In the past two years, one little-known, high-paying Little Rock company has saved its customers more than $1 billion.
The company -- Southwest Power Pool -- is a nonprofit regional transmission organization that oversees operation of the electric power grid.
Southwest Power Pool operates like an air-traffic controller over the electricity grid, directing where the power goes just as an air-traffic controller directs planes on where to land.
It makes next-day projections on the cost of electricity to its 94 member companies in 14 states. That allows those electric companies to optimize the use of their generating plants, even to the point of some members deciding not to operate smaller plants the next day, said Nick Brown, Southwest Power Pool's chief executive officer.
"We will use much more efficient units somewhere else," Brown said in a recent interview. "That optimization has saved more than $1 billion in [Southwest's 14-state market]."
A portion of those savings affect several thousand Arkansans.
Southwest Power Pool manages the electricity grid for more than 400,000 Arkansans who buy electricity from Arkansas Electric Cooperative Corp., Southwest Electric Power Co., Oklahoma Gas & Electric Co. and Empire District Electric Co.
But even though Southwest Power Pool is based in Little Rock, fewer than 5 percent of its end users are in Arkansas, Brown said.
Rates that Southwest Power Pool charges for its services are established by federal regulators and not the state's Public Service Commission, said John Bethel, executive director of the commission's general staff.
"Those charges are passed on to [Southwest Power Pool's] electric utility members' customers through their rates," Bethel said.
Southwest Power Pool is one of the highest-paying businesses in Arkansas. Its 600 employees, many of whom are engineers, earn an average of $88,000 a year, Brown said. That's almost four times higher than the state per person average income of $22,798.
The company celebrated its 75th year in business last month. It was formed nine days after the Japanese attack on Pearl Harbor in 1941. It was created when 11 electric utilities agreed to pool their resources to keep power flowing to Jones Mill, an aluminum production facility near Malvern.
President Franklin Roosevelt set a goal to produce 50,000 airplanes a year, creating a need for huge quantities of aluminum. Jones Mill's operation required 120 megawatts of electricity, more than the capacity of 100 megawatts for all plants in Arkansas at the time. The 11 utilities were successful in pooling power to support the plant.
After the war, Southwest Power Pool continued to provide power to homes in its market area.
In 2012, Southwest Power Pool moved into a $62 million, 20-acre headquarters complex off Chenal Parkway in west Little Rock. Before that, the company worked out of three separate locations in the Little Rock area.
At the time, the state provided basic incentives available to many new or expanding businesses.
Those included a three-year cash rebate equal to 4 percent of payroll for new jobs, paid annually, said Scott Hardin, a spokesman for the Arkansas Economic Development Commission. Southwest Power Pool also received a sales tax refund on all materials associated with construction and equipment purchases, Hardin said.
Even with the new campus, Southwest Power Pool kept an operations center in Maumelle, which was used as a backup should something go awry at the main operations center.
But both the Maumelle center and the west Little Rock center now are operated continually, Brown said.
"They are linked and [operated together] around the clock," Brown said. "We have personnel stationed [in Maumelle] on a permanent basis. Both function and are able to perform all of the services all of the time."
One of the company's plans is to automate even more of its operations, Brown said.
"But I think our biggest risk in the future is going to be cybersecurity," Brown said. "Those who would use that technology to do harm seem to be growing every day. And our ability to keep pace with their efforts to infiltrate our systems for harm just keeps us hopping. I don't think that's going to change."
Another regional transmission office, Midcontinent Independent System Operator, has a regional office in Little Rock. Midcontinent has about 50 employees in Little Rock with incomes similar to Southwest Power Pool.
Midcontinent, based in Carmel, Ind., oversees the electricity grid for all or parts of 15 states and one Canadian province. Its regional office in Little Rock manages the electricity grid for Entergy Corp.'s operations in Arkansas, Louisiana, Mississippi and Texas.
SundayMonday Business on 01/08/2017