National Penn Bank to their newest center city location at the corner of 21st and Market. Occupancy is scheduled for the Spring 2013 while the apartments above have begun delivery, totaling 282 units. PRG would also like to thank Metro Commercial Real Estate and Joe Dougherty for their efforts representing the Tenant.

!

ial c u r c 10 l media socia execs r tips foIt’s easy to makfe

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! ower o t the p ong u b , s p r misste dia is too st es e m utiv l c ia e c x so vel e le r io e 10 for sen Follow thes for . e r th to igno s to set a pa ia C ed l Crucia sful social m s e c a suc gy. strate

REGION’S BUSINESS Independence Media Corp.

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By the numbers Past presidents, energy, The Hobbit, The Donald’s big payoff and gifts for clients. !

PRESIDENT AND PUBLISHER James D. McDonald

1,000-7,000 SF premier retail space 22 residential apartments above Corner space available on 5th and Bainbridge Tremendous Signage/Exposure in the heart of Queen’s Village

EDITORIAL DIRECTOR Karl M. Smith ASSOCIATE EDITOR Terrence Casey CONTENT TEAM Victoria Marchiony CONTRIBUTORS Chris Weeden, Timothy Holwick, Don Lee ADVERTISING DIRECTOR Larry Smallacombe DIRECTOR OF BUSINESS DEVELOPMENT Jim Bauer ACCOUNT MANAGER Rachel Sollberger

© Copyright 2012 Independence Media Corp. All rights reserved. Use of material within without express permission of publisher is prohibited.

Region’s Business is published weekly on Thursdays and online at www.RegionsBusiness.com.

The publisher makes no representations or warranties regarding the advertising appearing in its pages or its websites.

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20 DECEMBER 2012

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EDITOR’S DESK

Putting Ups and Downs of 2012 Behind

Karl Smith is the Editorial Director for Region’s Business.

You can contact him at ksmith@regionsbusiness.com.

Welcome to the final 2012 edition of Region’s Business. We won’t be publishing next week, but we won’t be shutting down either.

A lot of activity will take place between egg nog and Christmas presents as we set the table for what we believe will be an exciting 2013.

Not that 2012 hasn’t been plenty exciting.

My wife and I were reflecting on the final days of the year over the weekend, as we made the long journey home after a visit with family in Northeast Ohio.

After a joyous celebration, everyone in the family was feeling good.

On the way home, though, we got some not-so-good news and the mood took an unexpectedly melancholy turn.

That seemed to be theme for our family throughout 2012 - a real run of peaks and valleys. In some sense,

that’s how most years go, but the pitch of those highs and lows were particularly sharp in 2012. [Maybe I shouldn’t speak too soon. After all, 2012 isn’t over quite yet.]

Since launching in August, we’ve had our shares of the same here at Region’s Business, though I’m pleased to say the valleys haven’t been terribly steep and peaks were plentiful.

As we look ahead to 2013, there exists plenty of opportunity for both peaks and valleys.

As President Obama starts his second term, we’ll be looking for a few things. First off will be the solution to the fiscal cliff and the details surrounding the implementation of Obamacare. Next, we’ll be looking for how he plans to execute on his agenda.

For the latter, we will have to keep a keen eye on the Republican

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Party and see if they’ve learned a lesson from November. Can they provide viable alternatives to President Obama’s agenda or will they continue to be seen as simply obstructors?

Here in Philadelphia, well, there are a lot of moving parts. We plan on keeping them all in plain view, including the continued residential real estate boomlet in parts of the city and the continued strength of the region’s travel and tourism industry. Our universities have a lot of dramatic plans and projects in the works that will bear close watching as well.

The major initiative that we’ll be rolling out in mid-January will speak to the energy and momentum in the region and we’ll be making that a major focus over the whole of 2013.

In addition to that broad effort,

there are a few other things we’ll keep pursuing.

Before year’s end, we’ll be relaunching RegionsBusiness.com.

While it will remain a work in progress, you will find a more dynamic, interactive site that I hope you will find more useful and engaging.

Speaking of engaging, we’ll also continue to find more ways to add voices to our conversations, both in print and online. We’re constantly looking to expand our roster of Ideas columnists and Op-Ed contributors and will be actively pursuing bloggers for the relaunched website.

We know that, like that family drive home, there will be bits of unsettling news along the way, but while we’re away, our enthusiasm will continue to build as we steamroll into 2013. Hope you’ll come along for the ride.

20 DECEMBER 2012

REGIONSBUSINESS.COM

WEEKLY BRIEFING

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SCHOOL DISTRICT OF PHILADELPHIA PHARMACEUTICAL

TRANSPORTATION

37 Buildings to Close

Teva Project On Hold International pharmaceutical giant Teva has delayed plans to build a distribution hub by Red Lion Road in Northeast Philadelphia.

When the company broke ground on what Mayor Michael Nutter called “the biggest economic development project of our administration” in September 2011, it was believed that the $300-million project would generate about 3,000 construction jobs and about 400 permanent jobs.

Plans are apparently paused, not canceled.

“At this time we cannot elaborate further about plans for this property,” the company said in a statement. “Road improvements as committed along Red Lion Road continue and are scheduled to be completed in the spring.

“Teva remains committed to maintaining the property and working with local government.”

City Presents Alternate Airport Expansion Plan The Nutter administration recently met with airline and Delaware County officials to discuss a plan it believes would save 72 houses and move UPS close to International Terminal A and farther from residential areas, the Philadelphia Inquirer reported.

The newest proposal is being considered by US Airways, a spokesman told the Inquirer.

A plan recently released

by Superintendent William R. Hite calls for the closure of 37 school buildings and changes in grade configuration at 18 more schools.

The utilization rate of school buildings is currently 68 percent; these closures will increase that to almost 80 percent, according to the school district.

The district will host 16 community forums in early 2013 to further discuss school-specific recommendations and transition plans.

BY THE NUMBERS

School Closures

22

Elementary School Buildings

11

High School Buildings

4

Middle School Buildings

BANKING

REAL ESTATE

Allen Edmunds Store Opening Allen Edmonds will open its first Pennsylvania branch February 1 in Philadelphia at a 1,200-square-foot storefront at 1736 Chestnut Street.

DEVELOPMENT

DEVELOPMENT

Entertainment Complex Gets Commission Approval

Old City Site Converting to Apartments

Data Center Sold San Francisco-based data center developer and operator, 365 Main Inc., bought 16 data centers in several cities, including a 20,000-square-foot property at 3701 Market St. in Philadelphia, from Equinix Inc. Terms of the transaction were not disclosed.

City Apartment Building Bought Post Brothers Apartments of Philadelphia bought Presidential City Apartments, on City Avenue, from an undisclosed Brooklyn, NY, firm for $51 million, the Philadelphia Business Journal reported.

PHILADELPHIAREALESTATE.COM

The Philadelphia City Planning Commission recently voted to conditionally approve the Plan of Development for “Canal Street North,” the proposed complex at Delaware and Frankford avenues that would include, among other things, a 3,000-person concert venue, a bowling alley, and a Country Western-themed bar and grill.

The main sites of the complex would be the now-vacant Ajax Metal Works, which is slated to become a concert venue, a restaurant, miscellaneous retail and a distillery, and a dry ice building across Delaware Avenue from Sugarhouse Casino, which will house the honkytonk.

The former site of the Berger Bros. tinnery at 229 Arch Street in Old City is being rehabilitated for residential use

by Berger Development, in collaboration with architects Cecil Baker & Partners.

According to its website, the project, called 229 Arch: A Boutique Residence, will include 65 rental apartment units, many including original architectural features, ranging in size from 700 to 1300-square-feet, with prices starting at $1,350/mo.

The building itself will include an onsite fitness center, a virtual concierge, a community gathering room and a landscaped courtyard.

Citibank Closing Area Suburban Branches

Citibank plans to maintain offices in Central Philadelphia but will close offices in the surrounding suburbs in March, according to the Philadelphia Inquirer.

Slated for closure are branches in: Berwyn in Chester County; Villanova, Media and Springfield in Delaware County; Abington, East Norriton, Montgomeryville, Plymouth Meeting and Willow Grove in Montgomery County; Doylestown, Southampton, and Warrington in Bucks County CHAMBER REPORT

Israeli Companies Featured The Philadelphia-Israel Chamber of Commerce and Greenberg Traurig LLP recently hosted the 9th Annual Israel Conference, with eight-minute pitches allowing the 10 Israeli startups to show how their products increased the bottom line and deserved the attention of participating investors, partners and customers.

