Region's Business 21 March 2013

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REFORM NEEDED FOR PA. TURNPIKE HOW TO GET MORE TWITTER FOLLOWERS A JOURNAL OF BUSINESS AND POLITICS PHILADELPHIA EDITION 21 MARCH 2013 MARCH MADNESS BRINGING HOOPS, REVENUE TO REGION Pennsylvania has enjoyed a major economic windfall through natural gas production, but now seeks to convert that into long-term efficiences, especially in transportation. REGION’S BUSINESS PLAN CALLS FOR BUS LINE TO CONNECT CULTURAL SPOTS RegionsBusiness.com $2.00 U.S. CAN THE NATURAL GAS BOOM FUEL CHANGE? YOUR BOTTOM LINE FOCUS MIGHT HINDER YOUR COMPANY CULTURE Listen 2, 3, 4 times a day!

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Region's Business is a journal of business and politics for the Philadelphia region

Transcript of Region's Business 21 March 2013

Page 1: Region's Business 21 March 2013

REFORM NEEDED FOR PA. TURNPIKEHOW TO GET MORE TWITTER FOLLOWERS

A JOURNAL OF BUSINESS AND POLITICSPHILADELPHIA EDITION 21 MARCH 2013

MARCH MADNESS BRINGING HOOPS, REVENUE TO REGION

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

REGION’S BUSINESS

PLAN CALLS FOR BUS LINE TO CONNECT CULTURAL SPOTS

RegionsBusiness.com

$2.00 U.S.

CAN THE NATURAL GAS BOOM

FUEL CHANGE?

YOUR BOTTOM LINE FOCUS MIGHT HINDER YOUR COMPANY CULTURE

Listen 2, 3, 4 times a day!

Page 2: Region's Business 21 March 2013

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3REGIONSBUSINESS.COM

© 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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Online: RegionsBusiness.comTwitter: @RegionsBusiness

Subscription & Advertising information:610.940.1656

PRESIDENT AND PUBLISHER James D. McDonaldEDITORIAL DIRECTOR Karl M. SmithASSOCIATE EDITOR Terrence CaseyCONTENT EDITOR Alexis SachdevCONTRIBUTORS Brandon Baker, Michael Jacobs, Don Lee, Charles Gerow, Timothy Holwick, Eric Boehm, Rebecca Savedow, Ed MillerPROOFREADER Denise GerstenfieldADVERTISING DIRECTOR Larry SmallacombeDIRECTOR OF BUSINESS DEVELOPMENT Deirdre AffelADMINISTRATIVE COORDINATOR Zelinda Barnes

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21 MARCH 2013

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

21

27 Leaving a Green Legacy! 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.

35 March Madness, Money Coming! 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.

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

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

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.

CONTENTS

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.

2013: YEAR OF THE INNOVATOR

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

20 Fuel for Change ! Can Pennsylvaniaparlay its natural gasboom into long-termchange, especiallyin transportation?

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Karl Smith is the Editorial Director for Region’s Business. You can contact him at [email protected].

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

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

Alexis Madrigal of The Atlantic spent some time inside Facebook’s o"ces 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 stu!.

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 co!ee 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 di!erence 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 immedi-ate access to a USB cable or Yahoo! providing free food (which, in turn, fosters collabora-tion 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 collab-orative, energetic culture is one thing, but actions always speak louder than words.

Bottom Line Focus Can Hinder Your Culture

EDITOR’SDESK

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WEEKLY BRIEFING

BY THE NUMBERS

57,500Jobs 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%Southeastern Pennsylvanian children under five years old

in a childcare setting

26%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

12Philadelphia’s rank among the largest U.S. cities for

bachelor’s degrees

WORLD CLASS GREATER PHILADELPHIA

Berwyn’s Triumph Acquisition Finalized

The acquisition of United Technol-ogy 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 Philadel-phia Inquirer report.

PECO Proposal: Increased Production of Smart Meters

PECO Energy Co. has proposed spend-ing $282 million to install its smart meters for all 1.6 million customers before 2015, according to The Philadel-phia Inquirer.

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

ENERGY

Cherry Hill Auto Named Region’s Top Workplace

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.

AUTO

DEALBOOK

BY REBECCA SAVEDOW

Just a week after Mayor Michael Nut-ter’s announcement of Philadelphia’s sixth consecutive year of population growth, plans were released by the Economy League of Greater Philadelphia to posi-tion the city closer to becoming a world class city.

The league’s global positioning strate-gies (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 Com-mons.

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

“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 initia-tive 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 o!er 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, high-quality, childhood education available to the region was one of the strategies dis-cussed. The plans include post secondary education initiatives and workforce train-ing 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.”

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

Mayor Michael Nutter addresses the World Class Summit Monday evening. REBECCA SAVEDOW

Bernard Dagenais, Main Line Chamber of Commerce President REBECCA SAVEDOW

Page 6: Region's Business 21 March 2013

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WEEKLY BRIEFING

BY THE NUMBERS

Pennsylvania Adds 3 New BillionairesPennsylvania 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:

$8.7BName: Hansjoerg Wyss

Residence: West ChesterSource of Wealth: Medical Devices

$2.7BName: Mary Alice Dorrance

MaloneResidence: Coatesville

Source of Wealth: Campbell Soup

$2.3BName: Henry Hillman

Residence: PittsburghSource of Wealth:

Investments

$1.6BName: Richard Hayne

Residence: PhiladelphiaSource of Wealth: Urban Outfitters

$1.6BName: Susan Hirt Hagan

Residence: ErieSource of Wealth:

Erie Indemnity

Revel Interim CEO Confirmed

The New Jersey Casino Control Com-mission 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.

