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Heartland CPD Spends Madison Electric Dollars on Sioux Falls Politics

My Madison neighbor Jerry Heckenliable will love this one. You know all those high electric rates the City of Madison charges? Some of that money is going to promote the proposed Sioux Falls events center. Yes, Sioux Falls.

The finance report for the "Build It Now" committee supporting Mayor Huether's $115-million events center shows a $2500 contribution from Heartland Consumer Power District, which sells electricity to Madison. Heartland boss Mike McDowell proudly tweets HCPD's support for the Sioux Falls project:

Mike McDowell supports SF Events Center -- Twitter, October 5

Your electric bill at work.

Now I'm sure that Heartland can argue that all of the communities it serves can enjoy some ancillary benefit from the increased economic activity Mayor Huether says the new event center will bring to the Sioux Falls metro area. But I'll bet Jerry Heckenliable would argue Madison could get more direct economic benefit if Heartland would stop currying favor with the rich and powerful and leave that money in the pockets of Madison residents to spend as they see fit.


  1. Michael Black 2011.10.07

    This is so insignificant it isn't even funny.

    Why don't you blog about how much money and opportunity our gov't has wasted on budget deadlock in Washington. Billions of dollars...and yet do you care?

    [CAH: I do care, Michael, but you have lots of national pundits writing about that budget deadlock. I do my share of commentary on Washington, but I want to cast at least as much light on the bad use of taxpayer and rate-payer dollars here at home.]

  2. Bruce C. Boatwright 2011.10.07

    All politics is local. $2.5K to Sioux Falls might be nothing to some, but to people cutting back on the food budget to keep the lights on, that kind of money gives them pause...... And one might ask, What else are they donating and to whom?

  3. John Hess 2011.10.07

    That guy tweets! Sept 29: LAIC Board meeting today. A major topic was new initiatives targeted at retail expansion and development. Details still a work in progress.

  4. Steve Sibson 2011.10.07

    Oh yes, another public/private partnership. The good old capitalism meet socialism. A love affair for the corrupt.

  5. Charlie Johnson 2011.10.07

    Allows Heartland to have another photo-op and press coverage. The utility business must be doing good to offer major contributions. Works well for a state senator who works there. Contribute money that is actually not yours.

  6. LK 2011.10.07

    I have no real reason to care about what Heartland Public Power does. To the best of my knowledge, their policies don't affect my hometown.

    Still, I hear conservatives complain all the time that they don't want their tax dollars going to Public Broadcasting or the National Endowment for the Arts because those organizations promote a liberal agenda that conservatives find anathema.

    I'm willing to bet that Heartland which is “public entity” gets some piece of the federal pie along with local and state tax breaks. Further, individual electric customers usually don't have too many options about where to shop. Heartland is spending money that people are forced to give them through rates, subsidies, or tax breaks. (I eagerly await the clever counter-argument that people can live without electric power if they’re truly concerned about monopoly power.)

    The principle is more important than the amount. If a public entity isn't supposed to spend money on things constituents don't like, it doesn't matter if the donation is $2,500 or $25,000,000.

  7. Warren Phear 2011.10.07

    How much do Madison residents pay per Kilowatt hour? After I know that...then I'll pass judgement.

  8. matthew siedschlaw 2011.10.07

    Question not statement....Didn't the city of Madison or the LAIC have to redo Heartlands loan for their new building?

    [CAH: Matt, you might be thinking of the favor the city did for the LAIC on its loan on the tech building north of the DSU campus, which was renamed from the Hueners building to the Heartland building. That's different from the building Heartland itself built on the SE edge of town.]

  9. Just a reader 2011.10.07

    I've been a reader of this blog for many years, but shy away from commenting because I am uncomfortable airing my thoughts in a public forum. However, I feel the need to chime in and clear up some of the misconceptions running rampant here. (Apologies in advance if this ends up to be an error-laden rambling mess. I am attempting to type it on my phone.)

    First of all, according to Heartland's annual report, their operating expenses were over $39 million last year. So making a fuss over $2500 is really much ado about nothing. Heartland likely budgets a certain amount of money for donations, community outreach, economic development, etc. Either way, that $2500 would not go toward lowering anyone's electric bill.

    Secondly, some of the commentors here seem to think Heartland's primary obligation is to do what is in the best interest of Madison; in reality, Heartland has an obligation to ALL their customers, which includes cities throughout eastern South Dakota, Minnesota and Iowa -- including the city of Sioux Falls. According to the City of Sioux Falls' website, they purchased 47 million kwhs from Heartland last year. I don't understand the uproar over investing $2500 in a community that is one of their biggest power purchasers. If the convention center does get built, ultimately it will help keep rates lower for all Heartland customers. Convention center = more electricity sales = more revenue for Heartland.

