Prairie Business February 2014

February 2014

The Sky's the Limit Why unmanned aerial systems could become agriculture’s next best bet pg. 26

ALSO Learning Together Expanding research, collaborative opportunities to build workforce

pg. 32

Harvest Time Stem cell banking business enters the region

pg. 40

|INSIDE| February 2014 VOL 15 ISSUE 2

DEPARTMENTS

FEATURES

6 Editor’s Note

BY KRIS BEVILL

Learn here, stay here 8 Business Advice

BY MATTHEW D. MOHR

More on EBITDA 8 Management Matters

BY JOHN GIRARD

Training or education?

10 Finance

BY MATT VARILEK

New Year, new health insurance options for small businesses The recently completed Pioneer Generation Station, a three-unit, natural-gas fueled peaking station located near Williston, N.D., is owned and operated by Basin Electric Power Cooperative. PHOTO: BASIN ELECTRIC POWER COOPERATIVE

12 Research & Technology

BY DELORE ZIMMERMAN

A new Africa. The next Asia?

14 Economic Development

26 The Sky’s the Limit

UNMANNED AERIAL SYSTEMS

BY HAROLD STANISLAWSKI

Minnesota creates Job Creation Fund

Why unmanned aerial systems could become agriculture’s next best bet

16 Prairie News 20 Prairie People

32 Filling the Need HIGHER EDUCATION

24 Business Development Prescription for success

Collaboration among higher education, industry, states key to addressing workforce demands

38 Talk of the Town Expanding in all areas 40 Health Care Stem cell harvesting business banks on future technology

EVENTS The Bakken/Three Forks Shale Oil Innovation Conference & Expo ...............................Feb. 10 -12 Grand Forks, N.D...................................................................................www.bakkenoilconference.com

44 Legislation Bill gets at ‘STEM’ of workforce shortage

TEDxBrookings ................................................................................................................................Feb. 21 Brookings, S.D. .................................................................................www.ted.com/tedx/events/10763

46 Energy

South Dakota BIG Job Fair .............................................................................................................Feb. 25 Sioux Falls, S.D. .................................................................................www.getgrads.com/fairs/big.htm

50 Business to Business

N.D. Housing Finance Agency 23rd Annual Statewide Housing Conference ..............Feb. 26 -27 Bismarck, N.D......................................................................................................................www.ndhfa.org

52 By the Numbers Follow us on Twitter https://twitter.com/PrairieBiz Check us out on Facebook https://www.facebook.com/PrairieBusiness

An Aeryon Scout hovers over a Kansas field.

PHOTO: ASSOCIATION FOR UNMANNED VEHICLE SYSTEMS INTERNATIONAL

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Prairie Business Magazine February 2014

Scan this with your smartphone's QR Reader to visit our website.

Next Month The March issue of Prairie Business magazine will present the region's Top 25 Women in Business. The issue will also cover IT safety, and efforts to further encourage entrepreneurialism among women and in rural communities.

www.prairiebizmag.com

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|EDITOR’S NOTE|

Learn here, stay here ardly a week goes by that I don’t have a discussion with a business leader or economic development official about workforce. Workforce shortages have been an ongoing concern for nearly every industry in our area for some time, and with continued low unemployment and a strong and growing business climate it seems the situation will continue to persist for the near future. Individual community situations vary but in general the region’s overall workforce shortage can be blamed on two major factors: a lack of population to supply workers and a shortage of people who possess necessary skill sets to fill open jobs.

This month, we look at the role universities and research parks can play in combating both of those issues. I recently attended a symposium hosted by North Dakota State University’s Research and Technology Park to provide an overview of the park’s efforts to develop a new strategic plan that will meet the state’s changing needs. At the symposium it was noted that businesses are in need of workers from all levels of higher education and that the declining number of college-age students in the area makes out-of-state recruitment critical. The consultant contracted to devise a proposal for the new strategy was quick to point out what she called the region’s “gaping weakness,” which is that the area’s population is simply not large enough to provide all the people necessary to support its strong economies. Universities and research parks can be the most effective tool in recruiting new residents to the region, she said. Also, while higher education institutions currently collaborate with private industry, there is room for improvement and expansion of those efforts. Read "Filling the Need" for more on the topic.

This issue’s cover feature addresses one aspect of a very exciting announcement made at the end of 2013. Grand Forks, N.D., received federal designation as an unmanned aerial systems (UAS) test site and is one of only six sites where UAS, commonly known as drones, will be integrated into the national airspace. That designation is expected to have a significant economic impact on the area as companies and researchers test equipment and develop the necessary protocols required to bring UAS into the market. One of the first industries expected to utilize UAS is agriculture and our region’s rich agricultural heritage and willingness of producers to incorporate new methods and technologies makes it a prime testing ground for UAS-related practices. Many of the area’s higher education institutions have already been teaching students about UAS and its potential to be an effective tool in precision ag. We highlight a few of them and discuss how commercial use could affect the farming industry in “Taking Ag to the Sky.” Finally, we visit Fergus Falls, Minn., for this month’s Talk of the Town. The lakes country community of about 13,000 is experiencing growth by way of an expanding health care industry and a resurgence of manufacturing. The community is also expected to become home to a first-of-itskind indoor commercial growing operation, supported by a USDA Rural Development loan, which will produce lettuce and eventually strawberries, herbs and spinach. Supporters say the project serves as yet another example of how value-added agriculture can benefit the region. Read “Expanding in all areas” to learn more about that project and other developments in Fergus Falls.

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KRIS BEVILL Editor kbevill@prairiebizmag.com

Correction: The January issue incorrectly identified the Energy and Environmental Research Center as the U.S. Department of Energy EERC. The facility is the University of North Dakota EERC.

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Prairie Business Magazine February 2014

Business Prairie

northern plains business resource

MIKE JACOBS, Publisher RONA JOHNSON, Executive Editor KRIS BEVILL, Editor BETH BOHLMAN, Circulation Manager KRIS WOLFF, Layout Design, Ad Design Sales Director:

JOHN FETSCH 701.212.1026 jfetsch@prairiebizmag.com Sales:

BRAD BOYD - western ND/western SD 800.641.0683 bboyd@prairiebizmag.com SHELLY LARSON - eastern ND/western MN 701.866.3628 slarson@prairiebizmag.com Editor: KRIS BEVILL 701.306.8561

kbevill@prairiebizmag.com

Editorial Advisors: Dwaine Chapel, Executive Director, Research Park at South Dakota State University; Bruce Gjovig, Director, Center for Innovation; Lisa Gulland-Nelson, Vice President, Marketing and P.R., Greater Fargo Moorhead EDC; Tonya Joe (T.J.) Hansen, Assistant Professor of Economics, Minnesota State University Moorhead; Dusty Johnson, Chief of Staff for South Dakota Gov. Dennis Daugaard’s office; Brekka Kramer, General Manager of Odney; Matthew Mohr, President/CEO, Dacotah Paper Company; Nancy Straw, President, West Central Initiative Prairie Business magazine is published monthly by the Grand Forks Herald and Forum Communications Company with offices at 375 2nd Avenue North, Grand Forks, ND 58203.

Qualifying subscriptions are available free of charge. Back issue quantities are limited and subject to availability ($2/copy prepaid). The opinions of writers featured in Prairie Business are their own. Unsolicited manuscripts, photographs, artwork are encouraged but will not be returned without a self-addressed, stamped envelope.

Subscriptions Free subscriptions are available online to qualified requestors at www.prairiebizmag.com Address corrections Prairie Business magazine PO Box 6008 Grand Forks, ND 58206-6008 Beth Bohlman: bbohlman@prairiebizmag.com Online www.prairiebizmag.com

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|BUSINESS ADVICE|

More on EBITDA

BY MATTHEW D. MOHR eaders will recall my previous articles discussing the financial measurement value of earnings before interest, taxes, depreciation, and amortization (EBITDA). I do not regard EBITDA as a reliable or consistently usable financial tool.

Recently, a relatively new venture showed its first significant quarterly profit, but the company highlighted its EBITDA most prominently in its financial review to investors. The current quarter’s net income was a major milestone for the company but EBITDA looked like a much better number, until one dug a little deeper.

EBITDA generally is used to show how much, if all else fails, the likely cash flow should be to cover debt payments of an enterprise. In this particular case the enterprise has burned through the bulk of its investors’ capital so earnings on the remaining net worth are reasonable. EBITDA in the quarter was many times larger than reported earnings, so management chose to show

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how big its EBITDA was rather than focus on obtaining profit. But the enterprise is young enough to still need cash and cash required due to non-expense needs is still high, so EBITDA didn’t even begin to represent the ability to repay debt.

Outside of debt repayment, the enterprise’s quarterly EBITDA, if it was cash flow, would take 10 years to cover the equity already expended! Success was really showing a profit. Focusing on EBITDA demonstrated management’s lack of financial ability and understanding.

EBITDA is not a reliable measure of financial soundness, and should not be the focus of financial review or management objectives. Only cash flow and real profitability are meaningful financial measures of success. PB Matthew D. Mohr CEO, Dacotah Paper Co. mmohr@dacotahpaper.com

|MANAGEMENT MATTERS|

Training or education?

BY JOHN GIRARD s a professor and former North Dakota Board of Higher Education faculty adviser, I am frequently asked why it takes so long to train college students. The question comes from a range of higher education stakeholders, including policy makers, business leaders, concerned citizens and even students.

I often reply with a story. One day when my daughter came home from school I asked her what she had done in class. She replied, “We learned about sex.” I remember thinking, “I wonder if that was sex education or sex training.” I was delighted to hear it was the former.

The point of this awkward story is that there is a huge difference between training and education.

Take for example a diesel technology program in which students are trained to maintain diesel equipment. Graduates must be able to fix the equipment, not just discuss the theory. They are job ready and trained

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for most tasks they will encounter. Turning to education, consider a four-year management program.

Students earn a broad education designed to help them solve problems in the complex global environment in which they will be operating. They are educated and job ready for a series of rather ambiguous and everchanging tasks. Could they be trained as managers in less time? Perhaps, but they would be much less prepared for the uncertainties of modern organizations.

