PUC candidates focus on failed seed company during State Fair debate5 seek two seats on state board that oversees utilities, among other duties.
By: Tom Lawrence, The Daily Republic
HURON – The financial collapse of a Redfield sunflower processing plant was the main point of discussion recently during a debate among five candidates for the South Dakota Public Utilities Commission.
The PUC, although primarily a utilities regulatory agency, also oversees grain elevators and warehouses. That’s why the $2.6 million Anderson Seed Company scandal has come to dominate the campaign for two seats on the commission.
Republican incumbents Chris Nelson and Kristie Fiegen took on Democratic challengers Matt McGovern and Nick Nemec and Libertarian Party candidate Russ Clarke at the South Dakota State Fair in Huron Saturday afternoon. All five said they deplored what happened with the Anderson Seed Company, and offered proposals for preventing such fiscal disasters in the future. But their ideas on how to do that differed. “I have a plan where we can make those farmers whole,” Nemec said.
He said the PUC could create a program where 1 cent is collected from each bushel of grain sold in the state and put into a fund. Since about 1 billion bushels of grain are produced each year in South Dakota, such a “check-off” program could generate $10 million in just a year.
“A lot of farmers don’t like a check-off,” Nemec admitted. “This would be a check-off that would be implemented only when necessary.”
He said it could be halted in three months after the farmers and others who were cheated are paid back and only used in the future in similar cases. He compared it to neighbors helping each other in case of a prairie fire or illness.
“And that’s just the way we do it,” Nemec said. “We take care of our own. We take care of our neighbors.”
Nelson, the chairman of the PUC, said he favors a five-point plan to tighten rules to prevent such problems in the future. He said he has called on the Legislature to enact it and said a bill doing just that will be introduced during the 2013 session.
Under the plan, the commission must get current financial documents before licensing a company, he said. If a firm is based out of state, it must submit information within seven days whenever the PUC requests it.
The new rules would make submitting false information a felony. The companies would also be obligated to inform the PUC if fiscal problems arise.
In addition, the categories of companies should be “narrowed” to more accurately set bonds, he said. Right now, grain buyers who purchase $2 million in grain pay the same bond as a business that buys $10 million worth. That needs to be changed, Nelson said.
Anderson Seed’s bond was $100,000, far short of the debts it could not cover. The 39 people and businesses who claim they are owed money have until Sept. 17 to file with the PUC, he said.
Once those claims are filed and proven, the $100,000 will be split among the farmers and commercial firms who were not paid.
Nemec said that all made sense to him.
“All the proposals that Chris talked about I can support,” he said.
But Nemec and McGovern both said under current law, farmers are last in line to get paid off in cases like Anderson Seed’s collapse, while banks are first. They said they favored passing a state law that farmers own the grain until he or she is paid for it and the check clears. McGovern said such a plan has worked in North Dakota and Ohio. Putting farmers at risk under the current rules simply isn’t fair, he said. “It’s just not acceptable,” McGovern added. Fiegen said she realizes the Anderson Seed Company collapse was bad news. “Absolutely, Redfield was not fun,” she said. The PUC certified grain buyers in 2009, Fiegen noted. “Does it go far enough?” she asked rhetorically. “Probably not quite.” But this is the first such bankruptcy in the state in 10 years, and that is a record few states can match. Clarke said he favored full disclosure as a means to prevent such problems in the future. “One of my favorite sayings is, light is the best disinfectant there is,” he said. Clarke said he favors “minimum government, maximum freedom.”
The candidates have led varied personal and political lives.
Fiegen, like Nelson, was appointed to the PUC by Gov. Dennis Daugaard. She was chosen to complete the end of a term won by Steve Kolbeck in 2006. Kolbeck resigned in 2011 to take a job with a telecommunications company; he was the only Democrat in Pierre elected to a statewide office when he departed.
Fiegen is serving the final quarter of her six-year term and now faces McGovern and Clarke for a full term.
She is the vice chairwoman of the PUC, and a former four-term legislator who had been president of South Dakota Junior Achievement for 17 years before she was named to the PUC in 2011. Fiegen grew up on a family farm near Chancellor and now lives with her family in Sioux Falls.
She said she viewed herself as an advocate for regular people.
“I bring a voice, a consumer voice,” Fiegen said. “Because consumers need to be heard. Every decision we make affects farmers, affects ranchers, affects our pocketbooks.”
She said she would oppose what she views as onerous federal regulations and will promote a continued expansion of broadband Internet.
“I want to make sure we have common sense in our government,” Fiegen said.
She repeatedly used the word “pocketbook” during the forum and said she would work to keep rates and costs down.
“I always do what’s right. That’s who Kristie Fiegen is,” she said. “We are advocates for you. That’s who we are advocates for.”
McGovern, a Wisconsin native who took a job with the United States District Court in Rapid City after he earned a law degree, now lives in Sioux Falls, where he has a law practice. He has been an advocate for wind power,
He said Fiegen was “a very friendly person” but a “rubber stamp for the utilities” while his legal training would allow him to research issues and make reasoned decisions.
“My campaign is not funded by lobbyists, it is not funded by the utilities the PUC regulates,” he said.
McGovern said he is hearing from voters that the PUC must prevent problems like the Anderson Seed scandal and needs to strive to keep electric bills down.
He said he was interested in success stories, like an Aberdeen firm that produces wind turbine parts and the Mitchell Technical Institute wind energy program. They need to be sustained and supported, he said.
