July - 2013 - Alaska Business Monthly by Alaska Business

SPECIAL SECTIONS: TELECOM & TECHNOLOGY ■ ENERGY & POWER ■ MID-YEAR ECONOMIC OUTLOOK

July 2013

$3.95

Tops Off Summer Projects booming across the state

Page 66

July 2013 TA BLE OF CONTENTS DEPARTMENTS From the Editor. . . . . . . . . . . . . . . . . . . . . . . . . 7 Inside Alaska Business . . . . . . . . . . . . . . . . . 8 Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59 Right Moves . . . . . . . . . . . . . . . . . . . . . . . . . . .60 Alaska This Month . . . . . . . . . . . . . . . . . . 122 Events Calendar . . . . . . . . . . . . . . . . . . . . . 125 Market Squares . . . . . . . . . . . . . . . . . . . . . 126 Alaska Trends. . . . . . . . . . . . . . . . . . . . . . . . 127 Ad Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

ABOUT THE COVER Construction is known as Alaska’s second season and it is in full swing now. In the cover photo, Ironworker Lance Walton of Swanson Steel bolts in the last steel beam at the top of the UAA Seawolf Sports Arena at the topping off ceremony earlier this summer. Cover photo © 2013 Ken Graham Photography.com

ARTICLES

TRANSPORTATION

78 Photo courtesy of Vitus Marine

VIEW FROM THE TOP

The Vitus Marine tug Jackie M.

12 | Chris Howell, CEO Northwest Data Solutions Compiled by Mari Gallion

ALASKA NATIVE CORPORATIONS

18 | Diesel Dilemma Remote fuel deliveries come at a price By Zaz Hollander

FINANCIAL

34 | When Employees Acquire the Company ESOPs offer an attractive alternative in Alaska By Tracy Barbour

LEGAL SPEAK

38 | Going Paperless? Great—but don’t shred your document retention policy By Renea I. Saade

HEALTH & MEDICINE © The Kuskokwim Corporation

Lower Kalskag’s rusty water is not potable.

14 | Water and Wastewater Woes Thousands of Rural Alaskans still hauling potable water and using honey buckets By Rindi White 4

Alaska Business Monthly | July 2013

62 | Respect Your Elders Home health care and assisted living By Susan Sommer

CONSTRUCTION

66 | Construction Tops Off Alaska Projects booming across the state Compiled by Susan Harrington, Managing Editor

MINING

78 | Red Dog Mine International player, local jobs driver By Zaz Hollander

Caterpillar 777 with a load of ore from the Aqqaluk deposit.

OIL & GAS

100 | North Slope Summer Activity Construction and maintenance keep contractors busy By Mike Bradner

106 | Moving Oil from OCS to TAPS Arctic oil could spawn massive new pipeline By Zaz Hollander

OIL, GAS & FISCAL POLICY 114 | Missing the Point By Bradford G. Keithley

VISITOR INDUSTRY

118 | The Real Southeast Wrangell’s pioneering tourism entrepreneurs By Paula Dobbyn www.akbizmag.com

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July 2013 TA BLE OF CONTENTS special section

special section

Telecom & Technology

Economy

40 | Zensor Sensors Opening the door to research commercialization at UAA By Vanessa Orr

47 | ‘It Can Wait’ Wireless Leaders Unite To Curb Texting While Driving By AT&T 48 | Google Glass Where technology is going By Tyler Arnold

Photo courtesy of Verizon

44 | Building Out Alaska’s Wireless Network By Nicole A. Bonham Colby

50 | Verizon in Alaska Rolling out a scratch-built network By Will Swagel

A Verizon tower in Juneau.

52 | Alaska Business Monthly’s 2013 Telecom & Technology Directory

special section Energy & Power

82 | Rural Alaska’s Alternative Power Solutions Hybridizing, enhancing, supplanting diesel and wood By Julie Stricker 88 | Wärtsilä Update MEA’s Eklutna Generation Station takes shape By Margaret Sharpe

Photo courtesy of MWH Global

92 | ENSTAR Expands Operations South Homer and Kachemak City prepare for natural gas By Vanessa Orr

Stetson Creek ﬁeld work.

Alaska Business Monthly | July 2013

96 | Cooper Lake Hydroelectric Upgrade Restoring stream habitat, improving aquatic conditions By Rindi White

24 | Mid-Year Economic Outlook July 2013 Compiled by Mari Gallion ■ Alaska By Sean Parnell ■ Architecture and Engineering By Colin Maynard ■ Arctic Policy By Nils Andreassen ■ Congressional Delegation By Don Young, Mark Begich & Lisa Murkowski ■ Construction: Commercial By John MacKinnon ■ Construction: Military and Civil Works By Christopher D. Lestochi ■ Economic Development By Bill Popp ■ Education By Ashok Roy ■ Economy By Mouchine Guettabi ■ Employment By Caroline Schultz ■ Energy By Joe Griffith & Chris Rose ■ Financial Services By Joe Everhart ■ Fisheries By Marcus L. Hartley ■ International Trade By Greg Wolf ■ Mining By Curtis J. Freeman ■ Alaska Native Corporations By David Gillespie, Andrew Guy, Jason Metrokin, Gabriel Kompkoff & Aaron Schutt ■ Oil & Gas By Kara Moriarty ■ Tourism By Julie Saupe & Sarah Leonard ■ Transportation By Aves Thompson www.akbizmag.com

FROM THE EDITOR Follow us on and

Volume 29, Number 7 Published by Alaska Business Publishing Co. Anchorage, Alaska Vern C. McCorkle, Publisher 1991~2009

EDITORIAL STAFF

Managing Editor Associate Editor Editorial Assistant Art Director Art Production Photo Consultant Photo Contributor

Susan Harrington Mari Gallion Tasha Anderson David Geiger Linda Shogren Chris Arend Judy Patrick

BUSINESS STAFF

President VP Sales & Mktg. Senior Account Mgr. Account Mgr. Survey Administrator Accountant & Circulation

Jim Martin Charles Bell Anne Campbell Bill Morris Tasha Anderson Mary Schreckenghost

501 W. Northern Lights Boulevard, Suite 100 Anchorage, Alaska 99503-2577 (907) 276-4373 Outside Anchorage: 1-800-770-4373 Fax: (907) 279-2900 www.akbizmag.com Editorial email: editor@akbizmag.com Advertising email: materials@akbizmag.com Pacific Northwest Advertising Sales 1-800-770-4373 ALASKA BUSINESS PUBLISHING CO., INC. ALASKA BUSINESS MONTHLY (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co., Inc., 501 W. Northern Lights Boulevard, Suite 100, Anchorage, Alaska 99503-2577; Telephone: (907) 276-4373; Fax: (907) 279-2900, ©2013, Alaska Business Publishing Co. All rights reserved. Subscription Rates: $39.95 a year. Single issues of the Power List are $15 each. Single issues of Alaska Business Monthly are $3.95 each; $4.95 for October, and back issues are $5 each. Send subscription orders and address changes to the Circulation Department, Alaska Business Monthly, PO Box 241288, Anchorage, AK 99524. Please supply both old and new addresses and allow six weeks for change, or update online at www.akbizmag.com. Manuscripts: Send query letter to the Editor. Alaska Business Monthly is not responsible for unsolicited materials. Photocopies: Where necessary, permission is granted by the copyright owner for libraries and others registered with Copyright Clearance Center to photocopy any article herein for $1.35 per copy. Send payments to CCC, 27 Congress Street, Salem, MA 01970. Copying done for other than personal or internal reference use without the expressed permission of Alaska Business Publishing Co., Inc. is prohibited. Address requests for specific permission to Managing Editor, Alaska Business Publishing. Online: Alaska Business Monthly is available at www.akbizmag.com/archives, www. thefreelibrary.com/Alaska+Business+Monthly-p2643 and from Thomson Gale. Microfi lm: Alaska Business Monthly is available on microfi lm from University Microfi lms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.

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Alaska Economy Looking Up “

e have built a solid foundation of opportunity here in Alaska,” Governor Sean Parnell wrote for Alaska Business Monthly’s annual Mid-Year Economic Outlook (Page 25). I can’t help but agree that the opportunity is here and it’s time to capitalize on it. There are kernels of wisdom in all the comments proffered for this special section and I’d like to share a few. Engineer of the Year Colin Maynard, a Principal with BBFM Engineers Inc., shared that “the engineering industry outlook is for a pretty flat year.” That may change, though. Institute of the North Executive Director Nils Andreason reminds us that “there is a significant amount of work being done to assess Alaska’s strategic role as an Arctic state; infrastructure needs as they relate to safe, secure, and reliable operations; and approach to issues such as research, resource management, and response capacity.” AGC of Alaska Executive Director John MacKinnon tells us that “in spite of reductions in defense spending, the building construction side of the market continues strong, though still below capacity.” We always have room to grow the economy. AEDC President and CEO Bill Popp wrote, “Business and professional services, health care, oil and gas, and construction are the industry leaders that are pushing the Anchorage economy to new heights.” Those thoughts are echoed by Visit Anchorage President and CEO Julie Saupe as she explores in length how visitor industry efforts will “quite likely make 2013 the new high mark for Alaska tourism.” Not every sector will see increases, though. Vice President and Senior Economist Marcus L. Hartley with the research and analysis firm Northern Economics gives a warning that “the increasing value of the dollar relative to other currencies, particularly the Japanese Yen, coupled with the recession in Europe, could mean lower revenues for Alaska’s seafood exporters.” This will have an impact on our international trade bottom line. World Trade Center Alaska Executive Director Greg Wolf forecasts “when 2013 results are tallied, Alaskan exports will be in the $4.3 billion to $4.5 billion range.” Avalon Development Corp. President Curtis J. Freeman began his commentary with: “The mineral industry this year has a split personality.” You’ll have to read the Mid-Year Economic Outlook for the rest of his wisdom. Alaska Oil and Gas Association Executive Director Kara Moriarty explains how “the oil and gas industry continues to have mega opportunities but continually faces challenges.” The voice of Alaska’s transportation industry continues that train of thought. Alaska Trucking Association Executive Director Aves Thompson wrote that “the oil tax reform issue still hangs over our heads, so I think we remain cautiously optimistic.” “We plan to continue our strategic growth,” asserts Aleut Corporation CEO David Gillespie. “These businesses are in position to strengthen Alaska’s economy,” states Calista Corporation President and CEO Andrew Guy. “I am optimistic about the state of Alaska’s economy.” comments Doyon, Limited President and CEO Aaron Schutt. Alaska Native regional corporation leaders express growth, strength, and optimism for Alaska. I like that. I like the July issue, too. The team at Alaska Business Monthly has produced another really great magazine. Enjoy! —Susan Harrington, Managing Editor July 2013 | Alaska Business Monthly

INSIDE ALASKA BUSINESS

Alaska Regional Hospital

laska Regional Hospital won three Telly Awards for video and television production, recognizing outstanding local, regional, cable TV commercials and programs, video and film productions, online commercials, and video and films. The hospital added to its list of previously won Telly awards a silver and bronze for each of two thirty-second TV spots in its “Dem Bones” campaign promoting the hospital’s No.1-ranked orthopedics department. It also won a bronze award for best videography and cinematography used in those TV spots. Established in 1979, the Tellys are known in the industry as the top awards honoring TV, video, and film. For this year’s 34th Annual Telly Awards, about 11,000 entries were submitted from all fifty states and several countries. Alaska Regional won in the category open to hospitals with more than two-hundred beds. The campaign was produced for the hospital by Northwest Strategies, an Anchorage full-service marketing, advertising, and public relations agency, with twenty-five employees and a diverse portfolio of clients.

Crowley

rowley’s Alaska petroleum distribution subsidiary, CPD Alaska, LLC., was recently honored with the “Alaska Safe Truck Fleet of the Year” and the “Most Improved Fleet” awards during customer ConocoPhillips’ and the Alaska Trucking Association’s annual Safety Awards Banquet, held in Anchorage. To be considered for the “Safe Truck Fleet of the Year” award, the Crowley team was evaluated and ranked on sev-

Compiled by Mari Gallion

eral 2012 statistics, including the total number of miles driven, as well as the company’s Federal Motor Carrier Safety Administration CSA fleet scores, accident frequency and overall OSHA rate. Last year, the 125 vehicles in the Crowley fleet drove more than 1.8 million accident free miles, delivering in excess of 100 million gallons of petroleum products to 280 communities across the state of Alaska.

Rockford Corporation

klutna Generation Station Tank Project —a project valued at $2.1 million—was recently awarded to Rockford Corporation by Matanuska Electric Corporation. This project consists of the design and construction of two 500,000 gallon fuel oil storage tanks, and one 365,000 gallon fire water tank at MEA’s new power generation station located in Eklutna, Alaska. The project is to begin late August 2013, and will be completed by May 2014. The project will provide local employment opportunities for Ukpeaġvik Iñupiat Corporation shareholders. Rockford Corporation is one of five construction companies of the holding company UIC Construction Services which includes Kautaq Construction, LLC; SIKU Construction; UIC Construction, LLC; and UIC First Nations Construction Services, LLC. Ukpeaġvik Iñupiat Corporation is the Alaska Native village corporation of Barrow, Alaska.

Children’s Miracle Network

en-year-old Karen Nickoli has been chosen as the 2013 Alaska Champion in the Children’s Miracle Network Hospitals Champions program.

Karen spent more than a year at The Children’s Hospital at Providence and finally returned home in March. Nickoli was diagnosed with acute lymphoblastic leukemia in 2011. Far from her Yup’ik Eskimo home in Russian Mission, Nickoli stayed at Providence Hickel House, a hospitality home in Anchorage funded in part by CMN Hospitals. In December 2012, Nickoli was in remission and returned to her small village. Every year, the Children’s Miracle Network Hospitals Champions program identifies a child with a remarkable medical story from each state. These champions serve as ambassadors for the 17 million children treated at Children’s Miracle Network Hospitals annually. The champions and their families will travel to Orlando, Florida, and Washington, D.C., in October to highlight the vital work taking place at children’s hospitals around the country.

Within the Wild Adventure Company

ithin the Wild Adventure Company’s executive pastry chef Mandy Dixon has officially opened the doors to her family’s new seaside café, La Baleine, in Homer. The café serves breakfast and lunch daily through the summer from its location on the Homer Spit. Within the Wild Adventure Company, run by the entire Dixon family, owns the home goods boutique, RusticWild, next door, as well as Tutka Bay Lodge and the Cooking School at Tutka Bay, situated across Kachemak Bay. The family owns an additional wilderness retreat, Winterlake Lodge, northwest of Anchorage.

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Alaska Business Monthly | July 2013

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INSIDE ALASKA BUSINESS Dixon designed a menu of traditional and modern rustic-style Alaska dishes and pastries for the café. The cuisine places a heavy emphasis on locally sourced and grown ingredients from around the Kachemak Bay area. Within the Wild Adventure Company will donate a percentage of the café’s proceeds to Cook Inletkeeper, a community based nonprofit organization with a mission to protect the habitat of Cook Inlet.

Green Winter Farms, LLC

SDA-Rural Development Alaska announced the selection of Green Winter Farms LLC, a small rural Alaska business, to receive a Value-Added Producer Grant. The grants help agricultural producers increase their income by expanding marketing opportunities, creating new products or developing new uses for existing products. Green Winter Farms LLC is a threeyear old rural business that specializes in growing herbs for local markets, primarily basil. This award advances USDA-RD’s goals to develop a bio-based economy and support local and regional food systems by providing other Alaska communities their locally grown products where they can be delivered a fresher product than can be obtained anywhere else.

Huna Totem Corporation

ormerly the Cultural Interpretive Services department of Huna Totem Corporation, Alaska Native Voices will offer a cultural tourism resource and consulting service to other Native peoples, cultural groups, and communities around the world.

Compiled by Mari Gallion

For the past thirteen years, Huna Totem Corporation has shared its people’s culture and history with travelers who have visited the Huna Tlingit ancestral homeland, Glacier Bay National Park and Preserve, and their modern day home in Hoonah. The new service will help other groups or destinations share their culture with visitors. A solid business plan and training model will be developed for each client that balances cultural integrity and visitor expectations. Huna Totem Corporation began its Cultural Heritage Guide program in 2000. Cultural presentations are planned onboard 199 cruise ships in Alaska waters during the 2013 season. Huna Totem Corporation also opened Icy Strait Point, a cruise destination offering cultural and adventure experiences in Hoonah in 2004. More than a million travelers have visited Icy Strait Point, with another 135,000 cruise passengers scheduled to visit in 2013.

A2Research

ASA recognized A2Research, a joint venture with Alutiiq 3SG, as the Small Business Prime Contractor of the Year during an award ceremony in Washington, D.C. This prestigious agency-wide recognition follows two years in which A2Research received the NASA Stennis Space Center Small Business Contractor of the Year Award. A2Research is a Small Business Administration 8(a) joint venture between minority-woman-owned Alcyon Inc. based in Huntsville, Alabama, and Alutiiq 3SG, a wholly-owned subsidiary of Afognak Native Corporation based in Anchorage. A2Research provides gas, materials and environmental laboratory analy-

sis; professional data reduction and analysis; maintenance of measurement standards; and the calibration and repair of instrumentation at NASA’s Stennis Space Center in Mississippi, where rocket engines are tested. A2Research has performed a laboratory services contract at Stennis since 2010.

DOWL HKM

OWL HKM is now ranked 175 on the Engineer News Record’s Top 500 Architectural or Engineering Design Firms’ list—up seventeen spots from 193 from the prior year. DOWL HKM has moved to the top of the list for Alaska-based companies. Engineer News Record ranks companies based on revenue for design services performed. DOWL HKM is headquartered in Anchorage and has twenty offices throughout Alaska, Arizona, Montana, North Dakota, Washington, and Wyoming. DOWL HKM provides civil, transportation, and structural engineering; environmental services; land use and transportation planning; geotechnical engineering; water resources planning and design, materials testing and special inspections; landscape architecture; Geographic Information Systems; real estate services; land survey; and construction management and project administration.

Chugach Electric Association

hugach Electric Association has launched an innovative energy efficiency pilot program designed to inform residential members about their energy use and assist them in taking steps toward reducing energy consumption. The pilot program is funded

Your Project, Our Responsibility. 24/7 Service

Pacific Pile & Marine has a robust fleet of marine equipment including our recent addition of a 600-Ton 4600 Ringer.

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From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services. 620B East Whitney Road I Anchorage, AK 99501 July 2013 | Alaska Business Monthly

INSIDE ALASKA BUSINESS by the Alaska Energy Authority’s “Biggest State to Biggest Saver” grant from the U.S. Department of Energy. The pilot is comprised of two different online tools that have been developed by Opower, a leader in the field of utility consumer engagement. The MyPower tool gives residential members information about their energy consumption through a user-friendly online portal, which they can start using by simply logging into their account through the Chugach website. The second tool gives residential members the ability to share and compare their energy use with friends on Facebook with a Social Energy Application. It allows members to compare energy use to similar homes and among friends, publish conversations about energy to social networks, form teams to achieve collective energy goals, participate in energy-saving challenges, and discover great energy saving tips and insights.

City of Seldovia

he Denali Commission issued an $843,054 grant to the City of Seldovia for improvements to their harbor. The harbor upgrades will improve the safety and operations of the harbor and increase both access and capacity. It is expected that with these improvements the City of Seldovia will experience improved economic and subsistence opportunities. The harbor is essential to the economy and community of Seldovia as the area is not on the road system, making the harbor the primary transportation system for residents and tourists. The harbor is used for commercial, charter, and subsistence fishing as well as for recreational vessels. During storms, the harbor also

Compiled by Mari Gallion

acts as a refuge shelter for vessels. Harbor improvements are expected to allow the healthy economy of Seldovia to continue to grow and flourish. The improvements will allow for new slip owners for small and large vessels both private and commercial and increased tourism access to bed and breakfasts, lodges, restaurants, and shops. With the expanded harbor, the community has also planned the addition of a new value-added fish processing plant and marine repair facility for which there is a high demand from commercial fishing operations in the region. The harbor improvement project for the City of Seldovia is being jointly funded by the Denali Commission grant and $1 million in matching funds from the State of Alaska. The design plans for the harbor improvements were previously completed by the U.S. Army Corps of Engineers with funds from a separate Denali Commission grant. Construction is expected to be completed by the summer of 2014.

Chalkyitsik Clinic

he Chalkyitsik Traditional Council celebrates the completion and opening of their new clinic in the town of Chalkyitsik. The Denali Commission in partnership with the Chalkyitsik Traditional Council, Indian Health Service, and the Alaska Mental Health Trust Authority invested more than $2 million in both design and construction of the newly constructed clinic. The 1,642-square-foot facility, designed and constructed by the Alaska Native Tribal Health Consortium is a much needed and welcome addition to the Community. The state of the art facility will provide the residents of Chalkyitsik

with exam rooms, dentistry offices, sleepover quarters, behavioral health offices, a pharmacy, and a waiting room. During construction, Alaska native Tribal Health Consortium focused on local hire and seven jobs were held by community members throughout the project. The health records will now be electronic, enabling patient files to easily be shared with doctors providing services via telemedicine. The state of the art facility will also allow for a Physician Assistant to visit Chalkyitsik three times a year, more often than with the old facility. Additionally, residents can use a brand new large screen to video conference with healthcare providers. Chalkyitsik is located on the Black River about fifty miles east of Fort Yukon. Access is primarily by air and no roads connect Chalkyitsik with other villages.

Alaska’s Focus Photography

ohn and Cindy Hitchcock, co-owners of the TSS Photography Alaska franchise, announce the re-branding of their photography business to Alaska’s Focus Photography. The new name reflects the change from a TSS Photography franchise to an independently owned Alaskan company and the desire to provide all their customers with the very best in products, services, and innovation. The transition to the new name, including the rebranding of products, changes to packaging and marketing materials, and migrating to a new website and Facebook page, will take place over the next few months. Alaska’s Focus Photography has planned extensive outreach programs to their employees, customers, and vendors to help move forward with their new identity. R

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Alaska Business Monthly | July 2013

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View from the Top

Compiled by Mari Gallion

Chris Howell, CEO NorthWest Data Solutions

riginally from northern Idaho near the Canadian border, Chris Howell grew up in an economically depressed region where logging and farming were the predominant industries. The eldest of six children, he was raised helping out at his family’s dairy. As a teenager, Howell dreamed of coming to the 49th state. His ﬁ rst profession was as a timber faller, an occupation which took him to Idaho, Montana, Washington, and Colorado before personal circumstances opened the door of opportunity for Howell to cut timber in the Last Frontier. Howell moved to the Southeast Alaska logging camps in the late eighties. When his younger brother brought a computer to the logging camp in 1990, Howell says he felt inept, inadequate, and ignorant regarding this new technology—and those were feelings he was not comfortable with. Thus, he decided to “make them go away” by learning all that he could about the computer. HOW TO MOVE ON: The logging industry was a period of the past. I decided to live in Anchorage after I finished my degree. I am not cut out for living in big cities. To me, Anchorage is a big city. However, I love Anchorage because there are plenty of opportunities available and the city is not oppressive. It is spread out. I love Alaska and always will. If people want to work, there is always work—if you are willing to swallow your pride. COMING TOGETHER: I finished a degree in Management Information Systems at the University Alaska Anchorage in 2003. After graduation, University of Alaska Anchorage had visions of starting an entrepreneurship program for graduating students that wanted to begin startups. Many of us graduating seniors became excited about starting an IT business, so six of us joined forces and started NorthWest Data Solutions (NWDS) in July 2003. Our first projects were for Chenega Technology Services Corporation. We later got projects with Alaska USA Federal Credit Union and medical, engineering, transportation, and Prized Product ecommerce companies. FLAGSHIP PRODUCT: SMS Pro is our flagship product. It is aviation safety management system (SMS) software that we sell to airlines and airports around the world. SMS Pro was started by Brendan McCormack and NWDS in 2007. We re12

Alaska Business Monthly | July 2013

leased it to production in January 2008. More than four years passed before we started receiving a return on our investment. My goal for SMS Pro was to provide one job for one developer in Anchorage. It has far exceeded this goal. What I love about SMS Pro is that we continue to bring in money from outside Alaska. My heart beams when income comes from Outside and we are not pulling from the local economy. To me, that provides a very deep sense of gratification and of achievement. SMS Pro is now one of the most popular aviation SMS software products on the market. We are known for customer service and for having a complete system that allows airlines and airports to manage their aviation safety requirements. For the first several years, NWDS’s income came from local business. We now derive 65 percent of our revenues from Outside, including Africa, Middle East, Asia, Canada, and Latin America. INVEST IN LIFE: There have been times in my life when people ask me, “Why are you doing this?” To them, there appears to be no immediate gain. But what I consistently do is prepare myself for new opportunities. Life is not about immediate gratification. And you don’t always have to do things for money. Many times we provide free services to earn goodwill. R www.akbizmag.com

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ALASKA NATIVE CORPORATIONS

Photo courtesy of Anchorage Gateway Rotary

Anchorage Gateway Rotarian Larry Parker tests water in the Upper Kalskag home of Fred and Dunia Holmberg.

Thousands of Rural Alaskans still hauling potable water and using honey buckets By Rindi White

laska ranked dead last in the nation in the year 2000 for the number of homes without access to running water and sewer. Despite a concerted effort to make running water available for every resident of Alaska, that figure is mostly unchanged thirteen years later, and about six thousand homes are still without in-home water service, according to the state. That’s about one family for every three living in Rural Alaska. Got cell phone access? Check. Internet? Check. Multiple television channels? Check. Electricity? Check. Flush toilet? Nope. For some, that means hauling water in five-gallon buckets for cleaning, cooking, and drinking. And without water service, most of those six thousand homes also lack flush toilets, relying on in-home waste containers commonly called honey buckets. The state and federal government, along with the Alaska Native Tribal Health Consortium, have been working to solve

Alaska Business Monthly | July 2013

this issue, but workers with the state’s Village Safe Water program say funding has slipped in the past ten years, and the program is not able to keep up with the need for new water service or repairs to existing water service in the 280 villages scattered across Rural Alaska. “We have less and less money to do more and more capital projects. The gap continues to grow,” says Village Safe Water Facility Programs Manager Bill Griffith. “It’s the only rural utility of any kind that doesn’t have a subsidy.” Yet it’s one of the most important utilities available—numerous studies have shown a lack of running water to be linked with higher rates of skin and respiratory infections.

Most Dire in the Y-K Delta Of those six thousand homes without running water, roughly half are in the Yukon-Kuskokwim region, Griffith says. Vilwww.akbizmag.com

Rural Alaska Water and Sewer Facilities ‘Unserved’ Communities

Photo by Alaska DEC, Division of Water

Water and sewer utilidor in Saint Michael.

lages in the region frequently have wells that produce only brackish water, a mix of sea and fresh water unsuitable for drinking. Soils tend to be unsuitable for sewer lagoons, he says, and creating a lagoon at sea level generally means hauling in gravel, sometimes from far away by barge, to provide the proper drainage needed. “The other thing about the Y-K Delta is, you have a lot of small, very isolated communities,” Griffith says. For the Village Safe Water program, that means a large outlay of capital funding for a project that ultimately won’t make a large dent in the goal of getting running water and sewer to those remaining six thousand homes.

A Small Pilot Project Aims at Making Life Easier That’s where the Anchorage Gateway Rotary and The Kuskokwim Corporation [TKC] project “Bringing Clean Water to Rural Alaska Elders” program comes in. It won’t drill wells or build a community sewer system, but it will get a source of fresh water into the homes of nine elders in Upper Kalskag. Upper Kalskag is a village of about 210 residents on the Kuskokwim River about one hundred miles northeast of Bethel. It’s one of ten villages that make up TKC, says Maver Carey, TKC president and Anchorage Gateway Rotarian. Upper Kalskag City Administrator Dwayne Hoffman says residents of the city have individual wells and sewer service provided by Alaska Rural Utility Collaborative. The sewer service works fine but the wells are hit and miss. Some are so loaded with iron it stains www.akbizmag.com

sinks and toilets and, when poured into a glass, looks like orange Gatorade. Hoffman says it’s difficult to know what’s causing the iron-rich water. His home has a good well with clear water, he says. Down the street, his neighbors have rusty water. Solving the problem is costly, so residents with rusty wells simply pack water for drinking and cooking. Carey suggested the group take the project on after Anchorage Gateway completed a water project in Gambia that was launched by another Anchorage Gateway member who is from Gambia. “I said ‘If we can do a project in Gambia, why can’t we do a project in our own backyard?’” Other groups have attempted to do projects in Rural Alaska, Carey says. Success has been challenging. But she says she has an advantage—she knows all the players and can work with them to make the project succeed. Rotary groups are known for their collective effort to eradicate polio from the world. But Carey says the group also promotes safe water and sewer projects around the world. That’s where the fresh water program comes in, Anchorage Gateway Rotary President Dave Sheffrey says. “For quite some time now we’ve been looking for a project that affects us locally,” Sheffrey says. About two years ago, Carey suggested the Clean Water project. They’ve been working on it steadily since last fall. The group looked into different ways to address water issues in Rural Alaska communities and found re-drilling wells was simply too costly, but it might be possible to put fift y-gallon tanks for fresh water into elders’ homes and have someone fill them frequently.

*Construction is ongoing in these six communities to provide individual homes with running water and sewer service. July 2013 | Alaska Business Monthly

SOURCE: Alaska Department of Environmental Conservation, October 26, 2012

Rural Alaska community is considered “unserved” if less than 55 percent of the yearround occupied homes in the community are served by a piped or closed-haul system. Of Alaska’s 216 rural communities, forty meet the deﬁnition of “unserved.” These are as follows: ■ Akiachak ■ Alatna ■ Allakaket ■ Arctic Village ■ Atmautluak ■ Birch Creek ■ Buckland* ■ Chalkyitsik ■ Chefornak ■ Chitina ■ Circle ■ Crooked Creek ■ Diomede ■ Eagle ■ Eek* ■ Hooper Bay* ■ Kipnuk ■ Kivalina ■ Kongiganak ■ Koyukuk ■ Kwethluk* ■ Lime Village ■ Lower Kalskag* ■ McCarthy ■ Newtok ■ Oscarville ■ Platinum ■ Ruby ■ Shageluk ■ Shishmaref ■ Slana* ■ Stebbins ■ Stevens Village ■ Stony River ■ Takotna ■ Teller ■ Tuluksak ■ Tununak ■ Venetie ■ Wales

Photo by Alaska DEC, Division of Water

Anaktuvuk Pass 500,000 gallon water storage tank.

“It’s going to be a freestanding plastic well; you open up the pipe and pour it into something else. It’s pretty sustainable,” Carey says. The water will come from Upper Kalskag city hall. The city has a good well and some residents already haul water to their homes in plastic five-gallon buckets. “The elders are packing water anyway,” Carey says. “They have to rely on their nieces or nephews and, if they get busy hunting, they might have to wait for a while.” The project will pay for a local installer to fit the tanks in the elders’ homes, she says. Hoffman says a city worker will be able to fill the elders’ tanks once a week. The project will pay for a four-wheeler with a one-hundred-gallon tank mounted on it that the worker can use to deliver the fresh water. The project cost is pegged at $50,000. In May, Carey said all but $14,000 of that had been raised, much of it from other Rotary groups around Anchorage. “We’re trying to get the last money together to get the [water] tanks out on the barges,” she says. The deadline is looming—typically the last barge visits Upper Kalskag in August. Hoffman says there has been talk at the city council of extending the program to others in the community, perhaps for a small delivery fee. The roughly forty residents who now pack water could perhaps purchase a tank and pay for weekly fill-ups. It hasn’t been formally discussed, he says, but it seems like a good project. 16

Alaska Business Monthly | July 2013

“I’m pretty sure people would be wanting to do this; I don’t think the council would say no to having a reliable water source system,” he says. Carey says she believes the Clean Water project will snowball once the pilot project is in place. She’s not sure there is a clean source of water in each village, but she hopes to expand the project in the villages where it makes sense.

Alaska Water and Sewer Challenge Launched Griffith says he wasn’t familiar with the Rotary/TKC Clean Water project, but it seems like it’s a good solution for residents who already have water and sewer. For residents in communities without in-home water and sewer, the state is trying to find a way to bring at least twenty gallons of water per person, per day, into their homes. Recent studies have shown that, without access to plentiful water, people tend to stop washing as frequently and have higher rates of skin infections and respiratory infections. “Lower levels of water services were associated with a higher burden of hospitalizations for pneumonia and influenza, skin infections, and [Lower Respiratory Tract Infections] LRTIs,” states a November 2008 study published in the American Journal of Public Health that focused on Rural Alaska residents. The study states that Alaska Native elders, infants, and children are largely the ones who suffer health issues related to the lack of fresh water.

It’s not news that Rural Alaskans would be healthier with access to clean water and sewer. The 2008 study outlines the history of the issue and states that, in 1954, when the U.S. Public Health Service created the Indian health program, infectious diseases were responsible for 46 percent of the deaths of Alaska Natives. In 1950, fewer than 10 percent of Rural Alaska homes had modern sanitation. In 2006, about 84 percent of Rural Alaska homes were equipped with modern sewer and water service. The incidence of deaths from infectious diseases has fallen dramatically. But the war is not yet won. And the tools for fighting are more and more costly. So the Village Safe Water program launched a research and development project called the Alaska Water and Sewer Challenge aimed at providing individual solutions for those remaining six thousand Alaska residences without running water and flush toilets. “We think there’s a lot of technology that’s being used in other parts of the world that we can bring back to Alaska,” Griffith says. According to a Water and Sewer Challenge brochure, “The project focuses on decentralized water and wastewater treatment, recycling, and water minimization.” Previously the state focused on building central water systems with a central plant that has to be heated, meaning significant overhead. In Southcentral Alaska, users pay to upgrade systems and rates cover the cost of providing service and doing maintenance. That hasn’t been the case in Rural Alaska. “In Rural Alaska, everything ever built is 100 percent grant funded and, to this day, none of the capital costs are locally financed,” Griffith says. Village Safe Water has helped to finance repairs and build new projects. Last year eleven projects were readied for construction. But with less money coming from the federal government, from the Indian Health Service, and from the State of Alaska, the list of projects is growing and each year fewer and fewer can be completed. “The idea of people going back to honey buckets is something people are going to fight as long as they can. But there’s not really an alternative [now] to a centralized system,” Griffith says. www.akbizmag.com

Want to help out? Contact Maver Carey at The Kuskokwim Corporation at 907-243-2944, extension 206 or at mec@kuskokwim.com. Find out more about the Village Safe Water Alaska Water and Sewer Challenge at the project website: dec.alaska.gov/water/ watersewerchallenge/ Akiak, for example, has a forty-yearold system that Griffith describes as hanging on by a thread. Mountain Village’s water and sewer systems are not operational year-round, and Unalakleet was in the news this spring when, just after Iditarod mushers cruised through, the town used the last drop of water in its 1 million gallon storage tank and, with water no longer running through the pipes, had a massive pipe freeze-up. The Water and Sewer Challenge in June launched a worldwide solicitation, seeking multidisciplinary teams to work on the issue. Griffith says six teams will be chosen to put together proposals on how to achieve certain targets—total water use at a set capital cost, for example. The proposals will be evaluated, pilot projects will be funded, and hopefully, he says, in five to six years teams will be out shrinking that figure of six thousand homes down to none. “It’s a little ways down the road, but we’re trying to put things together that haven’t been done,” Griffith says. Why hasn’t this been done years ago? Why are homes in Rural Alaska equipped with numerous other modern conveniences and still lacking water and sewer? “It’s more challenging than electricity [for example],” Griffith says. “Electricity is fairly simple, technologically. You can do it in any kind of soil. Technologically, water treatment is unbelievably complex. When you start looking at all the different things that can be in a water source, it gets very challenging.” But health-wise, it’s probably the most important utility of all. “The health impact of water and sewer can’t be overstated,” Griffith says. R Rindi White is a freelance journalist living in Palmer. www.akbizmag.com

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TRANSPORTATION

Photo courtesy of Vitus Marine

The Vitus Marine tug CAVEC and barge AVEC-208 ofﬂ oad freight and fuel at Koliganek in this photo taken in June 2012. Remote fuel deliveries, which can bring logistical and weather challenges, account for up to half the cost of fuel in rural Alaska.

