Energy policy in South Dakota

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Energy policy in South Dakota
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Quick facts
Energy department:
South Dakota Department of Environment and Natural Resources
State population:
0.8 million
Per capita income:
Energy consumption
Total energy consumption:
382 trillion BTU[1][2]
Per capita energy consumption:
464 million BTU
Energy spending
Total state energy spending:
$4,547 million
Per capita energy spending:
Residential natural gas price:
$8.29 per thousand cubic foot
Residential electricity price:
10.06 cents per kWh
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Energy PolicyEnergy policy in the United StatesFracking in South DakotaEnergy and environmental news
Energy policy in South Dakota depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in South Dakota is primarily focused on achieving cost-effectiveness, rather than energy efficiency or renewable energy use. As the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, these policies often require subsidies to make the produced energy affordable, and their effects are difficult to measure.

Energy policy involves trade-offs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: Energy policy in the United States for more information on energy policy.
See also: Fracking in South Dakota

Energy overview

State facts

Below are quick facts about South Dakota's energy climate.

South Dakota

  • is a net electricity importer.
  • has fossil fuels in the form of crude oil and natural gas.
  • has renewable energy in the form of hydroelectric energy, wind energy, geothermal energy, solar energy and biofuels.
  • has no nuclear plants, major coal mines or oil refineries.
  • ranked fifth in the nation in ethanol production in 2011.
  • had more net electricity generated from hydropower than from any other source in 2011.
  • has the fifth largest wind resources in the nation.[3]

In South Dakota

  • it is estimated that 88 percent of the land area has high wind power potential.
  • wind and hydropower accounted for 77 percent of the net electricity generation.
  • electricity costs about 1.9 cents per kWh lower than the national average.
  • industry, including agriculture, consumed the highest amount of natural gas in the state.[3]

Available energy resources

South Dakota’s traditional energy resources consist of crude oil and natural gas. South Dakota’s crude oil production accounts for far less than 1 percent of the nation's total. South Dakota also produces small amounts of natural gas and no coal. Natural gas comes to South Dakota mainly by pipeline from North Dakota.[3]

South Dakota has renewable energy resources in the form of wind, biofuels, solar and hydropower. Three-fourths of the state’s energy comes from wind and hydropower. South Dakota has the fifth largest wind resources in the nation. Overall, South Dakota has only moderate geothermal potential. However, the south-central region of South Dakota has been identified as having high geothermal potential. South Dakota could also use their excessive agricultural waste to produce energy. Many of South Dakota’s renewable energy resources remain undeveloped.[3]

Consumption and prices

The industrial sector consumes the most energy in South Dakota, accounted for about 40 percent. Transportation is a distant second, it accounted for about a quarter of energy consumption in 2011. Commercial and residential use accounted for the remaining third. Petroleum is the most used source of energy in South Dakota followed by coal, natural gas, hydropower and other renewables. Prices for energy resources are slightly below the national average.[3]

Energy consumption in South Dakota
SD energy sector usage chart.png

     Transportation       Residential     Industrial       Commercial
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Petroleum is used primarily in the form of gasoline and diesel fuel in South Dakota, and prices of both are usually near the national average.[5] According to the U.S. Energy Information Administration's February 2014 report, the federal excise tax is 18.40 cents per gallon of gasoline and 24.40 cents per gallon of diesel fuel. In addition to that, South Dakota collects a total tax of 24 cents on every gallon of gasoline or diesel and 22.6 cents on every gallon of gasohol fuel, which ranks it at the 28th highest in the U.S.[6][7]

Comparisons tables

The table below compares South Dakota’s consumption and spending for energy, as well as prices for natural gas and electricity, and carbon emissions to those of Wyoming, which has similar population, resources and consumption needs because of climate and geography. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • South Dakota’s rank of 47th in carbon emissions means that carbon emissions are less in South Dakota than in Wyoming, which has a ranking of 33rd.
  • Per capita income in both South Dakota and Wyoming are higher than the national average, yet South Dakota still ranks lower (at 19th) than Wyoming (at eighth).
  • These two states are very similarly ranked in the top 10 on per capita spending and per capita consumption.
  • Both states are similarly ranked in the bottom third in the nation for the price of natural gas.
  • Because of the small size of each respective state, both South Dakota and Wyoming rank in the bottom 10 for total energy consumption.
Consumption and Expenditures Comparisons Summary
Type South DakotaWyomingU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population0.8 million460.6 million52313.9 million
Per Capita Income Average$43,65919$48,6708$42,693
Total Consumption382 trillion BTU45553 trillion BTU4097,301 quadrillion BTU
Per Capita Energy Consumption464 million BTU8975 million BTU1312 million BTU
Total Spending on Energy$4,547 million47$5,406 million46$1,394,088 million
Per Capita Spending on Energy$5,5319$9,5293$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$8.2939$8.4036$12.48
Price of Electricity, cents per kWh10.063910.243712.31
Total Carbon Dioxide Emissions, million metric tons (2010)15.14764.9335,631
*Rank is from highest to lowest.

