July 23, 2014
South Dakota

PUC rejects request to require company to buy wind power

Bob Mercer, Journal correspondent | Rapid City Journal | July 23, 2014 | rapidcityjournal.com

The South Dakota Public Utilities Commission ruled unanimously Tuesday against a company that wants to make rural electric cooperatives buy its wind power.

Prelude, based in Green Bay, Wisc., is attempting to use a 1978 law known as PURPA to force Basin Electric and five local-level cooperatives to purchase electricity Prelude plans to produce.

The five other cooperatives are Butte Electric at Newell, Grand Electric at Bison, Moreau-Grand Electric at Timber Lake, Rosebud Electric at Gregory and Rushmore Electric at Rapid City. They receive power from Basin Electric.

PURPA applies to rate-regulated utilities. Rural electric cooperatives aren’t rate-regulated under South Dakota law.

Basin Electric, based in Bismarck, N.D., argued the PUC should dismiss Prelude’s complaint because Basin isn’t subject to rate regulation by the PUC.

Basin produces electricity and purchases electricity that it supplies to local-level rural cooperatives across the region.

PUC staff attorney Kristen Edwards agreed with Basin that the PUC doesn’t have jurisdiction.

“The state Legislature has not given us authority to rate-regulate cooperatives,” commissioner Kristie Fiegen said.

Miles Schumacher, a lawyer representing Basin Electric, said the federal PURPA law doesn’t extend rate-setting authority to state commissions over cooperatives that aren’t public utilities.

Prelude lawyer Robert Lorge of Madison, Wisc., argued that Basin Electric hadn’t filed proper documents with the South Dakota secretary of state’s office that prove Basin is a rural electric cooperative.

“By their actions they’re not really acting as a cooperative,” Lorge said.

That is because Basin provides service known as wheeling where electricity generated by other utilities is carried over parts of Basin’s transmission network, he said.

Public Utilities Commission member Chris Nelson said the secretary of state documented Basin Electric Power Cooperative has been an active corporation in South Dakota since Dec. 16, 1968.

“I didn’t see the dotting of i’s and crossing of t’s,” Lorge said. He added, “The name doesn’t mean anything.”

Lorge said Basin charges for carrying other utilities’ power over its lines and therefore isn’t a cooperative in that respect.

The PUC’s chief legal counsel, John Smith, said it’s been clear for many years the commission doesn’t regulate rates for rural electric cooperatives.