South Dakota Supreme Court has ruled that state regulators erred in authorizing an electric utility to serve an established industrial customer of an electric cooperative.
The commission had found that the Northwestern Public Service Co. could replace Northern Electric Cooperative as the electric supplier for Hub City Inc. Hub had purchased an industrial property containing manufacturing facilities served by the utility and a plant addition served by the co-op.
Previously, the commission had allowed the co-op to serve the addition, although it was inside the utility's service territory under the "new customer, new location, large load" provision of the state's Territorial Integrity Act. Later, however, the commission found Hub could cut its energy costs by allowing the utility to serve the entire facility. The commission ruled a "significant change in circumstances" justified such a switch. It said the service agreement between the co-op and the original industrial customer granted the property owner a contractual right to terminate the co-op as its supplier.