Training and education are both essential, but they are very different. Think back to the story and consider what mix of training and education your people need. PB John Girard Professor of Management, Minot State University Founder, Sagology John@JohnGirard.net Twitter: @JohnGirard

|FINANCE|

New Year, new health insurance options for small businesses

BY MATT VARILEK here’s no doubt the federal website associated with the Affordable Care Act got off to a rocky start last fall. But with recent improvements to the website and to our health care system more generally, the arrival of the New Year is a good time for small business owners to take a fresh look at their health insurance options. Because whether you’re someone who loves the Affordable Care Act … or feels something short of true love … you still need to understand it so you can make smart choices for yourself and your employees. At the Small Business Administration, we’re continuing our ongoing efforts to make sure small business owners can access the information they need to make those choices.

For years, we had a health insurance market that put small businesses at a disadvantage. Because they had less bargaining power, small businesses paid an average of 18 percent more for the same health insurance plan offered to the bigger business down the street, and their premiums could skyrocket if a single employee got sick. That made it hard for many small business owners to offer coverage and still turn a profit.

The Affordable Care Act is no silver bullet – but because of it small businesses and their employees in Minnesota, North Dakota and South Dakota are getting better choices, starting with new protections against the outrageous rate hikes many small business owners faced in the past. Also, we estimate that in the three states, over xx thousand small businesses employing xx people will be eligible for an average tax credit of $xxx.

Greater availability of more affordable coverage also stimulates entrepreneurship by freeing individuals from “job lock,” where would-be entrepreneurs are stuck in a job largely to preserve their health benefits. Thanks to the Affordable Care Act people can strike out on their own with more confidence about being able to secure good health insurance. It is estimated that thousands of new start-ups will be created as a result.

Despite the rocky start of healthcare.gov, insurance marketplaces across the country are increasingly delivering on their promise of making it easier to shop for private health insurance, and harnessing the forces of competition to make that insurance more affordable.

So what should small business owners do in 2014?

1) Call a broker or agent. Insurance brokers and agents located throughout your state are now able to enroll small businesses in qualified insurance plans offered as part of the voluntary Small Business Health Options Program (SHOP).

2) Compare options, explore potential savings. Small

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businesses with fewer than 25 full-time employees who make an average of $50,000 or less are encouraged to purchase SHOP-qualified plans, as this is one condition for receiving employer health care tax credits. Since it first became available in 2010, the Small Business Health Care Tax Credit has provided more than $1 billion in tax credits to small business owners – essentially providing a major discount on the cost of health insurance.

By working with a broker and checking out the options offered on your state’s SHOP marketplace, small business owners will be able to compare and contrast options to find the plan that best meets their needs.

3) Enroll in a plan and fill out paper application for SHOP eligibility.You can get an agent, broker, or navigator to help you, if you want. Using one of these partners to help fill out the application can save valuable time and energy.

4) Send the application to the SHOP Marketplace.

After receiving a completed application, the SHOP Marketplace will notify you about eligibility by phone, email or regular mail, if you request it. Once again, this eligibility is one of the requirements for receiving the Small Business Health Care Tax Credit of up to 50 percent of what you spend on your employees’ health insurance. You apply for the tax credit when you fill out your business tax returns for the 2014 tax year.

Dates to Know If your employee enrollments are submitted between the 1st and 15th day of the month, your group coverage begins the first day of the next month. For example, if your employee enrollments are submitted on Feb. 10, 2014, your group coverage begins March 1.

For enrollments submitted after the 15th of the month, coverage begins the second following month. So, if employee enrollments are submitted on Feb. 18, your group coverage will begin on April 1.

For more information on the SHOP Marketplace, visit HealthCare.gov or call 1-800-706-7893, 9 a.m. – 7 p.m. EST, Monday through Friday. TTY users should call 1-800-7067915. Additional information specific to small business health care is available at sba.gov/healthcare.

Matt Varilek SBA Regional Administrator, Region VIII Matthew.varilek@sba.gov

|RESEARCH & TECHNOLOGY|

A new Africa. The next Asia?

BY DELORE ZIMMERMAN

hina gets a lot of attention for its economic performance, but there's another global growth story that is often overlooked: Africa.

The road exiting the Kotoka International Airport in Accra, Ghana, reveals a landscape dotted with new hotels and high-rise office buildings at various stages of completion. The skyline’s multiple construction cranes seem to confirm a growing sense that the African continent has become a likely stage for globalization’s next act, where China was just a mere two decades ago.

Ghana is considered the gateway to West Africa based on its strong agrarian roots and stable, democratic political environment. Agriculture is the dominant sector in Ghana’s economy employing about 60 percent of the labor force and contributing about 40 percent to the gross domestic product (GDP).

Ghana, however, imports food for its growing population and a rapidly emerging middle class. So a North Dakota Trade Office-led trade mission of educators and food specialists visited Ghana in January to talk about the nutritional benefits of products from the state. They, along with Praxis Africa — a venture of AdFarm and Praxis Strategy Group — also demonstrated how those products might be incorporated into the Ghanaian diet.

But the future holds more than agriculture. In early 2013, Hope City was launched, intended as a $10 billion high-tech hub aiming to foster technological growth. The objective is to attract major players in the global ICT industry to the West African country to design, fabricate and export software and everything arising from this country. Microsoft is among the early commitments to the project.

The ambitious, futuristic project — one of Africa’s several proposed technopolis initiatives — will include an assembly plant for tech products, business offices, an IT university and a hospital, as well as

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Prairie Business Magazine February 2014

housing and recreation spaces, restaurants, theaters and sports centers. If everything goes as planned the technology park could house 25,000 residents and create jobs for 50,000 people.

Certainly Ghana and the African continent still face a number of significant and inter-related challenges including endemic poverty, food shortages and nutritional deficiencies, threats of disease, climate change, gender imbalances and capacity constraints. But a rising consumer class coinciding with a growing entrepreneur class that benefits from relatively affordable housing, good connectivity, and regular power in Accra make the outlook for Ghana’s economy quite promising.

Many people and businesses from around the world are arriving in force in Ghana to take advantage of these growing opportunities. Families who once fled deteriorating economic conditions and limited opportunities now see their children returning from recession-ridden countries to run their own businesses in one of the world's fastest-growing economies.

Businesses in telecom, banking, retail, construction and oil and gas industries are booming, sending foreign investment to all-time highs.

North Dakota and the surrounding region have an affinity to Ghana that makes it a global connection with high potential. Agriculture and energy are foundations of both economies. But more importantly, the two geographies have friendly, pragmatic people who value long-term relationships and are willing to work for a better future. PB Delore Zimmerman President, Praxis Strategy Group Executive Director, Red River Valley Research Corridor delore@praxissg.com Twitter: @DeloreZimmerman

|ECONOMIC DEVELOPMENT|

Minnesota creates Job Creation Fund

BY HAROLD STANISLAWSKI

uring the 2013 Minnesota legislative session, a new tool in economic development called the Job Creation Fund was created. The Job Creation Fund provides financial incentives to new and expanding businesses that meet certain job creation and capital investment targets in Minnesota. It’s a great new tool that can help companies make investments in our state.

Companies deemed eligible to participate may receive up to $1 million for creating or retaining high-paying jobs and for constructing or renovating facilities or making other property improvements. In some cases, companies may receive awards of up to $2 million.

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Eligibility and requirements The program is available to businesses engaged in manufacturing, warehousing, distribution, technology-related industries and other eligible activities. Companies must work with the local government (city, county or township) where a project is located to apply to DEED to receive designation as a Job Creation Fund business.

To be designated as a Job Creation Fund business, a business must, at minimum: • Be engaged in an eligible business activity • Obtain local government support for their project via council resolution • Invest at least $500,000 in real property improvements within one year of becoming a designated Job Creation Fund business • Create at least 10 new full-time permanent jobs within two years of becoming a Job Creation Fund business while maintaining existing employment numbers • Pay at least $12.45 in wages and benefits adjusted annually based on 110 percent of federal poverty guidelines • Have other location options outside of Minnesota

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• Cause no undue harm to Minnesota business competitors • Certify that the project would not occur without Job Creation Fund assistance Projects that begin prior to becoming designated by DEED are not eligible for the Job Creation Fund.

Available benefits Companies that meet eligibility requirements must sign a business subsidy agreement with DEED to meet job retention, creation, wage, and capital investment requirements. The following benefits may be available once a business meets the conditions of its agreement and provides proof of performance: • $1,000 per year per job created for jobs paying at least $26,000 in cash wages • $2,000 per year per job created for jobs paying at least $35,000 in cash wages • $3,000 per year per job created for jobs paying at least $45,000 in cash wages • Up to a 5 percent rebate for real property improvements for businesses located in the Twin Cities Metro • Up to a 7.5 percent rebate for real property improvements for business located in Greater Minnesota This program is an important tool for those businesses considering a major investment.

Information on this program can be obtained by contacting your city or regional EDA office.

Information is also on the web at: www.mn.gov /deed/business/financing-business/deed-programs/job-creation-fund.jsp. PB Harold Stanislawski Executive Director Fergus Falls Economic Improvement Commission Harold.stanislawski@ci.fergus-falls.mn.us

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Prairie News

Industry News & Trends

The Alliance Pipeline is a 2,300-mile integrated Canadian and U.S. natural gas transmission pipeline system running from production areas in western Canada and the Williston Basin to the Chicago market. The company recently completed the Tioga Lateral portion of the project and was recognized for its efforts to preserve native prairie. PHOTO: ALLIANCE PIPELINE

Pipeline company honored for prairie preservation The U.S. Fish and Wildlife Service recently recognized Alliance Pipeline for its efforts to preserve native prairie while installing its Tioga Lateral pipeline in western North Dakota. According to the agency, Alliance engineers avoided native prairie whenever possible. In areas where that was not possible the company committed to replanting with native species and monitoring to make sure planting efforts are successful. The company is also funding the purchase of a grassland easement to offset unavoidable loss and is funding a North Dakota State University study to help identify new methods to restore native prairie.

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“We’re hoping that other companies will follow suit to avoid and compensate for impacts to native habitat,” says Jeff Towner, North Dakota field office supervisor for the agency. “We’re seeing dramatic declines of grassland birds, game animals and other species like rare butterflies that rely on native prairie. By working together with willing partners to avoid impacts to native prairie and by offsetting losses that cannot be avoided, we can somewhat reduce the impact of oil and gas development.”

|PRAIRIE NEWS Western State Bank, Dakota Community Bank, Wells Fargo contribute to housing fund The North Dakota Housing Incentive Fund received multiple contributions in December and has fully capitalized the fund one year ahead of expectations.

