From this

… to this

What is Tim Pawlenty, the Green Chameleon, thinking? Very odd move… I cannot believe, though I guess it’s good if some of Koppendrayer’s beliefs about Excelsior Energy’s Mesaba Project are genetically implanted in her brain… but some things I find in a search do not bode well. First, she has ZERO experience in utilities. ZERO.

Second, she seems to spout off the way Koppendrayer does. Earlier this session, Wergin weighed in on a bill that would allow chiropractors to practice on animals, saying:

We need to keep in perspective the differences beween animals and humans.

[Animals] do not have the same status of humans… Animals are checked into the cargo space of airplanes.

Here’s Wergin’s take on whistleblower Paul Wotzka testifying:

Paul Wotzka is a hydrologist who worked for the Department of Agriculture for 16 years and then moved to the Minnesota Pollution Control Agency. Last spring, he was invited to testify before a different legislative committee, but his superiors refused permission. Shortly afterward he was fired.

The state maintains Wotzka was fired not for his interest in testifying, but because he took files from the Agriculture Department to his new job.

Sen. Betsy Wergin says that’s reason enough not to have him testify.

“And Senator Marty I’m going to ask that you not have this person testify because I think it’s wrong,” she said.

And then there’s this — Wergin and Laura Brod were leading the GOP charge against Franken:

Here’s Pawlenty’s official blather:

“Betsy has a tremendous combination of small business and public policy experience as well as extensive community involvement,” Governor Pawlenty said. “This perspective will be a great benefit to her on the PUC.”

… now she’s on the PUC… what does this mean? Given a comparison of my little bro’s opinions and mine, it’s even more confusing!

Otter Tail Power and Otter Tail Corporation are in the news again, with a bland look at their corporate structure.  This is the same corporate structure which is being reorganized because the utility and non-utility businesses were all lumped together.  Now, according to 6/3/08 filings at SEC and PUC, they’re going to reorganize, and put it into a utility holding company, and separate out the non-utility over aways from the utility.  And because an abusive kind of guy out west is getting all riled up about reporting on Otter Tail’s connection with Bill Gates, I think it’s time to get some more info out there!

Here’s the story in the STrib:

Is Otter Tail a utility or conglomerate?

And a snippet:

There have been no formal allegations against Otter Tail for commingling money between the utility and its other holdings. Still the utility in recent years faced a string of accusations that irregular accounting hurts ratepayers. Whiste-blowers first raised the issue four years ago, which led the Minnesota Public Utilities Commission to call Otter Tail in for its first comprehensive rate and operations review in 20 years.

Otter Tail, which has about 130,000 customers, almost half of them in Minnesota, has denied any improprieties in its bookkeeping, and an administrative law judge last month told the commission that he found no evidence of inaccurate financial reporting. Still, some advocates are nervous about its growing diversification…

Read the ALJ’s Rate Case recommendation here and check out p. 21, Capital Structure, and p. 71 too:

ALJ Rate Case Recommendation

Here’s the punch line regarding corporate structure reflected in the loosey-goosey capital structure (p. 103):

4. OTP has not shown that its proposed capital structure accurately reflects an appropriate division of debt and equity. The department’s proposed capital structure does reflect an appropriate division of debt and equity and should be adopted in calculating required revenue.

So what do y’all think about their structure?  The STrib article notes Minnesota Power’s other businesses, but they’re organized in a holding company structure with some separation of activities, and it seems that concern about this is a legitimate issue, particularly in a rate case.  If you can’t tell what’s a regulated business and what’s not, how could they justify or support a rate increase?

It’s about time the story on Bill Gate’s active role in Otter Tail Power and the Big Stone II plant was aired in public — how long has it been going on???  The group of Minnesota Representatives brought this up months ago.


Given his investment and loan, Gate’s interest in Otter Tail Power appears more than “passive”

By Ron Way
Monday, July 7, 2008

When a group of Minnesota legislators pointed to a seeming disconnect between philanthropist Bill Gates’ public calls to address climate change and his partial ownership of a Minnesota utility that’s pushing to build a controversial coal-burning power plant, Gates’ investment manager said the Microsoft billionaire had only “passive” interest in the utility.

But a review of Gates’ investment suggests his 9 percent stake in Otter Tail Power of Fergus Falls, Minn., may be more than passive. Gates owns $90 million in voting stock in the utility, and his investment firm made a strategic $50 million loan to Otter Tail, a move that has attracted the attorney general’s attention.

