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FOR IMMEDIATE RELEASE: Wednesday, April 7, 2010
CONTACT: Leah Mohr, deputy executive director, South Dakota Public Utilities Commission, (605) 773-3201 or (605) 280-4327

New PUC legislation is friendly to small renewable energy systems

Pierre, S.D. – New legislation that will become effective later this year will benefit owners of small wind turbines, solar energy equipment and geothermal systems. The 2010 legislature approved measures that reduce property tax and ensure fair prices for the sale of excess energy for owners of these and other types of small renewable energy facilities. The bills were introduced by the South Dakota Public Utilities Commission as part of its Small Renewable Energy Initiative and will become effective July 1, 2010.

Senate Bill 58 revises existing statute to make the first $50,000 of the assessed value of a small to medium renewable energy property, or 70 percent of the assessed value if that figure is greater, exempt from real property tax. The bill repeals 13 sections of the state tax code related to property tax reductions for small renewable systems.

In testimony before legislative committees, PUC Chairman Dusty Johnson stated the existing law is confusing and complex and treats various small renewable energy systems differently. "This property tax incentive is better than the one that's in state law today," he said. "The new legislation focuses on the big picture of incentivizing renewables. The change makes the system simpler and fairer," Johnson concluded.

Senate Bill 61 is new legislation that requires electric utilities to file with the PUC their minimum rates for the purchase of electricity generated from renewable resources and produced by a facility that has a capacity of 100 kilowatts or less. The rates will be posted on the PUC Web site,, to allow the producer to easily review and compare rates to make an informed decision regarding the economics of a small renewable power facility.

"Purchasing and operating a small renewable energy system can be a significant investment," said PUC Vice Chairman Steve Kolbeck. "The generator wants to consider all the financial facts up front, such as property taxes and the rate at which their local utility will buy excess power. This legislation gives them the means to review those rates quickly and easily anytime," he said.

The commission expects the new legislation to spur interest and action among South Dakotans who wish to generate their own electricity through renewable resources.

"Through our research and discussions with vendors, we understand there are about 180 small renewable facilities operating in the state," said PUC Commissioner Gary Hanson. "Several of those owners, as well as representatives of the utility industry, offered comments that helped shape the final legislation," he said.

The PUC announced its small renewable energy initiative in June 2009. Other components of the initiative include interconnection rules approved in June 2009 and a model wind energy system ordinance for local governments drafted by the PUC in the fall of 2008. A fifth component, legislation to refund portions of the contractors excise tax on small renewable projects, was defeated by the 2010 legislature.

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