McGovern, who has dropped his last name Rowen and is running under his middle name, evoked his grandparents, George and Eleanor McGovern and said he was proud of their legacy. He said his “roots in South Dakota” and his legal training and background qualify him for the commission.
Clarke taught Greek and Latin in Indiana before he moved to South Dakota 19 years ago with his wife, a South Dakota native. He worked in computer field before taking a job in the insurance industry.
Clarke, who lives in Sioux Falls, said he believes the PUC should advocate for progress, but not mandate change. He said his party does not believe in government dominating people’s lives.
“Technology is always a good thing, it is always going to move us forward, it is always going to lower rates,” Clarke said. But don’t force it on people, he said.
“We have to make those decisions,” Clarke said.
However, he said he realizes the PUC’s actions will continue to have an “enormous impact on South Dakota.” Clarke said he would like to see more efforts made to promote alternative energy and face the challenges of climate change.
“As the PUC and citizens of the state, we’re going to have to decide what role, if any, government should have on this,” Clarke said.
He said wireless telecommunications need to be promoted, including the American Indian telecommunications industry, which needs to have “equal footing” in South Dakota.
Clarke urged voters to visit the candidates’ websites and the PUC website to learn more.
Nelson was appointed to the PUC in January 2011 after Mitchell resident Dusty Johnson, who had just been elected to a second term on the commission, resigned to become Daugaard’s chief of staff.
In 2010, Nelson was term-limited as secretary of state and had lost a Republican primary to Rep. Kristi Noem to run for Congress.
Nelson and Nemec are competing to serve the remainder of the term Johnson was elected to in 2010, since Nelson’s appointment was only valid until the next general election.
Nemec, a Holabird farmer, former two-term legislator and Democratic national committeeman, said the PUC should concentrate on renewable energy like wind and solar.
“Solar energy is almost completely untapped in South Dakota,” he said. “We need to concentrate on newer, renewable forms of energy to develop within the state of South Dakota. That is the wave of the future. The coal industry is going to be priced out of existence, not so much from regulations but the glut of natural gas in our country.”
He said he has lived and succeeded because of the “sweat of my brow” and said he would bring his background as a successful farmer to the PUC.
Nelson, a rural White Lake native who now lives in Pierre, said the appointment was the “most amazing surprise of my life” and an opportunity he appreciates.
“First of all, I have grown to love serving the people of South Dakota,” he said. “Second, I love challenges.”
He said there are tremendous challenges facing the PUC, with the threat of increased electric and phone rates, primarily because of federal regulations. Nelson said the seed company bankruptcy is another challenge he wants to meet.
Debate held in tent
Candidates touched on other issues during the forum, held in a tent on the fairgrounds in 90-plus degree temperature. Fairgoers, including kids with cattle, strolled past as dozens of people listened to the candidates.
Fiegen said the Environmental Protection Agency was hampering people and businesses with its rules.
“First of all, we want to protect the pocketbooks of our farmers and ranchers, and protect the pocketbooks of families so they can put food on the table,” she said. “We want to protect our earth. We have to protect consumers. These regulations have to be reasonable.”
McGovern said the EPA can be “heavy-handed at times.
The candidates also discussed net metering, in which a person who generates electricity through wind power can sell it to a utility. All said it was a good idea, but there are concerns about pricing and the rules surrounding it.
Nelson said he wants South Dakota to adopt its own rule on net metering, and not use the federal standard.
He also said President Obama had vowed to push coal-fired electric plants out of business with regulation during the 2008 campaign and that is exactly what is happening. It’s being done too quickly, Nelson said, and ratepayers are seeing the impact on their bills.
Clarke said coal has a damaging impact on the environment, but as a believer in small government, he wasn’t sure what the PUC’s proper role should be to deal with that.
“Something has to be done to stop that,” he said. “We want the market to do that.”
All five of the candidates said they support extending the federal production tax credit for the wind energy industry.
Nemec said while some feel the PUC is a government handout, other energy industries receive support, including the billions spent on American military involvement in the oil-rich Middle East.
“So don’t kid yourself, some of these other industries are also receiving subsidies,” he said.
Nelson said he was encouraged by new transmission lines in eastern South Dakota.
“We’ve only begun to tap the potential that’s out there with wind,” he said.
Transmission lines are needed, Nelson said, noting that some turbines were shut down last summer because there was no way to store or move the energy they were producing.
McGovern said seeing new transmission lines coming into Brookings County offers a glimpse of the future.
Nelson said varied rates for electricity, depending on what time you use it, is possible in the near future.
“I think that’s exciting,” he said, since it could lower rates and reduce fuel usage.
The South Dakota PUC has three commissioners who serve six-year terms and are paid $91,390 annually. The third commissioner is Republican Gary Hanson, now in his second term, which ends in 2014. Hanson was in the audience at the debate.
The PUC regulates investor-owned electric, natural gas and telephone utilities and has lesser authority overseeing role wireless communication companies and cooperative, independent and municipal utilities.
It also tries to settle disputes between customers and their utilities, operates the South Dakota Do Not Call Registry and administers the state’s One Call notification center (call before you dig). The commission also operates the natural gas pipeline safety program and licenses and inspects state public grain warehouses and grain buyers.
It is also charged with promoting energy savings, renewable energy development and promoting the expansion of wireless telecommunications networks.