Wells Fargo contributed $1 million to the fund. John Giese, business banking manager for Wells Fargo North Dakota, says the organization recognizes that affordable housing is one of the state’s biggest challenges. Western State Bank contributed $300,000 to support an affordable housing development in the Devils Lake area. Dakota Community Bank & Trust contributed $400,000 toward projects in Bismarck, Dickinson and Mandan.

HIF, administered by the North Dakota Housing Finance Agency, provides developers of affordable rental housing projects with low-cost financing. The fund received a $15.4 million general fund appropriation by the 2013 state legislature and was approved to issue an additional $20 million in tax credits for North Dakota taxpayers that contribute to the fund.

Bremer employees volunteer more than 150K hours Bremer Financial Corp. employees donated more than 150,000 volunteer hours in 2013, according to an internal survey. Volunteer hours included time spent serving on nonprofit boards, coaching youth sports, distributing meals and other community-focused activities. In 2012, Bremer employees donated more than 100,000 hours to volunteer projects.

Additionally, the financial institution’s majority owner, the Otto Bremer Foundation, provided $38 million in grants in 2013 to Bremer communities in Minnesota, North Dakota and Wisconsin, compared to about $36 million in donations in 2012.

Arvig Enterprises acquires CD Communications Perham, Minn.-based full service telecommunications provider Arvig Enterprises recently acquired Grand Forks, N.D.-based CD Communications Inc. CD Communications specializes in telephone system sales, installation, structured cabling, IP communications and network management. Clarence Dawes, senior account representative and former company owner, says partnering with Arvig will bring additional resources to CD Communications, allowing for potential significant growth. David Arvig, vice president and chief operating officer of Arvig, says the acquisition is part of the company’s goal to grow its communications and entertainment businesses and expand its service area.

Eide Bailly, Sundog among best ND workplaces for young people The North Dakota Young Professionals Network named Fargo-based marketing firm Sundog the 2013 Best Place to Work in recognition for the company’s ongoing dedication to young professionals and its development of a company culture that encompasses the NDYP’s “attract, retain and engage” movement. Sundog was named the 2010 Best Place to Work and is the only company to receive the group’s top honor twice.

Eide Bailly and the North Dakota Department of Commerce tied as the best places to intern. Eide Bailly won the honor because it offers more than 40 internships annually in North Dakota as well as a twoday summer leadership program for students, according to the group. The commerce department was selected based on its history of investing in young workers through multiple programs.

Program provides college prep for ND veterans North Dakota State University’s veterans education training program, the

University of Mary in Bismarck, N.D., Minot State University and the North Dakota State College of Science are collaborating to expand online preparatory services for veterans. The program, launched in January, allows veterans to visit those campuses and participate in online preparatory courses. The online precollege courses can also be accessed remotely for those who prefer to participate off-campus.

Jeri Vaudrin, NDSU’s veterans education training coordinator, says approximately one-third of the state’s approximately 56,000 veterans enrolled in higher education classes in recent years, but only 20 percent earned a degree. The preparatory program was funded during the 2013 state legislative session as an attempt to help veterans meet their educational goals.

The program is expected to be expanded to additional sites in the future.

For more information, visit ndsu.edu/trio/vet.

$2.5M donation sets VCSU record The Valley City State University Foundation has received a $2.5 million gift from the estate of Leonard and Marjorie (Dreis) Wright. It is the largest donation in VCSU history and will be applied to the university’s scholarship fund.

Marjorie Wright attended VCSU, then known as Valley City State Teacher’s College, and became a teacher. She married Leonard in 1945 and the couple moved to Alaska, where she worked as a teacher before joining his business, Badger Construction, which prospered with work on construction projects associated with the Alaska oil pipeline.

McKenzie County Healthcare, Sanford partner to serve Bakken Watford City, N.D.-based McKenzie County Healthcare Systems is collaborating with Sanford Health to expand key medical services in western North Dakota’s busy Bakken region. The collaboration will

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|PRAIRIE NEWS

Brookings residents take part in visioning session More than 100 Brookings, S.D., residents participated in a daylong brainstorming session held Dec. 12 to discuss the future of the community. The Visioning Charrette, sponsored by the Brookings Economic Development Corp. and supported by a Bush Foundation Community Innovation Grant, resulted in hundreds of ideas. Among the most popular were the establishment of a large, indoor green space, a central calendar and information exchange, increased leadership training opportunities and transportation solutions, according to Al Heuton, executive director of the economic development corp.

In late December, the group was working to clearly define project ideas and potential actions before distributing the information to partner organizations to incorporate into work plans and budgets.

Brookings held a similar charrette process in 2007, which identified more than 70 project ideas and development concepts. Over the next six years, more than 80 percent of those projects were either completed or received attention, Heuton said. He expects similar outcomes from this session.

Brookings, S.D., residents attended a recent gathering to discuss visions for the community’s future. PHOTO: BROOKINGS ECONOMIC DEVELOPMENT CORP.

bring more specialty physicians to the area, expand air ambulance services and provide a new facility to support oil-producing companies’ health care needs. Sanford specialists providing outreach care to the area will initially include cardiologists, orthopedic specialists and pediatricians.

Ethanol maker beats sustainability goal South Dakota-based Poet, one of the world’s largest ethanol producers, announced it has produced more than 700 million pounds of biobased products since 2009, surpassing a goal set in 2010 to produce 500 million pounds of biobased products by 2015. The company credits its early success largely to its method of producing corn oil as a coproduct of its specialized ethanol production process.

St. Alexius expands in Mandan Increased demands for services have prompted St. Alexius Medical Center to open a

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22,000 square foot clinic in Mandan, N.D. The facility will initially include four family medicine physicians and one internal medicine physician.

The $8 million building includes space reserved for future growth.

overlays project in Williston, N.D. The overlays were needed due to heavy truck traffic that caused problematic asphalt rutting. Ulteig worked with ACME Concrete Paving Inc. to complete the project. The gold award is ACPA’s highest level of recognition.

Digi-Key rolls out enhanced website

USD opens expanded university center

Thief River Falls, Minn.-based electronic components provider Digi-Key Corp. recently unveiled an enhanced website designed to allow customers easier access to the company’s 1 million in-stock components. The website includes a web-based bill of materials manager which, along with other website enhancements, is part of Digi-Key’s commitment to be the first choice for engineers and purchasers, according to the company.

The University of South Dakota recently celebrated the grand opening of its expanded Muenster University Center. The 31,000 square foot addition offers expanded city and contemporary dining options as well as a media wall which includes 16 60-inch HDTVs spanning 16 feet.

Ulteig earns ACPA award Ulteig earned a gold award from the American Concrete Pavement Association for the West Dakota Parkway intersection rehab

Murphy Oil spin-off sells ND ethanol plant Murphy USA Inc. announced in December it has completed the sale of Hankinson Renewable Energy LLC, a 132 million gallon per year ethanol facility in Hankinson, N.D., to Guardian Hankinson LLC for $173 million. The

|PRAIRIE NEWS

company says the sale is part of its strategy to exit noncore businesses. The new ownership is a joint venture among ethanol operators in Minnesota, Nebraska and South Dakota, according to the Wahpeton Daily News.

Sanford expands footprint to Montana Sanford Health has signed a strategic alliance with Great Falls, Mont.-based Benefis Health System. The health care organizations will collaborate on clinical initiatives, physician recruitment and services, information technology, quality programs, research potential and health care cost reduction. Benefis serves a 15county area in north-central Montana and includes two hospitals in Great Falls. The organization employs more than 2,800 people throughout its system. Sanford currently consists of locations in nine states and is the largest rural, not-for-profit health care system in the U.S. Its network includes 39 hospitals and 140 clinics.

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|PRAIRIE PEOPLE|

Marcia Hultman

Hultman to lead SD labor, regulation department

Kraus-Anderson hires business development director

Marcia Hultman has been appointed secretary of the South Dakota labor and regulation department. She has served as interim secretary of the department since the retirement of Pam Roberts last October.

Hultman joined the labor department in 1997 as a public information officer. She was appointed to the role of workforce services division director in 2000 and became deputy secretary of the department in 2006. Prior to joining the labor department, Hultman spent 11 years as a high school English teacher. She is a graduate of Black Hills State University.

Kraus-Anderson Construction Co. has hired Tracy Pogue as director of business development in its Bemidji, Minn., office. Pogue has 20 years of business development experience, most recently as real estate loan officer at Deerwood Bank in Bemidji. He is a graduate of Bemidji State University and is active in numerous local organizations and events.

Tracy Pogue

Lou named founding endowed chair of neurology at UND med school

AE2S promotes Bergantine to Moorhead operations manager

Brian Bergantine

AE2S (Advanced Engineering and Environmental Services Inc.) has promoted Brian Bergantine to operations manager of the firm’s Moorhead, Minn., office.

Bergantine has more than 17 years of water engineering experience and will lead opportunities to expand the firm’s client base in western Minnesota. He is a graduate of the University of North Dakota and is a licensed professional engineer.

Jau-Shin Lou

NDSU names first general education director

Starion Financial hires virtual bank manager

Melissa Frohlich

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Melissa Frohlich has been promoted to virtual bank manager at Starion Financial. In this role, Frohlich oversees the virtual bank and customer service center, ensuring staff members provide quality customer service and achieve bank goals.

She partners with other departments to ensure successful implementation of electronic banking products and services. She also assists with training employees on new mobile and online banking products. Prior to this role, Frohlich served as marketing project manager at Starion.

Prairie Business Magazine February 2014

Dr. Jau-Shin Lou has been named founding chair of the Dr. Roger Gilbertson endowed chair of neurology at the University of North Dakota School of Medicine and Health Sciences. He will teach medical students and post-M.D. residents in addition to his administrative responsibilities in neurology. In addition, he will see neurology patients at Sanford Health in Fargo and will serve as chairman of Sanford’s neurology department.

Lou is widely recognized for his clinical trials in Lou Gehrig’s disease and fatigue associated with Parkinson’s disease. He was voted one of U.S. News and World Report’s best doctors in 2011-’12.

Amy Rupiper Taggert

Amy Rupiper Taggert, associate professor of English, has been named North Dakota State University’s first director of general education. In this one-third time position, she is responsible for coordinating, overseeing and nurturing general education at NDSU. In addition to roles on the general education and university assessment committees, she will serve in an auxiliary role on the accreditation report writing team and become a liaison for the Gateways to Completion program with the Gardner Institute.

