Co-ops And Municipalities Take Up Talks In Dispute Over Electricity Territories

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KELO Pierre Capital

Lobbying has been intense for South Dakota lawmakers this session about how much power municipal electric utilities should have.

Leaders for approximately 30 rural electric cooperatives in South Dakota think state laws give too much juice, of the political kind, to the 35 municipal electrics.

Meanwhile there are six investor-owned electrics, known as IOUs, in South Dakota, who serve small and large communities: Black Hills Energy, MidAmerican Energy, Montana-Dakota Utilities, NorthWestern Eenrgy, Otter Tail Power and Xcel Energy.

State laws call for rural co-ops and IOUs to negotiate trades of territory. But municipal electrics can annex territory, so long as they pay for what they take.

This session the rural co-ops brought Senate Bill 66. It was headed for a showdown Friday at a hearing in the state Senate’s Local Government Committee.

But word spread through the statehouse Thursday the sides decided were now going to keep talking.

Senator Brock Greenfield is the bill’s prime sponsor. Before a room that wasn’t close to being full, the Clark Republican confirmed the rumor Friday morning.

He told the Senate panel: “We have a situtation. It’s a developing situation.”

“Last evening, the two sides of this issue began, or continued I should say, discussions and decided at this point to seek a cease-fire. They will be coming to the table and negotiating. And I am completely happy with that development,” Greenfield said.

The legislation seeks to restrict municipal electrics’ authority to expand. Greenfield suggested the legislation might become unnecessary.

“I do think there will be brighter days ahead relative to this issue. I have every confidence the two sides will negotiate in good faith,” Greenfield said. “Sometimes legislative answers come without legislation, and that could very well happen.”

The committee chairman, Republican Senator Phil Jensen, of Rapid City, said the bill would be held until a date to be determined.

Jensen first took testimony from the only witness who drove from out of town to testify at the hearing.

Bob Pesall, a Flandreau city alderman and lawyer, opposed the change. Flandreau has a municipal electric system.

Pesall said state government allows utilities to use eminent domain to take private property for the general public’s good against the will of the owners, so long as they are fairly compensated.

“We don’t have vertically integrated utilities that much any more. We don’t one agency that’s generating their electricity, sending it through their own lines of transmission to their own distribution and then ultimately to the consumer,” Pesall said.

“We have regional transmission organizations that regulate all that stuff. So a utility company that owns a transmission line doesn’t necesarily control who transmits electricity on it,” he said.

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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