P e r f o r m a n c e R e p o r t 2 0 0 8

Grow.Improve.Visualize.Empower.

Carter Exhibit 1

Board Vision

Having been a part of AdvanceSC since its inception, I am pleased to

represent the board of directors and continue sharing the great results

and impact that our organization’s funds are making across the Upstate of

South Carolina. Each member of our board feels honored to contribute

time and energy into making wise choices with the funds Duke Energy

entrusts to our stewardship. Though our quarterly decisions determine

who receives awards from AdvanceSC, our organization could not make

a difference in our state without the vision and dedication of the many

agencies, institutions and companies who apply for the available funding.

It is organizations represented by those featured in this year’s report

who make a positive economic impact on the entire state through their

collaboration with others in their local communities and across the Upstate

region. In light of the current national economic and political climate, the

AdvanceSC board remains keenly aware of the importance of collaboration

among local leaders, and we are grateful for each organization’s continued

commitment to our area’s growth and development. Whether you are

helping to warm a family through public assistance, train a student in

a difficult skill, create more jobs through economic development or

improve your company’s manufacturing capabilities, we are privileged to

support each project that has received funding in 2008 and look forward

to continued success in the future.

Sincerely,

Carol BurdettePresident, AdvanceSC Board of Directors

Contents

BOARD VISION

ADVANceSc OVeRVIew

TeSTImONIAlS:

Guardian Industries Corp.

Master Precision Global

United Christian Ministries of Pickens County

York Technical College

FuNDINg PROgRAmS:

Public Assistance

Manufacturing Competitiveness Funding (MCF)

Economic Development

Education

FINANcIAl SummARy

Board of Directors 2008

JIm AlexANDeROconee County Economic Development Commission

DAVID BeARDMilliken & Company

RIchARD BRIeReSolutia, Inc.

cAROl BuRDeTTeUnited Way of Anderson County

RuSS DARNAllSouth Carolina Technical College System

JAck elleNBeRgSouth Carolina Department of Commerce

lIllIAN BROck FlemmINgGreenville County Schools

TeRRI heARDMichelin North America, Inc.

BOBBy hITTBMW Manufacturing Co.

SANDy mARTINDuke Energy

keN RADADuke Energy

PeRRy STePheNSThe Timken Company

wIllIAm TAylORThe Springs Company

Carter Exhibit 1

Assisting the Communities of the Carolinas.

Established by Duke Energy in 2004,

AdvanceSC assists communities in Duke

Energy’s South Carolina service area

through grants for public assistance and

economic development. The organization

concentrates on advancing education to

support industry, assisting other economic

development organizations to attract

and retain industries and enhancing the

competitive position of manufacturers.

Duke Energy provides funding for

AdvanceSC with 50 percent of its

profits from certain wholesale or Bulk

Power Marketing (BPM) sales of electricity

in South Carolina. AdvanceSC is a limited

liability company managed by a board of

directors independent of Duke Energy.

Our recent AdvanceSC grant award was utilized to help fund a project within our

glass-tempering department. The funds from the Manufacturing Competitiveness

Grant covered approximately 30% of the total for the equipment costs for the project.

The project included a total replacement for the controls of the tempering furnace.

The old control system was installed and commissioned in early 1989, and the heart of

the system was a vintage that well preceded Microsoft DOS and is no longer supported

by the manufacturer. Several of the components are no longer available for purchase.

A failure of any of the existing equipment would have completely idled our department,

so Guardian Industries approved an overall system replacement for our plant.

The new control system funded by AdvanceSC monitors and automatically adjusts

the heat controls and speed of the line. It also controls the fan speed for the air duct

pressures within the air quenching areas of the line. One of Guardian Richburg’s sister

facilities in Corsicana, Texas designed and replaced their system approximately four

years ago. Their platform was used as the base to the Richburg furnace with the

appropriate modifications to facilitate the differences between that furnace and the

one located here in South Carolina.

Between the Texas and South Carolina facilities, the entire design and installation

was completed with Guardian personnel. As such, the cost of the equipment and the

associated shipping charges comprised the total cost of the project.

Guardian Industries Corp.

“ The new control system funded

by AdvanceSC monitors and

automatically adjusts the heat

controls and speed of the line.” Dan Johnson, Plant Engineer

Carter Exhibit 1

Founded in 1989, United Christian Ministries (UCM) provides emergency assistance

services to residents of Pickens County, South Carolina. Our services assist people

in crisis or poverty in meeting their basic needs for food, clothing and shelter. Our

relationship with Duke Energy, The Duke Energy Foundation and AdvanceSC has

allowed us to provide heating and cooling assistance to thousands of individuals

through the years. My testimonial to the work of AdvanceSC’s funds in our

organization could be filled with dollar amounts, percentages and other service

statistics, but I believe the positive impact of AdvanceSC is best illustrated by the

following story.

