Energy Efficiency Resource Standards
South Dakota does not have a statewide energy efficiency resource standard (EERS), but utilities are allowed to run voluntary energy efficiency programs. The Public Utilities Commission is authorized in statute to implement policies "allowing a public utility's rates to align utility incentives with the delivery of cost-effective energy efficiency and promote energy efficiency investments." Some utilities in South Dakota do take advantage and file Demand Side Management plans with the Commission.
In 2008, the state passed a voluntary "renewable, recycled and conserved energy objective," which set a goal of obtaining 10% of the state's electricity through renewables, recycled energy and energy efficiency by 2015. This was a nonbinding objective, but today over 80% of South Dakota's electricity is generated from renewables with wind power making up the largest share.
Resource Planning
South Dakota requires electric utilities to submit a 10-year plan on a biennial basis. The plan must include a statement of efforts made "toward efficient load management."
- Rules: ARSD 20:10:21
Rate Structures & Incentives
Cost Recovery
The South Dakota Public Utilities Commission can use costs, revenues, cost of capital and other factors in determining a utility's rate case. The commission approves energy efficiency cost recovery riders for utility tariff sheets on a case-by-case basis.
Lost Revenue Recovery
Lost revenue recovery for energy efficiency programs in South Dakota is handled on a case-by-case basis. Northwestern Energy was approved for a lost revenue recovery mechanism for both gas and electric programs in its 2009 plan, 2012 plan and subsequently in its 2017 plan.
Utility Incentives
The commission may approve incentive rates 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. Utility incentive mechanisms have been approved as part of a number of utility efficiency plans.
Noncompliance Penalties
There is no mandatory energy efficiency standard. The state's renewable, recycled and conserved energy objective is voluntary, and as such, there is no penalty for noncompliance.
Stakeholder Collaboration
There is not an identified statewide stakeholder collaborative process for utilities engaged in energy efficiency programs in South Dakota.
Program Evaluation
Cost-effectiveness Testing
There is a statutory requirement for cost-effectiveness testing of energy efficiency, but it does not specify the test to be used or any other parameters of that testing. The choice of cost-effectiveness tests for energy efficiency programs in South Dakota is determined by the utility filing. In their 2025 plan filing, Xcel used the Total Resource Cost (TRC) Test.
Net vs. Gross
Net vs. gross revenue is reviewed on a case-by-case basis in South Dakota. In MDU's 2009 natural gas plan, they measure only gross energy savings. In NWE's 2012 gas and electric plan their evaluation scope of work includes the measurement of the effect of both free riders and spillover. MidAmerican Energy’s 2018-2022 plan proposes reporting only ex-post and ex-ante gross energy savings.
Technical Resource Manual
South Dakota does not have a statewide Technical Resource Manual for energy efficiency program design and evaluation. Utilities determine their own evaluation methodologies and measure savings values.
State Energy Plan or Vision
The South Dakota State Energy Plan is implemented by the State Energy Management Office. The stated goal of the Plan is "to promote energy efficiency and energy cost savings by helping South Dakota’s institutions implement cost-effective energy efficiency improvement measures."