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20 DECEMBER 2012

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WEEKLY BRIEFING MANAGEMENT GAMING

Area Companies Name New CEOs

Board Schedules Public Hearings for City Casinos The Pennsylvania Gaming Control Board has requested that each of the six applicants for the Category 2 casino license in Philadelphia present their proposals in a public forum to be held February 12 at the Pennsylvania Convention Center.

Board Chairman William H. Ryan, Jr. said the session will not include public comment.

Additional hearings will be held at the Pennsylvania Convention Center April 11 and 12.

Groups interested in testifying in April can apply on the gaming board’s website beginning March 4.

The available license would allow a casino to have up to 5,000 slot machines and 250 tables games.

Royal Bank

The Provence, a casino proposed by Tower Entertainment, would be located at 400 N. Broad St. SUBMITTED

Applications received are: Tower Entertainment, LLC (The Provence) at 400 North Broad Street Market East Associates (Casino Philadelphia)at 8th and Market Street Wynn PA, Inc. (Wynn Philadelphia) at 2001 Beach Street, and 2001 through 2005 Richmond Street

PHL Local Gaming, LLC (Casino Revolution) at 3333 South Front Street PA Gaming Ventures, LLC (Hollywood Casino Philadelphia) at 700 Packer Avenue Stadium Casino, LLC (Live! Hotel and Casino) at 900 Packer Avenue

RACING

ATLANTIC CITY

PA Snags Stallions from NJ

Union Opposes Revel Financing

Pennsylvania’s casinosupported horse industry scored a victory over New Jersey with the news that two top Standardbred stallions are taking their talents across the state line.

Perretti’s Rocknroll Hanover, the nation’s top pacing stallion the past couple of years, and Muscles Yankee, a trotting stallion, will stand at stud at a leased Newtown facility for the 2013 breeding season, said Bob Marks, who is Perretti Farms’ marketing director and breeder.

Mr. Marks said Perretti has leased a barn and a few paddocks and can set up a lab on the site to handle the stallions’ end of Standardbred breeding.

The rest of the Perretti operation will stay on 900 acres in Cream Ridge.

“We prefer to stay in Jersey, but unfortunately,

Local 54 of the UniteHERE casino workers union, which is trying to unionize Revel, Atlantic City’s newest casino, sent a report warning the casino’s main investors against pumping any more money into the struggling casino resort.

After analyzing the casino’s finances from publicly filed reports, the union estimated Revel will need another $300 million to

under the circumstances, it’s just impossible,” Mr. Marks said.

Those circumstances are purely economic.

A portion of the slot revenue from Pennsylvania casinos supports harness racing by funding stakes races just for Pennsylvania-sired horses and providing bonuses for successful horses that have a Pennsylvania sire or have both parents from Pennsylvania.

stay afloat in 2013.

In order to meet its interest payments, Revel will have to make $28 million to $33 million a month in gambling revenues.

The casino’s best month for gambling revenue during its 8 ½ months of business totaled just $20 million. Revel’s take for November following Hurricane Sandy was a mere $6.2 million.

PENNSYLVANIA LOTTERY

Senator Challenges Company Address State Senator Christine Tartaglione is investigating the address of Camelot Global Services PA LLC, the only company who has put a bid in for the Pennsylvania Lottery.

Camelot registered at an address in Delaware

in November. Ms. Tartaglione claims that the company is attempting to avoid paying Pennsylvania taxes through the “Delaware Loophole.” Delaware has no corporate income tax, whereas Pennsylvania’s is nearly 10 percent.

Royal Bank recently announced that F. Kevin Tylus has been named president, chief executive officer and a director of the bank, effective immediately. He will report directly to the board of directors.

The announcement completes a management transition plan that was revealed in April.

Robert R. Tabas, who has served as chief executive officer since 2009, will retire from day-to-day management, but will remain as chairman of the board of directors.

Galera Therapeutics Malvern, Pa.-based biotechnology company Galera Therapeutics Inc., announced that Dr. Mel Sorenson will replace founding CEO Robert Beardsley as its president and CEO. Mr. Bearsdely will now serve as executive chairman of the board of directors.

Doylestown Hospital Doylestown Hospital has announced that James Brexler will become its next president and chief executive officer, effective mid-to late- January. Mr. Brexler succeeds Richard A. Reif, who is retiring after serving in those positions for the past 23 years.

Brexler had been chief executive of Erlanger Health System a six-hospital, 1,035-bed regional health system in Chattanooga, Tenn., for eight years before retiring last November. He is currently working as a consultant for Vanderbilt University Hospital.

Grand View Hospital The Board of Trustees of the Grand View Hospital and Health Foundation announced that Jean M. Keeler has been selected to replace recently-retired Stuart H. Fine as president and CEO, effective immediately.

Ms. Keeler has been on staff since 1996 and most recently served as senior vice president and general counsel.

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20 DECEMBER 2012

WEEKLY BRIEFING: HEALTH CARE

REGIONSBUSINESS.COM

HEALTH CARE

HEALTH CARE

Jefferson Launches Lung Care Center

Temple Opening Center in Northeast Phila.

Thomas Jefferson University and Hospitals is creating the Jefferson — Jane and Leonard Korman Lung Center using a donation of an undisclosed amount from the Jane and Leonard Korman Family Foundation.

The purpose of the center is to allow Jefferson to better understand lung disease through innovative research and expanded clinical programs for exceptional patient care.

Leonard I. Korman has been a Thomas Jefferson University trustee since 1998, and The Korman Family Foundation is a longtime Jefferson supporter.

Neurological Center Opens Site in KOP In addition to its locations in Gibbsboro and Rochelle Park, NJ, the Center for Neurological and Neurodevelopmental Health has opened a new office in King of Prussia, Pa. The center first opened

in 2005; it treats patients with disorders or issues like autism, ADHD, concussion, brain injury, memory loss, headaches and migraines, anxiety and neuropsychiatric disorders, Tourette disorders, and epilepsy and seizures.

Temple University Health System will open its second urgent-care facility December 31 at 11000 Roosevelt Boulevard.

The health system opened its first Temple ReadyCare site in Port Richmond earlier this year.

Temple ReadyCare

will serve patients of all ages with non-emergency health-care needs without an appointment.

The facility will be staffed

by Temple physicians and will offer X-rays, lab testing, immunizations and physicals seven days a week.

$1M Donated to Einstein The Otto Haas Charitable Trust has made a $1 million grant to the Einstein Health Network to establish the John Otto Haas Chair in Physical Medicine and Rehabilitation, which will enable MossRehab to

send the organization’s doctors to hospitals throughout the world to work with and learn from other top leaders in rehabilitation and physical medicine, as well as bring top doctors to MossRehab to teach.

20 DECEMBER 2012

REGIONSBUSINESS.COM

BUSINESS

Discussing Social Media

WEEKLY BRIEFING

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ENTREPRENEURSHIP

Startups Present at Tech Week

At a Social Business Roundtable on December 13 at the Four Seasons Hotel, David Lipson, president of Philadelphia Magazine, urged businesses to invest in social media strategizing.

When Philadelphia Magazine tried to deal with social media on its own, Lipson said: “We fell flat on our faces.”

Local Startup Shutting Down Lokalty, a Center Citybased local loyalty rewards startup announced on its blog that the program would shut down at the end of the month after launching late last year because of a crowded loyalty rewards space and difficulty selling to local businesses.

The team plans to shift focus to a new product called Partcle aimed at helping users discover local businesses.

TECHNICALLYPHILLY.COM

Representatives from three Philadelphia startups presented December 12 at the monthly Philly Tech Meetup at the Quorum center in University City.

Swap by Friidum: Swap allows users to leave the business cards at home and exchange a stored bio of up to 140 characters by texting the program.

WizeHive: This cloud-based collaboration tool allows users to work in secure space, sharing files and managing projects.

Firefly: Created by three Wharton students, Firefly allows businesses to more easily assist customers through an installation process by remotely sharing the customer’s screen without the need for a download or Java.

The next meetup will be held January 9. Visit meetup. com/philly-tech to register or to apply to present your business.

