Heartland receives USDA Friend of Rural Development Award

For over a decade, Heartland Consumers Power District has been providing low-interest loans to new and expanding businesses throughout their customer base, utilizing funds provided by USDA Rural Development (RD).

For their efforts in promoting rural development, Heartland was recently presented the “USDA Friend of Rural Development Award.”  USDA RD State Director Julie Gross and USDA RD Business & Cooperative Programs Director Dana Kleinsasser presented Heartland with the award at the company’s annual Summer Conference, where USDA was invited to speak about programs and services available to Heartland customers.

Gross illustrated Heartland’s partnership with USDA RD over the years, describing Heartland as an advocate of rural development and working tirelessly to help their customer communities grow.

Heartland’s HELP Fund makes use of USDA’s Intermediary Relending Program (IRP), which provides low-interest loans to local intermediaries, such as Heartland, that re-lend to businesses to improve economic conditions and create jobs in rural communities.

In Fiscal Year 2019, Heartland received an IRP loan of $1,000,000 to help finance loans to small and emerging businesses and community facility projects in a 14-county area.  It is anticipated that as many as 10 small businesses will be assisted and more than 121 jobs will be created or saved through this funding.

Heartland also participates in the Rural Economic Development Loan and Grant program, which provides zero interest loans to local utilities to re-lend to local businesses.

Heartland received a Rural Economic Development loan of $400,000 and a grant of $300,000 in 2019 to provide assistance to the City of Volga to make major infrastructure upgrades to help accommodate a new business expansion.  Prairie Aquatech’s 300,000 square foot, $60 million facility will create 35 jobs in the city. 

Heartland’s partnership with USDA has resulted in over $15 million in investments in South Dakota’s rural communities served by the company and the creation of over 125 jobs.

Gross recognized the entire Heartland staff with the award.

“Economic development is a team effort and the entire staff at Heartland is dedicated to helping their customer communities grow and thrive,” Gross said. “It was fitting to present the award at their Summer Conference where they provide resources to communities to further economic development, including promoting USDA’s programs.”

Heartland CEO Russell Olson said the award epitomized Heartland’s relationship with USDA.

“We always say that one of the most important tools for successful economic development is partnerships,” Olson said. “We strive to be a strong partner to our customer communities and utilize our partnership with USDA RD to help them flourish. To be considered a friend of their program is an honor and we are humbled to accept the award.”

The certificate presented to Heartland reads “Heartland Consumers Power Districts is commended for providing assistance and incentives that encourage new businesses, expand existing businesses and create jobs in an effort to grow communities.  As a valued partner, we appreciate the promotion and understanding of our programs.  When rural America thrives, all of America thrives.”

Heartland is a non-profit, public power utility providing wholesale power and energy to municipal systems, state institutions and other organizations in the region, including the city of Madison.

Colman sees business expansion, job growth

Two businesses open in larger locations with assistance from HELP Fund

The stories of two business expansions in Colman, SD are somewhat intertwined. They both recently re-located to larger facilities within the city, moves that couldn’t have happened without each other.

Colman Building Center (CBC) owners Dean and Peg Gulbranson recently built a new showroom and warehouse in the city’s industrial park along Highway 34.

“We already had one extra warehouse in the industrial park because we ran out of room in our downtown location,” said Dean Gulbranson. “As we kept growing, we ran out of room again and needed additional space.”

At the same time the Gulbransons were contemplating another warehouse, they were approached by another business, Chester Mechanical, looking to purchase their existing space.

“We didn’t have any room to expand at our downtown location, so the timing was perfect. We decided to build a new showroom along with the additional warehouse in the industrial park. Now everything is in one location and we don’t have to drive back and forth to get supplies.”

After ten years in the downtown location, CBC opened their new location January 2, nearly doubling the size of their existing showroom. They now have about 20,000 square feet of retail and warehouse space, with land available for additional future growth.

Colman Building Center’s new location along Highway 34

Full-Service and Specialty Store

CBC is a full-service lumber and hardware store, helping make projects a reality from conception to completion. Draftsmen are available to design houses and other buildings, they complete the bidding process and supply all materials. They work with a variety of contractors in the region, including those from Madison, Sioux Falls and Mitchell.

The new showroom has a large selection of hardware and home supply items and because there isn’t another retail store in Colman, Gulbranson says they are like an old-time general store where people can pick up about anything.

