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Bill That Freezes Utility Territory Tough Decision For Lawmakers

Katie Hunhoff - South Dakota Magazine

State Senate leadership say municipal utilities and rural electric coop officials are working on a compromise to a policy dispute about service areas.

A bill this session strips the ability of municipalities to provide electric to annexed territory.

It’s an issue that transcends partisan politics.

Current state law allows a municipality to seize utility service with any annexed land… meaning municipal utilities are allow to acquire customers serviced by rural electric coops.

Municipal utilities are generally able to provide electricity at a lower rate, which can be used to court businesses for economic development.

But that action takes away from rural electric coops who serve electricity to the far reaches of the state.

Senate Bill 66 would put a freeze on any territory acquired by municipal utilities, which impacts rural electric co-ops.

Representative Jamie Smith is the minority leader in the house. He says it’s a sensitive issue.

“In the democratic caucus, at least within the house, we have our members vote their conscience,” Smith says. “And what’s best for their district. Those don’t always align on a whole caucus level, especially on an issue like that. We definitely instruct our people to do what they need to do and that’s where we stand.”

Those two types of electricity providers are working on a compromise to settle what’s allowed in state statue when acquiring territory, according to legislative leadership.

State Senator Kris Langer is the majority leader in the senate. She says the republican caucus does not have a position on the bill.

“I’ve been involved in some negotiations,” Langer says. “They’re really trying to work some things out and made a lot of progress. I’m hoping the two sides reach an agreement and we won’t see it legislatively at all.”

It’s a vote that lawmakers would like to avoid, but one that may come down to how their district is served.