A former utility regulator, now a company executive, comes up against his past

November 24, 2017 GMT

Chris Nelson asked Steve Kolbeck a tough question at state government’s Public Utilities Commission meeting Tuesday.

Nelson, a Republican member of the commission, wondered whether utility companies should face penalties for misreporting data in their filings.

Kolbeck was in a difficult spot. He had been a Democratic member of the commission, until resigning in June 2011 for a job with telecom company CenturyLink.

Nelson was on the commission at the time Kolbeck resigned. Gov. Dennis Daugaard appointed Nelson in January 2011 to the vacancy left by Dusty Johnson.

Johnson, a Republican, resigned his commission seat to become chief of staff for Daugaard. Johnson had just won re-election.

Kolbeck changed jobs again in November 2016, becoming principal manager for Xcel Energy-South Dakota.

It was in the Xcel role that Kolbeck appeared before the commission Tuesday

Nelson said date mistakes by utilities were “pervasive” and seemed to favor the companies. Should there be a penalty, Nelson asked Kolbeck.

“More of a philosophical question,” Nelson told Kolbeck. “Help me out.”

Under consideration was an Xcel rate put in place years ago for recovering expenses of its electricity transmission system.

Patrick Steffensen, a member of the commission’s staff, caught several errors in the company’s filing.

He found three years of misreported amounts for capital structures. There also was a project whose start date had been revised to March 2022 rather than May 2019. And another project didn’t qualify.

Those three items together meant Xcel should get about $101,000 less than the company requested.

After subtracting those amounts, Steffensen recommended the recovery rate be reduced to $0.003131 per kilowatt-hour starting Jan. 1, 2018

Xcel had wanted $0.003475.

Those seemingly miniscule fractions of a penny would have added up to six-figure dollars.

Nelson praised the commission’s staff for digging out those kinds of mistakes.

Kolbeck knew what was in Steffensen’s report. He apologized.

“I don’t think it is intentional. I don’t think we would put the commission in a bad spot,” Kolbeck said.

Commissioner Gary Hanson, a Republican, said he appreciated “the granularity” the commission staff took in checking utility companies’ rate-recovery filings.

Hanson as well praised the commission staff for protecting South Dakota consumers.