Release: Agreement between municipal and rural electric groups to continue discussions ends debate on annexation, arbitration and territory freezes


PIERRE, SD – The Interim Legislative Committee to study electric services in South Dakota met for the final time in Pierre yesterday and recommended the municipal and rural electric groups work together to find common ground. Legislation concerning service territory freezes, arbitration and limiting the rights of a municipal electric to expand were all debated and ultimately tabled or withdrawn.

The nine-member summer study group, which was created after the 2019 Legislative Session, was tasked to review and make recommendations regarding the right of a municipal electric utility to provide service in annexed areas. For five decades, municipal electric advocates have entered into many good faith agreements with rural electric co-ops to address a community’s right to expand and provide electric services to businesses and residents. Despite multiple concessions by the municipal electric organizations and the promise of no further negotiations by the rural electric co-ops, the co-ops continue to bring the issue back to the legislature.

“The committee has done a fine job throughout this process and yesterday’s outcome highlights what we’ve been saying from the beginning – this is a complex issue and the agreements we entered into in the past more than justly compensate the rural electrics,” said Russell Olson, CEO of Heartland Consumers Power District and Chair of the Coalition to Preserve Consumer Choice. “As we promised the committee members, we are committed to continuing to work with the rural electric co-ops and legislators to address concerns outside of a territory freeze or arbitration discussions. We’re hopeful South Dakota communities will now have the certainty they need to continue to grow and provide for their residents,” added Olson.

The committee voted to combine bills and encouraged the groups to work together to find a solution within the draft framework. The proposed bill outlines a process by which affected utilities would work together to negotiate electric service territory rights. If such negotiations were unsuccessful, the process would include taking the matter to the Public Utilities Commission. The bill also proposes that additional notice be provided to the rural electric cooperatives when the municipality intends to expand. The parties will continue to negotiate the particulars of both proposals in the months leading up to the 2020 Legislative Session.

“The impact our public power utilities have on economic and community development in the towns we serve is essential to South Dakota’s growth and quality of life,” said Deb Birgen, Vice President of Legislative and Government Relations for Missouri River Energy Services. “We have worked hard to be a reasonable partner with the rural electric cooperatives and have gone out of our way to do more than our fair share. We look forward to continued discussions on behalf of our communities.”

3 thoughts on “Release: Agreement between municipal and rural electric groups to continue discussions ends debate on annexation, arbitration and territory freezes”

  1. REAs are 30s-era FDR socialism. Relying on federal grants and favorable treatment in the law. No thanks!

  2. Yes and I’m sure relying on markets and profits would have electrified rural America. Yes Please!

    1. Exactly. And when a city takes away from the REAs, it reduces their base, the remaining members are left to support the cost of supporting the infrastructure, their costs now have to rise. Let he cities expand, just let the electric coops maintain their lines. I believe that Sioux Falls doesn’t have a municipal electric utility, and it survives . . . and thrives.

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