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 Jour-nal.

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

RETAIL

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 com-prised of three buildings.

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

DEVELOPMENT

ATLANTIC CITY

Liquor Sales Privatization Moves Forward After Hearing

BY MELISSA DANIELS

More than 100 Pennsylvanians filled the hallway in the Irvis O!ce 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 o!cials.

Nylon barricades kept the crowd cor-ralled 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 law-makers 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 privatiza-tion proposal would move forward, union-ized 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

center stage. Fending o" 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 conver-sation lawmakers have had for 80 years. But this time around, the details were new.

Mr. Young, a staunch opponent to priva-tization, took a seat next to Matt Brouil-lette, 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 con-sideration.

This article was originally published on Pennsylvania Independent at PaIn-dependent.com.

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

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WEEKLY BRIEFING

Kane: Turnpike Officials, Senator Conspired To Steal MillionsHARRISBURG — Three former

top o!cials at the Pennsylvania Turn-pike 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 o!cials were engaged in a “pay-to-play” arrangement with engi-neering 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 con-spiracy, bribery, bid rigging, theft and several other charges.

Attorney General Kane said the o!cials used their power to secure “secret gifts of cash, travel and entertainment, along with politi-cal contributions” from contractors doing business with the Turnpike Commission.

“The former state o!cials charged

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

Former state Sen. Robert Mellow, D-Lackawanna, was the only elected o!cial charged.

According to the grand jury pre-sentment, he was “actively involved in steering Turnpike contracts to particular vendors,” securing political contributions from turnpike o!cials and vendors and personally ben-efitted from gifts, including tickets to New York Yankees baseball games and trips paid for by Turnpike con-tractors, 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 Turn-pike Commission, and George Hata-lowich, a former COO and contract administrator for the Turnpike Com-mission.

All were involved in funneling con-tracts to certain vendors and secur-ing political contributions from those vendors.

Pennsylvania State Police Com-missioner 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 pub-lished by Pennsylvania Indepen-dent at PaIndependent.com.

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

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11REGIONSBUSINESS.COM21 MARCH 2013 WEEKLY

BRIEFING: GAMING

GAMING

Table Games Revenue DropsThe 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 PhiladelphiaEach week, Region’s Business will fea-

ture one or two of the proposed casinos vying for the city’s second gaming license.

BY SANDY SMITH

Project name: Wynn PhiladelphiaDeveloper: Wynn Resorts, Ltd.Operator: Wynn Resorts, Ltd.Location: 2000 Richmond Street, Port

RichmondParticulars:Gaming hall: 2,500 slot machines, 100

table gamesHotel: 307 rooms, each at least 800

square feet in sizeOther ancillary facilities: At least

three or four casual and fine dining food and beverage venues, including two facing the Delaware; 10,000-square-foot nightclub and 20,000-square-foot multipurpose entertainment facility; five-star spa. Parking: 2000-vehicle parking garage and 228-space surface lot

Like the Provence, Penn alumnus Steve Wynn’s proposal is more destina-tion resort than casino — and Wynn has established a track record of building luxurious casino-resorts that pamper their guests. Wynn Philadelphia is no dif-ferent. And like the Provence, the facility will be built in a single phase, with all the amenities and features included from the start.

This proposal’s most distinctive feature aside from the Wynn reputation for over-the-top luxury is its location: it is the only proposal located on the Delaware river-front. Wynn himself picked the 57-acre site — the largest of the six plots of land, established in 1825 as the William Cramp shipyard — just upriver from the Sugar House casino and designed it to fit in with the City Planning Commission’s Central Delaware Riverfront Master Plan, with public access to the river and a segment of the riverside pedestrian/bicycle trail incorporated into it.

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

rebuilt will dump tra!c 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 e"ort 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 with-out 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 spino" develop-ment 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 CasinoEach week, Region’s Business will fea-

ture one or two of the proposed casinos vying for the city’s second gaming license.

BY SANDY SMITH

Project name: Hollywood CasinoDeveloper: Penn National Gaming Inc.Operator: Pennsylvania Gaming

Ventures, LLC Location: 7th Street and Packer

Avenue, South PhiladelphiaParticulars:Gaming hall: Phase 1, 100,000 square

feet, with 2.050 slot machines (expand-able to 2,500), 66 table games and 15 poker tables; Phase 2, hall expands with an additional 1,000 slots

Hotel: Phase 2, 500 roomsOther ancillary facilities: Phase 1,

180-seat entertainment lounge with live acts, fine-dining steakhouse, sports pub, casual grill, noodle bar and food court with four outlets; Phase 2, 24,000 square feet of event/meeting space.

The most distinctive fea-ture of this proposal is its ownership structure: It’s the only one of the six that will be majority owned by a public benefit nonprofit.

The Philadelphia Casino Benefit Corporation will own two-thirds of Penn-sylvania Gaming Ventures, LLC (Penn National owns the remaining third).

At present, PCBC’s board has only one member, but should this proposal be selected, it will have a full complement of seven board members, including one selected by Penn National.

The sole purpose of the PCBC is to funnel money into the co"ers of the city’s employee pension fund and the School District of Philadelphia, and the proposal calls for the nonprofit to receive at least $2 million of the casino’s gross revenues annually.

That aside, the proposed casino more 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 gener-ate 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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p: 610.644.8637 f: 610.540.6433StreamCompanies.com

255 Great Valley Parkway, Suite 150Malvern, PA 19355

219 Cuthbert Street, Suite 500Philadelphia, PA 19106

IDEAS

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 engage-ment 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 #Bucks-County in your 140 character tweet. Same goes for #Philadelphia #MontCo, #Ches-terCounty, #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 fi nding 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

of conversations, schedule tweets at other-wise inopportune times to you, and measure your analytics.

