Utilities clash over service to major Menards facility planned near Bismarck

BISMARCK – Plans remain on track to build a major manufacturing and distribution center near Bismarck to serve Menards stores in the region, despite a protest over who should supply electricity to the site, an economic development official said this week.

Midwest Manufacturing, a division of Menard Inc., plans to invest more than $22 million into the site southeast of McKenzie, an unincorporated community about 15 miles east of Bismarck.

The 225,000-square-foot complex will contain seven manufacturing plants producing concrete blocks and pavers, wooden roof and floor trusses, treated lumber and other products, as well as a rail dock for distribution, according to information the company has provided to Burleigh County and the North Dakota Public Service Commission.

Products made at the site and shipped there by truck and train will be distributed to Menards home-improvement retail stores.

Menard Inc. has asked Montana-Dakota Utilities Co. to extend electric service to the site from a substation north of McKenzie. But Capital Electric Cooperative, which also serves customers in that area, is protesting MDU’s application to the PSC for permission to extend service.

“The reason why both of these companies want this customer is it’s a pretty significant load,” Public Service Commissioner Julie Fedorchak said.

The PSC held a formal hearing on the matter earlier this month and is scheduled to discuss it during a work session May 30. A final decision could come at the PSC’s regular meeting June 11.

Brian Ritter, executive director of the Bismarck-Mandan Development Association, said he’s received no indication that the electric service issue is holding up construction. Earthwork began at the site last fall but was cut short by the early onset of winter, and deep frost has been an issue this spring, he said.

Menard Inc. spokesman Jeff Abbott said via email Wednesday that the facility is expected to begin operations early next year.

It will employ 120 workers, with the potential to grow to 240 to 250 workers in the future, he said.

Ritter said the development association is excited about the prospect of adding more manufacturing jobs to an already diverse economy, especially as oil and gas development in the Bakken receives so much attention.

“Anytime you add manufacturing in a community like ours where we traditionally have not had a lot of manufacturing, that’s a positive thing. So regardless of the size, this is an important project for Bismarck-Mandan and the surrounding area,” he said.

North Dakota has the nation’s lowest unemployment rate at 2.6 percent, and Menards retail stores have struggled to stay fully staffed in western North Dakota, to the extent that the company has flown employees to its Minot and Dickinson stores from company headquarters in Eau Claire, Wis. Abbott said the company continues to fly team members to and from Dickinson.

Ritter is confident the company will find the employees it needs for the manufacturing and distribution center.

“We’ve got tremendous resources here with Job Service North Dakota and our ability to help them find those employees, and plus they already have a Menards retail outlet here, so they’ve got some perspective on what the labor market is like here already,” he said.

Steve Manor, general manager for Menard’s distribution center maintenance departments, testified during the PSC hearing on May 2 that once the facility is completed, it  will likely stimulate other development in the area to serve the needs of its employees.

“It’s not a short-term project,” he said. “We’ll be supplying jobs for many, many, many years to come and then this site will just continue to grow.”

Electric service protest.

Manor conservatively estimated the facility will consume about 7 million kilowatt-hours of electricity annually – enough to power about 535 homes for a year, based on average household consumption in North Dakota.

He testified that the company prefers MDU for electric service because it will provide a greater annual savings, it’s a regulated utility and the company has been happy with MDU’s service at its Menards store in Bismarck.

The extension of MDU’s underground service line would cross under a Capital Electric overhead line currently feeding a rural residence. Capital Electric also has an existing transmission line right along the site, raising the issue of whether MDU’s line would be duplicative infrastructure, Fedorchak said.

Fedorchak said most disputes over electric service territory are settled by the parties reaching a service area agreement, and the PSC hears less than one such case per year on average. Sixteen agreements have been approved since 2007, she said.

“They know what their infrastructure is, they know where their investments are, and if they can agree on what makes the best sense, then that serves everyone,” she said.