Region's Business 21 March 2013

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REGION’S BUSINESS

PHILADELPHIA EDITION

A JOURNAL OF BUSINESS AND POLITICS

CAN THE NATURAL GAS BOOM

FUEL CHANGE? Pennsylvania has enjoyed a major economic windfall through natural gas production, but now seeks to convert that into long-term efficiences, especially in transportation.

MARCH MADNESS BRINGING HOOPS, REVENUE TO REGION YOUR BOTTOM LINE FOCUS MIGHT HINDER YOUR COMPANY CULTURE PLAN CALLS FOR BUS LINE TO CONNECT CULTURAL SPOTS RegionsBusiness.com $2.00 U.S.

21 MARCH 2013

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21 MARCH 2013

REGIONSBUSINESS.COM

13 Turnpike

Commission Needs Reforms

20

CONTENTS

3 1519 Walnut Street

Fuel for Change

Can Pennsylvania parlay its natural gas boom into long-term change, especially in transportation?

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Another scathing report, this one complete with criminal charges, clearly indicates reforms are needed at the Pennsylvania Turnpike Commission.

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12 Increase Your Tweeps

Want more Twitter followers? Here’s how to get them - and keep them.

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2013: YEAR OF THE INNOVATOR

16 Cultural

Connection Proposed As part of a master Center District Plan, a bus line would connect cultural points from the river to the Mann Music Center.

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21

Four Companies Worth Watching

! Innovation abounds in the Delaware Valley’s energy sector as companies look for new ways to fuel businesses effecitvely and efficiently.

27 26 Building a Leaving Smarter Grid

a Green Legacy

Massive investments are underway to upgrade the electrical grid, which will not only improve efficiency, but shorten down times after events like Hurricane Sandy.

Airports may not be the first place people think of when it comes to fuel efficiency, but US Airways has made it a top priority with noticeable results.

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REGION’S BUSINESS Independence Media Corp.

600 West Germantown Pike, Suite 400 Plymouth Meeting, PA 19462 E-mail: feedback@regionsbusiness.com Online: RegionsBusiness.com Twitter: @RegionsBusiness Subscription & Advertising information: 610.940.1656

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“The differences between the Republican and Democratic budgets are stark and neither is attractive.”

CHARLES KADLEC ON FORBES.COM

35 March

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Two rounds of the NCAA men’s basketball tournament will not only bring exciting games to the region, but also plenty of economic impact as thousands arrive to witness the spectacle first hand.

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© Copyright 2013 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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21 MARCH 2013

REGIONSBUSINESS.COM

EDITOR’S DESK

Bottom Line Focus Can Hinder Your Culture

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

You can contact him at ksmith@regionsbusiness.com.

We recently ran a cover story on CFOs which, in part, talked about how that position had become more important in strategic discussions. That makes sense, since most businesses tend to be a bottom-line affair.

That being said, all decisions shouldn’t be based on the balance sheet.

Alexis Madrigal of The Atlantic spent some time inside Facebook’s offices and came across the much-talked about vending machines.

These contain a whole host of computer items, things like ear buds, power cords, USB cords, that sort of stuff.

All a Facbook employee has to do is swipe their ID card and the item is dispensed at the bottom, just like buying a bag of Doritos in the lunchroom. Here’s the rub, though. While the price of each item is displayed in the machine, employees are not charged for them.

The sound you just heard was every CFO reading this article falling to the floor after passing out.

This is an important illustration of how to build a culture and that’s something that

simply does not appear on the monthly P&L. Facebook trusts its employees to manage its equipment properly. This is not unfettered, though, swiping the ID card clearly creates a virtual paper trail, so there is accountability.

Yet, the message is clear - we trust you. It’s part of a culture that thrives on creativity, trust and responsibility.

Years ago, I worked at a newspaper that followed a similar pattern. Everything about the operation was about quality. The building was comfortable and clean. The equipment was up-to-date. There were coffee stations throughout. Eating lunch at your desk was frowned upon.

The end result? A profitable enterprise that consistently produced some of the highest quality work I’ve ever been associated with and a workforce that loved their jobs and worked with tireless dedication.

I’ve been on the other end of the spectrum, where people were given the evil eye if they asked for paper clips or pens. The building was dark and dingy. The result was a profit-

able enterprise that produced some good work, but generally uneven results. The workforce felt undervalued and the word most often associated with the operation was cheap.

Building a culture will happen, whether you take an active role in it or not and there is a distinct difference between being fiscally responsible and being flat-out cheap. It’s important that your employees understand the impact of their actions on the bottom line, but it’s also important that they understand that they have value, too.

Whether it’s Facebook giving them immediate access to a USB cable or Yahoo! providing free food (which, in turn, fosters collaboration and discussion), actions big and small will help shape your company’s culture - for good or ill.

So stop for a moment and ask, what does the way I run my business say about the kind of culture I want? Saying you want a collaborative, energetic culture is one thing, but actions always speak louder than words.

21 MARCH 2013

REGIONSBUSINESS.COM

DEALBOOK

Berwyn’s Triumph Acquisition Finalized

WEEKLY BRIEFING

Mayor At World Class Summit: ‘We Function As A Region’

The acquisition of United Technology Corp.’s Goodrich Pump & Control Systems unit by Berwyn-based Triumph Group Inc. is finalized, the company announced this week.

Triumph will add more than 500 employees and almost $200 million in annual revenue, according a Philadelphia Inquirer report.

Full-service Volvo retailer Cherry Hill Autos was named the No. 1 workplace for a small company in the Philadelphia region for the second consecutive year.

A survey conducted by TopWorkPlaces. com and published on Philly.com ranked the 51-year-old company No. 1 because the 68 employees see the business as a family first, Philly.com reported.

ENERGY

PECO Proposal: Increased Production of Smart Meters PECO Energy Co. has proposed spending $282 million to install its smart meters for all 1.6 million customers before 2015, according to The Philadelphia Inquirer.

The current plan calls for installing the new, smart meters until 2019, fulfilling PECO’s legal obligation to switch by 2024.

57,500

Jobs lost in Philadelphia between 2000 and 2010, making the city No. 6 for job growth among the nation’s 10 largest (by population) metropolitan areas

60%

AUTO

Cherry Hill Auto Named Region’s Top Workplace

BY THE NUMBERS

Southeastern Pennsylvanian children under five years old in a childcare setting

26%

Mayor Michael Nutter addresses the World Class Summit Monday evening.

BY REBECCA SAVEDOW Just a week after Mayor Michael Nutter’s announcement of Philadelphia’s sixth consecutive year of population growth, plans were released by the Economy League of Greater Philadelphia to position the city closer to becoming a world class city.

The league’s global positioning strategies (GPS), which encompass education and development, business growth and infrastructure, were presented Tuesday night at the 2013 World Class Summit at WHYY’s Hamilton Public Media Commons.

More than 30 regional business people, educators, policy makers and various other professionals with a vested interest in enhancing Philadelphia’s future convened to present the specific pathways that they have mapped out for the city.

Bernard Dagenais, Main Line Chamber of Commerce President REBECCA SAVEDOW

REBECCA SAVEDOW

“We’re not competitors against each other anymore, we function as a region,” said Mayor Nutter, who made remarks at the start of the program and emphasized the importance of uniting as a city in order to carry out this shared vision.

The plans are part of a larger initiative timeline set by the league to make Philadelphia a versatile place to live and a global destination by the year 2026. The initiatives are contingent upon the ability of professionals to collaboratively produce strategies that offer room for flexibility in a current climate that is both economically and technologically unpredictable.

Executive Director of the Economy League, Steven Wray, stated that aside from the availability of growth capital from seed to venture funding, “having enough experienced and skilled workers is increasingly recognized as a key, if not the most important driver of industry growth.”

Increasing the amount of early, highquality, childhood education available to the region was one of the strategies discussed. The plans include post secondary education initiatives and workforce training that can transition educated young people into industries through structured ways.

“God forbid anyone would actually find out about us, said Mayor Nutter through laughs from the audience, “that is our great, great fear each and every day — that someone would know that there is a great thing happening in Philadelphia.”

Of the above, children who are under the age of five and are in “good” programs or programs of “high quality”

10%

Students from the Philadelphia School District who complete a postsecondary degree within six years of finishing high school

63%

Job openings that will require workers to have at least some college education by 2018

34%

Philadelphia residents who have at least a bachelor’s degree

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Philadelphia’s rank among the largest U.S. cities for bachelor’s degrees WORLD CLASS GREATER PHILADELPHIA

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21 MARCH 2013

REGIONSBUSINESS.COM

WEEKLY BRIEFING

ATLANTIC CITY

Revel Interim CEO Confirmed

Liquor Sales Privatization Moves Forward After Hearing

The New Jersey Casino Control Commission approved Jeffrey Hartmann, former president of the Mohegan Sun casino resort, as the interim CEO of Revel casino, according to the Associated Press.

Revel, which has limped through its first year of operation, is expected to file for bankruptcy this week.

Former CEO Kevin DeSanctis announced last week that he would be stepping down from his role with Revel.

RETAIL Supporters and opponents of the privatization of liquor sales lined up for Monday’s hearing.

Report: New Supermarket Will Be Camden’s First In About Three Decades A 75,000-square-foot ShopRite supermarket planned for construction in Camden will be the city’s first new full service supermarket in three decades, according to a report in the Philadelphia Business Journal.

ShopRite will anchor a 150,000-square-foot shopping center to be built by Blue Bell-based Goldenberg Group by 2015.

DEVELOPMENT

South Kensington Apartment Complex Construction Planned A 311-unit apartment complex will be built at 2nd and American Streets in South Kensington, according to a report in the Philadelphia Business Journal.

Canus Corporation will reportedly construct Soko Lofts, which will be comprised of three buildings.

Canus Corporations will need first to present its plans to the South Kensington Community Partners planning and zoning committee, according to the Business Journal report.

BY MELISSA DANIELS More than 100 Pennsylvanians filled the hallway in the Irvis Office Building Monday morning. Whether for or against liquor privatization, they wanted to see what was about to happen — and they wanted a seat.

The House Liquor Control Committee was taking up House Bill 790, a proposal to end the state’s monopoly on wine and liquor sales and put it in the hands of the marketplace.

The line wrapped along the right side of the normally empty hallway. It snaked around two corners, with security guards keeping an eye trained on the crowd and keeping the hallways clear for lawmaker and state officials.

Nylon barricades kept the crowd corralled two and three deep.

The group didn’t go hungry, though. A good Samaritan left doughnut holes for the early risers.

The committee hearing was the first crack at the privatization proposal put forth by Gov. Tom Corbett, which lawmakers changed in the process. The bill passed, but only after more than two hours of debate and significant changes to the governor’s original plan.

Facing the likelihood that the privatization proposal would move forward, unionized state liquor store employees and their supporters flooded the hallways.

Union members donned yellow T-shirts with a crossed-out martini glass, the same yellow shirts now recognizable throughout the Capitol as privatization debates take

PA INDEPENDENT

center stage.

Fending off a cold Pennsylvania March, some wore the shirts over long-sleeved tees, while others had emblazoned yellow fleeces to match.

And they brought along signs: “Gov. Corbett’s rhetoric doesn’t match the facts.”

United Food and Commercial Workers Local 1776 president Wendell Young IV said the state store employees who came to the meeting Monday are looking out for their jobs and Pennsylvania taxpayers.

“They’re really concerned about the impact of what’s going to be talked about today,” Mr. Young said.

The heart of that debate is whether a privatized alcohol industry will leave Pennsylvania consumers better off on pricing, convenience and availability of alcoholic beverages — the same conversation lawmakers have had for 80 years.

But this time around, the details were new.

Mr. Young, a staunch opponent to privatization, took a seat next to Matt Brouillette, an ardent privatization supporter who heads up the free-market think tank Commonwealth Foundation.

While important in the privatization debate, Monday’s hearing was just the first stop in a long journey.

The House of Representatives must vote on the bill, and then the Senate gets its chance.

If successful in both chambers, what emerges will go to the governor for consideration.

This article was originally published on Pennsylvania Independent at PaIndependent.com.

BY THE NUMBERS

Pennsylvania Adds 3 New Billionaires Pennsylvania has three new billionaires, according to the latest Forbes report.

Added to the list of the state’s wealthiest are Dick Yeungling, Jr., of Yeungling brewery; Edward Stack, founder of Dick’s Sporting Goods; and Susan Hirt Hagen, whose father founded what became Erie Insurance Group.

The Allentown Morning Call published a list of the top five billionaires in Pennsylvania:

$8.7B

Name: Hansjoerg Wyss Residence: West Chester Source of Wealth: Medical Devices

$2.7B

Name: Mary Alice Dorrance Malone Residence: Coatesville Source of Wealth: Campbell Soup

$2.3B

Name: Henry Hillman Residence: Pittsburgh Source of Wealth: Investments

$1.6B

Name: Richard Hayne Residence: Philadelphia Source of Wealth: Urban Outfitters

$1.6B

Name: Susan Hirt Hagan Residence: Erie Source of Wealth: Erie Indemnity

21 MARCH 2013

REGIONSBUSINESS.COM

WEEKLY BRIEFING

9

Kane: Turnpike Officials, Senator Conspired To Steal Millions

Attorney General Kathleen Kane announces the charges against three former top Pennsylvania Turnpike officials and a former state senator Wednesday.

PA INDEPENDENT

HARRISBURG — Three former top officials at the Pennsylvania Turnpike Commission and a former state senator have been accused of running a political scheme that resulted in “untold millions” of taxpayer dollars being misused and stolen.