TRANSPORTATION

Amtrak Plans to Replace Acela Trains Amtrak announced it plans to replace existing Acela Express trains with new, faster trains on the Northeast Corridor in order to reduce travel times and accommodate growing ridership.

Acela Express trains, which can travel up to 150 m.p.h., are currently the fastest in Amtrak’s fleet, but due to track and signal restrictions, they average only 83 m.p.h. between Washington and New York and 72 m.p.h. between New York and Boston.

Amtrak will issue a

“request for information” in early 2013 for proposals on how to replace all Acelas gradually with entirely new, faster trains.

Later in the year, Amtrak will seek bids for such trains, the first of which will likely arrive in 2017 at the earliest.

Amtrak is simultaneously spending $450 million to improve the Northeast Corridor main line between Trenton and New Brunswick, N.J. in order to increase maximum speed for Acela trains from the current 135 m.p.h. to 160 m.p.h.

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20 DECEMBER 2012

REGIONSBUSINESS.COM

WEEKLY BRIEFING EXECUTIVE BOOKSHELF

WHO TO FOLLOW

@VetriCucina Adam Leonti The chef d’cuisine at Marc Vetri’s Vetri Ristorante was named to the 2012 Forbes “30 under 30” list.

RT @VetriCucina: This is my best panettone moment.

RESTAURANT ROUNDUP

MUST-HAVE APP

Driving Detroit

Google Maps

In “Driving Detroit,” author George Galster, a fifth-generation Detroiter and internationally known urbanist, sets out to understand how the city has come to represent both the best and worst of what cities can be, all within the span of a half century.

“George Galster has done a remarkable job of revealing how powerful elements in the Detroit metropolitan area created over time intense race and class polarization and a pronounced city-suburban dichotomy. There are lessons to be learned from this compelling study of a dysfunctional metropolitan region. Indeed, Galster’s illuminating analysis is a must-read.” — William Julius Wilson, Harvard University

iPhone users across the nation celebrated the recent return of free app Google Maps.

The app was removed when Apple launched its own map service three months ago, a toosoon release that led to tremendous problems and bigger complaints from Apple customers.

More than 10 million customers downloaded Google Maps in the first 48 hours of its return, Google reported.

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Paperless, quick, and and economical at $15 per month with an annual plan, Docusign has already been used by 90 percent of Fortune 500 companies.

Some Philadelphia area restaurants offering a Feast of Seven Fishes:

Amis: 4-11 p.m. December 23, $75 per person Davio’s: 5-11 p.m.

December 24, $75 per person

La Castagne: Daily through Christmas Eve, $75 per person

Sbraga: December 17-24, $75 per person ($50 for the wine pairing)

Bridget Foy’s: December 24, $45 per person

Verdad: Daily through Christmas Eve, $62 per person UWISHUNU.COM

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20 DECEMBER 2012

REGIONSBUSINESS.COM

DEALBOOK

MANUFACTURING

Ametek Acquiring 2 Miami Companies On December 17, Berwyn, Pa.-based global manufacturer of electronic instruments and electromechanical devices, Ametek, Inc. announced the acquisition of two separate privately owned, FAA-certified aviation repair operations, Aero Components International (ACI) and Avtech Avionics and Instruments (Avtech).

Both of the facilities are located in Miami, Fla., near Ametek’s High Standard Aviation aerospace maintenance, repair and overhaul (MRO) operation.

ACI repairs and overhauls fuel, hydraulic, pneumatic, power generation and heat exchanger components.

Avtech’s expertise is in the repair and maintenance of next generation and legacy avionics and instruments.

Comcast, Sprint Deal Clearwire TELEVISION

Comcast Adds NBC Peacock

CHRIS MURPHY

Sprint Nextel Corp. and Clearwire announced this week that they had come to an agreement in which Sprint would pay Clearwire a $120 million breakup fee if its $2.2 billion purchase fails.

Comcast owns 88.5 million shares in Clearwire that — at the proposed purchase price of $2.97 per share — would be worth $263 million.

The conditional deal is subject to a $20 billion sale of 70 percent of Sprint to Softbank Corp.

That deal is expected to close in mid-2013, making the Clearwire deal all but guaranteed, according to Reuters.

We will not be publishing next week.

Enjoy the holidays!

To get your 2013 subscription [$40 for the year] call 877.700.6245 or 215.627.6397

REGION’S BUSINESS A JOURNAL OF BUSINESS & POLITICS

With its 50 year anniversary approaching, Comcast has adopted a new logo that incorporates the iconic NBC peacock above the Comcast name in all capital letters and a new font.

Comcast removed the peacock from NBC Universal’s own logo after acquiring a 51 percent stake in the company in January 2011. NBC Universal will continue to use the all-text logo.

ENTERTAINMENT

Redbox Ticket Sales Launch in Philadelphia Coinstar Inc.’s Redbox is testing its first national ticket venture in the Philadelphia area and online.

The company partnered with Comcast Spectacor’s New Era Tickets to sell excess ticket inventory for some Philadelphia events at hundreds of Redbox DVD-rental kiosks.

Using a touchscreen, customers can purchase tickets that will be emailed to accounts for printing or available for retrieval at the event.

20 DECEMBER 2012

REGIONSBUSINESS.COM

IDEAS

15

10 Crucial Social Media Tips for Executives Steve Nicholls is the author of Social Media in Business. Learn more at socialmediainbusiess.com.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com.

Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

Here’s a list of 10 Crucial C’s for senior executives to create a winning social media strategy 1. Conversation: Social media is a conversation taking place online.

People share content – words, videos, music and webinars – between each other. Passive intake of information is no longer the name of the game; social media instead allows constant interaction and sharing.

2. Coordination: Social media makes coordinating projects across geography and time zones easier. A project manager has tools to manage and coordinate a project online between participants, locations and time zones. Social media is the glue bringing parts of a project together.

3. Cooperation: Social media allows more cooperation between participants. Social media is sharing, this means that it is a cooperative process, and has much potential in a business context.

4. Communication: Social media creates and enhances communication amongst a company’s staff, between staff and clients, between sales and customers and between upper and lower management. It generates and develops communication. Also, it allows both formal and information communication, where the former is owned by the organization and the latter by the employees. Management needs to be cautious not to push information communication underground by attempting to control it.

5. Collective intelligence: Usergenerated content equals to business intelligence. Taking advantage of this information is invaluable leverage and can help a company improve and perform better by accessing new ideas, finding solutions and getting feedback directly from customers or clients. This kind of business intelligence can be

collected at virtually no cost, which means that companies have the opportunity to gain business insight in a highly cost-effective way.

6. Communities: Social media allows a company to find, create and interact with pools of customers, clients, suppliers and even competitors, amongst other key players.

Communities can take shape both internally and externally. Tapping into communities is an efficient way to reach as many people as possible quickly and inexpensively.

7. Collaboration: Social media helps creating more efficient collaboration between co-workers, partners and stakeholders. Social media facilitates teamwork through a range of tools that can be managed across geographical limits. This can take place between employees, teams and departments, but also between bilateral groups like business/customers, business/suppliers

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or business/stakeholders.

8. Content: Social media is all about sharing content. Through social media tools, you can create, share, change and have access to all kinds of content. It is this freedom in generating and sharing content that makes social media so powerful.

9. Context: Context defines how a social media project will take shape. Looking at a company’s business environment, company culture and business goals will shape a social media project. This will prevent companies from going enthusiastically in the wrong direction.

10. Culture: Culture is a crucial component that will determine how successful a social media project can be. Opening a company’s culture is perhaps the single most important thing to do in order to engage with a social media project.

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20 DECEMBER 2012

REGIONSBUSINESS.COM

POLITICS ELECTION 2014

PHILADELPHIA

SENATE

City Contributes $22.7 Million to Pension Fund

Casey Not Kerry to State, Casey to Finance? Considering

A bond refinancing by Philadelphia has allowed the city to contribute $22.67 million to the city Municipal Pension Fund. The one-time contribution does not add to the city’s costs, Mayor Michael A. Nutter said in the announcement.

Philadelphia sold $299.8 million City Service Agreement bonds through the Philadelphia Authority for Industrial Development. It also bought back $348.1 million in maturity value zero coupon bonds at a discounted price.

Proceeds from the city’s sale will fund the purchase made by the city while funding a capitalized interest account.

The city makes annual contributions of more than $450 million to the pension fund, but it is underfunded by $4 billion, according to the announcement.