CBC is associated with Do It Best, which is a hardware, lumber and building materials cooperative. While CBC has increased inventory with the additional space, the receive weekly deliveries so if there is something they don’t have, they can get it in a week.

CBC also offers specialty services such as building custom feed bunks and cattle sheds for re-sale.

Expanded service, continued growth

The Gulbransons were also able to add more staff and equipment with the new location, including a semi with a Moffett truck mounted forklift, which allows drivers to unload cargo without waiting for assistance. This allows for delivery of more items, allowing CBC to better serve customers as they continue to grow.

CBC currently employs 9 people and are looking to hire three more as soon as possible.

While they have been open for two months in their new location, they are still putting the finishing touches on the warehouse and are planning a grand opening in April.

Move brings additional business to Colman

CBC’s former location on Main Street isn’t sitting empty. The building has been sold to Chester Mechanical, which brings an additional six new employees to the city.

Chris and Danielle Shoenrock purchased Chester Plumbing in nearby Chester, SD in August of 2013. The business had been family-owned and operated for 85 years as a hardware store and plumbing service. The Shoenrocks purchased the plumbing portion of the business and re-named it Chester Mechanical, while the hardware store was liquidated.

Chester Mechanical is a full-service plumbing, heating and air conditioning contractor focusing on new construction, small commercial projects, winterizing lake cabins and complete 24-hour service calls.

Chris has over 17 years of experience in the plumbing industry. He worked for ten years as a plumber with a company in Sioux Falls, SD before working at a plumbing wholesale company as a salesman. He holds his master plumbing license, which is the highest certification available.

The Shoenrocks continued providing service out of the back of the hardware store in Chester after the purchase, but as the company grew over the past five years, they began looking for alternative, larger locations.

HELP Fund helps both businesses transition

“When Chester Mechanical approached us about purchasing our building in Colman, I told them to reach out to Casey at Heartland about financing,” said Gulbranson.

Heartland assisted both businesses transition to their new locations with financing from the HELP Fund.

Heartland offers low-interest loans to businesses in customer communities through USDA’s intermediary re-lending program, through the establishment of a revolving loan fund. HELP Fund applications are evaluated for their economic development impact and job creation potential.

“These two businesses are prime examples of the importance of small, family-owned businesses in rural communities,” said Heartland Director of Economic Development and Governmental Affairs Casey Crabtree. “Both businesses are filling a need not only in their community but in the surrounding area and are growing like crazy in the process.”

While the success stories of these two businesses are certainly intertwined, they are also in the business of supporting each other. Chester Mechanical performed work on the CBC’s new facility, including installing the in-floor heating system.

CEO’s Report: Partnering for progress in customer communities

Listening to Don Macke speak at our Summer Conference about creating economic opportunities got me energized about development in our customer communities. He reminded me how important partnerships are in community development and I wanted to take this opportunity to re-educate you on the Heartland Economic Development loan (HELP) Fund.

Heartland has long partnered with United States Department of Agriculture Rural Development to offer low-interest financing to our customers, their economic development corporations and businesses within their communities. The HELP Fund has assisted with many projects that have provided great benefit to our customers.

Our loan program has helped finance electrical system upgrades to accommodate business expansion, equipment and machinery purchases, as well as construction, purchase and expansion of businesses. The HELP Fund has aided in the creation and retention of quality jobs, helping to not only bring people into rural communities but keep existing residents from looking elsewhere.

According to one of our loan recipients, without our program, they would have had to consider closing the doors. Our low interest rate made it feasible for them to construct a new building and they continue to operate a thriving business today in a small, rural Heartland community.

Heartland obtains funding for HELP loans through USDA’s Intermediary Relending Program, which provides 1% loans to local intermediaries, such as Heartland, to establish a revolving loan fund. Heartland typically provides 25% of the loan funds to the recipient with the remaining 75% coming from the IRP fund.

This program is a win-win for Heartland and our customers. USDA Rural Development is committed to helping improve the economy and quality of life in rural America, much like Heartland. The majority of our customers are smaller, rural towns and our loan fund helps provide opportunities to expand the local economy, which benefits us all.

Heartland typically partners with a bank when financing projects to not only share risk, but to better utilize the expertise and resources they offer. For each loan Heartland issues, we require some form of collateral in case of default and we have a proven track record of financing successful ventures. We charge a lower than average interest rate, yet bring in enough interest income to sustain the program.

