South Dakota
South Dakota clashes with Minnesota on clean energy, coal plant closures
SIOUX FALLS, S.D. – A political border war between South Dakota and Minnesota on how to handle tax policies, abortion and the pandemic response could spill over into renewable energy and the future of coal plants.
At issue is the pace with which gas and electric companies can transition away from fossil fuels without compromising reliability and affordability for customers, and what role government plays in those calculations.
That reliability was tested several times over the past few years, including during a winter storm in January that nearly caused rolling blackouts, one South Dakota official said.
The Democratic-controlled Minnesota Legislature passed a law in 2023 requiring all electric utilities in the state to produce only carbon-free energy by 2040 using sources like solar, wind, hydroelectric and nuclear power.
Xcel Energy, whose 3.7 million electrical customers include about 100,000 South Dakotans, is based in Minneapolis, so that law applies to the utility.
The South Dakota Public Utilities Commission, consisting of three elected Republicans, sent a letter to Xcel in January asking the company to reverse plans to close several coal-fired power plants ahead of schedule as part of its transition.
“Evidence is mounting that the premature closures … will elevate the risk of electricity outages particularly in tight load hours, including hours of extreme cold and extreme heat, as well as those hours when wind generation is low,” the letter stated. “These events are likely to pose a threat to life and property.”
The company stuck to its timetable, which includes replacing the coal plants with solar projects in the next few years, a plan approved by the Minnesota Public Utilities Commission.
Minnesota PUC commissioner: ‘Massively frustrating conversation’
More recently, members of Minnesota’s PUC clashed with utility company Otter Tail Power over its decision to amend its long-range plan to push back closures of coal plants – including Big Stone near Milbank, in northeast South Dakota – until at least 2040.
The Minnesota PUC approved Otter Tail’s Integrated Resource Plan on May 30 after concessions that included the company no longer using its North Dakota-based Coyote Station plant for Minnesota customers beyond 2031.
Otter Tail’s most recent modeling projects a retirement date of 2046 for South Dakota-based Big Stone, which started operation in 1975 and burns coal from Wyoming’s Powder River Basin.
“I just find this to be a massively frustrating conversation,” Minnesota PUC Commissioner Joe Sullivan said at the May 30 meeting . “I sympathize with Otter Tail because you have two different jurisdictions that look at the world differently. But if (Coyote Station) were in Minnesota, we’d say, ‘Otter Tail, it’s time to pull out.’”
Otter Tail, which serves about 130,000 electricity customers in Minnesota, North Dakota and South Dakota, addressed the delicate balance of transitioning to renewable energy when submitting its 2022-36 plan to state PUCs.
“Shifting the generation fleet’s focus to dispatchable gas resources and away from coal will help to improve operational flexibility while hedging market risk,” the report said. “That said, it is also necessary to ensure fuel-secure generation is available for those times when self-generation is necessary to maintain reliability of the system.”
South Dakota opposes new EPA rules
Disputes about the urgency of ditching fossil fuels for clean energy start at the federal level, where the Environmental Protection Agency (EPA) follows protocols in line with the party that controls the White House.
The EPA released new rules April 25 that elevate pollution controls for the coal industry, impacting wastewater discharge, the handling of coal ash and carbon emission limits. EPA Administrator Michael Regan, appointed by Democratic President Joe Biden, called it a “defining moment” for the agency.
South Dakota joined 22 other states in asking a federal court to review the new standards, which North Dakota Attorney General Drew Wrigley said were intentionally set “to destroy the coal industry.”
In a statement to News Watch, South Dakota Attorney General Marty Jackley referenced a recent Supreme Court decision that reversed the landmark 1984 Chevron ruling, eroding much of the power of federal agencies such as the EPA to interpret laws they administer, leaving that to the courts.
“The EPA’s directive and attack on fossil fuels is another example of a federal agency creating undue burdens on states and private businesses without proper authority while Congress does not act,” Jackley wrote. “The Supreme Court ruling in the Chevron case is aimed at addressing this type of action by the federal bureaucracy.”
SD 8th in per capita energy consumption
The Inflation Reduction Act passed by Congress and signed by Biden in 2022 included $370 billion in tax credits and other support for clean energy initiatives.
South Dakota has increased its wind energy production to 55% of in-state net power generation, a larger share than in all other states except Iowa, according to the U.S. Energy Information Administration (EIA). Other power sources include hydroelectric (29%), coal (10%), natural gas (6%), oil (0.3%) and solar (0.01%).
But South Dakota ranks eighth among U.S. states in energy consumption per capita, with 31% of households using electricity to heat their homes during frequently harsh winters.
South Dakota sees new interest in solar power
Despite being home to wide-open spaces and abundant sunshine, South Dakota ranks 47th in the nation for production of solar power.