Diesel Dilemma Remote fuel deliveries come at a price By Zaz Hollander

late September fuel delivery run flirted with disaster last year. A Crowley barge got stuck in the ice off Bethel waiting to make a final push up the Kugkaktlik River to Kipnuk and Chefornak. Severe weather off the Arctic Coast had delayed the barge for three weeks, pushing its schedule dangerously deep into the brief, ice-bracketed shipping season of the far north. The barge remained fast for a day in Bethel.

Alaska Business Monthly | July 2013

Finally, temperatures warmed enough that the vessel broke loose. The crew immediately made for points south—without making those last deliveries to the villages. “During the winter we took it upon ourselves to fly fuel in,” says Bob Cox, vice president for Crowley Petroleum Distribution in Alaska. “We honored our contract price. We absorbed all the added cost of flying it in. It was a little painful but it wasn’t the community’s fault. They ordered fuel on time.”

Crowley’s brief emergency certainly isn’t the only example of the difficulties that can arise shipping fuel to the farflung reaches of Alaska. Remember the winter of 2012? A Russian tanker complete with U.S. Coast Guard icebreaker escort delivered emergency heating oil and gasoline to Nome after heavy ice spawned by brutally cold temperatures blocked an earlier barge shipment. Nobody said getting fuel to rural Alaska was easy. Or cheap. www.akbizmag.com

Delivery Costs Drive Price Up Transporting fuel to rural Alaska accounts for anywhere from 15 percent to 50 percent of its total cost, according to various estimates from Alaska energy experts and fuel providers. Rural Alaska still basically runs on diesel and other fuels, though some places are moving to wind and other renewables for some of their power. All of Alaska’s rural communities—many in the coastal hubs and upriver villages of western Alaska—depend on diesel fuel for some, if not all, of their primary energy needs. The majority of Alaska’s population is concentrated in more urban areas with ready access to the grid: Anchorage, Mat-Su, Fairbanks, and Juneau. The remaining 20 percent of the state’s residents, however, live in nearly three hundred widely scattered, hard-toreach communities spread across our massive state. Generally, it takes a certain population density, an economy of scale, to justify the construction of large energy projects. Even large hub communities such as Bethel, Kotzebue, or Nome top

out at 6,200 residents. Most rural villages, about 250 communities in all, have populations ranging from 50 to 1,100, according to the Institute for Social and Economic Research at the University of Alaska Anchorage. Per capita income is low. The cost of goods and services is incredibly high. The cost of diesel these days can range from $6.50 to $10.50 a gallon in a region like the Northwest Arctic Borough. The expense of getting diesel and other fuels to a destination is a major cost driver, according to the Institute of Social and Economic Research. Costs rise the farther a community is from a hub. A six-month shipping season—most communities are icebound the rest of the year—means that fuel must be stored in tank farms. The construction and operation of tank farms adds in another layer of cost. “You have to trans-load all this fuel onto a whole other set of tugs and barges and take it to the tanks where it’s going to be held for winter,” says Mark Smith, CEO of fuel shipper Vitus Marine. “Wait. Those are only for places

close to the ocean. For villages farther inland, along even shallower rivers, you have to use even smaller tugs and barges. These boats typically cost more to operate than the ocean tankers that carry millions of gallons. Now we have only tens of thousands of gallons being carried, so the unit cost for that fuel starts to skyrocket.”

By Sea ... or Air There’s not much in the way of port infrastructure on the western Alaska coast in the form of deep-draft harbors or protected marinas. Instead, fuel barges with reinforced hulls make for shore after larger ships anchor offshore. That’s fine on a calm day, but the trip gets sketchy fast if there’s a swell and big weather behind it. Shipments can be delayed by weeks. Most fuel comes via barge or truck, but some fly-in communities—like Anaktuvuk Pass—rely on Everts Air Fuel, a more expensive transport option but the only air-based delivery option these days. Everts serves eighty-four different communities or mines. Aircraft land and pump fuel into trucks, trail-

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ers, tanks, or pipelines to village tank farms. While new weather cameras and other advances have made fuel flights safer, challenges remain. “Our biggest challenge is keeping prices low with the rising costs of 100 [Low Lead] aviation fuel as well as fuel prices in general,” Trevor Crouder, Everts’ fuel operations manager, says in an email. “Some of the other challenges we face are poor runway conditions, cold/poor weather, lack of weather reporting over large areas, and remoteness of our destinations.”

Banding Together Some communities, such as Nome and Kotzebue, decided to band together to bring down the cost of fuel deliveries. The Western Alaska Fuel Group, as it’s called, also includes Naknek, Dillingham’s Nushagak Electric utility, and Unalakleet. The group places orders that reach 7 million gallons—five times the amount Kotzebue might order alone—and sometimes as much as 11 million gallons. “We’re able to go out on a competitive bid for a much larger quantity,” says Brad Reeve, Kotzebue Electric Associa-

Northland Services: Consider it done. Since 1977, Northland has provided reliable freight transportation between Seattle, Alaska and Hawaii. With more than 140 sailings annually, Northland delivers cargo to more destinations in the 49th and 50th states than any other marine carrier. Heavy equipment, construction materials, seafood or supplies to remote villages; you name it, Northland delivers. So next time, ship with confidence. Ship with Northland.

Alaska Business Monthly | July 2013

tion’s general manager. “Whereas if we went out individually, nobody would pay any attention to us. We’d be the little kid in the back of the crowd trying to get everybody’s attention.” Then there’s the bold partnership brokered in 2010 by the Alaska Village Electric Cooperative, also called AVEC.

AVEC Goes Rogue Last year marked the first full year that AVEC used its own barges to transport fuel. The cooperative that serves fiftyfive villages has long contended that fuel pricing in rural Alaska reflects a lack of competition, says Meera Kohler, AVEC’s chief executive. AVEC entered into a five-year contract with Vitus Marine to build and operate two tug-and-barge sets for the cooperative. Using their own transportation for fuel saved AVEC and its members twenty cents per gallon for the 4.6 million gallons delivered in 2012, according to Kohler. That translates to about $1 million in savings. “The savings were passed on 100 percent through our fuel charges,” she says. “There is nothing that sticks to our fingers.” AVEC has historically chafed against rural Alaska’s fuel shipping costs and contracts. The cooperative filed a lawsuit against Crowley and Yukon Fuel when the shippers merged operations in 2004. “Our concern then was, and still is, that it was creating this enormous fuel monopoly,” Kohler says. As a result of the legal action, the Alaska Attorney General’s office issued a consent decree requiring Crowley to spin off a portion of its assets to another competitor. Ultimately, Delta Western got the assets. Then, in 2008, the cost of fuel spiked. Fuel shippers like Crowley, locked into five-year contracts, in 2010 raised prices dramatically to make up for the increase. “What previously was an annoying issue became an imperative issue,” Kohler says. “Because, obviously, the cost of fuel is not going to go down any time soon but transportation cost goes up.” For Vitus, the AVEC agreement allowed them to build tug-and-barge sets equipped specifically for a typical AVEC village—which is a lot like many western Alaska villages—using reliable funding for niche-built vessels that are expensive to construct. www.akbizmag.com

“After we’ve served AVEC, that allows us to use the excess capacity to serve other, similar villages,” Vitus CEO Smith says. “Truthfully, the utility financing is very attractive. They’re long-term, steady entities that can get the most attractive interest rates from banks.”

Waiting on Mother Nature Vitus Marine serves another fifty villages on top of the AVEC deliveries. The company operates three smaller tugs and three smaller barges along with the two sets built for AVEC. They also charter tanker ships; last year Vitus chartered two and this year Smith says he expects to charter three. The most logistically complicated deliveries they make? “Iliamna Lake,” he says. “The window of navigation on the Kvichak River is August 15 to October 1, so we have to wait for the right time in the season, work with customers, and match the right vessels and the right barges to the load.” Many western Alaska villages rely on spring runoff to move ice out of river systems. Rain patterns make a big difference to Vitus and its delivery sched-

www.akbizmag.com

“I would like to find a customer who would build their own equipment and then lease it to me to operate. We were never offered that deal.” —Bob Cox Vice President, Crowley Petroleum Distribution in Alaska

ule. That’s part of the challenge of such a seasonal business. This season’s late spring, for example, had crews waiting to launch. Vitus assembles its full crew in April to train and do vessel maintenance. If rivers remain iced up, like they were in May, Vitus has “an entire army” just sitting on the beach, Smith says. “I don’t have to tell you how painful it is to make payroll for an army that isn’t delivering anything.”

Crowley’s Part of Alaska’s History Crowley Petroleum Distribution division in Alaska is big. The company maintains twenty-three offices and a network of twenty fuel terminals in regional hubs. It boasts a storage capacity of more than fifty million gallons. The company started its fuel operations here in the 1950s. Today, Crowley

moves fuel with a fleet of eighteen pieces of equipment including six tugs for lighterage and another four tug/barge sets for line haul fuel transport. About half the fuel Crowley distributes comes out of Cook Inlet, according to Cox. About a quarter comes out of the Pacific Northwest. The balance comes in the form of overseas imports. Crowley serves around three hundred villages in western Alaska, a number that shifts every season. Ice, as always, is the limiting factor. “As the ice goes out, southern waters become ice-free sooner than northern waters,” says Sean Thomas, Crowley’s vice president for western Alaska. “We kind of chase the ice north going into Bethel along the coast, then Nome and Kotzebue. We do our Arctic business— Barrow, Kaktovik—in the summer

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months. Then we repeat the process in the fall with the ice chasing us out.” AVEC’s move to establish its own transportation network set up new competition for Crowley, says Alaska fuel distribution Vice President Cox. “It takes a lot of gallons off the market we used to compete for every year,” Cox says. “You have to make some adjustments. We’re not afraid of competition.” He added that the contract to operate those tug-andbarge sets didn’t go out to bid. The agreement with AVEC now allows Vitus to lower its costs because Vitus is operating equipment it didn’t have to pay to build. “I would like to find a customer who would build their own equipment and then lease it to me to operate,” Cox says. “We were never offered that deal.” True, says AVEC’s Kohler in a subsequent email. That’s because the cooperative’s objective was “to stimulate competition—that would be defeated if we were simply to enhance the primary competitor!”

‘Unique Service’ Delta Western, along with Vitus and Crowley, rounds out the major fuel distributors in Alaska. The company has developed a roster of about two hundred village customers in its nearly thirty years operating in Alaska. What’s changed in that time? “The regulations,” CEO Kirk Payne answers immediately. “There’s regulation creep in all of our lives, typically for the better. It makes for safer operations, more stewardship of the environment. But there’s a cost to do that.” The company operates eight tugs and barges ranging from 150,000-gallon barges to 3.4 million-gallon barges. Tankers used by the company can hold as much as 19 million gallons. Numerous fuel transfers are a hallmark of service in western Alaska. Each community is different when it comes to deliveries, Payne says. Some, a ship just pulls up to the dock and delivers fuel. “Of course, there’s communities you have to go up a river and across a lake, you have to lift up a powerline, get under a powerline,” he says. “It’s a really unique service.” Kotzebue Case Study Kotzebue offers up a pretty good example of the challenges delivering fuel in rural www.akbizmag.com

Photo courtesy of Crowley Petroleum Distribution

Alaska, even to a larger hub community. The community of 3,200 sits surrounded by water on a gravel spit that juts into Kotzebue Sound. But that doesn’t mean a big tanker sidles up to a dock and oﬄoads fuel right then and there. No, this is western Alaska. Nothing is that easy. Instead, a line-haul barge parks fourteen miles off Kotzebue. A lighterage barge brings in smaller quantities of fuel. “So it takes days to shuttle fuel back and forth,” says Reeve, the electric association’s manager. “Three to ten days, depending on the weather. The worst case was ten days. Somebody came in late that season. They actually had to pull out and head down to Cape Deceit and find safe harbor there.” A six-inch pipeline runs through town for a little more than a mile. The pipe ends at a tank yard with two big tanks that hold 1 million gallons of fuel each, plus a smaller tank with a capacity of 150,000 gallons. The fuel serves 1,250 residential and commercial meters, Reeve says. Moving fuel accounts for about 50 percent of the costs these residents and businesses pay.

Crowley delivers needed fuel and freight to isolated Alaskan communities by river barge. The company also hauls away accumulated and unwanted goods on the return trips, helping keep communities clean. (Shown: Nenana, AK)

That number is higher in Kotzebue due to lighterage barges getting fuel onshore. Unlike a place like Nome, where shipments pull right up to the dock, Kotzebue’s deliveries depend on weather conditions. And weather in Kotzebue is highly unpredictable. It’s also windy. That would explain the wind turbines. Kotzebue last year generated 13 percent of its power from wind, thanks to a new-

ly expanded farm of turbines. The community pioneered wind development in the Arctic back in the late 1990s. Reeve says he hopes soon to generate a quarter of Kotzebue’s power from wind or other renewable energy sources. “Whatever doesn’t cost us fuel, we’re trying to use,” he says. R Zaz Hollander is a journalist living in Palmer.

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July 2013 | Alaska Business Monthly

special section

Mid-Year Economic Outlook

Mid-Year Economic Outlook July 2013 Compiled by Mari Gallion

Sean Parnell

Colin Maynard

Nils Andreassen

Don Young

Mouchine Guettabi

Caroline Schultz

Joe GrifďŹ th

Chris Rose

Joe Everhart

Curtis J. Freeman

David Gillespie

Andrew Guy

Jason Metrokin

Gabriel Kompkoff

Aaron Schutt

Kara Moriarty

Julie Saupe

Sarah Leonard

Aves Thompson

Alaska Business Monthly | July 2013

Mark Begich

www.akbizmag.com

Lisa Murkowski

John MacKinnon

Alaska

Sean Parnell Governor e have built a solid foundation of opportunity here in Alaska, with a triple-A bond rating for the state, the lowest unemployment rate (6 percent) since 2007, and a favorable outlook for the coming year. Our tourism sector has recovered and mining is still growing strong, and the More Alaska Production Act will rebuild our energy sector and put more oil back in the pipeline.

www.akbizmag.com

Christopher D. Lestochi

Bill Popp

Ashok Roy

Marcus L. Harley

Greg Wolf

Architecture and Engineering

Colin Maynard Principal BBFM Engineers Inc. he engineering industry outlook is for a pretty flat year. There do not appear to be any large upcoming design projects, at least in the vertical construction portion of the industry. The military and other federal agency work has been slowing down, even before sequestration. The State capital budget is significantly lower than a couple of years

ago and is mainly for remodel and addition projects. Municipal and school district work seems to be primarily state funded. There are some projects that are bonded but they are of

July 2013 | Alaska Business Monthly

a limited size. Private sector development has a couple of new retail facilities but the work in this area is mainly for remodels and additions.

Arctic Policy

Nils Andreassen Executive Director Institute of the North ith the launch of the Alaska Arctic Policy Commission, there is a significant amount of work being done to assess Alaska’s strategic role as an Arctic state; infrastructure needs as they relate to safe, secure and reliable operations; and approach to issues such as research, resource management, and response capacity. This effort is undertaken at the same time a National Arctic Strategy is produced by the White House, which attempts to balance concern for the environment with economic development for the people of the North. Important to both processes is the effort to consult with all stakeholders and to ensure open lines of communication. Alaska can also look forward to Canada’s Chairmanship of the Arctic Council and act as a partner during these next two years.

Congressional Delegation

Don Young U.S. Representative hile the economy in Alaska is showing signs of strength, I am still concerned about the torrent of regulations pouring out of the federal government, many stemming from the Dodd/Frank financial reform and Obamacare. In a time when the economy is still sputtering, and each and every job is critical, the last we need to do is bury businesses who want to hire Alaskans in a mountain of paperwork.

Mark Begich U.S. Senator he remainder of 2013 shows a lot of promise. Alaska has one of the lowest unemployment rates in the country and positive economic indicators point to a steadily decreasing national unemployment rate. Alaska’s economy continues to grow

T 26

Alaska Business Monthly | July 2013

due in large part to its robust small businesses, strong tourism industry, world renowned fishing industry, and our tremendous natural resource wealth. Alaska saw the first drilling in the Arctic in twenty years this past summer and I hope we can continue to move forward with responsibly developing our vast natural resources. I’m working hard on the federal side to keep Alaska’s economy growing and to make sure Washington stays out of the way as much as possible.

Lisa Murkowski U.S. Senator here are a great number of oil and gas projects under development across the state, but nearly every one faces roadblocks at the federal level. The permitting process under the current administration is clearly broken. Alaska is a rich state, we all know that, but our economic success depends on our ability to access our resources. Beyond that, we are also facing the reality imposed by sequestration and the impacts it will have on our considerable federal footprint. Alaska’s economic well-being is strong—many states would love to possess our fish, our beauty, our resources, our people, and our potential—and I remain committed to fighting against every threat and for every opportunity to build momentum.

Construction: Commercial

John MacKinnon Executive Director AGC of Alaska n spite of reductions in defense spending, the building construction side of the market continues strong, though still below capacity. There continues to be large retail expansion of Wal-Mart, Sam’s Club, and Natural Pantry and continued construction of Walgreens and Autozone. New entrants to the market include Cabela’s and Bass Pro Shops. Major upgrades to existing facilities are happening with Fred Meyer in mid-town. Highway work remains strong and very competitive resulting in some very thin margins for many contractors. In all sectors, we continue to feel the benefits of recent state capital budgets.

Construction: Military and Civil Works

Col. Christopher D. Lestochi Commander, Alaska District U.S. Army Corps of Engineers e are executing 322 projects valued at $312.9 million in fiscal year 2013 with our environmental and special programs carrying the bulk of the workload. Unlike previous years, work will focus on both Alaska and eastern Asia. Our current income is fueled by a surge in small interagency and international projects led by ongoing support for humanitarian assistance and foreign military sales programs. We continue to experience a decline in traditional high-dollar military construction projects with two firing ranges worth $18 million in progress. Similarly, although our civil works program received no new work in the president’s budget, we are still tackling several carry-over projects valued at $41.6 million that include a breakwater extension in Sitka Harbor and shoreline protection in Unalakleet. For the remainder of the year, half of our contracts are still to be awarded, while potential business opportunities could generate additional work.

Economic Development

Bill Popp President and CEO Alaska Economic Development Corporation, Anchorage 013 is shaping to be a banner year for the Anchorage economy. Strong job growth in excess of 2 percent for the third year in a row coupled with an unemployment rate less than 5 percent are the result of robust employment numbers in several categories. Business and professional services, health care, oil and gas, and construction are the industry leaders that are pushing the Anchorage economy to new heights.

Education

Dr. Ashok Roy Vice President for Finance & Administration/ Chief Financial Officer University of Alaska system ith regard to K-12 education, urban areas are doing better than the rural areas mainly

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due to energy costs and broadband access. In spite of Alaska spending much more per student than other states, the outcomes are significantly less than desirable. About 35 percent of our teachers are hired from out-ofstate, as hiring teachers for rural Alaska who will stay with us is a chronic problem. With regard to higher education, state support for the University System of Alaska has been solid and we are in a stable equilibrium. Expectations for the short term can be described as cautious optimism. Challenges emanating from reductions in federal grants due to sequestration; reduced enrollment due to smaller graduating classes for most of the next decade in Alaska; need to make college affordable and lessen student debt; and rising fixed costs will require the University to tighten its belt. The Alaska Performance scholarships are a bright spot. The overall future impact of the oil tax bill (SB21) is uncertain but will impact state spending. Problems and issues in education are often not susceptible to simple answers or binary logic.

Economy

Mouchine Guettabi PhD, Assistant Professor of Economics—Institute of Social and Economic Research, University of Alaska Anchorage n general, the Alaska economy is fairly healthy and continues to grow at a moderate pace. However, federal government employment in the state continues to decline and the full effects of sequestration are yet to completely materialize. Given that government (federal/ state/ and local) represents close to 20 percent of the state’s gross state product, the implications of the cuts can have far reaching consequences. On the positive front, the rebound of the construction sector along with continued solid performance in the health care and social assistance sector are two of the brighter spots. Going forward, the state’s growth will be less pronounced than that of the nation in the near term since we experienced a less severe recession and therefore have less slack. Most sectors are expected to remain stable and experience mod-

est gains. Preliminary numbers in the manufacturing sector look weaker than previous years. Aside from that, the nation’s recovery and high oil price remain key drivers in Alaska’s future performance.

Employment

Caroline Schultz Statewide Economist Research & Analysis Section Alaska Department of Labor and Workforce Development ur annual employment forecast for 2013, made at the beginning of the year, was for modest growth of 1.2 percent, or about 4,200 new jobs. Now that we have preliminary data for early 2013, we can see that private industries are driving this growth — particularly subsurface resource extraction, construction, and health care. Public sector employment has been declining through 2012 and into 2013 as a result of reductions in the federal civilian workforce. Despite drag from declining federal employment, Alaska’s peak summer employment in 2013 should be at an alltime high.

Energy

Joe Griffith General Manager Matanuska Electric Association hile MEA is moving ever closer to bringing our own local power generation online, we recognize that there are serious challenges to the industry as a whole around Alaska. Across our resourcerich state we all face fuel supply issues which must be resolved. There are also nearly a billion dollars of needed transmission upgrades along the Railbelt so that we can continue to deliver the low cost and reliable power so critical to our state’s economy.

Chris Rose Executive Director Renewable Energy Alaska Project fforts by residential and commercial consumers to reduce energy use and cost through efficiency measures will increase. Given the new reality of lower state revenues, the state

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Alaska Business Monthly | July 2013

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will also begin to look harder at ways to decrease its own utility bill for heat and electricity in schools and other public buildings, estimated now to be over $640 million per year. As we approach the expiration of long-term natural gas supply contracts, Railbelt utilities will look for ways to mitigate the effects of higher gas prices in the state’s most populated region. Potential projects include efforts to build out the Fire Island wind farm to its full 54 MW capacity and explore for geothermal resources near Mt. Spurr. Discussions will also continue on how independent power producers can invest private sector dollars in more flat-priced renewable electric generating capacity.

Financial Services

Joe Everhart Alaska Regional President Wells Fargo he fi nancial services industry in Alaska remains healthy and strong. Banks continue to see record growth in deposits as custom-

ers remain cautious about investing in the stock market. Loan demand is on the rise as the economy recovers and interest rates remain at record lows. We are optimistic about Alaska’s future with the potential for further responsible resource development on the horizon.

Fisheries

Marcus L. Hartley Vice President and Senior Economist Northern Economics eafood—Alaska’s largest export industry—should have a solid year. However, with an industry as diverse as seafood, some sectors face immediate challenges, while others could experience a banner year. The increasing value of the dollar relative to other currencies, particularly the Japanese Yen, coupled with the recession in Europe, could mean lower revenues for Alaska’s seafood exporters. These challenges will make domestic markets and overseas marketing efforts more important than ever.

C O M I N G

In recent years, groundfish (pollock, cod, rockfish, and flatfish) has generated more than half of the total value in Alaska’s fisheries. In 2013, harvests of pollock are expected to increase by more than 100 million pounds. While this increase may be partially offset by expected decreases of other groundfish species, a greater volume of harvests will undoubtedly come onshore to processors in Dutch Harbor, King Cove, Sandpoint, and Kodiak. Salmon fisheries represent another 25 to 35 percent of Alaska’s seafood value. Total salmon harvests are expected to increase by 40 percent, powered by a near doubling of forecast runs of pinks, although runs of sockeye in Bristol Bay are forecast to decline by 25 percent. One of the interesting stories to follow this year will be how much of the salmon harvest heads to the canning line, and how much is fi lleted and frozen. In 2012, many processors responded to low supplies of canned sockeye salmon and strong demand by canning a higher portion of the catch than has been seen in recent years.

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International Trade

Greg Wolf Executive Director World Trade Center Alaska ith three months of data available, Alaskan exports to overseas markets are generally trending as we had forecasted in the January issue of this magazine: down somewhat from the previous two years, but still at a historic level. We are forecasting that when 2013 results are tallied, Alaskan exports will be in the $4.3 to $4.5 billion range, down from the all-time record high of $5.2 billion achieved in 2011. Softening precious metal prices, for example, are a contributing factor. The long-term trends, however, remain unchanged and bode well for Alaskan exports. Alaska is in the right place, at the right time in history, with the right commodities—natural resources and seafood—needed by growing markets and populations around the world.

Mining

Curtis J. Freeman President Avalon Development Corp. he mineral industry this year has a split personality: producing mines are expected to remain profitable as commodity prices remain stable, although down somewhat from 2012. Exploration spending, however, is expected to be down dramatically over 2012 levels, which were down substantially for 2011 spending levels. Risk capital has dried up leaving many junior explorers with stock prices at historic lows and treasuries at care and maintenance levels. Look for bottom feeding by cashed-up companies.

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Alaska Native Corporations

David Gillespie, CEO Aleut Corporation ur growth and development came together in 2011/2012 with the acquisition of two new subsidiaries: Patrick Mechanical, a mechanical engineering firm in Fair-

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banks, and Analytica, an environmental testing company headquartered in Colorado with offices in Anchorage and Fairbanks. The outlook for continued growth from all seven LLCs is poised in an profitable direction. We plan to continue our strategic growth throughout 2014.

Andrew Guy President and CEO Calista Corporation alista Corporation continues to serve as a partner in Alaska’s economy. Revenues grew from $300 million in 2011 to $400 million in 2012. The right of Alaska Native Corporations to participate in the SBA 8(a) program played a strong role in our success and those of the other ANCs. However, with this federal program under increasing attack Calista strives to diversify our revenue base. Statewide, we must address the increased costs of energy, supplies and transportation. We look toward targeted infrastructure development in rural Alaska to better support ANCSA corporations and small businesses as they strain under these fiscal weights. These businesses are in position to strengthen Alaska’s economy.

Jason Metrokin President and CEO Bristol Bay Native Corporation believe Fiscal Year 2014 will be a year of exciting transition for Bristol Bay Native Corporation. We are focusing on investing in our people and our region as we work to

pursue our mission of “Enriching our Native way of life.” As a diversified company with investment and business holdings in a wide range of industries, I have a positive outlook for the coming year for BBNC. In addition to expansion of our oilfield and industrial services, our expertise in construction, and our entry into the tourism industry, we know Alaska, and the Bristol Bay region in particular, provides for good investment opportunities in the fishing industry. We continue to seek economic opportunities for the Bristol Bay region and are learning about the full extent and potential value of our region’s resources to allow us to make wise decisions that benefit our lands and our people through many generations.

Gabriel Kompkoff, CEO Chugach Alaska Corporation his year is a testament to the ability of Alaska Native Corporations to adapt to an increasingly complex and challenging economy. While our federal customers are operating with reduced budgets in 2013, the impact of sequestration on Chugach Alaska Corporation’s government contracting line of business has not been as drastic as predicted. We have made strategic decisions in order to increase our net earnings, and anticipate our government and commercial divisions will continue to grow. Still, as we move into the future, we know that business as usual—doing what we’ve done in the past—is not enough. This year is all about capitalizing on efficiencies and developing innovative approaches to our core competencies.

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July 2013 | Alaska Business Monthly

Aaron Schutt President and CEO Doyon, Limited am optimistic about the state of Alaska’s economy. The passage of Senate Bill 21, reforming the oil tax regime, was a huge success for Alaska and moves the state in the right direction of more oil production, increasing the number of barrels flowing through the pipeline and employing more Alaskans. Interior Alaskans pay some of the highest prices in the nation for a resource that is in our backyard. We are past due of adding more oil to TAPS. Doyon’s highest priority is continuing exploration efforts with two projects in the Doyon region: preliminary seismic work in the Stevens Village area and drilling a well in the Nenana/Minto Flats basin, which is expected to begin this summer. Success with either or both of these projects would positively impact the state’s economy.

Oil & Gas

Kara Moriarty Executive Director Alaska Oil and Gas Association s we approach the half-way point of 2013, the oil and gas industry continues to have mega opportunities, but continually faces challenges. The industry continues to provide more than 90 percent of the state’s unrestricted general fund, and so it is a concern that production through the Trans-Alaska Pipeline System is now hovering at just one-quarter of its capacity, or about 540,000 barrels per day. The good news is the Legislature did pass a new oil tax policy that will put Alaska back into contention for increased investment for the North Slope. Cook Inlet is already experiencing increased investment for currently producing fields and additional seismic and exploration work. Developing the federal Outer Continental Shelf has been pushed back a year to ensure equipment and permitting are in place for the 2014 season.

Toursim

Julie Saupe President and CEO Visit Anchorage laska’s tourism industry continues to anticipate a strong summer season. Stable marketing budgets from the state and community marketing organizations within have allowed increased exposure and reach over the past several years. As a result, fall and early winter inquiries from independent travelers, travel agents, and tour operators —a great leading indicator for summer—were robust. Two elements vital for visitation have expanded; capacity for both cruise and air passengers have increased significantly for 2013. Cruise capacity to Alaska this summer will total 934,074 passengers—an increase of 65,647 over 2012. Cruisers

Alaska Business Monthly | July 2013

making their way across the Gulf of Alaska will increase by 40,000 passengers. Many of these visitors will take a cruisetour through Southcentral and the Interior, or plan their own itineraries to locations far and wide. Alaska will also benefit from many new routes opening up on domestic and international carriers, and also increased frequency from many longtime carriers. New or returning domestic service of note includes direct flights into Newark (United), Atlanta (Delta), Minneapolis (Sun Country), San Francisco (Virgin America). In addition, Alaska Airlines and JetBlue have increased capacity to Alaska from Southern California and Seattle. Internationally, Anchorage will see service on Icelandair out of Reykjavik, Iceland, started May 15 with connections to Great Britain, Switzerland, Germany, Norway, Finland, and Sweden and other European cities. Condor celebrates twenty years of nonstop service between Anchorage and Frankfurt, Germany this year. Along with this increased capacity and interest on the leisure side, a solid convention season this fall will extend the economic impact. Hotels, attractions, transportation companies, restaurants, and gift shops are geared up and ready to welcome these visitors and, quite likely, make 2013 the new high mark for Alaska tourism.

Sarah Leonard President and COO ATIA laska’s tourism businesses have a positive outlook for this summer visitor season and through the winter and shoulder seasons too. This projection is fueled by a steady increase in visitors over the past four years. In 20112012, Alaska’s tourism industry saw a 3 percent increase in visitor numbers with over 1.8 million visitors traveling to Alaska. Alaska is also seeing new and expanded investments in tourism marketing dollars and industry. For example, Alaska will see two new airlines providing service, Icelandair and Virgin Atlantic, and three Airlines with expanded service, Alaska Airlines, United, and Jet Blue as well as cruise ship passenger gains. We know these investments in Alaska’s tourism industry are working to help create economic benefits for business owners, communities, and the State of Alaska. With continued and strong investments like these, Alaska can compete on an international scale as a quality travel destination.

Transportation

Aves Thompson Executive Director Alaska Trucking Association reight indicators are steady and truck sales are increasing. The household-goods-movers sector is doing well. Freight carriers are doing OK. Drivers are in short supply as are technicians and mechanics. The oil tax reform issue still hangs over our heads so I think we remain cautiously optimistic. R

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FINANCIAL

When Employees Acquire the Company ESOPs offer an attractive alternative in Alaska By Tracy Barbour

few years ago, Alaska Mining and Diving Supply underwent a major conversion: It became a 100 percent employee-owned business. The company established an employee stock ownership plan (ESOP) that enables its eligible thirty-five employees to earn a stake in the business. The more hours they work, the more shares they earn. And in six years, they get fully vested. “It’s a tremendous opportunity for those involved to be a part of an ESOP,” says President and General Manager Nick Olzenak, who’s been with Alaska Mining and Diving for eleven years. “From the employee side of things, it’s being able to control our own destiny. The sky is the limit. It’s an exciting time for the company.” Employee ownership of closely-held companies is increasingly becoming more popular in Alaska. Often, employees gain an ownership interest through an ESOP like the one created by Alaska Mining and Diving, stock awards, and stock purchases. In Alaska S corporations, limited liability companies, and smaller businesses are more likely to become employeeowned entities. So are companies that are well established and successful in the marketplace. These businesses often have been around for years and are well entrenched in their industries.

ESOP Defined According to the U.S. Securities and Exchange Commission, an ESOP is a federally-qualified retirement plan in which the company contributes its stock (or money to buy its stock) to the plan for the benefit of the company’s employees. Essentially, an ESOP is a broad-based instrument that gives eli34

Alaska Business Monthly | July 2013

Richard Rosston

Kim Blaugher

gible employees a chance to gain ownership in a company without having to invest their own money. Technically, the ESOP is a trust which purchases the company’s stock and holds it for the benefit of eligible employees. The ESOP maintains an account for each employee participating in the plan. Typically, employees must be full-time workers with the company for at least a year before they can participate. Shares of stock vest over time before an employee is entitled to them. With an ESOP, workers never buy or hold the stock directly while they’re still employed with the company. Instead, their shares are held in the ESOP trust as part of their compensation for work performed. If an employee is disabled, terminates, retires, or dies, the plan can distribute the shares of stock to them from their account. “The longer you’re with the company after the ESOP

is in place, the more stock you get,” says Kim Blaugher, CPA, vice president of consulting with Iowa-based Principal Financial Group. Blaugher—who is based out of the company’s Boise, Idaho office—has been working with ESOPs for twenty-five years. He has facilitated ten ESOPs in Alaska over the past five years, including the ones for Alaska Mining and Diving and Alaskan Brewing Company. Although an ESOP is commonly considered to be an employee benefit plan, it’s also a tool to strategically finance corporate mergers and acquisitions. An ESOP can leverage the tax advantages available to qualified employee benefit plans to allow for purchases with pretax dollars.

A Popular Option in Alaska When an ESOP is established, the owner can choose to sell his equity stake www.akbizmag.com

and remain active in the company. In fact, the leadership team and other aspects of the business typically remain the same after conversion to an ESOP, according to Blaugher. He says ESOPs are a popular alternative for well established companies in Alaska. It’s no wonder why, considering they allow companies to continue operating with local ownership after becoming an ESOP. “Nothing changes necessarily in the company after the ESOP,” Blaugher says. “That’s very appealing to a lot of companies, especially in Alaska. The owner can sell the stock and still participate in the company, and there’s no loss of control to an outside third party.” An ESOP can be an outstanding alternative for a seller wanting to transition ownership for succession planning or other reasons. However, an ESOP isn’t appropriate for everyone, Blaugher says. He adds: “If you want to sell your business today and leave, you don’t need an ESOP. If you have three to five years, an ESOP might work.” Jesse Janssen, vice president of lending at Alaska Growth Capital, has also noticed an increase in ESOPs in Alaska recently. From his experience, most owners choose not to step out of the picture when they sell their stock to an ESOP. Many of them have spent their entire lives building their business, and they prefer to maintain an ownership interest in the ESOP-owned trust. Selling to an outside company could scare away existing and prospective clients— and, ultimately, ruin the brand. However, Janssen maintains, there has to be a long-term succession plan. “At some point in the game, the owner will have to completely step away and sell the rest of the shares,” he says.