ECONOMY

Fiscal Cliff Not So Steep in Pennsylvania

Challenging Corbett

Consensus has grown around John Kerry as the next Secretary of State nominee after United Nations Ambassador Susan Rice withdrew her name from consideration.

Should the senior Democrat leave the Senate for a cabinet post, Senator Bob Casey could benefit directly, possibly as head of the Finance Committee.

One DC insider said Sen. Casey is a team player who might be amenable to an arrangement that would come to fruition after Sen. Kerry’s nomination.

— PoliticsPA.com

Senator Bob Casey said he is not currently considering a run for governor in 2014. He clarified his stance during a recent interview.

PoliticsPA asked Sen. Casey: “Senator, will you take this opportunity right now to rule out a run for governor in 2014?”

He replied, “If I start speaking to a race in 2014, that’s as if we’re focused on 2014 instead of 2012.

Look, I’m really happy where I am.

I’m really busy.”

— PoliticsPA.com

If the nation goes over the so-called “fiscal cliff,” it will be more like a fiscal pothole for Pennsylvania.

State officials estimate that Pennsylvania stands to lose about $300 million in federal grants and subsidies if the nation plunges over the cliff December 31.

It sounds like a big number — and for the programs funded with those dollars, it certainly is — but in the grand scheme of things the cuts would be a drop in Pennsylvania’s fiscal bucket.

That $300 million is less than 1.5 percent of the $21.5 billion in federal funding received by the state this budget year.

— PaIndependent.com

More Employers Subject to Living Wage Requirement

Timothy Holwick is a freelance writer covering Philadelphia government.

Find more coverage at citycouncilmatters.com.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com.

Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

On Thursday, December 13, 2012, Philadelphia City Councilman Wilson Goode proposed a bill that would expand the group of employers subject to the living wage program also known as the Philadelphia 21st Century Minimum Wage and Benefits Standard.

The purpose of the wage standard, as stated in the Philadelphia Code, is to “assure that as many employees as possible within the City of Philadelphia earn an hourly wage that enables them to live with more dignity and increased economic selfsufficiency.”

The living wage program specifically targets city financial aid recipients, but also singles out city contractors. This new bill changes the requirement for “recipients of City leases, concessions, or franchises, or subcontractors thereof.”

Previously, only employers

with 25 or more employees who fit that definition would be subject to the living wage standard, but this bill proposes eliminating that employee number threshold.

The living wage demanded by the Philadelphia Code in this instance is 150 percent of the Federal minimum wage. In addition to that enhanced pay, the employer must also provide fair benefits, as in benefits equal to other full-time employees, and paid sick leave. Any benefits provided may not be included in calculating the required wage.

As with many bills or laws like it, this bill seeks to leverage the expenditure of city funds to encourage the reinvestment of those funds in the community.

By decreasing overall poverty, so goes the goal, the 21st Century Living Wage program believes it will decrease the need for the taxpayer-funded social service programs.

THE COST OF DOING BUSINESS IN PHILADELPHIA MAY BE GOING DOWN, BUT THE COST OF DOING BUSINESS WITH PHILADELPHIA MAY BE GOING UP.’

Councilman Goode is often a champion for this sort of legislative mechanisms that return city funds to city residents. Moreover, his bills often seek to keep Philadelphia dollars in Philadelphia and helping its residents.

It is unclear how many employers this change may affect, but the dropping of the minimum employee requirement will certainly catch many more in its net.

Conventional wisdom would also suggest that employers with 25 or fewer employees are most likely to suffer financial hardship over such a requirement.

However, City Council would

likely say that such is the cost of accepting contracts or leases from the city.

Details regarding who is mostly affected by the change will emerge in the hearing phase.

Unfortunately, Philadelphia City Council takes a short break for the holiday season so that hearing will occur sometime in 2013.

With Councilman Bill Green continuing his crusade against taxes on businesses in Philadelphia, it is interesting to note that the cost of doing business in Philadelphia may be going down, but the cost of doing business with Philadelphia may be going up.

20 DECEMBER 2012

REGIONSBUSINESS.COM

POLITICS

17

DPW Secretary Commute Costing Taxpayers Thousands HARRISBURG — Secretary of Public Welfare Gary Alexander lives in Rhode Island — and his commute is costing taxpayers hundreds of dollars every month.

Monthly vehicle use reports filed with the Department of General Services show Mr. Alexander drove 41,727 miles in state-owned vehicles from July 2011 through June 2012. Of those trips, at least 21,807 miles were tallied under “commute” travel.

The trips add up. Mr. Alexander spent more than $4,700 in state expenses the calendar year 2011, according to state records.

Carey Miller, press secretary for the Department of Public Welfare, said

that the cabinet position Mr. Alexander holds with the state is one where offsite work is typical.

“These executive-level positions require 24 hours a day, 7 days a week commitment, and also requires extensive travel and meeting with stakeholders on a daily basis,” Ms. Miller wrote

in an email to PA Independent. “Fortunately with technology like (Blackberries) and laptops, Secretary Alexander is able to stay connected with staff and provide decisions for the department, when he cannot be here in Harrisburg.”

Indeed, the records show that when Mr. Alexander is in Harrisburg, it is not

always on a Monday through Friday schedule.

Most often it is a four-day Harrisburg work week. The records show 28 weeks in the fiscal 2011-2012 year that started with travel from Rhode Island to Pennsylvania, with a return three days later.

Nine additional weeks show roundtrips spanning five days. Six showed Mr. Alexander venturing from Rhode Island for a three-day work week in Harrisburg.

PA Independent obtained Mr. Alexander’s travel records through a Right-to-Know request.

Mr. Alexander earns $146,579 a year, according to the Department of Administration. DPW is one of the state’s largest departments by spending and staff, with a state budget of $10.5 billion this year and a staff of nearly 16,000.

— PaIndependent.com

Natural Gas Bringing ‘Gold Rush’ to Pennsylvania

Charlie Gerow is CEO of Quantum Communications, a Harrisburg-based public relations and issue advocacy firm.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com.

Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

It’s been called “a gold mine beneath our feet.”

More precisely it’s an ocean of natural gas estimated at more than 410 trillion cubic feet, enough to supply the U.S. and the world for centuries, a mile or more under the surface of Pennsylvania and neighboring states. Covering more than 95,000 square miles, the Marcellus shale gas formation is causing an economic renaissance in our commonwealth and throughout the northeast U.S. The natural gas industry invested more than $14 billion in Pennsylvania last year and supported more than 200,000 jobs. Nationally, natural gas has added more than $400 billion to the economy in the last five years.

Natural gas is clean, job creating and community building. It’s good for the economy and good for the environment.

The Marcellus shale gas common to Pennsylvania has been called “a game changer on a global scale.” No doubt that’s true.

But the benefits are being reaped by those closest to the source.

Unemployment in rural coun-

ties, once among the state’s highest, has plummeted to the state’s lowest. Businesses supporting natural gas development have boomed along the corridor where most of the drilling occurs. Not surprisingly, recent polls in the communities where drilling is being done show that the people who live there think the benefits far outweigh any potential risks.

The benefits of shale gas development aren’t confined to the areas where it’s being taken out of the ground. Consumers who have converted from oil or other fuels to natural gas for home heating have seen dramatic decreases in the price of their energy. No wonder more conversions to natural gas are up.

In Philadelphia and surrounding municipalities natural gas is keeping electric prices down, too. Electricity costs are down 2 percent over the past year alone.

Natural gas fired power plants have power companies lining up to put electricity-generating facilities right at the source of the natural gas — much of it right here in the Keystone State. In fact, nine new natural gas power

plants are being proposed for Pennsylvania.

And tax revenue generated by the natural gas industry (yes, they pay taxes, contrary to sometimes popular myth) has far surpassed projections and has helped Pennsylvania balance its budget at a time when the economy is sluggish. In 2012 alone, the industry paid almost $1.3 billion in state and local taxes, or the equivalent of 3.9 percent of the state’s 2011 tax revenues.

Energy independence has been a much talked-about but unrealized goal for decades. The result has left us economically vulnerable and has put our national security at risk. After all, many of the folks we buy oil from don’t like us very much.

The Marcellus shale and the Utica shale layer underneath it promise to make us energy independent and even energy exporters. Earlier this month the Department of Energy (DOE) published a macroeconomic report on liquefied natural gas (LNG) exports. DOE’s findings reveal the U.S. will experience “net economic benefits from

allowing LNG exports” and domestic price changes due to exports “remain in a relatively narrow range.”