Though energy prices in South Dakota are generally lower than national averages, their energy spending per capita ranks in the top ten. Energy consumption is eighth highest in the nation.[3]

See also: State Energy Rankings to compare all 50 states
Consumption of energy for heating homes in South Dakota
Source South Dakota 2011 U.S. average 2011
Natural gas 48.5% 49.5%
Fuel oil 3.4% 6.5%
Electricity 27.7% 35.4%
Liquid Petroleum Gases (LPG) 17% 5%
Other/none 3.5% 3.6%

Production and transmission

South Dakota produced 249 trillion BTU of energy in 2011. Of that over 50 percent came from biofuels and about 38 percent came from what the U.S. Energy Information Administration classifies as 'other,' which is "assumed to equal consumption of all renewable energies except biofuels." The remaining amount was in the form of natural gas and crude oil. South Dakota produced no energy from coal or nuclear power.[8]

Energy production by type in South Dakota, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Crude oil 9.4 3.78% 0.08%
Natural gas 1.9 0.76% 0.01%
Biofuels 143.8 57.75% 7.49%
Other 94 37.75% 1.32%

Over a third of the electricity generation in South Dakota is produced through hydroelectric energy. Hydroelectric dams on the Missouri River also contribute. About 30 percent comes from what the EIA classifies as “other” renewable energy resources. About a quarter of the electricity generation comes from coal and about six percent comes from natural gas. No electricity is generated in South Dakota by petroleum or nuclear power.[3]

Where electricity comes from in South Dakota[9]
Type Amount generated (MWh) % of state** % of U.S.**
Natural gas-fired 62,000 6.44% 0.01%
Coal-fired 262,000 27.23% 0.02%
Hydroelectric 354,000 36.8% 0.11%
Other renewables 284,000 29.52% 0.14%
Total net electricity generation 962,000 100% 0.02%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

Energy policy

Policy Issues
South Dakota has a goal to have 10 percent of commercial energy come from renewable sources by 2015. There is not, however, a non-compliance penalty and it is unlikely that the state will reach its goal.[10]
See also: Fracking in South Dakota

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves trade-offs in which energy production and prices are weighed against environmental concerns and efficiency. The state has a goal of 15 percent electricity from renewable energy resources by 2015 but it not on track to reach this goal. This lack of compliance could be due to the fact that there are no mandates or non-compliance penalties on renewable energy in the state state.[11] South Dakota offers property tax exemptions for wind and renewable energy systems to incentivize and encourage expansion of renewable sources for electricity generation. The state enacted legislation in 2008 that established a renewable portfolio objective. The goal of the tax exemption was to obtain 10 percent of all retail electricity sales from renewable and recycled energy sources by 2015. The next year, however, it was amended to allow energy conservation as a component to the goal. Compliance to these standards are voluntary.[3][12][13][14]

According to the “2013 State Energy Efficiency Scorecard” published by the American Council for an Energy Efficient Economy (ACEEE), South Dakota is tied for 47th with Mississippi and Alaska in energy efficiency with a score of eight out of 50.[15] There are differing estimates about the economic impact of these mandates in terms of costs that may affect prices and jobs, as well as the impact on the environment and pollution. Thus, for example, there are many new studies of what is called the "rebound effect" which refers to the fact that "some of the theoretically estimated gains in energy efficiency will be eroded as consumers consume additional goods and services."[16][17]

Major legislation

  • HB 1123 (2008) established a renewable energy mandate in South Dakota, similar to the renewable portfolio standards (RPS) found in other states. The objective was to have 10 percent of electricity in South Dakota come from renewable sources by 2015. This is a voluntary goal, yet utilities are still required to submit annual reports.[18]
  • SDCL 43-13-21 (2009) "created a model ordinance for siting wind-energy systems." The model was developed by multiple stakeholders and designed to be used by local governments. The model promotes small wind turbines, those less than 75 feet and usually used for on-site electricity consumption. For small wind turbines "the model ordinance addresses setbacks, access, lighting, noise, appearance, code compliance, utility notification, abandonment and the permitting process." For larger wind-energy systems, the provisions address "mitigation measures, setbacks, electromagnetic interference, lighting, spacing, footprint minimization, the placement of lines and cables, height, tower color and design, noise, permitting, decommissioning and pre-construction filing."[19]
  • SDCL 49-34A-19 gives the South Dakota Public Utilities Commission authority to use costs, revenues and other factors in its determination of a utility's rate case. The commission approves, on a case-by-case basis, energy efficiency cost recovery riders for utility tariff sheets.[20]
  • SDCL 49-34A-8.2 gives the South Dakota Public Utilities Commission authority to approve incentive rates. These incentive rates are designed "to encourage the performance and efficiency of public utilities, in the form of pre-approved rate models that go into effect as levels of performance are reached." As a part of many utility efficiency plans, utility incentive mechanisms have been approved.[21]
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Energy policy ballot measures

Voting on Energy
Energy policy
Ballot Measures
By state
By year
Not on ballot
See also: Energy on the ballot and List of South Dakota ballot measures

Ballotpedia has tracked 2 ballot measures relating to state and local energy policy in South Dakota.