Frances walks with great difficulty due to severe arthritis. She is 74 years of age.

After many years of marriage, she became a widow in 2004 when her husband lost his

battle with cancer. Frances owns her home which she used for collateral a few years

ago to secure a loan to pay her husband’s mounting medical bills. Her loan payment is

$150 each month. Her remaining living expenses are quite modest and thankfully so

as her sole source of income is her monthly Social Security check of $678. After the

deduction for her Medicare, Frances’s net monthly income is $585.

Frances first visited United Christian Ministries at the end of November 2002. One

might assume she visits often due to her meager income, but she is of the generation

that believes in self-sufficiency and dislikes asking for help. I imagine I will see

Frances most any day now as her visits are like clockwork. You see, Frances only

visits UCM once each year. The record of visits in her client chart outlines this

predictable pattern. She manages month after month but when the weather turns

cold she simply cannot stretch her dollars far enough to pay her heating bills. I look

forward to seeing Frances soon because in spite of her physical condition and limited

income she always manages to offer a smile and kind words to those she encounters

at UCM.

On behalf of the volunteers and staff of United Christian Ministries, thank you

AdvanceSC for enhancing our lives and enabling us to serve Frances and many others

just like her at their time of need.

AdvanceSC was very instrumental in helping to fund an important electrical hook-up

on behalf of Master Precision Global (MP Global) at Spartanburg Community College’s

Tyger River Campus. This funding allowed us to install the power requirements to

meet our project scope.

MP Global is a manufacturer of plastic electronic assemblies and has partnered with

Spartanburg Community College (SCC) in its Accelerated Business Center located at

the Tyger River Campus. Due to the cost to increase the availability of electricity to

our process, we were originally planning to reduce our project scope and the initial

economic profile (capital and employment).

The funds provided by AdvanceSC were spent to add power from an existing

transformer to a service panel located within the 42,000 square foot manufacturing

space provided by SCC. This funding has directly impacted our ability to continue

with our plan to reside at the Tyger River Campus for 18 months while creating and

training employees. With the support we’ve received so far, we’re looking forward

to branching out in the years to come – creating at least 120 jobs and making a

significant impact on the community. Thank you AdvanceSC.

United Christian Ministries of Pickens County

“ She manages month after month but when the weather turns cold, she simply cannot stretch her dollars far enough to pay her heating bills. AdvanceSC is there in her time of need.”

Teresa Nash, Executive Director

Master Precision Global

“With the support we’ve received so far, we’re looking forward to branching out in the years to come – creating at least 120 jobs and making a significant impact on the community. Thank you AdvanceSC.”

Bob Bronsink, Southeast Business Unit Manager

Carter Exhibit 1

AdvanceSC funds have been vital to York Technical College’s efforts to address one of the most

critical needs facing manufacturers in South Carolina and throughout the nation – the development

of a technologically savvy workforce to operate and maintain the sophisticated equipment used

in today’s manufacturing facilities. With the help of AdvanceSC, the College has been able to

successfully launch three major training initiatives in response to the growing demand for a strong

talent pool of qualified technicians in York, Chester and Lancaster counties.

Recent changes in technology and an aging workforce have created a critical shortage of skilled

workers at AbitibiBowater and at other pulp and paper manufacturing facilities across the United

States. To address the need for more skilled workers in the rapidly-changing pulp and paper

industry, the College used AdvanceSC funds to develop on-campus facilities to teach pulp/paper

processing technology. Our long-term goal is to share our acquired knowledge with other technical

colleges that serve the paper industry and to create a sustainable, long-term partnership with

AbitibiBowater that meets their needs for skilled workers.

AdvanceSC funding has been instrumental in helping to fund the College’s state-of-the-art

Mechatronics training center in Chester County. The Center’s goal is to help shape the future of

new and existing industry within the Chester community by training technicians to operate and

maintain the next generation of “smart” electromechanical (mechatronic) devices and products.

A related goal is to provide Chester County high school students with a seamless transition from

high school to college by enabling them to take mechatronics-related courses that can be applied

toward a degree or certificate from York Tech.

A third initiative focuses on preparing our industrial maintenance students to install, program, and

repair automated/robotic manufacturing equipment that is used in modern manufacturing facilities.