There are legitimate concerns about how we develop natural gas. They should and are being addressed. But many of the loudest voices in opposition to the development of Pennsylvania’s natural gas are from those who have gripes that are not legitimate. Many oppose any form of energy development, be it natural gas, oil, coal, nuclear or even wind. These are people for whom no amount of regulation of taxation would ever be sufficient.

Natural gas has and is transforming Pennsylvania economy.

Manufacturing jobs are returning. Billions in new government revenue is forecasted to continue to increase for at least the next 20-plus years. Fleets are adopting natural gas to power their buses, trucks and other vehicles.

Our educators are evolving their curriculum to meet the needs of this industry, from production to end-use.

Thanks to natural gas, it’s a great time to be a Pennsylvanian.

20 DECEMBER 2012

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OUR POWER STRUGGLE Pennsylvania enjoys a lot of options for powering, literally, its economy, but conflict exists and 2013 will see some of that play out.

E

nergy is complicated policy, and of late, Pennsylvanians have been the winners. Energy independence has emerged not just as a national issue but a local one. The state’s position with a variety of sources coupled with deregulation has resulted in prices that are among the cheapest in the region.

The abundance of coal and the capacities of the oil refineries have put Pennsylvania in this position, but with coal’s role diminishing around the nation and petroleum embattled with public perceptions of its own, the state is seeing a shift in policy.

Natural gas, made available cheaply because of the proximity and availability of the Marcellus Shale, has jumpstarted the local economy by filling the void. Improving technologies and greater education of the renewables have made solar and wind logical, profitable options. Nuclear continues to supply a third of the state’s electrical need.

Still, the old and the new grapple for market share, and the political fallout associated with each leaves the consumer at the mercy of political gridlock in Washington and Harrisburg. Any growth seen by renewables is threatened by policies while natural gas continues to have unprecedented relevance because of the recent discovery of the state’s vast reserves.

“There’s going to continue to be a lot of volatility in the energy markets particularly electricity,” said Maureen Mulligan from the Pennsylvania Solar Energy Industries Association.

Story by Chris Weeden Illustration by Don Lee

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Pa. Winning Battle On Energy Costs The average Pennsylvanian has won.

At a 10.45 cents per kilowatt hour, the Keystone State ranks the 36th lowest for electric prices in the U.S. — with the national rate at 9.9. Of Pennsylvania’s neighboring states, only West Virginia (7.88) and Ohio (9.03) pay less. By contrast, New Jersey (14.3) and New York (15.89) are in the top six. Hawaii’s 31.59 cents/kWh is tops in the United States.

The deregulation of the utilities empowered consumers in a landmark way. The process began in 1997 and has allowed residential users and larger outfits the opportunity to compare offers and seek the best price.

“Electric deregulation has been a tremendous success in Pennsylvania,” said Patrick Henderson, Energy Executive for the State, a position formed by the Corbett administration. “It has created new opportunities for generation suppliers to enter the PA markets and offer more affordable and creative packages tailored to the needs of residential, commercial and industrial customers. It has saved consumers billions of dollars, which allows PA businesses especially to remain competitive. Under the direction of our Public Utility Commission, we will be looking at opportunities to even further enhance electric competition in PA in the new legislative session.”

A utility bill is broken into three segments: generation, distribution and transmission. The former can now be negotiated, and savings can amount to roughly 1 cent per kilowatt hour, according to Jennifer Kocher, press secretary for the Public Utilities Commission (PUC). Those with substantially larger bills are in more of a position to find greater savings. Some schools and large commercial entities may pay as low as 8 cents per kWh. “They see it may only save a cent per kilowatt hour, but when the average house uses 10,000 kWh a year,” said Ms. Kocher, in her seventh year with the PUC, “that is very real. That’s $100 a year that most people would not leave lying around.”

Greater than the ability of the consumer to negotiate pricing is the availability of a diverse array of resources that Pennsylvania has available to it. The three largest sources of electricity — coal, nuclear and natural gas — account for almost 80 percent of the state’s production. Local, cheap sources coupled with greater market competitiveness have resulted in lower prices.

According to the Energy Information Administration, 42 percent of the country’s energy comes from coal. Pennsylvania is the fourth largest producer of it behind Wyoming, West Virginia and Kentucky and

Natural Gas Revolutionizes State, City

[ELECTRIC DEREGULATION] HAS SAVED CONSUMERS BILLIONS OF DOLLARS.’ —PATRICK HENDERSON ENERGY EXECUTIVE FOR THE STATE

has 44 percent of its electricity supplied from this fossil fuel.

A 2010 report titled The Economic Impact of the Coal Industry in Pennsylvania, commissioned by the Pittsburgh Regional Alliance, Greater Pittsburgh Chamber of Commerce and the Pennsylvania Economy League of Southwestern Pennsylvania, reported that state coal is responsible for 9,000 direct jobs and close to another 38,000 indirectly.

In Pennsylvania in 2010, the nuclear industry accounted for 34 percent of electric output, double the national average and ranked second. Natural gas witnessed the largest growth in natural gas mining in the state, generating more than 5,000 BTUs, double the 2010 production.

The savings for the state were profound, with a Penn State study in 2010 estimating the local production saved Pennsylvania residents $630 million because of a 13 percent reduction in price. Further reductions in price have resulted in greater financial benefits.

Those savings have become more profound as drilling increased. Ms. Kocher said the price of natural gas has dropped 40 percent since 2008 and the price per thousand cubic feet has dropped from $15 to $4.

“It’s been a game changer for [Pennsylvania’s] energy future,” said Ms. Kocher. “We’re no longer importing natural gas into the state from other states and regions. We have a surplus here and we’re exporting it. That will have a direct impact on cost. Beyond that you’ll see businesses be able to tap directly into the line and make that savings even more significant.”

Natural gas, because of its tremendous falloffs in price, is seeking ways to adapt to other uses. Oil, once the cheapest heating source, has been usurped by natural gas because it is not only less costly, but also cleaner and more convenient. Homes and businesses throughout the region have made the switch, a trend that will undoubtedly continue as more Shale is retrieved.

The goal both in Philadelphia and across the Keystone State is to expand use of natural gas in transportation.

Governor Tom Corbett supported the Pennsylvania Clean Transportation Corridor, and the state aims to have a compressed natural gas (CNG) pump every 50 miles within one mile of an interstate. That would enable schools like Lower Merion and universities like Temple to take advantage of expanded radii from their own facilities, saving thousands more in operating expenses.

“Energy is available at our front door and we have the infrastructure to deliver it to the city and businesses,” said Douglas Oliver, senior vice president for marketing and corporate communications for Philadelphia Gas Works.

“We are engaged in conversations with filling stations, fleets, anyone who has a role to play. This is where we want to go. The devil is in the details.”

In 2010, Pennsylvania produced just more than 500 BTUs of natural gas energy; in 2011 it more than doubled.

But the state budget may not be capitalizing as much as it should be. Possessing one of the lowest fee rates in the country, the $200 million impact fee generated was about half of what West Virginia’s tax level would have generated for the state.

Even so, utilities like PGW are seeing major benefits from natural gas.

“The general agreement is that Philadelphia Gas Works is doing a lot better than it was a decade ago. The feedback (from bidding companies) will be light years ahead from where it would have been 10 to 12 years ago,” Mr. Oliver said, who described this as “a very exciting time.”

“The cost is so low, folks who were using steam to heat their house are considering natural gas. Those who used natural gas for traditional use are now doing it at a lower cost.”

The city-owned utility is currently in the middle of privatization discussion, which slowed during a debate over who was responsible for paying $2.7 million in advisors’ fees. Once that issue is resolved, the city will begin to solicit bids for the utility, which one group estimated has a value of $1.85 billion.

If the money is there, Mr. Oliver said, the city will move forward with privatization. But it is also prepared to walk away from a bad deal.

- Region’s Business Staff

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Incentives Power Energy Development T

hroughout American history, virtually all energy industries have received grants, loans or subsidies to help get these fuels off the ground. More often than not, the contention in getting the legislation passed is the product of several forces: How it will affect cost to the consumers and taxpayers and how many jobs the industry will support.

Pennsylvania has been a part of this give and take associated with natural gas, solar and wind, although it has not been limited to these industries.

