South Dakota PUC denies Knife River's petition to assign Xcel Energy as provider

The South Dakota Public Utilities Commission on July 13 denied Sweetman Construction's petition, doing business as Knife River, to have Xcel Energy assigned as its electric provider in a service area currently assigned to Sioux Valley Electric.

Bill VanCamp, an attorney for Knife River, argued the proposed plant sits on bare ground with no existing utility service and therefore should qualify as a "new customer at a new location," citing the Safeguard Metals administrative decision as persuasive precedent. "We're asking this commission to examine what is a new customer based on the facts before it," VanCamp said.

Opponents, including counsel for Sioux Valley Energy and East River, told commissioners the statute should be read according to its plain language and existing precedent, and that Knife River is an existing customer of Sioux Valley and part of a contiguous quarry footprint. Mike Nadolsky for Sioux Valley said, "When you apply the plain meaning and effect of the words and phrases used, Knife River is not a new customer. This is not a new location." Danny Brown for East River emphasized the commission must hold Knife River to its burden of proof.

Staff advised the commission the central question is whether Knife River is a new customer; staff noted that, while other statutory factors may favor Knife River if the threshold is met, the commission must first resolve that threshold. "Staff believes that the issue here is whether Knife River is a new customer," staff said, adding that a more modern interpretation would tie a new customer to an unserved new location but ultimately deferring to the commission for interpretation.

Commissioners spent extensive time questioning parties about mapping, whether parcels had been replatted, potential take-or-pay contract terms, and the consumer-protection purpose of the territory statute. Chairman Nelson said the legislature's use of the word "new" twice at the statute's outset suggested a narrow exception and that the evidence here did not meet the statutory hurdles. Commissioner Feagin moved to deny the petition, citing the petitioner's failure to meet the "new customer and new location" threshold.

The motion to deny passed unanimously: Commissioners Hansen, Feagin and Nelson voted in favor. The commission recorded the action as a denial of EL25-032.

The commission noted the dispute raises questions that may merit legislative clarification, but concluded the commission must apply the statute as written and on the facts before it. The commission also summarized the implications for customer protection and territory integrity and closed the matter with the denial vote.