7) Promote your Twitter profi le 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 / #Fol-lowFriday.

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.

Increasing Your Number of Twitter Followers

Gina Rubel, is the president and CEO of Furia Rubel Communica-tions, Inc. in Bucks County.

CONTRIBUTE

Send comments, letters and essays to [email protected]. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

Page 13: Region's Business 21 March 2013

13REGIONSBUSINESS.COM21 MARCH 2013

POLITICAL COMMENTARY

Reforms Needed After Turnpike Commission ChargesThe 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-Phila-delphia, and former Gov. Ed Rendell also implicated, though not named or charged.

The presentment tells the tale of a govern-ment agency run amuck — corrupted and controlled by powerful political interests who used it for their personal gain to mis-direct, 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 o!enses seem like small potatoes by com-parison — as they are — but the past three months should make one thing blatantly clear: changes are needed at the Pennsylva-nia 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.

CONTRIBUTE

Send comments, letters and essays to [email protected]. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

Eric Boehm is bureau chief for PA Independent, a project of the Franklin Center for Government and Public Integrity

Page 14: Region's Business 21 March 2013

14 REGIONSBUSINESS.COM21 MARCH 2013

POLITICAL COMMENTARY

‘Nanny State’ Threatens Personal Liberties, FreedomsWe 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 Par-liament Iain Macleod coined it while arguing against an “authoritarian, interfering and overprotective” government.

Imagine the level of his rhetoric if he could see early 21st-century America where, in the name of good intentions, kids are constrained from selling lemonade, Girl Scouts are restricted in selling their cookies, fines are levied for dirty cars, Happy Meal toys are banned (they couldn’t get the meal itself) and “food confiscation teams” inspect the home-packed lunches of school kids to make sure they are USDA compliant.

Last week a New York Supreme Court Jus-tice struck down Mayor Michael Bloomberg’s “soda ban.” Restoring Gotham’s freedom to supersize their sodas, Justice Milton Tingling said that the “loopholes in this rule e!ectively

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. Indi-vidual 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.

CONTRIBUTE

Send comments, letters and essays to [email protected]. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

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

Page 15: Region's Business 21 March 2013

15REGIONSBUSINESS.COM21 MARCH 2013

POLITICAL COMMENTARY

Mayor Pitches Budget In Raucous ChamberOn 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 upcom-ing fiscal year.

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

Many will testify on the budget, particu-larly members of Mayor Nutter’s Adminis-tration, 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 assur-ances 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 cho-rus 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 Sheri!s.

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

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

the conclusion of his remarks on the labor contracts.

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

The mayor described how the new O"ce of Property Assessment completed a reas-sessment of all real property in Philadelphia, and the result is that property in Philadel-phia 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 recom-mended a tax rate of 1.3204 percent.

This tax rate will a!ect Philadelphia’s property owners di!erently and the mayor recognized that.

“To moderate the impact,” he said, “I am calling for a series of relief measures tar-geted 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 exemp-tion 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, includ-ing additional funds for police o"cers, libraries, as well as a reduction in the much-maligned Wage Tax.

He concluded on a note that recognized how progress has been di"cult. As will likely become evident in the coming weeks, every penny in Philadelphia is pulled 20 di!erent 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 qual-ity 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.

CONTRIBUTE

Send comments, letters and essays to [email protected]. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

Timothy Holwick is a freelance writer covering Philadelphia government. Find more coverage at citycouncilmatters.com.

MITCHELL LEFF/CITY OF PHILADELPHIA

Page 16: Region's Business 21 March 2013

16 REGIONSBUSINESS.COM21 MARCH 2013

Steadily, but almost quietly, Philadelphia has become a hotspot for entrepreneurs. The combination of great ideas, available capital and a welcoming environment have set the stage to make 2013 a breakout year for innovation and new businesses.

To Learn More ...For more information on sponsorship opportunities or to suggest story ideas, call our main office at 610-940-1656.The web: RegionsBusiness.comFacebook: Facebook.com/regionsbusinessTwitter: @RegionsBusiness

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2013: YEAR OF THE INNOVATOR

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

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 26Place: 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 28Place: Syscom Technologies, 490 Norristown Road, Suite 151, Blue Bell, Pa. Tickets: $4 per person MEETUP.COM

Cultural Corridor Line Included In Philadelphia Central District Plan

CENTRAL DISTRICT PLAN

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

The proposal is part of the Central District Plan, which was released Tues-day.

Philadelphia Planeto, the city Plan-ning Department sta! 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 tran-sit 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 below-grade from Broad Street west/north-west between Callowhill and Hamil-ton Streets then under Pennsylvania Avenue and along Fairmount Park near Kelly Drive.”

Using this old railroad space, the cul-tural transit line will be able to avoid tra"c 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 Subway-Elevated, 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 neces-sary 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 Cul-tural 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

Page 17: Region's Business 21 March 2013

17REGIONSBUSINESS.COM21 MARCH 2013 2013:

YEAR OF THE INNOVATOR

In Her Own Words: Rising Over Challenges at Happenings MediaIn her words:Every day at a startup is full of dif-

ferent tasks, obstacles and achieve-ments; it’s an environment that is both extremely exciting and abso-lutely terrifying at the same time; an environment that pushes entrepre-neurs 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 digi-tal marketing seminars to strategiz-ing advertising sales to structuring legal contracts to planning editorial to training licensees with just about everything in between.

