SDPUC staff supports settlement as proposed between Fall River Solar and Black Hills Energy

Capitol News Bureau
KELO Fall River County

PIERRE, S.D. (KELO) — A dispute that’s brewed for more than two years might finally be worked out between a proposed solar-power facility and western South Dakota’s largest investor-owned utility.

Fall River Solar has been attempting to use a federal rule to require Black Hills Power to buy electricity from it. The solar facility filed a complaint with the state Public Utilities Commission against the Rapid City-based utility on September 14, 2018. The sides, working on their own, reached a proposed settlement that was filed last week.

The commission’s three elected members are scheduled to decide Tuesday whether to approve the deal. The commission’s staff recommended approval in a five-page memo.

“The idea of determining a utility’s avoided cost and then capping the rate paid to a QF (qualifying facility) at the avoided cost appears simple and objective; however, in practice the determination of the utility’s avoided cost can be difficult and subjective,” the August 14 memo stated.

The rate that Black Hills Power would pay Fall River Solar for the next 20 years remains confidential from the public. Signing the settlement motion were attorneys Catherine Sabers for Black HIlls Power, William Taylor for Fall River Solar, and Kristen Edwards for the commission staff.

Based on offers that previously were rejected in the dispute, the settlement rate likely is somewhere between Fall River’s original request of $41.91 per megawatt/hour, which was later reduced to $41.66; and Black Hills Power’s original response, which wasn’t disclosed, and its updated $21.77.

The deal calls for Black Hills Power to buy up to 80 megawatt-hours per month. Fall River Solar meanwhile agrees to transfer all renewable-energy credits and other federal incentives to Black Hills Power. Fall River Solar now plans to start commercial operation near Oelrichs in Fall River County between December 31, 2021, and December 31, 2022.

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