SOUTH DAKOTA PUBLIC UTILITIES COMMISSION
2022 Highlights
Leadership
Chairman Chris Nelson
Vice Chairperson Kristie Fiegen
Commissioner Gary Hanson
Electric & Natural Gas Rate Changes & Adjustments
Energy Efficiency
Grain Warehouse
Leadership and Commissioner Outreach
Legislation
PipelineSafety
Public Outreach and Consumer Assistance
Siting
Telecommunications
ELECTRIC & NATURAL GAS RATE CHANGES & ADJUSTMENTS
- In August, the PUC approved an update to Otter Tail Power Co.’s Phase-in Cost Recovery rider rate, allowing the company to recover an additional $2,997,688 annually through two different rate structures: a percent of bill factor and per meter charge. The project costs approved to be recovered by the Phase-in rider rate were associated with the Astoria Station Natural Gas Plant, Merricourt Wind (North Dakota) Energy Center, additional load in the Lake Norden area, retirement of the Hoot Lake (Minnesota) Plant, Ashtabula lll (North Dakota) wind farm purchase, and Advanced Grid Infrastructure projects. As a result, a typical customer using an average of 1,000 kWh per month could see their monthly bill increase by approximately $7.54 per month. See docket EL22-013.
- In May, the commission approved Montana-Dakota Utilities Co.’s annual update to its Infrastructure Cost Recovery rider rate. The company sought to recover $940,248 in projected costs associated with the Thunder Spirit (North Dakota) Wind Project and other projects that benefit South Dakota customers. As a result of this update, the typical residential customer using 853 kWh per month saw a $0.35 decrease to their monthly bill. See docket EL22-007.
- The commission approved an update to Xcel Energy’s infrastructure rider factor in December with an overall revenue requirement of negative $2,400,533. In the filing, the company requested to transfer recovery of all projects included in the infrastructure rider to base rates as part of its ongoing rate case proceeding in docket EL22-017. The company estimates the average bill impact for a typical residential customer using 750 kWh per month will be a decrease of $10.85 per month resulting in a $0.83 monthly credit on customer bills. See docket EL22-026.
- State law authorizes the PUC to approve a tariff mechanism for the automatic annual adjustment of charges for the jurisdictional costs of new or modified transmission facilities with a design capacity of 34.5 kV or more and which are more than five miles in length. In 2022, four companies sought commission approval for this Transmission Cost Recovery rider rate.
- In February, Otter Tail Power Co.’s updated TCR rider was approved by the commission. The request, to generate $2,197,832 annually, would cover the company’s South Dakota share of electric grid expenses in the Midcontinent Independent System Operator (MISO) and Southwest Power Pool (SPP) in addition to continuing to include four transmission projects that the commission had previously approved for the TCR rider. As a result of this change, an average residential customer using 1,000 kWh per month could see their monthly bill increase by approximately $0.09. See docket EL21-031.
- In March, MidAmerican Energy Co.’s updated TCR rider rate was approved by the commission. In its request, the company described its costs assessed by MISO and the associated benefit to South Dakota customers would amount to an annual decrease of $111,447. Although the total revenue requirement decreased, this was driven by a large over collection during the prior year for the large general service class. While those large customers saw a decrease in their rate, residential customers saw a slight increase, with a typical residential customer averaging 700 kWh per month receiving an approximate $0.24 monthly bill increase. See EL22-003.
- The commission approved an updated TCR rider rate for Montana-Dakota Utilities Co. in May. The updated rate
included costs associated with five transmission projects: three that were previously approved and two new projects. The new projects were replacements of 41.6 kV lines to 60 kV and included a 19.2-mile span from Greenway to Hague and a 5.8-mile line from Hague to Herreid. The upgraded lines provide increased reliability and capacity for load growth. In its application, MDU sought to recover an annual revenue requirement of $2,524,329. The effect on customers is estimated as an $8.87 monthly bill increase for a typical residential customer using 853 kWh per month. See docket EL22-006.
- In December, Xcel Energy’s updated TCR rider rate was approved by the commission. Updates to the rider included the addition of 10 new rebuild projects, combining two previously approved projects into one, and moving 20 previously approved projects to base rate recovery, leaving a total of 20 projects as part of the TCR. Xcel proposes to continue recovering the costs associated with the 20 previously approved projects through base rates (See docket EL22-017). The result of moving this cost recovery to base rates is a negative $849,618 TCR revenue requirement and translates to roughly a $2.72 monthly decrease for an average residential customer using 750 kWh per month. See docket EL22-022.