AdvanceSC funds are helping to offset the high cost of equipping the College’s robotics laboratory

with advanced automated/robotic equipment that simulates a real-life manufacturing environment.

Our goal is to improve the technical skills of existing workers from local industries and entice other

companies to relocate to the area.

We are very grateful to AdvanceSC for supporting the College’s efforts to promote economic

development in our communities. Partners like AdvanceSC make it possible for us to equip

men and women with the necessary skills and training needed to compete for today’s high-tech

manufacturing jobs. Without well-trained, qualified technicians, our communities will neither

retain nor attract high-paying manufacturing jobs.

York Technical College

“ Partners like AdvanceSC make it possible for us to equip men and women with the necessary skills and training needed to compete for today’s high-tech manufacturing jobs.”

Dr. Marc Tarplee, Associate Vice President for Academic Affairs

Carter Exhibit 1

2008 Financial SummaryFunding ProgramsPublic Assistance ProgramsThrough The Duke Energy Foundation, Duke Energy and its customers in the Carolinas provide

financial assistance to South Carolina citizens in great financial need through direct grants to Duke

Energy’s Share the Warmth, Cooling Assistance and Fan Heat Relief programs. AdvanceSC makes

an additional annual allocation to these public assistance programs to be administered jointly with

the existing programs in South Carolina.

Once funding requirements for the identified public assistance programs are met, the remaining

AdvanceSC funds are divided among education, economic development and manufacturing

competitiveness programs.

Manufacturing Competitiveness Funding (MCF)Fifty percent of the remaining available AdvanceSC funds are allocated to the manufacturing

competitiveness fund to strengthen the competitive position of existing manufacturing within Duke

Energy’s service area. Recognizing the community value in retaining existing manufacturing, the

program provides financial assistance to manufacturers investing in applications that increase

productivity, efficiency and reliability, or which reduce environmental impacts.

Economic DevelopmentOnce funding requirements for the identified public assistance programs are met, 25 percent of the

remaining available funds are designated for direct funding of economic development initiatives and

for creating new sustainable manufacturing and manufacturing-related jobs within Duke Energy’s

service area in South Carolina.

Funds are provided to regional economic development partnerships and alliances, key chambers

of commerce and county economic development organizations for the purpose of attracting new or

expanding industries in the Duke Energy service area of South Carolina.

Specific project investment is considered where a broad base of community support exists and

where Duke Energy would provide electric service.

EducationAdvanceSC believes that education is one of the core components needed to prepare our state for

future economic development. The past two decades have witnessed South Carolina’s transition

from an agricultural- and textile-based state to a manufacturing-centric state, and the future of the

manufacturing sector is a key factor in the economic stability and growth of our state and its citizens.

The South Carolina Governor’s 2001 workforce survey cited that 61 percent of South Carolina

businesses were unable to find adequately skilled labor to fill job openings. AdvanceSC seeks to

fund programs that offer new solutions, develop new skills and create an educational foundation to

prepare our citizens for this emerging economy.

Programs eligible for support include:

• Technical college training programs that prepare the workforce to support new and existing

manufacturing and related industry;

• College or university research and higher education programs that provide innovative solutions and

competitive advantages for manufacturing and related industry;

• High school education programs that support workforce preparedness for manufacturing and

related industry and increase graduation rates.

2008 AdvanceSC Grants 2004-2008 AdvanceSC Grants

2008 Public Assistance Allocation 2004-2008 Public Assistance Allocation

2008 Education Grants 2004-2008 Education Grants

89% 11%

28% 19% 6% 47% 24% 28% 7% 41%

78% 22%

21% 4% 75% 11% 12% 77%

mcF education

economic Development Public Assistance

cooling

heating

college/university high School

Technical college

mcF education

economic Development Public Assistance

cooling

heating

college/university high School

Technical college

economic Development $4,114,032

mcF $6,728,414

education $2,706,850

Public Assistance $900,000

TOTAL $14,449,296

economic Development $11,026,270

mcF $18,626,341

education $12,498,933

Public Assistance $2,950,000

TOTAL $45,101,544

cooling $100,000

heating $800,000

TOTAL $900,000

cooling $650,000

heating $2,300,000

TOTAL $2,950,000

college/university $100,000

Technical college $2,031,360

high School $575,490

TOTAL $2,706,850

college/university $1,517,351

Technical college $9,637,188

high School $1,344,394

TOTAL $12,498,933

Carter Exhibit 1

Providing funding for: Public Assistance

Manufacturing Competitiveness

Economic Development

Education

w w w. a d va n c e s c . c o m

Carter Exhibit 1