A sign displays the names of South Dakota’s three elected public utilities commissioners outside of their Pierre office in January 2023. (Joshua Haiar/South Dakota Searchlight)
South Dakota regulators will take six months to study Otter Tail Power Company’s proposed 12.5% electric rate increase, which the company says would cost a typical residential customer an additional $14.39 per month, or $172.68 per year.
The proposal would generate an additional $5.7 million in annual revenue for Otter Tail, which delivers electricity to about 11,500 northeastern South Dakota customers.
The company applied for the rate increase on June 4. The state Public Utilities Commission voted Tuesday to delay the rate increase from going into effect for six months, giving the commission’s staff time to assess the request, which is a typical procedure for the commission.
The commission also voted Tuesday to charge Otter Tail up to $500,000 for costs associated with reviewing the request.
The company argues rising operational costs and infrastructure investments necessitate the increase. The current rates were set in 2019.
“This increase is needed for the company to continue providing high-quality, reliable, and safe electric service,” Otter Tail wrote in a letter to the commission.
Otter Tail also increased fees in September, raising the typical resident’s electric bill by $4.14 monthly. It was part of a rate adjustment mechanism that allows utilities to adjust customers’ bills for specific projects. Those projects for Otter Tail include buying a natural gas plant in Deuel County, building a wind farm in North Dakota, and replacing and upgrading turbine blades and parts to increase the efficiency and lifespan of multiple wind farms.