- In February, Otter Tail Power Co.’s updated TCR rider was approved by the commission. The request, to generate $2,197,832 annually, would cover the company’s South Dakota share of electric grid expenses in the Midcontinent Independent System Operator (MISO) and Southwest Power Pool (SPP) in addition to continuing to include four transmission projects that the commission had previously approved for the TCR rider. As a result of this change, an average residential customer using 1,000 kWh per month could see their monthly bill increase by approximately $0.09. See docket EL21-031.
- In May, the commission received and began processing MidAmerican Energy Co.’s application for approval to increase rates by approximately $7.037 million for natural gas service to customers in its South Dakota service territory. The commission will make a decision in 2023. See docket NG22-005.
- PUC staff began processing a request received in June from Xcel Energy to increase revenue for electric service in its South Dakota service territory by approximately $44.1 million annually. Due to the large amount of public interest shown in this docket, the commission held a public input meeting in Sioux Falls in November. A final decision on this case is expected in 2023. See docket
EL22-017.
- The commission approved updates to energy efficiency and conservation programs. In 2022, the estimated energy savings for all investor-owned utilities was 14,739 megawatt hours of electricity and 6,476 dekatherms of natural gas.
- Montana-Dakota Utilities Co. updated its Conservation Program Tracking Mechanism in 2022. The commission approved a revised Conservation Tracking Adjustment rate of $0.025 per dk in February. As a result, a residential customer using 70 dk annually would see an estimated annual increase of $0.35. MDU’s conservation program provides incentives to residential customers for using high-efficiency heating equipment and programmable thermostats. Rebates for high efficiency furnaces are available for commercial customers as well. In addition, commercial customers can apply for rebates on a customized basis where the company reviews each project individually and offers a rebate based on the amount of energy savings projected. See docket NG22-001.
- Xcel Energy’s 2023 Demand Side Management and revised Cost Adjustment Factor was approved by the commission, along with the company’s 2021 DSM status report, 2021 DSM Tracker Account and performance incentive earned in 2021. The 2023 DSM plan includes no changes in either the residential or business offerings, which includes incentives for efficient lighting and water heating and enrollment in the company’s Saver’s Switch program, for example. All Xcel customers collectively share the cost of the DSM program, with an average residential customer using 750 kWh per month paying $0.36 a month, a slight decrease over the previous year’s rate. See docket EL22-010.
- Otter Tail Power Co. continued its Energy Efficiency Plan in 2022. The commission approved the 2021 financial incentive, 2021 Energy Efficiency Plan Status Report and an unchanged Energy Efficiency Adjustment Factor in June. The company’s residential and commercial programs incentivize customers to use efficient lighting, heat pumps, appliances, and thermostats among other energy-saving measures. See docket EL22-011.
- Performed 485 inspections at 371 licensed facilities.
- PUC staff wrapped up receivership of Farmers Cooperative Elevator of Avon in April of 2022. A portion of the cooperative, including the grain elevator, agronomy business and bulk fuel business, was sold to Battle Creek Farmers Cooperative N/S dba Farmers Pride Coop in March 2022. Following the sale, all producers and creditors were paid in full. Farmers Pride also retained elevator and agronomy employees, resulting in no loss of jobs or services in the Avon community. The full process began in July 2021 when the commission granted PUC staff’s request to seek receivership due to the elevator’s financial difficulties. The 1st Judicial Circuit Court ordered PUC Grain Warehouse Program Manager Cody Chambliss to serve as receiver, limited to control of the grain elevator, in August 2021. This allowed the cooperative to continue operating the fuel station, farm store and fertilizer plant while utilizing grain assets to pay grain-related debt. See docket GW21-002.
- The commission launched their new “Ask an Inspector” promotional campaign at the South Dakota State Fair. The campaign encourages producers to contact the PUC’s grain warehouse staff with any questions about South Dakota’s grain industry and to report any concerns about the practices or financial solvency of grain businesses operating in South Dakota.
LEADERSHIP AND COMMISSIONER OUTREACH
- Commissioner Chris Nelson continued to serve as the PUC chairman and Commissioner Kristie Fiegen carried on in her role as vice chairperson.
- Commissioner Chris Nelson was re-elected in November to serve on the PUC until 2029.
- Chairman Chris Nelson spoke about universal service contribution reform with members of INCOMPAS (the internet and competitive networks association) and the use of critical minerals in clean energy and for energy security at the Center for Public Utilities Current Issues Forum. He also delivered a PUC update to South Dakota audiences including Agtegra representatives; the Pierre Rotary Club; South Dakota Federation of Labor members; NorthWestern Energy’s board of directors; and rural electric managers, staff and publication editors. He presented general information about the PUC’s siting authority to county officials at district and state conferences. Nelson connected with students from Newell, James Valley Christian School, Chamberlain, South Dakota Mines, and legislative interns to share insight about the PUC, state government, and how the electric grid is changing. He also offered remarks at the ribbon cutting of NorthWestern Energy’s Bob Glanzer Generating Station near Huron, spoke with Sioux Falls’ Kiwanis and Sertoma groups and lent a hand at Boys State to help run the Boys State Senate.