More than once, we’ve heard from loan recipients that they couldn’t have done it without us. We’ve heard the same from banks. We are a true partner with this program, helping to fill a funding gap that neither the bank or loan recipient can provide. It gives us great pride to come into our customer communities and see a business flourishing because of the extra help we were able to provide. The HELP Loan is just one way we are investing in the success of our customers.

Heartland can also provide financing to customers interested in implementing a load management program. Effective load management systems pay for themselves in savings in a few short years. In addition, it can reduce labor costs and help customers better understand their electricity usage. Heartland will provide direct financing to utilities at a low interest rate to implement a program.

USDA administers a number of other programs beneficial to rural communities and businesses. For example, the Rural Energy for America Program (REAP) has grants and guaranteed loans available to agricultural producers and rural small businesses to make energy efficiency improvements. Grants may be up to 25% of eligible costs using this federal program.

Energy improvements to small businesses include more efficient lighting, coolers or freezers, or heating and cooling systems. Energy efficiency projects may also include enhancing building insulation, doors and windows or other means of reducing energy usage and costs to a business.

You can learn more about USDA’s Rural Development programs by contacting a USDA Rural Development office in your area or visiting www.rd.usda.gov. For more information about a HELP Loan and how it can impact your community, please contact Heartland Director of Economic Development Casey Crabtree. We look forward to partnering with you to move your community forward.

USDA is an equal opportunity provider, employer and lender. See full non-discrimination statement for further information.

Madison Regional Health opens, obtains funding from Heartland

MRHS 3At a time when many health care facilities in rural Midwest communities are renovating or expanding in order to keep up with the latest technology and improve patient services, one organization opted for a  brand new health system built from the ground up. The doors opened in October 2015 to a new $36.8 million facility in Madison, South Dakota. Resulting from the fusion of Madison Community Hospital, Northland Family Practice Clinic and Interlakes Medical Center, Madison Regional Health System is a non-profit, independent critical access hospital and clinic serving residents in Lake County and the surrounding area. Medical services include inpatient and outpatient care, such as obstetrical, surgical, clinical and nutritional, among others. The state-of-the-art facility is a milestone for the community and represents the future of health care in Madison and the entire region.

Tammy Miller 2015
Tammy Miller

“This project builds upon the quality of care the hospital and our associated physician clinics provide by offering the best possible environment for patient care,” said Madison Regional Health CEO Tammy Miller.

Construction on the 110,000 square-foot,  22-bed facility began in 2013 after five years of planning. The new building is modern and efficient, equipped with the latest technology and equipment. It was designed with the patient in mind, featuring natural light and soothing colors as well as more practical improvements such as wireless computers for patient monitoring and private bathrooms in patient rooms. The building offers four OB rooms and a birthing center, accommodating the organization’s recently expanded women’s health care services. It also features updated OR units and a pharmacy, a larger emergency room, more space for outpatient care, and a cafeteria open to the public, among other amenities.

The new facility replaces a hospital built in 1962. The new location is ideal, sitting on a major highway bypass on the south edge of Madison allowing for easy access and room to grow. Dakota State University purchased the old building with plans to renovate and transform it into student housing and support services space.

From left to right: Madison Regional Health CFO Theresa Mallet, CEO Tammy Miller, Heartland CFO Mike Malone and Accountant Sharla Fedeler.
From left to right: Madison Regional Health CFO Theresa Mallet, CEO Tammy Miller, Heartland CFO Mike Malone and Accountant Sharla Fedeler.

Miller and project officials utilized federal and local resources for funding. The U.S. Department of Agriculture (USDA) Rural Development awarded two loans totaling over $30 million, including a $20.5 million loan through the Community Facilities Direct Loan Program and a $10 million Rural Development Guarantee with AgStar Financial Services.

“Madison Regional Health continues a tradition of health care that has been serving this area for over a century,” said Heartland CEO Russell Olson. “We are proud to be involved in this critical project. The new facility offers expanded options and services, ensuring high-quality care for the region for years to come.”

Heartland issued Madison Regional Health a $1.3 million loan at 0% interest for ten years to help with the purchase of patient telemetry equipment, radiology equipment and furniture. Heartland acquired funds from the USDA Rural Economic Development Loan and Grant (REDLG) program, which provides funding to rural projects through local utilities. USDA provides zero interest loans to local utilities which they, in turn, pass through to local businesses for projects that will create and retain employment in local areas. REDLG awarded Heartland a $1 million loan and $300,000 grant for the project.