Dependability of resources and rising energy costs are where Kristi Fiegen, chair of the South Dakota PUC, centers her concerns amid talk of climate change and reducing greenhouse gases, she told News Watch in a phone interview.
“When I talk about reliability of the grid, I want dispatchable generation of electricity for customers in South Dakota,” said Fiegen, who is up for re-election in 2024. “Non-dispatchable energy (wind and solar) is reliant on the weather. And when it’s reliant on the weather, we don’t when we turn on the lights if it’s going to be there.”
Winter storms tested the power grid
Fiegen, who was first elected to the PUC in 2011, helps regional transmission organizations (RTOs) maintain and monitor the electrical grid, which was pushed to the limit during recent winter storms that nearly caused rolling blackouts.
The 61-year-old Chancellor native holds leadership roles in the Southwest Power Pool (SPP), a nonprofit organization that manages electric transmission for parts of 14 states, including South Dakota.
South Dakota is also part of the 15-state Midcontinent Independent System Operator (MISO), which helps ensure energy distribution regardless of whether a customer uses Xcel, MidAmerican Energy, Black Hills Energy, NorthWestern Energy, Otter Tail or another utility company.
Cooperation between these and other RTOs nationally was critical during Winter Storm Gerri, which brought brutally cold air and blizzard conditions to much of the Midwest in January.
“During that storm we got 7,000 megawatts (of electricity) from the East to help us keep the lights on,” said Fiegen. “If we hadn’t gotten that, we would have shut off lights in January during the first week of (legislative) session.”
A year earlier, in December 2022, Winter Storm Elliot led MISO to declare a maximum generation event due to higher-than-expected electricity consumption and loss of production from natural gas facilities due to freezing, mainly in the South. Similar problems emerged during a 2021 winter storm that rocked Texas and shut down power.
“Since those events, we’ve devoted a lot of time to resource adequacy,” said Fiegen, who serves alongside fellow Republicans Chris Nelson and Gary Hanson on the PUC. “We believe in clean energy, but our No. 1 goal as commissioners in South Dakota is to have reliable and cost-effective electricity for our customers.”
‘It’s a life and death issue, not convenience’
Coal was replaced by natural gas as the largest energy source in the United States in 2016, with natural gas now making up 39% of electricity generation compared to 20% for coal.
Transitioning to solar and wind too quickly could impact the reliability of the electrical grid in extreme conditions, the North American Electric Reliability Corp. (NERC) stated in its 2023-24 Long-Term Reliability Assessment.
“There is a need for dialogue among a broad group of stakeholders when policies and regulations have the potential to affect future electricity (capabilities),” the study said. “Regulations that have the potential to accelerate generator retirements or restrict operations must have sufficient flexibility and provisions to support grid reliability.”
That report was cited by South Dakota’s PUC in its letter to Xcel Energy, which responded that it shares the commission’s reliability priorities and will be adding solar and wind capacity as well as dispatchable energy through nuclear and hydrogen-ready combustion turbines.
The company’s stated goal is to provide customers with “100% carbon-free electricity by 2050 and reduce carbon emissions from its operations 80% from 2005 levels by 2030.”
South Dakota PUC member Nelson told News Watch in April that there will always be a need for electric power generated by coal, natural gas or other sources that don’t let up when the weather turns still or cloudy.
“I do expect we’re going to see a pretty significant increase in the amount of solar and wind because we really need to keep a diversity of power generation sources,” Nelson said. “But there’s going to be times when the wind isn’t blowing and the sun isn’t shining, and we need to have some way to generate electricity during those times. When it’s 25 degrees below zero, you want your house to stay warm because at that point it’s a life and death issue, and not a convenience issue.”
This story was produced by South Dakota News Watch, a nonpartisan, nonprofit news organization. Read more in-depth stories at sdnewswatch.org and sign up for an email every few days to get stories as soon as they’re published. Contact Stu Whitney at stu.whitney@sdnewswatch.org.
Enter your email and we’ll send a secure one-click link to sign in.
KELOLAND.com is provided by Nexstar Media Inc., and uses the My Nexstar sign-in, which works across our media network.
Learn more at nexstar.tv/privacy-policy.
KELOLAND.com is provided by Nexstar Media Inc., and uses the My Nexstar sign-in, which works across our media network.
Nexstar Media Inc. is a leading, diversified media company that produces and distributes engaging local and national news, sports, and entertainment content across its television and digital platforms. The My Nexstar sign-in works across the Nexstar network—including The CW, NewsNation, The Hill, and more. Learn more at nexstar.tv/privacy-policy.