For the first part of the decade, the state had been a national trend-setter in developing green technologies, but the advent of natural gas has stymied that growth because it possesses a larger potential for exportation and can play a larger role in the replacement of oil in the manufacturing industry. This would further increase the state’s energy independence greater than any other source.

“Pennsylvania has been a net electricity exporter (to other US states) for many years. It is important to note that where the nation is not energy independent is with regard to foreign oil. Last year, the US imported 45 percent of its oil — the lowest percentage in over a decade,” said Patrick Henderson, Energy Executive for the State.

“This is where natural gas has even greater opportunities. Imported oil is used primarily for transportation and plastics and petrochemical manufacturing. Gov. Corbett is aggressively pursuing opportunities to convert fleet vehicles to domestic natural gas. “ “He was the first eastern U.S. governor to sign onto the multi-state natural gas vehicle memorandum of understanding, designed to pool state purchasing power and encourage US automakers to expand natural gas vehicle model choices. In addition, Act 13 signed by Gov. Corbett provides $20 million over three years to provide grants to encourage fleet vehicle conversions.”

The proliferation of the wind industry has been the direct result of 1992 federal legislation that made harnessing the renewable source financially feasible. The Energy Policy Act stated that corporation’s wind systems will receive a tax credit of 2.2 cents per kilowatt hour for the first 10 years of operation. Wind turbines last from 10-20 years, according to Dave Rosenberg, vice president of marketing and communications for manufacturer Gamesa, which has two American locations, both in Pennsylvania.

Erecting these systems requires millions of dollars of upfront systems. Their payback takes years, but the Production Tax Credit (PTC) allowed investors to recoup their costs in a timely manner while also allowing wind to compete on a cost basis with other energy forms.

Earlier in the decade, Pennsylvania was at the forefront of renewable technologies. In November 2004, the state established an Alternative Energy Portfolio Standard (AEPS), one of the first in the country.

“This is still a young industry and really wasn’t until 2002 that the industry went from being a toddler stage; it was crawling and walking and now we’re close to the point where we’re running but not sprinting,” Mr. Rosenberg said. “Ten years ago, this industry did not exist in the United States. We had no manufacturers that did industry-

In 2011, $80 million in funding was made available for larger commercial, industrial, non-profit and governmental locations as well as to create solar manufacturing centers within the state.

TONY BOON

scale wind turbines, we didn’t have workers trained, didn’t have technology.”

The (AEPS) set the requirement that so much of a utility’s and the state’s energy must come from a diverse array of sources broken up by tiers.

Tier I was the renewables. By the 2020-2021, the state mandated that 8 percent of the state’s energy production must come from photovoltaic energy, solar-thermal energy, wind, low-impact hydro, geothermal, biomass, biologicallyderived methane gas, coal-mine methane and fuel cells.

Tier II, consisting of waste coal, distributed generation systems, demand-side management, large-scale hydro, municipal solid waste, wood pulping and manufacturing byproducts, and integrated gasification combined cycle would comprise an additional 10 percent.

Gamesa, a Spanish-based wind turbine manufacturer, opened two facilities in Pennsylvania because of this 2002 legislation. Gamesa holds roughly a market share of 10 percent, installing 1.3 megawatts of capacity. Mr. Rosenberg said 12 megawatts of production went up nationwide.

On December 17, Washington Gas Energy Services (WGES) announced a partnership with wind energy developers and manufacturers that it would offer PECO, PPL, Penelec and MetEd customers its electricity at a lower rate than what it’s currently paying, embodying how the PTC works with energy deregulation to save the consumers money. It formed WGES PA WindPower to launch the initiative, collaborating with ChoosePA wind to offer the service.

The solar industry benefited from the Alternative Energy Portfolio Standard greater than any other renewable because it set a specific annual quota with annual increases.

In 2007, it established a .0013 percent production level.

In 2012, it is at .0325 percent with the overall renewable energy minimum at 3.5 percent.

Related to this was the institution of the Solar Renewable Energy Credits (SRECs). This stipulates that for every 1,000 kilowatt hours (or one megawatt) of production, the system owners receive a credit that is then purchased back by the utilities to meet the standard. The benefit was twofold: first it helped utilities meet this standard without needing to develop their large-scale projects, and it also helped the payback period on those that installed the systems.

Finally, the state released funding to further stimulate the industry to reduce the overhead of those fronting the costs. The Sunshine Program reimbursed up to 35 percent of the system costs for residential and commercial systems with size limitations enacted. The total rebate program totaled $100 million. The program first launched in May 2009 and has been revised several times since.

In 2011, $80 million in funding was made available for larger commercial, industrial, non-profit and governmental locations as well as to create solar manufacturing centers within the state. Combined with a 30 percent federal tax credit, the industry was not only lucrative for those able to obtain the cash for investment, it made economic sense as a viable alternative.

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Renewable Industry Caught in Legislative Crossfire When the political wrangling takes place, words such as “grant” and “rebate” get relabeled as “cost” by the opposition.

That four-letter word has the potential to kill the wind and solar industry.

Gamesa had been selling from abroad when the PTC first took effect and acquired two Pennsylvania locations because of the Alternative Energy Portfolio Standard, said Dave Rosenberg, Gamesa’s vice president of marketing and communications.

Gamesa has manufactured wind farms in four Pennsylvania locations for a total of 248 megawatts of production. In total, the wind industry has seen $15.5 billion of investment over the last five years.

This year was a historic year, Mr. Rosenberg said, with the 13 mW of industry-wide installation a high, but he said that the figure is not reflective of the industry. The PTC is set to expire at year’s end, resulting in systems completed January 1 or later not receiving that 2.2 cents per kilowatt hour credit.

Through the course of the year, the wind industry has witnessed a figurative shutoff of the engines. Because these installations require such a massive scope, the lead time is one to 1.5 years from contract signing through initial operation. The PTC only applied to systems built by December 31.

The uncertainty through the Republican primaries continued through the election to this point. By the start of the year, it became impossible to secure future business with the uneasiness resulting from the ominous deadline.

Such a prognostication is based on historical fact. The three times the bill has been allowed to expire (1991, 2001 and 2003), there was a 73 to 93 percent contraction in volume.

The layoffs begin with the developers, those who survey the land and generate the business. Eliminations by suppliers represent the second phase, as they make the parts necessary to build the turbines. Then, the manufacturers get hit because of the lack of new orders.

Finally, the construction and field work-

Gamesa developed this test turbine for the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) in Colorado, as part of an effort to develop wind turbines designed specifically for the U.S. marketplace. COURTESTY OF GAMESA

ers are laid off.

According to Mr. Rosenberg, this process is well underway. In the first quarter of this year, the developers were let go, followed by those comprising the supply chain in the late spring and early summer. In the fall, manufacturers such as Gamesa started shedding jobs. At its peak between the two operations, the company employed about 1,000 people.

It has gotten as low as 700 between layoffs and those that survived the cuts taking furloughs. Many have been hired back because of an increase in international business.

“We need an energy policy here in the United States and we have to have a broad base of varied energy sources, not just coal or nuclear.” Mr. Rosenberg said. “There are valid reasons for having a wide range of energy sources, not just

wind, so when one’s not available you have others and it helps level the playing field and wind has really been able to drive down the cost of electricity.”

As for solar, the goal is to have .5 percent of the state’s energy production come from the industry by 2021, but attaining that number will be difficult.

Like wind, the industry is contracting, but this is not necessarily a direct result of Washington’s actions. Maryland and Delaware still have grants available, albeit significantly smaller than they were at their programs’ inception.

Pennsylvania’s Sunshine Program, with its $100 million rebate program, has turned away applications since November 2011. And the state’s $80 million for larger scale projects including $5,000 grants for each job created? Gone.

Complicating the issue was the state’s

attempt at establishing its Solar Renewable Energy Credits as a viable financial piece for investors to recoup their costs.

For every megawatt the system produces, the system owner is able to sell these credits back to the utilities to help them meet their Alternative Energy Portfolio Standard number. These credits were redeemable for the first 15 years of a system’s life. Panels are almost universally warrantied for 25 years at 80 percent of the rated production level.

But the state, despite the landmark nature of the AEPS, set the bar too low.

