Company officials met the public at a “community open house” Tuesday in the N.C. Cooperative Extension Service’s office in Dobson where they outlined plans for the project and answered questions.

Fibrowatt’s generating system was developed in Great Britain and used in its first U.S. operation at Benson, Minn. The system heats chicken litter to produce gasses that fuel the power plant’s boilers, turning water into steam that turns its generators. The depleted chicken litter later can be used for fertilizer. Pointing to emissions data from the Minnesota Pollution Control Agency, Fibrowatt officials said their Benson plant releases less carbon dioxide, carbon monoxide, nitrogen oxides, sulfur dioxide and hydrogen chloride per megawatt than coal plants in North Carolina. A group from Surry and Wilkes counties visited the Benson plant this year and said they detected no odor problems.

Fibrowatt estimates its first plant in North Carolina will cost $140-$150 million, employ 75-100 people, generate 40 to 55 megawatts of electricity, and annually consume up to 500,000 tons of chicken litter the company will buy for estimated $15 million.

Surry and neighboring Wilkes County both are among North Carolina’s broiler-chicken producers. Fibrowatt officials noted that, regardless of which county is chosen, the plant will buy chicken litter from producers within a 100-mile radius.

Today’s editions of the Winston-Salem Journal, Surry Messenger, The Mount Airy News and Elkin Tribune all have reports on the open house, including residents’ reactions.

The Winston-Salem Journal’s map showing the Surry County location off N.C. 268 near Gentry Road is here.

Fibrowatt co-founder and CEO Rupert Fraser said it will take about three years to build the plant after his company negotiates a contract to sell the power to Duke Energy. He said Fibrowatt hopes to announce its choice of a site by the end of this year.

It’s no secret that Fibrowatt has had its eye on Surry County and other N.C. locations for the past four years. The company uses technology developed in England to generate electricity from poultry litter. Surry County is one of the state’s major poultry producers and Wayne Farms has a large broiler-chicken production operation at Dobson. Neighboring Wilkes County is the state’s largest broiler-chicken producer. Fibrowatt officials plan on consuming 500,000 tons of chicken litter to generate 40 to 50 megawatts annually.

What’s not as widely known is that Fibrowatt and officials in North Carolina have quietly accelerated plans for the new development and their efforts to choose a site. The Winston-Salem Journal reports that Fibrowatt now has narrowed its choices for the first plant to Surry and Wilkes counties.

A 10-member delegation from Surry and Wilkes counties traveled last month to Benson, Minn., where they attended the opening of Fibrowatt’s first U.S. plant. That generating station employs about 100 people.

Bryan Cave, Surry’s agriculture-extension director, told the Journal that some in the group were curious to see whether an odor would be detected near the operation. They also wanted to know how the litter was brought in (in sealed trucks) and the process that it went through before burning. The Fibrowatt process heats chicken litter to produce gasses burned to produce steam that turns generators. The depleted chicken litter, sterile and dry, later can be used for fertilizer and feed supplements.

“I could stand right beside the plant in Minnesota and not smell litter at all,” Cave told the newspaper. “Everyone is entitled to their opinion. Based on the science and what I’ve seen, there’s not a great big issue there.”

Charlie Sink, a Wilkes County commissioner, also made the trip and said that the Minnesota facility is an impressive, modern plant. Worries about odor seem to be local people’s biggest concern, he said, so he stood next to the plant’s storage building and smelled nothing objectional.

The Journal article said Fibrowatt’s preferred site in Wilkes County is at North Wilkesboro’s industrial park off N.C. 268. A preferred location in Surry County was not named in the Journal’s article.

Robin Rhyne, president of the Surry County Economic Development Partnership, has been Surry County’s lead contact with Fibrowatt since 2005. In a Mount Airy News article on Oct. 29, Rhyne acknowledged some environmental groups’ concerns about odors, plant emissions and waste products, but pointed out that waste disposal also is an environmental problem. She said no other organizations have proposed an alternative “green” solution to disposing of chicken litter.

