THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, January 25, 1995 TAG: 9501250433
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: STAFF AND WIRE REPORT
LENGTH: Medium: 64 lines
Virginia is the front-runner for a $500 million Nucor Corp. steel mill that would employ 600 workers because South Carolina isn't offering the needed incentives or electric rate breaks, Nucor's top executive says.
``We realize what's reasonable and what could be done, but we're bumping our heads into a stone wall,'' F. Kenneth Iverson, chairman and chief executive officer of the Charlotte, N.C.-based company, said of the company's negotiations in South Carolina.
``We're still talking to South Carolina, but we're talking more seriously to Virginia,'' Iverson said Tuesday in a phone interview. ``We've had some productive meetings'' with Virginia Power.
The company has narrowed its search to three potential sites, near West Point, Va., near Cainhoy, S.C., and an undisclosed third site that Iverson called a ``dark horse.''
``West Point . . . looks like the site we'd select if everything else works out,'' Iverson said. ``We need the tax incentives, the electric rates and the negotiations with the railroads.''
Electric costs are important to the company, which will make flat-rolled steel at the mill.
Last week, Virginia Power President James T. Rhodes said: ``We're talking with Nucor very seriously and we're trying to be innovative.'' He declined to be more specific, citing customer confidentiality.
Virginia Power has a couple of proposals before the State Corporation Commission that could benefit Nucor. Late last month, for instance, it asked the commissionto approve a plan that would let its 25 largest industrial customers shift up to 20 percent of their power purchases into a more flexible pricing scheme.
Virginia Power proposes to tell customers the day before what it will charge them for electricity hour-by-hour the next day. The intent of its ``Real Time Pricing'' plan is to allow users to schedule their plants to operate in the hours when electricity is the cheapest.
Nucor's Iverson said that during a recent meeting with Gov. David Beasley, the company showed that power rates at its Arkansas mill and those offered by Virginia are lower than in South Carolina. He said Beasley asked whether the firm was making up the figures.
``He didn't believe us, I think,'' Iverson said. ``That made me damn mad.''
Beasley refused to comment.
Earlier this month, South Carolina Electric & Gas Co. submitted new rates to Nucor, including a $50,000 grant for infrastructure improvements for the mill if it comes to Berkeley County. The Berkeley Electric Cooperative also is courting the mill. Iverson said that while South Carolina has offered to build roads and rail spurs, the company wants property and sales-tax relief.
``There is some standard relief, but it's not enough for a $500 million plant,'' he said.
He said the company wasn't trying to drive up the stakes. ``We're not playing a poker game,'' he said. ``We're not asking for what we don't already have from some other state or other utility.'' MEMO: Staff writers Mylene Mangalindan and Dave Mayfield contributed to this
report. by CNB