Yet, the biggest challenge of grow-

ing a business does not come in man-aging the multitude of daily respon-sibilities. 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 nur-turing the many seeds we’ve planted over the past two years — adding new territories, expanding editorial fea-tures, improving client services, pro-moting contests, improving design, growing sales revenue and much more. Now more than ever, though, we’re able to refl ect 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 cre-ating a garden.

DIARY OF A STARTUP

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

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

“This spring is not just about watering

the plants, but it’s about creating a garden.”

Special Delivery.

To subscribe, call

610.940.1656

REGION’S BUSINESSA JOURNAL OF BUSINESS & POLITICS

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Page 18: Region's Business 21 March 2013

18 REGIONSBUSINESS.COM21 MARCH 20132013:

YEAR OF THE INNOVATOR

BY BRANDON BAKER

When Phil Katz plans out his day and fi ne-tunes fi lm productions in his corner

o! ce, 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: perpet-ual Republican mayoral candidate, Sam Katz. His o! ce, as one could imagine, has been designated “City Hall.”

“He wanted to feel close to an o! ce 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 com-pany’s work stems back to 2008, when Mr. Katz fi rst purchased his father a Netfl ix 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 fi rst 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 fi lm produc-tion as a hobby growing up, but opted to attend Washington University for mar-keting 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-

versity, and went back to square one. “I essentially put myself through

fi lm 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 Market-ing and History Making Productions company in 2007 under the Katz Cre-ative 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 vid-eos when they come in here, and that’s where I see people fail,” Mr. Katz said. “But I love working with clients and fi guring out how it all makes sense … I

want this to be a one-stop shop.”Ground Up most recently worked

with Washington, D.C.-based Weal-thEngine 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 fi ve team members and a slew of part-time 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 fi ghting 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.”

After compiling 500 short videos for the “Philadelphia: The Great Experi-ment” 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 ele-ment 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 o" .”

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 confi dent 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 bril-liant executive.”

HISTORYTAKING PHILLY’S HISTORYOUT OF THE PARK

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

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

—PHIL KATZ

/HistoryOfPhilly [email protected] www.katzcreativegroup.com

BRANDON BAKER

Page 19: Region's Business 21 March 2013

19REGIONSBUSINESS.COM21 MARCH 2013 2013:

YEAR OF THE INNOVATOR

BY THE NUMBERS

Nutter Calls For KEYSPOT Funds

$18MFederal funding for

Philadelphia’s “KEYSPOT public computing centers

and digital access initiatives” that will run dry this

summer, according to Technically Philly.

$624,000Mayor Michael Nutter’s

proposed investment by the City of Philadelphia into the KEYSPOT program, which

launched in 2011, according to the Technically Philly

report.

MVM Associates Helps Raise $8M

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

“Many companies qualify to participate in tax incentive programs that can gener-ate 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 tech-nology firms to transfer these credits to other taxpayers that can use the credit. The proceeds then go back to the firm.

FUNDING

The Energy Efficient Buildings Hub and Ben Franklin Technology Part-ners of Southeastern Penn-sylvania created the EEB Hub Commercialization Center. Located at Building 101 in The Navy Yard, the HCC will house and support entrepreneurs and busi-nesses focused on improving energy e!ciency in new and retrofitted buildings.

“The HCC will offer a suite of services and financ-ing designed to accelerate market introduction of energy e!ciency technolo-gies, 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 o"er business and product development ser-vices, access to financing and entre to a network of proto-typing and fabrication labs.

The HCC will launch vir-

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 Com-mercialization Center to further accelerate our e"orts to foster start-up formation, entrepreneurial activity and innovation in the energy e!cient building technology sector, said Laurie Actman, Deputy Director, EEB Hub.

“Our goal is for the HCC to be the number one desti-nation in the nation for any new or existing company to develop and launch a new technology or service that contributes to energy effi-cient building activity.”

EEB Hub Opens At Navy Yard

• Save money—pre-tax deductions save employers on FICA taxes.• Boost employee morale—they can save more than $900 a year. • Easy to implement—online orders, payments and more.• Trusted—the only local, nonprofit transit benefit program.

RideECO is the new name for the commuter benefit program fromDVRPC, which offers Easy Commute Options. As always, RideECOallows employers and commuters to save by putting pre-tax dollarstowards public transportation fares.

S E P T A / D A R T F I R S T S T A T E / N J T R A N S I T / P A T C O / V R I D E / A M T R A K

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

Everyone saveswhen youremployees sit here.

Page 20: Region's Business 21 March 2013

REGION PLUGS INThe natural gas boom brought an economic windfall that many hope will spur innovation in transportation. At the same time, many companies across the Delaware are looking for new ways to power the region and the economy.

20 REGIONSBUSINESS.COM21 MARCH 2013

TEXT BY MICHAEL JACOBS ILLUSTRATION BY DON LEE

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 com-monwealth 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 per-cent 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 confer-ence 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 o!ce.

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 natu-ral 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 over-all 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 low-hanging 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 inter- est in moving to natural gas vehi-cles.

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 dis-agree. 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 admin-istration in Harrisburg and the Democratic admin-istration in Washing-ton support an “all of the above”

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

W

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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 ine!cient 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 tradi-tional 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 com-pliance — it’s not uncommon for haulers facing 60-min-ute drives to dump the waste into sewers, where grease causes 40 percent of the nation’s overflows, Ms. Lands-burg 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 stra-tegic 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 o"er 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-mem-bers, then spun o" 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-

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 e!cient at collecting grease, Ms. Lands-burg 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 envi-ronmental value we can from the material we recover.”

