South Dakota PUC approves Ottertale Power settlement that trims company’s requested rate hike

The South Dakota Public Utilities Commission approved a settlement on March 10 that trims Ottertale Power Company’s proposed rate increase and directs interim refunds to customers.

Ottertale counsel Lauren Donafo told the commission the company originally filed on June 4, 2025 seeking a net increase of $5.7 million — roughly a 12.5% overall increase — but that parties negotiated a settlement that reduces the net increase to $3.3 million, or 7.74%. Ottertale said the settlement includes an interim rate refund plan that will be credited to customers on May bills.

“the settlement stipulation results in just and reasonable rates,” Donafo said in presenting the agreement; company staff Amber Grineer and witness Matt Olsen were available to answer questions.

Commission staff recommended approval and described key changes in rate design and tariffs. During commissioners’ questioning, Ottertale and staff explained that riders for infrastructure and reliability (including production tax credits tied to renewable generation) are handled separately and can cause year-to-year fluctuations in bills. Ottertale said the current case includes planning and subscription costs tied to wildfire mitigation (roughly $200,000 company-wide in expense categories) and that future filings could propose additional physical mitigation spending.

Commissioners focused on residential impacts. Ottertale and staff confirmed that, depending on which filing is used for the comparison, the company’s originally proposed residential increase was about 13.84% (an alternate filing showed 14.03%), and the settlement reduces the residential net increase to about 8.49%. Amber Grineer estimated an average interim refund of roughly 21% of interim rates paid for South Dakota customers; staff noted average dollar refunds could be about $3–$4 per month for a typical residential account, varying by rate class.

Commissioner Fegan praised the iterative work between company and staff: “You live with your customers… I feel like customers is right there,” he said, commending the settlement and staff’s memo. Chairman Nelson also endorsed the settlement and noted a multiyear moratorium on new rates would contribute to rate stability.

On a motion to grant the joint motion for approval of the settlement stipulation and to approve Ottertale’s interim rate refund plan, Commissioners Fegan and Nelson voted yes and the motion carried.

Next steps: Ottertale will implement the settlement terms and the commission’s staff will work with the company on the notice and timing for interim refunds to customers. The docket record will remain open for any implementation filings required by the settlement.