A former Wisconsin regulator sought to lead one of the state’s largest utilities just months after voting to approve two of the company’s projects.
Mike Huebsch, who resigned from the Public Service Commission in February, later applied for the job of chief executive officer of Dairyland Power Cooperative, according to documents obtained by a group suing the agency over approval of a controversial power line through southwestern Wisconsin.
In his last five months on the PSC, which oversees utilities in Wisconsin, Huebsch voted to authorize two projects in which Dairyland is a major partner: the $492 million Cardinal-Hickory Creek transmission line and a $700 million natural gas plant.
Though he did not land the job, the timing of his application has prompted allegations of bias by opponents of both projects.
In a cover letter to Dairyland’s board, the longtime Republican lawmaker from West Salem cited his years of government experience, which included four years in Gov. Scott Walker’s cabinet before being appointed to the PSC in 2015.
“For over 25 years I have served the people of the state of Wisconsin in our state government,” Huebsch wrote. “My career of representing the people of western Wisconsin in the legislature and then in the executive and regulatory branches have provided me unique and diverse experiences that will allow me to immediately step in as the Chief Executive.”
Huebsch last month provided a copy of his letter and resume to the PSC, which turned them over to attorneys for the Driftless Area Land Conservancy in response to a demand for communications regarding his future employment “by any of the parties to the Cardinal-Hickory Creek” project, of which Dairyland will own 9%.
An attorney representing the conservancy said the revelation that Huebsch sought employment with one of the project’s owners casts doubt on the impartiality of his decision.
“The public can fairly ask, would Commissioner Huebsch have felt free to vote against Dairyland ... if he were thinking about, in the near future, seeking a job as CEO?” said Howard Learner, executive director of the Environmental Law and Policy Center. “It just stinks.”
Huebsch, who now runs a government and regulatory consulting firm, did not respond to requests for comment. PSC spokesman Matt Sweeney said the agency, which is representing Huebsch in legal challenges to both utility projects, has advised him against commenting publicly.
In his application letter, Huebsch cited his regulatory experience “in the delicate process of moving our state and nation’s energy portfolio toward a more carbon free, renewable future.”
Wisconsin law prohibits former state officials from profiting off their past positions to aid private interests. Specifically, they are barred from receiving pay to appear before or negotiate with state agencies for 12 months after their public service.
But the law does not preclude them from seeking employment in industries they oversaw, and Huebsch would not be the first utility regulator to go to work for a utility.
“Utilities recognize that former regulators are extremely valuable to assist them with navigating the regulatory process,” said Tyson Slocum, director of the energy program at the nonprofit consumer advocacy group Public Citizen. He suggested Wisconsin needs tighter revolving-door laws: “It’s inherently a problem, because deep-pocketed entities are willing to pay to retain the services of a former regulator.”
But Phil Montgomery, a retired Republican legislator who served as PSC chairman under Walker, said Huebsch was an honorable public servant who deserves to be able to earn a living using the skills he gained as a regulator.
“He’s one of the most morally centered and ethically conscious people I know,” Montgomery said. “What’s he supposed to do? Is he supposed to be a truck driver?”
Two big projects
The PSC voted unanimously in September to approve the Cardinal-Hickory Creek project, a joint venture of American Transmission Company, ITC Midwest and Dairyland that will run between Dubuque, Iowa, and Middleton. Construction is scheduled to begin in late 2021 pending the outcome of legal challenges.
Huebsch, who led the discussion of the project at the PSC, reiterated the utilities’ claim that the line is needed to enable the development and delivery of cheap wind power from states to the west and suggested this will not be the last such project considered.
The Driftless Area Land Conservancy sued in federal court, claiming conflicts of interest on the part of Huebsch and Chairwoman Rebecca Valcq, who previously worked for WEC Energy Group, the majority owner of ATC.
Both have denied any bias and dismissed the allegations, which were raised after the commission’s preliminary vote to approve the application.
