# IUB



Weekend open thread: Job news edition

Last week’s horrible nationwide jobs report for June is another danger sign for the U.S. economy. Charles Lemos put the numbers in perspective here. The U.S. unemployment rate doesn’t appear to be rising, but that’s mainly because discouraged workers have stopped looking for a job. Other pieces of the economic picture aren’t looking great either, and some analysts think we are on the brink of a double-dip recession.

In terrible news for central Iowa, Wells Fargo announced on July 7 that it is “eliminating Des Moines-based Wells Fargo Financial and 3,800 positions nationwide.” From the Des Moines Register report:

Wells Fargo Financial will eliminate 2,800 positions in the next six months. The majority of those will come with the closing of 638 Wells Fargo Financial stores around the country, including 12 in Iowa. Only 14 of the initial layoffs will be in the Des Moines headquarters.

Wells Fargo also will eliminate an additional 1,000 positions in the next 12 months, most of those positions in Des Moines, said David Kvamme, president of Wells Fargo Financial. […]

Currently, Wells Fargo Financial has approximately 14,000 team members throughout the country, and 3,500 in Des Moines. The remaining 10,600 jobs will transition to other Wells Fargo units, including mortgage and community banking.

Laid off employees will receive 60 days’ working notice and a severance package.

Affected Wells Fargo employees also are encouraged to apply for other jobs throughout the company. Wells Fargo currently has more than 400 open positions in the Des Moines area, Kvamme said.

Wells Fargo is Iowa’s largest bank in terms of deposits and Central Iowa’s largest private employer with about 12,900 employees in the Des Moines area.

The Des Moines area is far from the worst place to do job-hunting; unemployment and the cost of living are pretty good compared to other medium-sized cities. Still, that’s a lot of people who will hit the job market at the same time.

Here’s some good news from the past week: the Iowa Utilities Board adopted “rules to encourage the development of more small wind generation systems across Iowa,” the Newton Independent reported.

One prominent Iowan got a new (unpaid) position this week, as President Obama appointed Vermeer Corporation president and CEO Mary Andringa to his 18-member export advisory council. Heavy-hitter Iowa Republicans tried to recruit Andringa to run for governor last year, and she is a chair of Terry Branstad’s campaign.

The celebrity job story of the week was of course LeBron James abandoning the Cleveland Cavaliers for the Miami Heat. I haven’t watched an NBA game in years, but I think James should have stayed in Cleveland, or at least not humiliated his hometown on nationwide television. A couple of good takes on the unprecedented dumping via tv special: Bill Simmons for ESPN and Matt Taibbi for Rolling Stone.

Some enterprising person was able to make google searches for “Terry Branstad” turn up ads for cheap drugs from Canada. The ads look like they are coming from Branstad’s official campaign website. Luke Jennett of the Ames Tribune got the scoop. As of Sunday morning, the problem still hadn’t been fixed.

This thread is for anything on your mind this weekend.

UPDATE: Who else watched the World Cup final? I was rooting for the Netherlands, but at least it wasn’t decided by penalty kicks. Spain scored a goal in the final minutes of extra time to post its fourth straight 1-0 victory. (Paul the psychic German octopus was right.) I’m happy for Spain, because they looked like the better team for most of the game, but it’s incredible to think that they are the World Cup champions after scoring eight goals in seven games.

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Background on new Iowa Utilities Board Chairman Rob Berntsen

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.  

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Alliant may walk away from the Marshalltown coal plant

On Wednesday the Iowa Utilities Board delivered a long-awaited ruling on "ratemaking principles" for the coal-fired power plant that Interstate Power and Light (a subsidiary of Alliant Energy) wants to build near Marshalltown. The ratemaking principles determine how much of a return the investor-owned utility can make on its investment. A higher return for the utility means the company can pass more of the cost of building a new plant onto customers.

The Iowa Utilities Board's decision was well below what Alliant requested and not far above what the Iowa Consumer Advocate's Office was seeking. The Cedar Rapids Gazette quoted an energy industry analyst:

"We expect LNT (Alliant Energy) will not accept the ratemaking principles as approved by the Iowa Utilities Board, instead allowing the proposal to die," said David Parker of Robert W. Baird in Milwaukee. He said Alliant will probably look instead to building more wind and natural-gas electric turbines.

At Century of the Common Iowan, noneed4thneed links to an article from the Marshalltown Times-Republican that similarly suggested the future of the project is in doubt.

Alliant's official statement left options open but made clear that the company was not happy with the ratemaking ruling. Excerpt:

In its decision, the IUB established a return on equity of 10.1 percent and a cost cap of $2816.00 per kilowatt, excluding AFUDC. IPL had requested a return on equity of 12.55 percent and a cost cap of $3483.00 per kilowatt, excluding AFUDC. IPL has proposed to own 350 megawatts of the facility's output, with the remaining output owned by other partners or included in purchased power agreements.

