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FOR IMMEDIATE RELEASE: Oct. 16, 2018                               
CONTACT: Leah Mohr, South Dakota Public Utilities Commission, (605) 773-3201 or (605) 280-4327

PUC approves refund and lower rate for Montana-Dakota Utilities Co. customers

PIERRE, S.D. – This week the South Dakota Public Utilities Commission approved a refund and reduction of rates for Montana-Dakota Utilities Co. customers as a result of the federal tax cuts enacted late last year.

The total refund to be distributed among Montana-Dakota’s natural gas customers is $1,326,915; the company will refund $591,424 to electric customers. Refunds will appear as a credit on customer accounts in mid-February. An average residential natural gas customer will receive an estimated $14.05 refund; an average residential electric customer will receive an estimated $41.84 refund.

The commission additionally approved a reduction of Montana-Dakota’s base rates. The amount of the rate reduction was determined by PUC staff and Montana-Dakota representatives completing a review of 2017 test year data considered in calculation of the 2018 refund amount and further adjusted to include plant additions placed into service by Oct. 31, 2018. The company currently estimates the base rate reduction will be approximately $250,000 for Montana-Dakota’s South Dakota electric customers and $300,000 for the company’s South Dakota natural gas customers. The final rate reduction will be determined by Dec. 1, 2018, and submitted to the commission for review.

PUC Chairperson Kristie Fiegen stated that consumer protection was her primary focus in reviewing the docket. “Looking out for the customer is my number one concern. This outcome is fair to the company and passes the benefits of the tax cut to consumers,” Fiegen said.

PUC Vice Chairman Gary Hanson observed, “This is a gift that keeps on giving. Every year that the utilities pay less in taxes due to the lower rate, the customers will continue to financially benefit.”

PUC staff and Montana-Dakota presented a settlement stipulation to the commission and asked for approval at the PUC’s regular meeting on Oct. 16 in Pierre. Prior to accepting the agreement, Fiegen asked her fellow commissioners to require the company to include interest on the refund amount paid to customers. Commissioner Chris Nelson moved to amend the motion to require a higher interest rate and his motion was successful.

“This tax cut refund continues our efforts to return money to utility consumers. Adding a requirement that the utility pay an appropriate interest rate on the refund further benefits customers,” Nelson said.

In December 2017, PUC staff requested the commission open a docket to investigate the effects the federal tax cut would have on rates paid by customers of regulated electric and natural gas utilities. The commission voted to proceed with the investigation and ordered any adjustment made to rates as a result of the tax cut be effective on Jan. 1, 2018. Since then, the PUC has approved refunds to customers of Xcel Energy, Black Hills Energy, NorthWestern Energy and Montana-Dakota Utilities Co. Discussions with Otter Tail Power Co. and MidAmerican Energy Co. are ongoing.

The Tax Cuts and Jobs Act docket can be viewed on the PUC’s website at, Commission Actions, Commission Dockets, Gas and Electric Dockets, 2017 Gas and Electric Dockets, GE17-003 – In the Matter of Staff’s Request to Investigate the Effects of the Tax Cuts and Jobs Action South Dakota Utilities.