Common interests, teamwork lead to winning solution for AEP, steel firms, communities

A long-term need for transmission steel poles and lattice towers has sparked economic development and hundreds of new jobs in Ohio, Oklahoma and Texas.

(Story by Stephen J. Ostrander)

HICKSVILLE, Ohio — A convergence of forces — one being AEP Transmission’s long-term need for transmission steel poles and lattice towers — has sparked the revival of a steel fabrication plant in Northwestern Ohio, the expansion of another in Tulsa, Okla., and the arrival of a third in Texas.

AEP Transmission engineers and AEP Economic Development teams expedited the expansion of these enterprises.

“This is the proverbial win-win solution for everybody involved,” said Kelly Bledsoe, engineer supervisor – Transmission Line Engineering Design Standards. “The communities in our service area benefit from the addition of new jobs; the steel manufacturers find suitable sites and skilled labor; and AEP enlarges its customer base and supply line from these enterprises.”

Steel plant brings more than 200 jobs, revives small town’s economy

For Hicksville, a village of 3,600 people in AEP Ohio service territory in Defiance County, Ohio, a $15 million investment in a 300,000-square-foot building and 94-acre site by Fort Worth-based FWT means the return of more than 200 jobs to a recession-strapped community and hope for an economic upturn. FWT manufactures steel poles.

It started when Bledsoe informed Tim Wells, AEP Ohio economic development director, an AEP steel pole supplier, Fort Worth Tower (FWT) had been searching for a new manufacturing site north of Interstate 70, which runs through the middle of Ohio and Indiana.

“As we assessed our future need for steel poles and lattice towers, it became clear we had to enlarge our supply base to handle the work in our territory and around the country,” explained Bledsoe, a 2012 recipient of an AEP Key Contributor award for his effort to secure manufacturing sites for FWT and Brametal. “We’re in a competitive environment, so we have to deliver service on time and be cost-sensitive. We cannot afford delays and higher costs due to shortages of an engineered product essential to our success, nor wait for its manufacture and delivery from a faraway location.”

A rejuvenated steel plant in Hicksville, Ohio (above), within AEP Ohio service territory, will supply AEP Transmission’s steel needs for infrastructure improvements in its eastern footprint.

Wells contacted FWT, got its specifications for a site, and then searched for a location. The Hicksville site matched FWT’s criteria. The previous occupant, Dietrich Industries, a subsidiary of Columbus-based Worthington Industries, shut down its sheet framing factory there in 2004. State economic development loans of $7 million from the JobsOhio program sweetened the deal.

With billions for transmission projects in the offing, the expansion to Ohio with a fully operational plant gives FWT an “improved geographic presence” in the Midwest market, Fred Moore, FWT’s chief executive officer, wrote in a statement. The move will reduce the company’s transportation costs and delivery times to customers in region.

Major AEP supplier in Tulsa to expand with new plant, additions to workforce

In its hometown of Tulsa, Okla., Valmont Industries, a major international steel pole fabricator and AEP supplier, will construct a ‘green field’ plant on property it previously owned and enlarge its workforce to meet rising orders for tubular steel poles.

“Valmont is expanding because of its anticipated expanded business with AEP,” said Janet Smith, manager of economic and business development at Public Service Company of Oklahoma.

Production at that plant should begin in the late spring of 2013. Initially, Valmont plans to hire 75 new employees to operate the new plant. Last year, Valmont added 25 jobs to its Tulsa facility after being chosen a steel pole supplier for a portion of the Texas Competitive Renewable Energy Zone (CREZ) transmission project.

AEP helps lure Brazilian firm to Texas

AEP’s economic development group in Texas also helped Brametal, an international developer and manufacturer of steel lattice towers, look for a factory site in the southern U.S. AEP Transmission introduced the Brazilian-based company to the market two years ago as the supplier for a project for near Roanoke, Va. AEP targeted Oklahoma and Texas and arranged meetings with local and state leaders, including Texas Gov. Rick Perry.

Brametal eventually chose Alvarado, Texas, where its partner Sabre Industries had available facilities. Though beyond AEP’s footprint, Brametal also chose to construct a tower testing facility. The last remaining full-scale transmission tower testing facility in the U.S. was run by EPRI in Haslet, Texas. It closed in 2005 before the transmission boom began. Brametal’s tower testing facility is currently under construction and is scheduled for completion this year. It will benefit not only AEP but the entire transmission industry, saving time and expense of testing transmission towers overseas, and will be the only site of its kind in North America.

“This is really a call to action,” said Ray Covey, manager of economic and business development – AEP Texas North. “The real challenge for everybody is to identify another opportunity that can grow the company. We can repeat this success.”

Expansions good news for transmission industry

The expansions are good news for the transmission industry as it embarks on an ambitious program to renew an aging infrastructure and deliver renewable generation to markets. All three companies expressly expanded their operations to manufacture the custom steel structures electric utilities will require for their transmission investments.

AEP benefits in two ways. First, projected revenues from the FWT and Valmont sites will be about $750,000 a year. More important, AEP Transmission has more confidence that vendors will be able to meet the growing demand for both steel poles and lattice towers.

“While we helped bring in potential suppliers, we make it clear that we cannot make them any promises,” explained Bledsoe. “The vendors understand that their finished products must still meet our standards.”

Opportunity to grow business: mindset for growth company

“He (Bledsoe) had the foresight to call business developers working for the opcos because he saw a problem as an opportunity to grow the company,” said Covey. “This is the mindset we need for a growth company.”

“We are thrilled that AEP Transmission engineers and economic development teams of the AEP Operating Companies contributed to the expansion of these companies and the prosperity in communities we serve,” said Scott Moore, vice president – Transmission Engineering & Project Services. “It’s beneficial for everybody. Much of this new production capacity is due directly to AEP’s needs for transmission structures throughout its territory. They enlarge the roster of vendors who could hasten the manufacture and delivery of structural steel for our construction projects.”

“As we seek to grow AEP’s customer base, one fantastic opportunity is to partner with suppliers to AEP,” said Mark James, vice president – Economic and Business Development for AEP. “In helping them find profitable locations in AEP we not only are supporting their cost structure, but are also helping AEP by creating potential supply chain efficiencies. It is a classic win-win. We value our relationships with the Transmission and Supply Chain organizations that brought about Fort Worth Tower’s investment in Hicksville, Ohio. We look forward to many more!”