- Vice Chairperson Kristie Fiegen spread the message about the importance of public service and the mission and current events at the PUC at numerous presentations and speaking engagements. She discussed such topics as leadership, ethics, citizenship, state government, and renewable energy with students from Sioux Falls, Newell, Chamberlain and Parker as well as South Dakota Girls State delegates. Her remarks at the Midwest Economic Outlook Summit in Fargo, North Dakota, focused on the need for a balance of energy resources to effectively “keep the lights on.’’ Rural electric staff members and managers heard an update from Fiegen about the PUC at gatherings throughout the state.
- Commissioner Gary Hanson offered thoughts about nuclear energy as part of a panel discussion at the New Mexico State University Center for Public Utilities’ Current Issues Forum. The session explored the benefits, costs and challenges of nuclear energy and other emerging technologies. He also spoke to several service and nonprofit organizations regarding the workings of the PUC and issues of energy reliability, affordability, and environmental protection, and the potential of what electric generation will look like in the future. Hanson’s expertise was also shared as part of an Electric Vehicle nationwide working group with the purpose of, among other issues, discovering and helping promote opportunities for mitigating potential impacts to the grid from EVs.
- Commissioner Kristie Fiegen, a member of Southwest Power Pool’s Regional State Committee, was selected to serve as chairperson of the Regional Allocation Review Task Force, Improved Resource Availability Task Force, and the RSC Nominating Committee. The RARTF is responsible for defining the analytical methods used to review the reasonableness of the regional allocation methodology. The IRATF was formed in 2021 following Winter Storm Uri to assess and make recommendations related to fuel assurance and resource planning and availability for the SPP region.
- The annual PUC Briefing for Legislators in January provided an opportunity for Commissioners Nelson, Fiegen and Hanson to share current information with lawmakers about PUC hot topics such as telecommunications, broadband, pipeline safety, siting, energy regulation, regional transmission organizations, and grain warehouses.
- The commission successfully shepherded three bills revising grain buyer statutes designed to better protect producers. The new legislation increased penalties for actions related to grain transactions, prohibited and provided a penalty for grain brokers engaging in certain transactions or activities, and reduced the period for filing claims upon the revocation of a grain buyer license.
- The commission supported legislation to add solar energy facilities to the financial security for decommissioning. The legislation allows the PUC to ensure funds are available to decommission solar projects should it be required. The measure was soundly approved by the legislature.
- The PUC’s proposed legislation to establish safety standards regarding biogas gathering lines through minimal regulation received unanimous support from both chambers. At the time, such lines were unregulated, not falling under either state or federal authority and posed a threat to public safety.
- In September, PUC commissioners urged U.S. Senators Mike Rounds and John Thune to oppose proposed, federal electric transmission permitting reform legislation known as Manchin Legislation. The legislation, introduced by Sen. Joe Manchin of West Virginia, strove to federalize the process to site electric transmission lines, eliminating state authority over the siting of electric transmission projects found by the Secretary of Energy to be “national interest facilities’’ and abolishing or significantly reducing the protections state law currently provides for landowners and citizens in the area. Originally attached to the federal government’s stopgap funding package, the legislation was removed amid strong opposition.
- PUC staff completed 148 days of pipeline safety inspections.
PUBLIC OUTREACH AND CONSUMER ASSISTANCE
- The PUC visited with more than 3,800 consumers about the purpose and services of the PUC at spring home shows in Sioux Falls and Rapid City and at the South Dakota State Fair.
- The commission continued educating consumers about scam calls through their ongoing “Don’t Know? Don’t Answer!” informational campaign. The campaign informs consumers about scam calls, the tricks scam callers use to gain access to sensitive information or resources and provides tips on to report scams and protect against their tactics.
- Increased the total amount of South Dakota telephone numbers on the Do Not Call registry to 706,684.
- In February, the PUC received SCS Carbon Transport LLC’s application for a permit to construct and operate a carbon dioxide transmission pipeline. Following the filing, Commissioner Kristie Fiegen disqualified herself from the docket due to a familial relationship with a landowner along the proposed pipeline route and Gov. Kristi Noem appointed State Treasurer Josh Haeder to serve as acting commissioner for the docket. The proposed project plans to span five states and include approximately 2,000 miles of pipelines for the transportation of CO2 from more than 30 ethanol plants, including seven in South Dakota. Approximately 469 miles of pipeline would be placed in the state, crossing Beadle, Brown, Clark, Codington, Edmunds, Hamlin, Hand, Hyde, Kingsbury, Lake, Lincoln, McCook, McPherson, Minnehaha, Miner, Spink, Sully, and Turner counties. Five public input meetings were held in Onida, Sioux Falls, De Smet, Redfield, and Aberdeen in March of 2022 and were collectively attended by more than 1,000 people. The PUC received over 450 applications for party status in this docket and granted intervention to more than 430. An evidentiary hearing and final decision by the commission are expected to take place in 2023. See docket HP22-001.