"We will need to review the IUB's written order to determine our next steps," states Tom Aller, president-IPL. "However, the conditions placed by the IUB on the proposed hybrid power plant present a number of challenges in today's financial climate, and we are disappointed that this decision seemingly does not take that reality into account. We will continue to work with our partners to determine how today's decision will impact our respective companies' long-term generation plans. IPL remains committed to pursuing safe, reliable, environmentally responsible and cost effective energy supply options to meet Iowa's future energy needs."

I would not be surprised if Alliant follows the lead of LS Power, which opted last month not to pursue a proposed coal-fired power plant near Waterloo. Alliant's subsidiary in Wisconsin may ask state regulators to allow an emergency rate hike because the economic slump has reduced demand for electricity:

Utility executives said the increase would be needed to offset a dramatic decline in power sales because of the recession.

With the closing of the Janesville General Motors plant and other factory cutbacks, the utility is forecasting power sales to drop 6% this year.

"It is understandable that our customers find it frustrating that the economic hardships many of them are experiencing could in turn compel us to increase their electric bills," said Patricia Kampling, the utility's chief financial officer, during a conference call Thursday.

Think about that for a minute. All along Alliant and their boosters in Marshalltown have been telling us that a new coal-fired power plant is needed to meet increased electricity needs. But future demand is almost surely going to be below what they have projected.

We could reduce our baseload needs further with an aggressive energy efficiency policy.

While several analysts interpreted Wednesday's ratemaking ruling as bad news for Alliant, it's worth noting that Plains Justice had a different take:

"The Iowa Utilities Board has missed an important opportunity to protect our state's economy and shield  Iowa consumers from a significant electricity rate increase," said Carrie La Seur, President of Plains Justice.

"New coal power plant proposals are being canceled across the country because they cost too much and pose too many financial risks. The IUB has really let Iowans down by opting for an expensive, polluting coal plant instead of the available cheaper alternative of aggressive energy efficiency programs," she added.

I put the full text of the Plains Justice release after the jump.

On a related note, Plains Justice passed along this news via e-mail a few days ago:

Last week, the Iowa Utilities Board (IUB) denied a petition to re-open the generating certificate proceedings for the proposed Marshalltown coal plant. The generating certificate grants permission for the power plant to be built.

A petition for re-hearing had been filed by the Iowa Office of Consumer Advocate and joined by Plains Justice on behalf of Community Energy Solutions, Iowa Environmental Council, Iowa Farmers Union, Iowa Physicians for Social Responsibility, and Iowa Renewable Energy Association (the Coalition). Now that the petition has been denied, the IUB's decision to grant the generating certificate can be appealed in state court although it is not yet known whether anyone will appeal.

A lawsuit would only add to the delay and expense of building this power plant.

Meanwhile, the Iowa Department of Natural Resources is expected to issue a draft air permit for the Marshalltown plant very soon. Opponents of this 50-year investment in the wrong direction on energy will want to make their voices heard during the public comment period on that permit. Coal-fired power plants are a major source of fine-particulate matter pollution, which is linked to various respiratory illnesses.

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Norris to leave Iowa Utilities Board, work for Vilsack again

John Norris will become Secretary of Agriculture Tom Vilsack’s chief of staff at the US Department of Agriculture, Iowa Independent reported today. Norris was Vilsack’s chief of staff early in his first term as governor.

In November, Norris’s wife, Jackie Norris, accepted an offer to become chief of staff for First Lady Michelle Obama.

Before Barack Obama announced his plan to nominate Vilsack to run the USDA, John Norris indicated that he was interested in being appointed to the Federal Energy Regulatory Commission.

Norris’s departure means that Governor Chet Culver will need to make two appointments to the three-member Iowa Utilities Board this spring. Norris currently chairs the IUB. Someone will need to fill the remainder of his term, which expires in April 2011.

IUB member Krista Tanner has been serving out the remainder of a term that expires in April 2009. I do not know whether she will ask to be reappointed to a full six-year term on that body.

Last year Tanner and Norris cast the deciding votes to approve an application to build a new coal-fired power plant near Marshalltown. However, the IUB has yet to issue a ruling on ratemaking principles for that plant. Reuters reported last March,

Ratemaking principles define how construction costs will be recovered in utility rates throughout the life of the generating facility. [Interstate Power and Light] is requesting a 12.55 percent return on common equity as part of the filing.

Several environmental organizations have intervened with the IUB regarding the ratemaking for this proposed plant. The board’s decision could affect whether Interstate Power and Light proceeds with this project or abandons it as unprofitable. LS Power recently announced that it no longer plans to build a coal-fired power plant near Waterloo.

If you know any qualified candidates who are interested in serving on the Iowa Utilities Board, encourage them to submit their resumes and supporting materials to the governor’s office as soon as possible.  

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