S.D. regulators aren’t taking either side in electricity fight

Capitol News Bureau
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PIERRE, S.D. (KELO) — Representatives of rural cooperatives and municipal-owned utilities from across South Dakota traded verbal blows Thursday before a panel of state lawmakers, in the latest round of their escalating fight over which side should have more control over providing electricity to customers in annexed areas around communities.

Standing at center ring was Chris Nelson, one of three elected members of the state Public Utilities Commission. He said the agency that oversees electricity service isn’t taking a side. Nelson said the quality from all providers has been “exceptional.” Then-Gov. Dennis Daugaard named him to the regulatory body eight years ago.

Nelson said the Legislature decided in 1975 to require all electricity providers in South Dakota to file maps showing their service territories. He said there are 149 different sets of territories between investor-owned utilities, co-ops and municipals.

The commission began digitizing the documents in 2008 to obtain precise legal descriptions — “Extremely tedious, as you might imagine,” he said — and finished the last one this summer. On paper, the boundaries look like the work of what Nelson described as “a drunken cartographer” but reflect the ways things were in 1975.

In his time as a commissioner, Nelson said the various sides “routinely” sought the agency’s approval for exceptions to cross into each other’s territories to serve new customers.

He said there’s also a requirement that any new customer needing at least two megawatts of electricity can shop around for a better deal regardless of the territory’s provider.

Dakota Access Pipeline used the shop-around freedom in 2015 to reach an agreement with NorthWestern Energy for a pump station in Spink County because the investor-owned utility had a power line near it. The area normally was served by Northern Electric Cooperative.

The commission regulates electricity rates charged to customers by investor-owned utilities but doesn’t have pricing control over municipals or rural coops.

Disputes have come up a few times because of imprecise lines, Nelson said.

State law gives the commission the authority to decide who should be the service provider if a dispute can’t be resolved, but that power hasn’t been used that anyone at the agency can recall for at least 40 years, Nelson said.

Senator Alan Solano, a Rapid City Republican, is chairman for the study committee on electric services in an annexed area.

Senator Brock Greenfield, a Clark Republican, brought Senate Bill 66 in the 2019 session. In its original form it called for changing the balance so that rural electrics had more control in areas around communities. Greenfield later amended it to call for a study.

Several lobbyists representing municipal utilities later complained to the Legislature’s Executive Board that the study panel was stacked more favorably for rural electrics.

The study panel will meet several more times before the 2020 legislative session.

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