Benefits of ESOPs An ESOP offers tremendous benefits for the owner, company, and employees. For the owners, Janssen says, it’s an excellent way to capitalize on their work in the company. “It allows the owner the flexibility to liquidate whatever portion of the company they choose and defer taxation on the (capital) gain,” he says. There are also significant income tax benefits for the company—and the employees that own it. For example, an ESOP is a tax-exempt entity for federal www.akbizmag.com

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“As a business, we have a huge competitive advantage. We don’t have the same (tax) obligations as a non-ESOP company. We can bring out a product line quickly. We can make an acquisition if we need to.” —Nick Olzenak President and General Manager Alaska Mining and Diving Supply

and state corporate income tax purposes, which means the ESOP can make pre-tax dollars available to finance company growth. That can translate into a major benefit for companies like Alaska Mining and Diving. “As a business, we have a huge competitive advantage,” Olzenak says. “We don’t have the same (tax) obligations as a non-ESOP company. We can bring out a product line quickly. We can make an acquisition if we need to.” The tax-exempt status of an ESOP also allows employees to acquire an ownership interest in the company (through the trust) without paying a current income tax on the stock. That’s because they’re not responsible for paying the income tax liability until the shares are distributed. As an intangible benefit, the employees of ESOPs have a vested interest in the company’s success. They also get to experience the pride of ownership. Those benefits are making a noticeable difference at the Nerland Agency, which became an ESOP in 2005. The Anchorage-based ad agency has thirtysix employees, which have stock in 100 percent of the ESOP. “The ESOP says ‘independence’ and ‘accountability’ in new ways, and our employee owners step up even more to the challenge of being the best they can be,” says Owner/President Karen King. “In new-business recruitment, our ability to talk about our employee ownership and the individual ownership it brings to ‘the work’ is a sellable advantage.” Becoming an ESOP has proven to be a great recruiting and retention tool, although the agency was already fairly successful in these areas. “People mention it during recruitment, and it both intrigues them and appeals to their 36

Alaska Business Monthly | July 2013

self-interest (as it should), as a company reward/benefit they don’t often see on their job search.” Being employee-owned has also had a positive effect on the company’s value. Its stock price has risen significantly since the initial price evaluation, according to King.

Ownership through Stock Awards and Purchases Employee ownership often results when a private company awards stock to a few managers or other key employees. The stock is typically granted as part of the employee’s compensation package, serving as an incentive or reward for performance. The employee normally receives a minority share—such as 5 or 10 percent—of the company’s stock, leaving the owner with a majority ownership interest. “It’s more typical in Alaska where you see key employees end up with minority stock,” said Richard Rosston, a partner with Dorsey & Whitney LLP. Sometimes select employees gain ownership of a business by buying out the stock of the majority owners. Here’s one possible scenario: The original owners might decide to sell to an outside buyer and ask top management if they want to buy the company first. An acquisition involving employees is very similar to a sale to an outside buyer in that a fair market value must be established to determine the purchase price and for taxation purposes. Sometimes, however, allowances are made when employees are the buyer. For example, buyers usually want certain warranties and representations with a purchase and sale agreement. These warranties and representations could involve how many shares are issued/authorized and who owns them; whether the shares are owned free and clear of all liens and encumbrances; copies of audited financial statements and absence of liabilities not disclosed in the financial statements; and the location, completeness, and accuracy of the books and records. Statements relating to accounts receivable, inventory, tax returns, assets, litigation, insurance, environmental matters, employee benefits, and number of employees are also commonly made under warranties and representations. However, the owner will often make fewer warranties and representations

when selling to company managers. That’s because they’re already familiar with the business. “These (warranties and representations) are in a typical merger and acquisition agreement, but the seller may say you don’t need all of these because you already have access to that information.” The motivation for company owners to award or sell stock varies. For some owners, the underlying objective is succession planning. They might want to retire, but don’t have family members to assume control of the company. So they opt to transfer some or all of their ownership interest to key employees who have been instrumental in the company’s development. This not only enables the owners to leave the business in good hands, but it lets well-deserving employees share in future profits, giving them further incentive to continue in their position. “If the company is successful that person makes more money,” Rosston says. When employees gain ownership of a company, many factors remain the same. The company generally maintains the established legal structure, management, and brand identity. “People build up goodwill in a name, so they’ll usually keep the same name,” Rosston says. Janssen agrees. When companies become employee-owned, they typically don’t make any major changes that could potentially disrupt the company’s success. He explains: “If a company’s going to convert to employee owned, it’s happening because the company worked. You don’t want to step into a company and make broad changes and possibly lose market share.” Employees who purchase company stock are responsible for finding their own money to fund the deal. An entity such as Alaska Growth Capital can finance the acquisition—as long as the loan makes sense. Janssen takes a number of factors into consideration: “We look at whether there are employees there who can manage the company. Do the valuations of the company make sense? The biggest issue is who’s buying the company and are they going to run the company the same way.” R Former Alaskan Tracy Barbour writes from Tennessee. www.akbizmag.com

Legal Speak

By Renea I. Saade

Going Paperless? Great—but don’t shred your document retention policy

oing business in the technologyfocused 21st century has become synonymous with going paperless. More and more businesses are saying goodbye to rows of sturdy metal file cabinets and converting to an electronic data storage system. It is easy to understand the appeal. Going paperless can increase efficiency and reduce a company’s carbon footprint and overhead costs. Well organized, electronically stored documents can be found with the click of a mouse instead of the hours it usually takes to thumb through a dusty pile of papers. A paperless approach to data storage usually translates to a company purchasing less paper, printer ink, and copier toner, and fewer file folders and labels. Adopting a paperless approach often allows the company to rent less space and decrease costs for shredding and file archiving. So, by all means, go paperless. But do not shred your company’s document retention policy in the process. For those that do not already have such a policy, be sure to adopt one as you transition to a paperless system.

Managing Data and Documents A document retention policy, also known as a records and information management policy, establishes and describes how a company expects its team to preserve and manage company documents and data from creation to destruction. Such policies not only serve various business purposes but also provide many legal benefits. Every company doing business in the United States has certain recordkeeping and record retention obligations under federal and state law. For example, under most state laws, employers must retain certain personnel records for at least one 38

Alaska Business Monthly | July 2013

A proper document retention policy should: ■ Defi ne the types of documents and data covered by the policy ■ Provide procedures on how to store and destroy documents and data ■ Include a schedule of how long the company should retain various kinds of documents/data—the schedule must correspond with the company’s obligations to retain certain documents for the legally required amount of time ■ Specify how email (both sent and received) will be addressed ■ Specify how data (including voicemails and texts) received or stored on company cell phones and personal digital assistants (PDAs) will be addressed ■ Specify how confi dential, proprietary and trade secret information will be addressed ■ Specify which procedures are mandatory versus best practices ■ Provide a mechanism for audits and/or quality reviews ■ Provide a process for the collection and preservation of documents if a lawsuit or investigation is anticipated or commenced (this is known as a “litigation hold” plan) ■ Designate a document retention “offi cer” or “manager” for employees to contact if they have questions year after an employee leaves the company, as well as payroll records for at least three years, and any workplace injury records for a minimum of five years. All companies must keep their taxrelated documents for a minimum of three years and up to six years in certain circumstances. There are other requirements, particularly for those companies that are federal contractors or receive public funding.

Benefits and Disadvantages There are also benefits and disadvantages to keeping particular documents longer than required. For instance, in Alaska, a company can be sued for breach of contract or bring a contract claim related to the delivery of professional services for up to three years, and warranty claims on products sold can be raised for up to four years. Thus, a company would want to keep documents related to such transactions for a minimum of those respective periods of time. A document retention policy can help prevent the premature destruction of documents that may be relevant to a pending or future lawsuit or governmental investigation and provide the company with a legal defense to some document production requests when certain records relevant to a litigation or investigation have been deleted or destroyed, as the policy demonstrates that the deletion or destruction was done with reasonable care (as opposed to

done haphazardly or with a perceived attempt to destroy key evidence). Because each company is different, there is no “one size fits all” approach to document retention policies. The precise details of a company’s policy will depend on the company’s size, internal structure, type of business, use of historical documents and data, internal resources, affiliation with other entities, places of operation, and so forth. However, all companies should consider a few fundamental components and issues as they develop or review their document retention policies.

Join the Paperless Movement Again, go ahead and join the paperless movement. Your employees and Mother Earth will likely thank you. Just be sure that your transition to an electronic system is done in a manner that complies with a reasonable document retention policy. R Renea I. Saade is a partner at Stoel Rives LLP (stoel.com). She provides legal advice and representation to companies in connection with their employment law needs and contract disputes. Contact her at 907-263-8412 or risaade@stoel. com. This article is provided for educational purposes only and does not serve as an adequate substitute for legal advice. www.akbizmag.com

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special section

Telecom & Technology

Photo courtesy of Zensor LLC

University of Alaska Anchorage Faculty Inventor and Electrical Engineering Professor Dr. John Lund holding a Zensor sensor, which he invented. The low-cost wireless sensors are powered by two small solar panels and can be used for monitoring remote infrastructure, asset management, surveillance, and security. Zensor sensors are patent pending.

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Sensors Opening the door to research commercialization at UAA By Vanessa Orr 40

Alaska Business Monthly | July 2013

hen Dr. John Lund, a professor of engineering at the University of Alaska Anchorage (UAA), first began studying the remote monitoring needs of companies doing business in the Arctic, it spawned the idea of creating a longer-lasting, lowercost, maintenance-free wireless sensor. It also launched UAA into a new role as the owner of its first ever startup company, Zensor. While Zensor, established in February by Lund and UAA Vice Provost for Research and Graduate Studies Dr. Helena Wisniewski, is the first company to take part in UAA’s new business infrastructure designed to commercialize innovative faculty and student research, it certainly won’t be the last.

Already more than twenty-five UAA entrepreneurs have filed invention disclosures; a number significantly higher than when Wisniewski joined the UAA staff less than two years ago.

The Entrepreneurial Approach “I was hired for two main reasons—to increase the research enterprise and to get technology commercialization in place,” explains Wisniewski, who has been at the university for a year and nine months. “I was delighted that they wanted to go in this direction; the talent was here, but they needed someone to come in and pull it all together. Now we’ve gone from three invention disclosures to more than twenty-five, and two of these are from UAA students. Also, www.akbizmag.com

“I was delighted that they wanted to go in this direction; the talent was here, but they needed someone to come in and pull it all together. Now we’ve gone from three invention disclosures to more than twenty-five, and two of these are from UAA students. Also, nine of these have evolved into patents pending with more in process.”

—Dr. Helena Wisniewski UAA Vice Provost for Research and Graduate Studies

nine of these have evolved into patents pending with more in process.” “This is an exciting time for UAA,” agrees Chancellor Tom Case, adding that there were a number of reasons why the university chose to become involved in the commercialization of research. “There is real value in experiential learning, or learning by doing, in addition to classroom lectures, which is why the university has long placed an emphasis on undergraduate research. This approach also contributes to the growth of interdisciplinary work on campus, such as when engineering, computer science, and business students and faculty collaborate to take an entrepreneurial approach. “We are also responsible for helping to meet the state’s needs, especially in the area of economic development, when those needs match the university’s mission,” he continues. “And over time, mutually beneficial partnerships between universities and industries can result in the development of research parks clustered close to universities, which provides a good interface between entrepreneurship and research.”

including GPS and gas sensing. “Zensor sensors are designed to meet many market needs,” explains Wisniewski. “In industrial installations

such as the pipeline, for example, the sensors can tell if there is gas or liquid leaking or if there are any cracks or structural instabilities in real-time.

The Sensor that Started it All Zensor LLC, a Seawolf Holdings company, offers a new generation of wireless sensors for use in remote monitoring, asset management, and surveillance and security. The sensors require no batteries, are effective with a small power source, and cost much less than comparable sensors on the market. “Zensor sensors are intended to make monitoring remote infrastructure cheaper, easy, and reliable,” Lund says. Unlike other sensors that are dedicated to one use, Zensor sensors collect and transmit data on humidity, light intensity, temperature, color, sound, thermal images, vibrations, and the tilt of a stationary object, such as a telephone pole. Additional capabilities can be added, www.akbizmag.com

July 2013 | Alaska Business Monthly

“In the area of surveillance and security, the sensors can be placed along the border to detect vibration and can distinguish if the movement is caused by a person or animal,” she adds. “Zensor sensors can also be used at remote sites over large expanses to provide information in diﬃcult-toreach geographic areas. Sensors can be dropped from UAVs [unmanned aerial vehicles] to cover the landscape and provide information on environmental changes such as ice ﬂow or melt.” One of the main advantages of the Zensor sensors is that only one sensor needs to be near a power source in order to provide data on what all of the other sensors are doing. “If one malfunctions, it does not take the whole network down,” Wisniewski says. Solar energy coupled with an ultra-capacitor means that no batteries are required, and sensors are estimated to last more than fift y years. Best of all, Zensor sensors cost less than $40 per unit, compared to approximately $150 and up for other sensors on the market. According to Wisniewski, Zensor sensors are available in small quantities now, and an initial installation may be completed by the end of summer. “We would like to set up a manufacturing facility in Anchorage to produce these sensors; in the first phase of the plan, the facility would involve more hand assembly; in the second phase, there would be more automation using a robot system for assembly,” she explains.

Taking a Product to Market While the university has always been home to brilliant researchers and innovative ideas, marketing those ideas is a relatively new concept. Wisniewski, a technical entrepreneur who has successfully launched ten startup companies and who has worked for public and private companies in academia and for the federal government, set up the university’s commercialization infrastructure that was approved by UAA’s Board of Regents in August 2012. This infrastructure includes Seawolf Holdings and the Seawolf Venture Fund, which provides seed money for startups. The venture fund is planning to raise $10 million and already has a $1.5 million letter of commitment 42

Alaska Business Monthly | July 2013

from the municipality of Anchorage’s 49th State Angel Fund. “We’re planning on raising money from a combination of private corporations, individuals and venture funds, which is one way that the university and the community can work together on community investment,” Wisniewski says. “We hope that this leads to more interactions that can help to fulfill some of the community’s needs.” Wisniewski adds that Seawolf will be considering proposals from the community or from outside of the state, provided that a company’s oﬃces relocate to Anchorage. “Our goal is to build businesses based in Anchorage and Alaska, which will attract more corporate investments to the area and enhance Anchorage as a center for technological advancement and innovation,” she continues. When one of UAA’s startup companies succeeds, it will benefit both the entrepreneur and the university. “The university has equity in the startup company and the founder has equity in the startup company, so if it’s sold, they both benefit,” Wisniewski explains. “Even if an inventor does not create a startup, if their technology is licensed, they still receive a portion of the net end royalty.” According to Wisniewski, of the first $10,000 that is received from licensing, the inventor gets 100 percent of net. Above $10,000, and the inventor receives 50 percent of net. If the company is sold and includes patents, the founder gets a portion of the royalties. If a faculty member is a founder of the startup company, they receive equity in the company. “The UAA policy on royalties is one of the best that I’ve seen throughout the country,” she says. “Getting 50 percent of net after $10,000 is very nice; most universities offer 50 percent up to a point, and then a lower amount on a sliding scale.” While each contract is negotiated individually based on the amount of help that the university provides to a particular spinoff company, working together benefits everyone involved. “Some companies will fail, some will see moderate success, and others will be very successful,” says Case. “There are a number of universities that have had one or more spinoffs become very successful—and

they’ve seen significant cash ﬂow back into their universities. “When times are tough and money is hard to come by, this could also provide economic benefits to the state as it would reduce the university’s reliance on legislative funding,” he adds.

Incentive for Considering UAA Both Wisniewski and Case agree that providing a way to get good ideas to market could serve as an incentive for faculty and students to consider UAA. “This model, when done well with a good concept, not only benefits the state and the university, but students who have great ideas,” says Case. “While not all of the different kinds of research that we do here has commercialization potential, that does not make it any less worthy as it is adding to the body of knowledge. But for those ideas that do lend themselves to commercialization, this program provides a good step to take that opportunity.” “Not only does the commercialization aspect provide researchers with the opportunity to produce patents and create startup companies, but it also provides hands-on experience for students and faculty in how to become more entrepreneurial,” Wisniewski adds. “While not all faculty members are interested in generating intellectual property, the research component is very integral to this process, and intellectual property often generates new research questions.” Now that Zensor sensors have opened the door, UAA is looking at launching its second startup in the next few weeks and has two more waiting in line. “We are also discussing a licensing opportunity for UAA’s surgical rod bender for spinal surgery with interested partners, and are starting to receive revenues from licenses for our student success model, so there will be quite a few things happening in the next couple of months,” says Wisniewski. “Future commercialization could span a variety of areas, including embedded sensors, educational software, cyber security, biomedical devices, and further down the road, potential therapeutic pharmaceuticals to treat neurodegenerative diseases,” she adds. “This is a very exciting time for UAA.”  Vanessa Orr is the former editor of the Capital City Weekly in Juneau. www.akbizmag.com

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special section

Telecom & Technology

Building Out Alaska’s Wireless Network By Nicole A. Bonham Colby

t may be no surprise that the state of Alaska is so large that it is diﬃcult to cover the entire state in the footprint of a single satellite in geosynchronous orbit. What is the significance of that scenario? As a result, providing wireless service to customers across the entire state requires an extraordinary degree of planning, infrastructure, deployment, and challenging maintenance. From ice fields to rainforest island peaks, telecommunications workers operating Alaska’s wireless network are essentially adventurous explorers with a day job that looks something like a reality TV drama. Unlike the Lower 48, where four-wheel-drive makes most communications sites accessible, here it’s a case of not trains, planes, and automobiles but instead snowcats, ﬂoatplanes, and helicopters. It was not that many years ago when a single telegraph line was being constructed through Southeast Alaska to connect the state to the Lower 48. That eventually gave way to an underwater cable—considered “fiber”—and then to satellite communications, additional cable, even more fiber, and added communications companies. Nowadays, Alaska is as wired as the rest of the world—in some cases, much more so. The state’s backbone of communications to support the wireless network is a hybrid of wire, fiber, and microwave links that are, for the most part, transparent to the wireless user. 44

Alaska Business Monthly | July 2013

Transition Time For the end user, Alaska’s wired communications are fast becoming wireless in nature—from the user’s perspective, that is. The offerings may end up sounding a bit like alphabet soup: mobile phones, both smart and basic; computers connected via Wi-Fi hot spots, 3G, 4G, 4G LTE, high speed packet access, CDMA, GSM and a variety of other technologies. There is almost nowhere along the population corridors of this state where wireless communication is not omnipresent. The providers of these services consist of three primary communications service providers: AT&T, General Communications, Inc., and Alaska Communications Systems. The fourth-largest service provider, Matanuska Telephone Association, is also a major player in Alaska’s telecommunication market. These are not the only providers that make up the “cloud” of wireless services in Alaska, but they are the largest. Collectively, individual providers indicate there are more than 562,000 mobile device subscribers in the state, served by the three primary providers. AT&T Mobility (AT&T) “The wireless industry is arguably the most competitive in the world,” says Scott Meyers, director of sales in Alaska for AT&T. “The future is mobile broadband and that is where we are making our investment.” To that end,

he says AT&T has invested $650 million between 2010 and 2012 in wireless communications in the state. A good portion of that investment is in the wires to make the expansion of wireless possible. AT&T’s build-out includes voice and broadband with 4G, 3G, and 4G LTE; with the goal to have its entire Alaska network upgraded to 4G LTE by the end of 2014. Already, LTE is available in Anchorage, the Matanuska-Susitna Valley, and Juneau. The company completed 250 wireless upgrades in the past year alone, including new cell sites and increased cell site capacity and backhaul speeds. Meyers says the company is committed to growth and continues to invest in expanding coverage area and increasing speeds of the network. “Consumer demand is driving wireless broadband and we are striving to meet the customer demand.” He also notes that there are places in Alaska where landlines are not available and wireless is the only option. AT&T customers can choose from a variety of packages to include data only, voice only, or both services.

General Communications, Inc. (GCI) Perhaps the most aggressive build-out plan in the state is to counter that of AT&T and the imminent crouching tiger of Verizon. Last June, GCI teamed up with Alaska Communications to form the Alaska Wireless Network, or www.akbizmag.com

AWN. According to GCI’s vice president David Morris, “AWN combines the wireless assets and coverage of the two … this will make both more eﬃcient and increase their buying power.” While AWN will be basic infrastructure to the two carriers, the end user will not see nor detect any difference in service. “One big advantage,” says Morris, “is by combining the buying power, it will enable the companies to be more competitive on the cost of handsets [phones] with the nation’s major providers.” The rollout of AWN is pending regulatory agency approval and may possibly receive the go-ahead by this July. Morris points out that, with AWN, GCI and Alaska Communications customers can travel from Ketchikan to Kotzebue and their phone will work and not be limited to the highway and cruise ship corridor limits of other carriers. AWN will be managed by GCI with CEO Wilson Hughes as AWN’s first president and CEO. GCI holds the number two ranking of wireless carriers in the state, with more than 142,000 subscribers. Mor-

ris says the company’s goal is to continue to expand wireless, including the data side of things. On the data side, the company is adding TurboZones at almost lightning speeds. As of this writing, nearly 1,300 of these zones are operational. A TurboZone provides data that is not typically Wi-Fi, nor is it typically cellular, says Morris. GCI customers can get download speeds up to 35-40 MB with qualifying plans. These zones or locations are typically in public areas such as restaurants, coffee shops, airports, shopping malls, and sports arenas. According to the company’s website: “If you don’t see your town listed yet, stay tuned.”

Alaska Communications Systems With more than a one hundred year history in the state, Alaska Communications, under the stewardship of President and CEO Anand Vadopalli, serves hundreds of thousands of customers across the state at home and at work, from Alaska’s smallest businesses to the largest enterprises, government agencies, and other telecommunications providers.

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With an emphasis on customer service and understanding customer and market demands, the company was among the first regional carriers in the United States to offer the iPhone, which they introduced in Alaska last April. “It’s also why we invested millions to bring Alaskans 4G LTE wireless services last year,” says Vadapalli. “Our 4G LTE service is available across the state, not just in a few markets.” To support both wireless and wired customers, Alaska Communications offers in- and out-of-state hosted data centers to support business continuity and data recovery with 24/7/365 network monitoring services. There is a lot of talk about the ubiquitous cloud, and the name implies wireless while it is anything but. However, the cloud is accessible with wireless broadband connections and most all of Alaska Communications’ cloud services are available via such wireless broadband connections. Th is includes the cloud-based voice-overIP phone system, introduced to help customers reduce costs and streamline operations.

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July 2013 | Alaska Business Monthly

As a developing partner in AWN, Vadapalli says AWN will be the largest, most advanced wireless network in Alaska, serving communities that would never be served by any national carrier. As partners, Alaska Communications and GCI will independently sell the services and continue to compete with one another utilizing the AWN-provided shared wireless infrastructure. He compares AWN to the trans-Alaska oil pipeline that allows oil companies to share a single pipe and says, “AWN will provide a stateof-the-art Alaska wireless network owned and operated by Alaskans for Alaskans.” The increased buying power of AWN will enable the carriers to bring new products to Alaska faster and likely cheaper. “As for the future,” Vadapalli says, “we will continue to increase broadband deployment and speeds, and expand our suite of business offerings including Voice over Internet, new cloud services, and managed services for businesses.” He went on to say, “We have a long and proud history in the state and look

forward to continuing to bring Alaska’s businesses and Alaskans the latest technology and services.” Alaska Communications has invested more than $500 million in Alaska since 2001 and the company participates on the governor’s Broadband Task Force.

Challenging Topography With all the build-out and improvements in wireless, there are still mitigating circumstances that affect both voice and broadband service for mobile devices. Most of these factors are outside the control of the provider or carrier. Strangely enough, probably the most daunting issue that adversely affects service is the proximity of the cell site. Closer is not necessarily better if there is a mountain or abundance of trees between a mobile user and the cell site or if the user is in a car or a building. Such interferences all adversely affect the radio signal that is trying to shake hands with the device. The more wireless services—to include all types and classes—the more congested the radio spectrum gets, causing radio frequency interference,

or RFI. These services do not all have to be in the same frequency range or class to cause cross-band interference. Add latency to the equation and it is truly amazing that such communication systems work as well as they do. Consider the connection between devices and the source or router as a finite pipe. The more users sharing that resource, the less each user is allocated. Common carriers, or so it seems, cannot keep up with the demand. The more they build, the more users want. To further complicate matters, it’s necessary to consider the capacity of the server and the congestion of the site. Tourism and transient workers may add to the congestion on a seasonal basis. AT&T’s Myers says there are 710,000 residents in Alaska and a lot of people work and visit here that do not live here. He speculates there could be times when there are more users than residents. Not to mention multiple devices per person.  Nicole A. Bonham Colby writes from Ketchikan.

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Telecom & Technology special section

‘It Can Wait’ Wireless Leaders Unite To Curb Texting While Driving

By AT&T

T&T’s It Can Wait® campaign to end texting and driving was significantly bolstered in midMay by the commitment of more than two-hundred organizations to join the movement. Their efforts support a new national advertising campaign, a nationwide texting-while-driving simulator tour, retail presence in tens of thousands of stores, and outreach to millions of consumers with a special focus throughout the summer months between Memorial Day and Labor Day—known as the 100 Deadliest Days on the roads for teen drivers, according the AAA Foundation for Traﬃc Safety. The 2013 campaign drive will culminate September 19 when efforts turn toward encouraging everyone to get out in their community and advocate involvement on behalf of the movement.

‘Deadly Habit’ “Texting while driving is a deadly habit that makes you twenty-three times more likely to be involved in a crash,” said AT&T Chairman & CEO Randall Stephenson. “Awareness of the dangers of texting and driving has increased, but people are still doing it. With this expanded effort, we hope to change behavior. Together, we can help save lives.” The campaign kicked off May 20, with AT&T, Verizon, Sprint, and T-Mobile bringing a multi-million dollar, cobranded advertising campaign to raise awareness of the dangers of texting and driving, and encouraging everyone to immediately take the pledge against it online at itcanwait.com. The campaign is focusing on the stories of people who are living with the consequences of texting while driving. Their stories will be told through various media including TV, radio, digital, and social. The first story in the camwww.akbizmag.com

paign was of Xzavier Davis-Bilbo, who in 2010 at five-years-old, was struck while crossing the street by a young woman texting while driving—leaving him paralyzed from the waist down. Texting while driving is an epidemic, and it’s not isolated to teen drivers. It affects adults as well. A recent AT&T survey shows business commuters know texting while driving is unsafe, but they still engage in these behaviors. In fact they are texting and driving more than they used to. Six in ten commuters said they never texted while driving three years ago. Nearly half of commuters admit to texting while driving, which is more than teens—49 percent of commuters self-report texting while driving, compared to 43 percent of teens, according to a teen survey conducted by Beck Research on behalf of AT&T. Drivers know the risks, yet all this texting while driving is being done despite knowing the risks—98 percent said sending a text or email while driving isn’t safe. For many, it has become a habit. More than 40 percent of those who admitted to texting while driving called it a habit, according to a commuter survey conducted by ResearchNow on behalf of AT&T.

Raising Awareness USAA will collaborate with AT&T to take the It Can Wait texting-while-driving simulator tour to new audiences, driving the total number of planned simulator events to more than four-hundred this year. USAA and AT&T will share the It Can Wait message with military audiences in a tour to more than ten military installations and events across the country. With prominent presence in AT&T, Verizon, Walmart, Sprint, T-Mobile,

Best Buy, and RadioShack stores, the It Can Wait message will be in tens of thousands of retail locations throughout the summer campaign period. Also, government agencies including the U.S. Department of Transportation, National Highway Traﬃc Safety Administration, and National Transportation Safety Board have all committed to help end distracted driving and support the efforts of It Can Wait and others who are working to raise awareness. Throughout the campaign, It Can Wait advocates will take the message to their customers, employees, and stakeholders in a variety of ways. Social media have been major drivers. In the past year, more than 310 million unique user accounts have been reached through Facebook, Twitter, and YouTube alone. It Can Wait advocates are contributing to a social media campaign delivering daily reasons why texting and driving can wait through the 100 Deadliest Days for Teen Drivers. The messages with pictures and personal accounts are shared on Twitter, Facebook, Instagram, Pinterest, and ItCanWait.com. The highlight of the summer campaign will be a national day of action on September 19. On that day, It Can Wait advocates will reach out in their communities to raise awareness of the risks of texting while driving, encourage everyone to make a personal commitment not to text and drive and recruit others to join the growing ranks of advocates dedicated to saving lives by ending texting while driving. To take the pledge and see a list of supporters, visit ItCanWait.com. For additional information and resources, visit att.com/itcanwait.  July 2013 | Alaska Business Monthly

special section

Telecom & Technology

Google Glass Where technology is going

Photo courtesy of Google

By Tyler Arnold

’ll never forget the first time I tried Google Glass. The highly anticipated piece of so called “wearable tech” has had the tech world abuzz since its debut in 2012. Now, after a successful PR campaign that included top celebrities and business leaders getting early copies of the device (and photographed wearing it), the rest of the world gets a peek. While Glass isn’t in stores or in mass production yet, Google has released more than one thousand copies of the device to key Google partners and early developers looking to build off of the Glass platform. Fortunately, I was able to get my hands on a pair during a trip to San Francisco at Google I/O (Google’s massive annual conference). If you’re going to judge Google Glass for what it currently is, you’re going to be disappointed. Glass isn’t so much a piece of tech as it is the first step in a movement to come. At $1,500 a piece, it has a quarter (or less) of the features that come in any free smartphone with

Alaska Business Monthly | July 2013

Using Google Glass gives you a real sense for where technology is going. It’s becoming more ubiquitous and wearable, eventually merging into our bodies. a two year contract. While Glass may be viewed as an “overpriced smartphone accessory,” its use of stateof-the-art technology and ﬂat out revolutionary design allows it to glide through the often turbulent and punishing tech community.

A New Experience Putting Glass on for the first time required a bit of adjusting to align the screen to the upper right hand corner of my right eye. It’s a somewhat underwhelming experience since the device is off by default when you first put it on. It wasn’t until I touched the side of the device (the entire right hand side of the glasses is touch sensitive, like a giant touchpad) that the device turned on. Alternatively, you can also tilt your

head at a 30 degree angle to wake up the screen. Once the screen turns on, your eyes begin to adjust to an experience that you’ve likely never felt before. All of a sudden, you’re being fed information in the right hand corner of your eye that doesn’t go anywhere as you move your head around. Indeed, it takes a while to get used to just moving your eye up and to the right instead of moving your head along with it. While adjusting to this unnatural experience may take time, I felt I got a hang of the Google Glass experience fairly quickly. When the screen ﬂ icks on, it starts displaying the time. You’re required to speak the words “OK Glass,” to activate the device and some of its broader features. Be careful though, as the www.akbizmag.com

Using Google Glass Surprisingly, most individuals recognized Google Glass right away. Since it’s “wearable tech,” nobody really asked to try it since it’s sort of like asking a stranger to try their glasses. Interested parties typically resign themselves to asking a few basic questions like, “Does it work?” or “Is it cool?” as they continue with the rest of their day. While I enjoyed taking a few pictures and starting a few interesting conversations while wearing the device, I felt a few hours with Glass was all I needed to be satisfied. I didn’t get a chance to use the sharing features (uploading pictures to Google+) nor did I drive with them on as it fed me directions. Using Google Glass gives you a real sense for where technology is going. It’s becoming more ubiquitous and www.akbizmag.com

Photos courtesy of Google

conversation may alert those around you! At the moment, you can’t do much more than take a picture, video, or ask for directions. You can place a call when it’s tethered to your phone, but the audio quality is poor (understandable for such a new technology). Since Glass itself only has WiFi onboard, it has to be tethered to a smartphone with a data plan to be used out in the wild. I wore my pair (on loan from a friend) on a grocery trip to a nearby Whole Foods. I took a few pictures along the way just for fun but mainly wanted to get the feel for wearing the device over extended periods and to observe the reactions I would get from other people.

wearable, eventually merging into our bodies. Seeing how smartphones have become an international phenomenon over the last five years alone, I can only imagine where the Glass technology will be in just a few years time. Google is doing all of the right things by experimenting in this space. In the meantime, however, I’ll be saving my $1,500 for something else and let the real early adopters dictate how this amazing little piece of technology can improve. Indeed, Glass is the Motorola Brick (oﬃcially known as the DynaTAC, fi rst production cell phone) of the next era—an early symbol of what’s to come. With that in mind, I’d encourage everyone to at least try the technology (if they can)

to get their own visions of the future. Just don’t forget to tilt your head 30 degrees when you do.  Tyler Arnold is Co-Founder and CEO of SimplySocial, whose company namesake social media marketing software for the enterprise and business market helps organizations manage social media activity in three easy steps. Learn more and contact Arnold online at gosimplysocial.com. July 2013 | Alaska Business Monthly

special section

Telecom & Technology

Photo courtesy of Verizon

Verizon in Alaska

A Verizon technician inside the generator room at the mobile switching center in midtown Anchorage.

Rolling out a scratch-built network By Will Swagel

laskans embracing wireless technology should celebrate the advent of 4G LTE service in the Great Land. 4G LTE stands for Fourth Generation Long Term Evolution and the new technology promises much faster downloads than 3G service—five to ten times faster. Besides making music and movies stream more easily, the technology will facilitate a rash of new applications being developed, connecting mobile devices with such things as a “smart” house or “smart” car that can be controlled from anywhere. Verizon Wireless, which already provides 4G LTE service to the Lower 48 and Hawaii, has been working to add the Last Frontier to its footprint since

Alaska Business Monthly | July 2013

at least 2010 when the company purchased a 700MHz license covering the entire state. Verizon’s 4G LTE roll out is set for this summer. The company bills itself as having the largest 4G LTE network in the nation, available to more than 200 million people. This spring, Verizon was testing its newly-built 4G LTE towers in Juneau, greater Fairbanks, Anchorage, and the Mat-Su Valley. The company had built a brand new switching center in midtown Anchorage. Verizon has announced partnerships with Copper River Telecom, Matanuska Telephone Association, and Ketchikan Public Utilities. “Expanding into Alaska gives us two things,” says Demian Voiles, vice president

for sales and operations for the Alaska region. “It allows our customers (outside of Alaska) to roam on a high quality network when they are visiting Alaska for business or recreation. We also see a strong business case for being in Alaska and providing competition in wireless communication.”

Scratch-Built Network Voiles says although Verizon has the largest 4G LTE network in the country, Alaska presented a unique opportunity to build a 4G LTE network from the ground up, instead of incrementally retrofitting 3G and earlier technology. “This is the first time in the nation— anywhere—that a carrier has been able to build an all 4G LTE network from scratch www.akbizmag.com

“This is the first time in the nation—anywhere—that a carrier has been able to build an all 4G LTE network from scratch and that’s really exciting for us as a company. That applies to the new switching center we built in midtown Anchorage—all new equipment with the latest technology. The towers we are building for cell sites are in the optimal locations they need to be in to run 4G LTE.” —Demian Voiles Vice President for Sales and Operations, Verizon Alaska region

and that’s really exciting for us as a company,” he says. “That applies to the new switching center we built in midtown Anchorage—all new equipment with the latest technology. The towers we are building for cell sites are in the optimal locations they need to be in to run 4G LTE.” Since 2011, Verizon has spent about $100 million planning, permitting, and building in Alaska, says Scott Charlston, Verizon’s public relations manager, head of philanthropy, and head of employee communications for the Pacific Northwest/Alaska region. “In the process,” he says, “we’ve hired and contracted with hundreds of Alaskan workers and firms. Our employee base in the state is growing every month and that will continue as we expand our network and sales channels.”

Useful and Reliable New Technology Charlston says the 4G LTE speeds will enable increasing use of technologies where a person’s car or even refrigerator—if properly equipped—will be able to alert an owner to maintenance problems and offer remote control from a phone or tablet. Verizon has launched a service enabling an aftermarket Delphi Automotive device to connect cars to Verizon’s network. “Instead of just ‘Check Engine,’ it will tell you to check engine for what,” Charlston says. The connected household refrigerator could send data back to its manufacturer and alert the homeowner if there is a problem. The manufacturer could also tell the repair person what parts to bring and save the expense of a second visit. “We’re really expanding the concept of what it means to be connected,” Charlston says. “In our quarterly reports we’re starting to talk about connected devices, because it’s not just one person with one cell phone anymore.” Charlston says he is proud of the number of new Verizon towers equipped www.akbizmag.com

with backup generators that allow wireless service to continue during power outages. Verizon also has contractors signed on to keep the generators fueled in the event of a prolonged outage. “Eighty-five percent of our cell sites have generators,” he says. “That’s well above the industry average.” “The same goes for the switching center,” Voiles adds. “We have a huge bank of batteries and a large diesel generator and another backup [generator] to keep the batteries fed, if necessary.” Voiles says Verizon also has connection to all four of the fiber cable runs to the Lower 48, to provide redundancy.

