Electrical Transmission
Introduction to the South Dakota PUC and Electrical Transmission Oversight
The South Dakota Public Utilities Commission (PUC) is a three-member elected body tasked with regulating investor-owned utilities, including electric, natural gas, and telecommunications services, under South Dakota law. In the context of electrical transmission, the PUC's primary role is to oversee the siting and permitting of major transmission facilities, ensure reliable service, approve rates, and protect consumer interests while balancing economic and environmental considerations. The PUC regulates investor-owned electric utilities, such as Xcel Energy, MidAmerican Energy, and Black Hills Power, but does not have jurisdiction over municipal utilities or most electric cooperatives, which are governed by their own boards or local authorities. This article details the PUC’s responsibilities regarding electrical transmission, focusing on permitting, rate regulation, service oversight, and recent developments, as outlined in South Dakota law and administrative rules.
Permitting of Electrical Transmission Facilities Under SDCL Chapter 49-41B
The PUC’s most significant responsibility for electrical transmission lies in the permitting process for major transmission facilities, governed by South Dakota law, the Energy Conversion and Transmission Facility Siting Act. This law applies to “transmission facilities,” defined as electric transmission lines and associated facilities with a design of 115 kilovolts or more, or those extending 10 miles or longer. Examples include high-voltage lines connecting power plants to substations or linking South Dakota’s grid to regional networks.
Permitting Process
The permitting process begins with a notification of intent filed at least six months before submitting a formal application which is dictated by South Dakota law. Applicants must provide detailed plans, including:
Route maps and facility descriptions.
Environmental impact assessments, covering effects on agriculture, wildlife, and cultural resources.
Proof of financial capability to construct and maintain the facility.
Compliance with safety and land-use regulations.
Applicants pay fees and deposits to cover PUC review costs as governed by South Dakota law. The PUC holds public hearings, allowing input from landowners, local governments, and other stakeholders. For instance, projects like the Big Stone South to Brookings County 345 kilovolt line involved extensive public engagement.
Approval Criteria
The PUC grants a permit only if the project meets four criteria under South Dakota law:
Complies with all applicable laws and rules.
Does not pose a threat of serious injury to the environment or inhabitants.
Does not substantially impair the health, safety, or welfare of affected communities.
Does not unduly interfere with the orderly development of the region.
Decisions must be issued within one year of application receipt and permits may include conditions, such as environmental mitigation or restoration requirements. Violations of permit terms are Class 1 misdemeanors with civil penalties up to $10,000 per violation. For trans-state facilities crossing state lines, legislative approval may also be required.
The PUC monitors construction to ensure compliance but does not oversee ongoing operations, which fall to utility operators and regional grid managers like the Midcontinent Independent System Operator (MISO).
Rate Regulation and Cost Recovery
The PUC regulates rates charged by investor-owned electric utilities for transmission services, ensuring they are just, reasonable, and non-discriminatory, as mandated by South Dakota law. Transmission rates are often set through tariffs approved by the PUC, reflecting costs for infrastructure maintenance, upgrades, and regional grid integration. For example, utilities may recover costs for transmission projects through rate adjustments, subject to PUC review in rate cases.
Rate cases involve public hearings where utilities justify proposed increases, and the PUC evaluates factors like operational costs, return on investment, and consumer impact. In 2023, the PUC approved rate adjustments for Xcel Energy to fund grid reliability improvements, including transmission upgrades. The PUC also oversees cost allocation for projects benefiting multiple utilities, ensuring South Dakota consumers are not unfairly burdened.
Service Reliability and Consumer Protection
The PUC ensures reliable electric service by enforcing service standards under Administrative Rules of South Dakota. These rules require utilities to maintain adequate transmission capacity, report outages, and address service disruptions promptly. The PUC investigates significant outages, such as those caused by storms, to assess utility preparedness and response.
Consumer protection is a key focus. The PUC handles complaints related to billing, service quality, or disconnections, mediating disputes between customers and utilities. It also enforces rules against unfair practices, such as unauthorized charges, and ensures utilities comply with low-income assistance programs like the Low Income Energy Assistance Program (LIEAP), which may indirectly support transmission infrastructure funding.
Renewable Energy and Transmission Integration
South Dakota’s growing renewable energy sector, particularly wind power, has increased the need for transmission infrastructure to deliver electricity to urban centers and regional markets. PUC facilitates this by reviewing transmission projects tied to renewable generation, ensuring they meet siting requirements and support grid reliability. For instance, projects like the Watertown Area Transmission Project enhance connectivity for wind farms in eastern South Dakota.
The PUC also collaborates with regional organizations like MISO to ensure South Dakota’s transmission grid aligns with federal standards and regional energy goals. While the PUC does not regulate renewable energy production directly, its permitting decisions influence the feasibility of wind and solar projects by enabling or restricting transmission access.
Recent Developments and Challenges
In recent years, the PUC has addressed transmission challenges driven by aging infrastructure, renewable integration, and extreme weather risks. In 2024, the PUC reviewed several transmission line proposals to support grid modernization, focusing on resilience against storms and cyberattacks. For example, Otter Tail Power Company’s proposed upgrades to 115 kilovolt lines were evaluated for cost-effectiveness and environmental impact.
Landowner concerns over eminent domain for transmission projects remain a contentious issue. While South Dakota law allows utilities to seek easements, the PUC encourages voluntary agreements and imposes conditions to protect property rights, such as requiring restoration of affected land. The rejection of Referred Law 21 in November 2024, which would have allowed PUC permits to override local ordinances, preserved county-level zoning authority.
Conclusion
The South Dakota PUC plays a critical role in overseeing electrical transmission through permitting, rate regulation, and service reliability enforcement. By administering governing South Dakota law and related rules, the PUC ensures that transmission projects meet safety, environmental, and public welfare standards while supporting the state’s energy needs. Its limited jurisdiction over cooperatives and municipal utilities highlights a focus on investor-owned systems, but its influence shapes regional grid connectivity. For updates or specific inquiries, contact the PUC at 1-800-332-1782 or visit puc.sd.gov, as regulations may evolve with legislative changes or new energy demands.
