Dems mount agressive campaign for PUCThe race for 2 seats turns increasingly testy as election looms.
By: Chet Brokaw, The Daily Republic
PIERRE — The race for two spots on South Dakota’s Public Utilities Commission has turned increasingly testy as Democratic challengers accuse Republican incumbents of letting utility companies charge customers too much and failing to protect farmers who lost $2.6 million when a grain-buying company went broke and couldn’t pay them.
Democrats Matt McGovern and Nick Nemec jumped into the race in June, castigating Republican commissioners Chris Nelson and Kristie Fiegen for their handling of the failure of Anderson Seed Co. of Redfield. They later criticized the GOP incumbents for granting a power company too large an increase in electricity rates.
“We need commissioners who will stand up for consumers and farmers, not the utilities the commission regulates,” said McGovern, a Sioux Falls lawyer and grandson of the late U.S. Sen. George McGovern.
Nelson and Fiegen contend they’ve held down utility rates and have done everything possible under current law to help farmers who sold sunflowers to the failed grain-buying company.
“We did, in fact, do our job,” said Nelson, a former secretary of state. The outcome of the two races will determine the balance of power on the three-member commission that regulates natural gas, electric and telephone utilities, and grain warehouses. The third commissioner, Gary Hanson, is not up for election this year. The outcome also reaches into voters’ pocketbooks because the commission determines rates and the quality of service offered by utility companies. PUC commissioners serve six-year terms. In most years, only one seat is on the ballot.
Nelson, 48, was appointed to the commission two years ago to replace Dusty Johnson, who resigned after winning re-election to become Gov. Dennis Daugaard’s chief of staff. Nelson is now running for the remaining four years of that term. He is being challenge by Nemec, 54, a former state lawmaker and farmer from Holabird.
Fiegen, 50, is a former state legislator from Sioux Falls and president of Junior Achievement of South Dakota. She also was appointed to serve the final two years of another commissioner who resigned. Fiegen is now seeking a full six-year term against the 40-year-old McGovern. Also in the race is Libertarian Russell Clarke, 52, of Sioux Falls, a former college instructor who now works for an insurance company.
Farmers began notifying the PUC in January that they weren’t being paid for sunflowers they had delivered to Anderson Seed’s operation in Redfield. A Canadian company later announced that it planned to buy the Redfield facility, but officials said there would be no money left to pay farmers after the sale proceeds are used to repay a bank loan secured by a mortgage on the property.
After Anderson Seed failed, the commissioners said they would ask the 2013 Legislature to change the law so grain buyers would have to provide a current financial statement when they apply for a license, one given under penalty of perjury. Anderson Seed provided a 9-month-old financial statement when it renewed its license in 2011.
Nelson and Fiegen note they weren’t even on the commission when Anderson Seeds got its initial license and the subsequent renewal. The $100,000 bond the company had to provide won’t cover all of the farmers’ losses, and the commission intends to seek modest changes in bonding laws.
Nemec said he entered the race specifically because of Anderson Seed.
“I thought that was a travesty and a failure to regulate,” he said.
Nemec wants to make such companies post much higher bonds and to change state laws that prevented a state economic development agency from telling the PUC that Anderson Seed was in financial trouble. If all else fails, a temporary check-off fee of 1 cent a bushel on all grain sold in South Dakota could be imposed just long enough to pay farmers for losses in such cases, a way for all farmers to help those who have been hurt, he said.
McGovern believes bankruptcy law should be changed so farmers, now considered unsecured creditors, are put on equal footing with banks and other secured creditors. But Nelson said if bond amounts are set too high, grain buyers couldn’t afford them and bonding companies would refuse to sell them.
McGovern stirred up the race with a television ad that accuses the current commission of approving a rate increase for Xcel Energy that lets the company use rates charged to South Dakota electricity customers to help pay for the company’s use of private jets and its chief executive officer’s $11 million salary.
“I won’t approve rate hikes until they eliminate their wasteful expenses,” McGovern said.
Nelson and Fiegen said Xcel’s top officer is paid to run companies in eight states and the company’s employees often can travel more efficiently on private airplanes than on commercial flights. In electric bills sent to an average South Dakota residential customer, only 12 cents a year goes to pay the CEO’s salary and only 30 cents a year goes to operate a private plane, according to the company.
Nelson said the Democrats fail to mention that the PUC allowed Xcel a far lower profit in South Dakota than it’s allowed to earn in other states, a move that saved South Dakota customers $3 million.