The credits get purchased on the open market. The current value of the credits sits at $12, according to Maureen Mulligan from the Pennsylvania Solar Energy Industries Association, a figure also verified through the exchange website flettexchange.com. By contrast, at one

20 DECEMBER 2012

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point, New Jersey’s SRECs were upward of $600, but have since fallen as well.

Further compounding the issue is one caveat of the bill that allowed for other systems to register in Pennsylvania. The state worried that by closing the borders to just Pa. systems, it would be in violation of the interstate commerce clause even though other states had enacted such measures without being challenged. It flooded the market with more credits than the utilities needed to purchase under current AEPS guidelines, making it easier for the standard to be reached.

It effectively killed the market. At its peak, Ms. Mulligan projects that the industry employed 8,000 people in the state, a figure that she says is now down to the hundreds. The group’s membership once consisted of 80 different installers diminished to 20 since the funding began to dry up in late 2011.

To alleviate the hemorrhaging, the Pennsylvania House introduced House Bill 80. It aimed to significantly raise the requirement of energy coming from the Tier I renewable sources. The original 2004 legislation required 8 percent come from such industries by 2021; the new bill provided a 2-percent increase each year from 2021-2026 and accelerated short-term requirements. Overall, it would ensure one fifth of the energy

23 REGION’S BUSINESS come from this category. Additionally, following 2020 and the .5 percent production requirement, it would increase annually until it reached 3 percent in 2026.

As of 2021, half of the systems providing that electricity would have to be from within Pennsylvania.

“Let’s not throw the baby out with the bath water,” said Ms. Mulligan. “At least fix the share. There’s a lot of interest and demand. Prices were falling. We brought clean energy, got prices down.”

First introduced in 2009, the bill was again not called upon for a vote despite having 106 co-signers and only requiring 103 votes. Since then, the bill has dropped the 3-percent to 2 percent quota and excluded the passage regarding outside systems to no avail.

Mr. Henderson even used cost to the consumer as the reason why there needs to be careful evaluation of the bill before it passes.

“We must be very mindful of surgical legislative fixes that seek to align state or federal laws with market realities,” he said. “The primary concerns with legislation like this is, one, increased costs to consumers and, two, the signal this may send to the market with regard to legislative “tweaks” to the law. Certainty in the legislative arena is important.”

State’s Energy Future Depends on Both Technology, Politics How Pennsylvania will receive its energy depends 2016; and 60 percent in both 2017 and 2018, ending as much on the ability of technology to improve as it after that,” the release said.

The revised 2018 extension would not only allow does with the politics associated with it. Both Dave Rosenberg from Gamesa and Maureen Mulligan from continued sales, but the gradual phase out would allow PASEIA said that the benefits their industries have for the development of two more cycles of technologireceived over the years are no differcal innovation before eradication.

“I haven’t seen coal, natural gas or ent than what existing technologies nuclear sign up to give up their tax credcontinue to see.

Natural gas is changing business its,” Mr. Rosenberg said. “The industry is I HAVEN’T SEEN and transportation in Philadelphia really taking the lead on helping reduce and across the state as a wider variety COAL, NATURAL GAS the debt over time. We’re saying we really of businesses are using the cheaper OR NUCLEAR SIGN UP understand it. There’s a phase out over fuel in a greater number of ways. the next six years and what that phase TO GIVE UP THEIR The solar industry is slightly secure TAX CREDITS.’ out will do is allow us to go through two because its federal tax credit will exist technology cycles to get us to the point — DAVE ROSENBERG, GAMESA through 2016. where we can easily compete with the The wind industry, with its 2.2 credit.” cents per kilowatt hour credit set to As the state struggles with various expire in mere weeks, can see the industry go from forces pulling it in different directions, Pennsylvaboom to bust as quickly as the calendar flips to 2013. nia is still in a better position than most, specifically With the PTC so pivotal in the success of the wind because of the Shale, coal and nuclear energy. Dereguindustry, on December 12, the American Wind Energy lation continues to mean greater competition, as the Association released a statement supporting an effort market does not seem in danger of being overtaken that would reduce the cost of the PTC to the govern- by just a few players anytime soon. Whether the state continues to support the measures it adopted almost ment over time.

“The result of the AWEA’s analysis specifies that the a decade ago to ensure a diversity of clean energy tax credit would start at 100 percent of the current 2.2 sources remains to be seen. The hope from those in cents a kilowatt-hour for projects started in 2013, and their respective industries is that the end of the year be phased down to 90 percent of that value for projects will bring greater bipartisanship so they too can thrive in service in 2014; 80 percent in 2015; 70 percent in in the market.

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20 DECEMBER 2012

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Q&A

20 DECEMBER 2012

REGIONSBUSINESS.COM

VALENTIN RADU’S

CLASSICAL

For 26 years, Vox Ama Deus and its artisitic director have brought the best of Mozart, Bach and Beethoven to the stage in Philadelphia armed with original style instruments and Romanian inspiration.

DIRECTION

What’s the elevator pitch for Vox Ama Deus?

They perform with instruments appropriate to the pieces. When we do baroque repertoire, we perform on original baroque instruments at baroque pitch, which is half a step lower than the modern pitch.

I speak from the podium and talk about the various aspects of the piece.

One of the reasons for that is that one of my goals is education.

All singing is in the original language. In the [concert program] we have lyrics...and the English translations, and also notes on the pieces.

What inspired you to organize the group in 1987?

In my native Romania I was a big fan and admirer of a very world-famous group in Bucharest called Coro Madrigal (Madrigal Chamber Chorus), which was led by a very famous conductor, Marin Constantin.

They performed mostly a cappella in beautiful costumes at the stage of the Philharmonic in Bucharest, one of the most beautiful concert halls in Europe. I always wanted a group like that. It was a fantasy of mine for many years.

First it was called Vox Renaissance

www.facebook.com/VoxAmaDeus

Consort in 1987. For four years we were unaccompanied a cappella and then I added a few instruments to make it more authentic. In 1991, on the bicentennial anniversary of the death of Mozart, one of my idols, I founded the second, Ama Deus Ensemble. In 2007, I started the third group, Camerata Ama Deus chamber orchestra.

What is one of your favorite performances the group has done?

We always do a very big presentation at the Kimmel Center on Good Friday, usually a Requiem. In 2007

www.youtube.com/VoxAmaDeus

for the first time I did a very huge piece of music called Verdi Requiem and dedicated that piece to the heroes of the war in Iraq and Afghanistan. That was a very emotional performance for the nature of the piece (which) took up the whole evening and also the dedication.

What’s next for Vox Ama Deus in 2013 and beyond?

We have a huge upcoming gala concert: Gershwin and Ellington at the Kimmel Center on January 4 with world-famous British pianist Peter Donohoe.

www.voxamadeus.org

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20 DECEMBER 2012

REGIONSBUSINESS.COM

OPINION

Uncertain Tax Credits Means Critical Time For Wind Energy T

David Masur is the director for PennEnvironment, a statewide, citizen-based environmental advocacy group. Learn more at www.PennEnvironment.org.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com.

Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

he economic and environmental imperatives for investing in renewable energy are clearer now than they ever have been.

Our economy is finally starting to recover, opening the door for investing in industries that will mean real homegrown jobs now—jobs that can’t be outsourced and with a promise for durability and future growth.

Yet the coming weeks are crucial for the future of clean energy, nationally and in Pennsylvania.

Critical clean energy tax credits — the renewable energy production tax credit (PTC) and the offshore wind investment tax credit (ITC) — are set to expire at the end of this year unless Congress acts.

The urgency for promoting clean energy has reached new levels on the heels of extreme weather events occurring across the nation and around the world.

Mother Nature delivered another wake-up call in the form of Superstorm Sandy, sending a message loud and clear: this is what global warming looks like. Gov. Andrew Cuomo was spot on when he said, “Anyone who says there is not a change in weather patterns is denying reality.”

And while there is abundant clean, renewable energy all around us — from the heat of the sun and the power of the wind, to the energy lost in leaky windows and doorways of our housing stock and commercial buildings – critical clean energy tax credits are about to expire unless Congress acts.

The negative effects of letting these tax credits expire are real — and already starting to be seen in Pennsylvania.

From the wind power company Gamesa laying off more than 160 workers at their manufacturing plant in western Pennsylvania to Iberdrola Renewables recently cancelling a 24-turbine wind farm in Bedford County, the impact of losing these wind energy tax credits will have a significant effect on businesses right here in the Commonwealth.

global warming pollution as taking 218,000 cars off the road per year.