Attorney General Kathleen Kane said the officials were engaged in a “pay-to-play” arrangement with engineering firms, insurance companies and banks that had contracts with the turnpike between 2000 and 2011.

In total, eight men have been charged with various counts of conspiracy, bribery, bid rigging, theft and several other charges.

Attorney General Kane said the officials used their power to secure “secret gifts of cash, travel and entertainment, along with political contributions” from contractors doing business with the Turnpike Commission.

“The former state officials charged

wielded extraordinary power which they wrongfully used for self-enrichment for their own political purposes,” she said. “Those who ‘pay-to-play’ have sought and been rewarded with multimillion-dollar turnpike contracts, and the public has lost untold millions of dollars.”

Former state Sen. Robert Mellow, D-Lackawanna, was the only elected official charged.

According to the grand jury presentment, he was “actively involved in steering Turnpike contracts to particular vendors,” securing political contributions from turnpike officials and vendors and personally benefitted from gifts, including tickets to New York Yankees baseball games and trips paid for by Turnpike contractors, which he did not disclose on state ethics forms.

Charges were also filed against Mitchell Rubin, former chairman of the Turnpike Commission, Joseph

Brimmeier, former CEO of the Turnpike Commission, and George Hatalowich, a former COO and contract administrator for the Turnpike Commission.

All were involved in funneling contracts to certain vendors and securing political contributions from those vendors.

Pennsylvania State Police Commissioner Frank Noonan called it “a complex scheme.”

He said the investigation was aided by former employees of the turnpike who tried to “do the right thing” and were reassigned or terminated by the commission for speaking out about the criminal activities.

“This has happened all too often in Pennsylvania,” Commissioner Noonan said. “Pennsylvanians deserve better from our government.”

This article was originally published by Pennsylvania Independent at PaIndependent.com.

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21 MARCH 2013

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WEEKLY BRIEFING EXECUTIVE BOOKSHELF

WHO TO FOLLOW

@donnaserdula Donna Serdula LinkedIn expert Ms. Serdula tweets frequent tips for the professional networking website.

RT @donnaserdula: Is your #LinkedIn #headshot black & white? It’s alright! A great black & white professional headshot will help you stand out.

RT @donnaserdula: Your #LinkedIn headline should be like a headline in a newspaper. It should compel the reader to read more.

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21 MARCH 2013

WEEKLY BRIEFING: GAMING

REGIONSBUSINESS.COM

GAMING

Table Games Revenue Drops The play of table games at Commonwealth casinos during February generated nearly $8 million in tax revenue, according to the Pennsylvania Gaming Control Board.

With an average of 1,049 tables in operation statewide on a daily basis during February, gross revenue from the play of all table games was $55,348,241, producing $7,987,252 in tax revenue.

This month’s gross table games revenue was $1,208,697 lower than in February 2012 when revenue totaled $56,556,939, a 2.1 percent decrease.

The Board noted with these figures that February 2012 was a leap year month resulting in an extra day of casino play.

The Board also noted that the 11 casinos operated with an average of 1,049 tables on the gaming floor in February of this year compared to 977 tables last February when 10 casino were in operation.

Coupled with figures on slot machine revenue released earlier this month, overall gross revenue from both slots and tables was $251,293,452 this February compared to $272,244,678 in February of last year, a decrease of 7.7 percent.

PENNSYLVANIA GAMING CONTROL BOARD

Casino Proposals By The Numbers: Wynn Philadelphia Like the Provence, Penn alumnus Each week, Region’s Business will feature one or two of the proposed casinos Steve Wynn’s proposal is more destinavying for the city’s second gaming license. tion resort than casino — and Wynn has established a track record of building luxurious casino-resorts that pamper

BY SANDY SMITH their guests. Wynn Philadelphia is no difProject name: Wynn Philadelphia ferent. And like the Provence, the facility Developer: Wynn Resorts, Ltd. will be built in a single phase, with all the Operator: Wynn Resorts, Ltd. amenities and features included from the Location: 2000 Richmond Street, Port start.

Richmond This proposal’s most distinctive feature Particulars: aside from the Wynn reputation for overGaming hall: 2,500 slot machines, 100 the-top luxury is its location: it is the only table games proposal located on the Delaware riverHotel: 307 rooms, each at least 800 front. Wynn himself picked the 57-acre square feet in size site — the largest of the six plots of land, Other ancillary facilities: At least established in 1825 as the William Cramp three or four casual and fine dining food shipyard — just upriver from the Sugar and beverage venues, including two House casino and designed it to fit in with facing the Delaware; 10,000-squarethe City Planning Commission’s Central foot nightclub and 20,000-square-foot Delaware Riverfront Master Plan, with multipurpose entertainment facility; five- public access to the river and a segment star spa. Parking: 2000-vehicle parking of the riverside pedestrian/bicycle trail garage and 228-space surface lot incorporated into it.

Its location right next to the Girard Avenue interchange on I-95, which when

rebuilt will dump traffic right at Wynn’s front door, indicates that Wynn expects the overwhelming bulk of the resort’s patrons to arrive by car, but it is also right next to SEPTA’s Route 15 trolley and three bus routes, enabling workers and those who would rather not drive to access the site as well.

If the PGCB selects this proposal, the $926 million resort will be the largest private construction project in the state’s history. It is also Wynn’s second effort to develop a casino in the city where he attended college: the investors in the failed Foxwoods casino recruited him to rescue the project, ultimately without success, when it was beginning to flounder a few years ago. We were unable to obtain economic impact figures in time for this report, but estimate that its impact, especially from spinoff development around the site, would be at least equal to that of the Provence.

This article was originally published on the Philadelphia Real Estate Blog, www.PhiladelphiaRealEstate.com.

Casino Proposals By The Numbers: Hollywood Casino The most distinctive feaEach week, Region’s Business will feature one or two of the proposed casinos ture of this proposal is its vying for the city’s second gaming license. ownership structure: It’s the only one of the six that will be majority owned by a

BY SANDY SMITH public benefit nonprofit.

The Philadelphia Casino Project name: Hollywood Casino Developer: Penn National Gaming Inc. Benefit Corporation will own two-thirds of PennOperator: Pennsylvania Gaming Ventures, LLC sylvania Gaming Ventures, Location: 7th Street and Packer LLC (Penn National owns the remaining Avenue, South Philadelphia third).

Particulars: At present, PCBC’s board has only one Gaming hall: Phase 1, 100,000 square member, but should this proposal be feet, with 2.050 slot machines (expandselected, it will have a full complement of seven board members, including one able to 2,500), 66 table games and 15 selected by Penn National. poker tables; Phase 2, hall expands with The sole purpose of the PCBC is to an additional 1,000 slots funnel money into the coffers of the city’s Hotel: Phase 2, 500 rooms employee pension fund and the School Other ancillary facilities: Phase 1, District of Philadelphia, and the proposal 180-seat entertainment lounge with live calls for the nonprofit to receive at least acts, fine-dining steakhouse, sports pub, $2 million of the casino’s gross revenues casual grill, noodle bar and food court annually. with four outlets; Phase 2, 24,000 square That aside, the proposed casino more feet of event/meeting space. closely resembles the existing Sugar-

House facility in form than it does the urban casinos; it will enjoy excellent auto access via Broad Street and the Walt Whitman Bridge/Packer Avenue interchange of I-76, plus adequate transit access.

The developer estimates that the annual direct and indirect economic impact of the project on Pennsylvania will be $596.6 million. The project is projected to directly and indirectly generate 4,390 jobs in Pennsylvania, 3,740 of those in Philadelphia..

This article was originally published on the Philadelphia Real Estate Blog, www.PhiladelphiaRealEstate.com.

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REGIONSBUSINESS.COM

IDEAS

Increasing Your Number of Twitter Followers

Gina Rubel, is the president and CEO of Furia Rubel Communications, Inc. in Bucks County.

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

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

Many business owners and politicians are beginning to understand the value of social networking platforms such as Twitter but many don’t understand the rules of engagement or how to increase their “network.”

There are several things you can do to increase your numbers on Twitter.

1) Tweet, tweet and tweet some more.

The more you share information of value, the more likely you will gain followers.

2) Start using hashtags in your Tweets.

For example, if you live in Bucks County and your tweet is relevant to others in the county, then include the hashtag #BucksCounty in your 140 character tweet. Same goes for #Philadelphia #MontCo, #ChesterCounty, #BerksCounty, etc. You get the point. The folks who follow each hashtag will often retweet you and some will follow you. There are hundreds of hashtags you can use for every topic under the sun.

3) Get involved with conversations that are trending on Twitter using trending hashtags.

I got involved in the SuperBowl Ad conversation using various hashtags and picked up about 20 followers while watching the game. I also ended up finding new and interesting people to follow. I even received a tweet from @Coca_Cola.

4) Look at other people’s lists (people who are thought leaders and who have lots of followers in the areas of interest to you) and follow their followers and the people they follow.

For example, if you love politics, then look for lists of politicos. Ultimately, people want to follow others with similar interests.

5) Retweet stories and content of value to your audience.

For example — retweet articles from publications and news sources in your local community, share information of value to your target audiences, and if you blog, tweet your posts using hashtags to help drive readership.

6) Use Hootsuite (it’s easy to learn).

Follow topics that interest you, stay on top

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of conversations, schedule tweets at otherwise inopportune times to you, and measure your analytics.

7) Promote your Twitter profile on Facebook, LinkedIn, Pinterest, etc.

(Go to Facebook and ask your “friends” to follow you on Twitter.)

8) Ask your connected network to send you shout-outs on Twitter and be sure to send them shout-outs.

Think about using tools like #FF / #FollowFriday.

9) Start conversations or engage in conversations with thought leaders on Twitter.

10) When you attend events, be sure to engage in the Twitter conversation using the event hashtag (which is an especially valuable tool for conference attendees).

These are just a few simple ways to reach new followers and to engage with new and wonderful people on Twitter.

Happy tweeting. And while you’re at it, don’t forget to follow me…. @ginarubel.

21 MARCH 2013

POLITICAL COMMENTARY

REGIONSBUSINESS.COM

13

Reforms Needed After Turnpike Commission Charges

Eric Boehm is bureau chief for PA Independent, a project of the Franklin Center for Government and Public Integrity CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com.

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

The newest round of allegations of misdeeds at the Pennsylvania Turnpike Commission are by far the most serious, the most criminal, and the most important for driving home reform of one of the longstanding homes of public patronage in the Keystone State.

Last week, Attorney General Kathleen Kane announced charges against former state Sen. Bob Mellow, D-Lackawanna, former Turnpike Commissioner Mitchell Rubin, former Turnpike CEO Joe Brimmeier, former Turnpike COO George Hatalowich, two lower ranking turnpike employees and two longtime turnpike vendors.

The men were charged with running a complex “pay-for-play” scheme in which campaign contributions and gifts were paid by vendors to favored politicians in return for contracts with the turnpike.

Though only eight were charged, the grand jury presentment paints a compelling picture of a much wider-ranging scam, with former state Sen. Vince Fumo, D-Philadelphia, and former Gov. Ed Rendell also implicated, though not named or charged.

The presentment tells the tale of a government agency run amuck — corrupted and controlled by powerful political interests who used it for their personal gain to misdirect, misuse and steal millions of dollars from Pennsylvania taxpayers.

“These men were using the Turnpike to line their pockets and to influence elections,” Attorney General Kane said. “That is stealing from the public, pure and simple.”

The allegations come on the heels of a report from former Auditor General Jack Wagner, who in January released an audit of the Turnpike Commission showing poor financial management and a complete lack of oversight of the expense accounts for high ranking members of the commission.

Last week’s allegations make those offenses seem like small potatoes by comparison — as they are — but the past three months should make one thing blatantly clear: changes are needed at the Pennsylvania Turnpike Commission.

To his credit, the new CEO of the turnpike is at least doing something. Mark Compton

has promised to review all contracts that are still active from the period of 2002 through 2010 that was the focus of the grand jury investigation.

And for what it is worth, lawmakers in the Capitol say the turnpike is no longer their personal piggy bank — though what do you expect them to say?

As for further changes, state Rep. Donna Oberlander, R-Clarion, has proposed a bill that would eliminate the Turnpike Commission entirely by rolling it into the state Department of Transportation. That’s a good plan, but it’s not one that can be accomplished in the near future because the turnpike has more than $8 billion in debt.

If the state were to absorb that debt, it would risk its own credit rating and create another budgetary challenge in a year that is already full of them.

Immediate reforms are essential and an end to political patronage is a good place to start. But in the long run, the Pennsylvania Turnpike Commission has made its own case for elimination.

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21 MARCH 2013

POLITICAL COMMENTARY

REGIONSBUSINESS.COM

‘Nanny State’ Threatens Personal Liberties, Freedoms We hear a lot about teaching children “individual responsibility.” But watching government, at every level, it doesn’t seem that message has moved too far up the ladder.

The Nanny State is more pervasive than ever. The term has been around for nearly half a century, since British Member of Parliament Iain Macleod coined it while arguing against an “authoritarian, interfering and overprotective” government.