The existing water treatment plant for the Minnehaha Community Water Corp. on June 9, 2026, south of Dell Rapids, S.D. (Photo: Bart Pfankuch / South Dakota News Watch)
DELL RAPIDS, S.D. – Scott Buss can only imagine what this town north of Sioux Falls might have looked like – and how many jobs and taxes would have been generated – if there wasn’t a local shortage of available water.
Buss, executive director of the Minnehaha Community Water Corp., sat in the conference room of the rural water system based in Dell Rapids recently and ticked off the industrial and agricultural projects turned away due to a lack of water.
After hitting its limit on how much water it can provide a few years ago, the rural system has had to turn away proposed projects valued at hundreds of millions of dollars that offered an untold number of new jobs, he said.
The rejected projects include the Agropur Cheese plant that eventually opened in Lake Norden. A few proposed hog farms and dairy expansions in northern Minnehaha County were also stalled, Buss said.
Get South Dakota news and information in a free email on weekdays. Cancel any time.
Subscribe
Other proposals, most of which never came to fruition in South Dakota, included the $1.5 billion Gevo corn-based jet fuel plant, the $5oo million Wholestone Farms hog processing plant and a data center that at some point all eyed the Dell Rapids area for development.
“All the water rights are spoken for between Dell Rapids and Sioux Falls, so there was no more water to be had in Minnehaha County,” Buss told News Watch in an interview in June. “With all the (residential) development that was coming in, we realized that our well capacity and our treatment capacity was limiting our ability to take on new high water-use customers.”
Buss and the nonprofit corporation’s board of directors aren’t waiting around to potentially miss out on more opportunities.
In a unique arrangement, the corporation is partnering with the neighboring Big Sioux Community Water System to the north on a $170 million expansion project called Shared Resources. The expansion, started three years ago, will use new wells into the Big Sioux Aquifer to generate 8 million gallons of water more per day starting this fall.
“It’s going to be a huge and great benefit for Big Sioux and Minnehaha water,” said Jodi Johanson, director of the Big Sioux system based in Egan. “This project is going to make sure that down the road we have enough water for the future.”
2 systems get stronger together
The Minnehaha water corporation is still able to bring on new residential and retail customers who consume part of the 9.2 million gallons of treated water it can provide on a daily basis.
The system was formed by a group of farmers and landowners in the 1970s but sought a reliable way of providing more and cleaner water to residents of Minnehaha County outside of Sioux Falls who relied exclusively on individual wells. The system started with about 1,200 customers but has grown to more than 5,500 now in seven cities, mostly north of the Sioux Falls metro area.
Given the limits on water from the aquifer, and balancing the water needs of consistent housing and retail growth in northern Minnehaha County, the water system had to say no to developments that request 1 million or more gallons of water per day, Buss said. A million gallons per day is equivalent to the water consumption of about 4,300 homes, he said.
Billions needed to keep South Dakota taps flowing
South Dakota water systems will increasingly turn to the Missouri River to provide water for future population, agricultural and industrial growth. But plans will require billions of dollars and decades of construction to keep taps flowing freely.
As with other rural water systems in South Dakota, the aquifers the systems rely on for their water are either running low or are legally tapped out, or both.
In the case of Minnehaha water corporation, the Big Sioux River Aquifer has gotten drier, but state law is also preventing it from taking more water from the aquifer.
In 1996, the state Water Management Board allocated water rights, or withdrawal limits, to systems that take groundwater from the aquifer, Buss said.
Those limits have now been reached, meaning that Minnehaha water cannot take any more than the 7 million gallons per day it is drawing now.
The system also receives about 2 million gallons per day from the Lewis & Clark Regional Water System, making its daily maximum capacity of about 9.2 million gallons per day, which it sometimes reaches, especially during spring planting season or hot summer months.
Directly to the north, the Big Sioux Community Water System produces up to 2 million gallons per day for about 2,400 customers in Moody and Lake counties as well as some in Brookings County and in western Minnesota, Johanson said.
The system still has room within its water rights to draw more water, making it an attractive partner for Minnehaha water.
Though Big Sioux Community Water System has not turned away any large projects, it needs more water to serve a boom in residential growth in the region, Johanson said.
In the area around Lake Madison, near Madison, developers are considering projects that could someday bring 500 new homes and a new nine-hole golf course, she said.
Support solutions-focused storytelling. Help South Dakota News Watch tell stories that identify and share solutions to the state’s biggest challenges.
Donate
The system also serves a number of dairies that use significant water and provides water to the Dakota Ethanol plant in Wentworth, which is undergoing an expansion. Farmers in the region are also using greater quantities of water to deliver chemicals onto their land, Johanson said.
“This is our first expansion,” she said. “We’re looking forward and we’re trying to find the solution before we face a problem.”
Federal government and customers pay the way
The biggest Shared Resources ticket item is a new $80 million water treatment plant that is nearly completed on 240th Street a few miles north of Dell Rapids.
