Stop the BIG Power Grab

Proposed Changes by the Rural Cooperatives will harm private property owners, hurt economic development and create more government bureaucracy and uncertainty.

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Rural Cooperatives Proposed Changes

When cities expand, the municipality can annex land to deliver comprehensive services including water, sewer, roads and municipal electric. Rural cooperatives want to take away the right of consumers to be served by their locally-owned municipal electric utility.

While some may view annexation as “taking over” territory, that view couldn’t be further from the truth. Annexation is largely voluntary at the request of the developer or landowners because they want to be part of the municipality.

Why is this bad for South Dakota communities?

Rural cooperatives are looking to monopolize all new electric service in the state through a territory freeze, which will deter new businesses from locating in South Dakota and inhibit city growth by limiting the municipal electric utility’s ability to serve new load.

If municipal electric utilities lose their ability to annex, property owners will be left without a choice of provider and lose out on any future economic development opportunities. In addition, rates will increase in order to make up for lost revenue. Any new business locating within the city’s growing boundaries would be forced to take power from the rural cooperative, but the city would still be responsible for extending other services. Without electric revenue to supplement these services, all other rates would increase, including property taxes.

Changes in law would lead to:

Higher taxes

By trying to stop the city from expanding, co-ops would leave taxpayers to make up for lost revenue by way of higher taxes.

More expenses for businesses.

Proposed changes would lead to increased expenses for any business located in a community with a locally-owned, locally-run electric utility.

Less economic development

Many businesses choose South Dakota because the local utility provides a one-stop shop for all services. If they’re forced to deal with multiple providers, our cities don’t look as attractive.

Less transparency

Cooperatives are not required to hold open meetings, and their boards are made up of members located across a large geographic area. Municipal utilities are required to have open meetings where the public can be heard, and the utility board or city council is made up of local residents with a vested interest in the community.

So why the sudden power grab?

Let’s shine a light on motives:

South Dakota’s private electric cooperatives buy their power from Basin Electric Power Cooperative in Bismarck, ND. Over the last three years, Basin Electric and its subsidiary Dakota Gasification Co., have suffered about $212 million in net losses and will continue to lose $30 to $50 million annually until 2024.

Utility rate increases have helped keep the organization afloat – and as a byproduct, these increases have been passed on to private coops and then to paying customers. In fact, rates have increased by 18% over the last five years. It only makes sense that they would look at new territory, and their proposed changes to SD Law, as a way to make up these funds.

These changes will negatively affect our state, only to benefit an out-of-state interest experiencing tight financial times. Don’t bail out Basin by sending your electrical revenue out of state to pay for bad decisions made in North Dakota. Don’t support the BIG Power Grab by rural electric cooperatives.