Rupiper Taggert joined the NDSU English department in 2002. She specializes in writing and rhetoric, with a focus on pedagogy and curricular programs.

|PRAIRIE PEOPLE|

Corey Heaton

Heaton named Wells Fargo SD retail banking president Corey Heaton has been named retail banking area president for Wells Fargo in South Dakota. Based in Sioux Falls, he will manage a team of approximately 490 people in 49 banks throughout South Dakota and southwestern Minnesota. Heaton joined Wells Fargo in 2006 as a store manager in Sioux City, Iowa. In 2011, he was named district manager for Iowa’s northwest district.

Kim Schneider

Schneider to lead ND builders association Kim Schneider has been selected to serve as executive officer for the North Dakota Association of Builders. She previously served as director of the American Lung Association in North Dakota and worked in advertising firms in Fargo and Minneapolis. She is a graduate of Minnesota State University Moorhead.

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|PRAIRIE PEOPLE|

Bryan Kindopp

Kindopp to lead Great Western Bank in SD

Kline to head ND housing agency

Great Western Bank has named Bryan Kindopp its regional president for South Dakota.

Kindopp also leads the bank’s Nebraska region. In his expanded role, Kindopp is responsible for more than 600 employees in 86 bank locations.

Combined, the Nebraska and South Dakota regions account for $4.4 billion in assets, $4 billion in deposits and $3.5 billion in loans.

Kindopp is a graduate of South Dakota State University and has more than 22 years of experience in the financial industry. His career with Great Western Bank began in 2001 as a market president.

The Industrial Commission of North Dakota has appointed Jolene Kline as executive director of the North Dakota Housing Finance Agency. Kline has served as acting executive director since the retirement of Mike Anderson last May. She joined the NDHFA in 1985. In 2006, she was selected as the first director of the agency’s planning and housing development division, which assists communities in addressing housing shortages and unmet needs.

Jolene Kline

Ulteig hires senior aviation engineer

Hunke promoted at MDU construction group

Jon Hunke

Jon Hunke has been promoted to the position of controller at MDU Construction Services Group, a subsidiary of MDU Resources Group. Hunke joined MDU’s construction group in 2003 as a financial analyst. Since then, he has held a number of positions within the company, serving most recently as director of financial software and training. He holds a bachelor’s degree in accounting from North Dakota State University and a master’s degree in management from the University of Mary.

Wayne Switzer

SD PUC vice chairman to lead national telecommunications committee

AE2S adds Cline as chief development officer

Gary Cline

Gary Cline has joined AE2S (Advanced Engineering and Environmental Services Inc.) as chief development officer. In this role, he will develop strategies to ensure the firm’s continued growth and stability by broadening the services and client base of the firm and its affiliated companies. He has more than 30 years of water and wastewater experience and holds a master’s degree in civil and sanitary engineering and a bachelor’s degree in civil engineering from Michigan State University.

Regional Medical Clinics names clinical service director

Mike McGrath

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Mike McGrath has been selected as director of clinic services for Regional Medical Clinics in Rapid City, S.D. He has worked with Regional Health Physicians since 2008, serving most recently as the clinic administrator for Regional Urgent Care clinics.

Regional Medical Clinics is the largest network of primary and specialty clinics in western South Dakota and eastern Wyoming.

Prairie Business Magazine February 2014

Ulteig has hired Wayne Switzer as a senior aviation engineer in its civil services department.

He most recently served as a client manager for KLJ. He previously worked for Washington Dulles International and the U.S. Federal Aviation Administration’s Washington district office.

Switzer has more than 16 years of experience in project management, airport engineering and client management. He is based in the firm’s Bismarck, N.D., office.

Chris Nelson

South Dakota Public Utilities Commission Vice Chairman Chris Nelson has been selected to serve as chairman of the committee on telecommunications for the National Association of Regulatory Utility Commissioners. The committee analyzes trends and best practices to develop association policy and works with national agencies including the National Telecommunications and Information Administration, the Federal Trade Commission and the Department of Justice. As chairman, Nelson will head a 28-member panel and will join the NARUC’s board of directors. Nelson has been a member of the committee since 2011.

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|BUSINESS DEVELOPMENT|

Prescription for success Consulting group forms alliance to provide individualized service for small businesses

BY KRIS BEVILL Fargo consulting group believes it has developed the prescription for small business success. The recently formed Small Business Rx Alliance is comprised of about 10 independent consultants representing various business-related disciplines who work together to evaluate and assist small business owners with business concerns on an asneeded basis, providing advice and specialized duties to fit each business’ specific needs.

Think of it as an executive in a box, says Harlan Goerger, alliance member and owner of leadership and sales development consulting firm AskHG. He says the group specializes in offering transitional services to small businesses that may be in need of financial guidance or advertising advice, for example, but can’t necessarily afford to bring a full-time person on staff. The alliance allows business owners to hire its consultants on a parttime basis until it becomes large enough to warrant a full-time person or has resolved its singular issue. This approach is not only effective but can save business owners a substantial amount of money as well, according to Goerger. “You’re not paying $100,000 a year, you’re paying maybe a couple hundred dollars a month,” he says.

The brainchild of the group, Joe Day, is co-owner of financial services company 1st Consumer Benefit Consultants Inc. He got the idea to form the alliance after developing an employee assistance program for businesses. “I thought, if we can do that much for

A

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Prairie Business Magazine February 2014

employees, what can we do for the employers?” he says.

Day asked area business owners what issues cause them the most problems and began gathering a group of experts to provide them with the services they needed most. The alliance officially launched last fall and currently includes consultants specializing in finance, law, human relations, payroll, benefits services, advertising, IT, web services and leadership and sales training. Day says the alliance has already been more successful than he envisioned and has received “overwhelmingly positive” feedback from clients.

The alliance works exclusively with executives and business owners. Clients so far have included businesses in a variety of industries ranging in size from startups to large companies, according to Goerger. “Some are growing very fast, others are more mature and looking to increase profitability rather than grow,” he says.

Because each company’s issues vary, potential clients must first complete a confidential questionnaire and divulge details of their organization’s financial health and other issues. The alliance gathers weekly to review questionnaires in a confidential setting and determine potential courses of action. Occasionally, the group decides a company is beyond the point of recovery, but typically they are able to put a plan in place to assist the business owner in improving their business. The group refers to the evaluation as the “triage” stage and provides the review at no cost. Once the evaluation is complete

|BUSINESS DEVELOPMENT|

Harlan Goerger, owner, AskHG

Joe Day, co-owner, 1st Consumer Benefit Consultants Inc.

and the business owner has agreed to the action plan, the group moves ahead with implementation. Fees for the alliance’s services vary depending on the consultant and service, but Goerger says the typical range is $100 to $300 per hour.

The overall goal of the group is to help small business owners build successful, sustainable and profitable organizations by providing services clients can afford. Day says the group has been successful because each member believes that no one is an expert in every area of business and they willingly recommend others when an issue is out of their field. While the initial alliance group is based primarily in Fargo, Day says the concept may soon be expanded to Bismarck, N.D. The group also hosts a radio program in Fargo to provide insight into the various aspects of running a successful business. PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

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|UNMANNED AERIAL SYSTEMS |

Taking Ag to the Sky Why unmanned aerial systems could become agriculture’s next best bet

BY KRIS BEVILL

Brad Mathson, instructor at Lake Region State College’s Precision Ag Center in Devils Lake, N.D., supervises while intern Caitlin Lunday operates one of the center’s unmanned aerial systems (UAS). PHOTO: LAKE REGION STATE COLLEGE

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|UNMANNED AERIAL SYSTEMS |

he Federal Aviation Administration’s muchanticipated Dec. 30 announcement that Grand Forks, N.D., had been selected as a test site for unmanned aerial systems (UAS) left those working in and around the industry flying high. Because only six sites in the U.S. were federally approved to integrate UAS into national airspace, proponents say billions of dollars of economic activity could be generated for test site states as UAS-related companies set up shop and test their equipment. Further economic impact is expected as unrelated industries begin to incorporate UAS technology into their operations and become trendsetters in their own right.

North Dakota’s largest industry, agriculture, has already been targeted as being one of the most likely industries to utilize UAS technology. Certainly, there are many questions regarding commercial use of UAS that need to be answered first, but one of the benefits of UAS in agriculture is that several concerns regarding UAS use are minimized, according to Michael Toscano, president and CEO for the Association of Unmanned Vehicle Systems International.

“Agriculture is ideal because right now the two biggest concerns with UAS are safety and privacy,” he says. “If you’re using it for agriculture, there are a lot of fields with no people in them and vegetables don’t care if you watch them. So there is an ideal case of where this technology can be used.”

And while it will be at least 2015 before any regulatory standards are expected to be put in place for the commercial use of UAS, many of the region’s ag and aerial experts have already begun using the systems for training purposes and have determined that the potential uses for UAS in ag are unlimited.

T

Training Next-gen Producers Lake Region State College in Devils Lake, N.D., is one of several education institutions in the region, including the University of North Dakota, North Dakota State University and Northland Community and Technical College in Thief River Falls, Minn., which has already incorporated UAS training into its curriculum.

Brad Mathson, a precision agriculture instructor

at LRSC, has been using UAS in his courses since last year. He sees unlimited potential for the types of UAS applications in agriculture and has been incorporating it into the precision ag curriculum wherever it is needed. Much of the training is currently devoted to evaluating various types of systems and instruments, such as cameras and imaging tools, that can be used in agriculture. Students also learn to the fly the equipment and interpret the data collected. This summer he hopes to also implement UAS in field scouting and expects that LRSC will also be collaborating with the University of North Dakota in Grand Forks on testing protocols for agriculture.

Mathson says the LRSC’s precision ag center focuses on livestock and crop farming for UAS and he believes the advantages UAS offers to both industries is untold because it will allow producers to identify and evaluate issues as they happen as opposed to after the damage has been done. “I liken it to the medical field … the ag industry has looked at yield data for the past 20 years, which is like an autopsy because at that point the crop has been harvested and it’s too late to fix any growing problem,” he says. “This type of technology is like getting a CAT scan.

We can actually see the program develop, usually before the human eye would even notice the problem. That’s the most exciting part about this is it’s a proactive instead of a reactive type of diagnostic tool.”

Similarly for cattle producers, UAS could be used to detect sickness or other issues with livestock. Mathson says LRSC is currently exploring using thermal imagery cameras to fly over cattle and measure their temperatures, which could be helpful in determining potential illnesses or during the breeding season.