LTE in Rural Alaska While Verizon’s cell towers are clustered in and around Alaska’s largest cities, the company has formed partnerships with three Alaska rural providers, under its “LTE in Rural America” program—Ketchikan Public Utilities, the Matanuska Telephone Association, and Copper Valley Telecom. “What we’re trying to do as quickly as possible is to expand our LTE technology—which is the quickest form of 4G wireless—into as many places as possible,” Charlston says. Copper Valley Telecom, for example, currently provides land line telephone service, DSL internet connections, and 3G wireless voice and data service to about four thousand subscribers in an area ranging from Valdez and Cordova to Glennallen. Tabitha Gregory, Copper Valley’s chief customer relations agent, explains that the partnership with Verizon is “a leasing arrangement and a roaming arrangement.” Copper Valley is upgrading its 3G cell towers to 4G LTE and leasing bandwidth from Verizon—specifically, CVW 700 MHz upper C block wireless spectrum. This will allow for the interconnection with Verizon’s 4G LTE network.

“Come October, our customers will be surfing on their wireless devices at 4G speeds,” Gregory says. “And when they roam, in Anchorage or the Lower 48, they will be roaming on Verizon and able to take advantage of their robust 4G network. Likewise, when Verizon customers are in our area, they will roam on the Copper Valley Telecom lines.”

Alaskan Surprise Charlston says that his company often tops lists in comparisons of such things as wireless quality, customer service, reduction of dropped phone calls, and the reliable transfer of data. Nonetheless, he says, Verizon “really took to heart the advice that several people gave us upon entering Alaska—and that was to listen first and then speak.” To that end, Verizon employees transferred to Alaska from Lower 48 posts were given cultural training at the Alaska Native Heritage Center in Anchorage. Voiles says Verizon received surprising news when they told employees they were moving into Alaska. “We had employees coming out of the woodwork who are from Alaska and had family in Alaska and would like to go home,” Voiles says. “They wanted to continue to work for Verizon, but in Alaska.” “That’s a real blessing,” he continues, “because they already know the Alaska market and they’re skilled and trained Verizon employees. It’s been a real win for us.” Voiles, who moved to Anchorage with his family about eighteen months ago, says he is quite prepared for many such surprises in the coming years. “I’ve heard people say wherever they live is different,” he says. “Sometimes it’s true and sometimes not. In Alaska, it’s absolutely true.”  Alaskan author Will Swagel writes from Sitka. July 2013 | Alaska Business Monthly

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S

2013 TELECOM & TECHNOLOGY DIRECTORY

INFORMATION TECHNOLOGY Company Company

TopExecutive Executive Top

Alaska Communications 600 Telephone Ave. Anchorage, AK 99503 Phone: 907-297-3000 Fax: 907-297-3052

Anand Vadapalli, Pres./CEO

Alaska Mac Store 1231 E. Dimond Blvd. Anchorage, AK 99515 Phone: 907-272-7697 Fax: 907-272-5097

Raymond Long, Pres.

Alaska Power & Telephone PO Box 459 Skagway, AK 99840 Phone: 907-983-2202 Fax: 907-983-2903

Robert Grimm, Pres.

Allied GIS Inc. 8600 Spendlove Dr. Anchorage, AK 99516 Phone: 907-333-2750 Fax: 907-333-2751

Gail Morrison, Pres.

Apokrisis LLC 700 W. 41st Ave., Suite 205 Anchorage, AK 99503 Phone: 907-250-4454 Fax: 866-890-5369

Kristen Lindsey, Mng. Partner

Applied Microsystems Corp. 3909 Arctic Blvd., Suite 201 Anchorage, AK 99503 Phone: 907-261-8300 Fax: 907-562-8507

Ross Toole, Pres.

Arctic Information Technology 375 W. 36th Ave., Suite 300 Anchorage, AK 99503 Phone: 907-261-9500 Fax: 907-261-9591

Steve Dike, Pres.

Arcticom 310 E. 76th Unit B Anchorage, AK 99518 Phone: 907-276-0023 Fax: 907-276-1913

Don Lederhos, Owner

AK AK Estab. Estab. Empls. Empls.

Services Services

1999

830

1997

1957

100

Telephone service provider (local and long-distance), broadband DSL, WiFi, networking, key system sales and support, Southeast Alaska Microwave Network (SAMN) providing regional access for voice and data. facebook.com/alaskapowerandtelephone.

2002

GIS, mapping for: oil & gas industry, spill response, environmental, land ownership, permitting, utility, programming, web services, ArcGIS Online, Google Earth Pro, mobile apps, application dev., software sales, training, CMMS, asset & facility mngmt. software/ implementation, ESRI Business Partner, Adapx & VUEWork software resellers.

2003

We offer comprehensive Internet services including website design and development, search engine optimization, Internet marketing strategy, social media marketing, online advertising, e-mail marketing, pay-per-click advertising, Web analytics, social media, Web consultation and content copywriting.

1987

Hardware and software sales, networking assessment/design/management/integration, Web development, Web business applications, data protection and backup, power and cooling sales, content management services, eWorX Managed Services. Member of 1NService, a network of technology service providers.

1998

A Doyon Government Group Company providing Alaska businesses with accounting & finance software, customer relationship management, retail & POS systems, SharePoint sites, network infrastructure design & installation, flat-rate IT services, cloud computing, IT security, data backup & recovery, & technical training.

1999

Motorola two-way communication sales and service. Satellite telephone sales, service and rental. Portable repeater rental and sales.

letsbetteralaska@acsalaska.com alaskacommunications.com

We are a leading provider of high-speed wireless, mobile broadband, Internet, local, long-distance and advanced broadband solutions for businesses and consumers in Alaska. Through corporate donations and employee volunteer work, we believe in giving back to help build a better Alaska. Hardware, service & support, software, training, upgrades, and wireless networking.

info@akmacstore.com akmacstore.com

aptalaska.com

gmorrison@alliedgis.com alliedgis.com

info@apokrisis.com apokrisis.com

info@amicro.com amicro.com

info@arcticit.com arcticit.com

pete.jiacalone@arcticom.com

Alaska Business Monthly | July 2013

www.akbizmag.com

Company Company

Top Executive Top Executive

AT&T 505 E. Bluff Dr. Anchorage, AK 99501 Phone: 800-478-9000

Shawn Uschmann, Reg. VP

Borealis Broadband 2550 Denali St., Suite 512 Anchorage, AK 99503 Phone: 907-563-3278 Fax: 907-337-4695

Horst Poepperl, CEO

AK AK Estab. Estab. Empls. Empls.

Services Services

1876

549

For more than a century, we have consistently provided innovative, reliable, high-quality products and services and excellent customer care. Today, our mission is to connect people with their world, everywhere they live and work, and do it better than anyone else.

1997

Borealis Broadband owns and operates a completely independent wireless broadband network in Anchorage and in rural areas. Our network delivers professional quality, highly reliable symmetric Internet service to business and residential customers.

Bowhead Innovative Products & Solutions Steve Darner, Pres. 6700 Arctic Spur Rd. Anchorage, AK 99518 customerservice@bowheadsupport.com Phone: 907-375-6600 Fax: 907-375-6680 bowheadsupport.com/bipsalaska

2006

System integration, product acquisition from OEMs, Integrators, VARs, telecoms, and distributors. We work to identify, evaluate, and add new products and services to our overall offerings in order to satisfy the full range of IT and telecom needs.

Business Application Developers 2826 W. James T. Cir. Wasilla, AK 99645 Phone: 907-373-7773 Fax: 907-373-7773

Kenneth Farmer, Pres.

1990

Requirements analysis, database design, data architecture. Software programming, service, documentation and support.

Cloud49 PO Box 112250 Anchorage, AK 99511 Phone: 855-256-8349

Nathaniel Gates, CEO

2010

Cloud49 is the premiere provider cloud computing solutions including hybrid cloud storage and pay as you go virtual servers. Cloud49 sells through a network of trusted service providers. Although Cloud49's roots are in Alaska, they have since added locations in Seattle, Los Angeles, and Austin.

Compu-Doc 2140 E. Wolverine Cir. Wasilla, AK 99654 Phone: 907-376-8285

Mark Chryson, Owner

1995

Antivirus, malware removal, Internet/Web connectivity, network installation and design, service and support, software, training, upgrades, Web design, Web hosting, wireless networking, disaster recovery, hardware, and remote access.

DenaliTek Inc. 1600 A St., Suite 105 Anchorage, AK 99501 Phone: 907-865-3100

Todd Clark, Pres.

1991

Local information technology company providing computer and network support, telephone systems and unified communications, storage, virtualization and cloud.

Design-PT Inc. 430 W. Seventh St., Suite 202 Anchorage, AK 99501 Phone: 907-222-6133 Fax: 907-222-5448

Jeremiah Dunham, Pres./CEO

1995

We build happier and healthier communities through the application of technology. To do so, we provide networking support, application development and integration, website development, and IT consulting for nonprofits.

DSI, Inc. 6041 Mackay St., Suite 101 Anchorage, AK 99518 Phone: 907-276-2444 Fax: 907-258-4439

Noel Janda, Pres.

2007

Avaya, Nortel, NEC, Alcatel-Lucent, Proxim and Ceregan. IT Infrastructure including VOIP Telephones, GPON-Fiber to the desk, LAN/WAN. Engineering, design, installation, service, sales, and leasing. PBX, IP telephony, call centers, call accounting, local area networks, fiber optics, and microwave.

Frigid North Co. 3309 Spenard Rd. Anchorage, AK 99503 Phone: 907-561-4633 Fax: 907-563-0836

Tom McGrath, Owner

1979

Cabling service; data communications; hardware; network design, installation, security & upgrades; remote access; service & support; wireless networking; wire & cable; premises telecom products; batteries; computer networking products; antennas & tower products; electronic test equipment; tools & accessories.

Futaris (Fomerly Alaska Telecom, Inc.) 301 Calista Ct., Suite B Anchorage, AK 99518 Phone: 907-344-1223 Fax: 907-344-1612

Daniel Boone, Pres./CEO

1981

Futaris is a technology company providing Satellite Communications, Broadcasting Services, LMR, Managed IT and Data Security Services to enterprise and government entities. Futaris has recently been approved as a HITRUST CFS Assessor organization and is the only such assessor in the state of Alaska.

GCI 2550 Denali St., Suite 1000 Anchorage, AK 99503 Phone: 907-265-5600 Fax: 907-868-5676

Ron Duncan, CEO

Glacier Bear IT 4101 Arctic Blvd., Suite 104 Anchorage, AK 99503 Phone: 907-569-0560 Fax: 907-334-3027

Damon German, Dir. Tech. Infstr. Srvcs.

Government Computer Sales Inc. 794 University Ave., Suite 108 Fairbanks, AK 99709 Phone: 907-474-8306 Fax: 907-474-8307

John Powers, CEO

HiSpeed Gear 610 Attla Way #2 Kenai, AK 99611 Phone: 888-283-5136 Fax: 907-283-4713

Mary Daly, Pres.

IBM 1200 Fifth Ave. Seattle, WA 98101 Phone: 415-706-8409

Austin Walsh, Direction Pacific NW/AK

www.akbizmag.com

@ATTCustomerCare att.com, facebook.com/ATT

info@borealisbroadband.net borealisbroadband.net

badinc@mtaonline.net badinc.net

info@cloud49.com cloud49.com

mark@web-ak.com web-ak.com

info@denalitek.com denalitek.com

facebook.com/designpt designpt.com

noel.janda@dsi-ak.com dsi-ak.com

frigid@gci.net frigidnorth.com

sales@futaris.com futaris.com 1979

gci.com

1,734 Integrated communications provider offering facilities-based local and long distance telephone services, Internet and video services, statewide wireless service, data, telehealth, and more.

2010

An Alaskan company with over 30 years of experience in technical support & small business development, we take a proactive approach to exceeding clients' needs for computer technical support & customize our services to match your business age, scale & future plans. Contact us to schedule a FREE on-site consultation.

1989

Virtualization services, Dell, VMWare, Commvault, Microsoft, Wyse, HP Imaging, data center specialist, enterprise applications, disaster recovery and business continuity planning and remediation, Lifecycle Technology Partner- 1000ÂŁs of technology products and software.

1998

An Alaskan owned technology hardware and service company providing support to individuals, small business, and enterprise organizations. We service Kenai, Soldotna, Homer, Seward, Anchorage, and Juneau. At HiSpeed, We Speak Geek so you don't have to.

1947

International Business Machines is the worlds leading business and technology company that help business' and governments create a Smarter Planet.

contact@glacierbear.com glacierbear.com

info@gcsit.com gcsit.com

hispeed@hispeedgear.com hispeedgear.com

austinw@us.ibm.com ibm.com

July 2013 | Alaska Business Monthly

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S 2013 TELECOM & TECHNOLOGY DIRECTORY

INFORMATION TECHNOLOGY

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S 2013 TELECOM & TECHNOLOGY DIRECTORY INFORMATION TECHNOLOGY Company Company

Top TopExecutive Executive

Integrated Logic, LLC PO Box 2121 Palmer, AK 99545 Phone: 907-745-5115 Fax: 888-827-9105

Chris Johnson, CEO

Jeffus & Williams Co. Inc. PO Box 32417 Juneau, AK 99803 Phone: 907-523-2400 Fax: 907-523-2468

Wade McKeown, Pres.

Lewis & Lewis Computer Store 405 E. Fireweed Ln. Anchorage, AK 99503 Phone: 907-743-1600 Fax: 907-274-1221

Philip Fontana, Pres.

MTA Inc. 1740 S. Chugach St. Palmer, AK 99645 Phone: 907-745-3211 Fax: 907-761-2481

Greg Berberich, CEO

Network Business Systems 1231 Gambell St., Suite 300 Anchorage, AK 99501 Phone: 907-272-2888 Fax: 907-272-7117

Scott Thorson, CEO

NorthWest Data Solutions 2425 Leary Bay Cir. Anchorage, AK 99515 Phone: 907-227-1676

Christoper Howell, CEO

OTC PO Box 1711 Girdwood, AK 99587 Phone: 907-382-0456

Kelvin Doyle, Owner

PangoMedia Inc. PO Box 240133 Anchorage, AK 99524 Phone: 907-868-8092 Fax: 907-563-2264

Craig Fisher, CEO

Resource Data Inc. 1205 E. Int'l Airport Rd., Suite 100 Anchorage, AK 99518 Phone: 907-563-8100 Fax: 907-561-0159

Jim Rogers, Pres.

SanComp IT Services LLC 15835 Noble Point Dr. Anchorage, AK 99511 Phone: 907-317-1922 Fax: 877-335-6403

AK Estab. Empls. Empls. Estab.

Services Services

2008

Integrated Logic, LLC is a digital network solutions company serving medium & enterprise businesses, education, healthcare & the public sector in Alaska & beyond. We employ roughly two dozen individuals & offer a broad range of technology products & services, empowering our clients to meet their strategic business & IT goals.

1984

VoIP and traditional telephony, Cat 5E and 6 data cabling, fiber install and splicing, network design, switch and router installation, network security. Offices in Juneau and Sitka.

1987

Lewis & Lewis is a full-service IT company, specializing in HP and Xerox printing products and services.

1953

287

Alaskan owned, non-profit coop. Delivering communications products including wireless, high-definition digital television with video-on-demand & local community content, highspeed Internet, local & long distance, IT business support, dir. & TV advertising; the only company offering rolling gigs.

1987

Alaskan owned and operated, our mission is to help clients solve business challenges by leveraging technology. Through 26 years of dedication and experience, we have forged partnerships and assembled the best and brightest team of professionals to handle all your IT needs.

2003

Web development, custom software and database development. Aviation safety management systems. Temporary staffing of professional software engineers.

2007

Website design, Internet marketing, mobile apps, and Google search engine. Based in Girdwood, Alaska providing custom service and consulting to clients in-state and abroad.

1997

Custom software and database programming, web interface development, information technology consulting, buy-build analysis, systems analysis and integration, business intelligence and reporting services, IT staff augmentation.

1986

125

Custom software development, system integration, business process analysis, web and mobile application development, SharePoint development, network services, and GIS.

Sanjay Talwar, VP Tech.

2010

510

IT consulting, software implementation & dev., systems integration; Application analysis, upgrades & support, database conversion, new database development & data manipulation networking; ASP .NET, C/C++, HTML, JavaScript, XML, C Shell & VB.net; SQL servers, Oracle, & Informix; Healthcare data analysis.

Skurla's POS Solutions 1317 W. Northern Lights Blvd., Suite 1 Anchorage, AK 99503 Phone: 907-243-2683 Fax: 907-248-2466

Lynn Skurla, Owner/Gen. Mgr.

1976

Alaska's Retail/Hospitality IT and Point of Sale Specialists: restaurant/bar systems, retail/ grocery/inventory systems, Mobile & iPad Solutions, cash registers, scales, POS security cameras, credit & gift cards.

Sockeye Business Solutions 737 W. Fifth Ave., Suite 209 Anchorage, AK 99515 Phone: 907-258-2642

Nick Brorson, VP Client Relations

2006

Sockeye Business Solutions is an Anchorage based business software consulting company that solely focuses on implementing, customizing, integrating, and supporting Microsoft's Dynamics line-of-business software applications. This includes ERP, CRM, and SharePoint applications.

Software North LLC 2230 E. 52nd Ave. Anchorage, AK 99507 Phone: 907-561-4412 Fax: 907-561-5412

Donald Anderson, Gen. Mgr.

1978

Disaster planning, network design, network security, programming, software, training, Web design and Web hosting.

Sundog Media LLC 5033 Sillary Cir. Anchorage, AK 99508 Phone: 907-338-1847 Fax: 866-521-0355

Joe Law, Founder

1996

Anchorage Alaska's Website Design Studio. Small businesses, non-profits & companies just like yours count on our Sundog team to meet website design, management, hosting & domain management needs. Alaskan & family owned since 1996, we are a friendly group of people designing & managing brilliant websites.

SunGard Availability Services 800 Fifth Ave., Suite 4100 Seattle, WA 98104 Phone: 425-495-7079

Don Wright, Strategic Accounts Exec.

SunGard Availability Services is your partner in IT availability and business continuity. With more than 30 years of disaster recovery expertise, supporting complex hybrid IT environments, we partner with organizations of all sizes to provide solutions backed by service level agreements to meet specific business requirements and objectives.

Talking Circle Media 5630 B St. Anchorage, AK 99518 Phone: 907-245-3209 Fax: 907-245-3339

Jonathan Butzke, Owner

Video production, live video webcast, conference A/V, Internet video and website design. A/V equipment rentals.

info@integratedlogicllc.com integratedlogicllc.com

service@jeffuswilliams.com jeffuswilliams.com

info@lewisandlewis.com lewisandlewis.com

mtasolutions.com

info@nbsys.com nbsys.com

support@nwds-ak.com nwds-ak.com

otcweb@gmail.com otcwebdesign.com

pangoinfo@pangomedia.com pangomedia.com

info@resdat.com resdat.com

info@skurlas.com skurlas.com

facebook.com/followsockeye sockeyeconsulting.com

don.anderson@softwarenorth.com softwarenorth.com

info@sundogmedia.com sundogmedia.com

don.wright@sungard.com sungardas.com

info@talkingcirclemedia.com talkingcirclemedia.com

Alaska Business Monthly | July 2013

1989

www.akbizmag.com

Company Company

Top Executive Top Executive

TecPro Ltd. 816 E. Whitney Rd. Anchorage, AK 99501 Phone: 907-348-1800 Fax: 855-348-1830

Cynthia Saunders, Pres.

TelAlaska 201 E. 56th Ave. Anchorage, AK 99518 Phone: 907-563-2003 Fax: 907-565-5539

Brenda Shepard, Pres./CEO

Tex R Us LLC 2525 Blueberry Rd., Suite 206 Anchorage, AK 99503 Phone: 907-248-3978 Fax: 907-563-2948

Andrew Zhelayer, Gen. Mgr.

Tongass Business Center 618 Dock St. Ketchikan, AK 99901 Phone: 907-225-9015 Fax: 907-225-9014

A. Lani Davis, Chairwoman

Weston Technology Solutions 139 E. 51st Ave., Suite 200 Anchorage, AK 99503 Phone: 907-375-8324 Fax: 907-375-8325

Greg Freeman, VP

AK AK Estab. Empls. Estab. Empls.

Services Services

1997

TecPro offers electrical contracting services, UL Listed industrial control system integration, and security integration services (video, access, alarm). Specialties include SCADA and PLC design, fabrication, installation, and programming.

1968

TelAlaska is a full service telecommunications company serving twenty five rural communities and providing advanced network services to urban markets.

1999

Antivirus, data communications, disaster recovery, E-commerce solutions, Internet/web connectivity, leasing/renting, network design, network installation, network security, network upgrades, relocation services, and remote access.

1983

Business supply, Sharp digital equipment, installation, Internet/Web connectivity, network design, network installation, network security, network upgrades, relocation services, remote access, service and support, software and business solutions.

1994

Weston offers unlimited business hours support for a single flat monthly fee. Ideal for businesses with 10 or more computers. Call or visit our website at Weston-tech.com.

info@tecpro.com TecPro.com

customerservice@telalaska.com telalaska.com

info@texrus.com texrus.com

orderdesk@tbcenter.com tbcenter.com, facebook/tbcenter

weston@weston-tech.com weston-tech.com

TELECOM MEDIA Company Company

TopExecutive Executive Top

Apokrisis LLC 700 W. 41st Ave., Suite 205 Anchorage, AK 99503 Phone: 907-250-4454 Fax: 866-890-5369

Kristen Lindsey, Mng. Partner

Applied Microsystems Corp. 3909 Arctic Blvd., Suite 201 Anchorage, AK 99503 Phone: 907-261-8300 Fax: 907-562-8507

Ross Toole, Pres.

www.akbizmag.com

AK AK Estab. Estab. Empls. Empls. 2003

1987

info@apokrisis.com apokrisis.com

info@amicro.com amicro.com

Services Services

July 2013 | Alaska Business Monthly

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S 2013 TELECOM & TECHNOLOGY DIRECTORY

INFORMATION TECHNOLOGY

ALASKA BUSINESS MONTHLY’S 2013 TELECOM & TECHNOLOGY DIRECTORY TELECOM MEDIA Company Company

Top TopExecutive Executive

Compu-Doc 2140 E. Wolverine Cir. Wasilla, AK 99654 Phone: 907-376-8285

Mark Chryson, Owner

Design-PT Inc. 430 W. Seventh St., Suite 202 Anchorage, AK 99501 Phone: 907-222-6133 Fax: 907-222-5448

Jeremiah Dunham, Pres./CEO

HiSpeed Gear 610 Attla Way #2 Kenai, AK 99611 Phone: 888-283-5136 Fax: 907-283-4713

Mary Daly, Pres.

Immersive VIdeo Solutions 907 E. Dowling Rd., Suite 14 Anchorage, AK 99518 Phone: 907-279-4000 Fax: 907-274-4000

Kenn Kadow, Principle

Nerland Agency Worldwide Partners 808 E St. Anchorage, AK 99501 Phone: 907-274-9553 Fax: 907-274-9990

Karen King, CEO/Pres.

NorthWest Data Solutions 2425 Leary Bay Cir. Anchorage, AK 99515 Phone: 907-227-1676

Christoper M Howell, CEO

Northwest Strategies 441 W. Fifth Ave., Suite 500 Anchorage, AK 99501 Phone: 907-563-4881 Fax: 907-562-2570

Timothy Woolston, CEO

Optima Public Relations PO Box 101134 Anchorage, AK 99510-1134 Phone: 907-440-9661 Fax: 907-376-9615

Tom Anderson, Mng. Partner

Resource Data Inc. 1205 E. Int'l Airport Rd., Suite 100 Anchorage, AK 99518 Phone: 907-563-8100 Fax: 907-561-0159

Jim Rogers, Pres.

SimplySocial Inc. 2830 Seafarer Lp. Anchorage, AK 99516 Phone: 877-250-8536

Tyler Arnold, CEO

Smart Phone Creative 205 E. Dimond Blvd., Suite 510 Anchorage, AK 99515-1909 Phone: 907-223-1213

Russell Pounds, Principal/VP Mktng.

Solstice Advertising 3700 Woodland Dr., Suite 300 Anchorage, AK 99517 Phone: 907-258-5411 Fax: 907-258-5412

Lincoln Garrick, Pres.

Sundog Media LLC 5033 Sillary Cir. Anchorage, AK 99508 Phone: 907-338-1847 Fax: 866-521-0355

Joe Law, Founder

Talking Circle Media 5630 B St. Anchorage, AK 99518 Phone: 907-245-3209 Fax: 907-245-3339

Jonathan Butzke, Owner

Tex R Us LLC 2525 Blueberry Rd., Suite 206 Anchorage, AK 99503 Phone: 907-248-3978 Fax: 907-563-2948

Andrew Zhelayer, Gen. Mgr.

Weston Technology Solutions 139 E. 51st Ave., Suite 200 Anchorage, AK 99503 Phone: 907-375-8324 Fax: 907-375-8325

Greg Freeman, VP

AK Estab. Empls. Empls. Estab.

Services Services

1995

1998

2005

Geo-spatial mapping using 360å¡ HD video cameras and LiDAR technologies.

1975

Globally connected agency with strong Alaska roots, skilled at communications strategy, brand development, advertising, media planning and buying, public relations, web and interactive design, experiential and social media. Named one of Outside Magazine's "Best Places to Work 2012."

2003

Web development, custom software and database development. Aviation safety management systems. Temporary staffing of professional software engineers.

1987

NWS is a full-service advertising and public relations firm that produces and implements multi-media campaigns promoting statewide businesses in some of Alaska's largest industries, including natural resources, tourism, transportation, healthcare, and retail.

2011

Website and graphic Design; media and public relations; radio, T.V., and Internet production; full-service advertising agency; social media content management and messaging; branding and marketing.

1986

125

2011

SimplySocial helps in building stories and building trust. Our unique software coaches you through the complexities of maintaining a social media presence. Create valuable content, respond to your audience, and grow an online fan base with our easy, yet efficient, tool.

1990

We have over 30 apps on the Apple including a #1 selling game. We develop customized apps for business to help increase operational capacity. Has iTiunes made it easier for you to buy music? We can develop video content & help streamline your business processes. Discover the innovation & creativity mobile can bring.

1997

Solstice is a full-service advertising and public relations agency providing a complete suite of communications offerings. From broadcast and radio to print, web, mobile and social media, Solstice does it all: strategy, media planning, research, copy writing, graphic design, interactive and production.

1996

1989

Video production, live video webcast, conference A/V, Internet video and website design. A/V equipment rentals.

1999

1994

Weston offers unlimited business hours support for a single flat monthly fee. Ideal for businesses with 10 or more computers. Call or visit our website at Weston-tech.com.

mark@web-ak.com web-ak.com

facebook.com/designpt designpt.com

hispeed@hispeedgear.com hispeedgear.com

info@immersivevideosolutions.com immersivevideosolutions.com

facebook.com/nerlandagency nerland.com

support@nwds-ak.com nwds-ak.com

chris@nwstrat.com nwstrat.com

info@optimapublicrelations.com www.optimapublicrelations.com

info@resdat.com resdat.com

contact@gosimplysocial.com GoSimplySocial.com

russell@prmalaska.com

info@solsticeadvertising.com solsticeadvertising.com

info@sundogmedia.com sundogmedia.com

info@talkingcirclemedia.com talkingcirclemedia.com

info@texrus.com texrus.com

weston@weston-tech.com weston-tech.com

Alaska Business Monthly | July 2013

Custom software development, system integration, business process analysis, web and mobile application development, SharePoint development, network services, and GIS.

www.akbizmag.com

Company Company

Top Executive Top Executive

Alaska Communications 600 Telephone Ave. Anchorage, AK 99503 Phone: 907-297-3000 Fax: 907-297-3052

Anand Vadapalli, Pres./CEO

Alaska Power & Telephone PO Box 459 Skagway, AK 99840 Phone: 907-983-2202 Fax: 907-983-2903

Robert Grimm, Pres.

Applied Microsystems Corp. 3909 Arctic Blvd., Suite 201 Anchorage, AK 99503 Phone: 907-261-8300 Fax: 907-562-8507

Ross Toole, Pres.

AK AK Estab. Empls. Empls. Estab.

Services Services

1999

830

1957

100

1987

Arctic Slope Telephone Association Coop. Stephen L. Merriam, CEO/Gen. Mgr. 4300 B St., Suite 501 Anchorage, AK 99503 info@astac.net Phone: 907-563-3989 Fax: 907-563-1932 astac.net

1979

Telecommunications service cooperative providing local, long-distance, wireless and Internet access services to residents, government and industry throughout the North Slope region of Alaska.

Arcticom 310 E. 76th Unit B Anchorage, AK 99518 Phone: 907-276-0023 Fax: 907-276-1913

Don Lederhos, Owner

1999

Motorola two-way communication sales and service. Satellite telephone sales, service and rental. Portable repeater rental and sales.

AT&T 505 E. Bluff Dr. Anchorage, AK 99501 Phone: 800-478-9000

Shawn Uschmann, Reg. VP

1876

549

Borealis Broadband 2550 Denali St., Suite 512 Anchorage, AK 99503 Phone: 907-563-3278 Fax: 907-337-4695

Horst Poepperl, CEO

1997

2006

letsbetteralaska@acsalaska.com alaskacommunications.com

aptalaska.com

info@amicro.com amicro.com

pete.jiacalone@arcticom.com

@ATTCustomerCare att.com, facebook.com/ATT

info@borealisbroadband.net borealisbroadband.net

GET NOTICED! Reaching a statewide business audience in Alaska’s leading business publication gets results!

Anne Campbell Advertising Account Manager (907) 257-2910 anne@akbizmag.com I will work with you to plan an ad campaign that offers marketplace visibility and fits your budget.

(907) 276-4373 • Toll Free (800) 770-4373

akbizmag.com

www.akbizmag.com

July 2013 | Alaska Business Monthly

ALASKA BUSINESS MONTHLY’S 2013 TELECOM & TECHNOLOGY DIRECTORY

TELECOM PROVIDERS

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S 2013 TELECOM & TECHNOLOGY DIRECTORY TELECOM PROVIDERS Company Company

Top TopExecutive Executive

Cordova Telephone Cooperative PO Box 459 Cordova, AK 99574 Phone: 907-424-2345 Fax: 907-424-2344

Paul Kelly, Gen. Mgr./CEO

DenaliTek Inc. 1600 A St., Suite 105 Anchorage, AK 99501 Phone: 907-865-3100

Todd Clark, Pres.

Design-PT Inc. 430 W. Seventh St., Suite 202 Anchorage, AK 99501 Phone: 907-222-6133 Fax: 907-222-5448

Jeremiah Dunham, Pres./CEO

DSI, Inc. 6041 Mackay St., Suite 101 Anchorage, AK 99518 Phone: 907-276-2444 Fax: 907-258-4439

Noel Janda, Pres.

Futaris (Fomerly Alaska Telecom, Inc.) 301 Calista Ct., Suite B Anchorage, AK 99518 Phone: 907-344-1223 Fax: 907-344-1612

Daniel Boone, Pres./CEO

GCI 2550 Denali St., Suite 1000 Anchorage, AK 99503 Phone: 907-265-5600 Fax: 907-868-5676

Ron Duncan, CEO

IBM 1200 Fifth Ave. Seattle, WA 98101 Phone: 415-706-8409

Austin Walsh, Direction Pacific NW/AK

Inmarsat 804 NW 200th Seattle, WA 98177 Phone: 206-633-5888 Fax: 206-237-9100

Dave Brengelmann, Dir.

Integrated Logic, LLC PO Box 2121 Palmer, AK 99545 Phone: 907-745-5115 Fax: 888-827-9105

Chris Johnson, CEO

Microcom 129 W. 53rd Ave. Anchorage, AK 99518 Phone: 907-264-0005

Sandra Blinstrubas, Pres.

MTA Inc. 1740 S. Chugach St. Palmer, AK 99645 Phone: 907-745-3211 Fax: 907-761-2481

Greg Berberich, CEO

Network Business Systems 1231 Gambell St., Suite 300 Anchorage, AK 99501 Phone: 907-272-2888 Fax: 907-272-7117

Scott L. Thorson, CEO

OTZ Telephone Cooperative, Inc. PO Box 324 Kotzebue, AK 99752-0369 Phone: 907-442-3114 Fax: 907-442-2123

Doug Neal, CEO

ProComm Alaska LLC 2100 E. 63rd Ave. Anchorage, AK 99507 Phone: 800-478-9191 Fax: 907-261-2663

Gary Peters, Pres./CEO

TelAlaska 201 E. 56th Ave. Anchorage, AK 99518 Phone: 907-563-2003 Fax: 907-565-5539

Brenda Shepard, Pres./CEO

Verizon Wireless Alaska 188 W. Northern Lights Blvd., Suite 901 Anchorage, AK 99503

Demian Voiles, VP Verizon Alaska

AK Estab. Empls. Empls. Estab.

Services Services

1978

Local exchange carrier, ISP provider, and DSL service.

1991

Local information technology company providing computer and network support, telephone systems and unified communications, storage, virtualization and cloud.

1995

2007

1981

robyn@ctcak.coop ctcak.net

info@denalitek.com denalitek.com

facebook.com/designpt designpt.com

noel.janda@dsi-ak.com dsi-ak.com

sales@futaris.com futaris.com 1979

gci.com

1,734 Integrated communications provider offering facilities-based local and long distance telephone services, Internet and video services, statewide wireless service, data, telehealth, and more.

1947

International Business Machines is the worlds leading business and technology company that help business' and governments create a Smarter Planet.

1993

Global satellite telephone and data service provided through local offices around the world.

2008

1984

Satellite communications, satellite delivered Internet, television and telephone communications.

1953

287

1987

1975

Wireless, local, long distance, and Internet.

2000

ProComm Alaska is proud to service the entire state of Alaska with personalized, cutting-edge two-way technologies and operations communications. From FCC Licensing assistance to Public Safety Dispatch Centers, not to mention our digital, commercial network, ProComm Alaska is your one-stop communications provider.

1968

TelAlaska is a full service telecommunications company serving twenty five rural communities and providing advanced network services to urban markets.

