A September 2000 report by the Minnesota Department of Commerce recommends
changes in the state's power industry but not full retail competition.
The reportwhich is the basis for a proposal to the Legislature's
2001 sessionproposes tax structure changes to promote the building
of new power plants, mandated statewide energy planning, increased energy
conservation and competition on the wholesale level.
Legislation adopted in April 1997 allows large industrial consumers retail
access by July 1998, and all consumers by July 2002. Rates were frozen
for two years, beginning July 1998. In October 2000, following a summer
of high price volatility, the Public Service Commission proposed that
full retail competition be delayed until July 2004.
A joint Legislative Study Committee on Restructuring was created in March
1997 to examine tax issues related to electricity restructuring, but the
committee has made no legislative recommendations and no major proposals
are anticipated in the 2001 session.
In 1999 the state's largest utility agreed to freeze its rates for five
years, until 2005, continuing a five-year freeze begun in 1995. Current
law allows retail choice for new, large customers. No restructuring proposal
is anticipated in the 2001 Legislature. According to the chair of South
Dakota's Public Utilities Commission, "with the experience in California
and the other states which have deregulated, the objection to deregulation
in South Dakota is stronger than in the past. No entity in South Dakota
sees any benefit to deregulation."
In April 1998 legislation is adopted to improve reliability by establishing
a competitive merchant plant generating industry and creating a regional
transmission organization (RTO); utilities are required to join RTO and
to create 50 megawatts of power from renewable sources. In October 1999
further legislation addressed conservation projects and low-income assistance
programs, created a nonprofit company to own and operate the transmission
system and lifted restrictions on utility investments in nonutility businesses.
Legislation passed in June 2000 mandates retail choice for consumers
by January 2002. Most residential consumers receive a 5 percent rate reduction
and rate freeze through 2003. Rate caps in effect for business consumers
as well. Bill includes stranded cost recovery measures, debt refinancing,
low income and energy efficiency fund, mercury emissions study and slamming
Source: Energy Information Administration, U.S.
Department of Energy and state agencies.