FOR IMMEDIATE RELEASE: March 11, 2026               
MEDIA CONTACT: Leah Mohr, South Dakota Public Utilities Commission, (605) 773-3201 or (605) 280-4327

PUC reduces Otter Tail Power Co.’s rate increase request
in settlement acceptance

PIERRE, S.D. - The South Dakota Public Utilities Commission approved a settlement stipulation from Otter Tail Power Co. and PUC staff allowing for an electric base rate increase below the company’s original request. The decision by the PUC, as outlined in the settlement, recognized an overall revenue deficiency of $3,320,277, far below the $5,719,671 included in Otter Tail Power’s original request. As a result, a typical residential customer using 932 kilowatt hours a month will see an estimated increase of $8.97 in their monthly bill, a significant decrease from the original ask that would have prompted an estimated $14.39 monthly increase to residential customers. The settlement stipulation, a comprehensive agreement on all issues, was filed jointly by PUC staff and the company on March 2, 2026, following extensive discovery, negotiations and research.

The commission’s action was taken at the PUC’s regular meeting on March 10, 2026, in Pierre. During the meeting commissioners Chris Nelson and Kristie Fiegen made additional inquiries about Otter Tail Power’s planning and management of large loads, interim rate refund plan, and planned outages for facility maintenance, among other topics. Commissioner Gary Hanson was unable to participate in the meeting due to personal circumstances.

Otter Tail Power submitted its application to the PUC on June 4, 2025. The company cited investments made since their last rate case, approved in 2019, and increases in operating and maintenance costs, including labor, due to inflation as the primary drivers behind the need to increase electric rates.

“The impact of this rate case combined with other special purpose rate riders since the last general rate case seven years ago keeps Otter Tail’s total rate increases at the rate of general inflation. It is something that not many utilities would be able to accomplish. It is a testament to both PUC’s staff and the company’s dedication to providing reliable service at a just and reasonable rate,” remarked PUC Chairman Chris Nelson.

One of the central issues in the proceeding involved the company’s request for a 50% increase in the residential customer service charge and implementation of a new residential facilities charge. Under the settlement, parties agreed to forgo the addition of a residential facilities charge and increase the residential customer service charge by 10%, bringing the previous $10 per month charge to $11 a month instead of the requested $15.

“One of the things I’ve always admired about Otter Tail Power is their strong customer focus. Safety and reliability are always their top priorities, closely followed by the customer service they provide,” said PUC Vice Chairperson Kristie Fiegen. “The company initially sought a 13.84% residential increase and a 12.5% overall increase across all rate classes. After working closely with the PUC staff, the approved settlement reduced those increases to 8.49% for residential customers and 7.74% overall. This agreement strikes a balance by giving Otter Tail Power what they need to continue operating effectively while protecting South Dakota customers,” she stated.

Interim rates were implemented on Dec. 1, 2025, as allowed by state law. As part of the settlement agreement, Otter Tail Power agreed to issue refunds to customers for the difference between interim rates and the approved permanent rate, including interest. The company also agreed to a moratorium on additional base rate increases that will prevent Otter Tail Power from requesting an increase in base rates that would go into effect prior to Dec. 1, 2029. This moratorium will help ensure base rate stability for customers. New rates, affecting approximately 11,500 electric customers in Otter Tail Power’s South Dakota service territory, will go into effect on April 1, 2026.

Otter Tail Power’s last base rate was filed with the commission in 2018.

The full docket can be viewed on the PUC website at puc.sd.gov, Commission Actions, Electric Dockets, 2025 Electric dockets, EL25-022 – In the Matter of the Application of Otter Tail Power Company for Authority to Increase its Electric Rates in South Dakota.

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