The Madison Regional Health System currently employs 225 people and continues to lease space to offer Sanford dialysis and Avera medical supply services. Meyer Orthodontics of Brookings, SD also has office space in the new facility.

 

*Public Power is Good for Business is a quarterly section highlighting successful businesses located in our customer communities. Public power communities help foster prosperity and growth by offering reliable electric service at low rates.

 

USDA is an equal opportunity provider, employer and lender. See full non-discrimination statement for further information.

2015 Recap: Evolving to meet customer needs

Over the past several years, one might say the buzz word surrounding Heartland has been transition. From operations to leadership to customer programs–change has been a reoccurring theme. While 2015 was no exception, the transitions within Heartland echo a national and global energy landscape in flux due to increasing state and federal regulations, threats to security and rapidly changing market and usage trends. However, Heartland found over the past year that change comes with opportunity. As challenges present themselves, Heartland continues to grow, adapt and evolve in order to meet the needs of our customers and uphold our promise of exceptional customer service and reliable power supply.

SPP Integration

After years of preparation, functional control of the Integrated System (IS) was turned over to the Southwest Power Pool (SPP) on October 1. Joining a regional transmission organization proved to be the best possible scenario for the IS, ensuring efficient and reliable delivery of power by removing transmission barriers between buyers and sellers. SPP was found to be the most customer-friendly, least-cost option for IS owners Heartland, Western Area Power Administration’s Upper Great Plains Region and Basin Electric Power Cooperative.

The move was historic for Heartland, altering operations with a new and expanding workload. The most significant changes since beginning operation within SPP are how we operate our generation facilities and handle coordination with WAPA. Heartland also acquired additional duties on behalf of  customers who receive WAPA allocations within both the SPP and Midcontinent Independent System Operator (MISO) markets. Although we are not required to physically perform scheduling for WAPA, we are responsible for creating forecasts and producing load schedules to be used by WAPA for their daily scheduling.

In order to succeed in today’s rapidly evolving industry, flexible planning and dynamic response to demands will be key. The SPP market will provide greater flexibility for buying and selling power as well as increase price transparency and efficiency.

Cybersecurity

Buzz Hillestad, principal consultant and managing partner at Helix Security, discusses the importance of cybersecurity at Heartland's Summer Conference in July.
Buzz Hillestad, principal consultant and managing partner at Helix Security, discusses the importance of cybersecurity at Heartland’s Summer Conference in July.

The electric grid has served America well for more than 100 years, keeping our homes heated, our rooms lit and our computers running. It is a complex network of power plants, substations, transformers, wires, sensors and poles that carry electricity across miles of transmission lines to be distributed to homes, schools and offices. Information changes hands many times throughout the process of delivering electricity, and the smallest margin of error along the way provides an opportunity for a cyber attack.

Speaking at Heartland’s recent Winter Conference, WAPA CEO Mark Gabriel revealed that WAPA’s system has experienced hundreds of thousands of attacks annually from across the globe, including from within the United States. While the electric power sector and government partners continue to take steps to manage risks, utilities of all sizes must also be held accountable. Because everything is interconnected, the grid is only as strong as its weakest link.

With this in mind, Heartland partnered with Helix Security in 2015 to launch a new program to help customers protect their valuable data. Helix provides cybersecurity services in five phases, starting with the fundamentals and building towards a fully functioning security management package. Data protection such as this is vital for any utility, and with Heartland sharing in the cost, the program is very affordable and potentially one of the most important services we provide our customers.

Growing Customer Base

Garden City MainHeartland continues to pursue new opportunities to expand our customer base and strengthen our company. In 2015 we announced the addition of Auburn, Iowa, a community of approximately 320 people located in West Central Iowa. Situated within the Midcontinent Independent System Operator (MISO), Auburn has a peak demand of 600 kilowatts. Our contract with the city is for ten years, during which time Heartland will supply all of Auburn’s wholesale power supply needs beyond their federal WAPA allocation as well as act as the scheduling agent for that allocation.