Finding Beauty in Ugly WasteFOCUS ON: BLACKGOLD BIOFUELS

Headquarters: Center City Philadelphia Website: www.blackgoldbiofuels.comPhone: 215-253-5844Founded: 2004 CEO: Emily LandsburgEmployees: 15What 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.”

RAINER ZENZ

approach toward developing energy resources, with the natural gas freed up through recent shale-fracturing technol-ogy 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 govern-ment 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 pub-lic transit agencies switching their buses to compressed natural gas (CNG) and allow-ing public access to their fueling stations.

It doesn’t hurt, he said, that a 50-cent-per-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 e"ort starts with education. The Department of Environmental Protec-tion 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 conven-tional 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 pro-pane-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 involv-ing at least five vehicles and new, publicly

Page 22: Region's Business 21 March 2013

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Page 23: Region's Business 21 March 2013

23REGIONSBUSINESS.COM21 MARCH 2013

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 sustain-able, 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 technol-ogy and our company.”

Renmatix doesn’t produce fuel. But it can use almost any nonfood biomass — basically any-thing 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 inves-tors 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 “ele-ments 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 pres-sure 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-e!ectiveness of the process, as the company has shown at its demonstration facility in Ken-nesaw, Ga., which can produce 3 tons of sugar a day from hardwood.

Much of Renmatix’s work has involved hard-wood 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, agri-cultural leftovers and waste streams available in southeastern Pennsylvania.

U.S. Agriculture Secretary Tom Vilsack

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 part-ners 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 start-ing point, he said. “Over time, we’ll see more and more of it gravitate to technology like ours.”

Finding Power in PlantsFOCUS ON: RENMATIX

Headquarters: King of Prussia Website: renmatix.comPhone: 484-751-4000Founded: 2008CEO: Mike HamiltonEmployees: About 80What it does: Uses high-pressure, high-temperature 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.

accessible fueling stations.“We’re trying to build demand

to send a signal to the automakers that there’s a customer base,” Mr. Henderson said. If Detroit builds them, people will buy natural gas vehicles, as long as they know they’ll be able to fill the natural gas tanks.

“People want certainty that they don’t have to look around to find a refueling station,” he said. Each new station is “a pebble in a pond. As the ripples go out, as they go through a city and a corridor, there are more options for people.”

He expects to see significant expansion of the refueling infra-structure within a year.

“I’ve been surprised by how many folks over the last 12 to 18 months have come to us to say they’re looking to put private capital investment into fueling,” he said. They want a consistent set of regulatory standards, and the state govern-ment helps by connecting them with interested fleet operators to talk.

“It’s important to bring about this change,” said Sil Lutkewitte, the alternative-fuels manager for Lehigh Gas. He said the transition to natural gas “has as much to do with educating the fleet manager as anything else.”

New stations contribute to that education. It isn’t as if you can stand on any corner and see a CNG station, he said, but each addition to the infrastructure provides an opportunity for Lehigh to talk to fleet managers and business own-ers about the fuel’s availability and value.

Clean Energy, the nation’s lead-ing provider of natural gas for transportation, spent the first 12 or 13 years after its founding in 1996 trying to educate companies about the environmental value of natural gas, spokesman Gary Foster said. But the California-based company found resistance because the di!er-ence in prices between diesel and CNG didn’t make up for the higher cost of the vehicles.

The drilling in the Marcel-

lus Shale and other American resources, however, drove down prices enough to get the atten-tion of companies operating truck fleets, especially waste companies, Mr. Foster said.

It takes as little as 18 months to save enough on fuel to pay for the more expensive compressed natural gas trucks for garbage and recycling, he said, and they last 10 to 12 years. The trucks are higher quality now, with better engines that provide the torque and power

waste companies want.

“Now it’s just a no-brainer,” Mr. Foster said. Half the new waste trucks sold nationwide in 2012 use natural gas, and CNG vehi-cles are expected to make up 60 percent of sales this year.

If your fleet uses more than 2,000 gallons of gasoline or diesel a year, Mr.

Lutkewitte said, CNG is worth the switch.

The largest natural gas fleet in the nation belongs to Waste Man-agement, which has more than 2,000 trucks powered by com-pressed or liquefied natural gas (LNG) and plans to switch 18,000 collection trucks to natural gas, CEO and President David Steiner announced in January.

Each time Waste Management replaces a diesel truck with a CNG vehicle, it saves 8,000 gallons of diesel fuel a year and eliminates 22 metric tons of greenhouse gases and 90 percent of the production of nitrogen oxide and soot, spokes-man John Hambrose said.

He said the company in 2007 announced goals of reducing its vehicle emissions and improving its fuel consumption by 15 percent by 2020, and “natural gas helps us make progress toward both of those goals.”

In addition to being cleaner and $1 to $3 a gallon cheaper than diesel, natural gas powers vehicles that are quieter, require less main-tenance and last longer, he said. Those advantages make it worth spending about $300,000 per CNG truck, $40,000 more than a

WE’RE TRYING TO BUILD DEMAND TO SEND A SIGNAL TO THE AUTOMAKERS THAT THERE’S A CUSTOMER BASE.’—PATRICK HENDERSON STATE ENERGY EXECUTIVE

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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., air-port 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 con-venience 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 cell-phones 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 cell-phone uses, car charging becomes auto-matic 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

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 sys-tem, 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 e!ectiveness.

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

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

comparison of their capabilities and oper-ating costs. The trial will include di!erent combinations of transmitters and receiv-ers 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 charg-ing during every circuit, enough to go around another time while running the air conditioner. It’s called opportunity charg-ing, 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 pas-sengers 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 cold-weather 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 charg-ing will at least double electric vehicle sales and help automakers meet the new, higher federal standards for fuel e"ciency.