Mathson notes that while satellite imagery is already used in agriculture, UAS could be more frequently used and could be used by individual farmers or as a service offered by a third-party. He expects there will be a contingency of early adopters in the region, but does not expect widespread use of UAS for some time. “We have to shake out a lot of the rules and regulations before we get to that point,” he says. However, as the growing global population continues to pressure farmers to produce higher yields on every field, the potential for UAS to

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|UNMANNED AERIAL SYSTEMS |

The view from an unmanned aerial system produced by DMZ Aerial known as the Aerial Intelligence Modified Quadcopter. PHOTO: DMZ AERIAL

help achieve that goal is great. “If we’re going to meet the goal of doubling our yields by 2050 to handle the world population we’re going to have to implement every tool we can to get to that level,” he says.

Industry Impact Doug McDonald, director of special projects at Grand Forks-based Unmanned Applications Institute International, agrees that the ag industry will be one of the biggest applications for UAS and that producers are primed to incorporate that type of technology into their operations. “The ag producer today is very technologically savvy already,” he says. “They’ve got sensors tripping off their combines and tractors [and] they’ve historically used all kinds of fairly intricate maps in regards to soil and pH. With the inclusion of UAS, you can do a lot of that cheaper, quicker and more timely, so I think from a producer perspective it’s going to add revenue. It’s going to be a great opportunity for agriculture to embrace some of the technological

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advances that they’ve already embraced, just ramped up.”

UAI International serves as a liaison between systems manufacturers, researchers and users of the equipment.

McDonald says he has been active in working with area colleges and universities at the forefront of precision ag and UAS to identify the opportunities, needs and requirements to make UAS a viable tool for the farming industry. Producers in the area have shown a high level of interest, he says, but many are waiting for the technology to be proven. The test site in Grand Forks, along with the planned UAS-focused business and tech park in Grand Forks, dubbed Grand Sky, could help to usher that along. Of the six test sites, North Dakota should have an advantage in agriculture applications because agriculture is the state’s largest industry, he says. Also, the state has an additional advantage in that several of its higher education institutions have had an ongoing focus on UAS. “I think we certainly have a leg up on some of our competition, but we have to get going,” he says.

|UNMANNED AERIAL SYSTEMS |

Hefty Investment North Dakota has invested $14 million in pursuit of a federal UAS (unmanned aerial system) test site designation. The 2013 state legislature appropriated $5 million for the effort, with $4 million contingent upon the site’s approval. In May, Gov. Jack Dalrymple established the Northern Plains Unmanned Aircraft Systems Authority to pursue the test site designation and other UAS opportunities.

Additionally, Grand Forks County secured an enhanced use lease with the U.S. Air Force to develop a UAS-focused business and technology park at the Grand Forks Air Force Base and landed a commitment from Northrop Grumman to be the park’s first tenant. Additionally, the region boasts multiple other education institutions that offer UAS-related training.

Timeline to Integration Surely the UAS industry is still in the fledgling stage, but the ramp up to commercial application is well under way.

Terry Sando, UAS sector senior manager at the Grand Forks Area Economic Development Corp., is part of a team at the organization working feverishly to build upon the momentum of the city’s test site designation status and attract companies and researchers that will make the area a hub for UAS development. The Grand Sky park, which is in the final stages of development, according to Sando, will hopefully allow the EDC to cluster multiple companies working in sensor and UAS technologies, positively impacting the state and expanding the site’s global footprint.

Sando has also been working with area implement dealers to evaluate their next steps in incorporating UAS into their service offerings. UAS offers the opportunity to collect massive amounts of data, but it is yet to be determined how best

The state has invested in UAS technology since 2006, when then-Gov. John Hoeven and Sen. Byron Dorgan worked to get the Center for UAS Research, Education and Training at the University of North Dakota designated as a Department of Defense Center of Excellence for UAV Education. The state also invested in the center at that time through its centers of excellence program.

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|UNMANNED AERIAL SYSTEMS |

to interpret and act on that data, he says. Implement dealers may simply want to sell the units for farmers to use and interpret the data themselves, or they may decide to employ specialists to use UAS and interpret data for the farmer as a service.

Either way, Sando expects implements to jump onboard quickly. “I expect they’ll see there’s going to be a lot of money in this and they’ll want to actively participate,” he says.

Currently, the cost of unmanned systems varies wildly depending on the size of the system and other factors. LRSC has been able to minimize the cost of its UAS through a collaborative relationship with the manufacturer, a Wisconsin-based startup called DMZ Aerial, which is loaning its product to the college.

Company co-founder Mitchell Fiene says he and his cousin, Zach Fiene, founded the company a couple of years ago after their summer jobs as crop scouts inspired them to develop a better way to monitor fields. “Now we’re in 11 states as well as Canada and our units are enjoyed by a lot of co-ops and retailers,” Mitchell says. “Most of our customers are in the USDA top 100 co-ops and independent retailers. It’s been really exciting.”

DMZ began selling its products last summer and earned $150,000 by the end of the year. The company’s most popular

system sells for $4,500 and includes a case, batteries, a camera and options for modified cameras. “It’s a really good entry level system because you’re able to essentially learn how to fly it in about a half hour,” Mitchell says.

Mitchell, who is still a college student, foresees unlimited potential for the company as the UAS industry gets off the ground in the U.S. He believes the market has immense potential to grow and that DMZ’s connection with LRSC and proximity to the Grand Forks test site will benefit the company. “I think it will be a very positive impact because essentially we will have free reign to test these systems without having to take a trip to Canada,” he says, adding that its “very possible” the company will establish a location in Grand Forks to test its equipment. “I think North Dakota is definitely going to be a hub for UA[S] research,” he says. And what does the future hold for his company and the industry? “Right now, the sky is the limit.” PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

UAS Test Sites On Dec. 30th, the Federal Aviation Administration announced its selection for six test sites to integrate UAS (unmanned aerial systems) into the national airspace, allowing the agency to develop research findings and operational experiences that will be used to form regulations for potential commercial applications. The sites were selected from a pool of 25 candidates representing 24 states and represent the country’s varying geographic regions and climatic diversity. Selected sites include: • University of Alaska (test site range includes locations in Hawaii and Oregon) • State of Nevada • New York’s Griffiss International Airport • North Dakota Department of Commerce (Grand Forks) • Texas A&M University – Corpus Christi • Virginia Polytechnic Institute and State University (site also includes test range locations New Jersey) In announcing its decision, the FAA noted that North Dakota is the only site to offer a test range in the temperate climate zone and includes a variety of different airspace, which will benefit multiple users.

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Prairie Business Magazine February 2014

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|HIGHER EDUCATION|

Graduate and undergraduate students at North Dakota State University have the opportunity to engage in cutting-edge research with faculty across multiple disciplines. PHOTO: NORTH DAKOTA STATE UNIVERSITY

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|HIGHER EDUCATION|

Filling the Need Collaboration among higher education, industry, states key to addressing workforce demands

BY KRIS BEVILL

orkforce shortages continue to be the most pressing issue for employers throughout the northern Plains. Continued strong economies have warranted expansions and new business growth, but a lack of workers has reached a critical point and poses a real threat to state and local economies if not addressed. Several factors are contributing to the issue, the most obvious being the low population density of the Dakotas and western Minnesota. There are simply not as many people as there are jobs. Secondly, new and expanding industries require employees with certain skill sets and there is a shortage of people trained to fill those jobs. Universities, research park leaders, private industry groups and government officials are all working to address the issue, which will require a widespread effort to resolve.

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Working Together North Dakota State University’s Research and Technology Park is currently working to develop a new strategic plan that will address the changing needs of the state. Kelly Rusch, vice president for research and creative activities at NDSU, says an updated plan is needed in order to lay out the park’s plans to grow with the university and determine its areas of research emphasis. NDSU and the research park are at inflection points after periods of growth and need to step back and evaluate what direction is best for the future, she says. The overall goal is to develop a plan that will mesh with other groups’ plans to address higher education and workforce needs, including the state and the Valley Prosperity Partnership. “We want to make sure we’re impacting the economic and social well-being of the state,” she says. “It’s an exciting time

from that aspect.”

Rusch, who recently joined NDSU from Louisiana State University, says she believes research universities like NDSU are the best-equipped to be the “creators of new knowledge” and become actively engaged in their communities. This includes collaboration with the private sector, however, she notes that workforce training is a twoway process that is benefited by businesses becoming engaged in the education process through mentorships, sponsorships and educational enhancement activities.

“The best public-private partnerships at universities are when companies are engaged at many levels,” she says.

Rusch points to Sanford Health as an example of multilevel collaboration with NDSU. The organization is collaborating with the university on a nursing program which includes a Centers of Excellence component and provides philanthropic support to the university’s athletics programs. Finally, and most importantly, it hires NDSU graduates.

Rusch believes those types of long-term public-private partnerships benefit both parties and can help to resolve the area’s workforce issues. She sees the research park’s role in the equation as being the bridge between the university and the community, drawing in entrepreneurs and providing an incubation center for new businesses, which may also eventually become long-term supporters of the university.

Bruce Gjovig, director of the Center for Innovation at the University of North Dakota, was one of several representatives from area research centers to attend a symposium held by the NDSU Research and Technology Park in December to address higher education’s role in continuing the state’s prosperity. He says he fully supports a sug-

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|HIGHER EDUCATION|

The Center for Surface Protection at NDSU partners with businesses on research needed for commercial applications. A North Dakota Economic Development Center of Excellence, the Center specializes in coatings technologies for a variety of industry sectors. Its research partners include local to global companies. PHOTO: NORTH DAKOTA STATE UNIVERSITY

gestion made at the event to shift the focus of research parks away from essentially being real estate developers and instead focusing on collaboration with industry. “I think sometimes there has been too much emphasis placed on buildings and real estate development and not understanding that a tech park is really a place for partnerships,” he says. Likewise, he supports continued and expanded collaboration between research centers like the Center for Innovation in Grand Forks and the research and tech park in Fargo, and increased collaboration between universities and the private sector. “We certainly have been [collaborating]. The question is, are we doing enough of it? I think there’s an expectation there that we need to do considerably more.”

One strategy suggested to foster more frequent collaboration between business and universities that Gjovig supports is the creation of a partnership concierge. With a concierge nurturing relationships between the two parties and bringing them together on a regular basis, Gjovig predicts that more collaboration would occur, potentially resulting in more frequent and effective program develop-

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ment to serve industry needs and more frequent private industry financial support for education institutions.