  1. South Dakota State Hydroelectric Power Plants and Transmission Systems (1922)
  2. South Dakota State Water Power (1918)

Utility policy ballot measures

See also: Local utility tax and fees on the ballot

Ballotpedia has tracked no ballot measures relating to local utility tax and fees in South Dakota.

Government agencies and committees

  • The South Dakota Department of Environment and Natural Resources (DENR) aims to protect public health and the environment. They provide environmental monitoring, assess natural resources, and give financial and other assistance for environmental projects and regulatory services. The department is managed by the South Dakota Secretary of Environment and Natural Resources.[22]
  • The South Dakota Public Utilities Commission (PUC) regulates utilities that provide services such as investor-owned electric, natural gas and telephone. The PUC ensures safe and reliable and cost-effective services from utility companies in South Dakota. It also has limited roles in regulating wireless communication companies and cooperative, independent and municipal utilities. The PUC also resolves disputes between customers and utility providers.[23]
  • South Dakota Energy Smart is a statewide initiative coordinated by the South Dakota Public Utilities Commission. Its purpose is to encourage development, promote and implement energy efficiency programs, help citizens save money and protect the environment.[24]
  • The Office of School & Public Lands manages state lands that are intended to benefit public education in the state. The department is managed by the South Dakota Commissioner of School and Public Lands. The department has been tasked with managing the revenue collected from these lands from mineral and livestock grazing leases and monitoring state-owned dams, among other responsibilities.[25]

Major organizations

  • The South Dakota Wind Energy Association (SDWEA) aims to help South Dakota utilize its high wind energy potential. Through developing the wind energy resources in South Dakota, the SDWEA aims at cost-effective alternate energy.[26]
  • The Environmental Law & Policy Center is a public interest environmental legal advocacy in the Midwest. It covers South Dakota as well as Illinois, Indiana, Iowa, Michigan, Minnesota, North Dakota, Ohio and Wisconsin. They "develop and lead successful strategic advocacy campaigns to improve environmental quality and protect our natural resources."[27]

In the news

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South Dakota Energy News Feed

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See also

External links


  1. These figures come from the U.S. Energy Information Administration State Profiles and Energy Estimates, South Dakota Overview. Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for October 2013. Updated pricing information is available on the state's EIA profile. Prices will be updated on this page biannually.
  2. U.S. Energy Information Administration, “South Dakota Overview,” accessed February 24, 2014
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 U.S. Energy Information Administration, South Dakota Profile Analysis, December 18, 2013
  4. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  5. To compare current gasoline prices in South to the U.S averages, go to
  6. U.S. Energy Information Administration, "Petroleum Marketing Monthly”, February 2014
  7. The Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013
  8. U.S. Energy Information Administration, “State Energy Data System, Production,” accessed February 25, 2014
  9. These figures come from the EIA State Profiles and Energy Estimates U.S. Energy Information Administration, "South Dakota Overview," accessed February 25, 2014
  10. The Institute for Energy Research, "The Status of Renewable Energy Mandates in the States," accessed February 26, 2014
  11. American Council for an Energy-Efficient Economy, "State Energy Efficiency Policy Database," accessed February 27, 2014
  12. According to a report called "The Status of Renewable Electricity Mandates in the States," by the free-market Institute for Energy Research, the cost of electricity in states with RPS were on average 38 percent higher in 2010 than in states without a RPS.
  13. Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
  14. Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
  15. ACEEE, “2013 State Energy Efficiency Scorecard,” accessed February 26, 2014
  16. International Risk Governance Council, "The Rebound Effect: Implications of Consumer Behavior for Robust Energy Policies," accessed March 3, 2014
  17. Scientific American, "How Bad Is the Rebound from Energy Efficiency Efforts?," May 21, 2013, accessed March 3, 2014
  18. Institute for Energy Research, "The Status of Renewable Energy Mandates in the States," accessed February 26, 2014
  19. Database of State Incentives for Renewable & Efficiency, "Model Ordinance for Siting of Wind-Energy Systems," accessed March 3, 2014
  20. Midwest Energy Efficiency Alliance, "Energy Efficiency Policies and Practices in South Dakota," accessed March 3, 2014
  21. Midwest Energy Efficiency Alliance, "Energy Efficiency Policies and Practices in South Dakota," accessed March 3, 2014
  22. South Dakota Department of Environment and Natural Resources, "About Us," accessed March 17, 2014
  23. South Dakota Public Utility Commission, "About the PUC," accessed February 26, 2014
  24. South Dakota Energy Smart, "Home," accessed February 26, 2014
  25. South Dakota School and Public Lands, "Office of School & Public Lands Duties and Responsibilities," accessed August 13, 2013
  26. South Dakota Wind Energy Association, "Home Page," accessed February 26, 2014
  27. Environmental Law & Policy Center, "About Us," accessed March 14, 2014