City, 3M aim to bring back production

When 3M decided to make its electronic flexible circuits in Singapore and California rather than Columbia, the company cut the local workforce in half, to 240, and left the manufacturing plant half-empty.

Now, with the last batch of 38 employees scheduled for layoff in June, company officials and Columbia’s Regional Economic Development Inc. are working to attract production of new 3M products to fill the unused space in the 380,000-square-foot building. And the city has given the company a break on its electric rates.

“We are working with 3M on an ongoing basis to get new 3M lines in that space,” said David Meyer, REDI’s marketing director. Plant Manager David Robinson said 3M is not interested in leasing the vacant space to a different company.

“We look forward to bringing in further business,” Robinson said. “We restructured around a solid core business, and we’re continuing to look at bringing in new products.”

City officials said they don’t want high electric rates to cause 3M to leave Columbia or not be able to attract another 3M line.
“It’s a great space,” City Manager Bill Watkins said. “We have to find a way to make it financially attractive. We have to take some of that risk out somehow.”

On April 21, the Columbia City Council passed an ordinance that lowers non-peak electric rates for industrial customers in certain cases. The amendment to the city code allows for more leeway in electric rates to help retain companies, and the prime candidate for assistance was 3M, according to John Glascock, interim director of the Water and Light Department.

“It’s a one-time shot,” Glascock said, adding that the assistance is available to other companies as well. “They’re using less [energy], and we didn’t want to penalize them by charging excessive amounts.”

The changes in the city code amended what is known as the “ratchet clause” and added a “thermal rider,” Glascock said. The electric load for an industrial customer is based on the peak load necessary, usually during the summer. In the past, under the “ratchet clause,” to recoup the cost of the extra infrastructure, the city would charge the company 75 percent of the cost of the peak load throughout the rest of the year even when the company was not using that excess capacity. 3M is also getting credit for using a “thermal rider,” which involves chilling water during off-peak times of usage so it can be used in air conditioning during the high-usage peak times, saving energy.

Glascock said the city administration has shown interest in electric rate riders offered by utility providers in Kansas City and St. Louis that are aimed at spurring economic development. For example, a free year of electricity might be given to a business that brings in a certain amount of jobs to a community, he said.