Local businesses see great opportunities in federal infrastructure package

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Cummins hopes the projects boosted by the infrastructure bill will help it sell more electric motors and power systems. (Photo courtesy of Cummins)

While the ink still dries on the $ 1.2 trillion federal infrastructure package, local businesses are already anticipating the additional activity that could result.

The Infrastructure Investment and Jobs Act, enacted by President Joe Biden on November 15, provides funding for a wide range of efforts in the years to come, from road projects to broadband expansion to initiatives. clean water and green energy.

This presents an opportunity for companies working in one or more of these areas, from large companies like Cummins Inc. and Allison Transmission Inc. to smaller ones like Telamon Corp., 120Water Inc. and BCA Environmental Consultants LLC.

Traci Kraus

“This is a really big deal,” said Traci Kraus, Washington, DC-based director of government relations at Columbus-based Cummins.

“This bill, every provision could affect Cummins in one way or another,” Kraus said.

Due to the complexity of the legislation, Kraus said, Cummins is still struggling to understand the details of the funding and how it will be distributed.

But the engine maker already sees particular promise in parts of the infrastructure package that focus on green energy. The company has been exploring hydrogen fuel cells for more than 20 years, but its investment in the technology began in earnest in 2019. In November 2020, Cummins hosted an online event for Hydrogen Day to promote its commitment to favor of green hydrogen technology, even as the executives admitted. the considerable obstacles that stand in the way of its widespread adoption.

Cummins’ first green hydrogen customers were outside the United States, particularly in countries of the European Union, which adopted official policies to promote green energy and reduce carbon emissions.

The law allocates $ 7.5 billion for zero or low carbon buses and ferries, which could benefit the electric powertrain business of Columbus-based Cummins Inc. (Photo courtesy of Cummins)

The US infrastructure package includes $ 9.5 billion to accelerate the development of clean hydrogen technology, including the creation of at least four regional “hydrogen hubs”. These hubs would serve as demonstration sites for the production, processing, delivery, storage and use of clean hydrogen. The infrastructure package also calls on the federal government to create a national hydrogen strategy.

“This makes the economy of some of these [hydrogen] projects work better, ”Kraus said. “It will certainly put the United States on a par with what is happening in Europe.”

Branden harbin

Other provisions of the infrastructure package include $ 66 billion earmarked for improving passenger rail transportation, $ 7.5 billion for zero and low carbon buses and ferries, and $ 110 billion for repair of roads and bridges. All of them have a potential impact on Cummins, Kraus said, as the company makes such a range of products, including electric powertrains for buses, locomotive engines and power systems for a range of heavy vehicles, including ferries. , construction equipment and dump trucks.

“Every time we build things it’s good for Cummins,” Kraus said.

Indianapolis-based Allison Transmission also sees opportunities. The company manufactures propulsion systems for conventional, hybrid and fully electric vehicles and commercial equipment.

While supply chain nodes and labor shortages may mitigate the immediate impact of the infrastructure bill, Allison will benefit in the long run from increased vehicle and component purchases, a said Branden Harbin, executive director of global marketing and external communications for Allison.

For broadband only

Carmel-based Telamon Corp. has its eye on another major piece of the infrastructure package: the $ 65 billion earmarked for expanding broadband internet infrastructure and access, in particular. in rural and underserved areas.

Albert Chen

The focus on the latter opens up new opportunities for Telamon, said company founder and chairman Albert Chen. That’s because Telamon’s telecommunications customers, including AT&T, Verizon, and TMobile, focus primarily on urban areas.

To prepare for new opportunities, Telamon hired a consulting firm this summer to help them connect with small community economic development organizations, the type of groups that might seek Telamon’s expertise. when they tap into federal broadband funding. “We really don’t have that kind of connection, so they help us make a connection,” Chen said.

A separate company that was also started by Chen, Telamon Energy Solutions, could also benefit from the infrastructure package. She designs, installs and manages solar panel projects, and her first major project took place at Indianapolis International Airport. The company is also launching a division focused on the installation and operation of charging stations for electric vehicles.

Chen said he was not sure what Telamon could gain in business from the infrastructure package. “It’s a difficult part to estimate. “

Much depends on how politics affects funding decisions, he said.

Telamon Energy Solutions designs, installs and manages solar panel projects, including this one for the city of Carmel. (Photo courtesy of Telamon)

Improve water supply

Megan glover

Megan Glover, co-founder and CEO of Zionsville-based 120Water Inc., said she expects a significant increase in activity from the infrastructure package, which contains $ 55 billion to improve access to water. potable throughout the country.

“These are dollars of a magnitude that [the water industry] hasn’t seen in decades, ”she said.

120Water offers water sampling kits, as well as software and services for drinking water management and compliance. Its customer base includes more than 200 water supply systems in 30 states. The company has roughly $ 10 million in annual recurring revenue, a key metric among software as a service companies.

Part of the water financing of the infrastructure bill is specifically earmarked for activities to locate and replace lead pipes. “We see this as the number one priority for our customers,” said Glover.

The infrastructure package also addresses several other water-specific initiatives, including efforts to remove chemicals called PFAS from water supplies and an initiative to reduce water loss due to practices like waste and pipe leaks. Glover said 120Water plans to step up its research and development and sales efforts in these areas in response to the passage of the infrastructure bill.

Coincidentally, the federal government is set to implement major revisions to its lead and copper rule for drinking water systems, which should create additional business for 120Water.

Glover said his company, which currently has around 75 employees, has ramped up hiring this year in anticipation of the lead-and-copper rule rollout. She plans to hire an additional 15-20 people in the first half of next year.

Clean up brownfields

Indianapolis-based BCA Environmental Consultants is keeping an eye on a smaller part of the infrastructure package, the $ 1.5 billion earmarked for the cleanup of brownfields, which are plots of land with known or suspected contamination.

Joel markland

“This is the most significant funding we have seen in the disciplinary areas we work in, in the history of our company,” said BCA President Joel Markland.

Founded in 1988, BCA works with municipalities wishing to clean up brownfields. Among its other services, BCA helps clients obtain federal grants to help cover cleaning costs.

The big X factor in the infrastructure package, Markland said, is exactly where brownfield money will be allocated. Depending on the amount of money spent on the grant program, he said, BCA could see its revenues increase by up to 20% in 2023.

Federal subsidies for brownfields cap at $ 500,000 each, he said, so even though only a portion of the $ 1.5 billion goes to subsidies, that’s a lot of additional subsidies.

Michael hicks

Looking further ahead, Ball State University economist Michael Hicks said the infrastructure package could deliver economic benefits long after the money has been spent.

As an example, Hicks cited funding for broadband expansion, which he said “will have a reasonably large effect” on the economy.

“Trustworthy, reliable and high-speed telecommunications are increasingly critical for businesses and homes, so this expansion will increase productivity nationwide, with obviously greater effects in places where broadband is available. is insufficient, ”Hicks told IBJ via email. “Part of this network will also allow autonomous vehicles and more automated warehouses and factories. This is where most of the benefits accrue. “•

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