PIERRE, S.D. (KELO) — South Dakota regulators gave the green light Tuesday on a confidential contract for NorthWestern Energy to buy renewable natural gas hauled by truck from dairy farms in the Brookings area.

The deal with CE bp Renew Dynamic Co II, which has its principal office at Newport Beach, California, was described as “a first” by Chris Nelson, chairman of the state Public Utilities Commission.

“It’s good for South Dakota agriculture. It’s good for natural gas consumers. It’s good for the company and just kind of good all the way around,” Nelson said.

NorthWestern is responsible for building the interconnection site, including an odorizer, where the trucked-in gas will be loaded into the utility’s existing pipeline. But the company collecting the gas from the dairies is responsible for the site itself, which will be at NorthWestern’s town border station at 1803 Western Avenue in Brookings.

According to NorthWestern’s application, the utility recently recalculated the estimated costs for the project. “Due to significant inflationary increases and evolving market conditions, the estimated costs to complete this project are approximately double the costs in the Agreement, which were based on 2021 calculations,” NorthWestern said in its filing. “This will also increase the recovery period from three years to seven years. Tariff rates will support the revised project recovery so no change in rate is necessary.”