Charlie Gerow is CEO of Imagine the level of his rhetoric if he could Quantum Communications, see early 21st-century America where, in the a Harrisburg-based name of good intentions, kids are constrained public relations and issue from selling lemonade, Girl Scouts are advocacy firm. restricted in selling their cookies, fines are levied for dirty cars, Happy Meal toys are CONTRIBUTE banned (they couldn’t get the meal itself) and “food confiscation teams” inspect the homeSend comments, packed lunches of school kids to make sure letters and essays they are USDA compliant. to feedback@ Last week a New York Supreme Court Jusregionsbusiness.com. tice struck down Mayor Michael Bloomberg’s Opinions expressed by “soda ban.” Restoring Gotham’s freedom to guest writers do not supersize their sodas, Justice Milton Tingling necessarily reflect those said that the “loopholes in this rule effectively of Region’s Business.

defeated the stated purpose.” Moreover, the judge ruled that the Board of Health had overstepped its authority.

It wasn’t the first time one of Mayor Bloomberg’s heavy-handed control schemes has been struck down. In 2010 a federal judge set aside another behavior-engineering plan of Hizzoner, who’d also like to ban private ownership of guns and use of tobacco.

None of these setbacks seem to have deterred Mr. Bloomberg. Immediately he launched another initiative, this one aimed at requiring merchants who legally sell cigarettes and other tobacco products to hide them so as to not lure younger shoppers into smoking or worse. As Jim Calvin, head of the New York Association of Convenience Stores rightly asked, “Does the mere sight of (beer) encourage underage drinking? The sight of lottery tickets to gamble? The sale of condoms to engage in premarital sex?”

Somehow those who believe they should use power derived from citizens to tell them what to do have forgotten that there are limits to the power granted to the government.

Every one of these plans (many no doubt begun with good intention) takes away the rights, liberties and freedoms of the sovereign citizens. Those little slices of individual liberty suck the lifeblood out of the economy and society as a whole. Where freedom is the rule, society thrives.

There’s no argument that rampant obesity is a serious health problem or that smoking cigarettes is not beneficial to your health. But people should be allowed to live their lives as they see fit. What cannot be accomplished by persuasion should not be done by coercion.

Whether it’s a ban on Big Gulp sodas or the ill-fated drink taxes they tried in Philly a few years ago, Nanny State solutions, no matter how “well intended,” fail. They often usher in unintended consequences that hurt the very people they were designed to protect. Individual freedom and responsibility that goes with it are vital to a healthy and just society.

And if there’s any truth in the notion that a mere glimpse of a cigarette will cause a kid to become a chain smoker, there are a lot of politicians who should stay out of sight.

21 MARCH 2013

POLITICAL COMMENTARY

REGIONSBUSINESS.COM

15

Mayor Pitches Budget In Raucous Chamber

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 March 14, Philadelphia Mayor Michael Nutter stepped to the podium to address City Council in a packed chamber regarding his upcoming budget.

Spectators filled every seat possible, and they made their voices heard. Many of the audience members represented union members who have been working without a contract for some time.

Their jeers drowned out the mayor’s speech so badly, he was forced to exit the chamber and finish his address elsewhere, before Philadelphia City Council members and a few, carefully screened audience members.

Each year to begin budget season, the mayor addresses City Council about his goals and recommendations for the upcoming fiscal year.

City Council budget hearings will take it from there, as hours will be spent deliberating over every cent in the budget before Council issues its approval.

Many will testify on the budget, particularly members of Mayor Nutter’s Administration, but the mayor is first to speak in his address.

Two of the largest financial issues facing Mayor Nutter were front and center during the address. Union members showed up to vocalize their displeasure with the lack of contract and raises for non-uniformed City employees. The Actual Value Initiative (AVI) just hit street level as residents have received their new property assessments and have begun applying for various forms of relief such as the Homestead Exemption.

Mayor Nutter attempted to provide assurances to the agitated city employees early in his address by saying, “I know many of you here today are city employees with serious concerns . . . You want a fair contract and so do I. But a fair contract must balance the interests of both hard working taxpayers and dedicated city employees.”

However, these particular city employees no longer seem interested in Mayor Nutter’s verbal assurances, as evidenced by the chorus of vitriol that followed these remarks.

Later, Mayor Nutter would describe how he has set aside $26 million of his proposed budget for future labor obligations to District Councils 33 and 47, Local 22 of the Firefighters Union and Deputy Sheriffs.

Over the proposed Five Year Plan, this commitment comes to $84 million.

“I respect the collective bargaining process,” said Mayor Nutter as he neared

MITCHELL LEFF/CITY OF PHILADELPHIA

the conclusion of his remarks on the labor contracts.

In addition to outstanding labor obligations, Mayor Nutter described how his budget interacts with AVI, which is now being fully implemented.

The mayor described how the new Office of Property Assessment completed a reassessment of all real property in Philadelphia, and the result is that property in Philadelphia has increased in value from $36 billion to more than $98 billion.

However, Mayor Nutter clarified that he is “proposing to collect not more current property tax revenue next year than the city has budgeted for this year.”

The result of that commitment is a reduction in the property tax rate from the current 9.771 percent to a level that will bring in about $1.2 billion in revenue.

To meet that goal, Mayor Nutter recommended a tax rate of 1.3204 percent.

This tax rate will affect Philadelphia’s property owners differently and the mayor recognized that.

“To moderate the impact,” he said, “I am calling for a series of relief measures targeted at both homeowners and those facing potentially significant increases.”

The Homestead Exemption is the most popular relief found in the AVI package and

the Mayor has proposed setting that exemption at $15,000.

He mentioned that more targeted relief may be made available for long-term residents living in highly gentrified areas of the city.

The mayor’s address mentioned many other points in his proposed budget, including additional funds for police officers, libraries, as well as a reduction in the muchmaligned Wage Tax. He concluded on a note that recognized how progress has been difficult. As will likely become evident in the coming weeks, every penny in Philadelphia is pulled 20 different directions.

City Council will do its best to resolve issues and promote fairness, but it falls to the mayor to provide the initial blueprint for those compromises.

Fortunately for Mayor Nutter, the quality of his budget is not measured in the applause-o-meter rating he receives during his budget address, but in the fiscal health of the City of Philadelphia.

As he pointed out in his address, the city is improving. As with the rest of the country, that recovery has been slow but noticeable, a welcome sign after years of recession.

Hopefully at next year’s address, the mayor can again report similar results.

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21 MARCH 2013

2013: YEAR OF THE INNOVATOR

REGIONSBUSINESS.COM

Cultural Corridor Line Included In Philadelphia Central District Plan

MEETUP CALENDAR

Entrepreneurs & Funding Network “Whether you’re new to the business of real estate investing or hoping to network with some seasoned professionals, our events are organized to help make social and networking effortless.”

Time: 6 to 7 p.m.

Date: Monday, March 25 Place: Stratus Roof Top Lounge at Hotel Monaco, 433 Chestnut Street, Philadelphia, Pa. Tickets: $10 at the door, free with RSVP

CENTRAL DISTRICT PLAN

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A proposed Cultural Corridor Line Bus Rapid Transit (BRT) would take riders from the Delaware River waterfront to the Mann Music Center, stopping at some of Philadelphia’s biggest cultural attractions.

The proposal is part of the Central District Plan, which was released Tuesday.

Philadelphia Planeto, the city Planning Department staff blog, had this to say about the proposal: “The Cultural Corridor Line will not only connect important attractions, but its service will fill an important transit function — bringing rapid service to the northwestern Center City for the first time (the Benjamin Franklin Parkway, Logan Square and Fairmount neighborhoods). To do this, the line will utilize the old railroad cut called the City Branch which lies largely belowgrade from Broad Street west/northwest between Callowhill and Hamilton Streets then under Pennsylvania Avenue and along Fairmount Park near Kelly Drive.”

Using this old railroad space, the cultural transit line will be able to avoid traffic jams on the Benjamin Franklin Parkway.

“The Cultural Corridor Line can also stitch together virtually all other forms of transit found in the Central District — Regional Rail, Broad-Ridge Subway system, Market-Frankford SubwayElevated, subway-surface trolleys, Girard Avenue Light Rail, PATCO, NJT buses, and the Intercity Bus Terminal operations,” according to Philadelphia Planeto.

“Not all of the Cultural Corridor Line can operate below street level in the City Branch, it will also be necessary to operate the BRT on surface streets to extend the reach of the service.

So, with inclusion of some on-street operation, potential exists for the Cultural Corridor Line to extend east to Penn’s Landing, up and down Delaware Avenue, and at the west end provide service to the Mann Music Center and West Fairmount Park.”

PHILADELPHIA PLANETO

Bootstrappers Breakfast “At a Bootstrappers Breakfast we have serious conversations about growing a business based on internal cashflow and organic profit.”

Time: 8 a.m.

Date: Tuesday, March 26 Place: Elephant & Castle, 1800 Market Street, Philadelphia, Pa. Tickets: $5 per person

Philadelphia Entrepreneur Meetup Group “Meet other local business people and all those who are interested in advancing their business through collaboration, brainstorming, idea think tank, green light thinking. Create a great elevator speech and share it with us.”

Time: 6 to 9 p.m.

Date: Thursday, March 28 Place: Syscom Technologies, 490 Norristown Road, Suite 151, Blue Bell, Pa. Tickets: $4 per person MEETUP.COM

21 MARCH 2013

2013: YEAR OF THE INNOVATOR

REGIONSBUSINESS.COM

17

In Her Own Words: Rising Over Challenges at Happenings Media DIARY OF A STARTUP

In the whirlwind storm of managing licensees, launching new branches of Happenings Media and developing new marketing strategies, Tina Paparone has come to both realize and gain excitement from the unpredictability of startup life.

In the months ahead, her sights are focused on the bigpicture nurturing of her beloved brand of lifestyle magazines.

In her words: Every day at a startup is full of different tasks, obstacles and achievements; it’s an environment that is both extremely exciting and absolutely terrifying at the same time; an environment that pushes entrepreneurs to rise to the occasion or fail trying; an environment that I have come to love, both as an entrepreneur myself and also as an advisor to our many licensees running businesses in their own local markets.

As a matter of fact, this type of environment makes summing up a month at Happenings Media for the purpose of this article a pretty big challenge.

Our days range from hosting digital marketing seminars to strategizing advertising sales to structuring legal contracts to planning editorial to training licensees with just about everything in between.

Yet, the biggest challenge of grow-

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ing a business does not come in managing the multitude of daily responsibilities. Instead, the challenge lies in rising above them, achieving those daily tasks while consistently moving toward a larger goal.

At Happenings Media, this applies at many levels — our goals for the network, for individual licensees and for our clients.

As we enter the spring season, Happenings Media is focused on nurturing the many seeds we’ve planted over the past two years — adding new territories, expanding editorial features, improving client services, promoting contests, improving design, growing sales revenue and much more. Now more than ever, though, we’re able to reflect on two years of experience in order to create a united set of goals that push the network forward. This spring is not just about watering the plants, but it’s about creating a garden.

“This spring is not just about watering the plants, but it’s about creating a garden.”

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21 MARCH 2013

2013: YEAR OF THE INNOVATOR

REGIONSBUSINESS.COM

TAKING PHILLY’S

The father-son duo Phil and Sam Katz are documenting the city’s history via a young marketing and production company

HISTORY OUT OF THE PARK

BY BRANDON BAKER

W

hen Phil Katz plans out his day and fine-tunes film productions in his corner office, he imagines he’s kicking back in his favorite Philadelphia locale: Citizens Bank Park.

In an attempt to keep the feel of the 340 N. 12th St. studio-turned-office uniform — there is a bathroom called the Water Works and a kitchen labeled McNally’s Tavern — a second corner space is occupied by his father: perpetual Republican mayoral candidate, Sam Katz. His office, as one could imagine, has been designated “City Hall.”

“He wanted to feel close to an office he was never actually able to have,” the younger Mr. Katz said.

Katz Creative Group is a creation of both Messrs. Katz. The root of the company’s work stems back to 2008, when Mr. Katz first purchased his father a Netflix subscription and was appalled that, upon browsing the documentaries category, no Philadelphia documentary was to be found. “[My dad] asked if we could put one together, and I said, ‘You’re crazy.’”

But after raising a successful round of funding for their first project, the 32-minute “The Floodgates Open” documentary chronicling Philadelphia between 1865 and 1876 took, the two — particularly the younger Mr. Katz — felt they could expand upon what they’d accomplished.

Mr. Katz, 30, had viewed film production as a hobby growing up, but opted to attend Washington University for marketing and entrepreneurship when the time came to draw a line. After making the documentary, however, he realized he “hadn’t learned a damn thing” in uni-

WE’RE FIGHTING A WAR IN MEDIA CONSUMPTION RIGHT NOW. PEOPLE ARE BEING BOMBARDED WITH CONTENT.’ —PHIL KATZ

BRANDON BAKER

versity, and went back to square one.

“I essentially put myself through film school by working hands-on with clients,” he said.

After trying his hand at Web design and recognizing his knack for it, Mr. Katz created his Ground Up Marketing and History Making Productions company in 2007 under the Katz Creative Group umbrella. The company develops a series of promotional videos for clients and handles all aspects of their use, including how they market the videos put together.

“A lot of companies haven’t thought about a marketing plan for their videos when they come in here, and that’s where I see people fail,” Mr. Katz said.

“But I love working with clients and figuring out how it all makes sense … I

/HistoryOfPhilly

want this to be a one-stop shop.”

Ground Up most recently worked with Washington, D.C.-based WealthEngine to create 15 videos centered around an employee training program.

Typically, Mr. Katz conducts interviews himself in the office’s green-screen room and is heavily involved with the post-production process, along with five team members and a slew of parttime freelance employees.

Ground Up, he said, aims to make quality, easily-consumed content in a media world where the amount and length of videos can be overwhelming.

