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Iowa board hearing pipeline case inexperienced
Erin Jordan
Nov. 11, 2015 12:01 pm, Updated: Nov. 11, 2015 2:28 pm
The three-person board that will decide whether a Texas company may use eminent domain to build a crude oil pipeline across Iowa is one of the nation's least experienced utility commissions.
The Iowa Utilities Board will start a hearing Thursday in Boone on whether Dakota Access, a subsidiary of Texas-based Energy Transfer Partners, may take, at market value, more than 350 parcels from landowners who haven't willingly sold to build the pipeline through 18 Iowa counties.
'It's, without a doubt, the most controversial issue the board has faced in quite a while,” said Darrell Hanson, of Altoona, who served on the board from 2007 to 2013.
And today's board can't draw on a wealth of on-the-job training.
Of 61 federal and state utility regulatory agencies, Iowa's was 10th from the bottom in terms of experience, with an average 2.4 years on the board, in a March report from the Institute of Public Utilities at Michigan State University.
Each of the board members was appointed by Gov. Terry Branstad and approved by the Iowa Senate. Earlier this month, Branstad said it would be appropriate for the utilities board to consider allowing eminent domain for the pipeline's construction.
'I think eminent domain should be used only very sparingly, but there are times when it is appropriate,” the Republican governor told reporters this month.
So who are board members and what do they do?
Utilities Board Chairwoman Geri Huser, 52, of Altoona, was appointed in March. Huser, an Iowa Finance Authority official, served as a state representative from 1997 to 2011. The Democrat was an Altoona City Council member and a social worker before earning a law degree in 2004.
Libby Jacobs, 59, a West Des Moines Republican, joined the utilities board in May 2011. She served in the Iowa House from 1995 to 2009 and was president of the Jacobs Group, a consulting firm specializing in strategic planning, board development, community outreach and fundraising, the board website states.
Nick Wagner, 42, of Marion, was named to the board in March 2013. Wagner, a Republican, served in the Iowa House from 2009 to 2013 and was the director of quality management for the ESCO Group, the board's website states.
The utilities board regulates rates and services of electric, natural gas and water utilities, as well as the services of communications utilities. The group supervises Iowa's more than 30,000 miles of hazardous liquid and natural gas pipelines and the transmission, sale and distribution of electrical current.
The utilities board is one of only a handful of state boards on which members are paid, with compensation 'consistent with current standards in industry” for different professions desired on the board, according to Iowa Code Section 476.2.
Huser's salary is $128,890, Jacobs's is $122,444 and Wagner's $116,001.
'It's lots of reading,” said Swati Dandekar, of Marion, who left the board in 2013, after serving two years, to run for Iowa's 1st Congressional District. 'Every day, we spent time reading all the dockets that came before us. If you have a question, you do not talk to colleagues. You go to the technical staff and try to understand.”
That's because with a three-person board, any meeting of two members is considered a quorum and can run afoul of open meetings laws if not announced to the public.
More than half of the 61 utility regulatory agencies in the United States have three members, according to MSU's Institute of Public Utilities. Another 23 agencies have five members, five groups have seven members and a Massachusetts group has one.
'I've always felt we ought to have five,” Hanson said. While scheduling is easier with just three people, a five-person board would allow for more diversity and the opportunity to have a practicing lawyer and someone with an economics background, he said.
Because members can't talk with each other about board business, they rely heavily on the staff, Hanson said.
'It (staff) is even more important in Iowa where we've had high turnover on the board,” he said.
Some of that turnover is caused by members who don't complete their six-year terms, but other switches have been political, he said.
'Sometimes governors get the idea they are really going to change course by replacing board members,” Hanson said. 'But what that does is give the board staff more influence. We have a great staff, but anytime you have people who sift through the issues and give you summaries, they have a lot of influence.”
Deputy Executive Secretary Judi Cooper has been with the board since 1982 in a variety of positions. Legal counsel David Lynch worked with the board in the mid-1980s and returned in 1998.
The most recent political shift came in March, when Branstad replaced board member Sheila Tipton, a Des Moines lawyer, with Huser and demoted Jacobs from the chair position. The shake-up followed complaints about Iowa Utilities Board rulings from MidAmerican Energy and the Rock Island Clean Line, Hanson said.
'It was interesting to see there were two companies in there complaining and a week or two later there were yet again changes on the board,” said Hanson, a Republican who Branstad chose not to reappoint in 2013.
The board will hear public comments on the proposed pipeline Thursday, followed by the evidentiary portion starting Monday and lasting through Dec. 3.
The board will rule on the permit request and, separately, on eminent domain. Decisions are expected around the end of the year.