State Support The North Dakota state legislature approved funding this year for a program that supports public-private research partnerships with the intent of leveraging university expertise for economic development and to encourage the growth and diversification of the state’s economy. Research ND is being implemented through the commerce department and has been funded with $12 million to disperse in grants to universities and research parks for projects carried out in partnership with the private sector. Of the total funds available, $2 million is designated to support the commercialization of intellectual property developed at the state’s research universities through spinoffs or startups, $4 million is devoted to biotech-related projects and the remaining $6 million can be doled out for R&D and commercialization projects related to private sector in any industry. The program will provide matching funds to universities for approved proj-

|HIGHER EDUCATION|

ects, capping at $300,000 per non-biotech project and $1 million for biotech projects.

Jolynne Tschetter, commercialization manager for the commerce department, says just three applications were received for the first funding round in November but she expects many more applications will be received for the February round as more businesses will have had time to sign partnering agreements with universities and prepare their projects. Funding rounds will continue to close every three months until the program’s funds are exhausted. Tschetter says she has noticed significant private industry interest in the program and hopes that many North Dakota companies participate.

Additionally, the department has been allocated $500,000 in funding from Research ND to administratively fund projects up to $50,000. “So if a company has a piece of equipment or part fail or they are a startup and need research help, if they have matching funds they can apply and it can be approved within a matter of days rather than wait through the application and approval process,” she says. “If you’re in a time crunch, you don’t have time to

wait. This was a way to be as responsive as we could to the needs of the private sector.”

Ask and React Dwaine Chapel, executive director of the Research Park and South Dakota State University, says the research park there has begun focusing more on recruitment efforts in partnership with the university in response to the state’s workforce shortage. “What we’re looking at is not only the research that needs to take place and working with industries and the university, but also talking to some of our local industry leaders and asking them what some of the key positions are they need to fill,” he says.

SDSU’s research park has also had some success in attracting businesses to the area to hire local workers that already have the skills they required. One example is a Chicago-based company that had been hiring graduates from the Dakotas, but found that it was eventually losing those employees because they were returning to their home states. “After a lot of discussions, we worked out a deal where they expanded their company to the research

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|HIGHER EDUCATION|

park,” Chapel says. “This summer they brought on four interns. Out of that they hired two people and they’re looking to hire an additional four this spring.”

Another example of adapting industry to meet workforce supply is the pharmacy industry, according to Chapel. He says SDSU graduates about 100 pharmacy students every semester, but there are no jobs for them in South Dakota. The research park could play a role in attracting companies to the state that could provide jobs for those workers, he says.

Private Role Private universities also see the need for expanded partnerships between their institutions and private industry to address needed skills training. In June, Bismarck, N.D.-based University of Mary named Lindsie Schoenack as director of business partnerships and continuing education to focus on that aspect of higher learning and build relationships with area businesses in need of specialized training. This month, another staff member will join the effort and will focus specifically on working with businesses in western North Dakota. “The biggest thing we can do as an organization is meet needs,” Schoenack says.

“We always ask our partners what they need and what we can do to help them.”

One of the university’s first such partnerships was formed through an academic alliance signed last year with Microsoft. The university is collaborating with Barnesville, Minn.-based Stoneridge Software to offer Dynamics AX training to Microsoft partners, which is expected to help fill the need for AX certified personnel throughout the country. The university was able to develop and launch the program on a rapid timeline, partially because private universities need only their board of directors’ approval to do so compared to the more cumbersome public university approval system, according to Schoenack. She says the university approved moving ahead with the Microsoft training program because it fit well with the university’s recent focus on continuing education and because it offered a good return on investment for the institution.

Another course being developed by the university in conjunction with private industry will focus on project management for a specific skillset. Schoenack says the course is in response to a request from a company that is finding difficulty in filling those specific roles. The resulting project management course will be unique in that it will be developed for open enrollment, but will include a

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Prairie Business Magazine February 2014

job shadow requirement for that company, enabling it to more easily recruit new workers with the desired skill set.

Schoenack says the university wants to work more frequently with private industry and develop more programs of a similar nature. “I suspect those are the types of things we are going to be focusing on — not only in getting the degree seeking, but helping the employer fill their workforce with educated individuals and people who show an affinity for that area,” she says.

Start Young In his 2014 State of the State address, S.D. Gov. Dennis Daugaard noted that the state’s December unemployment rate fell to 3.6 percent, making it the second lowest unemployment rate of any state in the nation. North Dakota continues to have the nation’s lowest unemployment rate. And like its neighbor to the north, South Dakota continues to battle workforce shortages. Daugaard addressed that topic during his speech and presented a plan to revise the state’s existing strategy focused on recruiting and training indemand workers. The program, known as South Dakota WINS, focuses on youth preparation, technical education/skilled jobs training, rural health care and recruitment of trained workers. Daugaard says the program has been effective so far, but “it’s a continuous effort. It’s not a one-and-done approach.”

Daugaard places special emphasis on beginning workforce training at the high school level so that those students may be more likely to pursue in-demand careers within the state. State programs focused on that effort include SDMyLife.com, a website designed to provide information about various careers, average salaries, education costs and training opportunities. “It’s sort of a career primer,” he says. “We’re not trying to require anybody to do anything, but we try to make sure students make decisions that are informed.” Daugaard is also encouraging more dual credit opportunities for high schoolers. Those types of programs can make it easier for students to graduate from college on time and reduce the cost of tuition, he says.

The South Dakota Board of Regents recently released an analysis of placement outcomes for the state’s university graduates and found that more than 70 percent of in-state students remain in South Dakota post-graduation compared to 30 percent of out-of-state students.

The board noted that sustaining and improving placement rates of out-of-state post-grads will be key to the state’s workforce development efforts. Daugaard says he

|HIGHER EDUCATION|

would like to see both in-state and out-of-state placement rates grow. However, considering the significantly higher rate of in-state placements currently, the state is emphasizing homegrown workforce recruitment. One advantage for in-state students historically has been lower tuition rates and that will likely continue this year as Daugaard has proposed a tuition freeze for in-state students only. He did not suggest freezing tuition rates for out-of-state students because those rates are already relatively low and because evidence suggests that if the state wants to build its workforce, existing residents are the best bet. “Obviously we’d like to keep all tuition low whether in-state or out-ofstate,” he says. “[However], if you had to decide what’s your better likelihood of a South Dakota worker, it’s probably more likely that an in-state student will stay and work in South Dakota than an out-of-state student.”

Further evidence supporting the success ratio of recruiting from within versus attracting from elsewhere is another of the South Dakota WINS programs. New South Dakotans, aimed at attracting trained workers from other areas of the country, has admittedly not worked as planned, Daugaard says. While some workers

have relocated from high unemployment areas to South Dakota, the program has not been nearly as successful as another program called Dakota Roots, which focuses on contacting people who have previously lived in South Dakota and enticing them to move back.

Daugaard looks to higher education institutions to manage their own recruitment efforts and collaborate with private industry to create in-demand training programs. He says he believes the schools are making every effort to be relevant to industry and meet their needs. To encourage greater collaboration and further develop strategies to address the statewide workforce shortage, Daugaard will be traveling throughout the state this spring to meet with higher education and business leaders as well as economic development officials to discuss specific issues in preparation for a statewide workforce summit to be held later this year. PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

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37

|TALK OF THE TOWN|

Expanding in all areas Health care, manufacturing, agriculture among industries planning expansion in Fergus Falls

BY KRIS BEVILL he expansion theme that has become so common elsewhere throughout much of the region is also taking hold in Minnesota lakes country communities including Fergus Falls, a town of about 13,000 people located about an hour’s drive southeast of Fargo. Several existing employers are expanding in 2014 and other new businesses are planned for the area as well, leaving community leaders optimistic for what the future holds.

Fergus Falls-based Lake Region Healthcare currently employees nearly 900 people throughout its network and more than 800 of them are located in Fergus Falls. The health care provider has been steadily expanding in recent years and plans to continue to do so this year in order to accommodate the growing need for its services. The list of projects includes a home medical supply store in Fergus Falls — Lake Region Home Medical Supply — which will offer home medical equipment such as oxygen, sleep apnea equipment, rehab equipment and men’s and women’s specialty items. The store is a joint venture between Lake Region Healthcare and Willmar, Minn.-based Rice Home Medical, which has established four similar retail stores in the area.

Lake Region Healthcare CEO Larry Schulz says

T

Fergus Falls, Minn., is located approximately 55 miles southeast of Fargo. PHOTO: FERGUS FALLS ECONOMIC IMPROVEMENT COMMISSION

38

Prairie Business Magazine February 2014

home medical equipment is a strategic growth area for the organization. “We recognize there is a need for easy access to many types of quality medical supplies and equipment in Fergus Falls and it makes sense for us to expand our services to fill that need as we strive to help people in our region improve their health,” he says.

The retail store is expected to open this spring and will initially employ up to five people and may expand to include additional employees and products in the future.

Plans are also in the works for Lake Region Healthcare to begin constructing a new clinic next to its hospital in Fergus Falls later this year. “We’ve gone from 46 to 71 providers over the last three years,” Schulz says.

“We need space for them to provide service and create accessibility for our patients.” He anticipates that a groundbreaking for the new clinic could be held this fall with an opening date tentatively planned for 2015.

Fergus Falls Mayor Hal Leland says he is pleased that the city’s largest employer is able to continue meeting the needs of the community. “This clinic expansion will allow them to do even more and bring in more specialties and provide more jobs,” he says. “We are extremely excited about that.”

With an unemployment rate of around 4 percent, Fergus Falls is not immune to the region’s struggle to

|TALK OF THE TOWN|

Lake Region Healthcare is the largest employer in Fergus Falls, Minn., and plans to continue to expand in 2014.

PHOTO: SCOTT THUEN/LAKE REGION HEALTHCARE

attract the workers it needs to satisfy employers’ demands, but Schulz says he is optimistic Lake Region Healthcare will be able to attract employees without having to look outside of the region. “Overall we have been fortunate to avoid severe shortages, although it is taking us longer to fill certain positions,” he says. “Other than for physician recruitment we have not had the need to engage in recruitment efforts to draw in employees from elsewhere.”

Leland says community leaders are actively working with the Minnesota Department of Employment and Economic Development as well as Minnesota State Community and Technical College to attract workers and provide the skilled training needed by the area’s industries so that they can continue expanding. Among

those in need of skilled workers is Innova Industries, a metal fabricating company, which is completing a 50,000 square foot expansion.

“They, along with all the other manufacturers, are having a hard time finding machinists, welders and other kinds of specialties in the manufacturing area so that they can either expand or add another shift, so yes, this is an extremely concerning area,” Leland says.