“I think we’re fighting a war in media consumption right now — people are being bombarded with content,” Mr. Katz said. “And...if you aren’t telling it quickly, you’re not telling it very well.”

info@katzcreativegroup.com

After compiling 500 short videos for the “Philadelphia: The Great Experiment” series online, Mr. Katz helped develop a multimedia viewing platform that aggregates video, audio and image content in one easy-to-sort package.

Soon after, the “marketing cloud” became an unexpected third-pillar element of his business plan, resulting in what he refers to as the “IntraPlayer.”

Mr. Katz has since begun leasing the tool to clients via subscription.

“I see it like this: The IntraPlayer is the house, and the video content is what we put in the house,” he said. “We strongly believe this will take off.”

Though much work still lies ahead for the Katz duo’s history series — they’re currently at work on documentary No. 4 out of about 10 to 12 — Mr. Katz is confident his production company will strike gold in the future, if only in the sense that it provides him a wealth of personal satisfaction.

“I couldn’t wake up in the morning and not have a passion for what I’m doing,” Mr. Katz said. “I love working with creative teams — I love turning a concept into a product.”

The elder Mr. Katz, planted at his “City Hall” desk and coy as ever, kept his feelings succinct: “It’s a fantastic business, run by a brilliant executive.”

www.katzcreativegroup.com

21 MARCH 2013

2013: YEAR OF THE INNOVATOR

REGIONSBUSINESS.COM

BY THE NUMBERS

Nutter Calls For KEYSPOT Funds

$18M

Federal funding for Philadelphia’s “KEYSPOT public computing centers and digital access initiatives” that will run dry this summer, according to Technically Philly.

$624,000 Mayor Michael Nutter’s proposed investment by the City of Philadelphia into the KEYSPOT program, which launched in 2011, according to the Technically Philly report.

EEB Hub Opens At Navy Yard The Energy Efficient Buildings Hub and Ben Franklin Technology Partners of Southeastern Pennsylvania created the EEB Hub Commercialization Center. Located at Building 101 in The Navy Yard, the HCC will house and support entrepreneurs and businesses focused on improving energy efficiency in new and retrofitted buildings.

“The HCC will offer a suite of services and financing designed to accelerate market introduction of energy efficiency technologies, reducing costs and creating jobs,” said RoseAnn B. Rosenthal, president and CEO of Ben Franklin.

“It will also introduce a new approach, developed

by Ben Franklin, to offer

services, virtually, creating linkages with companies regionally, nationally and internationally that are interested in exploring the opportunities in our region, and being involved with the EEB Hub.” In addition to space, the HCC will offer business and product development services, access to financing and entre to a network of prototyping and fabrication labs.

The HCC will launch vir-

Everyone saves when your employees sit here.

RideECO is the new name for the commuter benefit program from DVRPC, which offers Easy Commute Options. As always, RideECO allows employers and commuters to save by putting pre-tax dollars towards public transportation fares.

• • • •

Save money—pre-tax deductions save employers on FICA taxes.

Boost employee morale—they can save more than $900 a year.

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Trusted—the only local, nonprofit transit benefit program.

Learn more at RideECO.org or call 215-592-1800.

SEPTA/DART FIRST STATE/NJ TRANSIT/PATCO/VRIDE/AMTRAK

tual services on April 17, and will be open to permanent residents in May. For more information, go to www.eebhub.org/hcc “We are very excited to partner with Ben Franklin Technology Partners/SEP to launch the EEB Hub Commercialization Center to further accelerate our efforts to foster start-up formation, entrepreneurial activity and innovation in the energy efficient building technology sector, said Laurie Actman, Deputy Director, EEB Hub. “Our goal is for the HCC to be the number one destination in the nation for any new or existing company to develop and launch a new technology or service that contributes to energy efficient building activity.”

19

FUNDING

MVM Associates Helps Raise $8M MVM Associates, Inc. recently announced it has helped secure more than $8 million for more than 50 Pennsylvania technology firms by obtaining and selling transferable technology tax credits on their behalf.

“Many companies qualify to participate in tax incentive programs that can generate cash and aren’t even aware of it,” said Michael McCann, MVM president.

Pennsylvania is one of the few states with tax programs that directly benefit young technology firms.

The benefits are provided as a sellable tax credit through programs including the Keystone Innovation Zone, Research and Development Tax Credit and others.

The state allows participating technology firms to transfer these credits to other taxpayers that can use the credit.

The proceeds then go back to the firm.

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21 MARCH 2013

REGIONSBUSINESS.COM

REGION PLUGS IN

The natural natural gas gas boom boom brought brought an an economic economic windfall windfall that that many many hope hope will will spur spur The innovation in in transportation. transportation. At At the the same same time, time, many many companies companies across across the the innovation Delaware Valley are looking for newfor ways power the region and theand economy.

Delaware are looking newtoways to power the region the economy.

TEXT BY MICHAEL JACOBS ILLUSTRATION BY DON LEE

W

hen President Obama celebrated the growth of American natural gas production in his weekly radio address March 16, he could have had Pennsylvania in mind.

Pennsylvania produced 2.04 trillion cubic feet of Marcellus Shale natural gas in 2012, moving the commonwealth into the top five producers in the nation. That was more than double the total of 2011, which itself more than doubled 2010’s production.

Natural gas is generating 18 percent of Pennsylvania’s electricity and is expected to produce 22 percent next year, up from 14 percent five years ago, as utilities close coal-fired plants.

The air is cleaner because natural gas emits roughly 25 percent less than coal and oil, while the price of electricity in the state is down about 40 percent because natural gas generation is so much cheaper.

Manufacturers and residential customers are using more natural gas while paying half the price of five years ago, all while wells and pipelines are creating jobs in western and northern Pennsylvania.

“We have the opportunity to renew the energy industry in the commonwealth and provide clean-burning, environmentally friendly fuel that can play a significant role in reducing our nation’s dependence on foreign oil,” Nicholas DeBenedictis, the chairman and CEO of Bryn Mawr-based water utility Aqua America, said at a Temple University conference in January.

But while Pennsylvania rushes ahead with natural gas, transportation has sputtered in the slow lane.

“That’s the opportunity there to really lessen our dependence on foreign energy,” said Patrick Henderson, the state energy executive in Gov. Tom Corbett’s office.

Mr. Obama made that point in his radio address. He called for breaking the cycle of spiking prices at the gas pump by “devising new ways to fuel our cars and trucks with new sources of clean energy, like advanced biofuels and natural gas.”

U.S. natural gas vehicles are more popular than ever, but that’s not saying much.

“The United States is so far behind in natural gas as a transportation fuel,” said Matt Henderson, the shale gas asset manager at Penn State’s Marcellus Center for Outreach and Research.

Ford, which stopped making natural gas vehicles from 2004 to 2009, announced this month that it sold 11,600 in the United States in the 2012 model year, smashing its 2001 record of 5,491.

The Associated Press cited Pike Research estimates of total U.S. sales of 20,381 natural gas vehicles in 2012 and growth of 10 percent a year through 2019. Estimates of the number of natural gas vehicles in use in the United States range from 150,000 to 250,000.

But Americans buy 16 million vehicles overall each year, meaning natural gas vehicles are far less than 1 percent of the market.

“That has got to change,” Pennsylvania Environmental Protection Secretary Michael Krancer said at a conference on natural gas vehicle infrastructure in February. “It is lowhanging fruit, both from a national security/ energy security standpoint and a clean-air standpoint.”

Meanwhile, the global market for natural gas vehicles was 12.6 million in 2012 and will grow to 19.9 million by 2016, Pike Research says.

“We were running out of natural gas in the United States back in the ’90s,” Mr. Henderson said. “It was kind of a forgotten fuel for 10 to 15 years,” while countries such as Pakistan committed to natural gas.

In an interview, Mr. Krancer said clean air is Pennsylvania’s biggest interest in moving to natural gas vehicles.

He said the health benefits of reduced air emissions since 2008 in Pennsylvania are $14 billion to $37 billion on an annualized basis. He attributes most of the air-quality gains to natural gas, although others disagree. Replacing oil with natural gas in vehicles would extend those benefits.

“For our particular region, it’s a very big deal,” because of the density of the population and the number of vehicles, he said. “The market penetration of natural gas for transportation fuels is so low right now, we should see a lot of progress.”

Both the Republican administration in Harrisburg and the Democratic administration in Washington support an “all of the above”

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21 MARCH 2013

REGIONSBUSINESS.COM

Finding Beauty in Ugly Waste Grease is an ugly fact of life in the food service industry, but Philadelphia-based BlackGold Biofuels has a green solution for the drain-clogging, sewer-bursting sludge that restaurants catch in their grease traps.

Waste haulers now carry the waste water from those traps to dump into landfills, compost or spread across fields. Those disposal methods have little value and raise environmental issues such as leeching and methane release, said Emily Landsburg, co-founder and CEO of BlackGold.

“It’s a very challenging waste to deal with,” she said, noting the long distance haulers usually drive and the high fees they pay for disposal. “There hasn’t been a use for it. There’s a very inefficient marketplace handling the waste.”

BlackGold’s solution is to build recycling facilities with a capacity to process 15 million gallons of waste water a year in urban, industrial areas close to where restaurants are sending fats, oils and grease down their drains.

The waste haulers pay 20 percent to 25 percent less to dispose of the dirty water with BlackGold than in traditional ways, Ms. Landsburg said. The facility cleans and purifies the water; recovers the grease, which makes up about 3 percent of the waste water; and turns the grease into a low-grade biofuel or a biodiesel that can be used just like oil-based diesel fuel.

BlackGold’s process recovers about 85 percent of the energy from the grease, providing the best value for the material, she said. The environmental advantages include less use of landfills, a higher level of environmental compliance — it’s not uncommon for haulers facing 60-minute drives to dump the waste into sewers, where grease causes 40 percent of the nation’s overflows, Ms. Landsburg said — and an 85 percent reduction in greenhouse gas emissions in the production of biodiesel compared with conventional diesel.

Those benefits led Green Lane-based SLM Facility Solutions Nationwide, which manages grease traps and waste services for commercial kitchens, to form a strategic partnership with BlackGold in 2012. SLM’s clients will send their grease trap water to BlackGold when it has facilities nearby.

“We selected BlackGold as our recycling partner because of their focus on sustainability paired with the technology, financing and reach to offer this on a national scale to our clients,” SLM CEO Susan Daywitt said in a press release last year.

The Energy Cooperative created BlackGold in 2004 to search for a low-cost renewable fuel for its owner-members, then spun off the company in 2005 when it realized BlackGold had developed a breakthrough technology to produce fuel from grease trap water, Ms. Landsburg said.

“It became clear that this was a substantial opportunity to really create some environmental and civic value and profitably create a business,” she said. “We focused on commercializing the technology, first within wastewater treatment plants, then moving into building and opening facilities ourselves.”

A San Francisco wastewater treatment plant ran a suc-

FOCUS ON: BLACKGOLD BIOFUELS

RAINER ZENZ

Headquarters: Center City Philadelphia Website: www.blackgoldbiofuels.com Phone: 215-253-5844 Founded: 2004 CEO: Emily Landsburg Employees: 15 What it does: Captures fats, oil and grease in waste water and converts them into biodiesel fuel.

Why Philadelphia: The company spun out from the Philadelphia-based Energy Cooperative and has found a great talent pool in the area with the engineering companies and universities, co-founder and CEO Emily Landsburg says. “There’s a lot of activity in the water space here. … Our focus is in Philadelphia, and we intend to remain here.”

cessful beta test of the technology starting in 2010, but Ms. Landsburg said it’s simpler and faster for BlackGold to run its own facilities rather than work with municipal authorities.

The company has its first facility in Charlotte, N.C., and is building the second in Winston-Salem, N.C., then will open additional sites in North Carolina, South Carolina, Tennessee and Georgia and reach into Texas and the Midwest the next two years before going nationwide.

The Southeast is a better place to start than BlackGold’s home turf in part because the older infrastructure in the Northeast is less efficient at collecting grease, Ms. Landsburg said. But the fried diet in the South also plays a part.

“The cuisine does tend to be a little bit richer,” she said, adding that at a conference she heard an Alabama water utility representative say, “We fry everything. We fry lard.”

The facilities’ initial product will be biofuel, and they will add biodiesel, Ms. Landsburg said.

BlackGold sends its cleansed water into sewer systems to go through wastewater treatment plants, but Ms. Landsburg said she sees a huge opportunity in the future to capture, recycle and reuse that water.

And though fuel is in the company’s name, BlackGold’s identity is not as an energy company.

“We’re a recycling company,” Ms. Landsburg said. “We use the available technology to recover the biggest environmental value we can from the material we recover.”

approach toward developing energy resources, with the natural gas freed up through recent shale-fracturing technology playing a key role.

“I think the abundance of natural gas and shale plates across the country has forced an honest conversation about renewable energy and whether government should pursue it at all costs,” Patrick Henderson said. “By any fair estimation, there is an awful, awful lot of gas.”

That abundance gives Pennsylvania time to decide what comes next, he said.

Mr. Krancer said the private sector has gotten ahead of government and solved the chicken-and-egg issue of which comes first, the vehicles or the infrastructure, by developing both fleets and fueling stations.

“The role of government is really what the role of government ought to be in most instances: Let the market do what it does best, which is find solutions,” he said.

Matt Henderson said public-private partnerships are important, such as public transit agencies switching their buses to compressed natural gas (CNG) and allowing public access to their fueling stations.