    All businesses, public or private, make investments that benefit only a certain subset of their demographic. Where is the dissent over Heartland's contribution to the Rural Learning Center? While a fantastic facility for the region, it arguably offers far less benefit to Heartland's customer base than the convention center would. Cory, your former electric utility offers many incentives that only benefit certain customers -- rebates on heat pumps and appliances, sponsorship of events taking place in Brandon, Brookings, Sioux Falls and other cities that are not Madison, energy audits for certain customers, contributions to area organizations, etc. Many of these do not offer a direct benefit for you, but they do indicate a greater concern for the customer base at large.

    As for Jerry, he used to be a load forecaster at East River Electric. He should know better than anyone what factors go into rate development and that a $2500 contribution will do nothing to impact the bottom line of anyone's electric bill.

    (I do not work for Heartland, but I do have experience in the electricity industry.)

  10. Michael Black 2011.10.07

    I just saw an advertisement in the Madison Daily Leader that had Heartland among many other local businesses supporting a cause. Should they be doing that either?

    Heartland and East River are among the few places in town that have decent salaries in Madison. Both of them could have easily have moved their headquarters out of Madison and to Sioux Falls, but they did not. They invested serious money into the future of Madison. Being progressive requires investment.

  11. caheidelberger Post author | 2011.10.08

    You know, Michael, HCPD is a non-profit, just like Habitat for Humanity. If I saw Habitat taking it smoney and contributing to political campaigns, I'd be wondering why they weren't spending that money on shingles and lumber. HCPD is a non-profit. It exists by the grace of state law as a public corporation and a poltiical subdivision. It should be spending its money to provide electricity to consumers at the best value. Period.

    By SDCL 49-35-2, HCPD is a public corporation and a political subdivision of this state. Hmm... What would the headlines read if another political subdivision of this state, like the Madison City Commission or the Lake Herman Sanitary District, made a contribution to a political campaign?

  12. John Hess 2011.10.08

    Cory, this isn't a large amount, so what's your beef? Just a Read gave a pretty reasonable explanation. If you have a point it's being missed. I tried to locate some residential electric rates per KWH in cents: Madison 8.19 6.6, Sioux Falls 9.5, Brookings, 7.1 (Oct-June) 7.7 (July-Sept), and Rapid City 10.05. Looking at Darwin's bill it looks like the rural rate is 10.58 8.67 > 1000 6.8. Our Madison city bills sure have gone up.

  13. John Hess 2011.10.08

    Your blog did not like greater/less than symbols.
    Madison 8.19 less than 1000, greater than 6.8
    Sioux Falls 9.5
    Brookings 7.1 (Oct-June), 7.7 (July-Sept)
    Rapid City 10.05
    Rural Madison 10.38 if less than 500, greater than 500 but less than 1000 8.67, greater than 1000 6.8
    Sure seems strange the rural rate is so reasonable. Shouldn't there be huge economies of scale in town?

  14. Michael Black 2011.10.08

    Your views are strictly political. Otherwise you'd be complaining about East River too.

  15. caheidelberger Post author | 2011.10.08

    That's pretty serious phone-typing, JAR! Thanks!

    To the points:

    --Just a pittance? It's still money ill used. The state budget is a couple billion. If Governor Daugaard funneled just a couple thousand into a campaign contribution for a pal, that would warrant serious criticism, if not impeachment. The Governor and HCPD are governed by different statutes, but the point is about respsonsible use of every dollar. Every dollar HCPD uses to grease political wheels could be better spent to directly serve consumers.

    --True, HCPD serves Sioux Falls as well as Madison. But this contribution to a political campaign is not a direct investment in the community. If it were buying bricks, that would be a different issue. But this contribution is buying votes. I appreciate Heartland's investment in the Rural Learning Center, since that money contributes to an extant facility doing good right now (and using electricity itself and promoting more electricity-using activity in Howard, which serves Heartland's interest). But if Heartland were spending rate-payer money to win votes in Howard, I'd be just as alarmed. As a political subdivision, Heartland would do better to let voters make their own decisions, then directly support the projects that pass voters' muster or that are built by the private sector.