“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 tech-nology.”

Finding Wireless Car ChargingFOCUS ON:

MOMENTUM DYNAMICS

Headquarters: Malvern Website: momentumdynamics.comPhone: 484-320-8222Founded: 2009 CEO: Andy DagaEmployees: 16What 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.

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 o!ered 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. Ham-brose said, even though adopting CNG for a local fleet involves much more than buy-ing the trucks and hooking up new pumps.

He said the renovations in Bristol, such as gas-leak-sensing equipment that trig-gers 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 fuel-ing stations in an e!ort to promote natural gas in transportation, the company’s web-site says.

The PECO stations in Eddystone, Berwyn, Plymouth Meeting, Phoenix-ville and Coatesville join Waste Manage-ment’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 infrastruc-ture is in place.

“The more vehicles on the road that can use CNG, the better o! everybody that pro-vides 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 Col-lege and is opening an Allentown station.

Lehigh decided to dive into CNG in mid-2011 because of rising interest among com-mercial 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 cus-tomers get to where they’re going,” he said.

Clean Energy’s target customers are

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Drexel University is a national leader in teaching power engineering, but the Philadelphia school got lessons in saving and making money in the electricity mar-ket 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 elec-tricity, 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 con-sumption, he said, is “the breakthrough we’re centered on.”

The grid operator for a 13-state area that includes Philadelphia, PJM Interconnec-tion, rewards consumers for their peak-time 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 con-sume their electricity in smarter, more flex-ible 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 univer-sity 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 o!ces 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 manag-ers 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.

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

Founded in Conshohocken by the former chief operating o!cer and chief technol-ogy o!cer 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 elec-tric 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 gen-eration 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 imple-ment 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 com-plex 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 e"orts for the 1,517-build-ing 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-in-the-world project with the Southeastern Pennsylvania Transportation Authority to capture, store and sell the electricity gener-ated 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 bat-tery 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 proj-ects $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 invest-ment 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.”

Finding Ways to Reduce Power UseFOCUS ON: VIRIDITY ENERGY

Headquarters: Center City Website: viridityenergy.comPhone: 484-534-2222Founded: 2008 COO: Mack TreeceEmployees: About 45What 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.

rental car shuttles and other vehicles that serve the airport, plus Waste Man-agement and other waste haulers, Mr. Foster said. Most Pennsylvania cus-tomers have fleets of five to 10 vehicles.

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

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

Citing signs such as more LNG vehicles at truck shows and the sell-out 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 adopt-ers 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 conven-tional vehicles with natural gas equiva-lents, 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 o"ers a fed-eral credit to cover half the extra cost of natural gas and other alternative-fuel vehicles over five years.

Pennsylvania is spending state mon-ey 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 win-ners will buy the vehicles and open the fueling stations quickly.

Sometimes plans fall through.PHL Taxi Management won a

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26 REGIONSBUSINESS.COM21 MARCH 2013

$900,000 award from the Alterna-tive Fuel Incentive Grant Program in November 2010 to help buy 50 CNG-powered, 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 Phila-delphia 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, depart-ment 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 wire-less 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 ubiq-uitous, and the equipment involved in opening a CNG fueling site is much more expensive and makes sense only for a large fl eet with its own central station.

“It hasn’t been thought out care-fully,” he said. Rather than build out the natural gas transportation infra-structure, he said, it makes more sense to construct more gas-fi red 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-fi red plants that would add at least 6,000 megawatts in generation to the com-monwealth, 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

Hurricane Sandy knocked out power to more than 1.8 million Pennsylvania customers, and smart-grid technologies couldn’t stop toppling trees from damag-ing power lines.

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

Both PECO and PPL reported that San-dy was their most damaging storm ever, and both companies counted as successes their staging of employees and coordina-tion with other utilities to respond.

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

That smart-grid system delivered real-time information about conditions in specifi c 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 meter-ing 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 installa-

tion of reclosers on power lines. The com-pany 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 o! 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 cus-tomers when the problem ends.

PECO said reclosers throughout its service territory prevented 660,000 sus-tained outages in the fi rst 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 fi ve 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 fi nds and isolates the problem.

In addition to taking automatic actions, the software in PPL’s distribution man-agement 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 demand-side 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 batter-ies, 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 e" ciency, 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.

Building a Smarter Electrical Grid FLICKR.COM/WEAK_HOPE

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.

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27REGIONSBUSINESS.COM21 MARCH 2013

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 air-port’s first Leadership in Energy and Envi-ronmental Design Silver-certified facility, US Airways has taken the lead in lessening its e!ect on the environment.

“We all struggle with this. It’s very dif-ficult in this type of business to minimize your footprint,” said Rhett Workman, the airline’s managing director of corporate real estate and government a!airs on the East Coast. Airplane manufacturers deter-mine 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’ e!orts contribute to the air-port’s overall green vision under its 2006 environmental policy statement and the mayor’s Greenworks Philadelphia initia-tive.

“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 PEN-JERDEL 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 power-ing 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 elec-tric 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 coun-terpart. Federal and state grants have cov-ered that di!erence, 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 equip-ment and as the technology improves for more powerful vehicles. No electric heavy-duty 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 Sep-tember 2011. The facility made extensive use of recycled and locally sourced mate-rials while saving energy over time and creating a better working environment.

Building a LEED-certified o"ce build-ing 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 runo! 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 impor-tant 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 e!ect 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, how-ever. 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 natu-ral 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 o!. “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 pur-chase natural gas vehicles.”

Freelance writer Michael Jacobs lives in the Atlanta area.