It doesn’t hurt, he said, that a 50-centper-gallon federal tax credit for natural gas was reinstated in January. But he said tax credits aren’t necessary because the basic economics of natural gas will propel the transition.

“The state shouldn’t pay for converting all infrastructure” but can kick-start the market, Patrick Henderson said.

That effort starts with education. The Department of Environmental Protection put on seminars and forums across Pennsylvania last fall about the benefits of natural gas vehicles.

Pennsylvania has tried to remove bureaucratic hurdles to converting vehicles to natural gas, including easing safety inspections, emission standards and rules on who may install conversion kits, Mr. Henderson said.

The DEP has received applications for the first round of grants under Act 13 to help companies replace fleets of conventional trucks weighing at least 14,000 pounds with natural gas vehicles, he said.

The department should announce up to $10 million in grants by the end of April.

The DEP then will make its annual Alternative Fuel Incentive Grants, which are open to medium-weight natural gas vehicles in addition to electric and propane-powered vehicles. A second round of Act 13 grants in the fall will be worth $7.5 million, plus any leftover money from the initial round.

The state is looking for proposals involving at least five vehicles and new, publicly

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21 MARCH 2013

REGIONSBUSINESS.COM

Finding Power in Plants A company in King of Prussia is helping replace foreign oil with waste products from American sawmills and farms and perhaps even household garbage.

“We’re seeing a call from customers at the end of the value chain for products that are not derived from fossil fuels” but can be delivered at the same price with less volatility from sustainable, renewable materials, said Tim Brown, the vice president of corporate strategy for Renmatix.

“That’s what Renmatix brings to the table. …

We’re seeing significant interest in our technology and our company.”

Renmatix doesn’t produce fuel. But it can use almost any nonfood biomass — basically anything that grows — to make sugars that other companies turn into fuel, chemicals and plastics.

“Many things you make from oil you can make from sugar,” Mr. Brown said. “The key is the price point.”

Since its founding in 2008, Renmatix has demonstrated the viability of its process well enough to raise $75 million in 2012 from investors such as BASF, which sees the potential for biochemicals, and Waste Management, which hopes to apply the process to garbage.

Sugar as a fuel source is nothing new; just think of ethanol in gasoline. But while the corn usually used to make ethanol is a renewable energy source, it has a volatile price and takes away from the food supply.

Renmatix’s raw materials have much more stable prices.

Mr. Brown said the company is using “elements of materials that oftentimes would be thrown away or not utilized that will now have a purpose and value.”

Others are trying to get sugar from biomass using acids or enzymes; Renmatix uses water.

The company raises the temperature and pressure of water to a supercritical state. Supercritical water reacts quickly to produce sugar from the cellulose and hemicellulose in plant cells.

The speed and lack of chemicals increase the cost-effectiveness of the process, as the company has shown at its demonstration facility in Kennesaw, Ga., which can produce 3 tons of sugar a day from hardwood.

Much of Renmatix’s work has involved hardwood because paper companies have established supply chains and prices, Mr. Brown said, but the company sees other agricultural residues as a “great opportunity for the future.”

Renmatix launched its BioFlex Conversion Unit in King of Prussia in January to tweak its process to use perennial grasses, softwoods, agricultural leftovers and waste streams available in southeastern Pennsylvania.

U.S. Agriculture Secretary Tom Vilsack

FOCUS ON: RENMATIX

Headquarters: King of Prussia Website: renmatix.com Phone: 484-751-4000 Founded: 2008 CEO: Mike Hamilton Employees: About 80 What it does: Uses high-pressure, hightemperature water to convert nonfood plant-based materials into sugars that can be processed into fuel or chemicals.

Why Philadelphia: The area is one of the few U.S. hotbeds for the chemical industry, and the company went where it could find the best talent in chemistry and chemical engineering, says Tim Brown, the vice president of corporate strategy.

attended the launch, highlighting “a new wave of farmistry,” Renmatix CEO Mike Hamilton said at the time. “The sugars produced at this site will continue to enable development of the emerging bioeconomy and will be shared with key industry collaborators and Fortune 50 downstream partners in our active sampling program.”

Renmatix envisions building its sugar-making plants where the raw materials are available and seeing its customers develop facilities to produce chemicals or fuel nearby. That combination would cut costs and be environmentally friendly by minimizing the shipping of commodities, and the jobs couldn’t be outsourced, Mr. Brown said.

That’s not to say Renmatix won’t go global. A Russian investor bought into the company last year, and Renmatix signed a memorandum of understanding with a state development bank to finance possible facilities in Russia.

Mr. Brown said he expects gradual global development for Renmatix after it moves into a commercial phase of plants each able to produce 100,000 tons of sugar a year “sooner vs. later.”

Fuel and chemicals are a multitrillion-dollar business that will shift from oil to sugar as a starting point, he said. “Over time, we’ll see more and more of it gravitate to technology like ours.”

accessible fueling stations. lus Shale and other American “We’re trying to build demand resources, however, drove down to send a signal to the automakers prices enough to get the attenthat there’s a customer base,” Mr. tion of companies operating truck Henderson said. If Detroit builds fleets, especially waste companies, them, people will buy natural gas Mr. Foster said. vehicles, as long as they know It takes as little as 18 months they’ll be able to fill the natural gas to save enough on fuel to pay for tanks. the more expensive compressed “People want certainty that natural gas trucks for garbage and they don’t have to look around to recycling, he said, and they last 10 find a refueling station,” he said. to 12 years. The trucks are higher Each new station is “a pebble in quality now, with better engines a pond. As the ripples go out, as that provide the torque and power they go through a city waste companies and a corridor, there want. are more options for “Now it’s just a people.” no-brainer,” Mr. He expects to see WE’RE TRYING Foster said. Half the significant expansion TO BUILD new waste trucks of the refueling infra- DEMAND TO sold nationwide in 2012 use natural structure within a year.

SEND A SIGNAL gas, and CNG vehi“I’ve been surprised by how many folks TO THE cles are expected to over the last 12 to 18 AUTOMAKERS make up 60 percent months have come THAT THERE’S A of sales this year. to us to say they’re CUSTOMER BASE.’ If your fleet uses looking to put private —PATRICK HENDERSON more than 2,000 capital investment into STATE ENERGY EXECUTIVE gallons of gasoline fueling,” he said. They or diesel a year, Mr. want a consistent set of regulatory Lutkewitte said, CNG is worth the standards, and the state govern- switch.

The largest natural gas fleet in ment helps by connecting them with interested fleet operators to the nation belongs to Waste Mantalk. agement, which has more than “It’s important to bring about 2,000 trucks powered by comthis change,” said Sil Lutkewitte, pressed or liquefied natural gas the alternative-fuels manager for (LNG) and plans to switch 18,000 Lehigh Gas. He said the transition collection trucks to natural gas, to natural gas “has as much to do CEO and President David Steiner with educating the fleet manager announced in January. as anything else.”

Each time Waste Management New stations contribute to that replaces a diesel truck with a CNG education. It isn’t as if you can vehicle, it saves 8,000 gallons of stand on any corner and see a CNG diesel fuel a year and eliminates 22 station, he said, but each addition metric tons of greenhouse gases to the infrastructure provides an and 90 percent of the production opportunity for Lehigh to talk to of nitrogen oxide and soot, spokesfleet managers and business own- man John Hambrose said.

He said the company in 2007 ers about the fuel’s availability and announced goals of reducing its value.

Clean Energy, the nation’s lead- vehicle emissions and improving ing provider of natural gas for its fuel consumption by 15 percent transportation, spent the first 12 or by 2020, and “natural gas helps 13 years after its founding in 1996 us make progress toward both of trying to educate companies about those goals.”

In addition to being cleaner and the environmental value of natural gas, spokesman Gary Foster said. $1 to $3 a gallon cheaper than But the California-based company diesel, natural gas powers vehicles found resistance because the differ- that are quieter, require less mainence in prices between diesel and tenance and last longer, he said.

CNG didn’t make up for the higher Those advantages make it worth cost of the vehicles. spending about $300,000 per The drilling in the Marcel- CNG truck, $40,000 more than a

24 diesel equivalent.

Waste Management runs 32 new CNG vehicles for commercial and industrial pickups out of its Delaware Valley North facility in Bristol and has 10 more trucks on order, Mr. Hambrose said.

The company’s fueling station in Bristol is just becoming operational for public access, while its Camden, N.J., site has offered public refueling for about two years.

Of the 105 trucks Waste Management runs from Camden, 68 use compressed natural gas, and 10 more are joining the fleet this year, Mr. Hambrose said.

In western Pennsylvania, the company has 45 CNG trucks among the 97 in its Washington fleet and plans to add eight more this year.

“It’s a better way to operate,” Mr. Hambrose said, even though adopting CNG for a local fleet involves much more than buying the trucks and hooking up new pumps.

He said the renovations in Bristol, such as gas-leak-sensing equipment that triggers overhead doors to open, cost about $3 million, including a $400,000 state grant.

PECO, which operates 15 CNG vehicles, lets the public use five of its six CNG fueling stations in an effort to promote natural gas in transportation, the company’s website says.

The PECO stations in Eddystone, Berwyn, Plymouth Meeting, Phoenixville and Coatesville join Waste Management’s Bristol and Camden facilities (the latter operated by Clean Energy), Clean Energy’s own stations in Fairless Hills and at Philadelphia International Airport, and Lehigh Gas’ stations in King of Prussia and Concordville, with two more on the way, to serve the Philadelphia area.

Mr. Lutkewitte said those stations cover the major routes around Philadelphia, so fleet managers know the basic infrastructure is in place.

“The more vehicles on the road that can use CNG, the better off everybody that provides the fuel is going to be,” he said.

Both Clean Energy and Lehigh Gas plan to expand in eastern Pennsylvania as the demand grows.

Lehigh Gas also sells CNG in State College and is opening an Allentown station.

Lehigh decided to dive into CNG in mid2011 because of rising interest among commercial customers, Mr. Lutkewitte said, but “we’re definitely stepping out in front of this. We’re providing this and talking to customers at the same time” to educate them.

“What we’re really doing is living up to a motto of ours, and that is to help our customers get to where they’re going,” he said.

Clean Energy’s target customers are

21 MARCH 2013

REGIONSBUSINESS.COM

Finding Wireless Car Charging When a New York Times reporter took the electric Tesla Model S sports car for a Northeastern test drive on one of the coldest nights of this winter and ran out of power, the resulting review produced bad publicity for electric vehicles, as well as controversy about the writer’s motives.

Maybe the Tesla battery didn’t fulfill its promise. Maybe the reviewer didn’t charge the battery properly when he plugged it in and failed to take basic steps to extend the battery life. Maybe some combination.

But across the country, a modified, electric-powered shuttle van soon will run laps 24/7 between the Burbank, Calif., airport and an Enterprise rental car facility without stopping to plug in and without running out of power.

That’s the promise of Malvern-based Momentum Dynamics’ wireless charging system: a faster, easier charge than a plug can provide.

“Wireless power transmission has been the holy grail of electrical engineering,” said Andy Daga, the founder and CEO of Momentum Dynamics. “It’s a magical thing to watch.”

And it’s the key to overcoming the convenience barrier to wider use of electric vehicles, he said. Most people who are used to filling up a gas tank in about three minutes to travel 300 miles don’t want to spend eight hours plugged in to travel only 100 miles, especially if they have to handle electric plugs in the rain or snow.

“It’s the major impediment to the sale of electric vehicles,” Mr. Daga said.

His company combines two high-tech approaches to convenience: inductive wireless charging that moves safely and reliably through the air, rain or even a human arm, similar to the charging pads you can use in place of a plug for cellphones and other devices; and automatic payment using transponders, like a car paying tolls with E-ZPass.

Thanks to advances by the company’s engineers to boost the power of inductive charging 1,000 times from what a cellphone uses, car charging becomes automatic and invisible, Mr. Daga said. Pull your Momentum Dynamics-equipped electric vehicle into a parking space with an embedded charging plate outside Walmart or Wawa, do your shopping, and when you return, whether it’s 10 minutes or two hours later, your battery has received a boost without any credit

FOCUS ON: MOMENTUM DYNAMICS

Headquarters: Malvern Website: momentumdynamics.com Phone: 484-320-8222 Founded: 2009 CEO: Andy Daga Employees: 16 What it does: Develops a wireless charging system for electric vehicles.

Why Philadelphia: From a practical perspective, it already was the home of founder Andy Daga and a number of the engineers, Mr. Daga says. But there’s also a poetic reason: “Pennsylvania and Philadelphia in part are the home of Benjamin Franklin and the Pennsylvania Turnpike, so it’s an electricity and transportation nexus,” as well as the home of what he calls the first wireless revolution, the rise of radio in the 1920s, as the headquarters of “the Microsoft of its day,” Atwater Kent Manufacturing.

card swiping or other action on your part, regardless of weather.

The wireless system has advantages for the charging station’s owner as well, Mr. Daga said. A high-power wireless system doesn’t need the heavy copper wire and other external equipment of a wired system, so it costs about 20 percent as much ($15,000 vs. $75,000) and is not subject to the breakdown of the card reader, vandalism of the transaction screen or theft of the copper. Maintenance also is cheaper and easier, usually limited to the occasional replacement of a circuit board.

Momentum Dynamics is running trials to prove its system’s effectiveness.

Pennsylvania granted the company $587,000 in late 2010 for a test with the Berks Area Regional Transportation Authority. Momentum Dynamics is converting two 2013 Ford E450 paratransit buses into fully electric vehicles using the wireless charging system.

