Governor Chet Culver made two appointments to the Iowa Utilities Board this week. He named Rob Berntsen as the IUB's new chairman, replacing John Norris. Norris stepped down from the IUB in order to serve as chief of staff for Agriculture Secretary Tom Vilsack.
Culver also reappointed Krista Tanner as one of the IUB's three members. Culver appointed her in 2007 to serve out the remainder of someone else's IUB term, which expires at the end of April. Now she will serve out the remainder of Norris's term, which ends in April 2011.
The governor named Berntsen for the full six-year term that begins on May 1 and expires in 2015. (The third IUB member, Darrell Hanson was appointed by Culver in 2007 for a term that expires in 2013.)
Join me after the jump for more background on the new IUB chairman, along with some speculation about what can we expect from the board.
Like many previous IUB members, Berntsen has worked closely with the governor who appointed him. The press release from the governor's office mentioned that he began working for the Iowa Secretary of State's office in 1998. (Culver was elected Secretary of State that November.) He served for a time as Culver's chief of staff at the Secretary of State's office and worked on Culver's re-election campaign in 2002.
Berntsen then served as the Iowa director for John Edwards' 2004 presidential campaign and spent a year in Iraq as a U.S. Army Reserve officer in the JAG corps. After returning from Iraq, he moved to his wife's hometown in Indiana and started working for the Vectren Corporation.
Culver praised Berntsen and Tanner as "experts in the field of utility regulation." I share Bleeding Heartland user RF's concern about having the head of the IUB come straight from a utility, especially since Tanner also did legal work for utilities before she joined the board. I understand that attorneys do not always agree with their clients' views, but I believe that a company's chief counsel is more likely to be influenced by that particular company's perspective than an attorney who works for many clients.
I'd never heard of Vectren before Thursday. Here's how the company's website describes its work:
Vectren Corporation is an energy holding company headquartered in Evansville, Ind. Vectren's wholly owned subsidiary, Vectren Utility Holdings, Inc. (VUHI), serves as the intermediate holding company for three operating utilities: Indiana Gas Company, Inc. (Vectren North), Southern Indiana Gas and Electric Company (Vectren South), and Vectren Energy Delivery of Ohio (VEDO).
Vectren North provides energy delivery services to approximately 569,000 natural gas customers located in central and southern Indiana. Vectren South provides energy delivery services to approximately 141,000 electric customers and approximately 112,000 gas customers located in southwestern Indiana. Vectren South also owns and operates electric generation to serve its electric customers and optimizes those assets in the wholesale power market. VEDO provides energy delivery services to approximately 319,000 natural gas customers located in west central Ohio.
Vectren's Nonutility Group is involved in three primary business areas: Energy Marketing and Services, Coal Mining, and Energy Infrastructure Services. Energy Marketing and Services markets natural gas (ProLiance Energy) and provides energy management services, including retail energy and related services (Vectren Source). Coal Mining mines and sells coal (Vectren Fuels). Energy Infrastructure Services provides underground construction and repair (Miller Pipeline) and energy performance contracting services (Energy Systems Group or ESG).
After reading that information, I felt immensely relieved that Berntsen's appointment came after the IUB issued its ruling on ratemaking for a proposed coal-fired power plant near Marshalltown. That ratemaking ruling influenced this week's decision by Interstate Power and Light (a subsidiary of Alliant) not to build the coal plant.
Alliant has not ruled out building a new generating facility in Iowa:
[Alliant's VP for new energy development Kim] Zuhlke said that in the long term, Alliant would need more generating capacity. The utility now buys a third of its power from other utilities and generators, a cost that is passed on to customers.
Zuhlke said Alliant would look again at a plant fired by natural gas, a fuel more environmentally friendly than coal and whose price has dropped by two-thirds since the Marshalltown plant was approved.
"Natural gas will be one option we will examine," Zuhlke said. Alliant opened a natural gas-fired generator at Mason City in 2005.
If any company decides to pursue a new natural gas project in Iowa, I would expect the IUB to look favorably on all the utility's requests, given Berntsen's past work for Vectren and Tanner's ongoing concern about whether Iowa can meet future demand for electricity.
Like the Des Moines Register's editorial board, I would like to see utilities and electric cooperatives invest aggressively in energy efficiency and clean, renewable energy production:
The Iowa Utilities Board is currently considering Interstate Power's five-year energy-efficiency plan. The board should require the company to aim high. A 1.5 percent annual saving, for example, mirrors trend lines of 1.5 percent annual growth in sales. In addition, the Legislature has required rural electric co-ops and municipal utilities to set energy-efficiency goals by Jan. 1. It must monitor those plans to ensure they're aggressive, too.
Iowa also needs to make law changes to encourage small-scale wind projects, so farmers, for example, could put up turbines to power their operations and get a fair return for excess electricity. Zoning ordinances need to be changed to make it easier to put up turbines or install solar panels.
In a world where carbon will likely carry a price, Iowa's leaders need to look for every possible way to encourage generating clean power and using less of it.
It's not clear whether the IUB will issue its ruling on Interstate Power and Light's energy-efficiency plan before Berntsen begins his term on May 1. Several non-profit organizations submitted expert testimony to the IUB last September detailing ways the energy-efficiency plan could be improved.
Whenever the decision comes down, I hope the IUB will insist on ambitious energy-efficiency targets. Not only can efficiency measures help Iowa meet its baseload needs for electricity, they also boost the economy by saving consumers money that can be spent on other goods and services.