2010

Verizon Wireless operates the nation's largest 4G LTE network and largest, most reliable 3G network. The company serves 98.9 million retail customers, including 93.2 million retail postpaid customers. In Alaska, Verizon is building an all 4G LTE network from the ground up- the first of its kind anywhere in the nation.

austinw@us.ibm.com ibm.com

maritime.orders@inmarsat.com inmarsat.com

info@integratedlogicllc.com integratedlogicllc.com

Microcom.tv

mtasolutions.com

info@nbsys.com nbsys.com

frontdesk@otz.net otz.net

sales@procommak.com procommak.com

customerservice@telalaska.com telalaska.com

Alaska Business Monthly | July 2013

www.akbizmag.com

AGENDA

Compiled By Tasha Anderson

July

■

PNWER 23rd Annual Summit

■

July 14-19—Dena’ina Civic & Convention Center, Anchorage: The annual summit of the Pacific NorthWest Economic Region; Join more than 600 key business leaders, legislators, and government leaders from PNWER’s ten states, provinces, and territories to address the major policy issues impacting the region. pnwer.org

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USAEE/IAEE North American Conference July 28-31—Hotel Captain Cook, Anchorage: The theme of the conference is Industry Meets Government: Impact on Energy Use and Development. This conference will address the issues, challenges, and opportunities of industry-government relations as the stakeholders strive to meet their respective goals for commerce and society. Contact: Roger Marks 907-250-1197 rogmarks@gmail.com usaee.org/USAEE2013/

August

■

September

■

Alaska Oil and Gas Congress September 17-18—Anchorage: The Annual Alaska Oil and Gas Congress brings together

www.akbizmag.com

■

September 26-28—Kodiak Harbor Convention Center, Kodiak: This year’s theme is: “Fisheries and Watersheds: Food Security, Education, and Sustainability.” The conference will feature a variety of sessions focusing on marine science, sustainability, circumpolar health, and interdisciplinary education. Contact: Brian Himelbloom bhhimelbloom@alaska.edu 907-486-1529, arcticaaas.org

October

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All-Alaska Medical Conference

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Alaska Miners Association Annual Convention and Trade Show

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Alaska Coalition on Housing and Homelessness Conference October 9-11—Anchorage Marriott Downtown, Anchorage: Events include keynote speakers and training sessions. Registration

Sheraton Hotel, Anchorage: Includes luncheons, banquets, keynote speakers and short courses. Registration required. alaskaminers.org

Associated General Contractors of Alaska Annual Conference

Alaska Travel Industry Association Convention & Trade Show October 8-10—Sitka: Gathering for Alaska’s tourism industry leaders with delegates from tour operators, wholesalers, Alaska vendors, destination marketing organizations, and elected oﬃcials. Registration required. alaskatia.org

October 28-30—Dena’ina Civic & Convention Center, Anchorage: This is the largest conference and trade show for public power utilities in Alaska, held every other year. It provides opportunities to learn about the latest practices, innovations, and technology in the electric utility industry through education sessions, a trade show, and networking. Contact: Gail Patterson,360-816-1450 gail@nwppa.org, nwppa.org

November

Alaska Chapter of the American Fisheries Society Annual Meeting October 7-11—Princess Lodge, Fairbanks: This year’s theme is, “The Practice of Fisheries: Celebrating all who work toward sustainable fisheries in Alaska.” afs-alaska.org

October 25-28—Hotel Captain Cook, Anchorage: Annual conference of the Alaska Association of School Business Oﬃcials. alasbo.org

NWPPA/APA Alaska Electric Utility Conference & Tradeshow

October 2—Dena’ina Civic & Convention Center, Anchorage: Come honor the top Alaska companies ranked by revenue at our annual luncheon. Contact: Tasha Anderson, 907-276-4373 surveys@akbizmag.com, akbizmag.com October 7-9—Westmark Hotel and Conference Center, Fairbanks: A continuing medical education conference put on by the Alaska Academy of Physicians Assistants, providing up to 25 CMEs. akapa.org

October 24-26—Carlson Center, Fairbanks: 6th Annual gathering of Alaska Native peoples to discuss current news and events on a state, national and international level. This year’s theme is “Traditional Family Values,” with keynote speaker Nelson Angapak. nativefederation.org 907-263-1307 agrohall@nativefederation.org.

ALASBO Annual Conference

Alaska Business Monthly’s Top 49ers Luncheon

■

October 21-23—Carlson Center, Fairbanks: Sponsored by the First Alaskans Institute, the conference stimulates dialogue between young people and Elders, and encourages the maintenance of traditional Native values and practices in a modern world. Registration required. firstalaskans.org 907-677-1700 info@firstalaskans.org

Alaska Federation of Natives Annual Convention

Arctic Science Conference

Institute of the North’s Week of the Arctic August 12-18—The Institute has been convening Week of the Arctic since 2011 to help Alaskans understand the critical challenges and issues at stake in the Arctic. It culminates with the Robert O. Anderson Sustainable Arctic Award, which recognizes an individual or organization for long-time achievement in balancing development of Arctic resources with respect for the environment and local benefit. institutenorth.org

September 23-28—Anchorage: The theme is “Today’s Visions Tomorrow’s Reality.” The conference includes training, workshops, lectures, and a firefighter competition. facebook.com/AlaskaFireConference

required. alaskahousing-homeless.org/conference

Native Knowledge: Respecting and Owning our Living Culture

September 17-21—Hotel Captain Cook, Anchorage: The Alaska Association of Realtors 2013 Convention theme is “No Excuses” and will be hosted by the Valley Board of Realtors. alaskarealtors.com/2011-convention/

Alaska Fire Conference

NASBO Annual Meeting July 21-24—Hotel Captain Cook, Anchorage: The National Association of State Budget Oﬃcers, hosted by the Alaska Oﬃce of Management and Budget, meets to hear expert speakers on the economy, state revenues, healthcare reforms and more, as well as to network. Contact: Lauren Cummings 202-624-8434 lcummings@nasbo.org nasbo.org

■

AAR Convention

NASS Summer Conference July 18-21—Dena’ina Civic & Convention Center, Anchorage: Summer conference of the National Association of Secretaries of State: Join Secretaries of State from around the nation to discuss major state policy issues, share best practices, get professional development training, and hear expert speakers. Contact: Stacy Dodd, Events Manager 202-624-3525, nass.org

oil and gas professionals from across the U.S., Canada, and abroad, and is dedicated to updates on projects, policy, opportunities, and challenges in the oil and gas industry in Alaska. alaskaoilandgascongress.com

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November 13-16—Anchorage: AGC of Alaska is a non-profit construction trade association dedicated to improving the professional standards of the construction industry. agcak.org

RDC’s Annual Conference: Alaska Resources November 20-21—Dena’ina Convention Center, Anchorage: The conference provides timely updates on projects and prospects, addresses key issues and challenges and considers the implications of state and federal policies on Alaska oil and gas, mining and other resource development sectors. akrdc.org

July 2013 | Alaska Business Monthly

RIGHT MOVES Anchorage Chamber of Commerce

Michele Harmeling is the new Membership Development Coordinator of Anchorage Chamber of Commerce. Harmeling earned her Bachelor of Arts from the University of Alaska Fairbanks and her Master of Fine Arts from Eastern Washington University.

RIM Architects

Ridenour

Geserick

TimRidenour,AIANCARB, has been promoted from Associate to Principal of RIM Architects. Ridenour earned a Master of Architecture and Bachelor of Architecture from Montana State University and is a Registered Stump Architect in Alaska. Brian Stump, AIA, has rejoined RIM Architects after being away from the firm for three years. Stump has a Bachelor of Architecture from Washington State University. Matt Geserick has joined RIM Architects as a Level I Design Assistant. Geserick earned a Master of Architecture and a Bachelor of Science in Architecture from the University of Idaho.

Silverbow Bakery

Silverbow Bakery in Juneau has hired Jennie Rizzo as its Executive Chef. Rizzo graduated from Le Cordon Bleu College of Culinary Arts in Chicago.

Arctic Slope Regional Corporation

Arctic Slope Regional Corporation announced the appointment of Paul Dillahay as ASRC Federal President and CEO. Dillahay previously served

Compiled by Mari Gallion as ASRC Federal’s chief operating officer and had principal responsibility for day-to-day operations of ASRC Federal subsidiaries and the company’s Shared Services Center.

Ukpeaġvik Iñupiat Corporation

CathyFrosthasbeennamed Corporate HSET Program. Manager at Ukpeag vik Iñupiat Corporation. Frost obtained her BA in Psychology from Arizona State University and her MA in Public Administration with an emphasis in leadership from Northern Frost Arizona University.

Stoel Rives LLP

Stoel Rives LLP announces that Tina Grovier has joined its Anchorage office as a partner in the firm’s Environment, Land Use, and Natural Resources group. During her fifteenyear career she has helped secure federal and state permits for the first non- Grovier conditional state right-ofway for a North Slope natural gas pipeline, Alaska’s first heap leach facility, Alaska’s first third-party natural gas storage facility, and Anchorage’s first commercial-grade wind farm.

Northrim Bank

Northrim Bank announces the promotion of Caroline Huntley to Marketing Officer. Huntley received her Bachelor of Science in Business Administration and Marketing from the University of Alaska Anchorage. Huntley

Lumen Christi High School

Lumen Christi High School announced today it has named John Harmon as its new principal. Harmon attended Glacier View Elementary and is a graduate of Palmer High School. He holds a JD from Capital University and received a bachelor’s Harmon degree from Houghton College in New York. Harmon will receive his Master of Education in School Leadership, with a concentration in Catholic Theology, this summer from St. Joseph’s College in Maine.

Golder Associates, Inc.

Golder Associates, Inc.’s Anchorage office welcomes new hire Olin Twitchell as a Junior Level Fisheries Biologist. Twitchell is a graduate of the University of Alaska Fairbanks with a Bachelor of Science in Fisheries and a Minor in Arctic Skills.

Chugach Alaska Corporation

Chugach Electric

Chugach Alaska Corporation has appointed Randi Jo Gause as its new Senior Corporate Communications Manager. Gause has a Bachelor of Arts in Mass Communications with an emphasis in public relations from University of Utah.

ASRC Federal

ASRC Federal has named Ron Mason Sr. Vice President, C4ISR System Solutions. Mason has a bachelor’s degree in electrical engineering and a master’s degree in engineering management from Western New England College.

Reeves

Gillespie

David Gillespie and Susan Reeves were elected

OH MY! 60

Alaska Business Monthly | July 2013

www.akbizmag.com

RIGHT MOVES to three-year terms on the Chugach Electric Association board of directors. Gillespie is the CEO of The Aleut Corporation. Reeves is an attorney and the managing member of Reeves Amodio. Janet Reiser was elected board Chair, Reeves was elected Vice-Chair, Jim Henderson was elected Secretary, and Sisi Cooper was elected Treasurer.

MSI Communications

MSI Communications has hired Amy Guse as an Account Manager. Born in Anchorage and schooled in Kentucky, Guse’s career spans more than a decade of public relations and marketing in Alaska. MSI Communications has also hired Bryan Meshke to fill the role of Web Director. Holding two bachelor’s degrees, one in Business Administration and another in Fine Arts, Meschke presents a great combination of business savvy, artistic creativity, and extensive knowledge of technology.

The Alaska Native Medical Center

The Alaska Native Medical Center announces Roland Torres, M.D., FAANS, FACS, has been appointed Clinical Director for t h e D e p a r t m e nt of Neuro-surgery. Prior to joining The Alaska Native Medical Center, Torres was a Clinical Torres Associate Professor of Neurosurgery at Stanford University Medical Center, where he was also a Site Director for the Neurosurgery Residency Training Program.

Ahtna Netiye’, Inc.

A htna N eti ye’, In c . announces that Craig O’Rourke will serve as President of subsidiary companies Ahtna Government Services Corporation and Ahtna Design-Build, Inc., effective immediately. O’Rourke is a native of Orange Tansy County, California, and is

www.akbizmag.com

Compiled by Mari Gallion a graduate of University of California Los Angeles. He is also a Certified Hazardous Materials Manager and holds a Master of Science in Environmental Sciences from California State University, Fullerton. Ahtna Netiye’, Inc. also announces that Roy J. Tansy Jr. will serve as Interim CEO. Tansy has served the Ahtna family of companies in many different roles for more than ten years, the most recent being as Executive Vice President of Ahtna Netiye’ and the President of Ahtna Construction & Primary Products Company, a wholly-owned subsidiary.

engineering management in 2002 from the University of Missouri. He received a Bachelor of Science degree in 1998 from the U.S. Military Academy and was commissioned in the U.S. Army Corps of Engineers.

R&M Consultants, Inc.

Bradley Reid + Associates

Longtime journalist Ed Bennett has joined Bradley Reid + Associates, Inc. as a Copywriter/ Editor. He holds a BA in Communications and an MBA with an emphasis in Telecommunications Management, both from Alaska Pacific University. He is accredited in public relations by the Public Relations Society of America.

Fairbanks NSB School District

Fairbanks North Star Borough School District announces that Briana Randle will be the new Principal of Joy Elementary at the start of the 20132014 school year. Randle holds a bachelor’s degree in Geography and a master’s degree in Teaching Randle from Southern Oregon University as well as an administration certificate from Portland State University.

U.S. Army Corps of Engineers

Major Mark J. DeRocchi assumes the role of Deputy Commander for the U.S. Army Corps of Engineers-Alaska District at Joint Base ElmendorfRichardson. DeRocchi earned Master of Science degrees in Civil Engineering from the University of New DeRocchi Hampshire in 2008 and in

Daley

Frutiger

R&M Consultants, Inc. announces the addition of four staff members to its Anchorage office team. Janek Wierzbicki, PE joined R&M’s Surface Transportation Group as a Project Engineer. Wierzbicki holds a BS in Civil Engineering from the Schmidt Virginia Military Institute and is currently working on his MS in Civil Engineering. He is a professional civil engineer registered in Alaska and Utah. John Daley, PE joined R&M in January 2013 as a Senior Project Engineer in their Waterfront Engineering Group. Daley holds a MS in Civil Engineering (Coastal and Marine) and a BS in Civil Engineering from the University of Alaska Anchorage. He is a professional engineer registered in Alaska and Washington. Abe Schmidt joined R&M as a Geologist in the Earth Sciences Department. Schmidt holds a joint B.S in Geosciences from University of Montana/ University of College Cork. Marc Frutiger, PE moved back to Alaska and rejoined R&M as a Project Engineer in the Surface Transportation Group in February 2013 after working abroad for a few years. Frutiger has a BS in Civil Engineering from the South Dakota School of Mines and Technology. He is a professional civil engineer registered in Alaska and Wyoming. 

July 2013 | Alaska Business Monthly

HEALTH & MEDICINE

Respect Your Elders Home health care and assisted living

y dad, an eighty-something retired big game guide who still ﬂies his Super Cub back and forth each summer to the family’s commercial fish camp, and who came to Alaska before statehood, is happiest when he’s in the woods. He has always said that when he gets too feeble to live on his own, just send him out to the cabin and let nature take its course. Though we understand the sentiment, we of course won’t toss him to the wolves— but we will do what all good children do and find him the help he needs. Alaska’s elder care services and assistance for those with disabilities are, like most things anymore, on par with services across the country and available even in rural areas. And with the state’s senior population growing, these services will only become more prominent.

What is Home Health Care and Assisted Living? Senior apartments, adult daycare, nursing home, respite care—the plethora of terms within the home health care and assisted living spectrum can be overwhelming. Whether you’re seeking care for a senior or loved one with disabilities or you’re a service provider in need of information, a good place to start is with Senior and Disabilities Services (DHSS), a division of the State of Alaska Department of Health and Social Services. Experts there can help with everything from finding a provider to licensing and regulations to aging and disability resource centers around the state. DHSS describes an assisted living home as “a residence for people who need help with the activities of daily living such as bathing, dressing, grooming, eating, housekeeping, shopping, money management and the scheduling of appointments. Some assisted living homes provide transportation and/or escorts to appointments or community events. 62

Alaska Business Monthly | July 2013

By Susan Sommer Some homes may also provide limited health-related services such as assisting residents with taking medication.” Confusion can arise, however, because some facilities provide a wide range of services, from basic help to high-level nursing care. For example, state-run Pioneer Home locations offer private rooms for relatively independent individuals as well as full care for people with Alzheimer’s disease or related dementia. Home health care, on the other hand, focuses on providing health and some medical services in a person’s home. Since services run the gamut, home health care and assisted living are typically talked about as one industry that provides a continuum of services rather than being separate industries.

Alaska’s Senior Population Growing In 2010, Alaska was home to more than 91,000 people age sixty and older. More than half of them were older than sixty-five, with about 4,700 at eighty-five plus. The Alaska Department of Labor estimates that by 2035, there will be about 193,000 Alaskans age sixty and older, and that about 155,000 of them will be older than sixty-five with almost 19,000 at eighty-five plus. With increased age come health issues, some easily managed, but others such as Alzheimer’s, an emotional and financial drain on families. In 2010, there were about 5,300 Alaskans living with the disease. By 2035, that number is expected to jump to more than 20,000. Options Available Although an array of options is at hand, great care must be taken when selecting care for yourself or your loves ones, as one can never assume that what might seem basic—assistance with feeding, for example—is offered in services. Here are a few examples of available options.

Trinion Quality Care Services is an accredited provider of personal care services in Alaska. Trinion is also Alaskan-owned and -operated, giving the company an edge over standardized franchises in knowing how to handle Alaskans’ unique sense of independence as well as the often idiosyncratic living conditions of rural areas. Trinon offers “individualized personal care services for senior citizens, disabled adults, eighteen years and older, and other community members who need short or long term care in their home.” An example of this personalized approach is Trinion’s ﬂexibility in number of hours spent per day with each client— anywhere from one to twenty-four. Some franchise programs require a three-hour minimum, regardless of whether that meets the client’s needs. CEO Theresa Bovey and her cousin, COO/CFO Angie Gerken, stress that Trinion’s three-day intensive training for field staff prior to entering a client’s home sets their company apart from others in the industry; it includes training on ethical issues, matters of maintaining personal boundaries, and effective communication strategies. Once training is complete, team members go to a person’s home to help with medication reminders, personal hygiene, light housekeeping and other chores, shopping, errands, transportation, respite care, and more. Registered nurses have oversight for each client’s personal care plan even though medical care per se is not a service. Trinion staff members are also trained to help clients and family members navigate the complex family dynamics encountered in seeking help for a loved one. Midnight Sun Home Care (formerly Senior Care of Alaska) has been in the business of helping Alaskans since 2002. Like Trinion, Midnight Sun Home Care is not focused on medical care but rather assisting people with housekeepwww.akbizmag.com

BusinessPROFILE

Trinion Quality Care Services, Inc.

Specializing in the art of caregiving

hen Trinion Quality Care Services started in 2005, there were just a few large companies offering home care services in Alaska. The market has since been inundated with franchises and other providers, but Anchorage-based Trinion continues to thrive. Operated by cousins and best friends Theresa (Bovey) Welton and Angie Gerken, Trinion is among the most respected personal care agencies in Alaska. It offers a variety of nonmedical, personal care services for senior citizens, disabled adults, children and others who need short or longterm care in their home. These services, primarily provided to Medicaid clients, range from hygiene care and meals to providing transportation for appointments and shopping. Trinion also aids long-term care insurance holders and private clients. Trinion takes a personal approach to providing services for their 150 clients. It strives to match each client with a particular caregiver based on the client’s physical and emotional needs.“We’re a larger company, but we operate as if we were a small one,” says Chief Executive Officer Welton. “Everyone is treated like an individual.” Gerken and Welton—both born and raised in Alaska—are passionate about providing daily-living support to help Alaskans remain in their own homes. “We work hand in hand with hospice agencies, home health and assisted living homes,” says Welton, also Trinion’s program manager. “We consider ourselves to be collaborative internally and in our community. Aging in place safely is our key concern.” Welton, who holds a bachelor’s degree in social work, has served on the boards of AgeNet (the Alaska Geriatric Exchange Network) and the Older Persons Action Group. She is

also a founding member of the Alaska Chapter of the Home Care Association of America. Family relationships and teamwork are paramount at Trinion. Trinion has approximately 150 caregivers and an eleven-member staff that includes a nurse, care coordinators and case managers. “Quality care requires an interdisciplinary team approach,” says Gerken, chief operations officer. “Our secret to success is working together, and supporting our direct care workers, who are really the heart of our business.” Skilled caregivers are critical to Trinion’s success. The company has an amazing team of caregivers who specialize in the “art” of caregiving. Gerken explains: “The art of it is being able to preserve one’s dignity and provide hands-on care with compassion. It takes a special person to be a caregiver.” That’s why Trinion is very selective when employing caregivers. Prospective caregivers must undergo an initial screening, an interview and an intensive three-day training before they can

carry the Trinion name. “We invest in our caregivers from the beginning,” Welton says. “We want to make sure they demonstrate ‘quiet competence.’ We want the caregivers to go into the client’s home, make a connection, and use initiative while improving their client’s quality of life.” To ensure it meets the highest standards of care, Trinion uses a thirdparty, Home Care Pulse, to survey clients monthly about the services they receive. Trinion is also leveraging technology to meet those standards, including an automated telephone system to “clock in” and “clock out” caregivers whenever they’re on the job. “The investment in technology has helped us provide better service,” Gerken says.

Theresa (Bovey) Welton, CEO 4450 Cordova St., Suite 200 Anchorage, Alaska 99503 Phone: 907-644-6050 Fax: 907-644-4438 trinionqcs.com

Preserving Dignity — Providing Compassion — Promoting Respect P A I D

A D V E R T I S E M E N T

ing, errands, transportation, and more. The company offers overnight and livein services as well. It also addresses the emotional needs of seniors or those who may be home-bound such as loneliness and boredom: caregivers might play cards with their clients, read to them, or watch movies as a way of providing companionship and mental stimulation. And while seniors make up 90 percent of the company’s clients, others also seek assistance: disabled adults, new parents who need a break, family caregivers who need time off, and patients recovering from surgery at home. Midnight Sun Home Care won the Better Business Bureau’s 2013 Business of the Year Torch Award for Alaska. The award honors excellence in the marketplace. Founder and CEO Kevin Turkington says he’s “especially proud” of the award “because it was earned based on our core values, the Promise of Home, the Promise of Trust and the Promise of Community. Since 2002 we have lived by these values as we serve the Anchorage Mat-Su areas, so it really is an honor to be recognized for what you do every day! Life happens twenty-four/ seven,”

Alaska Business Monthly | July 2013

According to a 2011 report from Northwestern Mutual Life Insurance and Financial Services, the average cost of care in Anchorage is as follows: $526 per day for a nursing home, $4,726 per month for an assisted living facility, and $24 per hour for home health care. he says. “So do our services and along with them, our values.” When you need more than home health care, an assisted living home can be the next step. There are more than six hundred licensed assisted living homes in Alaska; two-thirds of them are in Anchorage. Many are small-scale operations and have just five or so residents. Larger ones, such as Anchorage’s Marlow Manor, with nearly fifty apartments, offers daily communal activities like meditation, bingo, movies, spelling bees, or live music. The State of Alaska oversees Pioneer Home locations in Anchorage, Fairbanks,

Juneau, Ketchikan, Palmer and Sitka. Any Alaska resident age sixty-five or older who has been physically present in Alaska for a minimum of twelve consecutive months prior to application can apply for admission. The average age of residents in all the Alaska Pioneer Home sites combined is almost eighty-seven. The homes’ core values are a positive attitude, love, accountability, trust and excellence. Approximately 59 percent of Alaska Pioneer Home residents have some form of dementia. Depending on level of care required, monthly costs run from $2,350 to $6,170. Providence Horizon House in Anchorage is another option for people looking for care in an assisted living home—although the limitations of services offered may not be readily apparent. It offers studio apartments in which residents get twenty-four-hour help with various everyday tasks as needed—but be advised that residents are expected to be semi-mobile in order to live in the apartments, which may mean different things to different people; and in the event that you or your loved one need temporary or permanent assistance with feeding, this is not provided.

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Each of the 370-square-foot apartments are wheelchair accessible and have emergency call systems, private bathrooms and showers, microwave ovens, refrigerators and sinks. Common areas include a dining room, activity room, hair salon, computer lab, and quiet spaces. Providence Horizon House apartment residents may have pets, provided they practice responsible pet ownership. “All pets must have proper vaccinations and pass a temperament test,” says Director Jamie Benard. Providence Horizon House also has two cottages for residents with Alzheimer’s disease or other memory disorders. Secured exterior doors prevent residents from wandering away from the facility. Staff is on hand twenty-four hours a day to help with daily tasks of living and to lead specially designed programs and activities for people with dementia. Another assisted living option unique to Alaska is the Alaska Housing Finance Corporation’s (AHFC) senior support programs. AHFC’s senior housing oﬃce was created in 1990 and works in conjunction with the Alaska Commission on Aging. AHFC funds major senior housing projects, keeps an up-to-date inventory of all the senior housing available in Alaska for independent and assisted living, and operates several senior facilities in larger communities around the state. The organization also offers information about home modifications that can help seniors stay in their own homes longer.

Obviously, costs can balloon quickly. How do we pay for long-term care of our loved ones without going broke ourselves? Having private long-term care insurance is one way. There are also Medicaid and Medicare programs that provide funding. The Aging and Disability Resource Centers can help navigate this often worrisome aspect of care.

chorage, Bristol Bay, Kenai Peninsula, and Southeast. The Kenai Peninsula center has oﬃces in Homer, Soldotna, and Seward. The Southeast center has oﬃces in Haines, Juneau, Ketchikan, and Sitka. All of these centers are part of a federal effort to help people more easily access and understand the longterm services and supports available right where they live. 

Resource Centers There are four regional Aging and Disability Resource Centers in Alaska: An-

Susan Sommer is a freelance writer and editor living in Eagle River.

Costs of Long-Term Care According to a 2011 report from Northwestern Mutual Life Insurance and Financial Services, the average cost of care in Anchorage is as follows: $526 per day for a nursing home, $4,726 per month for an assisted living facility, and $24 per hour for home health care. According to Trinion CEO Theresa Bovey, hourly rates in Alaska for 2013 are slightly higher at $25 to $27 an hour. Furthermore, Bovey says that in-home (otherwise known as private) care options are limited if not completely unavailable in most parts of Alaska. “There are several in Anchorage,” Bovey says, “and we know of only one in Wasilla. There may be others, but we don’t know about them.” www.akbizmag.com

July 2013 | Alaska Business Monthly

CONSTRUCTION

Alaska Airlines Center topping out ceremony. ÂŠ 2013 Ken Graham Photography.com

Alaska Business Monthly | July 2013

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Tops Off Projects booming across the state Compiled by Susan Harrington, Managing Editor

he Alaska construction industry is in full swing with hundreds of projects across the state underway pumping billions of dollars into the Alaska economy. A quick poll of a handful of architects, engineers, and general contractors resulted in a few dozen projects for a sample of the building going on this summer. The Alaska Department of Transportation alone listed more than a thousand projects, and many bids will have been decided by July with construction started, depending on funding. Motorists have been slowing down for construction workers in the double-fine construction zones for months now. Money started hitting the street before the late snows ceased and more will have by July.

Southcentral One of the largest multi-year vertical projects currently under construction in Anchorage is the University of Alaska Anchorage Seawolf sports arena, named the Alaska Airlines Center in March. The 196,000-square-foot facility is expected to be complete next August, and Cornerstone General Contractors is hard at work this summer on the $109 million project. In May UAA held a topping out ceremony when ironworkers aďŹ&#x192; xed an evergreen tree to the last iron beam, hoisted it to the top of the building, and bolted it into place. More than four hundred people attended the www.akbizmag.com

ceremony, which is a centuries old tradition among ironworkers and earlier builders to signify the top of a structure is set. The facility will seat 5,600 and be used for sports, graduations, and other community events. It was designed by architects Hastings+Chivetta and McCool Carlson Green. In June, Neeser Construction, Inc. had mobilized and set up field oďŹ&#x192;ce trailers, getting ready to break ground and begin the new UAA Engineering and Industry Building in the south parking lot across from the current sports arena. The projected $123 million, 81,500-square-foot facility is expected to be complete in summer 2015. It was designed by architects and engineers Livingston Slone, Inc. Several other projects are ongoing at the UAA campus as well, including the approximately $2 million MAC Dorm Renovation being done by Watterson Construction Company, Inc. Across the street from UAA, Davis Constructors and Engineers, Inc. continues completing phases of the $150.3 million Providence Generations project, a multi-year project aimed at modernizing and expanding Providence Alaska Medical Center for generations of Alaskans. Slated for completion in 2014, work began in 2011 and includes renovation of 100,789 square feet of existing surgery, pharmacy, sterile processing, and materials management space and construction of an July 2013 | Alaska Business Monthly

The new Natural Pantry design. Renderings courtesy of Spark Design LLC

85,782-square-foot Maternity Center. The Newborn Intensive Care Unit was recently expanded and modernized as part of the phased project. Davis will also be doing some site work this summer on the Providence Transitional Care Center, along with projects at the Lake Otis Medical Plaza and Alaska Neurology Center. In downtown Anchorage, the company built the Covenant House Alaska Replacement 68

Alaska Business Monthly | July 2013

project; with construction complete and landscaping and furnishings being finalized, move-in is anticipated this month or early August. Davis is also working on a residential development near Bayshore at Resolution Point for Hickel Investments, finishing up a Joint Base ElmendorfRichardson military housing privatization, and doing work on the JBER Camp Denali Readiness project that

includes an extension of the National Guard building and some mechanical and electrical work. In other residential construction, Neeser is continuing a housing project in South Anchorage between Abbott and Oâ&#x20AC;&#x2122;Malley roads off Lake Otis Parkway and starting a senior housing project in Eagle River. There is quite a bit of new retail work going up in Anchorage this summer. www.akbizmag.com

Covenant House Alaska.

Anchorage Sand Storage Facility. Rendering courtesy of PDC Inc. Engineers

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Watterson is doing a $9 million renovation of the Fred Meyer on Northern Lights Boulevard. PCL Construction Services, Inc. is building a one hundred thousandsquare-foot Cabela’s next to Target in South Anchorage off 104th Avenue and C Street. Neeser is working on a Sam’s Club at Tikatnu Commons, and started building a new Natural Pantry retail store in midtown at the corner of Thirty-Sixth Avenue and A Street in April.

The forty-five thousand square foot food and retail products stand-alone Natural Pantry is going to be about 25 percent larger and features a stylized storefront. It was designed by Spark Design LLC, the Architect of Record, for owners Rick and Vikki Solberg. The new Natural Pantry is about 25 percent larger than the University Center store and will continue to serve hot food and soup, as well as make on-demand sandwiches in a café setting every day. It is expected to be completed in January 2014, opening in February. Watterson is working on several other projects in Anchorage, including a Special Olympics Training Facility, the St. Elizabeth Ann Seton renovation and addition, and renovations at the Alaska Native Tribal Health Center. PDC Inc. Engineers is the prime for the 29,825-square-foot Anchorage Sand Storage Facility, one of three separate facilities designed for the Alaska DeJuly 2013 | Alaska Business Monthly

Rendering courtesy of Jensen Yorba Lott Inc/DLR Group

Kodiak High School. Sealaska Heritage Institute Southeast Alaska Native Cultural and Visitor’s Center. Renderings courtesy of MRV Architects

partment of Transportation and Public Facilities. The Anchorage facility was out to bid in June with an Engineer’s Estimate between $2.5 million and $5 70

Alaska Business Monthly | July 2013

million. Bids closed June 12 and the completion date is set for July 2014. In Seward, PDC provided engineering on the Crown Point Maintenance

Station design/build project. Bristol is the general contractor. This new facility will service road maintenance vehicles near Seward. The structure is an 8,400 square foot pre-manufactured metal building that includes three maintenance bays, accessory oﬃce, training rooms, and attached boiler and generator spaces. The exterior skin of the building consists of a low maintenance insulated metal wall and roof panels over steel building frames. The project also includes the development of the surrounding parcel to include a sand storage pad, drainage pond, and a parking area for the building users. The design for the project is based on a prototype design developed by PDC for a similar facility in Aniak. The design was completed early in 2013 with construction set for the summer. www.akbizmag.com

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Also on the peninsula, Neeser is in the middle of construction on the $35.8 million, fift y-two thousand-squarefoot Kenaitze Indian Tribe Dena’ina Wellness Center in the historic district in the city of Kenai. The project broke ground last summer and will open early next year. In Kodiak Davis is beginning work on a $21 million Long Term Care Facility the borough is building. In early June the company had done dirt work and laid some foundation for the multiyear project with an estimated November 2014 completion date. Perhaps the biggest project ever in the Kodiak Island Borough is the $80.4 million Kodiak High School project. Jensen Yorba Lott is the prime contractor and PDC is providing engineering. Watterson is the general contractor. The borough approved a $62 million construction budget in May. The Kodiak Island Borough also approved a $25 million landfill project.

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Southeast Farther south, MRV Architects Inc. is the prime on the Sealaska Heritage Institute Southeast Alaska Native Cultural and Visitor’s Center. PDC provided MEP engineering. It was going to bid in early June. MRV and PDC also teamed up on the University of Alaska Southeast New www.akbizmag.com

July 2013 | Alaska Business Monthly

Rendering courtesy of MRV Architects

University of Alaska Southeast New Residence Hall.

is underway this summer by Alaska Commercial Contractors, Inc. The first phase includes seismic retrofit of the main entry portico, including reinforcing the four large marble columns supporting the portico. The columns are made from Tokeen Marble from Prince of Wales Island in southern Southeast

Alaska and are one of the most recognizable features of the eighty-year-old building. Additional work this summer will include structural and drainage work in the crawl space under the ground ďŹ&#x201A;oor. This initial phase is in preparation for a multi-year second phase to retrofit the entire building for

Photo by Wayne Jensen

Residence Hall project, with MRV as the prime and PDC providing structural engineering. The project was due to begin construction in June and will house up to 60 beds in the first phase with future growth to a minimum of 120 beds. The first phase of construction for the renovation of the Alaska Capitol

Alaska Capitol renovation is underway. 72

Alaska Business Monthly | July 2013

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seismic forces and to renovate the exterior to address eighty years of wear and deterioration. The first phase of the Capitol renovation is about $1.7M, the rest is still in design. The future work will also include a significant upgrade of the thermal envelop and a replacement of the original steam heating system. All work is scheduled for the summer and fall seasons to minimize conﬂicts with the legislative sessions. Jensen Yorba Lott is the prime.

Mat-Su Valley Heading north, PDC is the prime contractor for the Palmer High School Major Renovation project, which is in the first of two phases. In 2013, PDC was selected as the prime consultant for this large evaluation, design, and phased construction renovation. Phase I includes an evaluation and inventory of the entire 196,606-square-foot building’s systems, including a hazmat lead and asbestos survey report and a seismic hazard evaluation. PDC will be providing a detailed report of the evaluation and recommendations for proposed corrections. PDC will provide a cost proposal for phase I and a subsequent cost proposal for phase II based on the phase I analysis for negotiation with the Borough. Phase II of the project will include design of the approved improvements. PDC will produce new drawings, specifications, and a new Statement of Probable Construction Cost with appropriate updates at each phase of design. Also in the Valley, Davis has a contract for the Matanuska Susitna athletic facilities improvements at Mat-Su Borough schools for which each site has different needs. Interior GHEMM Company is busy with the University Dining Facility in Fairbanks. The project model is a P3 public-private partnership project with Lorig Associates of Seattle. GHEMM is working for Lorig, the developer that put the project together and sold the bonds. Lorig will own the building and lease it back to the university for thirty years and then transfer title to the university. The project is a partial remodel and an addition to the Wood Center Student Union. It will take the place of www.akbizmag.com

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July 2013 | Alaska Business Monthly

the current dining facility and seat 334 people in the dining hall and 60 in the coffee house. It is expected to be done a year from this July. Also at UAF, Davis is closing out the Life Sciences Research and Teaching Facility, which will be open for fall semester this year. Watterson began the $2 million UAF – Fine Arts Vapor Barrier project in May. Additionally, Davis broke ground on the UAF Engineering Facility and started site work on the multi-year project in June. Responding to a 100 percent increase in student enrollment and graduation of baccalaureate-trained engineers called for in the University of Alaska Statewide Engineering Ex74

Alaska Business Monthly | July 2013

pansion Initiative, the new four-story, 116,900-square-foot engineering education and research facility is being designed around the theme of “Making Engineering Visible.” ECI/Hyer Architects was the prime and PDC is providing survey, civil, and structural design services for this new building, which is sited between the Duckering Building (current engineering building) and the Bunnell Building (College of Business) at the southeast corner of Cornerstone Plaza. During the fall of 2011, PDC’s survey crews performed a topographic survey of the site through the UAF term contract to get the project off to a fast start.

A portion of the existing campus sanitary sewer line ran beneath the proposed building. PDC designed the realignment of approximately eight hundred feet of this realignment of eighteen-foot-deep sewer on a fast-track schedule (two weeks) in October 2012 to allow the contractor to relocate the line prior to winter—and keep the project on track for construction this year. PDC is working on the UAF Critical Electrical Distribution Renewal project. PDC is currently developing the design of a new electrical distribution system for the entire UAF campus. This is a multi-year project that began in 2009, utilizing phased funding, with an expected total cost of $40 million. www.akbizmag.com

Transportation Solutions For Your Business!