The Dairyland job was not open at the time of the vote, and the lawsuit, filed by the Environmental Law and Policy Center, does not allege the commissioners stood to benefit from their votes but that the decision-making process was “imbued with at least an appearance of bias and a lack of impartiality.”
Former Dairyland CEO Barbara Nick announced her plans to retire on Jan. 7.
Huebsch announced six days later that he would step down the following month from his $128,500 job with a little more than a year of his six-year term remaining.
On Jan. 16, Huebsch and fellow Walker appointee Ellen Nowak voted to authorize Dairyland to build the Nemadji Trail Energy Center, a jointly-owned 625-megawatt natural gas-fired generator in Superior.
Huebsch applied on April 23 for the Dairyland position, which paid just over $888,000 a year in 2018, according to Dairyland’s tax filings.
Dairyland, which serves about 290,000 customers of municipal and cooperative utilities in four states, instead hired Brent Ridge, an executive with a consortium of public and municipal utilities in Washington state.
Greg Wannier, a staff attorney for the Sierra Club, said the group is reassessing its strategy in its court challenge of the Nemadji Trail decision and news of Huebsch’s interest in the Dairyland job raises “profound ethical concerns.”
“This entire incident only underscores the broader concerns we have about overly close relationships between public servants and the industries they regulate,” Wannier said.
Matt Rothschild, executive director of the Wisconsin Democracy Campaign, said it was “unseemly” for Huebsch to apply after voting in favor of projects that benefit the company and added that Wisconsin needs tighter laws.
“This is the revolving door that makes people sick to their stomach to watch: public officials cashing in on their connections and going to work for companies they used to regulate,” Rothschild said. “It’s an invitation to corruption — an invitation that is all too often accepted.”
Fave 5: Reporter Chris Hubbuch picks his top stories from 2019
We are sharing Wisconsin State Journal staffers' favorite work from 2019. From energy and environment reporter Chris Hubbuch:
My story about researchers mapping the toxic history of lead and zinc mining in southwest Wisconsin checks all the boxes for what I find interesting -- history, the environmental cost of human industry, geography, technology, and a bit of mystery. It was one of my favorite stories to write and also one of the most-read, a consonance that rarely happens on my beat.
Case in point: I truly enjoyed trying to explain the concept of stranded assets and how ratepayers can get left holding the bill when utilities shut down generators ahead of schedule. It's wonky stuff, but kind of a big deal in a state where utilities have invested billions of dollars in coal-fired plants in the past 20 years, plants that are now struggling to compete with cheaper natural gas and clean energy like wind and solar.
Along the same lines, it was fun trying to explore the different paths to a carbon-free electrical grid and the opportunities the transition could offer for ratepayers to become energy producers.
As much as I dislike politics, it was hard to ignore the ongoing battle between two key Trump constituencies -- Midwestern farmers and ethanol producers on one side and the petroleum industry on the other. Plus I got to use the phrase "fight to the knife."
Finally, one of my favorite -- and most popular -- stories was one not from my beat. The Garver Feed Mill reopened this summer after nearly two decades of neglect and stalled redevelopment efforts. As a recent transplant, it was an opportunity to learn about some of Madison's agricultural and manufacturing heritage as well as city politics. The public was clearly hungry to get a look -- and a slice -- overwhelming Ian's Pizza on their first day of business.
It’s been 40 years since the last zinc mine closed and nearly two centuries since Southwest Wisconsin was the nation’s primary source of lead. The last vestiges of the industry have all but disappeared, but the toxic legacy remains.
As renewable energy drives down the cost of wholesale electricity, utilities are shuttering expensive coal plants early. Should ratepayers continue to ensure shareholders profit from their investments?
New technology and a growing acceptance of climate change have brought the nation to the cusp of an energy transformation. But who profits from it, and is there time?
The petroleum industry and ethanol producers are fighting over federal mandates that require refineries to blend biofuels into their gasoline and the Trump administration's growing use of exemptions.
Part of a $19.8 million project -- including more than $10 million in public funding -- that could eventually include an adjacent hotel, Garver Feed Mill will host an event center and 11 other local food and wellness businesses.