Energy Efficiency Policies and Practices in South Dakota

Utility Sector

Utility sector policies are those policies that directly affect the way that the state's electricity and natural gas utilities do business and serve the energy needs of their customers.  These policies include utility forecasting and planning requirements for energy efficiency, requirements for energy efficiency delivery to customers, regulatory mechanisms to determine utility revenues for energy efficiency services, processes for working collaboratively with other utilities and energy stakeholders to advance energy efficiency, requirements for evaluating energy efficiency programs and portfolios, and policies to promote the development of the next generation of energy grids.

Resource Planning

South Dakota Administrative Rules 20:10:21:02 require electric utilities to submit a ten-year plan on a biennial basis. SDAR 20:10:21:13 requires that the plan includes a statement of efforts made toward "efficient load management."

► Overview of Resource Planning policies in the Midwest

Energy Efficiency Standards

South Dakota does not have a statewide energy efficiency portfolio standard for electric or natural gas utilities. The state has a voluntary "renewable, recycled, and conserved energy objective" in South Dakota Codified Laws 49-34A-101 which sets a goal of 10% of the state's electricity through renewables, recycled energy, and energy efficiency by 2015 but it is specifically stated to be a nonbinding statement of a policy objective rather than a mandate.

► Overview of Efficiency Standards policies in the Midwest

Rate Structures & Incentives

Cost Recovery

Under SDCL 49-34A-19, the Commission can use costs, revenues, cost of capital, and other factors in its determination of a utility's rate case.  The Commission approves energy efficiency Cost Recovery riders for utility tariff sheets on a case-by-case basis.

Lost Revenue Recovery

Lost revenue recovery for energy efficiency programs in South Dakota is handled on a case-by-case basis by the Commission.  Northwestern Energy was approved for a lost revenue recovery mechanism for both gas and electric programs in its 2009 plan in Docket GE09-001 and subsequently in its 2012 plan in Docket GE12-001.

Utility Incentives

Under SDCL 49-34A-8.2, the Commission may approve incentive rates to encourage the performance and efficiency of public utilities, in the form of preapproved rate models that go into effect as levels of performance are reached. Utility incentive mechanisms have been approved as part of a number of utility efficiency plans.

Noncompliance Penalties

There is no mandatory energy efficiency standard. The state's renewable, recycled, and conserved energy objective is entirely voluntary, and SDCL 49-34A-101 specifies that there is no penalty for noncompliance.

► Overview of rate structures & incentives in the Midwest

Stakeholder Collaboration

There is not an identified statewide stakeholder collaborative process for utilities engaged in energy efficiency programs in South Dakota.

► Overview of stakeholder collaboratives in the Midwest

Program Evaluation

Cost-effectiveness Testing

There is a statutory requirement for cost-effectiveness testing of energy efficiency in SDCL 49-34A-104, but it does not specify the test to be used or any other parameters of that testing. The choice of cost-effectiveness tests for energy efficiency programs in South Dakota is determined by the utility doing the plan filing. For example, Northwestern Energy (NWE) uses the Total Resource Cost Test (TRC) in their 2009 gas and electric energy efficiency plan in Docket GE09-001 and in their 2012 plan in Docket GE12-001, as does MidAmerican in their 2013-2017 plan in Docket GE12-005; however in Docket NG09-001 Montana-Dakota Utilities (MDU) used the Rate Impact Measure (RIM), the Program Adminstrator Cost Test (PACT; aka the Utility Test), the Societal Cost Test (SCT), and the Participant Cost Test (PCT) in its program testing.

Net vs. Gross

The issue of Net vs. Gross in South Dakota is on a case-by-case basis as well. In MDU's 2009 natural gas plan (Docket NG09-001), they meaure only gross energy savings. In NWE's 2012 gas and electric plan (Docket GE12-001) their evaluation scope of work includes the measurement of the effect of both free riders and spillover ("free drivers"). MidAmerican's 2013-2017 plan (Docket GE12-005) proposes reporting only ex-post and ex-ante gross energy savings.

Technical Resource Manual

South Dakota does not have a statewide Technical Resource Manual for energy efficiency program design and evaluation. Utilities determine their own evaluation methodologies and measure savings values.

► Overview of efficiency program evaluation in the Midwest

Smart Grid

The Smart Grid Information Clearninghouse identifies the following smart grid projects in South Dakota:

Recovery Act-funded smart grid projects that benefit South Dakota, as identified on SmartGrid.gov include:

► Overview of smart grids in the Midwest


Read the report that accompanies these pages:
Energy Efficiency Policies, Programs, and Practices in the Midwest:
A Resource Guide for Policymakers (2014 Edition)

►more information about the Resource Guide