GHEMM also has a dewatering project for Golden Heart Utilities; additions to a city maintenance facility and the local police station; and a $7.3 million, 18,000-square-foot library at North Pole for the Fairbanks North Star Borough. Watterson has two significant projects at Fort Wainwright; one is in the completion stage, the $67 million FTW348A Hangar project. The other is in the early stages. Watterson started the FTW357 Hangar project and was in the midst of foundation work in early June. This project was left off the U.S. Army Corps of Engineers project list last month. This is a $72 million Design/ Build hangar which was awarded last June, went through a protest, and was www.akbizmag.com

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July 2013 | Alaska Business Monthly

Fort Wainwright Hangar Project (FTW357). Renderings courtesy of Bettisworth North Architects and Planners, Fairbanks

designed this past winter by Watterson’s design team. The project is scheduled for completion in September 2014. Also at Fort Wainwright, American Mechanical Inc. has a MOUT Facility 8(a) set-aside. Another Watterson project in the Interior is the $1.4 million clinic in Ruby. Osborne Construction Company picked up a job at the landfill for the Fairbanks North Star Borough in the $7 million to $10 million range. Kiewit has passed the halfway mark and is continuing work on the Tanana River Bridge at Salcha for the Alaska Railroad Corporation. A considerable amount of ﬂat construction is being done in the Interior this summer, there is more ﬂat than vertical. HC Contractors Inc. has a chunk of that road work and those projects follow: 76

Alaska Business Monthly | July 2013

The 12-mile, $23,953,284 Dalton Highway MP 197-209 Rehabilitation project began March 2012 and will be complete this October. Stage two of the $598,900 FMATS ADA Curb Corner and Sidewalk Upgrades project will include 555 linear feet of 5’ sidewalk, 33 driveways, and 25 ramps, and will be completed this October. The $233,690 NR Bicycle pedestrian Facilities Rehabilitation and Improvements project will produce 1.7 miles of asphalt sidewalk and was to be completed in June.

The 0.8-mile, $21,965,862 Illinois Street Rehabilitation project began in April 2012 and will be completed in October. The 10.5-mile, $16,585,843 Goldstream Rd Improvements and Fairbanks Area Spot Intersection Improvements project began in June and will be completed in November. The 7-mile, $7,189,147 Steese Highway MP 5-11 Rehabilitation started in May and will be completed in October. The 3.5-mile, $4,442,893 North Pole Nordale Road Rehabilitation Project began in May and will be completed in October.  www.akbizmag.com

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MINING

The two largest buildings in Alaska can be found at Red Dog Mine’s port site. After consulting with local hunters after the ice moves out, the mine begins an impressive one hundred-day shipping season to move lead and zinc concentrate from the port site to markets around the world.

Red Dog Mine International player, local jobs driver By Zaz Hollander

he scale of the Red Dog Mine near Kotzebue is massive and worldwide. The mine is one of the largest zinc concentrate producers on the planet, thanks to an ultra-rich ore body expected to deliver major quantities of the sought-after mineral for the next twenty years. Red Dog also produces lead, though at a smaller scale. A port about fift y miles west of the mine contains the two largest buildings in the state by square footage. They store powdery piles of zinc awaiting shipment. The mine makes the most of a short, one-hundred-day shipping season bracketed by the heavy ice formation in the Chukchi Sea. The Alaska State ﬂag painted on the roof of one of those buildings is the biggest in Alaska. But the economic impact of the mine is also very local, backers say.

Alaska Business Monthly | July 2013

Along with decent jobs, the mine generates a tremendous amount of local revenue for the Northwest Arctic Borough, where high fuel prices and low job opportunities add up to some of the highest costs of living in Alaska. A unique operating agreement between mine operator Teck Alaska Incorporated and landowner NANA Regional Corporation, Inc. guarantees that a share of Red Dog’s jobs go to NANA shareholders. This spring, the number of shareholders working at the mine was around 53 percent of the 450 Teck employees there. Not all those shareholders live in the area but about half do. “That agreement has put people from this borough to work and that income stays in our community, whether it’s Buckland, Noatak, Kivalina, or Kotzebue,” Northwest Arctic Borough Mayor Reggie Joule says. “Right now about 25 percent of

the workforce still resides in the borough and that’s a healthy chunk of change in terms of the payroll that stays here.”

By the Numbers Red Dog is the Northwest Arctic Borough’s only taxpayer. In 2011, the borough’s Teck revenue was $8.9 million through a payment in lieu of taxes agreement. Last fiscal year, that amount jumped to a little more than $13 million, according to Borough Treasurer Judith Hassinger. NANA received $124.7 million in net proceeds from the Red Dog Mine in 2012, of which $76.4 million is shared with other regions, Kikiktagruk Iñupiat Corporation, and at-large shareholders, according to Shelly Wozniak, NANA’s communications director. The 1980s agreement between what was then Cominco and NANA now serves as a model for partnerships with www.akbizmag.com

indigenous groups and mine operators. NANA has brought in indigenous groups from places such as Bolivia and Australia who wanted to learn more. “What’s the true success of Red Dog Mine? It’s the partnership,” Wozniak says. “It’s become a beacon or standard that people try to achieve in their engagement.” Since mining began, NANA has received more than $894 million in proceeds from the mine, of which more than $515 million has been shared with other regions. In 2012, more than 573 NANA shareholders were employed at Red Dog (Teck and contractors), earning approximately $34 million in total wages. Last year, Red Dog spent more than $127 million on goods and services within Alaska, according to Teck Community and Public Relations Manager Wayne Hall. More numbers from Hall: 13 percent of the workforce is female. They “make the best heavy equipment operators,” he says. Alaska residents make up 79 percent of employees, more than the average for state mining operations. Hall also provided a list of permit numbers. The mine has seventy-one permits, thirty-one regulating bodies, fifteen

Human Resources staff at Red Dog Mine like (l to r) Sharon Westlake, Joann Ashby, Alice Weber, Bernice Wilson, Robert Nelson, Christina Clark, and Jennie Outwater, work hard to connect NANA shareholders with jobs at the mine.

agreements, sixteen work plans, ten approvals, and five standards to adhere to.

Zinc 101 Hall talks like a man accustomed to educating people about all things zinc. One of the primary uses of zinc is the galvanizing that protects steel from rusting. Most every car and truck rumbling down the road has some form of galvanizing. “One of the examples I like to give people: think about every mile of guardrail

you drive by in a day,” Hall says. “That’s coated with zinc to keep it from rusting.” The zinc concentrate leaving Red Dog goes all over the world. About a third goes to Teck Resources’ Trail Refinery and Smelter in British Columbia. Some 37 percent heads to Europe, 15 percent to Korea, 8 percent to Australia, and 5 percent each to China and Japan, according to 2011 numbers provided by Hall. Red Dog’s zinc is mined from a surface ore body that’s more zinc-rich than many. Mining within the mine’s origi-

st First Things Fir

First things first. At Fort Knox, our priorities are simple. Our people. Our community. Our environment. We invest in our people, so they are trained to do the best job possible. We support our community with charitable donations, volunteer hours and local purchases. We adhere to the toughest standards to protect water and air quality. These are our priorities. Because at Fort Knox, it’s about putting first things first.

Fairbanks Gold Mining Inc. A Kinross company

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are simple. r top priorities At Fort Knox, ou nment.Business Monthly July r2013 envi|roAlaska possible. r community. Ou do the best job to Our people. Ou d ine tra are they urs our people, so

volunteer ho

season when the Chukchi is ice-free. Ore components without market value—barite or silica—go to a tailings facility. All the water used in milling is recycled for use in future milling operations.

Robert Sheldon of Ambler is one of the more than 570 NANA shareholders employed at Red Dog Mine.

nal main zinc deposit ended in 2012. Now Red Dog is mining entirely from a new deposit—the Aqqaluk Deposit, named for Iñupiat leader Robert “Aqqaluk” Newlin Sr.—that’s located right next to the original deposit. The Aqqaluk Deposit contains 51.6 million tons of reserves, containing 16.7 percent zinc and 4.4 percent lead, and represents an estimated twenty years of additional mining for the region and NANA, according to the mine’s website. Miners drill a grid of twenty-fivefoot-deep holes in the rock and fill the holes with explosives to break up the rock. Front-end loaders transfer the chunks into haul trucks. A milling facility grinds up the ore to remove the zinc mineral component and separates it from the base rock through a series of stages that start with crushing and end with a water and chemical slurry that includes cyanide to make the ore particles “want to stick to air bubbles and take a ride to the surface,” as Hall puts it. The process is also known as froth ﬂotation. The ore concentrate that results is dried and then trucked to the port for storage, pending the one-hundred-day shipping 80

Alaska Business Monthly | July 2013

Water Worries Water quality was the subject of a 2003 lawsuit filed against Teck by numerous plaintiffs including the Native Village of Kivalina. The village and other plaintiffs claimed mine wastewater was contaminating their downriver drinking water: Red Dog Creek, which runs through the mine site, then into Ikalukrok Creek, and ultimately feeds into the Wulik River that supplies Kivalina’s drinking water approximately sixty-two river miles downstream from the mine. As part of a settlement agreement in 2008, Teck pledged to build a water discharge pipeline that would bypass Red Dog Creek and transport treated water to the Chukchi Sea, fifty-two miles away. The pipeline is still in the development stage, Hall says. Teck looked into a buried pipeline, but engineers declared that option too risky given the boggy ground and frost heaves that could result. Therefore, an above-ground pipeline is being studied and comes with other challenges, including keeping the water from freezing and the potential of interrupting caribou migration routes. Community meetings and involvement on the caribou topic planned for the summer, including the collection of traditional and local knowledge, could dictate how Teck proceeds, he says. In 2008, the U.S. Environmental Protection Agency issued a wastewater discharge permit to the mine owner. The Village of Kivalina and others filed a petition to review based on the contention that EPA’s response to comments was lacking. An EPA appeals board denied their petition, so the village challenged the board’s denial in federal court, according to an Associated Press story published last year. The 9th Circuit Court upheld the decision of the EPA board, according to the Associated Press story. The mine got a revised state wastewater discharge permit at the beginning of 2013, Hall says. Kivalina residents did not appeal it. Red Dog Creek runs cleaner today, given the mine’s treatment efforts, than

it did historically with all the naturally occurring metals in the area, he says.

‘Two Small Communities’ The Red Dog is bustling zinc empire set in the middle of nowhere. A fifty-threemile road connects the mine site with the Chukchi Sea port, located on NANA land that’s been leased to the Alaska Industrial Development and Export Authority. “One of the best ways I can explain Red Dog to people is it’s essentially two small communities,” Hall says. “You’ve got the mine and you’ve got the port.” Each community includes an airport to bring in goods and services. There’s a drinking water and sewage treatment plant, power generation facilities, medical services, and housing. There’s a major industry in the form of the mine— or port—right in the middle of it all. Typically, about 450 employees work shifts at the mine throughout the year—two weeks on/ one off or four weeks on two off. They stay in buildings at the mine and port. Weather blows in with a vengeance, but on a sunny day the mine site is “drop-dead gorgeous,” Joule says. “It can be kind of intimidating. It is literally surrounded by mountains,” the mayor and former state legislator says. “When you ﬂy in, you have to come into a pass so the weather’s got to be just right.” The mine is one of the top employers in the Northwest Arctic Borough, along with Manilaaq Association, the school district, and NANA itself. The borough’s costs of living would shock Alaska’s urban residents. Prices on gasoline or heating oil can run anywhere from $6.50 a gallon to $10.50, depending on which part of the borough you live in, Joule says. Then add in the cost of getting anywhere, of food, and of electricity usually powered by diesel. Red Dog paychecks inﬂuence the very fabric of society in the remote villages of the borough, he says. “Anybody that is working, and working at a good place where they’re making a good wage, have a profession, can get retirement ... those are things that are important to the economy,” Joule says.  Zaz Hollander is a journalist living in Palmer. www.akbizmag.com

SUPPORT

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Several machines from Cruz Construction’s extensive Cat fleet hard at work in Grayling, AK.

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Energy & Power

Photo courtesy of Birch and Tiffany Robbins

Rural Alaska’s Alternative Power Solutions Hybridizing, enhancing, supplanting diesel and wood By Julie Stricker

t’s a cloudy, late-summer day on Raspberry Island. The lights are on in the big lodge nestled against the lush green hills of the Kodiak Archipelago. The tide laps softly against the curve of the beach as guests check their email, put the day’s catch in the freezer, or dry their hair after a long, hot shower. For the past thirty years, the Robbins family has made their home on the remote island. They built the Kodiak Raspberry Island Remote Lodge with locally milled Sitka spruce and host guests “roughing it easy” in a slice of true wilderness. The stillness is unbroken except by the sound of the wind and water and occasional cry of an eagle. The nearest community is twenty miles away, and there are no roads. There are no power plants or power lines either, but the lodge offers such luxuries as hot showers, a jetted hot tub, and wireless Internet, without the rumble of a generator in the background. Figuring out how to provide the electricity to run the Robbins’ home, and later the lodge, is a process of constant change, upgrades, and tinkering, says Birch Robbins, who bought the lodge from his parents in 2008 and runs it with his wife, Tiffany. Robbins grew up on the island and recalls , “We’d run the generator as needed, to run the washer and dryer, freezer, tools, and so on, then shut it down when 82

Alaska Business Monthly | July 2013

The Kodiak Raspberry Island Remote Lodge, which is run on a combination of hydroelectric, solar, and generator power.

we were done. We’d rely on kerosene or propane lanterns or 12-volt lights if we needed them and the generator was off.” When the lodge first opened, it continued to run on generator power according to a rough schedule of daily needs, Robbins says. “They would typically turn on the generator in the morning, around 7 a.m.,” he explains via email, since the lodge’s telephone rarely works. “Many of the cabins didn’t have light switches, so the lights would simply come on when the generator came on, insinuating that it was time to get up.”

Hybrid Power Systems In 2004, a hydroelectric system was installed in a nearby creek, and Robbins has also added three solar panels as well as a backup diesel-powered generator, all of which charge a bank of batteries that power the lodge. A hybrid system of power like this is not at all unusual in rural Alaska as alternative forms of power are gradually enhancing, and supplanting, the dieselpowered generators and traditional wood stoves commonly used in territorial and early statehood days. One of the reasons for the trend is that the cost of renewables is coming down and the technology is more reliable, says Gwen Holdmann, director of

the Alaska Center for Energy and Power in Fairbanks. “As the technology continues to improve and diesel prices continue to stay the same or go up, there’s considerable economic incentive to use renewables,” Holdmann says. Unlike a generator, which can be hauled just about anywhere, renewable energy is site-specific. Figuring out how much power is needed is also key. “Having power is one thing,” Holdmann says, “having the quality of power to run equipment or instruments is another. Solar and wind power can be kind of intermittent.” While experimenting with solar panels, Birch Robbins has found that to be true. The panels produce about 9 amps on a sunny day, compared with the 4560 amps produced by the lodge’s hydro system. It’s a supplemental source of energy rather than one he can base his activities on. The hydro, however, is another story.

Time-Tested Hydropower Hydropower is a time-tested source of energy in Alaska, Holdmann says. “Small hydropower has been used in Alaska for at least one hundred years,” she says. There are small hydro projects all over the state serving small mining camps, homes, even some larger camps. www.akbizmag.com

Hydro is a good source of steady baseload power, she notes. It is the main source of power at the lodge on Raspberry Island. “One of the biggest advantages of hydro power over generator power is that we have 24-hour electricity,” Robbins says. “Our freezers, refrigerators; everything runs as needed. People who need lights, need to charge their iPhones, rely on a CPAP machine at night—the power is there. “And of course it’s clean; no emissions, no dirty oil changes, and so on,” he says. As a bonus, he has configured the system to divert some of the water coming through the hydro system under pressure, filter it, and use it as the water supply for the lodge. Robbins says their fuel costs have nearly been eliminated, although they did convert the hot tub to run on ondemand diesel. After the conversion, it takes about forty-three gallons of fuel annually, compared to the hundreds of gallons of diesel it used to take to run the generator to make the electricity to run the electric heater to heat the tub. There are drawbacks to hydropower, however. It requires water, which renders it useless in a drought or severe cold. Filtering debris such as rocks, twigs, and spruce cones is a constant chore. It is also more expensive to set up and install. “Our existing hydro system is ten times more expensive than our generator,” Robbins says. “Everything out here needs to move out by boat or plane, so hauling a generator out and plugging it into a fuel supply is relatively easy, compared to laying twelve hundred feet of six-foot pipe, hauling nearly five thousand pounds of batteries, inverters, alternators, charge controllers, etc., and hooking them all together to make power.”

Art Nash Jr., energy specialist for the Alaska Cooperative Extension Service, shows a commercially produced Kelly Kettle, used to boil water quickly in a camp setting, as well as homemade fire logs and a 2x6 “stove.” 84

Alaska Business Monthly | July 2013

Diesel Generators for Backup Since hydro can’t always handle the electric load, Robbins has tied the backup generator to the computer that runs the hydro, which automatically turns the diesel generator on and off if necessary. He is continuing to tinker with the system and plans to increase the filtering capacity enough to allow him to hook up a second alternator, which Robbins hopes will give him 80 amps of power. www.akbizmag.com

This is how the system ultimately works: The energy from the hydro, all 48 volt, charges four large batteries. Inverters convert the battery power to AC, and during peak usage times, such as mornings when the toaster, hair dryers, dishwasher, coffee pots, and electric heaters are in use, the batteries drain slowly. During quiet times, such as at night, the batteries fill back up. The generator kicks in to fill any gaps. The biggest drawbacks to using a diesel generator are the fuel costs as well as the noise and smell of exhaust, although newer generators are quieter and less polluting than earlier models, Robbins says. And while renewable energy makes sense for some remote locations, generators will likely always be necessary, if only for backup power. Different fuel options, such as natural gas or propane, may become more accessible in the future, Holdmann says, but diesel fuel likely will always have a place in the power array. “There’s a really good reason why diesel fuel is so popular,” she says. “There’s a lot of densely stored energy, a lot of

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Detail from the Kodiak Raspberry Island Remote Lodge’s hydroelectric power system, which produces between 45 and 60 amps of electricity. Photo courtesy of Birch and Tiffany Robbins

July 2013 | Alaska Business Monthly

BTUs in a barrel of fuel. It’s a compact way to move energy to a location and then use it on site.” Shipping out the barrels in which the fuel comes is another wrinkle, and one of the reasons many older resource exploration sites and communities in Alaska have sprouted plots of abandoned, rusting barrels. That happens less often today. “I think people are becoming a lot more aware of the environmental conditions,” Holdmann says. “That’s not quite as accepted today as it was fifty years ago.”

Urban Innovations for Remote Power Innovative ways to create power aren’t just for rural areas. Art Nash Jr., energy specialist with the University of Alaska Fairbanks Cooperative Extension, was trying to find a shortcut through a neighborhood behind the Sears store in Fairbanks a few months ago, when he saw what he thought was a parabolic hot water heater on the roof of a house. It was. Nash stopped, knocked on the door, and introduced himself.

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Nash is fascinated by the tinkerers he comes across in his search for alternative ways to produce energy in remote places. He has met people who have made rocket stoves out of stovepipe; a one-time-use “stove” made out of pieces of 2x6 lumber and aluminum; someone who makes homemade fire logs out of cardboard; and a man who has created a mobile renewable energy cart that can harness solar, wind, and hydropower. Nash explains how his fascination came about: “My grandpa used to take this and that and twist it this way and come up with one of them.” Nash teams up with Dave PelunisMessier of Tanana Chiefs Conference giving workshops on remote energy projects. The first thing he does is to ask the audience to think through what they need energy for and when they need it. What kind of fuel do they plan to use? How will they get it there? And, how much will it cost?

Finding Efficiencies Energy efficiency is important in rural Alaska. For instance, if you keep two 60-watt light bulbs on continuously for a year in Fairbanks, the energy cost will tally about $230. Try that in a village off the road system and the cost will more than quadruple. Instead of electricity, a DC windmill could power a 12-volt freezer. Propane can be used to run a refrigerator, a stove, or an on-demand hot water heater. “In general, if you get a generator, the BTUs you’re burning are giving you about 30 percent efficiency, up to about 40 percent,” Nash says. “Burning fuel to make electricity isn’t very efficient.” If all you need to do is heat water for tea, commercial and handmade rocket stoves are a convenient way to boil water using readily available biomass such as twigs and small branches, he says. Sometimes, the simplest of designs makes the most sense. Nash tells the story of Larry Dunn, a teacher in western Alaska who got tired of watching the kids carry bulky propane grills on campouts, when all they needed was a small fire to heat water or warm a pot of soup. He took a piece of 2x6 lumber, cut it into about eight-inch lengths, and fashioned the wood into a hollow chimney on a sturdy base with a small hole on one side. He wrapped it in tinfoil, www.akbizmag.com

stuffed the inside with paper, lit it on fire, and found he had a portable stove, more than enough to boil water. When the cooking was done, all that was left was the foil, which was then wadded up and packed out.

Renewable Ideas Wind turbines are popping up all over Alaska, including large wind farms such as Fire Island in Anchorage and Eva Creek in Healy, but small-scale turbines can produce enough energy for a household, provided there’s wind. Even then, measures must be taken to keep from overloading the circuits on excessively windy days and storing energy for calm days. Even a passive solar heater, if designed correctly, can provide enough heat to warm a room. Nash points to one “squirrel heater” design by Lakota Enterprises that collects heat and directs it into the ground under a cabin where it radiates up into the building. For more complex needs, Dayne Ellanna has it covered. Ellanna and his students in the University of Alaska Fairbanks Community and Technical College’s Process Technology Program built a cart that can take solar, wind, or hydro energy and store it in a bank of batteries. The cart is portable—it has a trailer hitch and can be towed to a site by a four-wheeler. He made sure it has good clearance for rugged trails and the batteries and instruments are wellpadded and well-insulated. At the end of the season, Ellanna says, the cart can be towed back to town and hooked up to a house circuit, where it could supply enough energy to run the lights or a 2,000-watt heater. Nash is constantly amazed by what Alaskans come up with, but he’s not surprised. Tinkerers abound in Alaska, where the focus is more on what will work than on preconceived notions of what should work. “You’ve got guys up here who you can give them an arc welder and a paper clip and ask them to make either an ashtray or a carburetor, and they can do it,” he says.  Julie Stricker is a writer living near Fairbanks. www.akbizmag.com

Investing $459 million through 2017 in clean, efficient energy. Providing safe, reliable & affordable power into the next generation. www.mlandp.com July 2013 | Alaska Business Monthly

special section

Energy & Power

Photo courtesy of MEA

Construction workers pouring concrete in April for the power block foundation at MEA’s Eklutna Generation Station.

Wärtsilä Update MEA’s Eklutna Generation Station takes shape

“

eat and light are not optional in Alaska,” says Joe Griffith, general manager of Matanuska Electric Association (MEA). He’s been working on a plan to make sure that MEA members are not left in the cold and dark when their contract with Chugach Electric Association expires 88

Alaska Business Monthly | July 2013

By Margaret Sharpe at the end of 2014. Construction on MEA’s own Eklutna Generation Station is about halfway complete, and MEA is aiming to be generating its own electricity starting January 1, 2015. For the past twenty-five years, MEA has been strictly a distribution utility and bought almost all of its power from

Chugach. The REA (Rural Electrification Administration), a former agency of the U.S. Department of Agriculture, decided to only fund one generation utility in the region. At the time, MEA’s membership was less than ten thousand, so the money went to Chugach. As the contract end-date neared, atwww.akbizmag.com

tempts were made to renegotiate for possible renewal, extension, or modification of agreement; but Chugach and MEA did not achieve agreement. The current administration at MEA decided to make a go of generating power on their own.

The MEA Solution MEA is Alaska’s oldest and secondlargest electrical utility, supplying safe, reliable power to its sixty thousand members. When Griffith joined MEA in mid-2009, he says “the first thing that was thrown on my plate was, ‘What are you going to do about this? Our power supply runs out in about five-and-a-half years—we don’t have anything on the books.’” MEA was left out of the process for the new Southcentral Power Plant in Anchorage—a joint venture between Chugach and Municipal Light and Power. “So I put a study team together and figured out what we could do to ensure that we had a power supply for our customers out here come January 1, 2015,” he says. “That’s how we made the decision to go with this [Eklutna Generation Station].”

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“Interestingly, it was the old original Eklutna hydrofacility power block site. So it was already a power plant back in the late forties/ early fifties—which was nice because the ground had already been leveled and compacted. In fact, the old building is still there.” —Joe Griffith General Manager, Matanuska Electric Association (MEA)

In 2009, MEA acquired approximately seventy acres northeast of the Eklutna Interchange of the Glenn Highway. “Interestingly, it was the old original Eklutna hydrofacility power block site. So it was already a power plant back in the late forties/early fifties—which was nice because the ground had already been leveled and compacted,” says Griffith. “In fact, the old building is still there.” Construction on the project started in spring 2012; if all goes per plan, completion and operation should be on target for the end of 2014. “The project is about midway through,” Griffith says. “We have a couple of contracts yet to put out. The biggest one is the power block [general contractor], and I’m asking for approval to proceed on that from the board.”

In April 2013, the concrete for the power block foundation was poured. “That is a concrete slab 130 feet by 480 feet, so it is bigger than a football field,” Griffith says. The large slab of concrete is upwards of 6 feet thick in some locations and has 1.5 million pounds of steel rebar. “So it’s not a trivial pour,” he adds. Shortly after the concrete sets, crews will begin installation of the uprights for the main power block building, which will house the engines, generators, and support equipment for the facility. This summer’s construction will be Balance of Plant, which is office buildings, warehouse, roads, and the design of the switching facility. “Some of that work will start as well as the interconnections that tie the plant into the transmission

July 2013 | Alaska Business Monthly

Ten 18-cylinder Wärtsilä 50DF (V confi guration) dual-fuel generating sets will provide 171 MW of power to the Railbelt transmission system and to MEA’s roughly 4,000 miles of transmission and distribution lines. The engines are en route and expected at the Port of Anchorage late this month or by early August. © Wärtsilä Corporation

system of the railbelt,” says Griffith. The construction season will likely make for some rapid advancement toward completion. The plan is to have the main building closed in and then work through the winter on interior tasks.

Diesel Back-Up Engines MEA bought ten engines in a $106 million contract with Wärtsilä North America, a wholly owned subsidiary of Wärtsilä Corporation headquartered in Helsinki, Finland. “The engines are [already] built and will be delivered in late July or early August,” Griffith says. “It’s a unique plant in the Railbelt in that these are reciprocating engines—piston engines like in your car—they’re not turbines.” His choice raised some eyebrows and was deemed old fashioned, but Griffith is a forward thinker. “I’ve taken a lot of heat for that decision from my compatriots in the business. But I recognize that the characteristics of MEA’s load—during the day and even swings over a year—were such that these smaller engines, with a lot of rotating mass, and the ability to throttle them back and still maintain a high degree of efficiency, would be very valuable to us.” The duel fuel calmed fears of not having natural gas when needed un90

Alaska Business Monthly | July 2013

der certain conditions, such as earthquakes or shortages. “These engines will switch seamlessly between diesel fuel and natural gas. We thought that would be a really remarkable way to take the pressure off the gas system on these very cold days we see in the winters around here.” The Wärtsilä engines weigh 390 tons and are fifteen feet wide, nineteen feet tall, and sixty-two feet long (with the generator bolted on). The engines will be shipped to the Port of Anchorage. Given their considerable size, they need to travel by special railcar—so special that only three exist in the U.S.—to the Eklutna site. “The engines will be set in September or October,” Griffith says. “And then it becomes a matter of connections.” Each engine has between 1,000 to 1,500 separate connections of pipes, wires, sensors, and air ducts. “Even after you get the building built and the engines seated on their foundations, you still have a lot of work to do to hook them up.”

Summer Construction In addition, MEA is building tanks on the site: a one-million-gallon diesel fuel tank and a smaller anhydrous ammo-

“The engines are [already] built and will be delivered in late July or early August. It’s a unique plant in the Railbelt in that these are reciprocating engines—piston engines like in your car—they’re not turbines.” —Joe Griffith General Manager Matanuska Electric Association (MEA)

nia tank, which will be used to treat/ clean exhaust. This points out another benefit of the Wärtsilä engines—they meet State of Alaska air quality permitting requirements. “So with all of that summer construction—it will be a busy place,” Griffith says. “It will start this month and will continue through about June/July of next year, at which time we’ll start the main plant shake down—given that it’s all done. And I think it will be.” Following a three-month period of testing and successful operating, MEA will switch over from Chugach power at the end of 2014. “That’s our target. If it doesn’t www.akbizmag.com

work, we’ll have to do something different. Right now we are still on schedule, feeling pretty good about it,” he says.

Adding Efficiency to Railbelt The new Eklutna Generation Station will add some efficiency and stability to the Railbelt electrical grid. “When it’s not efficient to run the big gas turbines and steam plants, [we now can] defer to the less-expensive but highly efficient smaller units,” Griffith says. “We have a lot of what’s called rotating mass or inertia that we add to the system; the small gas turbines simply don’t have it because they don’t have a lot of spinning mass.” Gas turbines lose significant efficiency as soon as you throttle back to about 85 or 90 percent; the Wärtsilä units maintain a high level of efficiency through almost the full throttle range. In addition, the transmission system is dispersed generation, which adds generation where it is needed to overcome bottlenecks in distribution. “Downtown Wasilla is our load center today. They can run twenty-five to thirty megawatts at the corner of Parks Highway and Palmer-Wasilla High-

way,” Griffith says. “That was one of our needs for the new transmission system we’re working on. So it adds a measure of stability, efficiency, and gives rotating inertia to the system that will not be there when everybody goes to small gas turbines. Generally, it gives MEA the ability to carry its own load if we had to for any reason.”

Meeting Challenges Griffith has had to overcome obstacles to get to this point in the project. “We have worked extensively for four years to find a fuel supply,” Griffith says. Very recently, Hilcorp Alaska, LLC told MEA they can fill that order through 2017. “That’s the first night I’ve slept in a long time,” Griffith says. “That was a big, and I applaud Hilcorp for coming in and solving this big gas problem for all utilities in the railbelt. We were beginning to fear that we were going to have to do something really heroic to keep the lights on. But I think Hilcorp has helped us through that.” “This gives MEA a power supply. That’s a big outcome,” Griffith says. “Had we not undertaken this when

we did, and made the decisions on the timeline we did, we would be having to be buy power from fift y-year-old engines at the Beluga Power Plant site at a 30 percent higher cost than it will cost us to generate it. That’s a huge effect. Multiply that over the fift y-year lifetime of a plant like this and that becomes a lot of money that we will have saved our membership by virtue of doing this.” “If we can keep the growth going— and that will be a challenge as the North Slope throughput begins to decline even more—then we could add two more machines in the facility we are building now,” he says. “So we’ve built flexibility into our system as we upgrade the transmission system, it ties us all tighter together, and we can all rely on other people’s generation that heretofore you couldn’t be assured was there when you needed it because of a weak transmission system. Today we think we are making steps to change that.”  Margaret Sharpe writes from Palmer.

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special section

Energy & Power

Photos courtesy Chumley’s Inc.

Boring crew preps pipe for pulling back pipe.

ENSTAR Expands Operations South Homer and Kachemak City prepare for natural gas By Vanessa Orr

ow much is too much to pay to heat your family’s home? For residents of Homer and Kachemak City, costs can range among an average of $383 per month for fuel oil, $586 for electricity, or $706 for propane. Starting next year, however, much bigger savings are in store as the two communities finally get access to natural gas from ENSTAR Natural Gas Company. “The City of Homer has been trying to get natural gas for decades,” explains City Manager Walt Wrede. “We were in ENSTAR’s service area, but it simply didn’t pencil out from a company point 92

Alaska Business Monthly | July 2013

of view; it would take them too long to recoup their investment.” However, when natural gas was discovered about four years ago on North Fork Road, not far from Anchor Point, things took a different turn. With a source of gas much closer to the city, Alaska State Legislators Senator Gary Stevens and Representative Paul Seaton put money in the state budget with the goal of bringing natural gas to Homer. “The first year, the governor vetoed most of the money, but provided a $525,000 grant to build a pressure reducing station in Anchor Point and 3,200 feet of line toward Homer,” Wrede

says. “The next year, the governor vetoed all of the money in the budget, but last year, we were able to get it through.”

Trunk Line Construction According to John Sims, director of business development for ENSTAR, the trunk line—which is the line that will bring gas into the community running from Anchor Point to the terminus of Kachemak City—will cost about $10.7 million. “The state of Alaska has provided an $8.1 million grant, which will leave approximately $2.55 million as ENSTAR’s investment,” he explains. Th is amount will www.akbizmag.com

“Before we could move forward, we had to come up with an acceptable plan that would ensure that Homer residents had ‘skin in the game.’ Once it was agreed that residents would pay the remaining 25 percent of the cost through a $1/mcf tariff, it really spurred the project on.” —Walt Wrede City Manager, City of Homer

be paid off gradually by customers, with ENSTAR expecting to recoup its outlay in roughly ten years. “Before we could move forward, we had to come up with an acceptable plan that would ensure that Homer residents had ‘skin in the game,’” Wrede says. “Once it was agreed that residents would pay the remaining 25 percent of the cost through a $1/mcf tariff, it really spurred the project on.” Construction on the trunk line began in March and is expected to be completed this fall.

Distribution System Next Once the trunk line is complete, work will begin on the main extension— the distribution system that will bring gas to the streets and rights-of-way in Homer—a process that is expected to take about two years. In September

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2012, the Homer City Council adopted Resolution 12-069 which initiated the Natural Gas Distribution System Special Assessment District (SAD) as a way to make natural gas available to the majority of the city’s residents. The SAD basically defines Homer as one big subdivision that will pay ENSTAR up front for constructing the distribution system. “The Council had to decide whether to try to make the gas available to everyone, or just to those who could currently afford it,” Wrede explains. “They decided to create a special assessment district which would put gas on every street within one to two years, with everyone getting it for the same price. “It’s a pretty ambitious project that will involve about seventy-three miles of pipe at a cost of $12.7 million,” he continues.

“The city is borrowing the money from the Kenai Peninsula Borough, and it will be paid back through assessments.”

Access and Assessments Every property owner with access to the gas line will be required to pay this assessment, which is estimated to cost approximately $3,200 per lot. The assessment is payable over a ten-year period, and the assessment is not due, and interest does not accrue, until all of the work in the SAD is complete in fall of 2014. “The city will finance the assessment if lot or parcel owners can’t afford it up front at an estimated rate of 4 percent, which is the same rate as the loan that we’re getting from the borough,” Wrede says. This corresponds to an annual payment of $405, though lot owners

July 2013 | Alaska Business Monthly

Photos courtesy Chumley’s Inc.

Chumley’s crew installing tracer wire prior to installing pipe.

can choose to pay the full amount upfront to avoid interest accrual. While most residents of Homer and Kachemak City will have access to natural gas, some lots and parcels, including those that are undeveloped, have no legal access, are not developable, or that will not serve enough customers, are not included in the SAD. While residents are not required to hook up to natural gas just because they have access to it, property owners in the natural gas SAD will still be required to pay the assessment. “There have been some naysayers on the project, some who are opposed to the idea of a special assessment district, and others who say that they can’t afford to pay an assessment and have no intention of ever hooking up,” Wrede says. “Others object to the city subsidizing a private company when it is not ending up with the infrastructure. “There was public debate and only 14 percent of property owners objected out 94

Alaska Business Monthly | July 2013

“This is actually kind of fascinating to us, because typically, we install the lines in the street to give us the ability to serve, but in this scenario, people are signing up for service before gas is even available. To see people sign up this early is pretty amazing.” —John Sims Director of Business Development, ENSTAR

of the almost four-thousand properties involved,” he adds. “Even if they choose not to hook up to natural gas, property owners will still benefit from having a natural gas line run by their properties.”