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

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

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28 REGIONSBUSINESS.COM21 MARCH 2013

FINE ESTATES PREVIEW

New York Style Over Philadelphia ParkLive a New York Upper East Side lifestyle at

Philadelphia prices in this cosmopolitan classic townhouse looking out over Washington Square Park.

This home has two-car gated parking; a new, five-story elevator security system; an impressive, 60-foot marble entryway; an elegant living room, formal dining room and kitchen overlooking a two-story atrium room as well as a nice garden.

There is also a very inviting fifth-floor retreat or au pair suite including a deck with city views, a kitchenette, bathroom, walk-in closet and four bedroom suites, all with new marble bathrooms, laundry, great closet space and own heat zone.

Features include: crown moldings, pine floors, fireplace in every room, beautiful public spaces, gracious bedroom suits, atrium with water feature, brick-walled garden, upper deck, attic, multiple kitchens, laundries and six full baths.

This flexible home is ideal for an executive with children and help, empty nesters with aging par-ents, professional co-occupants who want to share company and costs but also want own space.

Washington Square Park is just footsteps to res-taurants, city attractions and medical centers.

For more information, call Kathy Conway at (215) 266-1537

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4 BR / 6 BA$3.999 million

Page 29: Region's Business 21 March 2013

29REGIONSBUSINESS.COM21 MARCH 2013

REAL ESTATE

Expert: ‘Never Been Easier’ To Sell PhiladelphiaBY JEN HELLER MESERVEY

Earlier this month, the 11th annual RealShare Philadelphia, a meeting of more than 500 real estate professionals, was held.

More than two dozen industry experts spoke at the event, which took place in the Crystal Tea Room at the historic Wanamaker Build-ing.

One topic of discussion at RealShare was why, as Robert Fahey, executive vice president at CBRE, said, “It’s never been easier to sell Philadelphia.”

The panel of experts pointed to many di!erent reasons for the city’s current developer appeal.

Philadelphia is lower profile than nearby cities like Boston and Washington and less subject to “wild cyclical swings,” according to Chris Terlizzi, senior vice presi-

dent and regional manager at First Niagara Bank.

Experts also referred to a young-er demographic which is currently pouring into Philadelphia’s many renovated apartment buildings.

David Dolan, senior managing director with Newmark Grubb Knight Frank, said that nearly 6 million square feet of older o"ce space in Philadelphia has recently been converted to apartments, attracting major owner/developers.

The city’s high livability factor is due in part to the so-called “meds and eds” sector, according to Timo-thy Proctor, senior vice president at TD Bank.

However, the experts cautioned that recent 6-8 percent rent increases may not be able to sus-tain the 1,500 to 2,000 new units that will come on the market next year.

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

Universities across the country are facing a shortage of student housing, and with aging dormito-ries 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 contin-ued 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. MARC SZARKOWSKI

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30 REGIONSBUSINESS.COM21 MARCH 2013

REAL ESTATE

Successfully Selling High-End Urban Living

BY TERRENCE CASEY

In what Tom Scannapieco calls “the worst residential market in our lifetime,” one high-end urban living tower is prov-ing 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 mil-lion are in the same tower, said Mr. Scan-napieco, 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-de-sac 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 hav-ing views in four directions. But some

of the things that you might not think of right o! 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 enter-tain 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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Page 31: Region's Business 21 March 2013

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Page 33: Region's Business 21 March 2013

33REGIONSBUSINESS.COM21 MARCH 2013 A&Q

RICHARD SNYDER’S

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

COORDINATEDHEALTH CARE

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 e! orts, more practices in southeast Pennsylvania than anywhere else in the country have committed to improvement.

Why is coordinated care neces-sary?

Health care is complicated. Peo-ple 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 fam-ily and can advocate for your inter-ests and values is more important than ever. Remarkable advances in biomedical technology, pharmaceu-ticals 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 fi nancial incen-tive to help them make the invest-ments 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

o" ces so they can know about ser-vices delivered by other doctors. We are particularly proud of the work we are doing with residency train-ing 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 fi ve 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 technol-ogy in the early ’80s.

We have world class universi-ties 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 satisfi ed patients and physicians. I think everyone shares those same goals.

What do groups like IBC need (from city/state/federal govern-ments) 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.

Page 34: Region's Business 21 March 2013
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35REGIONSBUSINESS.COM21 MARCH 2013

BY ED MILLER

It’s that time of year again – March Mad-ness.

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 tourna-ment events in the past – the last of which was in 2009 for the fi rst and second rounds – but what sort of fi nancial impact will it have on the city?

The tournament will provide an economic boost to Philadelphia – especially the imme-diate area around the sports complex in the city’s southern section. With the event tak-ing 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 Phila-delphia Sports Congress, the city is expecting approximately 4,000 combined visiting fans from the eight schools that will be partici-pating. 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 walk-ing distance of the Wells Fargo Center and both are expecting a heavy increase in occu-pancy 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 a! ects 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 signifi cant 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. Nee-dle admitted. “The two rounds this city will host are expected to generate approximately 5,000 hotel room nights and $8 to $10 mil-lion 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 o! and the Sixers are on a road trip. The NCAA tournament will also put Philadelphia on display for the entire collegiate world to see.

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 tourna-ment on display, it will depict Philadelphia in a positive light – acting as a sort of tourism advertisement.

March Madness’ TV ratings can fl uctuate depending on the round but they’re always impressive – typically beating out its winter counterparts, the NBA and NHL – in fact, least year’s fi nal 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 Phila-delphia 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 con-tinuing its long history of hosting the tour-nament 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

MAD(NESS) MONEY

Tournament makes, costs lots of moneyAccording 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.