And if wind development continues ... the impact at a pace comparable to that of of losing these recent years through 2016, Pennsylvania would reduce global warming wind energy tax pollution by as much as taking an additional 185,000 cars off the road. credits will have The report also outlined that a significant today’s wind energy in Pennsylvania keeps 780 tons of smog-causing effect on pollution and 1,880 tons of soot pollution out of our air. That’s because businesses Pennsylvania is home to seventeen right here in the wind production facilities that generate enough electricity to power Commonwealth. nearly one-quarter million homes in the Commonwealth.

With states like Pennsylvania leading the way, wind power is cost-competitive with traditional energy sources – the price of wind has dropped 90 percent since 1980.

And the jobs are staying here – 60 percent of a wind turbine’s value is now produced in the United States – up from 25 percent in 2005.

Wind energy is a win-win for the American people, reducing air pollution and developing good green, homegrown jobs.

HADHUEY But there’s more progress to be made, here in Pennsylvania and across the country. To continue this And a spokesperson for the Wind growth and push clean energy indusEnergy Association said that without these tries across the finish line, we also need energy credits, wind energy employment federal solutions to grow our clean energy nationwide could drop from 75,000 to economy.

37,000—but if Congress acts to renew the The political support for renewing these tax credits, jobs in the wind energy sector important tax credits for America’s wind could top 100,000. energy sector is both broad and deep.

We have the technology and the workIt includes unusual bedfellows such as force to harness much greater levels of PennEnvironment and the Sierra Club, the clean energy right now—and we can’t U.S. Chamber of Commerce, the National afford to cut the legs out from this critical Governors Association and Republican industry by letting these tax credits expire. legislators from numerous states.

A spokesperson for Iberdrola stated, And even with this widespread support, “When we look at the path forward for the Congress may still leave this program on wind industry right now, the uncertainty the cutting room floor as the calendar year of the production tax credit is an imporwinds down. tant factor.”

We know that clean energy is growing In addition to job creation, wind energy is local economies, adding jobs, and creating good for our environment and public health. a cleaner future for Pennsylvanians – and A new PennEnvironment report showed it’s critical that Congress continue to invest that Pennsylvania’s current power generain its success. tion from wind energy displaces as much

20 DECEMBER 2012

REGIONSBUSINESS.COM

OPINION

29

Dramatic Changes to School District Welcome, Required

T

he positive momentum across Philadelphia is palpable as the city surges toward achieving world-class stature.

Appreciation for the region started from the outside as tourism flourished in the depths of a struggling economy. Now the city population is growing as a new generation learns the advantages of city life, strengthening the residential real estate market. Other elements of the economy continue to show growth, too, as the city’s innovation and creative economies thrive.

Amidst all these positives, remains a hurdle. If the city hopes to attain world-class status, if it hopes to be known as a model for other aging urban centers, it must address its perpetually failing and flailing public schools.

While the city’s economy and business community can – and, right now, do – thrive with a poorly performing school district, longterm viability can only be attained with competent public schools.

The energy of the downtown scene fuels the city’s population boom, drawing young professionals, but they will become parents who will want to put their children in schools that will prepare them for a competitive job market. Without change, the School District of Philadelphia will serve as the catalyst for another generation of urban flight.

The arrival of superintendent William R. Hite Jr. provided optimism, but his first major step toward reform gives reason to believe that the district is finally poised to address the need to rebuild.

Last week’s proposal to shutter almost 40 schools represents a bold initiative. While it is clearly only an opening salvo in what will be a contentious debate, its symbolic value should not be dismissed.

The idea of closing one out of every six schools shocked many, but it provided a clear message: The city’s schools cannot be turned around incrementally; there must be radical change, a fundamental rethinking of how the schools do business.

The school district must come to grips with some realities, including the fact that funding from Harrisburg is going to continue to decrease, even after Gov. Corbett leaves office.

More money has never been the answer and now the district must now cross increased funding off the list of solutions to its perpetual underperformance.

The move to close schools is an indication that the district is ready to take seriously the need to run more efficiently.

Running parallel to the school district’s ongoing struggles are the city’s universities, home to some of the brightest minds in the world, including those dedicated to education. As the district finally appears ready for transformative change, now is the time to connect with these institutions in a stronger way. The result could be – should be – something more exciting than anyone is considering, the type of public education system that Philadelphia not only needs if it is to become a world-class city, but the kind of system it deserves.

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COMMENTARY FROM ACROSS THE WEB

City Council Seeks To Undo Revised Zoning Code Philadelphia finally gets a modern zoning code with more reasonable rules for developers and residents alike, and here comes City Council trying to take the town back to the past.

--Council had seats on the commission that developed the code, which over four years held countless public meetings - a process that cost $2 million. It’s wrong for some Council members to ignore that exhaustive effort just so they can retain control over development in their districts. They need to instead consider the entire city’s needs, and give the code time to work before making changes.

PHILADELPHIA INQUIRER EDITORIAL, 17 DECEMBER 2012

Congress Will Work Even Less in 2013 Next year, members of Congress could be saying, “Thank God, it’s Thursday.”

The House is only scheduled to be in session on 15 Fridays next year, Roll Call reported. In 2011, the last nonelection year for the House,

EDITORIAL BOARD CEO and President James D. McDonald Editorial Director Karl Smith Associate Editor Terrence Casey

@LOLGOP

Uh oh, both Drudge and HuffPo are blasting the fiscal cliff deal. This stinks of compromise.

18 DECEMBER 2012

representatives had 21 Friday sessions. The House and Senate will have seven weeklong recesses at various points of the year.

PATRIOT NEWS EDITORIAL, 18 DECEMBER 2012

Tax Reform Action Needed Pennsylvania has been talking about property tax reform for decades. It’s time to stop talking about it and do it. And the state Legislature just might have the perfect opportunity to turn all that talk into action.

--Now a study has been completed including a draft report with 13 recommendations to get the ball rolling on property tax reform.

The question is: Will the Legislature attempt some of the suggestions included in the report, or let it collect dust on the shelf?.

DELAWARE COUNTY TIMES EDITORIAL, 17 DECEMBER 2012

HOW TO CONTRIBUTE To contribute, send comments, letters and essays to feedback@regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business. We reserve the right to edit all submissions for content, style and length.

ho ed

ho dy e

30

20 DECEMBER 2012

REGIONSBUSINESS.COM

BY THE NUMBERS

6.6M

135

Number of words in George Washington’s 1793 inaugural address.

271

Number of words (more or less) in Abraham Lincoln’s Gettysburg Address.

2,406

Number of words in President Obama’s 2009 inaugural speech.

379,894 Number of words in the Affordable Care Act.

Number of TV viewers who watched the last hour of the Miss USA pagent back in June 2012.

53%

Percent of U.S. electricity produced by coal in 1990.

42%

Percent of U.S. electricity produced by coal in 2012.

35%

$5M

Projected percent of U.S. electricity produced by coal in 2040.

Amount that Pennsylvania’s entry into the 2012 Miss USA pagent - Sheena Monnin must pay Donald Trump’s Miss Universe Organization.

An arbitrator ruled that the Cranberry Township native wrongly accused the group of fixing the results.

13%

Percent of U.S. electricity produced by natural gas in 1990.

25%

Percent of U.S. electricity produced by natural gas in 2012.

30%

Projected percent of U.S. electricity produced by natural gas in 2040.

1913 Last year in office for President William Howard Taft, the last American president to regularly sport facial hair. John Quincy Adams was the first president to display facial hair with long sideburns, but it was Abraham Lincoln who sported the first presidential beard.

8,000,000 9,500,000,000

Gallons of water used daily for Marcellus Shale drilling.

Gallons of water used each day in Pennsylvania.

$84,700,000

Box office sales for “The Hobbit: An Unexpected Journey” in its opening weekend, eclipsing the previous mark of $77.2 million set by “I Am Legend” in 2007.

95,674

The number of words, give or take, in the original novel “The Hobbit”

by J.R.R. Tolkein

2%

Increase in the percentage of executives participating in The Business Roundtable in Q4 who expect sales to decline, compared with those who participatd in Q3.

30%

Percent of CEOs participating in The Business Roundtable in Q4 who anticipate they will increase investment in capital goods, about the same as Q3.

$26

Average value of a client holiday gift, according to Trevose-based Advertising Speciality Institute.

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