For the first time in South Dakota a small wind farm has succeeded in using a federal law to force a utility company to agree to buy electricity from the wind farm’s turbines.
The state Public Utilities Commission made its final rounds of decisions Tuesday in the battle that Oak Tree Energy brought against NorthWestern Energy.
The family-run company is based in Clark County. Its proposed wind farm is within NorthWestern’s service territory.
Oak Tree Energy attempted in 2010 to negotiate with NorthWestern. The utility refused to buy the power, saying the additional electricity wasn’t necessary.
Oak Tree Energy turned to the PUC in April 2011. Oak Tree used a federal law known as the Public Utility Regulatory Policy Act of 1978 as the basis for its complaint.
Four of the family members behind Oak Tree were in the meeting room Tuesday.
The scene was similar to two weeks ago as the four Makens – Michael, Bill, Pat and James – silently watched while the three state commissioners negotiated with each other on the final factors setting how much NorthWestern must pay Oak Tree each year.
The commission initially made its decisions months ago, when they ordered the two sides to reach a contract, but NorthWestern last month persuaded the commission to reconsider several points.
Those were resolved Tuesday in several split votes.
Commissioners Gary Hanson and Kristie Fiegen favored recommendations made by staff member Brian Rounds rather than new recommendations offered by commissioner Chris Nelson.
A key point of difference was whether NorthWestern customers should pay more up front and less in later years over the 20-year life of the deal. Nelson preferred a more-level basis.
“I think that’s wrong,” Nelson said. “I’m concerned with what electrical bills are today.”
Hanson responded that he didn’t want to force an injustice on Oak Tree by limiting the company’s ability to get financing for the project.
NorthWestern Energy could appeal the matter to state court, but there’s been no indication the utility will take that route.
“It was a lengthy docket because it was an important one and sets precedent to some extent,” Hanson said as the discussions concluded Tuesday.
The Oak Tree case was the first PURPA-based complaint in many years for the PUC.
In 2004, Superior Energy asked commissioners to force Montana-Dakota Utilities to buy electricity from the Java wind farm.
The matter eventually went away in a settlement between Superior and MDU in 2005.
Oak Tree Energy originally filed in Delaware as a corporation in 2009 and then filed in South Dakota as a foreign corporation in 2012.
Leonard Makens was listed as chief executive office and the registered agent was Michael Makens, both of rural Clark.
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