Dakota Access Pipeline (DAPL) opponents have had our share of criticism for how the Iowa Utilities Board (IUB) has often handled matters. Most important, we feel strongly that the IUB never should have issued DAPL a permit in the first place — and we remain cautiously optimistic that the Iowa Supreme Court will concur when it issues its decision on the landowner/Sierra Club lawsuit.
But to give credit where credit is due, today’s order from the IUB (see full text below) is commendable. As the IUB states, “As of the date of this order, Dakota Access still has not filed with the Board the insurance policies that were effective August 15, 2018. Dakota Access stated such policies are normally available within 30 to 60 days, which means they should have been available by the middle of October. The Board will therefore require Dakota Access to provide the current insurance policies for the Board’s review within seven days of the date of this order.”
Thank you! Kudos to IUB members Geri Huser and Nick Wagner for not buckling to pressure to roll over and acquiesce to DAPL’s demands. Board member Richard Lozier did not vote because he had to declare a conflict of interest regarding any DAPL vote since he formerly worked as legal counsel for one of DAPL’s non-profit affiliates.
Go to the IUB’s website to read past filings from DAPL and you’ll get a sense of the company’s strong-arm tactics.
As we’ve seen in other states, Energy Transfer Partners (ETP), the parent company of DAPL, has often thumbed its nose at the law and at the courts. Opposition to ETP and its thuggish tactics isn’t simply from farmers, landowners, Native communities, environmentalists and advocates for climate action. Increasingly, pushback against ETP is coming from government itself.
We’ll see where this goes seven days from today. Stay tuned. And we’ll see how the Iowa Supreme Court rules sometime early next year. Fingers crossed.
STATE OF IOWA
DEPARTMENT OF COMMERCE
IN RE: DAKOTA ACCESS, LLC
DOCKET NO. HLP – 2014-0001
ORDER REQUIRING FILING OF INSURANCE POLICIES AND ADDITIONAL INFORMATION
(Issued December 28, 2018)
On March 10, 2016, the Utilities Board (Board) issued its “Final Decision and Order” in this docket, granting a hazardous liquid pipeline permit to Dakota Access, LLC (Dakota Access), pursuant to Iowa Code chapter 479B. Among other conditions, the order required Dakota Access to maintain at least $25,000,000 in general liability insurance at all times while the pipeline is operational. Dakota Access filed its initial insurance policies on March 16, 2016.
On August 16, 2018, Dakota Access filed a letter and certificate of insurance regarding its policies effective August 15, 2018, through August 15, 2019. Dakota Access stated these new policies are consistent with the Board’s March 10, 2016 “Final Decision and Order” in this docket and provide an aggregate coverage of $50,100,000 in liability insurance. Dakota Access further stated that it has requested copies of the new policies and will file them with the Board upon receipt.
On September 11, 2018, the Board issued an order seeking additional information and clarification regarding Dakota Access’ required insurance policies. On September 21, 2018, Dakota Access filed its response to that order. Dakota Access stated that the Board found the initial policies filed on March 16, 2016, met the Board’s requirements, and that the current policies continue to satisfy the Board’s requirements. Dakota Access stated that it typically takes 30 to 60 days to receive the fully-executed insurance policies from the insurance broker, and it would provide those to the Board upon receipt, which it anticipated would be within the next 30 days.
On October 16, 2018, the Board issued an order regarding Dakota Access’ insurance policies. On November 27, 2018, Dakota Access responded to the Board’s order, arguing that the Board’s requirements go beyond what is statutorily required and what was required by the Board’s “Final Decision and Order.” Dakota Access nevertheless stated that it had discussed the issue with its insurance brokers and could obtain a separate policy covering an incident arising within the borders of Iowa. If it did so, the new policies would total $25,100,000 in coverage for Iowa while excluding Iowa from the initial $25,100,000 in coverage under the existing policies.
As of the date of this order, Dakota Access still has not filed with the Board the insurance policies that were effective August 15, 2018. Dakota Access stated such policies are normally available within 30 to 60 days, which means they should have been available by the middle of October. The Board will therefore require Dakota Access to provide the current insurance policies for the Board’s review within seven days of the date of this order.
The Board also requires further information regarding what would constitute an “incident” for purposes of the potential new Iowa-only policies. Dakota Access states that the policies would cover “any incident arising within the borders of Iowa.” It is unclear if “incident arising within the borders of Iowa” means the spill itself would need to occur in Iowa to be covered, or if instead that the resulting damage to property must occur in Iowa. In other words, Dakota Access should clarify whether the policies would provide coverage to Iowans whose property may be damaged by a spill that originates in a bordering state.
Additionally, it is unclear from Dakota Access’ filing on November 27, 2018, whether the last excess liability policy providing the additional coverage from $25,100,000 to $50,100,000 in liability would remain in the event the Board requires Dakota Access to purchase an Iowa-only policy. Dakota Access states the Iowa-only policy would replace the current initial $25,100,000 in coverage from which Iowa would then be excluded, but Dakota Access is silent as to the remainder of the current coverage. Dakota Access should clarify whether that policy would remain, and whether it would still apply to Iowa.
The Board needs to see the current policies and the additional information in order to determine whether the Iowa-only policies proposed by Dakota Access would be beneficial or detrimental when compared to the current policies. It is possible that the current policies, although covering multiple states, may still provide more coverage to Iowa and its residents than the Iowa-only policies described in Dakota Access’ last filing. For instance, if the coverage limits of the current policies are per occurrence limits rather than an aggregate claims limit, many of the Board’s concerns regarding the coverage being exhausted by an incident in another state would be alleviated. The Board would appreciate additional clarifying information from Dakota Access, including the nature of policies (per occurrence or aggregate limits), the relevant endorsements and exclusions, and a comparison of the coverage between the two options.
IT IS THEREFORE ORDERED:
1. Within seven days of the date of this order, Dakota Access, LLC, shall file copies of its current insurance policies.
2. Within 14 days of the date of this order, Dakota Access, LLC, shall file additional information clarifying: a) whether the definition of “incident” in the proposed Iowa-only policies would cover a spill that occurs in another state but impacts Iowa property, b) whether the Iowa-only policies would provide $25,100,000 or $50,100,000 in total coverage, c) whether the limits for the current policies and proposed Iowa-only policies are per occurrence or aggregate claims limits, d) the relevant endorsements and exclusions of the current and proposed Iowa-only policies, and e) an overall comparison of the coverage of the current and proposed Iowa-only policies.
/s/ Geri D. Huser
/s/ Nick Wagner
/s/ Kelsie Vanderflute
Dated at Des Moines, Iowa, this 28th day of December, 2018.