Net metering for South Dakota municipal electrics

by Bill Powers, resident White SD which has a municipal electric

A significant fraction of electricity sold in SD (about 13%) is resold by municipalities to their municipal customers. These municipalities purchase electricity from an electricity generation facility. The SD PUC does not regulate such resale municipalities. This means that any net metering bill passed by SD Legislature would have no direct affect upon electrical
customers who purchase their electricity from these municipalities.

I believe that there are 34 such municipalities in SD. Thirty three of them are a member of the SD Municipal Electric Association. This association provides guidance to their members. I can find no guidance with regard to solar electricity generation, but I could find one regarding wind generation.

In a document titled “Guidelines For Municipal Permitting of Small Wind Systems” ( it says
regarding net metering:

“NET METERING refers to providing credits or payment to the SWS owner for power supplied to the system during times when the owner is producing more power than is being used. Net metering is not required by any South Dakota laws or regulations; however, the Federal Energy Regulatory Commission (FERC) mandated by authority from the Energy Policy Act of 2005, which
revised the Public Utility Regulatory Policies Act of 1978 (PURPA) requires in Section 210 that nonregulated electric utilities are required to purchase excess power from a qualified facility (QF)or to sell backup power to a QF, at an avoided cost rate.”

Here “SWS” refers to small wind generating sytems of less than 20 kw. A qualified facility (QF) is a small power production facility (a generationg facility of 80MW or less with a primary enery source from hydro, wind, solar, biomass, waste, or geothermal) or a cogeneration facility (a generating facility that sequentially produces electricity and another form of useful thermal energy in a way that is more efficient that the separate production.

The document goes on to say: “Net metering can be done in two ways – 1.) Allow the owner’s meter to spin in reverse in times when they produce more power than they are using. This method results in a 1:1 ratio meaning that they get the same dollar amount for the power they produce as you are charging them. This could become a problem for the utility if large (10KW+) wind systems are installed. Possibly could result in the municipality paying the owner of the SWS each month. 2.) Provide the owner credits each month based on a set cents/kWh of excess power produced. Similar to method one, but reduces the amount paid to the SWS owner. This method may require another meter, increased configuration, and detailed calculation for payment.”

This is the extent of SDMEA’s advice. It still leaves the municipalities having to choose between two broad options without much guidance as to which they might choose. I am trying to find out whether any such local municipalities have implemented any policy.


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