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AES Corp. to locate U.S. operations HQ in Indianapolis

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AES Corp., the multinational parent of Indianapolis Power & Light Co., plans to locate the headquarters of its U.S. operations in Indianapolis, creating up to 100 jobs by the end of 2014.

The 21 AES businesses across the country will transition to operate as one business unit, housed at IPL's existing headquarters on Monument Circle, company officials announced Friday morning. The company expects to invest $1.2 million to align its U.S. operations here.

IBJ reported Thursday that the company was considering Indianapolis for a corporate services hub.

"This decision demonstrates AES' commitment to Indiana," said Ken Zagzebski, CEO of IPL and the newly appointed president of AES' U.S. business unit. "AES decided to expand here primarily due to the excellent business and regulatory climate we have in the state."

AES, a Fortune 200 company, has 25,000 employees globally, including 3,600 in the United States.

The move comes as IPL plans more than $1 billion in projects to bring its coal-fired power plants into compliance with environmental regulations. It is expecting heavier scrutiny on customer rates as it plans a “fundamental shift” in regulatory strategy.

The Indiana Economic Development Corp. offered AES up to $2.7 million in conditional tax credits and up to $87,500 in training grants, based on the company's job-creation plans.

"We are proud that a global company like AES has chosen Indiana as its hub for all U.S. operations," said Gov. Mike Pence, who attended the announcement.

AES is looking to cut costs throughout the corporation, and it makes sense that it would choose Indianapolis as a hub, Charles Fishman, an AES analyst for Morningstar, told IBJ on Thursday. IPL is bigger and more profitable than Dayton Power & Light, AES's other U.S. utility, and AES is planning to invest more than $1 billion in its Indiana power plants.

"Indianapolis Power and Light has a reputation as being a very well-run utility," Fishman said.

Founded in 1981, AES provides energy to 23 countries through distribution and generation businesses. The company has 2,400 megawatts in power plants under development in eight countries.
 

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  1. Apologies for the wall of text. I promise I had this nicely formatted in paragraphs in Notepad before pasting here.

  2. I believe that is incorrect Sir, the people's tax-dollars are NOT paying for the companies investment. Without the tax-break the company would be paying an ADDITIONAL $11.1 million in taxes ON TOP of their $22.5 Million investment (Building + IT), for a total of $33.6M or a 50% tax rate. Also, the article does not specify what the total taxes were BEFORE the break. Usually such a corporate tax-break is a 'discount' not a 100% wavier of tax obligations. For sake of example lets say the original taxes added up to $30M over 10 years. $12.5M, New Building $10.0M, IT infrastructure $30.0M, Total Taxes (Example Number) == $52.5M ININ's Cost - $1.8M /10 years, Tax Break (Building) - $0.75M /10 years, Tax Break (IT Infrastructure) - $8.6M /2 years, Tax Breaks (against Hiring Commitment: 430 new jobs /2 years) == 11.5M Possible tax breaks. ININ TOTAL COST: $41M Even if you assume a 100% break, change the '30.0M' to '11.5M' and you can see the Company will be paying a minimum of $22.5, out-of-pocket for their capital-investment - NOT the tax-payers. Also note, much of this money is being spent locally in Indiana and it is creating 430 jobs in your city. I admit I'm a little unclear which tax-breaks are allocated to exactly which expenses. Clearly this is all oversimplified but I think we have both made our points! :) Sorry for the long post.

  3. Clearly, there is a lack of a basic understanding of economics. It is not up to the company to decide what to pay its workers. If companies were able to decide how much to pay their workers then why wouldn't they pay everyone minimum wage? Why choose to pay $10 or $14 when they could pay $7? The answer is that companies DO NOT decide how much to pay workers. It is the market that dictates what a worker is worth and how much they should get paid. If Lowe's chooses to pay a call center worker $7 an hour it will not be able to hire anyone for the job, because all those people will work for someone else paying the market rate of $10-$14 an hour. This forces Lowes to pay its workers that much. Not because it wants to pay them that much out of the goodness of their heart, but because it has to pay them that much in order to stay competitive and attract good workers.

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