In addition to Surry and Wilkes counties, five other counties have attracted Fibrowatt’s interest. The company has said it may build as many as three generating stations in North Carolina. The other counties being considered are Stanly, Montgomery, Moore, Duplin and Sampson. Fibrowatt intends to have informational sessions at all seven. The Wilkes County community open house is scheduled for 4 to 7 p.m. Nov. 14 at Wilkes Community College’s Walker Center in Wilkesboro.

Total revenues for the quarter that ended Sept. 30, 2007, were $139.7 million, $10.2 million less than in the comparable quarter a year ago. Storm restoration revenues alone were down $7.5 million to $4.8 million for the first quarter of fiscal 2008. However, core powerline revenue (the company’s mainstay business) per billable hour increased 10.2 percent year over year, reflecting more favorable pricing from contract renegotiations and the elimination of certain accounts that did not meet the company’s profitability goals.

Gross profit for the quarter was $23.3 million, or 16.7 percent of revenue, a 17.9 percent increase from $19.7 million, or 13.2 percent of revenue, for the first quarter of fiscal 2007, primarily due to improvements in operational efficiency, the successful elimination of certain low-margin accounts, and the negotiation of more favorable pricing on contracts.

Net income for the first quarter of fiscal 2008 totaled $5.3 million, or $0.16 per diluted share, compared to net income of approximately $1.6 million, or $0.05 per diluted share, for the first quarter of fiscal 2007.

“Pike’s performance continues to benefit from our efforts over the past several quarters to improve our operations, as evidenced by our year-over-year gross profit margin improvement,” stated Chairman and CEO J. Eric Pike. “While our revenues were lower than last year due to our efforts to exit certain low-margin accounts during the latter half of fiscal 2007, along with significantly lower storm activity during this first fiscal quarter, we continue to focus on delivering consistent core powerline performance while maintaining industry-leading profitability levels.”

Pike continued, “One of our primary objectives over the next several quarters is to increase productive employee levels and implement initiatives that enable us to attract new hires while also investing in our long term employees. We remain confident that Pike Electric is well positioned to capitalize on the positive industry dynamics, to continue delivering quality service to our customers, and to add value to our shareholders over the long term.”

Based on current customer contracts and business conditions, for its fiscal year 2008, the company continues to expect core powerline revenues to range from $550 million to $560 million. The company expects total gross profit margins to be in the range of 16-17 percent.

Pike Electric hosted a conference call Tuesday to discuss financial results for its fiscal first quarter. A replay can be accessed by dialing (888) 203-1112. The passcode is 4988589. The replay will be available until Nov. 13.

Based in Surry County, Pike Electric is one of the largest providers of outsourced electric distribution and transmission services in the United States. Its core activities consist of the maintenance, upgrade and extension of electric distribution and sub-500 kilovolt transmission powerlines for more than 150 electric utilities, cooperatives and municipalities. Pike Electric services a contiguous 19-state region that stretches from Pennsylvania in the north to Florida in the southeast and Texas in the southwest and is a recognized leader in storm restoration services.

More than half of the state’s counties remain locked in the D3 (extreme drought) or D4 (exceptional) categories on the newest Drought Monitor Map and 82 counties are experiencing severe drought or worse. The Charlotte area is rated D4, much of the Triangle (around Raleigh) is D3 and farther south of us in the Piedmont Triad most counties are rated D2 (severe) to D3. Mandatory water restrictions remain in effect in Guilford County around Greensboro and the Greensboro News & Record reports the outlook for next year is not favorable.

Earlier this month Surry County slipped into the “extreme drought” (D3) category. You should know, however, that the advisory council’s mapping system puts a county into one of the five drought categories if only a small section has less than a certain level of precipitation. In fact, most of Surry County never experienced worse than “severe” drought this summer, though that’s certainly bad enough. The drought stressed crops including tobacco, vinifera (wine) grapes and field grains, but the exceptional Easter freeze last spring actually may have been more costly to farmers. As for restricting water use, city officials in Mount Airy on Oct. 18 asked residents to voluntarily limit water consumption, but the request came more as a demonstration of sympathy for downstream counties’ residents than because of any actual shortage. Elkin also considered voluntary restrictions as early as Aug. 22 when Big Elk Creek’s stream flow slowed, but the town always had a tap into the Yadkin River available as a backup.

