Electric cooperatives in South Dakota say a compromise reached by a legislative panel is a positive step toward solving territorial disputes that have disadvantaged some utilities for more than 40 years.
Members of a summer study committee decided earlier this month to advance a process that would promote negotiations as an alternative to municipal utilities taking newly annexed areas from co-ops and investor-owned utilities.
The temporary compromise encourages negotiations between the municipals and affected co-ops or investor-owned utilities and gives the South Dakota Public Utilities Commission authority to decide unresolved cases. Under existing law, municipal utilities have faced no negotiation requirements.
“This is a good start to bring long-needed improvements to the state law governing electric service territory,” said Ed Anderson, general manager of the South Dakota Rural Electric Association. He said passage of a permanent law will be co-ops’ top priority during the 2020 legislative session.
Current efforts to resolve this issue began in 2017 with South Dakota co-ops and their statewide association pressing for reforms of a state law they contend provides unfair advantage to the 35 municipal utilities in the state. Under that law, co-ops and investor-owned utilities must negotiate territorial boundary changes, but municipal utilities can claim new service areas through annexation statutes.
Anderson credits the collective efforts of South Dakota’s co-ops, even those not directly affected, for building support among legislative study group members. The state’s legislative Executive Board is expected to work on the measure before the general session begins Jan. 14 in Pierre, the state capital.