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Wind industry and state regulators traded blows again Monday in SD legislature

PIERRE, S.D. – An undercurrent of distrust and uneasiness continued Monday between state regulators and lobbyists for wind-farm developers at South Dakota’s 2019 legislative session.

Lobbyists lined up as opponents Monday at a House hearing on SB 16. It would let the state Public Utilities Commission control escrow accounts for taking down wind farms when they’re too old to operate.

“We think this needs a deeper dive,” argued Bill Van Camp, a Pierre lawyer who represents Florida-based NextEra Energy that has three wind farms in South Dakota and might develop more.

State commission member Chris Nelson said escrow arrangements provide financial protection in case a wind farm’s owner goes bankrupt.

The money would be returned to companies if it isn’t needed.

“It’s a good bill for landowners and a good bill for developers,” Nelson said.

Justin Smith, a Sioux Falls lawyer representing the South Dakota Wind Energy Association, said the problem the state commission is trying to address was “non-existant.”

“There are no examples of projects where decommissioning was mishandled in South Dakota,” Smith said.

Commissioner Nelson countered that wind projects receive annual federal tax credits of $300,000 per turbine, comparred to the commission’s requirement that they put $5,000 in escrow per turbine each year.

“Nobody’s bankrupt today, I will admit that,” Nelson said. But, he added, “We know that businesses come and businesses go.”

Nelson said investor-owned utilities that the commission regulates on rates and other matters don’t have to post escrow money because the commission already has authority over them.

The Senate approved the bill 29-4 last month. The House Commerce and Energy Committee voted 11-2 Monday to send it to the 70-member House of Representatives.

But Representative Tim Rounds, a Pierre Republican, said after making the motion that he wants to give the sides time to see whether they can come up with something more acceptable to each other. The 2019 session’s main run ends March 13.

Said Representative Steve McCleerey, a Democrat who farms in the Sisseton area: “I think I’d rather see a plan than no plan.”

Wind lobbyists in turn took control of another wind-farm measure, SB 64, in the same committee with an amendment that rewrites much of it.

Representative Caleb Finck, a Tripp Republican, said the goal is to allow new wind farms to connect to radar system that turn on warning lights only when aircraft get near.

Finck said the systems default to lights-on if the radar connection is disrupted.

Brett Koenecke, a Pierre lawyer who lobbies for several wind-development companies, said wind farms already must have warning lights.

The industry’s amendment clarifies that only future farms would need to use the new systems and they meet current federal regulations.

“It’s intended to be entirely friendly,” Koenecke said.

Senator Brock Greenfield, a Clark Republican, brought the legislation. The Senate passed it 32-1 but Greenfield acknowledged Monday the Senate version needed changes.

Greenfield wouldn’t commit his support for the House committee’s latest version. Greenfield told Finck in the hallway afterward that he – Greenfield – would have to check with people back home who want the different approach.

This hasn’t been the easiest session for the state commission, whose three members are elected statewide but operate independently while under the state Department of Labor and Regulation.

Repblican Governor Kristi Noem issued a veto earlier this session to stop SB 14 that would have given the state commission clear authority over solar-power projects.

Her four-paragraph message faulted the commission, whose members are all Republicans, for inadequately negotiating with the wind industry. She ended with this statement:

“The renewable energy industry has already invested heavily in South Dakota, and continued investment depends on common sense, transparent, and customized regulation. I do not believe Senate Bill 14 or the process that led to its introduction meets these basic standards.”

Lawmakers are working on a revised version of another measure, SB 15, that would still give the commission authority over solar-energy facilities and increase the commission’s period to nine months for permitting wind-energy and solar-energy developments.

The commission currently has six months but wanted one year. The governor’s office and utility developers opposed one year. The Senate was scheduled to debate the revised SB 15 on Monday afternoon and expectations were that it would move forward to the House.