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+++ version:128B
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+128B 101st Legislative Session 128
+
+2026 South Dakota Legislature
+Senate Bill 128
+
+Introduced by: Senator Howard
+
+  Underscores indicate new language.
+  Overstrikes indicate deleted language.
+AMENDMENT 128B
+FOR THE INTRODUCED BILL
+
+An Act to update provisions related to certain large-use customers of utilities. 1
+BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 2
+Section 1. That a NEW SECTION be added to chapter 46-1: 3
+A large -use customer, as defined in  section 2 of this Act  § 49-34A-1, which is 4
+operating as a data center, shall provide notice to and cooperate with each local water 5
+provider to ensure that projected water consumption is compatible with the water supply 6
+in the area in which the customer is located. In addition, the customer: 7
+(1) Must implement closed-loop cooling technology that limits net water withdrawal to 8
+a daily amount, established by the Water Management Board for each source of 9
+water currently used in the state, by rule promulgated pursuant to chapter 1-26; 10
+(2) May not consume an amount of the available water supply in the local service area 11
+exceeding limits established in rule by the board, after allocation to residential and 12
+essential public services; and 13
+(3) In a water shortage, as declared by the Governor or determined by the board, 14
+must reduce water use until all residential and essential public service allocations 15
+are met. 16
+In establishing limits under this section, the board shall seek to ensure water 17
+availability and prevent disproportionate use of water by the customer. 18
+The customer shall submit to the board a quarterly report, in the form and manner 19
+prescribed by the board, of the customer's water use. The report must contain average 20
+usage data and certification of compliance with this section. The board shall make the 21
+usage data contained in the report available to the public. 22
+For purposes of this section, "closed -loop cooling technology" means a sealed 23
+system that continuously cycles a set volume of liquid through a closed circuit in which 24
+the liquid, after absorbing heat, is chilled and recirculated. 25
+128B 2 128
+  Underscores indicate new language.
+  Overstrikes indicate deleted language.
+For purposes of this section, "data center" means a centralized repository for the 1
+dissemination, management, processing, and storage of electronic data and information . 2
+Section 2. That § 49-1A-3 be AMENDED: 3
+49-1A-3. There is hereby levied on each public utility , as defined in  subdivision 4
+49-34A-1(12) § 49-34A-1, which is subject to the rate regulation of the commission, and 5
+all each telecommunications companies company, as defined in subdivision 49-31-1(26) 6
+§ 49-31-1, a tax of not more than .0015 or two hundred fifty dollars, whichever is greater, 7
+upon the annual intrastate gross receipts derived by the public utility or 8
+telecommunications company from its customers within  the State of South Dakota  this 9
+state during the preceding calendar year. The two hundred fifty dollar minimum gross 10
+receipt tax does not apply to telecommunications companies providing local exchange 11
+service, as defined in subdivision 49-31-1(13) § 49-31-1, or to radio common carriers. 12
+Section 3. That § 49-34A-1 be AMENDED: 13
+49-34A-1. Terms used in this chapter mean: 14
+(1) "Assigned service area," the geographical area in which the boundaries are 15
+established as provided in §§  49-34A-42 to 49-34A-44, inclusive, and 49-34A-48 16
+to 49-34A-59, inclusive; 17
+(2) "Commission," the South Dakota Public Utilities Commission of the State of South 18
+Dakota; 19
+(3) "Customer," any person contracting for or purchasing gas or electric service from 20
+a utility; 21
+(4) "Depreciated original cost," the cost of property to the person first devoting it to 22
+public service, less the depreciation reserve, which includes accumulated 23
+depreciation charges calculated on a straight -line method and based upon the 24
+estimated service life of the property , together with other items normally 25
+accounted for in the depreciation reserve,  and but does not include any good will 26
+or, going concern value,  nor does it include  or certificate value in excess of 27
+payments made or costs incurred in the initial acquisition thereof; 28
+(5) "Electric line," any line for conducting electric energy at a design voltage of twenty-29
+five thousand volts phase to phase or less and used for distributing electric energy 30
+directly to customers; 31
+128B 3 128
+  Underscores indicate new language.
+  Overstrikes indicate deleted language.