West Central Initiative, a community foundation serving westcentral Minnesota that provides gap lending, recently closed loans for six Fergus Falls businesses, including one for Innova’s expansion project. Dale Umlauf, WCI’s vice president of business development, says the number of loans is evidence that manufacturing is being revitalized in Fergus Falls.

Agriculture also continues to be a dominant force in the Fergus Falls economy and a new project planned for 2014 represents an expansion into a new area of the industry. The U.S. Department of Agriculture’s rural development agency recently approved a $2.1 million loan guarantee for Great River Energy to finance the purchase of equipment for Vertical Farms LLC, a year-round indoor growing and packaging facility. The facility will initially produce lettuce and plans to expand to include herbs, spinach and strawberries. WCI, the city of Fergus Falls and the Fergus Falls Port Authority are also funding participants in the first-of-its-kind project, which is expected to create about 14 jobs. “This is great news for Fergus Falls and for the region,” said Congressman Collin Peterson. “Value-added produce is making great strides in our rural communities along with the desire for local foods, and this will be a nice boost to the local economy.” PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

TOP 10 EMPLOYERS Company/organization Industry Employees Lake Region Healthcare .................................................Health care ....................................................833 Otter Tail Power Co. .........................................................Energy .............................................................400 Otter Tail county ...............................................................Government..................................................359 Fergus Falls Public Schools ...........................................Education .......................................................302 Pioneer Home Inc.............................................................Nursing care..................................................272 Broen Memorial Home ...................................................Nursing care..................................................216 Northern Contours...........................................................Manufacturing .............................................207 Minnesota Veterans Home............................................Nursing care..................................................140 City of Fergus Falls ...........................................................Government..................................................138 M-State College.................................................................Education .......................................................134 SOURCE: FERGUS FALLS ECONOMIC IMPROVEMENT COMMISSION/MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT

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39

|HEALTH CARE|

Stem cell harvesting business banks on future technology Fargo clinic offers cell harvesting for disease treatment potential

BY KRIS BEVILL he fear of aging and all of its consequences, from wrinkles to heart disease, has born a huge industry for companies schlepping products of varying degrees of effectiveness. Unfortunately, until the proverbial fountain of youth is discovered and marketed to the masses, aging continues to reign as an unstoppable outcome of life. Fortunately, technology has enabled the potential to make the aging process at least more healthful, and forward-thinking businesses are ready to provide those cutting-edge services to an eager and aging public.

One of them, CelBank, recently expanded its

T Eternity Medicine Institute in Fargo recently added adult stem cell harvesting services to its list of services, allowing clients to bank stem cells for potential health treatment applications. PHOTO: ETERNITY MEDICINE INSTITUTE

40

Prairie Business Magazine February 2014

services to Fargo. Owned by Maryland-based biotechnology firm Next Healthcare Inc., CelBank specializes in storing adult stem and skin cells for use in future stem cell therapies to treat age-related diseases.

Vin Singh, founder and CEO of Next Healthcare, has more than a decade of experience in the stem cell industry and says he was inspired to launch the company after learning of a technology developed in Japan several years ago that enables skin cells to be converted to stem cells. “That was the spark for me,” he says. “I said, wow, that is the Holy Grail of regenerative medicine. If you can take a skin sample and make heart cells and treat some(continued on page 42)

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41

|HEALTH CARE|

Vin Singh, founder/CEO, Next Healthcare Inc. (continued from page 40)

one who just had a heart attack – that’s a big deal.” Knowing that the actual therapies to use that technology would take years to come to market, however, Singh set out to develop a method for consumers to take advantage of future technological developments ahead of time. “That’s where the idea came from,” he says. “Bank the cells now, so that you have this healthy archive of seed material that can be tapped into later if you need to.”

The U.S. Food and Drug Administration has not yet approved any adult stem cell therapies, but thousands of stem cell trials are being conducted worldwide and about 50 U.S. trials are in the final testing phase, Singh says. He expects up to 30 percent of those therapies to become commercially available over the next few years, with likely applications being treatments for diseases including cardiovascular disease, autoimmune disease and cell replacement therapy for cancer patients. He says ideal candidates for cell banking range in age from 35 to 55 because they have healthy cells and are most likely to be in need of cell banking therapies when the technology is fully developed. “We think the next 25 years is the sweet spot for stem cell therapies,” Singh says. “Past that point there will probably be some other technology, like nanotechnology.”

Last fall, Eternity Medicine Institute, an age management

42

Prairie Business Magazine February 2014

clinic, signed on to be the exclusive provider of CelBank services in the Fargo area. Singh says that while the Fargo market is smaller than CelBank’s other locations, which include major metropolitan areas such as New York City, Los Angeles and Denver, he believes there is enough demand for anti-aging processes in this region to warrant the location.

Dr. Joel Schock, medical director at Eternity Medical Institute, says CelBank’s services were a natural fit for the age management clinic, which focuses on helping people live life more energetically and actively as they age. “People who are doing age management are interested in their health above and beyond the average person and are willing to go to where the cutting-edge technologies and techniques are, and are not interested in letting some of the degenerative processes of aging slow them down,” he says. “Cell banking offers, I think, the greatest promise in that area over the long run.”

Eternity Medical Institute clients have so far been “fascinated” by the idea of cell banking, Schock says. One of the institute’s first cell banking clients did so as a preemptive strike against a family history of bone marrow disease, he says.

Another client opted for the procedure simply for the peace of mind of knowing the cells would be available if needed. Most of the clinic’s customers are still evaluating whether the financial commitment for the out-of-pocket service, which costs about $3,500 for the initial cell harvest procedure plus annual storage fees, is worth the investment.

CelBank stores its customers’ samples at its state-of-theart, federally approved cell processing and storage center in Grand Forks, N.D. Singh says the company chose to locate its storage facility in Grand Forks because it meets the company’s criteria of being centrally located, relatively immune to natural disasters and more affordable than locations near the company’s Washington, D.C.-area headquarters. Additionally, Singh says Grand Forks offers access to bioscience talent at the University of North Dakota’s medical school and has a topnotch facility with room to expand as the company’s business grows. “We found a diamond in the rough in Grand Forks because it really fit all of our needs,” he says.

While it is hard to predict a timeline for FDA approvals, other countries including Canada already allow adult stem cells to be used in certain treatments and Singh believes his company is well-positioned to play a significant role in the new era of medicine worldwide. “We are the first to market in the service that we’re offering,” he says. “There are a handful of companies that do similar things, but nobody’s doing exactly what we’re doing. PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

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43

| LEGISLATION|

Sen. John Hoeven, R-N.D.

Sen. Amy Klobuchar, D-Minn.

Bill gets at ‘STEM’ of workforce shortage Proposed legislation seeks to increase STEM-related education, research opportunities

BY KRIS BEVILL bill introduced late last year by Sens. Amy Klobuchar, DMinn., and John Hoeven, R-N.D., seeks to address the nation’s skilled workforce shortage by encouraging more STEM (science, technology, engineering and math) education opportunities and collaboration between industry and higher education institutions.

“By cutting red tape for businesses and focusing on science, technology, engineering and math education, this legislation ensures that our businesses can invest in research and our workers have the skills they need to thrive in today’s competitive global economy,” Klobuchar said in a statement.

Hoeven says he co-sponsored the bill because STEM skill sets are in high demand in the nation’s job market and particularly in North Dakota, where STEM skills are required throughout the state’s robust and growing energy, value-added agriculture, advanced manufacturing and aviation industries. “North Dakota is actually the fastest-growing state in the nation in terms of growth for STEM-skilled jobs,” he says.

“There’s an incredible number of jobs available — good, quality jobs — and that’s the skill set that’s needed to fulfill those jobs. First and foremost it’s about giving young people great opportunities for careers, and then it’s about filling the jobs needs we have in North Dakota and across the country.”

Specific provisions of the Innovate America Act include increasing the number of STEM high schools in the U.S. from 100 to 200, increasing the number of computer science teachers in elementary and secondary schools to support the nation’s growing need for computer programmers, expanding opportunities for undergraduate students to engage in STEM-related research projects by allowing students at 2-year

A

44

Prairie Business Magazine February 2014

and 4-year schools to participate, and expanding the benefits for businesses supporting research and development activities at universities.

According to Hoeven, under current law businesses funding research at universities may qualify for a research and development tax credit for up to 65 percent of the funds. The Innovate America Act proposes that 100 percent of those funds should qualify for the tax credit.

Further, the bill would increase tax credits for businesses collaborating with higher education institutions and reduce regulatory burdens, making it simpler for small businesses to collaborate with universities on research and development, he says. According to the bill, improving and simplifying those types of tax credits would “deliver a powerful incentive for private sector innovation.”

The bill also offers export assistance to manufacturers with 500 employees or less, requiring the U.S. commerce department to identify the top 20 U.S. export industries and offer recommendations to further improve the competitiveness of those industries in the global market.

It is unclear when the Senate might vote on the bill, which was referred to the Committee on Health, Education, Labor and Pensions in late November. Hoeven says he is confident the bill will eventually pass, however, and that it could also be helpful in his efforts to gather a coalition of legislators interested in reforming existing STEM-related initiatives. “I think we can use it as a way to kind of reform some of the existing legislation and make it better,” he says. “I think if we can get people on-board with that approach we have a good opportunity to pass the legislation.” PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

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45

Expanding to meet power needs Energy industry, growing population continue to strain utility infrastructure

BY KYLIE BLANCHARD

The recently completed Pioneer Generation Station, a threeunit, natural-gas fueled peaking station located near Williston, N.D., is owned and operated by Basin Electric Power Cooperative. PHOTO: BASIN ELECTRIC POWER COOPERATIVE

46

Prairie Business Magazine February 2014

orth Dakota’s expanding oil play is creating added demand on the utilities serving the Bakken region. As the state tops all-time oil production and population records, the need for additional utilities infrastructure continues to grow.

“As a result of the drilling and production activity, electrical loads are growing rapidly,” says Curt Pearson, media and community relations manager with Basin Electric Power Cooperative. “Basin Electric’s member cooperatives serve much of that load.”

Basin Electric is the largest generation and transmission cooperative in the nation in terms of land area served. The company provides wholesale, supplemental electric service for 137 member cooperatives and 2.8 million consumers in North Dakota, South Dakota, Minnesota, Montana, Colorado, Iowa, Nebraska, Wyoming and New Mexico.