Starting this summer, the electric vehicles will run for at least a year alongside identical gasoline vehicles to get a clear

comparison of their capabilities and operating costs. The trial will include different combinations of transmitters and receivers to see which work best, Mr. Daga said.

The plan is to expand within BARTA, then move to other transit agencies.

In the case of the Burbank shuttle, the battery will get 10 to 15 minutes of charging during every circuit, enough to go around another time while running the air conditioner. It’s called opportunity charging, a concept Mr. Daga said his company is pioneering.

The charging will start automatically when the van parks at Enterprise to load and unload passengers, who won’t have to wait for the driver to mess with the electric system.

That approach wouldn’t work with a wired van, Mr. Daga said. The driver wouldn’t have time to plug in, allow the battery to charge, unplug, and still get passengers to and from the terminal on time.

Such commercial and transit fleets are Momentum Dynamics’ initial targets, Mr. Daga said, because their potential savings are so great. Heavy-duty electric vehicles save more than a dollar a mile on fuel costs and have lower maintenance costs than gasoline or diesel vehicles.

Passenger vehicles are a longer-term target because it takes at least three years to go through the engineering and build the wireless receiver into new vehicles.

“We know they want this very badly,” Mr. Daga said of automakers, “especially in Europe,” where gas prices are roughly double American prices.

Even the Tesla controversy could help passenger sales by highlighting the coldweather advantages of wireless. Not only does wireless save the driver from dealing with card swipes and cables in freezing cold, but it also can be set remotely to start a charging/discharging cycle hours before departure. That cycle heats up the battery, allowing a full charge, and makes the passenger cabin cozy, Mr. Daga said.

He has no doubt that wireless charging will at least double electric vehicle sales and help automakers meet the new, higher federal standards for fuel efficiency.

“Wireless will completely supplant wired charging within five years,” he said, predicting that if the charge port remains on vehicles, it will be seen as the power equivalent of a spare tire. “Our company will be the leading provider of this technology.”

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21 MARCH 2013

REGIONSBUSINESS.COM

Finding Ways to Reduce Power Use Drexel University is a national leader in teaching power engineering, but the Philadelphia school got lessons in saving and making money in the electricity market after it started working with Viridity Energy in 2010.

Viridity’s VPower software and human expertise have turned Drexel and other major electric consumers into “prosumers” that not only have lower power bills, but also get revenue from freeing up the electric grid’s capacity.

The power grid itself doesn’t store electricity, so the energy has to be consumed as it is generated, said H.G. Chissell, the senior vice president of East Coast sales for Philadelphia-based Viridity. When the grid is under stress during spikes in demand, as during a heat wave, the traditional response is to ramp up generation. Lowering consumption, he said, is “the breakthrough we’re centered on.”

The grid operator for a 13-state area that includes Philadelphia, PJM Interconnection, rewards consumers for their peaktime ability to reduce use because it doesn’t have to ask power plants to increase their output.

Viridity’s approach, including forecasting the grid’s needs and brokering sales, makes Drexel a virtual power generator on the wholesale market.

“We looked at seeing all their building on the campus as having the ability to consume their electricity in smarter, more flexible ways,” taking advantage of the ability of individual buildings to hold cold and heat to reduce electricity use without reducing comfort, Mr. Chissell said.

For example, the books in a library serve as thermal storage devices. The university can cool the building at night, and the books help keep the library comfortable while the thermostat is set higher during the day, when air conditioning at offices drives up the demand on the grid.

Viridity also found that Drexel could slow the fans in some buildings and use backup generators and storage units to contribute to the grid when needed.

“We’re asking building facilities managers to, one, be willing to collaborate with an outside group to coordinate in terms of the building function,” Mr. Chissell said. The partnership started with manual steps, then developed automated responses and expanded to six buildings.

“We finally got to a point where they felt very comfortable with our VPower,” he said.

FOCUS ON: VIRIDITY ENERGY

Headquarters: Center City Website: viridityenergy.com Phone: 484-534-2222 Founded: 2008 COO: Mack Treece Employees: About 45 What it does: Helps large energy users adjust their practices and reduce their consumption to become virtual energy producers contributing capacity to the electric grid.

Why Philadelphia: “We really felt it was a great center for us. …

Philadelphia is a great gateway to the region,” says H.G. Chissell, the senior vice president of East Coast sales.

“We had great learning on how to work with building managers.”

Founded in Conshohocken by the former chief operating officer and chief technology officer of PJM in 2008, Viridity didn’t need an education on how the grid works.

The company, which moved to downtown Philadelphia in October 2011, focuses on demand-side management instead of electric production.

While the monetary value of increased generation and reduced consumption to maintain the grid is the same, Mr. Chissell said, “there are intangibles to virtual generation over time.”

Those benefits include avoiding the greenhouse gases produced by increased power generation and relieving stress on the grid.

Managing demand as the grid’s first response “really helps all consumers in terms of reliability and cost” by preventing critical peaks, said Janeen Lawlor, Viridity’s marketing and communications director.

Demand-side management also takes advantage of the enhanced communication in the smart grid utilities are implementing, Mr. Chissell said. Digital sensors identify surges and gaps, and the utility can implement responses from Viridity customers in seconds.

Viridity’s customers are “large energy users that are sophisticated or on their way

to being sophisticated with communication and control,” from factories to colleges to skyscrapers to water treatment plants, Mr. Chissell said. Generally, a customer needs a peak load of 3 to 5 megawatts and the flexibility to cut that load by 10 percent to 20 percent.

That means individual homeowners aren’t candidates to become virtual power generators, but Viridity could work with a business that aggregated a residential complex or neighborhood by installing controls on the water heater or air conditioner in every home.

In addition to Drexel, Viridity has demonstrated the value of its approach with utility Con Edison, which has a pilot project in which 24 large buildings across New York City agree to have their electricity use reduced within 10 minutes of monitors detecting pressure or congestion on power feeders; with Fort George Meade, where optimization efforts for the 1,517-building installation include better controls for water filtration and water treatment; and with the Navy in San Diego, where three independent microgrids are working together to turn their electric generators into revenue generators on the public grid.

Viridity moved into the public transit market in June when it launched a first-inthe-world project with the Southeastern Pennsylvania Transportation Authority to capture, store and sell the electricity generated when trains brake to stop at stations.

The idea grew out of a desire to use the energy produced and wasted by a braking train entering a station to propel a train leaving the station, but the timing doesn’t work without using a megawatt-size battery to store the electricity. Such batteries were too mega-expensive to be feasible until Viridity provided the option to push some of that stored battery power onto the grid as a rapid response to PJM’s needs.

The project involves two stations on the Market-Frankford Line, and SEPTA projects $440,000 in annual combined savings and revenue from each site. Viridity hopes to sell other transit systems on the concept.

Such successes drew a $15 million investment from Mitsui in August. The Japanese company is interested in Viridity projects that involve storage, such as the SEPTA batteries, Ms. Lawlor said.

Mitsui also opens the door to Asia, although Mr. Chissell said that’s in the future. “We see opportunity internationally, but we’re really focused on domestic.”

rental car shuttles and other vehicles that serve the airport, plus Waste Management and other waste haulers, Mr. Foster said. Most Pennsylvania customers have fleets of five to 10 vehicles.

“Obviously Pennsylvania should be a prime target for natural gas vehicles” because of the Marcellus Shale’s production, he said. “It’s nice to see an end use of that production.”

A longer-term target for Clean Energy is the long-range trucking industry, which uses LNG for more range.

Citing signs such as more LNG vehicles at truck shows and the sellout crowd for a natural gas summit the American Trucking Association held in Washington in November, Mr. Foster said: “The education is starting to sink in.”

One of Pennsylvania’s early adopters of CNG vehicles is Aqua America subsidiary Aqua Pennsylvania.

Last May at an alternative-fuel conference at Drexel University, Aqua America announced plans to switch much of its fleet of large vehicles to CNG, and Aqua Pennsylvania led the transition with 20 dump trucks and 60 vans out of its 381-vehicle fleet. Aqua Pennsylvania has a private, overnight fueling station in Delaware County.

Other big companies converting parts of their truck fleets to natural gas include Comcast, Verizon and AT&T. “It’s just going to take time, just going through the natural lifecycle of fleets” and replacing retired conventional vehicles with natural gas equivalents, Matt Henderson said.

Speaking in Chicago on March 15, Mr. Obama included natural gas among the energy sources that will benefit from research financed by a new $200-million-a-year Energy Security Trust. His Blueprint for a Clean and Secure Energy Future, unveiled the same day, also offers a federal credit to cover half the extra cost of natural gas and other alternative-fuel vehicles over five years.

Pennsylvania is spending state money to help convert fleets to natural gas to send a signal that the customers are there for new infrastructure, Patrick Henderson said.

Under Act 13, grant applicants score higher if they will build CNG stations to expand the public infrastructure, he said. The expectation is that grant winners will buy the vehicles and open the fueling stations quickly.

Sometimes plans fall through.

PHL Taxi Management won a

26 $900,000 award from the Alternative Fuel Incentive Grant Program in November 2010 to help buy 50 CNGpowered, handicap-accessible taxis and install a CNG fueling station open to the public.

But PHL Taxi never got the $900,000 or the CNG cabs, and Philadelphia didn’t get the fueling station.

After Gov. Ed Rendell’s grant announcement, PHL Taxi decided to buy hybrid electric cabs instead, and the DEP rescinded the award, department community relations coordinator Lynda Rebarchak said.

The taxi company didn’t return a call for comment on its alternative-fuel change of heart.

A shift from natural gas to electric wouldn’t surprise Andy Daga, the CEO of Malvern-based Momentum Dynamics, which is developing wireless charging for electric vehicles.

“It doesn’t make any sense to put natural gas in cars,” Mr. Daga said.

Whereas the infrastructure to support electric chargers, whether plug-in or wireless, exists wherever people use electricity, natural gas lines aren’t ubiquitous, and the equipment involved in opening a CNG fueling site is much more expensive and makes sense only for a large fleet with its own central station.

“It hasn’t been thought out carefully,” he said. Rather than build out the natural gas transportation infrastructure, he said, it makes more sense to construct more gas-fired plants to generate cheap electricity for cars.

Such generating plants are on the way. PJM Interconnection, which operates the electric grid serving Pennsylvania and 12 other states, has at least eight applications for gas-fired plants that would add at least 6,000 megawatts in generation to the commonwealth, Patrick Henderson said.

Pennsylvania consumed slightly more than 1 trillion cubic feet of natural gas in 2012, up more than 30 percent from 2007. Electric generation accounted for 39 percent of last year’s consumption.

But there’s still plenty of Marcellus Shale natural gas to go around. Matt Henderson predicts production of 2.5 trillion to 2.75 trillion cubic feet this year, and the total easily could be higher.

As of mid-February, almost 3,000 of the 6,400 Marcellus Shale wells weren’t producing gas yet, usually because they were awaiting pipeline

21 MARCH 2013

REGIONSBUSINESS.COM

PECO announced its smart grid plans, costing $650 million, in August 2009. The rollout includes advanced metering infrastructure, smart meters for all customers by the end of the decade, and upgraded transmission and distribution systems.

FLICKR.COM/WEAK_HOPE

Building a Smarter Electrical Grid Hurricane Sandy knocked out power to more than 1.8 million Pennsylvania customers, and smart-grid technologies couldn’t stop toppling trees from damaging power lines.

But the smart grid did help people get their lights on sooner, according to a special Sandy forum the Pennsylvania Public Utility Commission held in January.

Both PECO and PPL reported that Sandy was their most damaging storm ever, and both companies counted as successes their staging of employees and coordination with other utilities to respond.

PECO also said its advanced metering infrastructure sped up restoration efforts by two to three days.

That smart-grid system delivered realtime information about conditions in specific locations, saving the company from sending trucks where they weren’t needed approximately 6,100 times after the storm.

That’s the power of the developing smart electric grid. It’s all about multiway communication: faster, more accurate information about issues and potential problems and faster, often automated responses.

PECO announced its smart grid plans, costing $650 million, in August 2009.

The rollout includes advanced metering infrastructure, smart meters for all customers by the end of the decade, and upgraded transmission and distribution systems. The federal government awarded the utility $200 million in stimulus mon-

ey for the smart meters.

Another PECO upgrade is the installation of reclosers on power lines. The company spent $1.5 million last year to install 12 of the devices in Delaware County and six in Montgomery County to improve service for 29,000 customers.

A recloser works like a circuit breaker.

It cuts off the electricity along an aerial line when it senses a problem such as a lightning strike. The recloser resets itself automatically and restores power to customers when the problem ends.

PECO said reclosers throughout its service territory prevented 660,000 sustained outages in the first nine months of 2012.

PPL announced in February that it will spend $968 million this year to improve its reliability and $3.8 billion over five years. The work includes smart meters and automated technology to prevent or shorten outages.

The automated technology reroutes power around a problem within moments so that most customers get service back quickly instead of letting one toppled tree take out electricity to hundreds of people for an hour or more while a crew finds and isolates the problem.

In addition to taking automatic actions, the software in PPL’s distribution management system uses data collected throughout the service area to calculate the best ways to reroute electricity around outages without automated switches.

The smart grid’s communications sys-

tems do more than address outages; they also provide for more complex demandside management as well as production responses to issues such as surges and brownouts.

“One of the key responsibilities of the grid operator is to keep the frequency at 60 hertz,” said H.G. Chissell, the senior vice president of East Coast sales for Philadelphia-based Viridity Energy.

Viridity helps clients cut their power use on demand or, if they have storage batteries, push power onto the grid to help PJM Interconnection maintain stability.