    --Every one of the other icnentive programs you discuss directly benefits customers. If another customer chooses to take advantage of a coupon for a heat pump and I don't, I don't begrudge Sioux Valley that program that makes direct improvements in customers' lives. Contributions to community organizations are a tricky question: yes, it is nice when East River helps Habitat buy lumber. But again, that's a direct contribution to concrete project, not a political campaign contribution. And even I am open to discussion about just how far such organizations ought to be using their money to contribute to other organizations rather than keeping rates low and directly serving their customers with the most affordable service possible.

    In a similar vein, consider the $50,000 contribution from Sanford. Yes, it's another drop from a massive organization's bucket. But wouldn't the hospital better serve its community by knocking $50,000 off some health care bills or investing that money directly in better medical equipment or hiring needed staff to provide immediate service to customers?

    --Along with his extensive experience in the industry, Jerry is a common-sense budgeter who knows that every penny counts.

  16. caheidelberger Post author | 2011.10.08

    Has East River contributed to this political campaign? Has Sioux Valley? If they do, I will make this same complaint. (I have discovered that arguing about what we think people would say in hypothetical situations doesn't make an effective argument.)

  17. caheidelberger Post author | 2011.10.08

    John, see the comment I wrote while you were typing! :-)

    We should call Jerry and ask him to explain the economics of that urban/rural differential. I too would think that rural power would cost more. Is Uncle Sam helping us out?

    [Sorry about the missing symbols, John! I don't think I can alter the code under the hood to allow those symbols to be directly entered. If you're ambitious, you could try these instructions for greater/less than symbols! > <]

  18. RGoeman 2011.10.08

    This isn't a Political Election or Campaign. There's nothing Political about it. It is a non-political election. This is all about Economic Development where Heartland is concerned and I commend them for getting behind growth and development.

    Perhaps your attack is more related to the fact that your number one blog target, Russell Olson, works for Heartland. Maybe you should focus on the fact that your non-political Sioux Falls Mayor is a Progressive Democrat so you can wrap your arms around this project that will open up dozens of opportunities for our region. I like Mike because he's forward-thinking. You should too.

    Cory, you're quickly becoming the poster-child for the CAVEman organization...Citizens Against Virtually Everything...No gym, no pipeline, no Event Center, etc.

  19. caheidelberger Post author | 2011.10.08

    Rod, there's a public vote, right? That's a political campaign, right?

    And I don't consider Mayor Huether a "progressive Democrat." He's a usurer, a credit-card banker, a corporate agent that lends support to Sibby's contention that the GOP and Dems serve the same master.

    Note I'm not saying I'm against the event center. I may not even take a position on it. I don't need to to criticize a political subdivision's use of its ratepayers' money to influence a local political campaign. The other two items you mention, the unnecessary gym and the Keystone XL pipeline, do not serve the public interest, and I see no discredit (either to myself or to the actual topic under discussion here) in opposing them.

  20. John Hess 2011.10.08

    Cory's a stickler about fairness, undue influence, etc, we should appreciate if not always agree. Way too often the system is twisted or broken. People just want fairness. A level playing field. Well, most of the 99 percent do. Look at these Wall Street Occupiers. Will be interesting to see what, if anything develops there. Start the revolution!

  21. Michael Black 2011.10.08

    This is a Freedom of Speech issue. Everyone is fine UNLESS they disagree with Cory.

  22. caheidelberger Post author | 2011.10.08

    Michael, you utterly miss the point. I'm not infringing on anyone's freedom of speech. I'm neither disagreeing nor agreeing with the statement Heartland is making with its money. I'm asking whether it is appropriate for Heartland to use its money for a political campaign. My question would still stand if Heartland were contributing to Bob Barclay's anti-event center campaign. You're starting to sound like Mike McDowell, Michael, trying to use the personal to distract from the political.

  23. Michael Black 2011.10.08

    You are against it because of the people that work there.

  24. caheidelberger Post author | 2011.10.08

    No, Michael, I don't. Get off the personal, stick with the political. Not one argument I make here depends at all on the personality of any individual at Heartland. Gandhi, Jesus, and Martin Luther King could be running the HCPD board, and it would still be a misprioritization of funds to spend money on a political campaign instead of on lowering electric rates or other direct benefits to consumers.

  25. Charlie Johnson 2011.10.08

    Until the voters of SF have made a decision, HCPD or any non-profit entity should stay out of the fray. If Mike or Russ or anyone else at HCPD wants to make a personal contribution, then fine . That's their business. The same goes with any potential contribution on the School bonding issue in Madison. If and when the Madison School District project is approved by the voters, then HCPD may consider a donation to the actual brick and mortar costs at MHS. Operative word is MAY.

  26. Michael Black 2011.10.08

    I look at the Heartland contribution as an advertising expense and not a political contribution.

