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Lending a Hand

The Unexpected Role of a Power Company in Economic Development

Greater Fergus Falls Steve Schoeneck Otter Tail Power Main Image Office Headshot
Steve Schoeneck, vice president of customer service and retail operations for Otter Tail Power Company, has seen economic development from all sides. For decades, Otter Tail Power has committed to investing in the communities the company serves.

In early 2022, 30,000 computers stacked two stories high in a nondescript row of buildings near Jamestown, ND fired to life for the first time. Drawing 100 megawatts of power, the datacenter, operated by Applied Digital, demands more energy than the neighboring city. And meeting that demand is no small feat. North Dakota Governor Doug Burgum, who was present for the grand opening in May, called the Applied facility a "success story" for North Dakota as that state works to attract high-tech business.


What's less apparent behind the headlines, however, is the decades of work spent building a reliable electrical infrastructure capable of powering major operations like the Applied Digital facility and the months of planning and negotiations that preceded throwing the switch. More than happenstance, it's the concerted efforts of utility experts and economic development specialists helping explore every option to bring big plans to reality.


It's a business Otter Tail Power Company has been in for decades.


Econ Dev 101

Prior to his 20 years with Otter Tail Power, Steve Schoeneck, the company's vice president of customer service and retail operations, spent almost a decade in economic development. At the time, he says economic developers were primarily focused on creating jobs. Today, however, the work is often more nuanced, with considerations for housing, childcare, and workforce training – though new jobs remain a top priority.


According to Schoeneck, there are three pillars of successful economic development:


1) Recruiting – Finding and attracting new businesses.


2) Business Retention and Expansion – Providing support for existing businesses to succeed and grow.


3) Developing infrastructure and amenities to support existing businesses and residents while providing for future growth and attracting new talent.


"If you leave any of that off, at some point it catches up with you and you have a city that is in decline," Schoeneck says. "To leave it to luck isn't a sound strategy. The cities that grow have somebody—or multiple people—helping push economic development."


In communities like Fergus Falls, a portion of that work is handled by entities like Greater Fergus Falls in conjunction with public organizations and non-profits. But Otter Tail Power's service area covers three states and more than 130,000 customers. The average Otter Tail community is home to fewer than 500 residents.


"Greater Fergus Falls is a blessing," Schoeneck says. "The organization has the ability to hire somebody and help create economic development. Most of these towns don't have that."


Schoeneck says that nationally rural growth is limited or in decline. With no urban customers in Otter Tail Power's network, the company's past leaders knew they would have to try something new.


Good Things Come Around

Applied Digital Governor Doug Burgum Grand Opening Otter Tail Power Feature Inset
North Dakota Governor Doug Burgum (pictured) called the completion of Applied's Jamestown facility "a success story" for North Dakota. Otter Tail Power's work in powering the facility was integral to securing the project. Photo Credit: Applied Digital

As a purely rural utility, Otter Tail Power recognized decades ago that the company's growth was bound to the success of its customers and communities. In the 1980s, Schoeneck says that while most utilities were focused on generating reliable electricity—"providing electrons," as he puts it—economic development efforts often received a lesser focus. Customers and companies alike took this steady flow of electrons for granted.


"A lot of countries aren't like that," Schoeneck acknowledges.


Electric reliability is still paramount, but as technology evolved and business became an increasingly global affair, the old way of doing things had to adapt. Otter Tail Power worked for a time through economic development consultants before ultimately creating an internal position – which remains to this day.


Otter Tail Power's three biggest cities in order are Jamestown (population 15,750), Bemidji (population 15,279), and Fergus Falls (population 14,029). The remaining 419 communities are much smaller. Schoeneck says towns of this size can live or die by the opportunities and support they receive. It's why Otter Tail Power supports an ongoing economic development position. If the company can invest in helping these communities grow, the incoming manufacturers, retail stores, and residents will become Otter Tail Power's customers.


Stories like Applied Digital, with which Schoeneck says the company worked extensively for months—even creating a new rate structure for large load customers—are becoming more common. Representatives of Otter Tail Power attend trade shows, site selection meetings, and business forums looking for businesses that might be a good fit for available energy generation on the Otter Tail Power network. From there, the process can take months or years – researching, analyzing, and negotiating.


And, naturally, not every prospective business becomes a reality. Still, Schoeneck believes the process has overall been beneficial and he teases that there will be more announcements in the years ahead.


More Than Words

They say that adversity is the real test of character, and Otter Tail's commitment to its customers was put to the test in 2022.


The same month the Applied Digital datacenter came fully online in Jamestown, a massive storm system rolled across the tri-state region. One of the hardest-hit communities was Castlewood, SD – population 690. A devastating tornado ravaged the city and its school. Homes and buildings were destroyed, though no lives were lost. When the dust cleared, help—including linemen from around the region representing Otter Tail Power—rolled in to provide aid.


Despite considerable losses to their own system extending well into Minnesota, the company provided Castlewood with $25,000 to help aid recovery. Otter Tail was later recognized with the Edison Electric Institute's prestigious Emergency Recovery Award for their response to the disaster.


"They're truly unbelievable if you ask me," remarked Castlewood mayor Brian Ries. "When you think about what happened, you think about all the what-ifs, and you realize we're okay. We're going to be okay."


To Schoeneck and Otter Tail Power, however, doing the right thing—whether through the company's ongoing economic development work or recovery efforts as in Castlewood and Morris—is a worthwhile investment in the future that benefits everyone.


"Where these communities go, we go. We want to help our existing customers to grow and be successful," Schoeneck says. "We're very tied to the development in all these cities."


- R.C. Drews for Greater Fergus Falls


Do you have the idea for Minnesota's next big business adventure? Click here to learn more about Greater Fergus Falls and our commitment to furthering economic development and growth in the Fergus Falls area.

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