PJM, whose 13-state area includes Pennsylvania, runs the largest open-bid market in the nation to regulate the grid’s 60-hertz frequency through such quick adjustments, which can be lucrative for the customers providing the help while still costing PJM and the utilities less than outages.

The smart grid and equipment upgrades also allow utilities to address what Momentum Dynamics CEO Andy Daga calls “the double-edged sword” of the wider use of electric vehicles: The utilities can sell more kilowatt-hours while promoting conservation and energy efficiency, but their old infrastructure can’t support more than one electric vehicle per three homes.

Because utilities can’t predict who will buy an electric vehicle, any more than they can predict where a tree will fall, they must gradually replace the transformer network, Mr. Daga said.

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21 MARCH 2013

REGIONSBUSINESS.COM

The largest natural gas fleet in the nation belongs to Waste Management

US Airways has converted a great deal of its ground fleet at Philadelphia International Airport to natural gas.

US Airways Creating Green Legacy When US Airways flies into the sunset and becomes part of American Airlines, it will leave a legacy of green innovations at Philadelphia International Airport.

From buying 131 electric ground service vehicles, the largest electric airline ground fleet on the East Cost, to building the airport’s first Leadership in Energy and Environmental Design Silver-certified facility, US Airways has taken the lead in lessening its effect on the environment.

“We all struggle with this. It’s very difficult in this type of business to minimize your footprint,” said Rhett Workman, the airline’s managing director of corporate real estate and government affairs on the East Coast. Airplane manufacturers determine most of an airline’s environmental impact in the air, but “on the ground we have more control over that. Part of our corporate mission is to go green across the board.”

US Airways’ efforts contribute to the airport’s overall green vision under its 2006 environmental policy statement and the mayor’s Greenworks Philadelphia initiative.

“We understand the importance of minimizing our environmental footprint, and we continue to work to seek out new and innovative ways to reduce waste and emissions and be caretakers of our natural and physical surroundings,” airport CEO Mark Gale said in accepting the PENJERDEL Council’s Green Vision Award in November 2011.

Mr. Workman said the electric vehicle initiative originated in 2006 as the airport

responded to the city’s air-quality failures, but the airlines couldn’t cover the $15 million cost. The project moved forward when the airport and airlines landed $12 million in grants, most coming from the federal Voluntary Airport Low Emission Program, to install charging stations.

The airport has installed about 240 charging stations, each capable of powering two vehicles at a time. The overnight charging stations are clustered at either end of the airport, while quick-charge sites are scattered throughout the complex.

For its part, US Airways bought 131 electric baggage tugs and belt loaders, about a quarter of the airline’s ground support equipment in Philadelphia, spokesman Todd Lehmacher said.

United Airlines bought 10 electric baggage tugs, and other airlines have expressed interest, the airport reported in September.

Each electric vehicle costs $10,000 to $15,000 more than its conventional counterpart. Federal and state grants have covered that difference, but US Airways still had to spend a couple of million dollars on its electric vehicles, Mr. Workman said.

He said the airline will add to its electric fleet as it needs to replace ground equipment and as the technology improves for more powerful vehicles. No electric heavyduty pushback tractors are on the market now.

The electric vehicles cut emissions, fuel costs and maintenance costs.

“It’s a win-win-win all around,” Mr. Workman said.

The airline made an even bigger green investment when it opened its $22 million, 57,000-square-foot LEED Silver facility for ground vehicle maintenance in September 2011. The facility made extensive use of recycled and locally sourced materials while saving energy over time and creating a better working environment.

Building a LEED-certified office building is one thing, Mr. Workman said, but “to take a vehicle maintenance facility and make it LEED-certified, that really put the design team and the engineering team to the test. It’s really one of the first of its kind.”

US Airways’ chairman and CEO, Doug Parker, touted this Philadelphia story in a column in the November issue of the airline’s in-flight magazine. In addition to the electric vehicles and the maintenance building, he cited the energy savings and reduced rain runoff expected from the use of vegetation on the roof of the Terminal F baggage claim facility scheduled to open next year. LEED Silver certification also is the goal for that building, the airport said in 2011.

Mr. Workman said it’s too soon to talk about how US Airways’ green efforts will carry forward after the merger with American, but he’s excited to talk to his future co-workers about their plans.

“What we’ve done to date is really a step in the right direction. Obviously there are a lot of other initiatives we’re taking to make things even greener, some with the airport,” he said. “At the end of the day, it’s the right thing to do.”

hookups, Patrick Henderson said, and 600 to 700 more wells are moving into production every six months.

“I think we’re getting to an important point where market demand will dictate where production increases,” he said, adding that he has heard of wells cutting back to firm up prices. The cost of natural gas fell below $2 per million British thermal units but is back up to about $3.50.

That bounce-back didn’t have much effect on vehicles because the pump price is only about 20 percent dependent on the cost of natural gas, compared with 80 percent for diesel, Matt Henderson said.

Patrick Henderson said the state government isn’t pushing for all vehicles to run on natural gas, but that fuel “has the greatest opportunity, bar none, because of abundance.”

Pennsylvania can’t go it alone, however. Natural gas innovation depends on what other states and American automakers do, Mr. Henderson said.

Transportation will be “one of the key drivers to increase the utilization of natural gas for Pennsylvania and the nation,” Matt Henderson said, although it will not have the impact of power generation.

He said private-sector innovations are on the way. General Electric is working on a home refueling station whose cost would be several hundred dollars, compared with $5,000 now, and 3M and Chesapeake Energy are trying to cut the cost of the fuel storage vessels that drive up the price of natural gas vehicles.

Ford’s Lincoln brand is planning a natural gas vehicle in 2014, and Mr. Krancer said General Motors and Chrysler also are stepping up.

He said it’s only a matter of time until the market for natural gas passenger vehicles takes off. “I have a 17-year-old daughter who’s driving now,” he said.

“When she’s in the market to buy her own car, she’ll be able to drive and purchase natural gas vehicles.”

Freelance writer Michael Jacobs lives in the Atlanta area.

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21 MARCH 2013

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21 MARCH 2013

REGIONSBUSINESS.COM

REAL ESTATE

29

Expert: ‘Never Been Easier’ To Sell Philadelphia

BY JEN HELLER MESERVEY

MARC SZARKOWSKI

NEW LISTING

dent and regional manager at First Niagara Bank.

Experts also referred to a youngEarlier this month, the 11th annual RealShare Philadelphia, er demographic which is currently a meeting of more than 500 real pouring into Philadelphia’s many estate professionals, was held. renovated apartment buildings.

More than two dozen industry David Dolan, senior managing experts spoke at the event, which director with Newmark Grubb took place in the Crystal Tea Room Knight Frank, said that nearly 6 at the historic Wanamaker Build- million square feet of older office space in Philadelphia has recently ing.

One topic of discussion at been converted to apartments, RealShare was why, as Robert attracting major owner/developers.

The city’s high livability factor is Fahey, executive vice president at CBRE, said, “It’s never been easier due in part to the so-called “meds and eds” sector, according to Timoto sell Philadelphia.”

The panel of experts pointed to thy Proctor, senior vice president at many different reasons for the city’s TD Bank. current developer appeal.

However, the experts cautioned Philadelphia is lower profile that recent 6-8 percent rent than nearby cities like Boston and increases may not be able to susWashington and less subject to tain the 1,500 to 2,000 new units “wild cyclical swings,” according that will come on the market next to Chris Terlizzi, senior vice presi- year.

PHILADELPHIA/SOCIETY HILL

According to The Wall Street Journal, the thousands of newly renovated apartments in Philadelphia will likely attract college students, regardless of the rent increase.

Universities across the country are facing a shortage of student housing, and with aging dormitories in dire need of upgrades, The Journal estimates that colleges in the U.S. are short between 1.5 and 2.15 million beds.

Even after the housing crash, parents and student loans continued to pay the increasing rent for student apartments.

These are a few of the reasons why major developers are buying more and more student housing in Philadelphia.

This article originally appeared on www.PhillyLiving. com.

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21 MARCH 2013

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REAL ESTATE

Successfully Selling High-End Urban Living

1706RITTENHOUSE.COM

BY TERRENCE CASEY In what Tom Scannapieco calls “the worst residential market in our lifetime,” one high-end urban living tower is proving that innovation can challenge market trends.

While owners of multi-million-dollar estates leave their suburban mansions on the market for months or years at a time, residences in 1706 Rittenhouse have been selling at a record pace.

In fact, 85 percent of Philadelphia homes that sold for more than $4 million are in the same tower, said Mr. Scannapieco, president of Scannapieco and developer of 1706 Rittenhouse.

His project was a risk, he admits, but he was confident the 31-story tower would sell despite the market.

“There are very few cities in the world that have a tower of full-floor residences, and you have to take a good look and say, ‘Is Philadelphia ready?’ The answer is yes.

We’ve got five left,” he said.

What makes 1706 Rittenhouse stand out, Mr. Scannapieco said, is the cul-desac community found on a vertical level, what he calls “the ultimate solution” in luxury urban living.

“To have a whole floor of a building, it just has so many advantages,” he said.

“You have the obvious advantage of having views in four directions. But some

YOU HAVE TO TAKE A GOOD LOOK AND SAY, ‘IS PHILADELPHIA READY?’ THE ANSWER IS YES.’ of the things that you might not think of right off the top of your head are that there’s no hallways. So when you take the elevator up , you enter into your unit.”

Furthermore, he adds, no hallways means no sound coming through the walls, and no cooking odors seeping from under your neighbor’s door.

“You have more sound insulation, more privacy,” he said. “Even the elevators are programmed only to take one call.”

The size of the units — about 4,250 square feet — allows residents to entertain in their home in the same way they did in the suburbs.

“Typical units in Philadelphia are 2,000 feet. It feels like they’re moving into an apartment,” Mr. Scannapieco said. “When you come and look at 4,250 square feet, there’s enough space to make the rooms grand.

“The master bedrooms, the living rooms, the dining rooms are the same size as the rooms that are in their big houses. In their mind, they can do the same entertaining.”

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Q&A

21 MARCH 2013

REGIONSBUSINESS.COM

RICHARD SNYDER’S

COORDINATED HEALTH CARE The chief medical officer of Independence Blue Cross says Philadelphia is quickly becoming “a magnet for health care innovation”

What is the elevator pitch for IBC’s medical home program?

IBC is improving primary care in the Delaware Valley. IBC has been committed to enhancing the health and wellness of the people we serve for 75 years. We’re dedicated to improving the way health care is delivered and the Patient-centered Medical Homes is doing just that.

Through our efforts, more practices in southeast Pennsylvania than anywhere else in the country have committed to improvement.

Why is coordinated care necessary?

Health care is complicated. People with chronic conditions often see several specialists and receive care in multiple settings. Having a personal physician who knows all of your care, knows you and your family and can advocate for your interests and values is more important than ever. Remarkable advances in biomedical technology, pharmaceuticals and information technology need to be leveraged without losing the personal touch that competent health care demands.

What else is IBC doing to advance patient-centered care?

Doctors want to do a better job.

We have created a financial incentive to help them make the investments necessary to deliver more patient-centered care. We also provide technical assistance. We make a program sponsored by the American College of Physicians available at no cost. We provide clinical information about our members receiving care in their

offices so they can know about services delivered by other doctors. We are particularly proud of the work we are doing with residency training programs to make sure that the next generation of physicians — the ones who will take care of me some day — are learning how to practice patient-centered care.

In an ideal world, what will Philadelphia health care look like in five or 10 years?

I’m sure we’ll see much more emphasis placed on primary care as the best way to keep people healthy and to avoid complications from chronic illnesses. We’re making strategic moves to transform our region into a national magnet for health care innovation, investment and employment, just like Silicon Valley became known for technology in the early ’80s.

We have world class universities and teaching hospitals and a booming health and life sciences economy, which provides us with the resources to advance health care in our region. Ideally we will have lower medical costs, better health outcomes and more satisfied patients and physicians. I think everyone shares those same goals.

What do groups like IBC need (from city/state/federal governments) to make this a reality?

Generally speaking, we need their support and funding to make the vision of change a reality. Health care reform is here to stay and the medical home model is one of the best ways to truly change how we deliver care.

33

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21 MARCH 2013

REGIONSBUSINESS.COM

BY ED MILLER

MAD(NESS) MONEY

I

t’s that time of year again – March Madness.

Perhaps the biggest annual event in collegiate sports, the three-week basketball tournament has become a juggernaut for TV ratings, advertisements and sponsorships, as 64 teams battle it out in the hopes of being named national champion. Each year the tournament is played all throughout the United States and from March 22-24 the Wells Fargo Center will once again host the second and third rounds of action.

Philadelphia has hosted satellite tournament events in the past – the last of which was in 2009 for the first and second rounds – but what sort of financial impact will it have on the city?

The tournament will provide an economic boost to Philadelphia – especially the immediate area around the sports complex in the city’s southern section. With the event taking place over the weekend, fans and media alike might be more inclined to spend the weekend in the city. According to Larry Needle, the executive director of the Philadelphia Sports Congress, the city is expecting approximately 4,000 combined visiting fans from the eight schools that will be participating. Add in almost 400 media members – three-fourths of which will come from out of town – and they’ll need somewhere to eat and sleep.

There are two hotels located within walking distance of the Wells Fargo Center and both are expecting a heavy increase in occupancy while the tournament is in town. In fact, the Holiday Inn located right next to the complex will likely see the largest increase in reservations. The affects of the tournament will trickle all the way down the economic ladder, causing a healthy increase in public transportation use and local watering hole activity.