  27. Charlie Johnson 2011.10.08

    Advertising for what? And yes it is a contribution to a ballot issue committee seeking a particular outcome on election day. Sounds very political to me. Again, if and when the project is approved(approval involves tax payer dollars), then HCPD or any other public entity can way in with contribution for actual construction.

  28. John Hess 2011.10.08

    Just what does Heartland do? Even after reading their web site (including their history) it's not clear. Part of their mission besides providing power is economic development of their service areas. They aren't described as a non-profit, but as a public corporation and political subdivision. How can they be both? They maintain a diverse power supply portfolio. Do they just buy power for their members (to include East River)?

  29. Supersweet 2011.10.08

    To Rod G: Noem has to be the numbere one target on this blog. Olson has to be in second place, tied with HCPD.

  30. RGoeman 2011.10.08

    I'd like to agree with you Supersweet, but I think he's been hammering Russ Olson for more years than Kristi Noem, although lately, Noem rules in 2011 for attack blogs from Cory. Gotta be careful blogging out west because they like Kristi in ranch country, west river.

    Heartland supplies supplemental power to municipalities, so when Madison's WAPA supply is at capacity, we buy supplemental power from Heartland. They are also interested in economic development which encourages more electrical usage, so perhaps they will support the Vote Yes renovation committee as it would stimulate economic activity for this area.

  31. caheidelberger Post author | 2011.10.08

    [As you guys try to rank my "targets", you are clearly forgetting the LAIC. ;-) ]

  32. Nick Abraham 2011.10.09

    A couple other little points:

    The City of Madison is Heartlands biggest customer since Marshall, MN left. The City is currently contractually obligated to buy all on demand power from them for almost another 30 years.

    I don't know where people are getting their rural versus city electrical rates, they sure don't match the numbers I see on my bill (city) and my partents (SVSW)..

  33. supersweet 2011.10.09

    CAH how about designing a poll to determine readers' perception of who you target the most? That may help settle our disagreement. You could add another question like "who would you like targeted?"

  34. Charlie Johnson 2011.10.09

    Like I said earlier, another opportunity for a photo op and press coverage gifting other people's money(rate payers). Would be different if it was Mike and Russ own personal funds. PS---I would be critical also if the gift had gone to the opposition group.

  35. Steve Sanchez 2011.10.09

    The aforementioned agreement to provide supplemental power was, in effect, a no-bid contract awarded to HCPD. Prior to granting the extension earlier this year, city officials never discussed the matter with any other energy provider.

    It's possible HCPD provides the most reliable power for the best rate. It would be nice, though, knowing alternatives had been explored - no matter how few.

  36. MotoGuzzi 2011.10.09

    I simply see this as a betrayal of the citizens of Sioux Falls - anyone who promotes this event center when the cost of bread is expected to double in the rising inflation. The 70 Million in interest would alone be taken from accounts which normally fund city road repairs or other maintenance. It's a lose lose situation. We don't need it but it's nice to now see the fools name in print who would betray good economic decisions.

  37. Douglas Wiken 2011.10.09

    This is as indicated a Constitutional matter, but not quite as indicated. It is another fruit of giving corporations rights equivalent to living breathing humans. The consequences of the Supremes and their United case will warp and abuse society until it is undone. This corporate power is another fruit of Koch and Pope.

  38. RGoeman 2011.10.09

    Charlie, I have to politely disagree with your opinion that Heartland and other entities should stay out of the fray until after the election. I'm really excited about the potential of musical acts that will be brought into Sioux Falls, events and conventions that we have not been able to get in our region, but Fargo and Sioux City attracts each year. Businesses from 100 miles away should get behind this project and join the Build It Now organization to help promote a positive outcome. We'll all benefit from the facility. Interest rates will never be lower and construction costs are very competitive right now. Nobody's taxes will increase to build it so why not?

  39. Charlie Johnson 2011.10.09


    Until the voters of SF decide, HCPD, should stay out the election process. In fact if I was a voter in SF, i might be inclined to vote in favor also. The residents of SF should decide their own fate. Now if Century Link, Premier Bank, other businesses want to weigh in with stockholder monies, that is their doings. HCPD is a non-profit public utility entity with revenue coming from rate payers. Bigger and more encompassing issue is how artificial entities(yes corporations) are playing and deciding elections on all levels. When the supreme court recently decided that corporations have the same constitutional rights as human beings, we began a very steep and slippery slope of turning this country into a nation whose makeup no longer protects individual rights nor demands individual responsibilities.

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