Natural Gas Advantages Despite its drawbacks, there are many advantages to switching over to natural gas from other heating sources. “When you compare the price of natural gas to propane, electricity, or fuel oil, you see huge savings,” says Wrede. “The government buildings in Homer alone expect to see savings of $2 mil-

lion a year; the owner of the Ocean Shores Hotel in town, who is remodeling one of his buildings, says that he expects that natural gas will save him $30,000 a year.” Rates from January 15, 2013 for a typical single family home show natural gas costing $134 per month, compared to $383 for No. 1 fuel oil, $586 for electricity, and $706 for propane. “Not only will residents experience a lower cost of living, but there are environmental benefits, too,” says Wrede. “Homer has adopted a Climate Action Plan with the goal of reducing our carbon footprint, www.akbizmag.com

Photos courtesy Chumley’s Inc.

and natural gas is a much cleaner burning fuel than oil. The idea of an oil tank leaking also scares everyone as cleanup is very expensive.” The city expects to see changes in how business is done as well. “Natural gas will save business owners a lot of money, which could provide a real economic shot in the arm. Residents will see a lower cost of living, and it will be cheaper to do business in Homer,” Wrede says. “It’s a game-changer.” In the short term, the pipeline project is expected to create a lot of construction jobs as well as jobs helping homeowners convert to natural gas. “About three hundred people have already signed up for gas and they are going to need plumbing and heating people to help with their home conversions,” Wrede says. “This is actually kind of fascinating to us, because typically, we install the lines in the street to give us the ability to serve, but in this scenario, people are signing up for service before gas is even available,” says Sims, who anticipates that gas will not be available until at least July. “To see people sign up this early is pretty amazing.”

Chumley’s crew staging pipe prior to install.

“I can’t say enough about how much effort these communities have put into this; a lot of work went into making this happen,” he adds. “Without their hard work, and the legislature and state allowing the funds to go through, the likelihood of this project happening were pretty slim. Soon it will be a

more affordable place to live, and that is all credited to the people of Homer and Kachemak City. They need to be commended.”  Vanessa Orr is the former editor of the Capital City Weekly in Juneau.

Converting to Natural Gas ENSTAR and a number of local engineers have put out information about how to convert to natural gas, and ENSTAR also has people in its Homer office to provide advice and to sign people up for service. The cost for converting will depend on how many things that a customer wants to change over to natural gas. “For someone who just heats their home with a monitor stove, it will not be that expensive,” says Wrede. “Someone who lives in a large, all-electric house, or who needs to replace an old furnace, will pay more.” Even with the initial investment and assessment, residents of Homer and Kachemak City will reap the benefits of natural gas for a long time. “People are excited about natural gas coming to the area and that’s very understandable when you look at the costs that they’re paying for fuel now,” Sims says. “People here are paying a higher per unit cost for heating than the residents of Fairbanks. They will defi nitely see relief. www.akbizmag.com

July 2013 | Alaska Business Monthly

special section

Energy & Power

Cooper Lake Hydroelectric Upgrade

The Stetson Creek diversion dam, a part of the Chugach Electric Association Cooper Lake hydro update. Photo courtesy of MWH Global

Alaska Business Monthly | July 2013

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COOPER LAKE HYDROELECTRIC PROJECT Supplemental EA

Proposed Project Components

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Highway Road Water Body River/Stream

Creek or other nearby streams as a result of the project? Hard to say, Steyer says. Chugach’s original license predates statehood. “Just finding good empirical data from the 1950s is difficult,” he says. A 2004 report on the potential aquatic habitat benefits conducted by engineering firm HDR for Chugach stated Cooper Creek will likely see “a shift in fish population presence and interaction, an increase in total biomass, and an increase in genetic diversity.” The report states that both resident and migratory rainbow trout populations will likely develop in area drainages and coho and chinook salmon will likely more frequently use the area for spawning, and it could spell more salmon in the nearby Kenai River.

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“Chinook and coho fry would utilize the available habitat for rearing before outmigrating to the Kenai River,” the report states. Ultimately, Steyer says, Chugach is doing the work because it’s a condition of license renewal. But the project has a side benefit of increasing the amount of energy Chugach will get out of the Cooper Lake project by about 10 percent. More water is coming into the lake than is being diverted out, he explains, so Chugach will have more available water to generate electricity. “As we looked at the value of that extra water over a fifty-year license, we concluded the value was enough to pay for a $12 million project, so we agreed,” Steyer says. The project cost was originally estimated at $12 million. But with further study, July 2013 | Alaska Business Monthly

Map courtesy of Chugach Electric Association

Stetson Creek Diversion Dam (revised location)

69-kV Transmission Line

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Adding Salmon to the Kenai River Chugach spokesman Phil Steyer says when the electric utility went through its relicensing process about ten years ago, resource agencies stated they wanted a three- to five-degree increase in water temperature in the lower part of Cooper Creek. Chugach placed a dam in the original Cooper Creek drainage in the late 1950s, Steyer explains. The water that flows into the creek now is natural seepage along the creek path and water from Stetson Creek, which drains from high in the mountains, he says. In order to warm the water downstream, the cool mountainous Stetson Creek water will be diverted to Cooper Lake and warmer water from the lake will be allowed to spill out into the creek drainage. “The two things have the net effect of raising the water temperature at the mouth of Cooper Creek,” Steyer says. What will the project mean in terms of habitat restoration? How many new salmon will be swimming in Cooper

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nearly $22 million project to restore salmon habitat on the Kenai Peninsula will get underway this summer at Cooper Lake, near Cooper Landing. It’s an effort to restore lost stream habitat and improve aquatic conditions linked to the Chugach Electric Association’s Cooper Lake Hydroelectric project. Chugach, with assistance from the state, is paying for the project. The work includes installing a diversion dam at nearby Stetson Creek, routing cool creek water into the lake, and draining off some of the warmer lake water into Cooper Creek, all with the goal of making salmon spawning conditions more ideal. The work is a condition the Federal Electric Regulatory Commission (FERC) required when it granted Chugach a new fifty-year license for its Cooper Lake hydroelectric project in 2007.

REGIONAL VICINITY

115-kV Transmission Line to Anchorage Substation (existing; see inset map)

Photo courtesy of MWH Global

snowfall. There was still between three and five feet of snow in the area in midMay, he says. In 2014 the construction contractor, Twin Peaks Construction from Anchor Point, will finish laying the pipeline, start and finish building the diversion dam at Stetson Creek, and finish any other operating systems needed to transport the water from the lake to Cooper Creek.

MWH Global Lends Field Expertise MWH Global is the construction manager on the project and has assisted Chugach throughout the relicensing effort. Project Manager Heather Williams says the Stetson Creek project is challenging because of the short construction season and some of the physical features the project encompasses. A canyon near Stetson Creek will make construction of the road and pipeline a A ﬁeld worker measuring rock characteristics at the Stetson Creek diversion challenge, and the rock-fill dam on Cooper Lake, where the siphon outworks is dam. to be placed, is a known bedrock area the project cost kept rising and is now and penstock extend about two miles that might pose problems when drilling nearly double that initial estimate. That’s east of the lake, to the Cooper Lake for the outworks. “We’ll have to be careful how that why Chugach sought a legislative grant to powerhouse on Kenai Lake. The powerhouse holds two turbines, each rated at proceeds,” she says. “The challenge help cover the extra cost, Steyer says. is that the dam is there and we need The utility successfully obtained a 9.69 MW. According to Chugach, water from to make sure anything done does not $5.8 million legislative grant in 2012 and a $576,000 grant from the state’s Renew- Cooper Lake is diverted through the damage the existing dam.” To address the short construction able Energy Fund. The project won leg- penstock and tunnel to the powerhouse islative support in part because it helps and discharged into Kenai Lake. season, Williams says the construction Those details will stay the same, crew was in the field in the spring to Alaska achieve the goal of producing 50 percent of the power in the state using Chugach Electric project engineer Peter clear trees. Poray says. The salmon habitat restorarenewable energy, Steyer says. “They’re waiting to do the rest of tion project will build a second dam on the mobilization when things dry out Enhancing an Important Piece Stetson Creek, channel the water into more,” she said in May. of the Energy Picture a thirty-six-inch high-density plastic MWH is no stranger to dams and Cooper Lake isn’t a huge project, but it’s pipeline, and send it two miles south in water-related projects. Alaska Regional key toward the utility’s ability to pro- a slow curve around the mountainside Manager Chris Brown says the compavide economical power to its members, to Cooper Lake. The pipeline is going to ny prides itself on assisting with FERC be buried in an access road leading to relicensing on dams throughout the PaSteyer says. The hydroelectric project provides Stetson Creek, Poray says. On the Coo- cific Northwest. about 20 MW of power and produces per Lake end of the project, a thirty“In the Pacific Northwest, generally about 4 percent of the power the com- inch pipe will be installed in the Cooper speaking, there haven’t been a lot of pany sells each year. Lake dam to allow water to drain from new dams constructed in the last [sevLicensed in 1957, the Cooper Lake the lake into Cooper Creek. eral] years,” Brown says. “So a lot of the “Th e goal this year is to set up the Hydroelectric project sits on state land work is rehabilitation and upgrades to a few miles from Cooper Landing. The staging area … and build an access road existing facilities as part of the FERC dam is a rock-fill structure spanning from Cooper Lake up to Stetson Creek,” relicensing.” Cooper Creek at the outlet of Cooper Poray says. “They’ll be cutting into the Although MWH assisted with Lake, according to information from rock spillway … and starting to build Chugach’s relicensing effort, the dithe high-density pipeline up to Stetson.” version dam project is a little different Chugach Electric. Cooper Lake predates the project, but Because the work is being done in than what the company typically works the dam caused the lake to expand to the mountains, Poray says it’s likely the on, Brown says. about 2,600 acres. A tunnel, conduit, construction season will be cut short by MWH Global, based in Broomfield, 98

Alaska Business Monthly | July 2013

www.akbizmag.com

Geotech investigation work at Cooper Lake. Photo courtesy of MWH Global

Rindi White is a freelance journalist living in Palmer. www.akbizmag.com

Photo courtesy of MWH Global

Colorado, is a wet infrastructure company, Brown says. That means the company engineers anything having to do with water—hydroelectric power projects, pipelines, water treatment facilities, and more. “We do a lot of water treatment in Anchorage, we do a lot for oil companies,” he says. The company has been in Anchorage for more than thirty-five years, serving a variety of markets. The Anchorage crew is part of a much larger company, which has 180 offices in thirty-five countries and currently operates on six continents, according to its website. MWH is assisting the state with licensing and engineering feasibility for the Susitna-Watana Hydroelectric Dam project, a project that Williams is also managing. 

Field workers performing a geotech investigation at Cooper Lake hydro project. July 2013 | Alaska Business Monthly

oil & gAs

Photo courtesy of Brooks Range Petroleum Corporation

The Alaska Industrial Development and Export Authority announced on April 24 that the fi rst phase of the Mustang oil development project on Alaska’s North Slope was completed with the construction of a fi ve mile gravel road and nineteen-acre gravel pad. The Authority’s board in December 2012 unanimously approved a $20 million investment for the purpose of owning an 80 percent share in Mustang Road, LLC. Brooks Range Petroleum Corporation will operate and maintain the road.

North Slope Summer Activity Construction and maintenance keep contractors busy By Mike Bradner

orth Slope contractors are busy this summer with new building and major maintenance projects. Winter is typically the busiest construction season because equipment can be moved overland on ice and snow roads, but summer is busy, too, because it is typically the time for major production facility “turnarounds,” periods of shutdown for major maintenance and upgrades. BP will do turnarounds in two of the six oil and gas process plants in the Prudhoe Bay field: Flow Station 2 in the east part of the field and Gathering Center 3 in the west, according to company spokeswoman Dawn Patience. 100

Alaska Business Monthly | July 2013

Maintenance work is actually increasing in the large North Slope producing fi elds because much of the production infrastructure, such as the process plants and pipeline, is aging. BP and ConocoPhillips, the major fi eld operators on the slope, estimate that about 60 percent to 70 percent of their total annual capital investment in the fi elds now goes to maintenance and only 30 percent to 40 percent to projects like new wells and production pads that will produce more oil. The work will occur from mid-June to late August and will be coordinated with periods of maintenance shutdowns of the Trans Alaska Pipeline System, so the effects on production will be

minimized, Patience says. The work being done includes safety upgrades, system inspections, and major maintenance, all of which must be done when a plant is temporarily shut www.akbizmag.com

down. The work will require about 270 additional workers, mostly contractor employees, on top of BP’s normal workforce for the Prudhoe Bay field, she says. Major maintenance work in 2013 is substantial, but it is less than what was done last summer, when BP had five Prudhoe Bay process plants down for turnarounds. There were about eighthundred additional workers hired for those projects, done in summer 2012. Conoco Phillips is also planning major projects at the Kuparuk River and Alpine fields, the company’s spokeswoman, Natalie Lowman, says. “We currently have some vessel and pipeline maintenance work underway at CPF3 (Central Processing Facility 3) that should be complete by late July,” Lowman says. “CPF-1 will be shut down for about twenty days in August,” she says. CPF3 and CPF-1 are two of the three major oil and gas processing plants in the Kuparuk field. In addition, Lowman says the Alpine field “has a planned maintenance shutdown in early August that will last about four days.” Maintenance work is actually increasing in the large North Slope producing fields because much of the production infrastructure, such as the process plants and pipeline, is aging. BP and ConocoPhillips, the major field operators on the slope, estimate that about 60 percent to 70 percent of their total annual capital investment in the fields now goes to maintenance and only 30 percent to 40 percent to projects like new wells and production pads that will produce more oil.

New CD-5 Drill Site Another North Slope project on which work is beginning this summer is the new CD-5 drill site planned for the Alpine field, according to ConocoPhillips’ Lowman. Gravel work was started last winter in anticipation of construction of a bridge across a channel of the Colville River that is part of the project, ConocoPhillips officials said earlier this year. Lowman said in May that materials for the bridge project were arriving in Anchorage and would be transported to the North Slope. CD-5 is a billion dollar project that will allow production of a small oil accumulation west of the main field. It is called a “satellite” of Alpine because oil production will rely on infrastrucwww.akbizmag.com

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ture in the larger field, such as the large crude oil process plants. The Alpine field is on state-owned lands but the new CD-5 pad is west of the Colville River and is within the National Petroleum Reserve-Alaska. When CD-5 begins production, it will be the first commercial oil production from the National Petroleum Reserve-Alaska, which was originally established as a naval petroleum reserve in 1923 although no oil fields were ever developed. The naval petroleum reserve became the National Petroleum Reserve-Alas-

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ConocoPhillips hopes that the bridge

“We completed all of the scope of and road facilities built for CD-5 will work for the first winter season.” enable the company to develop two —Gina Dickerson Point Thomson Construction Manager ExxonMobil Corporation

ka in 1975 when Congress passed legislation transferring the reserve from the U.S. Navy to the U.S. Department of the Interior, which now administers it through the Bureau of Land Management, an Interior Department agency.

small oil accumulations farther west in the petroleum reserve.

Point Thomson Construction Continues Also this summer, construction will continue at the Point Thomson gas and condensate project east of Prudhoe Bay that is being developed by Exxon Mobil Corporation. Gravel infrastructure, mainly field roads, pads, and an airstrip, were built last summer. This summer workers will shift to hooking together parts of a 570bed permanent camp facility and grading and contouring the gravel pads and road construction in the winter. The pads are for the major process plant and other facilities and for a five thousand-foot airstrip, says Gina Dickerson, ExxonMobil’s Point Thomson construction manager. ExxonMobil closed down its ice road to its Point Thomson project in mid-May, signaling the official end of the winter construction season on the project. “We completed all of the scope of work for the first winter season,” which focused on the basic infrastructure, Dickerson says. The winter work was completed in spite of a late start in building the ice road last January due to warm temperatures and twenty-one days lost due to bad weather, about one fourth of the cold weather season available for the work, Dickerson says. “We were lucky to be working with experienced Alaskan contractors familiar with the North Slope. They had contingency plans in place and were able to recover the lost time. They were a real advantage for us,” Dickerson says. About one million cubic yards of gravel were moved in construction of the gravel pads at Point Thomson. Contractors also installed 2,200 vertical support members (VSMs) for field gathering lines and a planned twelveinch pipeline that will connect Point Thomson with the existing Badami pipeline that extends east from Prudhoe Bay to the small Badami field, Dickerson says. The VSMs had to be installed this winter to allow the pipeline and field lines to be installed next winter. A construction subsidiary of Doyon Limited fabricated www.akbizmag.com

and installed the VSMs, and will construct the pipeline this coming winter. At the peak of activity, ExxonMobil and its contractors had six hundred workers on the project last winter, the majority of them employees of contractors. Pipe sections are now being joined at Doyon’s Fairbanks facilities for the pipeline project. Four fuel storage tanks fabricated in Washington state will also be delivered to the project this summer with a tug-and-barge sealift, Dickerson says. ExxonMobil does detailed planning for its projects, but on the North Slope weather is always the wild card, and losing essentially a quarter of the winter working days posed serious challenges this year. ExxonMobil did get one lucky break last spring, Dickerson says, when colderthan-usual weather allowed it to keep the ice road open two weeks longer, until mid-May. The original plan had been to shut it down at the end of April, she says. Point Thomson is a large gas and condensate discovery about sixty miles east of Prudhoe Bay. The initial development project involves a gas “cycling” project that will produce ten thousand barrels per day of a liquid gas condensate, which will be moved through the twelve-inch pipeline to the Trans Alaska Pipeline System, and then mixed with crude oil. The gas produced will meanwhile be injected back underground in the reservoir. The injection of the gas poses challenges because of the high reservoir pressure at Point Thomson—about ten thousand pounds-per-square-inch. Injecting the produced gas back underground at a high enough pressure will require leading-edge compression technology and high-strength steel.

Point Thomson aerial from three years ago. Almost everything shown was temporary equipment that has since been removed. ExxonMobil is now working to prepare the pad for installation of permanent development facilities. ©ExxonMobil

Arctic Challenges Additionally, building the project in the Arctic and in a remote location like Point Thomson presents other challenges. To surmount these challenges, both technical and Arctic, “one of the advantages of a large company doing a project like this is that we can draw from experience in other places, such as our production project at Sakhalin for Arctic experience and projects in Indonesia for working with high pressure reservoirs,” Dickerson says. ExxonMobil has long been involved in other Alaska Arctic projects also, including development of Prudhoe Bay and other North Slope fields where the company www.akbizmag.com

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The pipeline will have capacity for seventy thousand barrels per day, or seven times that needed for the initial condensate liquids. is a partner, although not an operator. Dickerson says the initial project will test the performance of the Point Thomson reservoir. If performance is adequate the cycling project might be expanded, but the long-term objective is for Point Thomson facilities to be part of a large Alaska natural gas project, she says. Point Thomson has a long history. The original discovery was made in the 1970s, but because it is a large gas find, with about 8 trillion cubic feet of gas, no development could take place because there was no way to move the gas to market. In the 1990s ExxonMobil began working on the project to cycle the gas, producing it, extracting the liquid condensates, and then injecting the gas back underground. An attempt to build a large cycling and condensate project just after 2000 foundered when concerns were raised about performance of the reservoir and whether the gas fluids would circulate through the reservoir efficiently enough for condensate liquids to be produced in the volumes needed. There was also litigation, with the state pressing ExxonMobil and its partners, now mainly BP and ConocoPhillips, to speed up the development. The settlement of the litigation in spring 2011 set the stage for the gas project now being built. Construction at Point Thomson and particularly the pipeline extension to the eastern North Slope is a critical development. The pipeline will have capacity for seventy thousand barrels per day, or seven times that needed for the initial condensate liquids. That space will be available for oil from separate oil and gas accumulations known to exist in the Point Thomson area. The pipeline could also be used by Shell to help bring oil from Beaufort Sea offshore prospects it is exploring, which are several miles generally north of Point Thomson. ď &#x2019; Mike Bradner is publisher of the Alaska Economic Report. www.akbizmag.com

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oil & gAs

Moving Oil from OCS to TAPS Arctic oil could spawn massive new pipeline By Zaz Hollander

alking about a pipeline to ferry oil from Alaskaâ&#x20AC;&#x2122;s Arctic may seem a little premature. After all, the major producers holding Outer Continental Shelf oil leases have mothballed drilling plans for this year. Still, despite the current lull, the as-yet hypothetical pipeline remains in play.

Possible routes for new pipelines to carry oil to TAPS from federal OCS leases in the Chukchi and Beaufort seas might connect at pump stations one, two or fi ve. Map source: Alaska Department of Natural Resources

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and environmental safeguards.

“The total mileage could be every bit as long as TAPS. Everything’s Conoco Phillips in April announced that the uncertain regulatory climate big when it comes to offshore.” —Curtis Smith, Shell spokesman

Before any oil makes it to the oil transportation superhighway that is the Trans-Alaska Pipeline System (TAPS), producers will have to permit and build extensive new pipelines to get oil from the Beaufort and Chukchi seas to TAPS. It would be a monumental project, given the difficult Arctic environment. Pipelines would trace the rumpled topography of the ocean floor. Close to shore, pipeline design would have to account for floating ice that rams up against land and scrapes long gouges into the seabed. Terra firma brings different challenges, such as unpredictable permafrost and the likely need for access across the environmentally sensitive reaches of the National Petroleum Reserve-Alaska (NPR-A). The scale of the project will be worth the expense and inevitable lawsuits, producers say, if they can tap into the

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huge reservoirs of oil they think the Arctic holds. The total mileage of pipelines from the Chukchi and Beaufort could rival that of TAPS, which runs eight hundred miles from Prudhoe Bay oilfields to the terminal at Valdez. It’s one of the largest pipeline systems in the world. “The total mileage could be every bit as long as TAPS,” Shell spokesman Curtis Smith says. “Everything’s big when it comes to offshore.”

‘Tremendous Timelines’ Royal Dutch Shell doesn’t plan any oil drilling in the Arctic until 2014 at the earliest. Shell shelved plans for 2013 Arctic programs after the New Year’s Eve grounding of the Kulluk drill rig off Kodiak, an engine fire in the Noble Discoverer rig, and a March federal analysis that urged an Arctic-only approach to exploration as well as stronger safety

prompted the company to shelve its Arctic program. Statoil North America followed suit. Shell dispatched scientific teams as recently as 2012 to the North Slope and the Northwest Arctic Borough to get a better understanding of where the pipeline would make land and how it would dovetail with TAPS. It’s highly likely any pipelines would need to cross the largely undeveloped ground of NPR-A; regulators and producers say legal challenge is all but guaranteed. The company holds leases with prospects about seventy-five miles offshore in the Chukchi Sea. Depending on the angle a pipeline takes, that could put it somewhere near Wainwright. In the Beaufort, the company’s leases are about twenty miles offshore, putting any pipeline about twenty miles from TAPS. A likely landfall point would be just north of Point Thomson. Shell figures building a pipeline will take seven years, Smith says. That’s part

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BARROW PRUDHOE BAY

STATE OF ALASKA

Trans-Alaska Pipeline September 2004

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Produced by: Department of Natural Resources Division of Support Services Land Records Information Section Date Printed: September 3, 2004 Version 1.0

July 2013 | Alaska Business Monthly

SOURCE: State of Alaska

Ketchikan

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With the recent interest in Arctic oil exploration has come a parallel scientific examination of the unique trials encountered when building oil pipelines in the Arctic. of the “ten years from first commercial discovery to oil” timeline the company likes to use. “There are tremendous timelines involved, even in the best-case scenario, following a commercial discovery,” he says. Meanwhile, the company continues to work toward a 2014 drilling season. The Kulluk is in Singapore for repairs from the ill effects of the New Year’s Eve grounding. The Noble Discovery drill rig is being upgraded in Korea. If drilling resumes, much of the work on any pipeline would start with a commercial discovery, Smith says.

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Alaska Business Monthly | July 2013

Call for Creativity While Shell’s 2012 experience has grabbed most of the recent headlines, it’s long been clear that operating in the Arctic comes with unique challenges. With the recent interest in Arctic oil exploration has come a parallel scientific examination of the unique trials encountered when building oil pipelines in the Arctic. A 2011 editorial in “The Journal of Pipeline Engineering” points out myriad risks. The editorial, written by Andrew Palmer, a professor at the National University of Singapore, describes “disappointingly slow” progress on technical difficulties first identified forty years ago. The amount of ice contained in frozen ground varies enormously, Palmer writes. It can be difficult, then, to follow the “first principle of construction on permafrost”: try to match the pipeline temperature to that of the ground. Otherwise, pipeline buckling can result. An above-ground pipeline gets around that problem but brings others such as high cost, potential earthquake risk, and wildlife concerns, Palmer posits. Then again, a buried line would face similar risks from earthquake or unwww.akbizmag.com

dersea fault lines, one pipeline expert pointed out after reading Palmer’s comments. A buried line could deal with such hazards in the same way as an above-ground line like TAPS did— by building the line on stilts so it can “slide” in a quake. Palmer continues on the topic of pipeline hazards in the sea, where two words present the biggest challenge to pipelines: ice gouging. Floating ice runs aground in shallow water and scrapes along the seabed, driven by wind, current, and the pressure of other pieces of ice driven along behind it, Palmer writes. The ice cuts into the seabed, creating a series of gouges that, in the extreme, can measure one hundred and fifty feet across, fifteen feet deep, and hundreds of feet long. Gouging ice encountering a pipeline could damage it severely, Palmer writes. Even a buried pipeline could be bent by ice dragging soil beneath it. Then there are “strudels,” powerful rotating watery swirls that erode the seafloor in summer when fresh water from Arctic rivers invades sea ice and seeks out holes and cracks, rushing downward through them. Palmer urges creativity in pipeline construction. “More needs to be done to look imaginatively at alternatives,” he writes.

Permit Process The state and federal pipeline permitting offices in Alaska will have a lot to say about where any Arctic pipelines go and how they connect to the existing TAPS structure. The state authorizes pipelines under the Right of Way Leasing Act, which hasn’t changed materially since the Legislature approved it in the mid1970s, in the era of TAPS. The state’s permitting process for a large pipeline project can run anywhere from seven months for a lease expedited by a legislative “best interest” finding to several years if the applicant chooses to integrate the state and federal permitting processes, such as Exxon’s Point Thomson lease, according to State Pipeline Coordinator Mike Thompson. Typically, the permitting process is more time-consuming when federal permits are involved, Thompson says. www.akbizmag.com

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The state’s permitting process for a large pipeline project can run anywhere from seven months for a lease expedited by a legislative “best interest” finding to several years if the applicant chooses to integrate the state and federal permitting processes, such as Exxon’s Point Thomson lease, according to State Pipeline Coordinator Mike Thompson. The presence of federal lands with sensitive environmental issues triggers the comprehensive, time-consuming government review that is an Environmental Impact Statement (EIS). Any Arctic pipeline will almost surely require an EIS, particularly if NPR-A is involved. An EIS tends to dictate a project’s schedule. The federal Bureau of Land Management’s Alaska office recently finished a plan that allows pipelines to come across NPR-A if there’s a discovery in the Beaufort or Chukchi seas, according to Ron Dunton, BLM’s deputy state director. The feds like to say that an EIS—”and this would be a very significant EIS”— takes eighteen months to three years, Dunton says. “But that’s assuming everybody’s got their act together, got all their baseline work done.”

Other agencies involved in permitting would include the U.S. Army Corps of Engineers for any wetlands construction and the Bureau of Safety and Environmental Enforcement. The Pipeline and Hazardous Materials Safety Adminstration at the U.S. Department of Transportation would also be involved.

Hooking Up to TAPS How any Arctic pipeline would connect to the actual TAPS system also remains to be seen. A spokeswoman for Alyeska Pipeline Service Company, the producer consortium that operates the pipeline, says it will be up to the producers how construction is handled. Alyeska would work closely with the producers on a connection agreement, says spokeswoman Katie Pesznecker.

To keep track of different production, Alyeska would have to build metering stations to measure incoming oil—one at Pump Station 1 at the North Pole refinery, the other at Valdez, Pesznecker says. Generally, new sources of oil are a positive since the pipeline was never designed to handle the low volumes moving through TAPS today, she says. Alyeska reports an average annual 5 percent to 6 percent decline in what’s called throughput. “We support any sort of increase in throughput, any effort that’s going to result in an increase to throughput that’s done in a safe and responsible manner,” Pesznecker says.  Zaz Hollander is a journalist living in Palmer.

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oil, gAs & FiscAl Policy

Missing the Point By Bradford G. Keithley

t the time this piece publishes, those seeking signatures on petitions to hold a referendum to overturn SB21, the governor’s oil tax reform bill, will be in the final days of their effort. If they succeed, a long campaign of more than a year will follow on the issue, with a vote scheduled for the August 2014 primary ballot. At least at an early stage, most observers expect the petition drive to succeed in gaining enough signatures to put the issue on the ballot. The issue will not go away, however, even if the backers of the referendum effort fail in those current efforts. Early indications are that the wisdom of the Administration’s bill likely will play a central role in the anticipated Republican primary battle next year between Governor Parnell and challenger Bill Walker, and thereafter in every contested race in the 2014 legislative elections. Even beyond that, we should anticipate frequent comments on the issue— and occasional, if not regular efforts to repeal or modify it—as legislators and others debate beyond the 2014 elections whether the bill is succeeding in its central purpose to increase North Slope production above levels which otherwise would have resulted under “Alaska’s Clear and Equitable Share” (ACES), 114

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the state’s previous tax approach.

The Arguments To this point, a central theme of the referendum effort has been that SB21 will have devastating consequences to state government finances, resulting in cuts to education and capital budget spending on which, at least according to one Senator, the Alaska economy “depends.” The petition drive’s initial sponsor, former Republican legislator Ray Metcalfe, even has gone so far as to suggest that the passage of SB21 ultimately will result in cuts in the Permanent Fund Dividend, the sacred third rail of Alaska politics (similar to social security at the federal level).

Both by implication and explicitly, the proponents of the referendum argue that these cuts will not occur if Alaskans repeal SB21 and retain ACES. For their part, the legislation’s defenders have claimed the reverse, arguing that SB21 somehow will save current state spending levels. Indeed, as discussed further below, Governor Parnell has gone so far as to outline a five-year fiscal plan which depends on such a result—and puts future Alaskans at significant financial risk if the legislation does not achieve that objective. Unfortunately for Alaskans, both sides are wrong. At current spending levels, ACES leads Alaska over a fiscal cliff as certainly as its proponents argue does SB21. From www.akbizmag.com

In short, both sides are missing the point about Alaska’s current financial situation. The problem confronting Alaska is not about revenue—while neither side will admit it, the most likely outcome is that both ACES and SB21 ultimately land Alaska in nearly the same place on revenue.

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the other side, defenders of SB21 are required to rely on heroic—and viewed fairly, unreasonable—assumptions to support assertions that the legislation justifies continued state spending at current levels. Even if the legislation achieves all that its supporters hope, the most likely scenario is that it still will fall far short of buttressing a continuation of Alaska’s current spending trajectory. In short, both sides are missing the point about Alaska’s current financial situation. The problem confronting Alaska is not about revenue—while neither side will admit it, the most likely outcome is that both ACES and SB21 ultimately land Alaska in nearly the same place on revenue. Alaska’s problem, instead, simply is that state government is spending too much regardless of which tax structure prevails. Ironically, for a state government that prides itself on being “conservative,” it is spending Alaska into the poorhouse at a rate that would make even California blush.

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ACES Leads to Its Own Fiscal Cliff Those who assert that retaining ACES, or something similar, will enable Alaska to avoid significant state spending cuts are wrong. Prior to the start of this year’s legislative session, the University of Alaska— Anchorage’s Institute for Social and Economic Research (ISER), the best economic think tank in the state, published another in an ongoing series of looks at state government fiscal policy. The study was based largely on the Department of Revenue’s Fall 2013 Revenue Forecast. That forecast assumed a continuation of ACES. The ISER study provides a devastatwww.akbizmag.com

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In its 10-year fi scal plan, the state Offi ce of Management and Budget (OMB) projects that spending the [state’s current] cash reserves might fi ll this gap until 2023 …. But what happens after 2023? Reasonable assumptions about potential new revenue sources suggest we do not have enough cash in reserves to avoid a severe fi scal crunch soon after 2023, and with that fi scal crisis will come an economic crash. ing look into where Alaska is headed if it continues down that path. According to the study—which, again, assumed the continuation of ACES—“[r]ight now, the state is on a path it can’t sustain. Growing spending and falling revenues are creating a widening fiscal gap. In its 10-year fiscal plan, the state Office of Management and Budget (OMB) projects that spending the [state’s current] cash reserves might fill this gap until 2023 …. But what happens after 2023? Reasonable assumptions about potential new revenue sources suggest we do not have enough cash in reserves to avoid a severe fiscal crunch soon after 2023, and with that fiscal crisis will come an economic crash.” Nothing that the proponents of the SB21 referendum have said subsequently undermines that analysis. At current spending levels, ACES leads inevitably to the same “fiscal crisis [and] economic crash” that the proponents argue that SB21 will cause.

The Governor’s Proposed Solution Isn’t Much Better Because ACES produces a crash, the defenders of SB21 argue that it must be better. But the testimony submitted to the Legislature by the Administration’s own experts proves that wrong as well. In the closing days of the debate, legislators asked the administration to provide forecasts of the revenue streams anticipated to result from SB21 and ACES. The purpose of the requested analysis was to provide legislators with the ability to compare the impact on state budgets of continuing down the current path versus a future determined by SB21. The result ultimately was a series of PowerPoint presentations that compare the results of the two main approaches under various scenarios. Building on the assumption, which I believe is valid, that production will be higher under SB21

than ACES, the presentations concluded that the net present value of state revenues also would be higher under SB21. Importantly, however, the analyses also showed that, under the most likely scenarios, SB21 was not higher by much and certainly not enough to justify continued state spending at current levels. For example, at long-term price levels which are the equivalent of today’s $100/barrel, the analyses show that ACES is likely to produce an average annual revenue stream over the next thirty years of $3.3 billion at a 6 percent decline curve, and $4.3 billion at a 3 percent decline curve. SB21, on the other hand, is predicted to produce average annual revenues of $4.7 billion at a 1 percent decline curve, and $5.3 billion at a 0 percent decline curve—in other words, at a level where new production continually replaces normal field declines throughout the next thirty years. Under those assumptions SB21 produces more revenue than ACES, but not nearly enough to support the governor’s recently proposed spending levels. Toward the end of the session, Governor Parnell announced a “five year” spending plan of $6.8 billion annually, with loopholes which permit even higher spending for “state-wide legacy projects.” Even using the best revenue estimate made by the administration’s own experts, at $100/barrel SB21 produces a long-term average annual revenue stream that is $1.5 billion below the governor’s proposed spending level. The deficit shrinks at higher oil prices. At a long-term price level which is the equivalent of today’s $110/barrel, for example, the administration’s experts predict average annual revenues produced by SB21 of $5.4 billion at a 1 percent decline curve, and $6.1 billion at a 0 percent decline curve. Better, certainly, but still significantly below the governor’s proposed spending level. www.akbizmag.com

According to the administration’s own experts, revenues adequately cover the governor’s proposed spending level only once long-term price levels exceed the equivalent of today’s $120/barrel, and even then only with the assumption of a long-term decline curve of 0 percent and without any revenue remaining to cover “state-wide legacy projects.” In order to deal with those additional factors, long-term price levels need to approach the equivalent of today’s $140/barrel, a level far in excess of current predictions.