In fact, the city is set to earn a significant amount in tourism dollars.

[The tournament is] “always a nice boost to the local economy and another feather in the cap for Philadelphia, as one of the nation’s great sports destinations,” Mr. Needle admitted. “The two rounds this city will host are expected to generate approximately 5,000 hotel room nights and $8 to $10 million in economic impact for the Philadelphia area.”

The 20,000-seat Wells Fargo Center will host several games during the tournament – all of which are anticipated to be sellouts. It’s nothing more than additional revenue while the Flyers have some much-needed time off and the Sixers are on a road trip. The NCAA tournament will also put Philadelphia on display for the entire collegiate world to see.

Tournament makes, costs lots of money According to varying reports, the NCAA’s men’s basketball tournament March Madness - will create a big loss in productivity, but it will also generate a lot of economic activity.

$134M

That’s what the first two days of the tournament will cost American businesses in lost productivity, according to Challenger, Gray & Christmas.

THE TWO ROUNDS THIS CITY WILL HOST ARE EXPECTED TO GENERATE APPROXIMATELY 5,000 HOTEL ROOM NIGHTS AND $8 TO $10 MILLION IN ECONOMIC IMPACT FOR THE PHILADELPHIA AREA.’

$70M

That’s the amount of economic activitiy the Final Four will generate for Atlanta from April 6 to April 8.

—LARRY NEEDLE

March Madness Games Will Boost City Economy Philadelphia will host two rounds of the NCAA men’s basketball tournament, generating money and exposure.

Philadelphia is home to the “Big-Five” but more often than not these schools are not displayed on national television due to their smaller size. With the city and the tournament on display, it will depict Philadelphia in a positive light – acting as a sort of tourism advertisement.

March Madness’ TV ratings can fluctuate depending on the round but they’re always impressive – typically beating out its winter counterparts, the NBA and NHL – in fact, least year’s final regional games averaged 10.1 million viewers according to the Nielson Ratings. That kind of audience can only add to the exposure and continue to build Philadelphia up as an east coast sports Mecca.

Television audiences will be tuned in from all around the nation, but what about the locals?

Fans from the area seem excited for the event and couldn’t be more proud of the

city, swarming such social media outlets as Twitter and Facebook to share their seat info, predictions and more. Much of the tickets sold for the weekend’s event will be to area spectators. Since there’s no better month for collegiate sports than March and with the city expecting to earn a healthy amount from the three day experience, it’s practically a win-win for both the city of Philadelphia and the NCAA. “We’re thrilled that Philadelphia is continuing its long history of hosting the tournament this year and grateful to Temple University and the Wells Fargo Center for stepping up as wonderful hosts,” Mr. Needle added.

You can follow Philadelphia-area freelancer Ed Miller on Twitter – @PhillyEdMiller File photo by Rebecca Savedow

LISA NOTTINGHAM

$1B

Yes, that’s a “B” as in BILLIONS. According to AdWeek, March Madness will generate $1 billion in ad sales.

33%

Percentage of IT departments preparing to block, ban or slow down streamed March Madness content through the throttling of video feeds, according to Forbes.com contributor Darren Heitner.

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21 MARCH 2013

REGIONSBUSINESS.COM

OPINION

Our Energy Economy Is Diverse and Growing I Daniel K. Fitzpatrick is President and CEO of Citizens Bank and RBS Citizens for Pennsylvania, New Jersey and Delaware; and the Chairman of the Greater Philadelphia Chamber of Commerce.

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

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

ncreasingly, for a variety of reasons, energy is at the center of our economic story.

In one example, the City of Philadelphia is spurring economic development through several green energy initiatives encouraging energy-efficient upgrades to existing buildings.

The construction boom of LEED certified buildings has employed countless Philadelphians – directly and indirectly. It also is ensuring that Philadelphia businesses spend less in energy costs to “keep the lights on.” This frees up capital to invest in other parts of their companies, such as advertising or technology improvements, which in turn benefit other industries in the region.

The Commonwealth of Pennsylvania has mandated 18 percent of Pennsylvania’s electricity be supplied using alternative energy resources, including 0.5 percent from solar, by 2020. This is driving additional investment and innovation in the alternative energy industry. And across the region, historically low cost domestic energy and other dynamics in international trade are making “in-sourcing” a reality and an important driver of economic growth and job creation by local manufacturers.

As President and CEO of Citizens Bank and RBS Citizens in Pennsylvania, New Jersey and Delaware; and Chairman of the Greater Philadelphia Chamber of Commerce, I have observed energy’s increasing relevance to our local economy. It is especially obvious when you look at our resurgent manufacturing sector. According to research from the Mayor’s office, manufacturing today generates more than $1.3 billion in total wages and supports more than 23,000 direct jobs in Philadelphia and 187,000 in the region.

If we are able to build the right workforce that can participate in this growth, the manufacturing sector is poised to become an even more important driver of economic growth and job creation in the future.

The Chamber is very focused on this workforce opportunity. Through partnerships like the Philadelphia Youth Network and Philadelphia Academies, we are making forward progress in continuing to create jobs in manufacturing.

Of course Philadelphia’s proximity to end markets is another important factor in the promising state of manufacturing today. The manufacturing industry lies in a prime location as both a port with substantial importing and exporting business and a rail hub with extensive shipping infrastructure. These conditions allow local manufacturers to reduce the cost of transporting raw goods to and from their facilities, and opens international markets for the sale of goods produced here.

In fact, in the Philadelphia region, exports reached

OTHER VOICES

“Hawaii is now on track to achieve the highest Renewable Energy Portfolio in the nation with 40 percent by 2030. Not everything we do in Hawaii will work in all states, but we are learning that some policies have broad application.”

SEN. BRIAN SHATZ, D-HAWAII

If we are able to build the right workforce that can participate in this growth, the manufacturing sector is poised to become an even more important driver of economic growth and job creation in the future.

“... this emerging American fossil fuel boom will almost certainly stem the development of alternative energy sources that do not generate greenhouse gases, because these new sources will keep energy prices low worldwide and make it almost impossible for solar, wind, geothermal and hydro sources of energy to compete.”

BILL DESTLER, ROCHESTER

$26.2 billion in 2011. Here’s an example of how powerful export jobs are in Pennsylvania—almost 13,000 companies are exporting from Pennsylvania and more than 90 percent of them are small and medium sized enterprises with fewer than 500 employees.

Interestingly, the products of some of these companies are used by energy providers around the world.

Energy and these other factors combined have created very favorable business conditions in Philadelphia. Whether the connection is obvious, like it is in the green economy, or indirect, like it is in manufacturing more broadly, it is there, and an important factor for us all to consider as we contemplate our economic opportunities.

INSTITUTE OF TECHNOLOGY

“It has a nice ring to it: using oil and gas revenue to shift transportation off oil and gas dependence. President Obama announced a plan to do just that ... — but the details of his plan are disappointing if you want to see the conversation on clean transportation go beyond cars.”

TANYA SNYDER DC.STREETSBLOG.ORG

21 MARCH 2013

REGIONSBUSINESS.COM

OPINION

37

Time for Innovation, Investment in Region’s Energy

T

he Marcellus Shale generated heated discussion over environmental impact, a debate that will likely rage on for months and years to come.

In the meantime, there is a very real, very practical result: An abundance of natural gas which, following the classic supply and demand model, means an extremely cheap source of fuel.

Some businesses have taken advantage of the situation, creating fleets of natural gas-fueled vehicles.

It’s time for the state and counties to follow.

There are few stronger proponents of natural gas than Governor Tom Corbett, who regularly calls fracking for natural gas “extremely important” to the state’s economy.

Indeed, the impact fee on natural gas extraction generates a massive flow of revenue for the state. The next step to support the industry would be to create a fleet of natural gas-powered vehicles.

The technology is proven and available, but the private sector has been cautious and the reason is simple. The cost of entry frightens most businesses.

That entry revolves around infrastructure, specifically building natural gas filling stations. To be practical, vehicles need to be able to refuel in convenient spots.

Creating enough stations to do that is simply beyond the reach of most businesses.

But a series of state-county partnerships could make this possible.

Many details need to be worked

out, of course, but the basic premise is simple. If the state could build a series of refueling stations and the counties in which they are located can add stations in complimentary locations, creating a fleet of natural gas-fueled vehicles becomes a practical possibility.

That also creates the opportunity for the private sector to get involved in a meaningful way, eliminating the biggest roadblock. Sidenote: Kudos to US Airways for their groundbreaking efforts at Philadelphia International Airport.

This proposal need not be an “all or nothing” effort. The goal is not to eliminate all gas-powered vehicles.

Instead, it is about diversity and innovation, about leveraging an opportunity.

This is about diversifying our sources of energy - making use of the abundance of natural gas while working to find cost-effective ways to leverage renewable sources like solar and wind.

It is this sort of innovation, this sort of creative thinking that needs to be applied to the energy-related challenges facing our region, the state and the nation. These challenges will not be solved in a single stroke, by a single silver bullet.

Instead, it will be a series of efforts both big (in what way can we update the region’s electrical grid to be more efficient and effective?) and small (do all state-owned buildings have energy efficient lighting fixtures and windows?).

It’s time to start taking those small steps.

COMMENTARY FROM ACROSS THE WEB

Seeking Civil Discourse in Obamacare Discussion In a way, though, it’s sad that holding an informed, civil conversation about health care should seem at all unusual. But after years of silly, misguided shouting about Obamacare, it does seem so.

Now, let me be clear: Civil dialogue does not [mean] pretending not to disagree. ...

Disagreement is the lifeblood of democratic dialogue, as long as it’s undergirded with respect.

CHRIS SATULLO ON NEWSWORKS.ORG, 17 MARCH 2013

Both Sides Correct in School-Closing Debate Thinking and reading about last week’s closing of 23 public schools by the Philadelphia School Reform Commission, I’ve concluded that the closings are necessary, though insufficient to address the fiscal crisis of the school district. Other school districts including some of the nation’s largest are expected to do the same thing, including Chicago, Newark, and Washington, D.C. But those protesting the school closings are

REGION’S BUSINESS A JOURNAL OF BUSINESS AND POLITICS © COPYRIGHT 2012 INDEPENDENCE MEDIA 600 GERMANTOWN PIKE, SUITE 400 PLYMOUTH MEETING, PA 19462 610.940.1656 | WWW.REGIONSBUSINESS.COM

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

@hblodget

A question ... Now that Cyprus banks closed until Thursday while government argues, how are people getting money to spend?

18 MARCH 2013 right, too. The closings are an outrage against poor children.

JAN TING ON NEWSWORKS.ORG, 13 MARCH, 2013

Sarah Plain Continues To Show No Loyalty to GOP It should have come as no surprise to anyone who has watched Sarah Palin’s erratic and dysfunctional behavior over the past fourand-a-half years that when it comes to Republican Party loyalty, she has none. ...

Now add to that list GOP uber-strategist Karl Rove. Palin’s widely publicized speech at CPAC this past weekend ... was little more than a veiled assault on Rove and his recently established Conservative Victory Project.

GEOFFREY DUNN ON HUFFINGTON POST, 18 MARCH, 2013

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.

38

21 MARCH 2013

REGIONSBUSINESS.COM

BY THE NUMBERS

360

Miles in the main portion of the Pennsylvania Turnpike, which opened on October 1, 1940. There are more than 500 miles in the Turnpike system.

15

Number of service plazas along the main line of the Pennsylvania Turnpike.

8

Number of officials associated with the Pennsylvania Turnpike charged as part of a grand jury investigation.

85

Number of of pages in the grand jury report on the Pennsylvania Turnpike.

2009

Year the grand jury investigation into the Pennsylvania Turnpike began, under then-Attorney General Tom Corbett.

25%

27,900,000

Corporate tax rate in China.

Number of small businesses in the United States.

28%

99.7%

Corporate tax rate in the United Kindgom.

$1,070,000

Maximum corporate tax rate in Canada.

Percentage of U.S. employers that are considered small businesses.

31%

Average per capita receipts for U.S. small businesses.

35%

19.4%

U.S. corporate tax rate.

Percent of overall small business expenses accounted for by employee wages.

4.6%

Percent of overall small business expenses accounted for by rent.

1%

1.9%

Percent fo overall small business expenses accounted for by promotional advertising, entertaining and meals.

Effective tax rate paid by Apple on foreign profits.

0.1%

170,000

2,100

Approximate number of Turnpike employees.

$39.15

Cash toll to cross main line of the Turnpike by car, approximately 11 cents per mile.

Effective tax rate paid by Google on foreign profits.

Number of U.S. small businesses killed by the recession between 2008 and 2010 according to analysis of census date by the Business Journals.

SMALL BUSINESS DATA FROM BOLTINSURANCE.COM

1996

Year the Philadelphia Eagles first held training camp at Lehigh University; Ray Rhodes was the head coach.

The team held camp at West Chester University the previous 15 years.

13

Number of quarterbacks that have started for the Eagles since they begin holding training camps at Lehigh University.

1

Number of Eagles quarterbacks named to the Pro Bowl during the years they held training camp at Lehigh University. Donovan McNabb earned the honor six times, most recently in 2009.

11

Number of NFL teams that will hold their 2013 training camp at a college or university facility.

0.3%

Effective tax rate paid by Facebook on foreign profits.

42

Number of months an average American making $42,000 per year would be able to pay off a new $25,000 car by using money saved by paying the same effective tax rate as Apple.

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