+(6) "Electric service," electric service furnished to a customer for ultimate 1
+consumption, but not including wholesale electric service furnished by an electric 2
+utility to another electric utility for resale; 3
+(7) "Electric utility," any person operating, maintaining, or controlling, maintaining, or 4
+operating, in this state, equipment or facilities for providing electric service to or 5
+for the public, including facilities owned by a municipality; 6
+(8) "Gas service," retail sale of natural gas or manufactured gas distributed through a 7
+pipeline to fifty or more customers or the sale of transportation services by an 8
+intrastate natural gas pipeline; 9
+(9) "Gas utility," any person  operating, maintaining, or  controlling, maintaining, or 10
+operating, in this state, equipment or facilities for providing gas service to or for 11
+the public; 12
+(9A)(10) "Incremental costs," all costs incurred by  a public an electric utility, which are 13
+directly attributable to a large-use customer and incurred in addition to the normal 14
+costs of providing service to other existing customers; 15
+(11) "Intrastate natural gas pipeline," any natural gas pipeline located entirely within 16
+the state that, which transports gas from a receipt point to one or more locations 17
+for customers other than the pipeline operator . However, provided that the term 18
+does not apply if: 19
+(a) If there is only one customer and the customer is a  wholly-owned wholly 20
+owned subsidiary of the pipeline operator,; 21
+(b) If the customer is the parent company of the pipeline operator, or; 22
+(c) If the customer and the pipeline operator are  wholly-owned wholly owned 23
+subsidiaries of the same parent company. Further, the term does not apply 24
+to; or 25
+(d) To natural gas lines and appurtenant facilities used to gather gas from 26
+natural gas production facilities or sites and move the gas to an 27
+interconnecting transportation pipeline system; 28
+(10)(12) "Large-use customer," a customer, established after July 1, 2026, which 29
+requires electric service with a contracted demand of two thousand kilowatts or 30
+more has an anticipated peak electrical demand of ten megawatts or greater; 31
+(13) "Municipality," any incorporated town or city in South Dakota this state; 32
+(11)(14) "Person," a natural person, a partnership, a private corporation, a public 33
+corporation, a limited liability company, a municipality, an association, a 34
+cooperative whether incorporated or not, a joint stock association, a business trust, 35
+128B 4 128
+  Underscores indicate new language.
+  Overstrikes indicate deleted language.
+any of the federal, state and local governments, including any of their political 1
+subdivisions, agencies and instrumentalities,  an association; business trust; 2
+cooperative, whether or not incorporated; federal, state, or local government or 3
+any agency, instrumentality, or political subdivision thereof; joint stock 4
+association; limited liability company; natural person; partnership; private or 5
+public corporation; or two or more persons having joint or common interest; 6
+(12)(15) "Public utility," any person operating, maintaining, or controlling, maintaining, 7
+or operating, in this state, equipment or facilities for the purpose of providing gas 8
+or electric service to or for the public , in whole or in part, in this state . However, 9
+provided that the term does not apply to an: 10
+(a) An electric or gas utility owned by a municipality, political subdivision, or 11
+agency of the State of South Dakota this or any other state or a; 12
+(b) A rural electric cooperative as defined in §  47-21-1 for the purposes of 13
+§§ 49-34A-2 to 49-34A-4, inclusive, §§ 49-34A-6 to 49-34A-41, inclusive, 14
+and § 49-34A-62. The term, public utility, does apply to a; or 15
+(c) A rural electric cooperative which that provides gas service; 16
+(13)(16) "Rate," any charge, classification, or  compensation, charge and classification, 17
+or any of them demanded, observed, charged, or  collected, demanded, imposed, 18
+or observed  by any public utility for any service and any  rules, regulations, 19
+practices, or contracts  contract, practice, regulation, or rule  affecting any such 20
+compensation, the charge or, classification, or compensation; and 21
+(14)(17) "Securities," stock and stock certificates or other evidence of interest or 22
+ownership, and bonds, notes, or other evidence of indebtedness. 23
+Section 4. That a NEW SECTION be added to chapter 49-34A: 24
+Each public utility  that provides electric service  shall establish a classification of 25
+service, with its own tariff and schedules, for large-use customers, which must be separate 26
+and distinct from classifications of service for other customers. 27
+A tariff established pursuant to this section: 28
+(1) Must allocate incremental costs in a manner that: 29
+(a) Is proportional to each large -use customer's share of the aggregated 30
+incremental costs of all large-use customers served by the utility; and 31
+(b) Does not include the incremental costs of a large -use customer with a 32
+contracted rate established pursuant to section 6 of this Act; 33
+128B 5 128
+  Underscores indicate new language.
+  Overstrikes indicate deleted language.