$134MThat’s what the first two days of the tournament will cost American businesses in lost productivity, according to Challenger, Gray & Christmas.

$70MThat’s the amount of economic activitiy the Final Four will generate for Atlanta from April 6 to April 8.

$1BYes, 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.

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

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.’—LARRY NEEDLE

LISA NOTTINGHAM

Page 36: Region's Business 21 March 2013

36 REGIONSBUSINESS.COM21 MARCH 2013

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 [email protected]. Opinions expressed byguest writers do not necessarily reflect thoseof Region’s Business.

Our Energy Economy Is Diverse and GrowingIncreasingly, 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-e! cient upgrades to existing buildings.

The construction boom of LEED certifi ed build-ings has employed countless Philadelphians – direct-ly 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 tech-nology improvements, which in turn benefi t other industries in the region.

The Commonwealth of Pennsylvania has man-dated 18 percent of Pennsylvania’s electricity be supplied using alternative energy resources, includ-ing 0.5 percent from solar, by 2020. This is driving additional investment and innovation in the alterna-tive energy industry. And across the region, histori-cally 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 obvi-ous when you look at our resurgent manufacturing sector. According to research from the Mayor’s o! ce, 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 Philadel-phia 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 substan-tial importing and exporting business and a rail hub with extensive shipping infrastructure. These condi-tions 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

$26.2 billion in 2011. Here’s an example of how pow-erful 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 compa-nies are used by energy providers around the world.

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

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.

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

“... 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

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

OPINION

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37REGIONSBUSINESS.COM21 MARCH 2013

Time for Innovation, Investment in Region’s EnergyThe Marcellus Shale gener-

ated 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 abun-dance of natural gas which, follow-ing the classic supply and demand model, means an extremely cheap source of fuel.

Some businesses have taken advantage of the situation, creating fl eets of natural gas-fueled vehicles. It’s time for the state and counties to follow.

There are few stronger propo-nents 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 fl ow of revenue for the state. The next step to support the industry would be to create a fl eet 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, specifi cally build-ing natural gas fi lling 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 part-nerships 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 fl eet 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 e! orts at Philadel-phia International Airport.

This proposal need not be an “all or nothing” e! ort. 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 fi nd cost-e! ective 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 chal-lenges will not be solved in a single stroke, by a single silver bullet. Instead, it will be a series of e! orts both big (in what way can we update the region’s electrical grid to be more e" cient and e! ective?) and small (do all state-owned buildings have energy e" cient lighting fi xtures and windows?).

It’s time to start taking those small steps.

REGION’S BUSINESSA JOURNAL OF BUSINESS AND POLITICS

© COPYRIGHT 2012 INDEPENDENCE MEDIA600 GERMANTOWN PIKE, SUITE 400

PLYMOUTH MEETING, PA 19462610.940.1656 | WWW.REGIONSBUSINESS.COM

EDITORIAL BOARD

CEO and President James D. McDonaldEditorial Director Karl SmithAssociate Editor Terrence Casey

HOW TO CONTRIBUTE

To contribute, send comments, letters and essays to [email protected]. 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.

Seeking Civil Discourse in Obamacare DiscussionIn 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 DebateThinking 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

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 GOPIt should have come as no surprise to anyone who has watched Sarah Palin’s erratic and dysfunctional behavior over the past four-and-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

COMMENTARY FROM ACROSS THE WEB

@hblodget A question ... Now that Cyprus banks closed until Thursday while government argues, how are people getting money to spend? 18 MARCH 2013

OPINION

Page 38: Region's Business 21 March 2013

38 REGIONSBUSINESS.COM21 MARCH 2013

25%Corporate tax rate in China.

28%Corporate tax rate in the

United Kindgom.

31%Maximum corporate tax rate

in Canada.

35%U.S. corporate tax rate.

1.9%Effective tax rate paid by Apple on foreign profits.

0.1%Effective tax rate paid by Google on foreign profits.

0.3%Effective tax rate paid by

Facebook on foreign profits.

42Number 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.

BY THE NUMBERS

1996Year 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.

360Miles in the main portion of the Pennsylvania Turnpike,

which opened onOctober 1, 1940. There are more than 500 miles in the

Turnpike system.

15Number of service plazas along the main line of the Pennsylvania Turnpike.

8Number of officials associated with the

Pennsylvania Turnpike charged as part of a grand

jury investigation.

85Number of of pages in the grand jury report on the Pennsylvania Turnpike.

2009Year the grand jury

investigation into the Pennsylvania Turnpike

began, under then-Attorney General Tom Corbett.

2,100Approximate number of

Turnpike employees.

$39.15Cash toll to cross main

line of the Turnpike by car, approximately

11 cents per mile.

27,900,000Number of small businesses in the

United States.

99.7%Percentage of U.S. employers that are considered small businesses.

$1,070,000Average per capita receipts for U.S.

small businesses.

19.4%Percent of overall small business

expenses accounted forby employee wages.

4.6%Percent of overall small business expenses accounted for by rent.

1%Percent fo overall small business

expenses accounted for by promotional advertising, entertaining

and meals.

170,000Number of U.S. small businesses

killed by the recessionbetween 2008 and 2010

according to analysis of census date by the Business Journals.

SMALL BUSINESS DATA FROM BOLTINSURANCE.COM

11Number of NFL teams that will hold their 2013

training camp at a college or university facility.

1Number 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.

13Number of quarterbacks that have started for the Eagles since they begin

holding training camps at Lehigh University.

Page 39: Region's Business 21 March 2013

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Page 40: Region's Business 21 March 2013