FOR IMMEDIATE RELEASE: June 27, 2018                               
CONTACT: Leah Mohr, deputy executive director, South Dakota Public Utilities Commission, (605) 773-3201 or (605) 280-4327

South Dakota PUC approves rate reduction for South Dakota Intrastate Pipeline

PIERRE, S.D. – The South Dakota Public Utilities Commission this week approved a reduction of rates charged by the South Dakota Intrastate Pipeline Co. The rate change was presented in a settlement agreement offered by SDIP, PUC staff, Montana-Dakota Utilities Co. and Ringneck Energy & Feed LLC and accepted by the PUC at its regular meeting in Pierre on June 26.

SDIP filed a rate increase request with the commission last summer, asking for approval to increase rates to generate approximately an additional $1.8 million in annual revenue, a nearly 81 percent increase in revenue. SDIP reduced the request to approximately $250,000 in additional annual revenue in November 2017, following extensive review of data and discussions with PUC staff and Montana-Dakota. Ringneck Energy joined the case in March. The rate approved by the commission will reduce SDIP’s annual revenues by approximately $279,000. The new rate, arrived at by negotiations among SDIP, PUC staff, Montana-Dakota and Ringneck Energy, will go into effect on Sept. 1, 2018. The settlement approved by the PUC includes a provision whereby SDIP agreed to a three-year rate case moratorium.

SDIP is an intrastate pipeline company that currently delivers natural gas from the Northern Border Pipeline to one customer: Montana-Dakota in central South Dakota. Montana-Dakota is the local distribution natural gas company serving Pierre and other central South Dakota customers. Ringneck Energy is scheduled to begin accepting natural gas service from SDIP in November 2018 for its ethanol plant currently under construction near Onida.

PUC Chairperson Kristie Fiegen lauded the efforts that resulted in a rate reduction to benefit the ultimate users of the natural gas delivered by SDIP. “I am delighted that what started out as a potential rate increase is effectively becoming a rate decrease,” she said. “I am appreciative of the PUC staff’s work to scrub through the numbers and work so intently and diligently.”

“Processing a rate request is no small undertaking,” PUC Vice Chairman Gary Hanson said. “Processing a rate request while coordinating and negotiating among four parties with distinct interests is indeed admirable and I appreciate that we finally have a resolution,” he concluded.

The participation of Ringneck Energy as a new, future customer of SDIP brought a unique set of circumstances to the case. The settlement agreement considered that once Ringneck Energy is operational some costs that would have been borne solely by Montana-Dakota will be shared by Ringneck Energy thereby decreasing costs to Montana-Dakota’s customers.

“The settlement agreement contains some excellent solutions,” stated PUC Commissioner Chris Nelson. “I appreciate that this was resolved so the Ringneck Energy plant can get up and running in a timely manner.”

The SDIP rate docket can be viewed on the PUC's website at www.puc.sd.gov, Commission Actions, Natural Gas Dockets, 2017 Natural Gas Dockets, NG17-009 - In the Matter of the Application of South Dakota Intrastate Pipeline Company for Authority to Increase Its Natural Gas Rates.

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