Appeals court upholds ruling favoring East River Electric over Dakota Energy

SIOUX FALLS, S.D. (Dakota News Now) – A legal battle involving East River Electric and Dakota Energy Cooperative is marking another chapter in it’s history and coming to an end, for now.

The United States Court of Appeals Eighth Circuit has upheld a ruling from a federal district court, holding Dakota Energy to it’s wholesale power contract until it runs out in December of 2075. The court’s decision finds that Dakota Energy has no legal route to a buyout of it’s contract, a stated goal of the energy cooperative when it first filed a lawsuit against East River in November of 2020.

That battle has lasted almost three years, with tensions running high between Dakota Energy’s Directors, East River Electric, and Dakota Energy’s own members.

“It’s been a long road, but we’re here. The Eighth Circuit agreed with our position, and we’re extremely excited that we’re going to be able to continue to serve Dakota Energy’s members for generations to come,” East River Electric Chief Member and Public Relations Officer Chris Studer said.

In a previous statement to Dakota News Now, Dakota Energy said it filed that initial lawsuit against East River over rising wholesale energy costs, and blamed East River and Basin Electric, East River’s electricity provider, of not doing enough to keep costs low. Dakota Energy has indicated that if it were to get out of it’s contract, it would look to buy power from Colorado-based Guzman Energy. Dakota Energy and Guzman Energy held a town hall meeting in April of 2021 in Huron, answering members’ questions on what a business relationship between the two entities would look like.

East River Electric has said that move would cost Dakota Energy electric consumers more, as Guzman Energy is a for-profit company. For comparison, East River Electric is made up of 24 energy cooperatives, including Dakota Energy, and one municipal-owned electric system.

“We have been watching their electric bills for the last 70 years, making sure that we’re providing the most affordable energy possible. We have long-term contracts to try and do that, to continue to provide low-cost power to those consumers,” Studer said.

Dakota Energy appealed the initial decision from a federal district court last April, claiming that the court ignored that East River Electric initially calculated a buyout amount for the cooperative before Basin Electric intervened. East River has denied that they ever offered a buyout of the contract, much less offering a dollar amount.

“Our Board of Directors, which includes Dakota Energy, they are the ones that are setting the rates that those cooperatives are paying and at the end of the day, what the consumers are paying,” Studer said.

This ruling isn’t the end of Dakota Energy’s legal options. If the cooperative chooses to do so, it can appeal to the Eighth Circuit “en banc”, meaning it would request a ruling from all 11 judges on the circuit. This latest ruling comes from only three judges on the circuit.

Dakota Energy leaders were not immediately available for comment at the time of publishing this story.

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