Iowa utility regulators pressed Black Hills Energy officials at a hearing Thursday about how the company is addressing pipeline safety problems identified by state investigators.
The Iowa Utilities Commission (IUC) held a hearing in Des Moines after launching an investigation following a June 2025 inspection of Black Hills Energy’s Spencer service area that identified 115 violations of state and federal regulations.
The findings covered 16 categories and included problems involving corrosion protection, disengaged pipeline support, meter stress and delays in correcting deficiencies. The IUC said the violations did not pose an immediate threat to the public, but the number of findings is a serious matter.
Commissioner Joshua Byrnes said the purpose of the hearing was not to be "vindictive."
“I don’t want anybody here today to think that this is like an 'I got you,'” Byrnes said. “Our staff and our inspectors take this very seriously, because the outcomes of a failure can be catastrophic and lives can be at risk.”
Byrnes said regulators have an obligation to address warning signs when they find them.
“The red flags have been raised and we need to have this conversation today,” he added.
IUC questions response times
The IUC's concerns extend beyond the number of violations found in the Spencer service region. During the hearing, regulators compared Black Hills Energy’s performance with other utilities operating in Iowa.
Information presented by the IUC showed Black Hills Energy averaged about 132 days to respond to identified deficiencies, compared with more than 28 days for Interstate Power and Light Company, an Alliant Energy subsidiary, and nearly 33 days for MidAmerican Energy.
The utility also had three times as many probable violations as the other major carriers in Iowa.
Commissioners questioned officials about staffing levels and whether Black Hills Energy has enough employees to identify and correct problems across its Iowa system. The utility provides natural gas service to about 163,000 customers in 133 Iowa communities. Across eight states, it serves about 1.35 million customers.
Kevin Jarosz, vice president of gas operations for Black Hills Energy in Iowa and Nebraska, described the inspection findings as eye-opening and said the company works to make improvements collaboratively with the commission.
“We firmly commit safety to our employees, our customers and the communities we serve, and we also commit to a strong compliance program, investment in our infrastructure and continuously improving where we need to,” Jarosz said. "We will continue to provide safe, reliable service to our customers, like we have for decades and into the future."
Company attorney Adam Buhrman also acknowledged in his opening remarks Thursday that changes are needed.
“We’ve spent considerable time evaluating the issues raised by the commission, reviewing our processes and operational practices, and identifying opportunities to strengthen our compliance programs going forward,” Buhrman said.
Company discusses corrosion concerns
Corrosion was one focus of the nearly four-hour hearing.
Investigators raised concerns about customer meter sets that inspectors believed showed active corrosion. They questioned company officials about whether some of the examples involved metal loss or surface oxidation.
Pete Hamell, general manager of Iowa gas operations for Black Hills Energy, said some oxidation on metal does not necessarily mean a pipeline component is deteriorating. He said a thin layer of oxidation can sometimes slow further corrosion.
“Our natural gas system is in the open environment, and over time, environmental factors can impact our pipelines,” Hamell said.
Hamell said the weather is not the only factor affecting the company’s natural gas system. He said improper excavation and landscaping by homeowners can also pose risks to pipeline integrity. He noted more problems arose during the COVID-19 pandemic as people spent more time working around their properties.
“They did a lot of landscaping projects, some home improvement projects that negatively affected our infrastructure,” Hamell said.
Hamell added that increased inspections and audits help the company determine whether its operations are meeting both internal standards and state requirements.
“The safe, reliable and affordable delivery of gas service to our customers is a priority for us,” Hamell said.
The Spencer region inspection is not the commission’s only concern. IUC officials said compliance issues have also been identified in other Black Hills Energy service areas in Iowa, including Council Bluffs.
What happens next
Black Hills Energy will have to wait to learn what consequences it could face.
A spokesperson tells IPR News a transcript of the hearing is expected to be filed with the Iowa Utilities Commission within about two weeks. Commissioners will then review the testimony and other evidence and may seek additional information before deciding whether to impose any penalties or order the utility to take corrective action.