Moreover, Gates’ Cascade Investment LLC of Kirkland, Wash., has made other investments in coal, including half ownership of a company that owns a large New Mexico utility and a huge stake in a railroad that operates unit trains that haul coal from mines in western Canada.

Otter Tail leads a five-utility consortium seeking to build a large, 550-megawatt coal-burning plant at Milbank, S.D., just across the Minnesota border on Big Stone Lake. Energy advocates, along with several state legislators and a prominent NASA scientist, have opposed the “Big Stone II” plant because it would release massive amounts of carbon, which is linked to climate change.

PUC still examining question of need
Earlier this year, two administrative law judges said the state’s Public Utilities Commission (PUC) should deny a “certificate of need” for transmission lines to carry into the state nearly half of the power from the “Big Stone II” plant. Even though an administrative panel has taken extensive testimony in the matter over several years, the full PUC board has delayed its decision so that still more examination can be conducted.

But it’s Gates’ split personality on climate change, along with his curious loan to Otter Tail, that has attracted attention.

Last August the Bill and Melinda Gates Foundation invested some $150 million into a carbon-trading fund designed to reduce carbon emissions of projects in China through something called the Kyoto Protocol’s Clean Development Mechanism.

In January, Gates joined Al Gore and Bono in Davos, Switzerland in high profile support for the United Nations’ Millennium Development Goals, which included addressing climate change as well as improving people’s health in developing countries. In his Davos speech, Gates expressed concern that climate change “will have the biggest effect on people who have done the least to cause it.”

Businesses that burn or haul coal
Meanwhile, Cascade Investment puts a lot of Gates’ considerable personal wealth into utilities whose business is burning coal or hauling it to industries that do. Here are some places where Cascade has parked Gates’ money:

• An estimated $90 million in voting stock in Otter Tail Power, along with a $50 million loan to Otter Tail that allowed the company to reduce interest payments on debt that was due. The loan wasn’t properly reported to PUC officials, as state law requires of investors that own more than 5 percent of a company to which a loan is made.

• Half ownership of EnergyCo in partnership with PNM Resources of Albuquerque, N.M. EnergyCo owns a 305-megawatt coal-burning plant in Texas and has partnered with utility giant NRG Resources of New Jersey, which operates facilities worldwide that include coal burners, nuclear plants and wind generators. In 2005 Gates invested $100 million to help EnergyCo acquire TNP Enterprises of Fort Worth, Texas, a gas and electric utility that also operates an oil refinery.

• Some $1.6 billion in the Canadian National Railway, with a major business of hauling coal from mines in Alberta and British Columbia to destinations throughout Canada and the central United States, and to ocean ports for international shipment.

When asked about Bill Gates’ public calls to address climate change through his high-profile foundation but his investment that appears to be heavy into coal, which releases atmospheric carbon linked to climate change, a foundation spokesman said only that Gates’ charitable works are separate from his investment company.

Michael Larson, who heads Cascade Investment, is known to refuse to talk with the media; he has declined repeated requests to comment on this story.

Oversees personal and foundation investments

However, a MarketWatch report on Cascade said that Larson not only is in frequent contact with Bill Gates but that he oversees Gates’ personal fortune at Cascade as well as the foundation’s finances.

The discrepancy in purpose caught the eye of Rep. Jean Wagenius, DFL-Minneapolis, and seven other legislators. In February they sent a letter inviting Gates to visit Minnesota to see “green investments we are making” that would provide “many opportunities to align the values of your foundation with your investment strategy.”

On June 6, after repeated promises by the foundation that it would respond to the Wagenius letter, Michael Larson said in a brief letter that Gates’ interest was “passive.”

“But you don’t own nearly a tenth of a company and loan it $50 million without having some involvement in the company that’s beyond passive,” said a state official familiar with the Otter Tail dockets at the PUC but who preferred to remain anonymous.

The Office of Energy Security in the Minnesota Department of Commerce said its review of the loan shows that it helped reduce interest payments by paying off loans that were at a higher interest rate; it recommended that the PUC approve the loan.

However, the attorney general’s office, which has noted that Otter Tail has drawn several anonymous complaints on financial reporting, has said that its review of the circumstances surrounding the Gates loan is continuing.

Ron Way, a former reporter for several Midwest newspapers, covers the environment and energy issues. He can be reached at rway [at] minnpost [dot] com.