- In March of 2022, the PUC granted TransCanada Keystone Pipeline, LP’s motion to release their road bond, remove public liaison officer and accept final reporting on the Keystone XL Pipeline project. TC Energy terminated the Keystone XL project in June 2021 after President Joe Biden revoked the Presidential Permit that would have allowed Keystone to construct and operate a pipeline segment across the international border. TransCanada Keystone Pipeline originally filed its application with the commission in March 2009 and was granted a permit to construct in June 2010. The company returned to the PUC in 2014 seeking an order accepting certification of the permit issued in 2010. Commissioners issued a final decision finding the permit valid and accepted certification in January 2016. See docket HP09-001.
- In August of 2022, the South Dakota Supreme Court upheld the PUC’s decision in docket EL19-003 to grant a permit to construct the Crowned Ridge Wind Farm. Intervenors Amber Christenson and Allen Robish sought an appeal to the high court in May 2020 following the 3rd Circuit Court’s affirmation of the commission’s decision in April. See South Dakota Supreme Court case #29334.
- In 2022, the South Dakota Supreme Court twice upheld the commission’s 2020 decision in docket EL19-027 to grant a permit to construct the Crowned Ridge Wind II project. The decision was first affirmed in March regarding an appeal sought by Garry Ehlebracht, Steven Greber, Mary Greber, Richard Rall, Amy Rall, and Laretta Kranz following the 3rd Circuit Court’s affirming of the PUC’s decision in March of 2021. A separate appeal to South Dakota’s high court, sought by Amber Christenson and Allen Robish, upheld the PUC’s decision in August. See South Dakota Supreme Court cases #29610 and #29615.
- Navigator Heartland Greenway, LLC filed its application for a permit to construct a carbon dioxide transmission pipeline with the commission in September. The project includes approximately 1,300 miles of pipeline spanning five states and plans to transport CO2 from more than 21 ethanol and fertilizer plants, including three ethanol plants in South Dakota. The CO2 would be transported to permanent and secure underground sequestration in Illinois and/or to off-take facilities for commercial or industrial use. South Dakota’s portion of the project includes 111.9 miles of pipeline crossing Brookings, Moody, Minnehaha, Lincoln, and Turner counties. The PUC held public input meetings in Canton, Flandreau and Sioux Falls in November and had more than 400 members of the public collectively attend. The commission received numerous applications for party status and granted intervention to nearly 140 parties. The commission is expected to hold an evidentiary hearing and render its final decision in 2023. See docket HP22-002.
- In November, the PUC determined and announced it had no jurisdiction over the proposed Gregory County Pumped Storage Project. While many energy-related facilities would require a PUC permit prior to construction, in this case, federal permitting jurisdiction supersedes state jurisdiction for hydroelectric projects on the navigable water of the United States. The GCPSP, a joint effort by Missouri River Energy Services and MidAmerican Energy Company, is proposed to be constructed along the Missouri River in Gregory County with transmission facilities in Charles Mix County. If built, the project is expected to have a nameplate capacity 1,800 megawatts.
- Twenty-six telecommunications carriers were deemed eligible to collectively receive millions of dollars in high-cost support from the federal Universal Service Fund for maintaining, upgrading and building out their voice and broadband networks in South Dakota. Each year, the commission must certify to the Federal Communications Commission that these carriers, designated as Eligible Telecommunications Carriers (ETCs), are using funds for the provision, maintenance and upgrading of facilities and services for which support is intended. dollars invested reflect the strengthening and expansion of telecommunications infrastructure to enhance system reliability and enable more service options to more customers, particularly in rural areas. In 2021, the Universal Service Administrative Co. distributed approximately $126.5 million in High-Cost Support and over $1.2 million in Lifeline and Link-Up monies to South Dakota companies.
- In March, the commission issued an order denying LTD Broadband LLC’s application for designation as an eligible telecommunications carrier for the purpose of receiving federal universal service support, by a 2-1 vote with Commissioner Hanson dissenting. The decision came after a December 2021 hearing that included the South Dakota Telecommunications Association as an intervenor. In April, LTD requested reconsideration or rehearing. The commission denied the request for reconsideration and granted the request for rehearing, limited in scope to newly discovered evidence and/or facts and circumstances arising subsequent to the previous hearing. In August, LTD requested the docket be suspended; STDA objected and requested the docket be closed. The commission closed the docket in October. See docket TC21-001.