Heartland began supplying power and electricity to Garden City, Kansas January 1. The Garden City commission approved a power supply contract with Heartland in June, agreeing to a supply of 15 megawatts for five years from Heartland resource Whelan Energy Center Unit 2 with the option to extend the contract for another five year term.

Situated within the SPP, Garden City’s electric department provides service to over 11,000 electric meters, maintains nine electric substations, 245 miles of overhead power line and 40 miles of underground power line throughout the city. This is Heartland’s first customer in Kansas, and Garden City’s proximity to WEC 2 as well as its location within SPP make it a perfect fit.

Customer Service and Advocacy

In 2015 we remained as dedicated as ever to our customers by finding new opportunities to provide assistance, additional funding, recognition and more.

  • Enhanced customer service programs: Heartland boosted both our energy efficiency and economic development programs with the addition of new opportunities for customers, including new energy efficiency rebates for lifetime warranty electric water heaters, residential LED light bulbs and commercial refrigeration, as well as new assistance programs for communities concerning Certified Ready Sites and spec buildings.
  • Riley Bullington, left, worked with Director of Economic Development Ryan Brown, right, on the customer research project in 2015.
    Riley Bullington, left, worked with Director of Economic Development Ryan Brown, right, on the customer economic development research project in 2015.

    Economic development research: Riley Bullington, a Dakota State University college student, spent several months interning at Heartland completing a research project aimed at helping our customers with business retention and recruitment ventures. Bullington collected demographic information and key economic development data for each of our customer communities to help Heartland determine where and how to invest resources in order to make the most impact. The information will also be used when meeting with prospective businesses, community developers and site selectors.

  • Distinguished Service Award: Heartland established the Distinguished Service Award in conjunction with Public Power Week, an annual opportunity for public power utilities to remind customers and stakeholders of the distinct advantages public power offers. It is designed to showcase public power utility employees in Heartland customer communities who are exceptional in service and who have made outstanding contributions to their municipality, community and other organizations. The inaugural recipient was Gary Horton, city administrator for the city of Akron, Iowa.
  • PURPA assistance: Because small renewable energy projects are growing more popular with homeowners and business owners, Heartland has taken steps to ensure our customer utilities are in compliance with the Public Utility Regulatory Policies Act of 1978 (PURPA). Our assistance included filing a motion with the Federal Energy Regulatory Commission to define both Heartland’s and our customer utilities’ roles regarding PURPA as well as assisting with the creation of policies should a qualifying renewable project arise in one of our customer communities.
  • Clean Power Plan: The Environmental Protection Agency published it’s final, controversial Clean Power Plan rule in the Federal Register October 23. That same day, a group of more than 20 states asked a federal court to strike it down, arguing the rule is “illegal and will have devastating impacts upon the states and their citizens.” Among the states challenging the rule were South Dakota, Nebraska, Kansas and Wyoming.

Intern tackles economic development research project

A local college student has joined Heartland’s team to help tackle an economic development research project that will benefit our customers in business retention and recruitment ventures. Riley Bullington, a junior at Dakota State University in Madison, SD, began an internship in February researching demographics and key economic development data for each of Heartland’s customer communities. According to Director of Economic Development Ryan Brown, the information will help Heartland determine where and how to invest resources in order to make the greatest impact as well as be used when meeting with existing and prospective businesses.

Riley Bullington, left, will primarily work with Heartland Director of Economic Development Ryan Brown during his internship.
Riley Bullington, left, will primarily work with Heartland Director of Economic Development Ryan Brown during his internship.

“In total, there are a few dozen factors he will be researching for each customer community,” said Brown. “This data is frequently sought after by site selectors and community developers, and his research will allow us to provide it in a timely and in-depth manner.”

Among the data Bullington will be collecting is local cost of living index, unemployment rates, average wages, available workforce, transportation data, applicable taxes and more. Brown expects the project to be wrapped up by the end of April.

“After meeting with our customers over the past year, it became evident each community could benefit from a defined marketing package,” said Brown. “This research project is a first step in that direction. It aligns and supports our existing economic development programs, and we can use it as a springboard for future economic development services.”

Bullington is originally from Brookings, SD. In his free time, he enjoys hunting, fishing and sports, and previously played baseball his freshman and sophomore years for DSU. He is on track to graduate this fall with bachelor’s degrees in business management and business marketing and a minor in agriculture business. Bullington’s future after college is currently unknown and he is exploring all options, including joining his father in retail sales.