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K&K Die has won a contract with Orion Township-based business Cobasys to produce metal stampings that would be used to make energy storage systems for hybrid vehicles. Cobasys has patented a nickel metal hydride, which is a technology used for hybrid batteries, and the work by K&K Die would contribute to the system for housing the batteries.

According to Sterling Heights Economic Development Manager Luke Bonner, Cobasys was granted a 100 percent tax abatement by the state of Michigan through Public Act 593 of 2002. The act created the Michigan Next Energy Authority, which intends to promote alternative energy technology in the state by providing tax incentives.

“I think it’s a good project,” Bonner said. “It helps one of our own businesses in Sterling Heights.”

The exemption applies to the more than $2.2 million Cobasys invested in purchasing the equipment for K&K to create the metal stampings. Even though the state has awarded the tax abatement, the city of Sterling Heights still has the option to refuse the decision. However, city leaders don’t want to.

“Our mayor and city council have been proactive in economic issues,” City Manager Mark Vanderpool said. “That includes focusing on new technology businesses.”

Energy storage systems made from the metal stampings at K&K Die, located on Enterprise Drive, will be used to support approximately 25,000 Chevrolet Volts, Bonner said.

“I think it’s a step in the right direction to encourage alternative energy uses,” Vanderpool said. “I’m really pleased our city is able to provide this opportunity to the business in the form of the tax abatement.”

By encouraging and fostering alternative energy technology, Vanderpool said, the city will benefit down the road. “Without this 100 percent abatement, K&K might not survive the economic slump.”

A formal discussion on whether or not to uphold the state’s award of the 100 percent tax abatement will take place at the next Sterling Heights City Council meeting, at 7:30 p.m. on March 18.