A 20-inch pipeline from the plant to the east will end at a 1.5 million gallon water tower, and a 24-inch pipeline to the west will terminate at a ground-level storage tank with a 4 million gallon capacity.
Six new wells will draw the water, and the storage tanks will provide both pressure and the ability to adapt to changing demands without service interruption, Buss said.
As with most modern water projects, the costs will be shared by government and end users. The systems are funding the project with $49 million in grants from the Biden-era American Rescue Plan Act and $121 million in low-interest loans from South Dakota’s Drinking Water State Revolving Fund.
The two systems are sharing the cost of the project loans commensurate with how much water they will receive, meaning Minnehaha will pay 65% of the costs for its 5 million gallons per day while Big Sioux will kick in 35% for its 3 million gallons more per day.
Minnehaha water is assuming $87 million in new debt and Big Sioux will take on $42 million in new debt, Buss said.
The average residential consumer in both systems that uses about 7,000 gallons per month will see their bill rise to $135 a month, roughly double the cost in 2020.
“It’s a big project, and it’s a good example of how two systems can work together to have some economies of scale,” Buss said.
Ratepayers will see a significant increase in their monthly water bills. The average residential consumer in both systems that uses about 7,000 gallons per month will see their bill rise to $135 a month, roughly double the cost in 2020, Buss said.
A big project, but even more water needed
But both systems view the Shared Resources project as a temporary fix and both are looking toward proposed projects that will tap the Missouri River for more water in the future.
Buss said his system has applied for 10 million gallons more water per day from Lewis & Clark, which has two expansion efforts planned.
Minnehaha water has simultaneously applied to receive 10 million gallons per day from the proposed Dakota Mainstem Regional Water System, a potentially $10 billion project to carry Missouri River water to more than 50 communities and organizations across eastern South Dakota and parts of Minnesota and Iowa.
The dual application effort is to make sure Minnehaha water can rely on taking in more water from at least one of the two systems as they come online, Buss said.
Johanson said Big Sioux has also signed on to accept water from Dakota Mainstem, even if it takes 20 to 40 years for the water to begin flowing.
To ensure that steady supply of high-quality drinking water, four major projects are in progress to take more water from the Missouri River – including WEB Water in the northeast, Lewis & Clark and the proposed Dakota Mainstem in the southeast as well as the proposed Western Dakota Regional Water System in western South Dakota and the Black Hills.
The projects are part of a wide-scale increase in water service capacity now underway in South Dakota, where water managers of several systems are implementing plans to serve the state for the next 40 to 50 years.
Regional rural water systems such as Minnehaha and Big Sioux are critical components of those projects because they provide water to communities and individual customers at the end of the delivery system.
Alicia Deschepper, zoning administrator for Moody County, said the water system expansions should allow for more growth to occur in Moody and Minnehaha counties, which are seeing new single-family housing developed at a rapid rate.
“I think it will be a great thing for our county and hopefully enable us to bring in more bigger businesses as well as more homes,” Deschepper said.
South Dakota News Watch is an independent nonprofit. Read, donate and subscribe for free at sdnewswatch.org. Contact content director Bart Pfankuch: 605-937-9398/bart.pfankuch@sdnewswatch.org.
SIOUX FALLS, S.D. (Dakota News Now) – The South Dakota Department of Public Safety said a nine-year-old girl from Waterloo, Iowa, is dead following a fatal Hughes County crash on Saturday.
This crash happened on Saturday, July 4, near the Spring Creek Recreation Area about 15 miles northwest of Pierre.
Preliminary crash information suggests a utility vehicle driven by a 37-year-old Iowa man was driving south on Spring Creek Drive. He attempted to turn around and rolled the vehicle.
A 16-year-old boy was also in the vehicle and was hurt, while the driver was not hurt.
The South Dakota Highway Patrol is investigating the crash.
Copyright 2026 Dakota News Now. All rights reserved.
-
World6 minutes agoCuba plunges into third major blackout this year as power crisis worsens
-
Politics9 minutes agoTop Platner ally turns on him after bombshell rape allegation rocks campaign: ‘Red line’
-
Health14 minutes agoExperimental vaccine shows promise against dangerous intestinal illness
-
Sports21 minutes agoEngland’s Jordan Henderson officially ruled out after freak fall causes fracture, opts for surgery
-
Technology24 minutes agoStarship delivery robots leave campuses for cities
-
Business29 minutes agoOrange County real estate investor pleads not guilty in $100 million bank fraud case
-
Entertainment36 minutes agoTom Sandoval’s ex Victoria Robinson accuses him of abuse; her restraining order is denied
-
Politics44 minutes agoTrump heads to NATO as tensions simmer with Europe