What Is the Solution? If both ACES and SB21 ultimately lead to the same end result, what, then, is the solution? The answer is remarkably simple: reduce government spending to levels which avoid the crash. In the same ISER analysis in which it outlined the problem, ISER also offered an answer. “What can the state do to avoid a major fiscal and economic crisis? The answer is to save more and restrict the rate of spending growth. All revenues above the sustainable spending level of $5.5 billion—including Permanent Fund income, except the share that funds the dividend—would be channeled into savings.” Put more succinctly, based on current long-term forecasts—which don’t vary substantially between ACES and SB21— “Alaska’s state government can afford to spend about $5.5 billion” annually. Ironically, while that level seems low when compared against recent annual spending levels of $7.9 billion for the just completed Fiscal Year 2013, and $6.8 billion authorized for Fiscal Year 2014 and proposed by Governor Parnell to be continued over the next five years, ISER’s number is in line with the spending levels achieved before the recent surge. Setting aside supplemental appropriations, from Fiscal Years 2008 through 2011 Alaska government spent the following approximate amounts: $4.25 billion (FY 2008), $5.0 billion (FY 2009), $4.23 billion (FY 2010) and $5.1 billion (FY 2011). Other than the rising expectations of citizens increasingly trained to expect significant expenditures to be covered by government, nothing has changed between the periods justifying the rate of increase. The governor and Legislature appear simply to have chosen to spend more because there was more available to spend www.akbizmag.com

and constituents, who do not have to pay for expenditures through increased taxes on their own incomes, have asked for more free (to them) goods. Rather than say no, and increase the state’s nest egg for future generations, the governor and Legislature have chosen to say yes. The consequences of that policy are becoming clear—as ISER predicts, “fiscal crisis” and “economic collapse”— and claims by proponents that either ACES or SB21 will fi x that are wrong. Only continued, significant spending reductions will suffice. 

Bradford G. Keithley is the President and a Principal with Keithley Consulting, LLC, an Alaskabased and focused oil and gas consultancy founded by him. Keithley also publishes the blog, “Thoughts on Alaska Oil & Gas” at bgkeithley.com.

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visitor industry

One of the ﬁrst stops on any jet boat tour of the Stikine River is a sea lion haul out on Leisnoi Island near the Stikine River Delta, a biological hot spot for marine life, birds, and waterfowl.

The Real Southeast Wrangell’s pioneering tourism entrepreneurs By Paula Dobbyn

ylvia Ettefagh made her living as a drift gillnetter, fishing the waters near her home in Wrangell for many years. When prices for Alaska wild salmon tanked in the 1990s following the rise of Chilean farmed salmon, Ettefagh knew she needed to switch gears. She and her husband, John Verhey, took a look around. It was 1995 and Wrangell’s main employer, a sawmill, had just closed, leaving more than 250 people jobless. Between the mill closure and the depressed salmon prices, Wrangell’s economy was dire. But amid the gloom and hardship, Ettefagh and Verhey saw potential in the town’s location. Wrangell sits on a mountainous coastal island in the heart of the Tongass National Forest. A massive rainforest of nearly 17 million acres, the Ton-

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gass hosts thousands of miles of salmon and trout-filled rivers and lakes, picturesque stands of ancient trees, and a plethora of wildlife including whales, bears, moose, and eagles, as well as stunning glaciers, emerald fjords, and snow-capped mountains. “It looked to us like tourism could be an option,” says Ettefagh. She and Verhey launched Alaska Vistas that year, becoming one of Wrangell’s pioneering tourism companies. Until then, tourism was in its infancy in Wrangell, a blue-collar town with a history of boomand-bust cycles in fur, fishing, mining, and more recently, timber. Ettefagh was not alone in sensing that Wrangell’s natural beauty could attract tourists. Several timber industry veterans moved in that direction as well. There are now at least

seven jet boat tour operators, a slew of hunting and fishing outfitters, a glistening convention and visitors’ center, and no shortage of operators offering kayaking, guided hiking, cultural tours, and other options. While Wrangell remains a sleepy, offthe-beaten-track town still trying to secure its economic footing, tourism has evolved into a growing sector that adds diversity to what had been a one-industry town. Tourism in Wrangell is largely built around the area’s wild landscape. Some of the main Wrangell-area highlights include the Stikine River, the LeConte Glacier, and the Anan Wildlife Observatory, one of the world’s best places to view black and brown bears feasting on salmon. “There’s nothing in Alaska, hands down, that beats Anan,” says Ettefagh. www.akbizmag.com

The newly restored Chief Shakes Tribal House in Wrangell is a draw for tourists looking to learn about the Stikine Tlingit culture. Tribal members are celebrated in May the successful restoration of the cedar structure, which had fallen into disrepair. © Paula Dobbyn

Although it lacks the name recognition of some of Alaska’s top tourist attractions such as Denali, Glacier Bay National Parks, or the McNeill River State Game Sanctuary and Refuge, Anan Wildlife Observatory is growing in popularity because of its large and easy visible resident bear population. About thirty-five miles southeast of Wrangell on the mainland, Anan is located in one of the Tongass’ protected spots, an area zoned as Land Use Designation Two (LUD II) for its critical fish and wildlife habitat. Human activities in LUD II areas are restricted so that fish and game can flourish. The LUD II designation has proved to be a boon for tourism businesses. In the case of Anan, the visitor industry considers it one of the prime destinations in Southeast Alaska. A float plane or a boat ride is required to get there. A half-mile trail through the forest leads to an observation deck from which up-close bear viewing takes place. About sixty black bears and fifteen brown bears congregate at Anan Creek when the salmon are running, usually from early July until late August or early September, according to Matt Jurak, the Forest Service site manager for Anan. An historic fishing site for members of the Tlingit tribe, Anan Creek has one www.akbizmag.com

of the most prolific pink salmon runs in Southeast Alaska, with an annual average return of 250,000 fish. It’s one of the few places in the world where black and brown bears tolerate each other. “It’s very unique in that regard,” Jurak says. Ettefagh says her clients are routinely wowed as they watch salmon jumping through the waterfalls and getting snatched by the bears. “In any given day, you can see anywhere ten to thirty bears. It’s because of the huge pink salmon run. Bears feel comfortable being there. There’s plenty of food for them to eat. It’s an amazing place,” says Ettefagh. There’s growing pressure to increase visitation at Anan. Under the current management plan, a maximum of sixty people per day can visit Anan during the peak season of July 5 to August 25. But that tenyear plan is up for review and with public comments currently being accepted. Most of the comments received so far are from people asking for more access to Anan, Jurak said.

Alaska Waters Inc. Jim Leslie, owner of Alaska Waters Inc., is another tourism entrepreneur who, like Ettefagh, was also forced to

change because of Wrangell’s economic meltdown. Leslie had a career before starting a tour company in 1992. He owned a logging business, Leslie Cutting Inc. When logging was in its heyday, Leslie employed seventy-five workers, operated seven remote logging camps, and had offices in Wrangell, Ketchikan, and Thorne Bay on Prince of Wales Island. But when the Southeast Alaska timber industry went bust, so did Leslie’s company. He took little time – exactly one day according to Leslie —deciding what his next move would be. Like Ettefagh, he decided that Wrangell’s backyard—both Anan Creek and the nearly 450,000-acre Stikine-LeConte Wilderness Area— could spawn a new business. With his wife, Wilma Stokes-Leslie, the Vietman veteran launched Alaska Waters Inc., a full-service tour company which showcases the Stikine River Valley, Anan bears, local glaciers, and other attractions. It also specializes in cultural tourism, providing visitors the opportunity to learn about Wrangell’s tribal communities. One of their tours consists of a rainforest walk with an Alaska Native cultural interpreter who instructs about Tongass edible and meJuly 2013 | Alaska Business Monthly

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Above: A grizzly bear with a fi sh in the Anan Wildlife Observatory near Wrangell. Photo by Tish Beach/ Courtesy of Wrangell CVB

Right: A black bear looks down at a grizzly bear with a fi sh in the Anan Wildlife Observatory near Wrangell. Photo by Doug Beach/ Courtesy of Wrangell CVB

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dicinal plants that indigenous people have used for millennia. While the early years of his tourism business were tough going at times, Leslie says never seriously considered leaving Wrangell after the timber industry imploded. “I like Wrangell and my wife is Alaska Native. Her family has been here for 10,000 years,” he says.

Naturally Wrangell It’s 7 a.m. at the cruise ship dock in Wrangell, a Saturday in early May. It’s quiet except for the hum of Leslie’s jet boat engine. This is the “shoulder season,” a couple of weeks before cruise ships arrive in Southeast Alaska. Several Southeast towns along the Inside Passage have chosen to make large cruise ships a centerpiece of their economies. Juneau, Ketchikan, and Skagway are cases in point. These towns are scheduled to receive more than one million cruise ship passengers this summer and their downtowns are set up to cater to them. Glitzy jewelry shops, kiosks offering shore excursions, and seasonal gift shops selling T-shirts, plastic totem poles, and other souvenirs www.akbizmag.com

Leslie is Well Aware of That After a small group of passengers board on this early Saturday morning, Leslie pulls his jet boat away from the dock. Crisp air infused a hint of salt and seaweed fills the cabin. The first stop is Leisnoi Island, a sea lion haulout at the mouth of the Stikine River. After lingering for a few moments, Leslie drives the boat past the Stikine River Delta, a major stopover for migrating birds on the Pacific Flyway. “We’ll have over one hundred thousand shorebirds come through here over the course of the migration,” says Leslie, gesturing toward a muddy flat in the braided river. Old logs and trees stumps line the mud. Many of the snags have bald eagles perched in the branches, scanning the www.akbizmag.com

dominate the main streets. The skies are filled with flightseeing helicopters that buzz tourists over ice fields and plop them on glaciers for picnic-style lunches and brief walkabouts. Wrangell is different. Large cruise ships don’t come here. Most of the visitors who arrive come on smaller vessels, the state ferry, or they fly in as independent travelers. As a result, the town has kept much of its original character. In place of trinket shops, Wrangell has hardware and drug stores, grocers and bars, the kind of places that serve regular people. “We’re the real deal,” says Terri Henson, Wrangell’s director of conventions. That’s one of Wrangell’s main selling points. “People come here because they want to experience what the real Alaska is,” says Brenda Schwartz-Yeager, a fourthgeneration Alaskan who was born and raised in Wrangell. Schwartz-Yeager owns Alaska Charters and Adventures, a company that offers jet boat tours, fishing excursions, and other tourism adventures. She’s been in the tourism business for twenty-four years. “Originally I started off in charter fishing. Gradually over the last twenty years, we’ve moved into much more nature-based tours. There’s still a bunch of people who want to come to fish but there’s a whole bunch of other people who want to see spectacular scenery, glaciers, bears. And we happen to have that all in our backyard,” says Schwartz-Yeager.

Jim Leslie, owner of Alaska Waters Inc., piloting a jet boat on the Stikine River near Wrangell. During the springtime, the Stikine River draws a huge concentration of bald eagles. The birds come to feed on an early run of salmon— marking the unoffi cial start of the tourist season. © By Paula Dobbyn

river looking for salmon. Naturalist John Muir described the Stikine River Valley as “a Yosemite one hundred miles long.” A trans-boundary river with its headwaters in Canada, the Stikine runs about four hundred miles until it empties out at Wrangell. It is North America’s fastest flowing navigable river. It flows through a majestic valley dotted with glaciers and snowcapped peaks. In the spring it attracts one of the world’s largest concentrations of bald eagles and in the summer it’s filled with five species of Pacific salmon, trout, and steelhead. Brown and black bears, moose, and wolves are common. As if on cue during the boat tour with

Leslie, a brown bear scampers up across the delta as the jet boat approaches. An hour or so later, a moose with calves is spotted swimming across one of the river’s many tributaries. This is the way tourism is supposed to be, according to Leslie. It blends in with the local scenery and doesn’t change the character of a place. “We don’t do large cruises. We’re not geared up for it. We’re geared up to be ourselves. We’re the real Southeast Alaska,” he says.  Freelance journalist Paula Dobbyn lives in Anchorage. July 2013 | Alaska Business Monthly

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ALASKA THIS MONTH Compiled By Tasha Anderson

dining

Above: Two Sisters Bakery owners Sharon Roufa, left, and Carri Thurman. Right: Two Sisters Bakery in Homer.

wo Sisters Bakery, located at 233 Bunnell Avenue in Homer, is not a one-stop bakery: To truly experience what this locally owned business has to offer, multiple visits are absolutely necessary. Currently co-owned by Carri Thurman and Sharon Roufa, Two Sisters Bakery, in one form or another, has been feeding Homer residents and guests since 1993 “as an answer to year round jobs and a need in the community for more services open through the long winters,” Thurman says. Thurman was one of the original partners. She “arrived [in Alaska] in 1985 as a twenty-two year old ski bum with a tent and fifty dollars.” Roufa joined the bakery when “one day a big group off a tour bus descended upon [Thurman] working alone while [Roufa] was having a coffee at the counter. She asked if [Thurman] needed help—and the rest is history,” Thurman says. Now Two Sisters Bakery offers “a variety of sweet and savory baked goods during the day along with soups and sandwiches on our fresh bread.” But in the evening, the bakery transforms into a bistro, serving “Alaskan microbrews on tap and a small but delicious selection of wines by the glass or bottle. The food in the evening is very different from the day with handmade pasta, local seafood, and steaks roasted in the wood fired oven,” Thurman says. But even a visit in the morning, at lunch, and in the evening would not be enough to enjoy Two Sisters Bakery’s services, as it is also a bed and breakfast with two suites available on the top floor of the building that come with complimentary breakfast and views of the ocean. twosistersbakery.net

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 www.akbizmag.com

Photos courtesy of Carri Thurman.

Two Sisters Bakery

ALASKA THIS MONTH Compiled By Tasha Anderson

trAvel

Photo courtesy of the Alaska Islands and Ocean Visitor Center

Alaska Islands & Ocean Visitor Center

A U.S. Fish and Wildlife Service ranger interacts with guests.

n your next visit to Homer, take the opportunity to get out of the car/boat/plane, stretch your legs, and enjoy the Alaska Islands & Ocean Visitor Center. Located at Mile 95 on the Sterling Highway, “admission to the Alaska Islands & Ocean Visitor Center and all guided walks, talks, and discovery labs are free of charge,” explains Marianne Aplin, the Center’s manager. The Center is a fusion of art and education, combining “whimsical” wrought iron bicycle racks shaped like shorebirds and a Centennial Photo Exhibition with presentations given by Fish and Wildlife Service Rangers and Alaska Geographic films and talks. Aplin says the Center tells the story of the Alaska Maritime National Wildlife Refuge, which was established “to conserve marine mammals, seabirds and other migratory birds, and the marine resources upon which they rely.” She continues, “exhibits give visitors an interactive glimpse of Alaska’s coastal wildlife, history, and people. [One] exhibit hall tells the story of the Kachemak Bay Research Reserve, where young visitors can climb into an octopus den or come eye to eye with a life-size moose calf sculpture.” The Alaska Geographic bookstore is located inside the center and can accept donations in support of center programming. Established in 2003, this is the Center’s 10th anniversary, which will be celebrated with an open house and community gathering on December 12. This summer the Center is open 9 a.m. to 5 p.m. daily, with daily guided walks at 11 a.m. and talks, labs, and films at 1 p.m. and 3 p.m. islandsandocean.org www.akbizmag.com



oldbelt Company

Meeting Space & Catering Available! For more information call 888-461-TRAM MountRobertsTramway.com July 2013 | Alaska Business Monthly

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entertAinment

Clare to Clare Fashion Show

Mayor Dan Sullivan strides down the 2012 fashion show runway.

“

t’s a big year,” says Clare Gauster, director of the Clare to Clare fashion show: It’s the fifth anniversary of the fashion show itself and the thirtieth anniversary of Clare House, an emergency shelter for women and children provided by Catholic Social Services and the beneficiary of the fashion show’s proceeds. The show, taking place July 27, “usually has about 1,500 people in attendance” and this year features fashions from seven local boutiques: Circular, Bottoms, Stallone’s, Flawless, Fourth Avenue Boutique, Lulu e. Bebe, and Posh. Outside of the ballroom runway, Gauster reports, “ShuzyQ is going to have a shoe lounge, which they’ve done for many years.” In addition, bodyphlo and the Beauty Room will have booths. Before the main runway show, in a collaborative effort, the Alaska Native Arts Foundation, Northwest Strategies, and the First Alaskans Institute are presenting an “Alaska Native fashion show... and it’s going to be really beautiful. [The Alaska Native Arts Foundation is] coming up with a theme and it’s going to have Alaska Native pieces in it,” Gauster says. And if that weren’t enough, an auction of goods donated from the Alaska community precedes the show. Executive Director of Catholic Social Services Susan Bomalaski says, “It is always important to make sure the mission is incorporated into the event; it’s wonderful to find a program to raise visibility as well as have some fun.” Tickets can be purchased for general admission, a runway seat, or tables of ten, which include wine and appetizers. “We’re generally sold out by the event,” Gauster says, so buy tickets as early as possible and plan ahead for next year. clarehousebenefit.org 124

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 www.akbizmag.com

EVENTS CALENDAR

Compiled By Alaska Business Monthly Staff

Anchorage 14

Haines

Salmon Bake and Fly In

This event includes vintage planes, a salmon barbecue, live music, beer garden, and an auction at the Alaska Aviation Museum. Alaska Aviation Museum, 3 p.m. to 6:30 p.m. alaskaairmuseum.org

Cordova 26-27

Copper River Wild! Salmon Festival and Jam

The festival includes the Taste of Cordova Seafood cook-off, local arts and crafts festival, Salmon Jam, Alaska Salmon runs, Small Fry activities, 4-H music camp, and a salmon barbecue. Downtown Cordova, various times. copperriverwild.org

25-28

Homer 27-28 KBBI’s Concert on the Lawn Homer and other Alaskan musicians treat the Homer community to a musical treat, sponsored by Public Radio KBBI. The concert includes food and other vendors. Karen Hornaday park, various times. kbbi.org

Delta Junction 26-28

Kodiak

Deltana Fair & Music Festival

Events include blueberry pie context, mud bogs, raffle, mutton bustin’, pageants and baby contest, parade, pet show, pipeline run, rhubarb throwdown, talent show, quilters guild exhibit, and tractor pull. Delta Junction, various times. deltanafair.com

Eagle River 10-14

Bear Paw Festival

Events include the Slippery Salmon Olympics, car show, Bear Paw pageant, Running with the Bears, the Teddy Bear picnic, vendors, and food. Downtown Eagle River, various times. bearpawfestival.org

Fairbanks 11 & 13

Carmen

This classic presented by Opera Fairbanks stars Vivica Genaux; is conducted by Maestro Gregory Buchalter; is directed by Jonathan Lowy of the Metropolitan Opera; and features choreographer and principal dancer Sara Erde of the Metropolitan opera dance corps. In French with English subtitles. Hering Auditorium, 7:30 p.m. operafairbanks.org

14-28

Fairbanks Summer Arts Festival

This festival highly encourages beginners to experience workshops in music, visual arts, dance, healing arts, literary and theatre arts, and culinary arts. The festival includes more than 120 guest artists. Various locations and times. fairbanksalaska.com/fairbanks-summer-arts-festival/

17-20

World Eskimo-Indian Olympics

A celebration of athleticism and tradition. Sports events include toe kick, drop the bomb, kneel jump, one hand reach, stick pull, Alaskan high kick, and more. Other events include traditional dance, Miss World Eskimo Indian Olympics pageant, Native arts and crafts, and opening and closing ceremonies. Carlson center, various times. weio.org

17-21

Golden Days

This year’s theme is “Gold Fashioned Fun.” Events includes parade, street fair, senior luncheon, comedy night, food, music, and the opportunity to have friends and loved ones “arrested” for failure to wear a Golden Days pin or garter. Various locations and times. fairbankschamber.org/goldendays

Funny River 12-14

Funny River Bluegrass Festival

Enjoy and support bluegrass artists from across the state. The event also includes food and other vendors. Various times. facebook.com/FunnyRiverBluegrass

Girdwood 5-7

Girdwood Forest Fair

This fair features Alaskan artists, hand-crafted items, food, and entertainers from across Alaska as well as the Forest Fair Parade on Saturday, July 6 at 10:00 a.m. Girdwood Fairgrounds, 11 a.m. to 8 p.m. girdwoodforestfair.com

www.akbizmag.com

Southeast Alaska State Fair

The fair includes Southeast’s Got Talent, a singer/songwriter competition, parade, logging show, wearable art review, most lovable dog contest, volleyball tournament, live music, and food, clothing, and arts vendors. Southeast Alaska State Fair, various times. seakfair.org

14-16

Bear Country Music Festival

This is a musical extravaganza that includes a spectrum of music, including bluegrass, country, folk, and soft rock; over fifty Alaskan bands and musicians are slated to perform. Kodiak, various times. kodiakisland.net

Ninilchik 6-7

Annual Rodeo

This is a hometown rodeo with bucking bulls, barrel racing, and more. Kenai Peninsula Fairgrounds, various times. kenaipeninsulafair.com

Seward 4

Mt. Marathon Race

This annual foot race, is 1.5 mile challenge up Mt. Marathon and back. Registration is closed by July, except for the July 3 Auction and Raffle, but spectators can enjoy the race finish and the awards ceremony at the AVTEC gymnasium. Downtown Seward; junior race starts 9:30 a.m.; women’s at 11:15 a.m. and 11:20 a.m.; men’s at 3 p.m. and 3:05 p.m. mmr.seward.com

Sitka 26-27

Homeskillet Fest

This is a summer music festival sponsored by Skillet Records. Performing artists include Kingdom Crumbs, Breathe Owl Breathe, Dustin Love Thomas, Iska Dhaff, Katie Kate, and more. Sea Mountain Golf Course, various times. homeskilletfest.com

Statewide July 2013

Independence Day

Celebrations take place statewide; check with local chambers and community organizations for detailed information. Have a safe and happy July 4th.

Talkeetna 4-6 & 13

Moose Dropping Festival

This year’s theme is “One Hundred Years of Mountaineering,” to commemorate the first ascent of Denali in 1913. This event includes various vendors, music, food, a parade, moose nugget field event, and fun run. Main Street and other locations, various times. talkeetnachamber.org

19-21

Birch Festival

This celebration of all things birch includes a reception, panel discussions, craft workshops, and presenters on plein air panting, birch craft, natural history of the birch, etc. Northern Susitna Institute Campus, various times. northernsusitnainstitute.org

Valdez 7/31-8/4

Gold Rush Days

This year’s theme is, “Celebrating the automobile—Valdez or Bust.” Events include PWSCC Luncheon and Golden Rock Awards, historic homes tour, craft-a-hat and eat-a-sweet, ugliest car contest, gold rush skit, kid scavenger hunt and dive for gold, wine walk, open air market with live music and beer garden, pancake breakfast, dutch oven demo, cupcake wars, and more. Various locations and times. valdezgoldrushdays.org July 2013 | Alaska Business Monthly

125

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Alaska Business Monthly | July 2013

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ALASKA TRENDS

By Paul Davidson

Self-Employment

Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

National trend shows decline

2012

2004

1996

1988

1980

1972

1964

1956

1948

ccording to data published by the U.S. Employment and Self-Employment U.S. Bureau of Labor Statistics, there are 1.3 million fewer unin1948-2012 corporated self-employed people in 2012 160 on average than in 1948. The Bureau of Labor Statistics and U.S. Census Bureau 140 jointly sponsor the Current Population 120 Survey, which compiles, among other things, industry and demographic data 100 Self-Employment on self-employed workers. 80 (In Millions) The Current Population Survey shows Total Employment 60 self-employment as most prominent in (In Millions) agricultural, construction, and services 40 industries. Workers with less education 20 than a high school diploma were the most likely to be self-employed and those with 0 an associateâ&#x20AC;&#x2122;s degree were the least likely. Business owners, recorded as incorporated self-employed, are legally considered employees of their own businesses and are accounted total employment, in millions, from 1948 to 2012. Unincorfor in the Bureau of Labor Statistics data beginning in the porated self-employment makes up 24 percent of total emyear 2000. Incorporated self-employment shows a 17.8 ployment for 1948 and 7.1 percent for 2012. Self-employment percent growth from 2000 to 2012, which accounts for shows a gentle decline from 1949 to its lowest level in 1970, all self-employment growth from 2000 and 2012 as unin- 7.03 million, and recovery by 2006 to levels close to those in corporated employment decreased by 6.7 percent over the 1949 (10.6 million). Total employment shows 197.5 percent same time period. growth from 1948 to 2012 and unincorporated self-employThe chart consists of unincorporated self-employment and ment shows a decline of 11.6 percent over the same period. ď &#x2019; SOURCE: U.S. Bureau of Labor Statistics, U.S. Census Bureau, Current Population Survey

ALASKA TRENDS HAS BEEN BROUGHT TO YOU THIS MONTH COURTESY OF AMERICAN MARINE/PENCO

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July 2013 | Alaska Business Monthly

127

ALASKA TRENDS

Indicator

By Paul Davidson

Units

Period

Latest Report Period

Previous Report Period (revised)

Year Over Year Change

Year Ago Period

GENERAL Personal Income—Alaska US $ 4th Q12 34,863 34,279 33,043 Personal Income—United States US $ 4th Q12 13,659,468 13,401,314 13,033,756 Consumer Prices—Anchorage 1982-1984 = 100 2nd H12 206.62 205.22 202.58 Consumer Prices—United States 1982-1984 = 100 2nd H12 230.34 228.85 226.28 Bankruptcies Alaska Total Number Filed March 48 52 88 Anchorage Total Number Filed March 36 35 67 Fairbanks Total Number Filed March 9 12 12 EMPLOYMENT Alaska Thousands March 336.50 336.61 336.35 Anchorage & Mat-Su Thousands March 188.15 189.30 186.59 Fairbanks Thousands March 43.32 43.28 43.54 Southeast Thousands March 34.72 34.41 35.13 Gulf Coast Thousands March 35.47 35.02 35.82 Sectorial Distribution—Alaska Total Nonfarm Thousands March 324 321 319.9 Goods Producing Thousands March 43.5 42.9 39.7 Services Providing Thousands March 280.4 278.5 280.2 Mining and Logging Thousands March 17.3 17.1 16.1 Mining Thousands March 16.9 16.8 15.8 Oil & Gas Thousands March 14.0 13.9 13.2 Construction Thousands March 15.1 14.9 11.4 Manufacturing Thousands March 11.1 10.9 12.2 Seafood Processing Thousands March 9.5 9.1 8.9 Trade/Transportation/Utilities Thousands March 60.9 60.4 60.3 Wholesale Trade Thousands March 5.9 5.8 6.0 Retail Trade Thousands March 34.3 34.1 33.6 Food & Beverage Stores Thousands March 6.0 6.1 6.1 General Merchandise Stores Thousands March 9.6 9.5 9.4 Trans/Warehouse/Utilities Thousands March 20.7 20.5 20.7 Air Transportation Thousands March 5.5 5.4 5.5 Information Thousands March 6.1 6.1 4.1 Telecommunications Thousands March 3.9 3.9 4.1 Financial Activities Thousands March 13.1 13.0 14.6 Professional & Business Services Thousands March 27.6 27.9 27.2 Educational & Health Services Thousands March 47.7 47.4 46.2 Health Care Thousands March 33.8 33.5 32.0 Leisure & Hospitality Thousands March 29.2 28.4 28.9 Accommodation Thousands March 6.6 6.5 6.1 Food Services & Drinking Places Thousands March 18.6 18.1 18.5 Other Services Thousands March 11.4 11.2 10.9 Government Thousands March 84.4 84.1 85.8 Federal Government Thousands March 15.0 14.7 16.1 State Government Thousands March 26.8 26.7 26.5 State Education Thousands March 8.7 8.8 8.6 Local Government Thousands March 42.6 42.7 43.2 Local Education Thousands March 24.4 24.3 25.7 Tribal Government Thousands March 3.5 3.4 3.7 Labor Force Alaska Thousands March 360.42 362.19 363.56 Anchorage & Mat-Su Thousands March 199.22 200.93 201.33 Fairbanks Thousands March 45.98 46.17 46.45 Southeast Thousands March 37.36 37.37 37.97 Gulf Coast Thousands March 38.49 38.26 38.20 Unemployment Rate Alaska Percent March 6.6 7.1 7.8 Anchorage & Mat-Su Percent March 5.6 5.8 6.7 Fairbanks Percent March 5.8 6.3 7.2 128

Alaska Business Monthly | July 2013

5.51% 4.80% 1.99% 1.79% -45.45% -46.27% -25.00%

0.05% 0.84% -0.51% -1.17% -0.98% 1.25% 9.57% 0.07% 7.45% 6.96% 6.06% 32.46% -9.02% 6.74% 1.00% -1.67% 2.08% -1.64% 2.13% 0.00% 0.00% 48.78% -4.88% -10.27% 1.47% 3.25% 5.62% 1.04% 8.20% 0.54% 4.59% -1.63% -6.83% 1.13% 1.16% -1.39% -5.06% -5.41% -0.86% -1.05% -1.01% -1.61% 0.76% -15.38% -16.42% -19.44% www.akbizmag.com

ALASKA TRENDS

Indicator

Southeast Gulf Coast United States

By Paul Davidson

Units

Period

Latest Report Period

Previous Report Period (revised)

Percent Percent Percent

March March March

7.1 7.8 7.6

7.9 8.5 8.1

Year Ago Period

8.3 9.4 8.5

PETROLEUM/MINING Crude Oil Production—Alaska Millions of Barrels March 16.52 15.15 17.59 Natural Gas Field Production—Alaska Billions of Cubic Ft. March 9.66 9.13 9.61 ANS West Cost Average Spot Price $ per Barrel March 108.93 112.76 122.68 Hughes Rig Count Alaska Active Rigs March 9 9 7 United States Active Rigs March 1756 1762 1979 Gold Prices $ Per Troy Oz. March 1,591.94 1,629.14 1,674.41 Silver Prices $ Per Troy Oz. March 28.7985 30.32 32.95 Zinc Prices Per Pound March 0.926315 1.064505 1.00 REAL ESTATE Anchorage Building Permit Valuations Total Millions of $ March 44.67 53.72 51.34 Residential Millions of $ March 9.96 8.73 9.22 Commercial Millions of $ March 34.71 44.99 42.12 Deeds of Trust Recorded Anchorage—Recording District Total Deeds March 1110* 857* 1040* *GeoNorth Fairbanks—Recording District Total Deeds March 277 222 366

Year Over Year Change

-14.46% -17.02% -10.59%

-6.08% 0.56% -11.21% 28.57% -11.27% -4.93% -12.60% -7.37%

-13.00% 7.99% -17.60% 27.26% -24.32%

VISITOR INDUSTRY Total Air Passenger Traffic—Anchorage Total Air Passenger Traffic—Fairbanks

Thousands Thousands

March March

356.57 77.42

287.87 65.81

355.39 70.96

0.33% 9.10%

ALASKA PERMANENT FUND Equity Assets Net Income Net Income—Year to Date Marketable Debt Securities Real Estate Investments Preferred and Common Stock

Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $

March March March March March March March

45,509.60 46,676.90 606.4 2,261.0 (3.3) 9.00 323.3

44,941.50 45,717.10 178.4 1,654.7 7.5 1.50 (16.5)

41,525.10 42,142.00 198.3 1,339.7 (75.8) 1.10 147.3

9.60% 10.76% 205.80% 68.77% -95.65% 718.18% 119.48%

BANKING (excludes interstate branches) Total Bank Assets—Alaska Millions of $ 1st Q13 2,163.28 2,203.51 2,088.25 Cash & Balances Due Millions of $ 1st Q13 45.15 58.83 46.12 Securities Millions of $ 1st Q13 135.91 133.54 151.97 Net Loans and Leases Millions of $ 1st Q13 1,201.04 1,159.55 1,119.55 Other Real Estate Owned Millions of $ 1st Q13 7.31 6.75 6.26 Total Liabilities Millions of $ 1st Q13 1,894.70 1,926.65 1,827.29 Total Bank Deposits—Alaska Millions of $ 1st Q13 1,837.36 1,877.43 1,783.65 Noninterest-bearing deposits Millions of $ 1st Q13 567.54 599.27 550.20 Interest- bearing deposits Millions of $ 1st Q13 1,269.82 1,277.86 1,233.44

3.59% -2.11% -10.57% 7.28% 16.76% 3.69% 3.01% 3.15% 2.95%

FOREIGN TRADE Value of the Dollar In Japanese Yen Yen March 94.70 93.06 82.42 In Canadian Dollars Canadian $ March 1.02 1.01 0.99 In British Pounds Pounds March 0.66 0.64 0.63 In European Monetary Unit Euro March 0.77 0.75 0.76 In Chinese Yuan Yuan March 6.28 6.29 6.32

14.91% 3.47% 5.21% 1.40% -0.71%

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July 2013 | Alaska Business Monthly

129

Advertisers indeX AES Alaska Executive Search.................35 Alaska Air Cargo - Alaska Airlines...101 Alaska Air Transit ........................................123 Alaska Airlines Visa ....................................30 Alaska Chamber ............................................25 Alaska Oil & Gas Congress ....................111 Alaska Rubber ................................................93 Alaska USA Federal Credit Union .......37 American Marine / PENCO ..................127 Anchorage Sand & Gravel ........................75 Arctic Controls...............................................111 Arctic Office Products (Machines).... 57 ASRC Builders ..................................................71 AT&T ......................................................................13 Bering Shai Rock & Gravel ..................110 Bowhead Innovative Products & Solutions ...........................46 Bowhead Transport Co. .............................19 Business Insurance Associates Inc. ....73 Calista Corp. / Futaris.................................86 Carlile Transportation Systems ...........39 Chris Arend Photography.....................130 City Electric Inc. .............................................85

130

Construction Machinery Industrial LLC ...............................................2 Crowley.............................................................105 Cruz Construction Inc. ............................112 Davis Constructors & Engineers Inc. ...64 Donlin Gold ....................................................... 91 Dowland-Bach Corp. ...............................103 EDC Inc. ................................................................71 ERA ALASKA ....................................................17 ERA Helicopters............................................115 First National Bank Alaska.........................5 GCI .............................................................. 115, 131 Hi-Line Moving Services .............................3 Homer Electric Association....................87 Island Air Express.......................................124 Judy Patrick Photography .......................28 Junior Achievement ....................................29 Kinross Ft. Knox .............................................79 Landye Bennett Blumstein LLP ............35 Lynden Inc. ........................................................27 MagTec Alaska LLC ..................................104 Matanuska Electric Association Inc. (MEA) .......................95

Alaska Business Monthly | July 2013

McKinley Service & Equipment Inc..................................104 Midnight Sun Home Care Inc................65 Mt. Roberts Tramway...............................123 Municipal Light & Power ..........................87 N C Machinery ................................................81 NALCO Champion .......................................117 NANA Regional Corp. ................................83 Northern Air Cargo ............................60, 61 Northland Services .....................................20 NTCL ....................................................................117 Nu Flow Alaska ............................................110 Offshore Systems Inc. ............................ 109 Olgoonik Development Corp............108 Oxford Assaying & Refining Inc. ......122 PacArctic Logistics .......................................22 Pacific Alaska Freightways ..................... 67 Pacific Pile & Marine ......................8, 9, 10 Pacific Rim Media / Smart Phone Creative......................... 41 Paramount Supply ..................................... 126 Parker, Smith & Feek ....................................33 Pen Air ..............................................................102

Personnel Plus..............................................122 Remax / Dynamic PropertiesMatt Fink......................................................23 Rotary District 5010 ................................124 Samâ&#x20AC;&#x2122;s Club ...........................................................11 SeaTac Marine Services ............................23 Seekins Ford Lincoln Fleet .......................75 Shoreside Petroleum ..................................22 Span Alaska Consolidators ......................31 Spenard Builders Supply ......................... 77 Stellar Designs Inc. .................................... 126 STG Inc. ................................................................89 SunGard Availability Services................55 Trinion Quality Care Services Inc. .....63 True North FCU........................................... 126 Unit Company...................................................73 Verizon ................................................................43 Visit Anchorage ..............................................45 Vitus Marine LLC ........................................ 126 Washington Crane & Hoist..................... 21 Waste Management ..................................113 Wells Fargo .....................................................132 West-Mark Service Center...................116

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