In 2009, Basin Electric and its member cooperatives planned for 400 megawatts (MW) of load to develop in the Bakken region, but due to the increased demand, the company is now planning for loads to grow an additional 1,000 MW by 2025.

Several new and proposed projects are helping to meet the region’s rising demand, including the recently completed Pioneer Generation Station near Williston, N.D., a three-unit natural gasfueled peaking station.

The Lonesome Creek Station Unit 1, a single 45-MW natural gas-fired peaking station near Watford City, N.D., was completed in December. Two additional 45-MW units are proposed at this site, at

N

|ENERGY|

Basin Electric Power Cooperative's Lonesome Creek Station, a 45megawatt natural gas peaking station near Watford City, N.D., began operating on Dec. 1 and is used to support the local transmission system and serve loads developing in the area. The second phase of the project, which will include two more 45megawatt units, is scheduled to be complete late this year.

PHOTO: BASIN ELECTRIC POWER COOPERATIVE

an additional investment of $115 million. Pending approval by the Public Service Commission, that expansion will begin in May. “Basin Electric has also identified the need for additional electric transmission capacity in northwestern North Dakota,” Pearson says. The company is proposing to construct, own and operate a new 345-kilovolt transmission line and associated supporting infrastructure named the AVS to Neset transmission project.

The $350 million transmission line will traverse Dunn, McKenzie, Mercer, Mountrail and Williams counties and consist of 200 miles of new single circuit and double circuit transmission line, the construction of two new substations, and modifications to three existing substations. Pending receipt of all required permits, construction is slated to begin this year.

“These generation projects, combined with the proposed AVS to Neset transmission project, which allows access to electric power from other regional utilities and power projects, will serve to meet the needs of the region,” Pearson says.

In November, Basin Electric signed two power purchase agreements in the development of the Sunflower Wind Project and the Antelope Hills Wind Project. Both projects are located in North Dakota. The company signed a third power purchase agreement in December associated with the Campbell County Wind Farm in South Dakota. “With the addition of these new projects, the renewable portion of Basin Electric’s generating portfolio will be more than 1,100 MW,” Pearson says.

The company’s expansion is driven by the needs of its member, he says. “Our member cooperatives in North Dakota — Burke-Divide Electric, Mountrail-Williams Electric, McKenzie Electric and Roughrider Electric in particular — are experiencing significant increases in their

members’ electric needs. Basin Electric works closely with these members to help meet their needs for affordable electric energy.”

Verendrye Electric Cooperative will also be working to improve its system’s reliability and serve its expanding membership through the help of a $63 million loan from the Rural Utilities Services, a branch of the U.S. Department of Agriculture.

The cooperative, headquartered in Velva, N.D., serves 134 townships, which includes 15,000 meters over 4,500 miles of line in seven North Dakota counties.

Verendrye Electric Cooperative was selected through an application process, and the loan is based on a long-range 20-year engineering work plan, as well as a short-term engineering work plan approved by the RUS. “Approximately half of the funding will be used for serving new member accounts over the next five years and the other half will be used for improved system reliability by replacing line and poles in the rural areas due to system aging,” says Tom Rafferty, community relations manager for Verendrye Electric Cooperative.

The loan allows the cooperative to be reimbursed for the system improvements once the projects are completed and will finance the improvements over a maximum 33-year repayment period.

In the next five years, Rafferty says the cooperative estimates 1,000 new accounts per year. “This loan allows us to continue to grow and maintain the good, reliable electric service that both rural and urban members expect and deserve.” PB Kylie Blanchard Contributing writer 701-391-0373, kylie.blanchard@hotmail.com

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47

|FEDERAL DRILLING DATA|

479 472

Oil +7

barrels/day month over month

Monthly additions from one average rig

February January

barrels/day

February January

482 477

Gas +5

thousand cubic feet/day month over month

thousand cubic feet/day

Legacy oil production change thousand barrels/day Bakken

Eagle Ford

Haynesville

Marcellus

Niobrara

Permian

0 (10) (20) (30) (40) (50) (60)

February-2013

(70)

February-2014

Indicated monthly change in oil production (Feb vs. Jan)

Indicated monthly change in gas production (Feb vs. Jan)

thousand barrels/day

million cubic feet/day

February-2013

February-2013

February-2014 500

60

400

50

300

40

200

30

100

20 10

0

0

-100 -200

-10 Bakken

Eagle Ford

Haynesville

Marcellus

Niobrara

Bakken

Permian

Eagle Ford Haynesville

Oil production

Natural gas production

thousand barrels/day

million cubic feet/day

February-2013

February-2013

February-2014

2,400

14,000

2,000

12,000

Marcellus

Niobrara

Permian

February-2014

10,000

1,600

8,000

1,200

6,000

800

4,000

400

2,000

0 Bakken

48

February-2014

Eagle Ford

Haynesville

Marcellus

Prairie Business Magazine February 2014

Niobrara

Permian

0 Bakken

Eagle Ford Haynesville

Marcellus

Niobrara

Permian

SOURCE: U.S. DOE ENERGY INFORMATION ADMINISTRATION

Coming next month: Prairie Business magazine’s inaugural

Top 25 Women in Business We highlight 25 of the region’s most successful, inspiring businesswomen

Join us in celebrating business women on the northern Plains!

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49

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51

|BY THE NUMBERS|

| SPONSORED BY

|

Oil Producing

Wells

Average Daily

+1,865

9,900* Oct. ‘12 8,035

Permits

Oct. ‘13

941,637* Oct. ‘12 749,212

+192,425

* All time monthly high

Average Rig

Total

Production (barrels)

Oct. ‘13

-103

Oct. ‘13

Count

267 Oct. ‘12 370

-5 218, May 2012

370, Oct. 2012

Price

Gas Oct. '13

per barrel

$85.15 Oct. '12 $87.00

-1.85

+272,485

Oct. ‘13

1,070,270* Oct. ‘12 797,785

(% Flared)

-1

* All time monthly high

All time monthly high:

Coal*

Gas

(MCF/day)

Oct. ‘13

(Thousand Short Tons)

28% Oct. ‘12 29%

-349

All time monthly high:

$136.29, July 2008

183 Oct. ‘12 188

All time monthly high:

All time monthly high:

* All time monthly high

Oct. ‘13

Oct. ‘13

2,443 Oct. ‘12 2,792

All time monthly high:

36%, Sept. 2011

2,924, March 2004

*EIA original estimate data (data since 2002)

Interest Rates

Employment

7

Effective federal funds rate 10-year treasury constant maturity rate

6 5 Percent

4 3 2 1 0

Jan2000 Jan2002

Jan2004

Jan2006

Jan2008

Jan2010

Jan2012

Gas Captured/Sold October 2013

12% 15%

Jan2014

UNEMPLOYMENT RATE Oct.-13 Oct.-12

EMPLOYMENT Oct.-13 Oct.-12

North Dakota

2.70%

3.20%

390,266

Bismarck MSA

1.7

2.3

59,178

59,533

Fargo MSA

2.3

2.9

115,799

117,293

Grand Forks MSA

2.5

3.2

52,348

53,204

Dickinson MiSA

1.0

1.4

21,983

20,351

Jamestown MiSA

2.2

2.5

9,685

10,430

Minot MiSA

2.3

2.7

35,962

35,505

Wahpeton MiSA

2.4

3.0

11,520

11,916

Williston MiSA

0.5

0.7

45,895

35,821

South Dakota

3.70%

4.40%

432,750

426,616

Rapid City MSA

3.6

4.2

64,142

64,087

Sioux Falls MSA

2.9

3.6

131,658

128,612

Aberdeen MiSA

3.0

3.3

22,798

22,575

Brookings MiSA

2.9

3.3

18,980

18,627

Huron MiSA

3.1

3.1

9,630

9,704

Mitchell MiSA

2.7

3.2

13,375

13,054

Pierre MiSA

2.7

3.1

11,846

11,872

Spearfish MiSA

3.5

4.2

12,244

12,326

Vermillion MiSA

3.2

3.7

7,359

7,554

Watertown MiSA

2.8

3.3

18,939

18,644

3.1

3.8

11,455

11,364

Minnesota

4.80%

5.60%

2,822,202

2,806,545

Duluth MSA

5.2

5.7

135,505

136,189

Minneapolis-St. Paul MSA

4.1

5.0

1,794,090

1,776,700

Alexandria MiSA

3.2

4.0

20,028

20,224

Bemidji MiSA

5.1

6.2

20,629

20,837

Brainerd MiSA

5.5

6.3

42,838

43,469

Fairmont MiSA

4.2

5.0

10,596

10,603

Fergus Falls MiSA

3.9

4.5

29,175

29,250

Hutchinson MiSA

4.4

5.9

18,437

18,472

Marshall MiSA

3.3

3.9

14,421

14,510

Flared due to challenges or constraints on existing gathering systems

Red Wing MiSA

3.8

4.5

24,815

24,864

Willmar MiSA

3.5

4.2

22,970

23,236

Flared due to lack of pipeline connection

Winona MiSA

3.8

4.5

28,097

28,271

Worthington MiSA

3.4

4.0

11,002

11,030

73%

Gas captured and sold

Yankton MiSA

SOURCE: N.D. PIPELINE AUTHORITY

Data provided by David Flynn, chair of the University of North Dakota Department of Economics. Reach him at david.flynn@business.und.edu.

52

381,795

Prairie Business Magazine February 2014

Abdul Baker, MD Neurosurgery Essentia Health-32nd Avenue Clinic Dr. Abdul Baker, a neurosurgeon, has joined Essentia Health-32nd Avenue Clinic in Fargo, ND. Dr. Baker has a special interest in spinal oncology, spinal trauma, minimally-invasive and motionpreserving spine surgeries. He is pleased to work with the collaborative neuroscience program at Essentia Health and plans to introduce a comprehensive Spine Center.

“I want to provide the highest-standard, multidisciplinary approach of treating patients with neurologic problems using all the clinical resources available at Essentia,” says Dr. Baker. “My goal is to provide compassionate yet comprehensive neurosurgical care for my patients.”

Dr. Baker earned his medical degree from Wright State University in Dayton, OH. He completed his residency in neurosurgery and a complex spine fellowship at the University of Louisville in Louisville, KY. Most recently, Dr. Baker completed a second fellowship in spine and peripheral nerve surgery at Johns Hopkins University Department of Neurosurgery in Baltimore, MD. To make an appointment with Dr. Baker, call 701.364.8900. To see his full profile, go to EssentiaHealth.org and click on “Find a Medical Professional.”