+(2) May not impose on other customers any rate increase or surcharge that is directly 1
+attributable to the utility usage of a large-use customer; and 2
+(3) Together with related schedules, is subject to commission approval and public 3
+inspection pursuant to § 49-34A-10. 4
+Pursuant to chapter 1-26, the commission shall promulgate rules for determining 5
+incremental costs on a cost -causation basis and may require a large -use customer to 6
+submit periodic reports of the large -use customer's actual and projected utility 7
+consumption, which may be used by the commission to verify the large -use customer's 8
+share of the total incremental costs. The commission may require the large-use customer 9
+to reimburse the commission for the retention of experts and any other costs incurred by 10
+the commission to determine cost impacts and review proposed tariffs pursuant to this 11
+section. 12
+Section 5. That § 49-34A-56 be AMENDED: 13
+49-34A-56. Notwithstanding the establishment of assigned service areas for 14
+electric utilities provided for in §§  49-34A-43 and 49-34A-44, new customers at new 15
+locations which develop after March 21, 1975, located outside municipalities as the 16
+boundaries thereof existed on March 21, 1975, and who require electric service with a 17
+contracted minimum demand of two thousand kilowatts or more shall not be  a new a 18
+large-use customer, or any other new customer requiring electric service with a contracted 19
+minimum demand of two megawatts or more  at a new location outside the existing 20
+boundary of a municipality, is not obligated to take electric service from the electric utility 21
+having the assigned service area where the customer is located if, after notice and hearing, 22
+the Public Utilities Commission the commission so determines, after notice, hearing, and 23
+consideration of the following factors: 24
+(1) The electric service requirements of the load to be served; 25
+(2) The availability of an adequate power supply; 26
+(3) The development or improvement of the electric system of the utility seeking to 27
+provide the electric service, including the economic factors relating thereto; 28
+(4) The proximity of adequate facilities from which electric service of the type required 29
+may be delivered; 30
+(5) The preference of the large-use customer; and 31
+(6) Any and all pertinent factors affecting the ability of the utility to furnish adequate 32
+electric service to fulfill customers' the requirements of all customers. 33
+128B 6 128
+  Underscores indicate new language.
+  Overstrikes indicate deleted language.
+Section 6. That a NEW SECTION be added to chapter 49-34A: 1
+Notwithstanding the requirements of section 4 of this Act, any large-use customer 2
+may negotiate with an electric utility  provider a rate for electric service and enter into a 3
+written contract that: 4
+(1) Specifies the duration of the contract and the estimated start date of the electric 5
+service; 6
+(2) Obligates the large-use customer to pay a minimum amount or a percentage based 7
+on the large-use customer's projected usage of the electric service that the electric 8
+utility is contracted to provide for the duration of the contract; 9
+(3) Does not shift incremental costs to other customers; 10
+(4) Does not result in any subsidization by other customers; and 11
+(5) Requires the large-use customer to report to the  electric utility and to either the  12
+commission and, if the electric utility is a public utility, or the approval authority, 13
+if the electric utility is not a public utility , at least annually, the following 14
+information: 15
+(a) The large-use customer's total electric usage during the reporting period; 16
+and 17
+(b) The large-use customer's projected electric usage for twelve consecutive 18
+months following the reporting period. 19
+Any report submitted pursuant to this section is available for public inspection, 20
+except that the large-use customer's proprietary information and trade secrets, as defined 21
+in § 1-27-28, and other sensitive information or data, as described in §  1-27-1.6, are 22
+confidential. 23
+A contracted rate  established negotiated between a large -use customer and a 24
+public utility pursuant to this section does not violate § 49-34A-3 if, after consideration of 25
+the factors in §  49-34A-56, the commission approves the contract and determines the 26
+contract is in the public interest. 27
+If the electric utility serving the large -use customer is a public utility, the 28
+commission may require the large -use customer to reimburse the commission for the 29
+retention of experts and any other costs incurred by the commission to process and review 30
+contracts, rates, and reports pursuant to this section. 31
+If the electric utility serving the large -use customer is not a public utility, the 32
+applicable approval authority may require the large -use customer to pay for costs 33
+associated with reviewing contracts, rates, and reports pursuant to this section.  34
+128B 7 128
+  Underscores indicate new language.
+  Overstrikes indicate deleted language.
+For purposes of this section, "approval authority" means the board of directors of 1
+a state or rural electric cooperative or the governing body, if the electric utility is owned 2
+by a municipality, political subdivision, or agency of this state. 3
+Section 7. That a NEW SECTION be added to chapter 49-34A: 4
+Notwithstanding any other provision of law, an electric utility may not:  5
+(1)  Increase any fee, rate, or surcharge imposed on any customer that is not a large -6
+use customer, for the purpose of financing, offsetting, or subsidizing the 7
+infrastructure costs, service demands, or utility consumption of a large -use 8
+customer; or  9
+(2)  Allocate to any customer that is not a large-use customer incremental costs or any 10
+other cost associated with the distribution, generation, or transmission 11
+infrastructure of a large-use customer. 12
+Section 8. That a NEW SECTION be added to chapter 49-34A: 13
+If an electric utility  a transmission operator  declares an energy shortage or 14
+forecasts that peak demand is projected to exceed supply, each large-use customer of the 15
+utility in the affected service area  must curtail electric electricity usage until the electric 16
+utility transmission operator  determines the total  electricity demand for residential 17
+customers and essential public services is met. 18