You can see North Carolina’s drought develop over the past five months by studying the Drought Management Advisory Council’s archives. What you should notice is that Surry County, throughout the summer, never suffered quite as much as the rest of the state (the eastern coastal counties excepted). The same pattern was seen in North Carolina’s three-year-long drought that ended in 2002-03. Surry County is backed up against the Blue Ridge Mountains and well-washed by the Mitchell, Yadkin, Ararat and Fisher rivers. Within this microclimate, Surry had and has a lot of water on and in the ground.

In its impact on economic development, water is a major consideration for many manufacturers, public facilities and home builders. Mount Airy City Manager Don Brookshire is fond of saying that growth follows the water (and sewer) lines. As one example right at hand, Benny East’s development of Mayberry Campground (see Thursday’s post below) wouldn’t have occurred without Mount Airy’s agreement to extend water lines down U.S. 601 past Interstate 74. Robin Rhyne of the Surry County Economic Development Partnership and city officials in Mount Airy, Elkin and Pilot Mountain all can point to surpluses in treatment capacity as a lure to companies who need dependable sources of water. And those prospective employers aren’t limited to the traditional manufacturers whose needs spurred Mount Airy, Elkin and Pilot Mountain to build their capacious water-treatment systems. Computer data “warehouses” and “server farms,” such as the one Google is building at Lenoir, need huge quantities of water for cooling systems. That’s one of the reasons why Rhyne was in Dallas, Texas, earlier this week; part of her time was spent meeting site consultants at a conference for computer companies. Value-added agriculture is a target for economic development, too, and water is one of the factors that gives the Yadkin Valley American Viticultural Area its unique quality for growing vinifera grapes.

As levers to lift economic development, Surry County’s climate and abundant water are invaluable assets with the added benefit that they than can never be outsourced or moved overseas.

This new feature shows viewers the highlights of Pike Electric’s accomplishments in fiscal 2007. It includes an overview of Pike Electric and the company’s strategic initiatives. The short documentary also gives stockholders and other interested parties an opportunity to see and hear directly from Pike Electric’s management team.

To watch the video, click Pike Electric 2007 Video Annual Report or, if the Windows Media Video does not open, go to the Investor Relations section of Pike’s web site.

Pike Electric, founded and headquartered in Surry County, N.C., is one of the largest providers of outsourced electric distribution and transmission services in the United States. Its core activities consist of the maintenance, upgrade and extension of electric distribution and sub-500 kilovolt transmission powerlines for more than 150 electric utilities, cooperatives and municipalities. Pike Electric services a contiguous 19-state region from Pennsylvania to Florida in the southeast and Texas in the southwest. The company is a recognized leader in storm restoration services.

Pike Electric’s common stock is traded on the New York Stock Exchange under the symbol PEC.

The corporation will report its first-quarter earnings and revenues in a conference call at 5 p.m. (EDT) Nov. 6.

Interim President Thomas J. Smith of Energy West said, “We are extremely pleased to complete this transaction. We now have a 138-mile, high-pressure transmission system and a 149-mile distribution system serving an area with 127,000 households in an attractive and fast-growing area. The business should be accretive to earnings for Energy West’s current fiscal year and offers tremendous opportunity for growth as we expand the 1 percent natural gas utilization rate in Frontier’s service territory.”

Frontier Utilities of North Carolina Inc. has been a wholly owned subsidiary of Sempra Energy and the parent company of Frontier Energy LLC. Frontier Energy in 1995 won approval from the N.C. Public Utilities Commission to construct and operate a new natural gas pipeline and distribution system to provide service to four counties (later expanded to six: Surry, Ashe, Watauga, Wilkes, Yadkin and Warren) in North Carolina. Frontier Utilities in 1997 partnered with Sempra Energy Utility Ventures to build and operate the $55-million natural gas-distribution system.

Natural-gas distribution in Surry, Yadkin and Wilkes counties began in December 1998. Frontier Energy’s first customer was Wayne Farms, a leading producer and processor of broiler chickens, which uses natural gas at its feed mill in Elkin to make steam for a chicken feed process. Frontier Utilities Chairman Andrew Rea said at the time, “For the region, this is the culmination of five years of hard work and dedicated efforts by a broad range of community and business interests to develop a natural gas distribution system that will improve the quality of life for North Carolina residents and businesses.”

