- Associated Press - Thursday, April 2, 2015

IOWA CITY, Iowa (AP) - An outgoing member of the Iowa Utilities Board has bluntly told Gov. Terry Branstad in a letter that his decision to remove her is improper and being done to placate a powerful energy company.

Sheila Tipton told the governor in the March 18 letter that his move to replace her and demote board chair Elizabeth Jacobs is an inappropriate attempt to influence future decisions to favor utilities and “appease MidAmerican Energy.” The company had complained about a ruling requiring the company to use some proceeds from a $280 million wind energy investment to reduce customers’ rates.

Tipton, a lawyer who represented MidAmerican and other energy companies in private practice, said the decision was fair to the company and its electric customers. She told Branstad that his personnel changes, effective April 30, are a “disservice to the citizens of this state.”

“Administrative agencies, including the Iowa Utilities Board, are intended to be independent and not subject to political pressures or threats of retaliation,” she wrote. “Yet, in replacing me and demoting Chair Jacobs, the message being sent to the board and its staff is to get in line and approve anything that the utilities, particularly MidAmerican, bring to it.”

Branstad has long been an ally of Des Moines-based MidAmerican, Iowa’s largest energy company. He was a paid director for MidAmerican’s parent company from 1999 - after his first stint as governor - until it was acquired by Berkshire Hathaway in 2000. A company political action committee and its executives have donated more than $120,000 to Branstad since 2010. The governor often praises MidAmerican’s wind energy production, saying it helped convince Facebook and Google to build data centers in Iowa.

Tipton told The Associated Press she hand-delivered the four-page letter to the governor.

Responding to Tipton’s letter, Branstad spokesman Jimmy Centers said the appointment of former lawmaker Geri Huser as chair would improve the board.

“We regret that Ms. Tipton is dissatisfied with the governor’s decision, but believe Ms. Huser will provide exceptional leadership, which will benefit the board and those it serves,” he said.

In January, the board voted 3-0 to approve MidAmerican’s plan to add 67 turbines to its fleet, its ninth major wind energy project in Iowa, but required it return $2 million annually to customers to better balance the project’s risks and rewards. The board denied MidAmerican’s request for rehearing Feb. 6.

MidAmerican objected during a Feb. 9 meeting with Branstad, noting the payments weren’t included in a settlement reached with the office that advocates for ratepayers. Later that month, MidAmerican President William Fehrman told the utilities board he’d informed the governor the company was going to scrap the project but Branstad “begged and pleaded” with him to continue, Tipton wrote.

MidAmerican spokeswoman Ruth Comer said executives were “seriously questioning the economic feasibility” of the project after the ruling but soon decided to move forward with construction. Branstad’s encouragement was one of the factors considered, she said, adding that MidAmerican didn’t seek board changes.

MidAmerican respects the board as its regulator, and that its appointments “are made at the discretion of the governor based on what he believes will be best for the state,” she said.

Tipton said she was informed there were internal MidAmerican discussions about the changes before they happened. Branstad appointed Huser, who has little utilities experience, on March 2 to replace Tipton and take Jacobs’ job as chair.

Tipton, 63, told Branstad that she was disappointed that he never asked the board to explain its decision. Under the original proposal, MidAmerican “stood to benefit handsomely from its investment” while customers would’ve taken nearly all the risk and received little reward, she wrote, calling that unreasonable.

Tipton’s letter said her removal is particularly unfair given the circumstances of her 2013 appointment to serve the final two years of a vacancy, for which she was recruited by Branstad’s then-chief of staff, Jeff Boeyink. Tipton said she told him she’d consider the appointment, which would require her to abandon her lucrative law practice, only if she could be assured a full six-year term when the seat expired April 30, 2015.

Boeyink told her reappointment to the $116,000-a-year position would “not be an issue,” she wrote.

Tipton said she was stunned when Branstad’s current chief of staff, Matt Hinch, said she was being replaced because the governor “wanted to make a change.” Centers denied Tipton had been promised reappointment, saying the governor is always free to make changes when a term expires.

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