Sempra subsequently acquired Frontier Utilities and 100 percent ownership of the Frontier Energy distribution system. The pipeline was completed in 2002. Three years later, in 2005, Sempra announced its intention to sell Frontier Utilities to Energy West, pending regulatory approval that was not received until earlier this year.

According to Dun & Bradstreet, Frontier Energy has annual sales in excess of $5 million. It employs approximately 30 people.

The N.C. General Assembly formed e-NC in 2000 to help expand broadband access across the state. Although dial-up Internet access was reported in all 100 counties in 2001, 20 counties reported less than 50 percent availability of broadband in 2002. Today, only four N.C. counties have less then 50 percent high-speed availability.

Three years ago, according to e-NC, 85 percent of Surry County had access to high-speed Internet service. Since then, cable, telephone and wireless providers have pushed that number to 89.68 percent. In the 12-county Triad region, only neighboring Forsyth County (96.7 percent) and Allegheny County (92 percent) have higher penetration; Surry is in a virtual tie with Guilford County’s 90.13 percent.

“Major deployment in urban communities is more-or-less done — what we are now trying to push for is broadband expansion into the most underserved areas of our state, which are often rural and economically disadvantaged,” said Jane Smith Patterson, executive director of the e-NC Authority. “Dial-up won’t cut it anymore — plain and simple. If broadband connectivity levels in this many homes, schools and businesses is so inadequate, we can’t expect companies to thrive and remain competitive, or that our rural children will have a chance to learn the latest technologies and Web-based applications.”

“Counties that lack high-speed connectivity are often at a crucial disadvantage in terms of opportunity and prosperity,” said Oppie N. Jordan, economic developer and appointed chair of the e-NC Authority governing commission. “I have a hard time believing that the citizens of our state would accept only 83.54 percent access to electricity. Likewise, we do not feel that citizens are accepting the reality of only 83.54 percent of homes having access to broadband Internet services. We are in the midst of transformation toward a 21st century, knowledge-based economy. Increasing statewide access to broadband Internet enhances economic progress by allowing citizens to have greater access to health care information, education and job-training opportunities, and support for small businesses and entrepreneurs.”

Now emerging as an infrastructure that is as vital to economic health and prosperity as roads, water, sewer and electricity, advanced telecommunications connectivity, including broadband fiber, rarely extends into communities that are sparsely populated. Geography also plays a role in limiting telecommunications access, particularly in North Carolina’s most mountainous regions.

In Surry County, Sprint Nextel Inc. and Surry Telephone Membership Corp. provide DSL connections and several companies offer DSL-service packages; Time-Warner Cable provides cable access; AT&T Wireless and Fastlink Communications (a Mount Airy-based provider) offer high-speed wireless service; and satellite service is available via HughesNet (formerly DirecWay) to customers with an unobstructed view of the southern sky.

Mount Airy is one of the first U.S. cities to provide free high-speed Internet access throughout its downtown district.

Sprint earlier this summer announced a $14.5-million project that will improve high-speed Internet service north from Elkin along I-77 in Surry County.

The 24 cents excludes the results of the natural gas businesses, spunoff as Spectra Energy in January 2007, the results of which are now reported in Discontinued Operations.

The higher ongoing results reflect improved results at U.S. Franchised Electric and Gas and Commercial Power, primarily due to favorable weather, as well as improved results at Duke Energy International.

These results were offset by a lower contribution from Crescent Resources, which changed from a wholly owned subsidiary to an effective 50-50 joint venture in September 2006.

For the first time, quarter-over-quarter comparisons of the former Cinergy operations are included in reported results. Duke Energy merged with Cinergy in April 2006.

“We’re very pleased with the strong performance of our major business units,” said Chairman, President and Chief Executive Officer James E. Rogers. “With normal weather for the rest of the year, and our continuing focus on our operations and cost management, we expect to exceed our 2007 annual employee ongoing diluted EPS incentive target of $1.15.”